mothercare plc
annual report and accounts 2012
wwwmothercareplccom
t ransformation 
and growth financial highlights
worldwide network sales
£12324m 64
group sales
£8127m 24
operating proﬁt
£16m 944
uk operating loss
£247m na
vs proﬁt of £111 million last year
international operating proﬁt
£349m 269
corporate expenses
£76m 13
uk sales
£5600m 46
uk retail stores and direct and uk wholesale sales
international sales
£6724m 178
retail sales achieved by our franchise partners joint ventures 
and associate and international wholesale sales
uk sales
£5600m 46
uk retail stores and direct and uk wholesale sales
international sales
£2527m 224
royalty revenues landed cost of goods delivered to  
our franchise partners and international wholesale sales
stores across the world
1339 57
space
4229k sq ft 95
uk stores
311 166
space
1946k sq ft 35
international stores
1028 150
space
2283k sq ft  237 overview
our brands 01
at a glance 02
our mission 04
chairman’s statement 08
chief executive’s statement 10
business review
business review 16
financial review 18
kpis – financial and nonﬁnancial 22
risks 24
corporate responsibility 26
governance
board of directors  30
executive committee 31
corporate governance  32
directors’ report  38
remuneration report  42
appendix to the remuneration report  50
financial statements
directors’ responsibilities statement  54
independent auditor’s report to the  
members of mothercare plc  55
consolidated income statement 56
consolidated statement of  
comprehensive income  56
consolidated balance sheet  57
consolidated statement of changes in equity  58
consolidated cash ﬂow statement 59
notes to the consolidated  
ﬁnancial statements  60
company ﬁnancial statements  98
independent auditor’s report on the  
company ﬁnancial statements  99
company balance sheet  100
notes to the company ﬁnancial statements  101
five year record  104
shareholder information 105
our brands contents
for more information visit 
wwwmothercareplccom
mothercare
mothercare opened its ﬁrst store in 1961 and since its earliest 
days has been a specialist retailer of products for mothersto
be babies and children up to the age of eight our core area of 
specialism remains the prebirth months and babies aged up 
to two years of age mothercare’s product offering is wide and 
includes maternity and children’s clothing furniture and home 
furnishings for babies and young children bedding feeding 
bathing travel equipment and toys we sell our products 
through retail internet and wholesale operations in the uk 
and internationally through a small but growing wholesale 
operation and signiﬁcant franchise operations in europe 
the middle east and africa asia paciﬁc and more recently 
latin america
mothercare stores
 uk – in town 106
 uk – oot 103
 international 668
oot  out of town
early learning centre
early learning centre was set up in 1971 as a mail order 
business selling educational books and toys and was acquired 
by the group in 2007 today elc is a designer and retailer of 
educational toys for children aged up to eight years which are 
primarily ownbrand products designed and sourced through 
our stateoftheart sourcing centre in hong kong product is 
sold through retail internet catalogue and wholesale 
operations in the uk and through our small wholesale and 
signiﬁcant franchise operations in europe the middle east and 
africa asia paciﬁc and more recently latin america
elc stores 
 uk – in town 102
  uk – inserts in  
mothercare stores 111
note the ﬁgure above refers to inserts  
in 103 oot mothercare stores and  
eight in town mothercare stores
 international 360
mothercare plc annual report and accounts 2012  01 
overview uk
consumer spending remained 
challenging throughout the 
year which resulted in the uk 
delivering an operating loss of 
£247 million for the ﬁnancial year 
ended 31 march 2012
 total uk sales were down 46 per cent at £5600 million with like
forlike sales down 62 per cent gross margin erosion of circa 500 
basis points over the year put further pressure on uk proﬁtability 
as a result the uk delivered an operating loss of £247 million for 
the year ended 31 march 2012
 the strategy for transforming the uk will over the next three years 
dispose of loss making stores reduce the operating cost base by 
at least £20 million and invest in product store environment and 
services thereby returning the uk to proﬁtability
at a glance
store sales direct wholesale
£3987m
uk store sales down 87
£1300m
uk direct sales up 08
£313m
wholesale sales up 449
2012 £3987m
2011 £4366m
2012 £1300m
2011 £1290m
2012 £313m
2011 £216m
we ended the year with 311 stores in the 
uk having closed a net 62 stores closed 
67 and opened ﬁve stores during the 
year space in the uk was down 35 per 
cent closing the year with 1946k sq ft 
across the store portfolio it is our 
intention to further reduce the store 
network to circa 200 stores reducing 
space to circa 1700k sq ft by march 2015
over the year storebased sales were 
down 87 per cent to £3987 million this 
was attributable to both the decline in 
likeforlike sales and the continued 
closure of stores
total direct sales were up 08 per cent 
at £1300 million with direct in home 
sales of £917 million and direct in store 
sales of £383 million the legacy 
platform which contributed to the 
under performance of our sales in this 
segment has now been replaced by 
a new platform our new website offers 
additional functionality making it 
easier for customers to navigate and 
complete orders more effectively which 
is expected to restore this segment of 
our sales to growth
wholesale sales were up 449 per cent 
to £313 million the mini club range 
which is a strategic partnership with 
boots uk continues to perform well 
we are exploring the opportunities for 
growing elc’s wholesale sales and 
have conducted successful trials with 
several leading retailers over the 
christmas period
uk sales
clothing 34
home  travel 36
toys 30
 
 
 
02  mothercare plc annual report and accounts 2012 international
our international business with 
1028 stores across 58 countries 
and with 41 partners continues to 
grow and saw proﬁts increase by 
269 per cent to £349 million
 international retail sales were up 185 per cent to £6655 million with  
likeforlike sales growth of 61 per cent
 we took our ﬁrst steps into a new region latin america and 
are encouraged by the potential offered by these new markets 
we continue to see growth opportunities over the next three 
years of circa 20 per cent per annum across our international 
markets with europe and the middle east and africa expected to 
grow by circa 10 per cent per annum asia paciﬁc by circa 20 per 
cent and latin america by over 100 per cent
stores direct wholesale
£6655m
international store sales up 185
na
international direct launching in fy13
£69m
wholesale sales down 266
2012 £6655m
2011 £5615m
2012 £69m
2011 £94m
retail sales through our franchise 
partners’ stores were up 185 per cent 
to £6655 million we have continued to 
open stores across all our geographies 
  europe – 409 stores in 28 countries and 
increased space by 67 per cent
  asia paciﬁc – 318 stores in 13 countries 
and increased space by 53 per cent
  middle east and africa – 290 stores 
in 14 countries and increased space 
by 231 per cent
  latin america – at the year end we 
had 11 stores in three countries and 
recently opened in venezuela we 
now have 12 stores in four countries
we have taken our ﬁrst steps towards 
a multichannel strategy across our 
international markets we now have 
operational internet sites for elc in 
russia and australia and for 
mothercare in kuwait ireland and 
australia we work with our franchise 
partners to develop appropriate 
websites and believe all our major 
partners will have transactional 
websites by march 2015
we have a small wholesale business 
for elc that helps us extend our reach 
to markets where we do not have 
franchise stores over the year 
wholesale sales were down 266 per 
cent to £69 million this was mainly 
the result of changing our wholesale 
operations in north america
international sales
clothing 64
home  travel 21
toys 15
 
 
 
mothercare plc annual report and accounts 2012  03 
overview our mission
04  mothercare plc annual report and accounts 2012
our aim is to be the deﬁnitive 
onestopshop for mothers 
across the world for product 
value and service 
the brand qualities that will help us deliver 
transformation and growth
passion p05
we are passionate about the quality 
of all our products which is reﬂected 
in our clothing ranges where we are 
working hard to deliver value without 
compromising on quality
expertise p06
we have over 50 years’ experience 
of meeting the needs of mothers and 
their babies and young children which 
is reﬂected in our new furniture and 
bedding ranges
innovation p07
we have taken the time to reﬂect on the 
feedback from mums taking the best of 
available technology and developing 
components where necessary to deliver 
lighter easier to manoeuvre and more 
ﬂexible pushchairs
for more information visit 
wwwmothercarecom transformation and growth
 passion
we take pride in the uncompromising quality  
of our clothing ranges and have taken heed  
of customer feedback with regard to our  
value proposition and fashionability
our autumnwinter 12 ranges have seen a step  
up in these important areas and we have worked 
hard to deliver on customer needs our clothing 
ranges aim to be relevant and age appropriate 
with a nod to fashion we have added key 
staples for the nursery bag with good quality 
cute slogan or animal graphic tshirts at great 
opening prices our ranges now move 
through the pricing architecture with clear  
good better and best ranges even  
at the top end we have realigned 
prices to offer uncompromising 
value to our customers
for more information visit 
wwwmothercarecom
mothercare plc annual report and accounts 2012  05 
overview transformation and growth
 expertise
we have relaunched our furniture and bedding 
ranges for autumnwinter 12 with clear ranges 
at each price point we recognise that some 
customers may have space constraints and have 
taken these needs into account when designing 
a compact range this attention to detail is also 
evident in the recently launched treasured range 
which was designed with the international 
customer in mind the success of the range in the 
uk at the ‘best’ end of our ranging reﬂects the 
quality and exclusivity of the product
for more information visit 
wwwmothercarecom

06  mothercare plc annual report and accounts 2012 transformation and growth
 innovation
mothercare plc annual report and accounts 2012  07 
overview
the movix pushchair is a great example of  
the innovation that we aim to deliver for our 
customers the lightweight versatile chassis  
has been designed to accommodate three 
different travel options for baby with no  
need for adjustment or additional adaptors 
suitable from birth the movix comes with  
a carrycot which is parent facing and also 
includes a threeposition seat which is both 
forward and parent facing in addition a car  
seat option is available extra thought  
has also gone into accessibility  
to the underseat storage and  
folding mechanism making life  
easier for mum
for more information visit 
wwwmothercarecom i was delighted to be approached and appointed chairman of 
mothercare last year for over 50 years mothercare has been one 
of the preeminent names on the uk high street and elc has over 
the last 30 years represented innovation and quality as a toy brand 
the strengths of both brands with a network of strong and 
passionate international franchisees are clear assets of the 
company complemented by its sourcing operations
the trading results of the uk business have worsened over the past 
two years on becoming chairman it became evident from an early 
stage that signiﬁcant changes within the business were required 
i assumed the role of executive chairman in november 2011 with 
a view to implementing these changes following the resignation 
of ben gordon as chief executive
the board then carried out a thorough structural and operational 
review of the whole business with the input of expert external 
consultants the key elements of that review – the ‘transformation 
and growth’ plan – are set out in this report in essence we have a 
plan to transform the uk business to reﬂect the needs of customers 
and the changes in their shopping habits while accelerating the 
group’s successful expansion internationally
  after a thorough search process the board appointed simon 
calver as the new chief executive simon has the skills experience 
passion and leadership expertise to put the company on a much 
stronger and more proﬁtable footing
  having the right people in place is a critical factor to the success 
of the ‘transformation and growth’ of the business i have 
reshaped the executive team so that now we have mike logue as 
managing director uk and jerry cull as managing director 
international each with ownership for their respective businesses 
their teams will be more focused and aligned to delivering the 
results we require
  it was clear that costs in the business had to be tackled quickly 
to reﬂect the reduction in the store estate in the uk we now have 
a clear programme in place to tackle these costs which included 
a well managed and professional consultation process at the 
watford head ofﬁce this resulted in some job losses both in 
watford and our overseas ofﬁces which were greatly regrettable
chairman’s statement
“ we have a robust plan for 
transformation and growth with 
new strong leadership capable 
of delivering the results”
 alan parker cbe 
 chairman
08  mothercare plc annual report and accounts 2012   we have worked with our banks who have been supportive of 
our business strategy by agreeing to provide increased facilities 
to allow the company to take some of the decisive steps required 
under the ‘transformation and growth’ plan
  we have carried out a thorough externally facilitated board 
evaluation process to review the overall effectiveness of the board 
and its interaction with the company’s executive management
in addition the company has made signiﬁcant progress over the 
last year in a number of areas
  international retail space of mothercare and elc products 
increased by 237 per cent over 400000 sq ft of extra space
  the uk business reduced its estate by 62 stores demonstrating 
that the company is in the vanguard of reshaping its business 
to reﬂect the new customer shopping trends
  a completely new website was launched in may 2012 which 
signiﬁcantly improves the online shopping experience with 
mothercare through computers or smart phones
since simon’s appointment as our new chief executive i have 
reverted to the position of nonexecutive chairman and will ensure 
that the appropriate governance and oversight of the company will 
be maintained
i believe we have put the company on the right course for success 
and that the actions that have been taken over a period of 
nearly six months will allow simon and his team to reestablish the 
relationship with our customers as a priority continue to address 
the structural issues in the uk business and to restore the 
group’s proﬁtability
i appreciate the strength of support that i have received from our 
franchise partners around the world without doubt this is a vital 
attribute to the strength and future development of the group 
i would like to say a big thank you to our franchise partners for 
their support
also i would like to recognise the hard work and loyalty of the 
many thousands of team members during a difﬁcult year their 
commitment continues to be a remarkable feature and remains 
fundamental to our future success
finally on behalf of the board i should like to thank ian peacock 
who retired after nine years as chairman of mothercare for his 
leadership of the company and contribution to the business
 
alan parker cbe 
chairman
worldwide network sales
international is now a larger part of 
our business and is set to grow by 
circa 20 per cent per annum
international 55
uk 45
 
 
 
237
increase in international retail space
mothercare plc annual report and accounts 2012  09 
overview group results
worldwide network sales grew by 64 per cent to £12324 million 
2011 £11581 million driven by the growth of our international 
business but tempered by the continued decline seen in the uk 
group sales which reﬂect uk revenues and the payments we 
receive from our international partners were up 24 per cent to 
£8127 million 2011 £7936 million
the decline in proﬁts in the 53 week period has however been 
disappointing with a reduction in underlying proﬁt before tax to 
£16 million down from £285 million last year international has 
continued to grow rapidly but the uk has struggled in the face 
of a challenging economic backdrop and an increasingly 
competitive environment
underlying proﬁt before tax declined to £16 million 2011 £285 million 
with exceptional charges and other nonunderlying items of 
£1045 million 2011 £197 million resulting in reported losses before 
tax of £1029 million 2011 proﬁt of £88 million
the nonunderlying charge of £1045 million includes £1044 million of 
exceptional items including a noncash write down of uk goodwill 
and other intangibles already announced in the ﬁrst half together 
with a provision for restructuring costs to deliver the ‘transformation 
and growth’ plan
whilst over 70 per cent of the exceptional charges are noncash items 
the decline in uk proﬁtability and the need to fund an additional 
quarterly rent payment due to the 53rd week in this ﬁnancial year 
have resulted in a yearend net debt position of £201 million 2011 net 
cash position of £153 million over the next three years we will be 
incurring cash restructuring costs of circa £35 million in total we 
recently reﬁnanced our banking facilities to fund the ‘transformation 
and growth’ plan increasing committed facilities to £90 million 
extending the term to may 2015 and resetting bank covenants 
see financial review for more details
as we announced in april the board has decided to suspend the 
dividend until the ‘transformation and growth’ plan delivers a 
marked improvement in our results there will therefore be no ﬁnal 
dividend payment this year which means the payout for the full year 
is 20p per share
chief executive’s statement
“ we need to bring the customer with us 
they need to be at the centre of every 
decision we make as a team this is 
our most important delivery yet”
 simon calver 
 chief executive
1339 stores
across 59 markets
10  mothercare plc annual report and accounts 2012 international results
total international sales were up 178 per cent to £6724 million 
2011 £5709 million with total reported sales up 224 per cent to 
£2527 million 2011 £2064 million international underlying operating 
proﬁts were up 269 per cent to £349 million 2011 £275 million this 
proﬁt comprised franchise proﬁts of £381 million and joint venture 
and associate startup losses of £32 million
we now have three joint ventures and an associate while our new 
joint venture in the ukraine is proﬁtable our joint ventures in india 
and china and our australian associate are startup operations and 
as such have made in total a £32 million loss for the period we see 
our equity stakes in these markets as an important investment in 
future growth opportunities
we have laid the foundations with our franchise partners that will 
see an acceleration in revenue and proﬁt growth we remain the 
only specialist mother and baby retailer in this position in the 
world today
we have great franchise partners many of which i have already 
had the pleasure of meeting they have such enthusiasm and 
passion for our brands and are excited by their potential in each 
of their countries
group revenues
24
helped by international group 
sales continued to grow
our business model
our business is fully integrated across all our 59 countries 
our international markets operate on a franchise model 
which means store operations are managed by our 
partners while in the uk we manage our stores directly it is 
important to know that these differences in who manages 
stores and the sale of our products means that there is no 
difference in the lifecycle of our product ranges which we 
manage across our global ofﬁces in the uk india china 
hong kong and more recently bangladesh
the product cycle starts at the concept stage where we 
consider our existing ranges global trends and customer 
needs we then test these concepts through customer 
focus groups this gives us great insight into price points 
and the best pricing architecture thus allowing us to arrive 
at relevant ranges at the good better best price points 
at the design stage we are always considering how we 
can help our customers by meeting their needs but also by 
considering the quality that our customers have come to 
expect from mothercare
once we have product ready for our stores merchandisers 
across all our markets consider the ranges and place their 
orders it is our job then to source efﬁciently and ensure 
product is manufactured to our high standards we then 
distribute product to all our markets ensuring timely 
delivery while also ensuring store staff across all our 
markets are trained in how best to sell our products
product design
manufacture
distribution
consumer feedback
sourcing
uk international
product concept
2011 £7936m
2010
2012
£7664m
£8127m
mothercare plc annual report and accounts 2012  11 
overview chief executive’s statement
continued
uk results
total uk sales were down 46 per cent at £5600 million 2011 
£5872 million with a likeforlike sales decline of 62 per cent total 
direct sales were up 08 per cent at £1300 million 2011 £1290 million 
with direct in home down 17 per cent at £917 million and direct in 
store up 73 per cent at £383 million our wholesale channel grew by 
449 per cent to £313 million
trading conditions in the uk deteriorated as we moved through the 
year although we have gained some market share in home  travel 
the market was particularly weak and while we have gained some 
market share sales were impacted by the reduction in the overall 
size of the market we have managed stock levels very tightly over 
the year through additional promotions and offers and as a result 
we ended the third quarter with a clean stock position and a 
reduced gross margin which was as expected down 500 basis 
points for the full year the uk segment of the mothercare group 
recorded a loss of £247 million 2011 proﬁt of £111 million for the year
our brands
the mothercare and the early learning centre brands resonate 
strongly with mothers across the globe the strength of the 
international business and franchise partners has allowed us to 
grow robustly and is a clear indication of the relevance of both 
brands in our overseas and uk markets we now have 1339 stores 
worldwide across 59 markets – 409 in europe 318 in asia 311 in the 
uk 290 in the middle east and africa and 11 in latin america 
following our recent launch in the uk over 80 per cent of expectant 
mothers continue to visit our stores and our challenge is to convert 
more of these visitors to loyal long term customers
mothercare was founded in 1961 and has since its earliest days 
endeavoured to offer motherstobe new mothers and their babies 
and children up to the age of eight innovative and quality products 
at great value that are relevant to their lives our ranges include 
products for feeding bathing travel equipment maternity wear and 
associated product children’s clothing furniture bedding and toys 
whilst we remain an important source of information and support for 
motherstobe and new mothers i realise that we can do a lot more 
these improvements will become increasingly apparent to our 
customers as we move through our threeyear ‘transformation and 
growth’ plan
early learning centre was founded in 1971 and has its roots in a mail 
order business that today includes 462 stores worldwide the internet 
and a small but growing wholesale business elc aims to provide 
babies and children up to the age of eight years nurturing toys 
that encourage learning and development in a fun and 
supportive manner
our strategy
we have over the last few months completed a thorough review of 
our business both uk and international this review forms the basis 
of our ‘transformation and growth’ plan which is essential to deliver 
uk proﬁtability and accelerate international growth the group’s 
task is to deliver this over the next three years
actions already taken
in international we opened our ﬁrst stores in latin america we also 
took our ﬁrst steps towards a multichannel offer with transactional 
websites for early learning centre in russia and australia and for 
worldwide network sales
64
our scale continues to grow with 
worldwide network sales up
elc 36 per cent newness aw 2011
stores 86
direct 11
 
 
 wholesale 3
 
 
 
12  mothercare plc annual report and accounts 2012 mothercare in kuwait ireland and australia with mothercare 
indonesia launching in june 2012
in the uk we continued our store rationalisation plan and ended the 
year with 311 stores on 1 may 2012 we launched our new website
our senior management team continues to be strengthened 
mike logue our uk managing director has been with the business 
since august 2011 and is building a strong uk team to assist him 
in the task ahead i joined on 30 april 2012 and jerry cull our 
international managing director who has been with the business 
for over 30 years continues to drive international forward
i would like to take this opportunity to thank alan parker our 
chairman who stepped up to an executive role for his leadership 
of the business over the last few months our review is now complete 
and i have a clear strategy in the ‘transformation and growth’ plan 
which we will implement over the next three years it is in essence a 
simple plan – accelerate international growth while returning the uk 
to proﬁtability through cost reduction and transformation this will be 
our most important delivery yet in addition the customer will return 
to the centre of everything that we do our success will be driven by 
our ability to reconnect with them converting more into shoppers 
both online and instore
our strategy is based on the four cornerstones of
  lean retail
  restore uk proﬁtability
  accelerate international growth
  multichannel worldwide
summary
i am excited to have joined the mothercare group as chief executive 
and i am conﬁdent about the opportunities ahead worldwide 
network sales are up 64 per cent and our brands remain as relevant 
to our customers today as they ever have been i have been fully 
involved in the formulation of the ‘transformation and growth’ plan 
and i know that it is both the right plan and one which the team and 
i can deliver
we have a long way to go and the plan to bring the uk business 
back to acceptable levels of proﬁtability will take three years we 
need to invest in ecommerce be ruthless with our nonstore cost 
base and use our scale and growth worldwide to drive sourcing 
economies and pass these savings onto the customers to improve 
our value for money around the world everything we do will 
enhance customer value experience and loyalty in each of our 
59 countries my team and i are up for the challenge and whilst 
there is much to do in this difﬁcult economic climate i look forward 
to delivering the ‘transformation and growth’ plan as a team this 
will be our most important delivery yet
simon calver 
chief executive
uk oot stores
35
our space in sq ft was down 
35 per cent as we migrated to 
larger oot stores during the year
2011 98
2010
2012
87
103
mothercare plc annual report and accounts 2012  13 
overview chief executive’s statement
‘transformation and growth’ plan 
the four cornerstones
1 lean retail
lean retail means delivering 
operational efﬁciencies and 
substantial nonstore cost reductions 
tightly managing cash and working 
capital and building on the scale of 
our sourcing operations
reduce uk nonstore costs by 
£20 million per annum annualised
our infrastructure is larger than we 
require given our new smaller uk 
operating base we have identiﬁed 
£20 million of annualised costs that 
can be taken out of the business over 
the next three years from areas like 
distribution head ofﬁce costs and 
payroll work has already begun 
in this area and we have taken action 
to reduce uk head ofﬁce payroll 
costs by 16 per cent
in addition we reduced uk stock 
levels by 12 per cent during fy201112 
and plan to continue to drive down 
our working capital requirements
sourcing efﬁciencies
our buying volumes continue to grow 
despite the recent decline seen in the 
uk international growth of circa 20 
per cent provides us with a strong 
base from which to underpin 
negotiations with our supplier base to 
reduce costs that we can pass on to 
our customers in lower prices further 
driving growth
category mix
clothing and home  travel are 
expected to grow as a percentage 
of sales as early learning centre 
stores are closed in the uk which will 
help to underpin our gross margins 
an increased focus on innovation 
should also help to drive sales of 
ownbrand product and again 
increase margin these changes 
in category mix are expected to 
lower prices whilst maintaining 
gross margins
2 restore uk  
proﬁtability
restoring uk proﬁtability means 
delivering proﬁtable growth through 
targeted and speciﬁc actions aimed 
at stabilising likeforlike sales and 
reducing signiﬁcantly store 
occupancy costs
national coverage
we have identiﬁed that circa 200 
stores in the uk is the optimum size for 
mothercare supported by online and 
wholesale business this will offer the 
best national coverage of mother and 
baby specialists in the uk these 
stores will not only be a place for 
shopping customer service and 
advice but will also offer our ‘collect 
in store’ service whereby online 
orders can be collected from stores 
the target 200 stores chain is based 
around our proﬁtable mothercare out 
of town stores key mothercare in town 
stores and early learning centres in 
key strategic locations the target 200 
store portfolio is currently proﬁtable 
the stores to be closed currently lose 
circa £13 million per annum and these 
stores will be closed by 2015
increase value and innovation across 
our product ranges
we have lost ground in terms of our 
value perception and we need to 
change this we aim to have a clear 
pricing architecture with good better 
and best ranges all offering value to 
the customer in terms of quality and 
price an increase in ownbrand and 
thirdparty exclusivity over the term of 
the plan will also help to improve our 
value credentials
in addition over the next few quarters 
we will continue to launch new and 
innovative products focused on solving 
the needs of mums and babies
enhance customer service and 
improve instore environment
we are investing in additional training 
for all store staff and will have started 
with specialist ﬁtters for car seats 
and bras in all our stores at all times 
we have also begun instore 
investment focusing on ﬁtting rooms 
and baby feeding and changing 
facilities which are important to 
our mums
customer satisfaction measurement 
by store has recently been introduced 
and will further help us to track daily 
store level performance it is essential 
that in all of our markets we set not 
follow the standards of service that 
mothers expect to retain the trust of 
our customers
14  mothercare plc annual report and accounts 2012 3 accelerate  
international 
growth
accelerating international growth 
means increasing sales in existing 
markets targeting new markets and 
focusing on key growth regions – 
china india the middle east and 
latin america
mothercare is a brand with truly 
global reach our international 
business continues to go from strength 
to strength we have great franchise 
partners and proven concepts for 
mothercare and early learning centre 
across the emerging markets which 
will drive space and revenue growth 
of approximately 20 per cent per 
annum over the term of the plan
we are now in four regions and each 
is delivering strong growth for us 
europe which includes eastern 
europe and the middle east and 
africa our two largest and oldest 
regions are expected to deliver 
growth of 10 per cent per annum asia
paciﬁc is expected to grow by 20 per 
cent per annum while our newest 
region latin america is expected to 
grow by over 100 per cent per annum 
albeit from a lower base our business 
is well balanced and each region 
beneﬁts from some high growth 
markets in particular we believe 
saudi arabia russia china india and 
latin america will drive growth over 
the term of the plan overall we 
expect international retail sales to 
grow by 20 per cent per annum over 
the next three years to march 2015
our joint ventures in the ukraine 
china and india and our australian 
associate are all on track to be 
proﬁtable by march 2014
4 multichannel 
worldwide
multichannel worldwide means 
launching new ecommerce platforms 
in the uk and all major overseas 
markets growing both online revenues 
and store sales and putting 
mothercare back into the lead
new uk platform
in line with the plan we launched our 
new uk ecommerce platform for both 
direct to home and instore ordering 
on 1 may 2012 the new website is a 
step change from the old legacy one 
with richer product content improved 
search capabilities and better visibility 
for search engines however this is just 
the start but it has enabled us to have 
and use the tools commonplace 
across the industry to drive conversion 
and sales mothers are becoming 
much more informed and for many of 
our categories signiﬁcant research is 
done online before customers visit our 
stores having a great website will 
therefore grow both online revenues 
and instore sales as the number one 
baby website we have a large 
amount of trafﬁc to our site and can 
increase conversion by doing the 
basics well thereafter we will begin to 
build long relationships with our 
customers growing with them as their 
family does
we have launched a new website in 
the uk and will build the capability to 
become one of the leading online 
players in the uk over the next three 
years we will be redeveloping and 
reconﬁguring our delivery network 
our technology teams and our loyalty 
and retention tools but we can and 
will get there
international websites
in addition we will lead the move to 
multichannel in our international 
markets with fully operational websites 
in ﬁve markets our existing platform 
has now been tested and is easily 
scalable across all our markets 
we aim to have transactional websites 
across our major markets over the 
term of the plan many of which will 
be some of the ﬁrst such sites in their 
markets in any category
wholesale
mini club our wholesale arrangement 
with boots uk for clothing has been 
a great success in addition to this we 
have a small but growing wholesale 
business for elc product both in the 
uk and internationally we have over 
the last few months successfully 
trialed with several retailers 
wholesale is a great format for 
growing our reach for elc and we 
would expect this element of our 
revenues to grow over the term of 
the plan
mothercare plc annual report and accounts 2012  15 
overview i joined mothercare in august last year after seeing the potential 
both the mothercare and elc brands had in the uk clearly our 
latest results highlight the task that is ahead of us i am however 
conﬁdent we can transform the uk business
having spent time with our customers and store teams in over 100 
of our shops they have made it very clear to me what needs to 
improve we have put in place a leadership team wholly focused 
on the uk and we are off and running reducing our cost base to 
ensure we have a lean uk business that can signiﬁcantly improve 
value and service
on 1 may 2012 we launched our new mothercarecom website 
and we have over 600000 customers a week visiting our site 
our customers are seeing market leading prices on car seats 
and pushchairs as we monitor prices online and instore daily it is 
fantastic to see our investment pay off as we grow market share
in july we launch our fantastic autumn winter 2012 aw12 clothing 
range which our sourcing teams around the world have worked 
tirelessly to design and produce prices are down double digits 
across the entire aw12 range whilst maintaining the quality all our 
customers trust us for
as we previously announced we are closing circa 70 elc stores and 
circa 40 mothercare stores by march 2015 this is absolutely the right 
strategy and we will maintain national coverage of both mothercare 
and elc even after these store closures the circa 200 store portfolio 
will include 100 early learning centres within our larger mothercare 
stores and 30 standalone elc stores which will complement our 
mothercarecom and elccouk websites we are well positioned 
to support our customers with the right multichannel operation
we have a lot to achieve however i am conﬁdent by continuing 
to listen to our customers and our teams around the uk we shall 
transform the uk back to proﬁtable growth 
mike logue 
managing director – uk
business review
uk
600000
customers a week visiting our site
“ we shall only succeed by 
delivering for our customers” 
  mike logue 
  managing director – uk
16  mothercare plc annual report and accounts 2012 our international business continues to go from strength to strength 
we are now present in four regions and all contribute to our overall 
target of growing space and sales by circa 20 per cent per annum 
we have also started our journey towards delivering a multichannel 
offer across our markets and have transactional websites in four of 
our markets and expect to have all our major markets covered over 
the term of the ‘transformation and growth’ plan
europe remains our largest region with 409 stores covering 
992k sq ft in 28 countries we expect space growth to continue at 
10 per cent per annum with the rapid growth markets of russia and 
turkey compensating for our weaker eurozone markets ireland and 
elc russia already have transactional websites and the initial 
response has been encouraging
the middle east and africa is our oldest region and has 290 stores 
covering 628k sq ft in 14 countries favourable demographic and 
growing afﬂuence underpin our growth expectations of 10 per cent 
per annum we have recently launched a transactional website in 
kuwait which is fully customised to ﬁt in with local customs 
and practices
asia paciﬁc now has 318 stores covering 644k sq ft in 13 countries 
the opportunities in india and china remain signiﬁcant and we 
expect to see space growth of 20 per cent per annum for the 
foreseeable future our joint ventures in india china and australia 
will all become proﬁtable over the term of our plan our 
transactional websites in australia are also proving to be successful 
and our website in indonesia launches in june 2012
latin america is our newest region and at year end we had 11 stores 
covering 19k sq ft across three countries we opened our ﬁrst store in 
venezuela in may 2012 the opportunity for growth is signiﬁcant and 
we believe we can grow to over 200k sq ft over the next three years
so as you can see the opportunity for growth is encouraging 
we have a proven business model for the emerging markets 
which we will continue to leverage over the next few years
jerry cull 
managing director – international
61 likeforlike growth
organic growth continues to play a 
role in our strategy for our 
international markets
business review
international
“ our global reach spreads our risk 
proﬁle and we are well balanced both 
across and even within the regions”
 jerry cull 
 managing director – international
2011 1845k sq ft
2010
2012
1538k sq ft
2283k sq ft
international space growth
mothercare plc annual report and accounts 2012  17 
business review financial review
income statement
£ million 201112 201011
revenue 8127 7936
underlying proﬁt 
from operations 
before sharebased 
payments 26 311
sharebased 
payments 06 22
net ﬁnance costs 04 04
underlying proﬁt 
before tax 16 285
exceptional items and 
unwind of discount 
on exceptional 
provisions 1045 36
noncash foreign 
currency 
adjustments 20 138
amortisation of 
intangible assets 20 23
lossproﬁt before tax 1029 88
underlying eps – basic 18p 247p
eps – basic 1052p 76p
proﬁt from operations before sharebased payments 
includes all of the group’s trading activities but 
excludes the sharebased payment costs charged 
to the income statement in accordance with ifrs 2 
see below
53rd week in 2012
the ﬁnancial year ended 31 march 2012 contained 
53 weeks compared to 52 weeks last year the 
ﬁnancial statements and this review have therefore 
been prepared on this basis
for information on a more comparable 52 week basis
  group sales were up 08 per cent to £7996 million 
2011 £7936 million
  uk sales were down 63 per cent to £5503 million 
2011 £5872 million
  international reported sales were up 208 per cent 
to £2493 million 2011 £2064 million
  group underlying proﬁt before tax £15 million 
2011 £285 million
nonunderlying items
underlying proﬁt before tax excludes the following 
nonunderlying items
exceptional items
  restructuring costs in uk head ofﬁce and distribution 
of £91 million
  onerous lease provision for the uk business of 
£115 million
  store impairment provision in relation to the uk 
business of £38 million
  sharebased payments credit in relation to leavers 
of £08 million resulting from the uk restructure
  net losses on disposal or termination of property 
interests of £226 million
  goodwill and intangible assets impairment 
in relation to uk share of goodwill and other 
intangibles arising on the acquisition of elc 
of £550 million
  impairment of investment in australian associate 
business £28 million
  share of restructuring costs in the australian 
associate business of £04 million relating to 
business reorganisation and integration
other nonunderlying items
  noncash adjustments principally relating to 
marking to market of commercial foreign currency 
hedges at the period end as hedges are taken out 
to match future stock purchase commitments these 
are theoretical adjustments which we are required 
to make under ias 39 and ias 21 these standards 
require us to revalue stock and our commercial 
foreign currency hedges to spot this volatile 
adjustment does not affect the cash ﬂows or 
ongoing proﬁtability of the group and reverses 
at the start of the next accounting period
  amortisation of intangible assets 
excluding software
  unwind of discount on exceptional property 
provisions £01 million
results summary
group underlying proﬁt before tax was £16 million 
201011 £285 million underlying proﬁt excludes 
exceptional items and other nonunderlying items 
of £1045 million of which £770 million was already 
reported in the ﬁrst half this includes the noncash 
write down of uk goodwill and intangibles £550 
million in the ﬁrst half together with the 
restructuring costs of delivering the new 
‘transformation and growth’ plan after these non
underlying items the group recorded a pretax 
loss of £1029 million 201011 proﬁt of £88 million
18  mothercare plc annual report and accounts 2012 exceptional items in 201011 included £36 million 
restructuring costs of the uk business £02 million net 
proﬁts on disposal or termination of property interests 
and £02 million unwind of discount on exceptional 
property provisions
results by segment 
the primary segments of mothercare plc are the uk 
business and the international business
£ million
revenue 201112 201011
uk 5600 5872
international 2527 2064
total 8127 7936
£ million
underlying proﬁt 201112 201011
uk 247 111
international 349 275
corporate 76 75
underlying proﬁt 
from operations 
before sharebased 
payments 26 311
sharebased 
payments 06 22
net ﬁnance costs 04 04
underlying proﬁt 
before tax 16 285
uk retail sales have declined yearonyear due to 
store closures and declining likeforlike sales across 
both the store estate and direct channels however 
proﬁt has beneﬁted from the property strategy with 
lower occupancy costs and tight cost control
international has beneﬁted from the 224 per cent 
growth in total international reported sales driving 
growth in royalty income and shipments with central 
costs growing at a slower rate international proﬁt has 
been reduced by losses in joint ventures and 
associates during the year mostly driven by the 
impact of restructuring in australia
corporate expenses represent board and company 
secretarial costs and other head ofﬁce costs including 
audit professional fees insurance and head 
ofﬁce property
sharebased payments
underlying proﬁt before tax also includes a share
based payments charge of £06 million 201011 
£22 million in relation to the company’s long term 
incentive schemes there are four main types of  
long term sharebased incentive scheme being the 
executive incentive plan the performance share  
plan the deferred shares plan and the save as you 
earn schemes full details can be found in note 28
the underlying ifrs 2 charge has reduced in 201112 
reﬂecting the reduction in the group’s performance 
and a number of leavers from the executive schemes
likeforlike sales total international sales 
and network sales
likeforlike sales are deﬁned as sales for stores that 
have been trading continuously from the same selling 
space for at least a year and include direct in home 
and direct in store 
international retail sales are the estimated retail sales 
of overseas franchisees and joint ventures and 
associates to their customers rather than mothercare 
sales to franchisees as included in the statutory or 
reported sales numbers total international sales are 
international retail sales plus international wholesale 
sales group network sales are total international 
sales plus total uk sales group network sales and 
reported sales are analysed as follows
reported sales network sales
£ million 201112 201011 201112 201011
uk retail sales 5287 5656 5287 5656
uk wholesale sales 313 216 313 216
total uk sales 5600 5872 5600 5872
international retail sales 2458 1970 6655 5615
international wholesale sales 69 94 69 94
total international sales 2527 2064 6724 5709
group reported salesgroup network sales 8127 7936 12324 11581
 estimate
mothercare plc annual report and accounts 2012  19 
business review financial review 
continued
financing and taxation
financing represents interest receivable on bank 
deposits interest payable on borrowings costs 
relating to bank facility fees and the unwinding of 
discounts on provisions
the underlying tax charge comprises current and 
deferred tax and the effective tax rate is nil per cent 
201011 256 per cent the tax charge in some areas of 
the business has been offset by allowable tax losses 
there is no underlying tax charge in 201112 201011 
£73 million the total tax credit was £111 million 201011 
charge of £23 million in 201213 the effective tax rate 
is expected to increase towards the standard rate 
of tax
pensions
we continue to operate deﬁned beneﬁt pension 
schemes for our staff although the schemes are now 
closed to new members details of the income 
statement net charge total cash funding and net 
assets and liabilities are as follows
£ million 201213 201112 201011
income statement
service cost 25 23 29
return on assets
interest on 
liabilities 10 02 06
gains on 
curtailment – 02 –
net charge 35 19 35
cash funding
regular 
contributions 20 19 22
deﬁcit 
contributions 32 61 23
total cash funding 52 80 45
balance sheet
fair value of 
schemes’ assets 2173 2084
present value of 
deﬁned beneﬁt 
obligations 2700 2460
net liability na 527 376
 estimate
deﬁcit contributions in 201112 include two annual 
payments due to the 53rd week this impact does 
not unwind until 201314 when no deﬁcit contribution 
will be due within the ﬁnancial year the gains on 
curtailment in 201112 are due to the uk restructuring 
headcount reduction
in consultation with the independent actuaries to 
the schemes the key market rate assumptions used 
in the valuation and their sensitivity to a 01 per cent 
movement in the rate are shown below
201112 

201011 

201112 
sensitivity 

201112 
impact on 
scheme 
liabilities 
£ million
discount rate 49 55  01  60
inﬂation – rpi 33 35  01  53
inﬂation – cpi 23 28  01  53
balance sheet and cash ﬂow
the balance sheet includes identiﬁable intangible 
assets arising on the acquisition of early learning 
centre of £69 million and goodwill of £268 million 
this relates to the international business in 201112 
the group carried out a review to determine whether 
there is any indication that the goodwill and intangible 
assets suffered any impairment loss it has been 
determined that the uk business does not generate 
sufﬁcient cash ﬂows to support the full value of the 
goodwill and intangible assets and consequently an 
impairment loss of £550 million has been charged
the group continues to generate operating cash 
with cash generated from operations of £56 million 
the inclusion in the year of a 53rd week adversely 
impacted the timing of cash ﬂows with additional 
rental £132 million and pension deﬁcit payments 
£33 million being incurred close management of 
working capital in particular stock levels generated 
an underlying inﬂow in working capital of approximately 
£90 million excluding the 53rd week rent payment
we have made signiﬁcant investments in our joint 
ventures and associates during the year to drive 
growth in international including £20 million in the 
ukraine £15 million in australia £13 million in china 
and £09 million in india
20  mothercare plc annual report and accounts 2012 after investing £249 million of capital expenditure 
£214 million net of lease incentives received 
receiving property sale proceeds of £23 million and 
£41 million in tax receipts and paying £119 million of 
dividends the net debt position at the year end is 
£201 million 201011 net cash of £153 million
at the year end the group had committed secured 
bank facilities of £80 million with an average interest 
rate of 14 per cent above libor which were due 
to expire in may 2014 it also had an uncommitted 
unsecured bank overdraft facility of £10 million on 
11 april 2012 the group reﬁnanced the banking facilities 
with the support of its two existing banks hsbc and 
barclays increasing the level of committed facilities 
from £80 million to £90 million at an interest rate range 
of 35 per cent to 40 per cent above libor and 
extending the term to 31 may 2015 these facilities 
provide additional liquidity and covenant headroom 
to accommodate the new threeyear strategy the 
covenants in the new facilities are tested quarterly 
and are based around gearing ﬁxed charge cover 
and guarantor cover 
going concern
details of this can be found on page 33 within the 
corporate governance section
capital expenditure
total capital expenditure in the year was £249 million 
201011 £218 million of which £32 million was for 
software intangibles and £217 million was invested 
in uk stores and web development landlord 
contributions of £35 million 201011 £96 million were 
received partially offsetting the outﬂow net capital 
expenditure after landlord contributions was 
£214 million 201011 £122 million net capital 
expenditure for 201213 after landlord contributions 
is expected to be circa £150 million
earnings per share and dividend
basic underlying earnings per share were 18p 
compared to 247p last year the board has decided 
that given reduction in proﬁts in the 53 week period 
and the cash investment required to deliver the 
‘transformation and growth’ plan the company will 
not pay a ﬁnal dividend for 201112 the total dividend 
for the year is therefore 20p per share 201011 183p 
per share
treasury policy and ﬁnancial risk management
the board approves treasury policies and senior 
management directly controls daytoday operations 
within these policies the major ﬁnancial risk to which 
the group is exposed relates to movements in 
foreign exchange rates and interest rates where 
appropriate cost effective and practicable the 
group uses ﬁnancial instruments and derivatives 
to manage the risks
no speculative use of derivatives currency or other 
instruments is permitted
foreign currency risk
all international sales to franchisees are invoiced in 
pounds sterling or us dollars
international published sales represent approximately 
31 per cent of group sales total international sales 
represent approximately 55 per cent of group network 
sales the group therefore has some currency 
exposure on these sales but it is used to offset or 
hedge in part the group’s us dollar and euro 
denominated product purchases the group policy 
is that all material exposures are hedged by using 
forward currency contracts 
interest rate risk
at 31 march 2012 the group had drawn down 
£20 million on its borrowing facility at this date and 
throughout 201112 no interest rate hedging was 
considered necessary following the reﬁnancing on 
11 april 2012 it is anticipated that the group will hedge 
the ﬂoating interest rate on a proportion of the 
new borrowings
shareholders’ funds
shareholders’ funds amount to £727 million a decrease 
of £1201 million in the year driven largely by the 
goodwill and other intangible impairments and 
exceptional provisions required for the uk property 
transformation and restructuring this represents 
£083 per share compared to £218 per share at the 
previous year end the retained earnings reserve in 
the consolidated balance sheet shows a deﬁcit of 
£265 million however the company has taken steps 
during the period to increase the retained earnings 
reserve in the company balance sheet to £723 million 
and therefore has the ability to pay dividends and 
make other similar payments when the ‘transformation 
and growth’ plan is delivering beneﬁts
accounting policies and standards
there are no new standards affecting the reported 
results and ﬁnancial position
neil harrington 
finance director
mothercare plc annual report and accounts 2012  21 
business review kpis – financial and nonﬁnancial
measuring our performance
international space
mar11 1845k sq ft
mar10
mar12
1538k sq ft
2283k sq ft
our success in our international markets is driven 
by the quality of our franchise partners who 
believe in our brands whilst we continue to target 
circa 150 store openings a year recently opened 
stores have been larger in size and we are now 
looking to grow space at the top of our previously 
guided range of 1520 per cent per annum space 
growth and the subsequent likeforlike sales 
growth remains the driving force for revenues in 
our international markets
international proﬁts
mar11 £275m
mar10
mar12
£232m
£349m
the focus on increasing space is clearly evident 
in the growth we have seen both in revenues 
and proﬁts over the last few years across our 
international business proﬁt growth has been at 
or ahead of space and we would expect this to 
continue to be the case for the foreseeable future
average length of service  
of storebased employees
mothercare
mar11 51 yrs
mar10
mar12
54 yrs
60 yrs
elc
mar11 52 yrs
mar10
mar12
51 yrs
58 yrs
a key strength for both mothercare and early 
learning centre is the connection our staff feel 
for the brands which is reﬂected in the above 
average level of staff retention we enjoy at march 
2012 mothercare had 4467 retail employees with 
an average service of six years with the longest 
serving employee being with mothercare for 
41 years elc with 934 retail employees had an 
average service of 58 years and 29 years for 
the longest serving employee
women in senior  
management positions
achieved to date
aug11 54
aug09
mar12
46
53
the aboveaverage number of women we have 
in senior management positions below executive 
committee level is largely attributable to working 
mums and those planning to become mums who 
have a strong afﬁnity with the brands and a 
culture built on teamwork and cooperation 
we strive to offer a fair and ﬂexible environment 
that will continue to see us give recognition 
where deserved
2283k sq ft
53
£349m
60 yrs
22  mothercare plc annual report and accounts 2012 business review
uk operating cost 
reduction
target uk operating cost reduction
fy15estimate £20m
the transformation of the uk is dependent in part 
on our ability to rationalise our uk operating cost 
base in april 2012 we announced that we aim to 
take £20 million on an annualised basis out of this 
cost base over the three years of the plan we 
have already commenced this process and will 
report on our progress at the end of each year
uk proﬁts
actual achieved to date
fy11 £111m
fy10
fy12
£361m
£247m
target
fy15estimate return 
to proﬁts
our threeyear transformation plan for the uk 
envisages a return to proﬁtability by march 2015
uk store numbers
actual achieved to date
mar11 161 373 212
mar10
mar12
175 387 212
102 311 209
target store portfolio
fy15estimate circa 200
mothercare circa 170
elc circa 30
it has been our strategy to rationalise our store 
portfolio to reﬂect the evolution we have 
witnessed in terms of shopping habits across the 
uk core to our strategy of transforming the uk 
and returning it to proﬁtability is the removal of 
loss making stores from our estate this process is 
expected to eliminate losses of £13 million through 
the closure of circa 111 stores on an annualised 
basis by fy15 as a result we expect to have 
circa 200 stores by march 2015
  mothercare
  elc
£20m
311
£247m
mothercare plc annual report and accounts 2012  23 
business review risks
principal risks and uncertainties
the principal risks and uncertainties facing the company 
may include some of those set out below these risks and 
uncertainties reﬂect and focus on some of the group’s 
challenges in delivering the ‘transformation and growth’ plan 
particularly in the context of the wider economic uncertainties 
at a macro level it should be borne in mind that this is not an 
exhaustive list and that there may be other risks that have not 
been considered or risks that the board considers now are 
insigniﬁcant or immaterial in nature but that may arise andor 
have a larger effect than originally expected against this 
background the system of internal control is designed to 
manage rather than eliminate risks to reduce the impact to 
the group and to ensure that adequate mitigation is in place 
risk impact mitigation
financial  the group fails to meet the 
ﬁnancial targets set out in the 
‘transformation and growth’ 
plan
  potential breach of covenants 
contained in bank facility 
agreements leading to event 
of default
  detailed monthly monitoring of 
ﬁnancial performance against 
plan targets
  alternative ﬁnancing options to 
supplement bank facility
  restructured head ofﬁce and 
uk store teams
  lfl sales in the uk do not 
meet expectations under 
‘transformation and growth’ 
plan
  poor business performance may 
mean that ﬁnancial targets are 
not met
  loss of supplier conﬁdence
  loss of market share
  reshaped uk business team
  new price and value strategy 
supported by promotional 
activity
  new website launched
  unforeseen additional cash 
funding to support international 
joint venture operations and 
associates 
  diverts cash away from the uk 
business
  may delay uk business 
turnaround
  joint ventures and associates 
submit business plans and 
management reports monthly to 
the company
  attendance at board meetings
  uk store rationalisation 
programme is difﬁcult to achieve 
in current market conditions 
  greater than anticipated costs 
of closure
  reduces cash available to 
uk business
  201112 targets met which 
provides a record of past 
performance
  dedicated and experienced 
property team 
  uncertainty in the macro 
economic environment – 
particularly the eurozone 
economies
  fluctuations and uncertainty in 
exchange rates
  continued weak uk consumer 
conﬁdence may delay business 
turnaround
  underperforming international 
business in affected regions
  increase in cost of goods 
impacts margin
  potential for increase in bad 
debts
  product range and pricing being 
adapted to meet customer 
demand
  strong franchise partners 
close working relationship 
with franchisees ensures early 
awareness of any ﬁnancial 
issues
  credit insurance
  limited exposure to eurozone 
economies
in order to manage risk effectively the executive committee 
see page 31 has overall responsibility for ensuring that a 
rolling programme of structured risk assessments of those 
areas having a signiﬁcant effect on the future of the business 
is carried out the programme ensures so far as practicably 
possible that the appropriate risk management processes are 
identiﬁed controls established residual risks evaluated and 
that the necessary action and risk avoidance measures taken 
or monitoring undertaken elements of the programme are 
reviewed by the internal audit function during the year 
the process outlined above has been in effect during the 
period and up to the date of the approval of the accounts 
by the board
24  mothercare plc annual report and accounts 2012 risk impact mitigation
operational  the uk business fails to deliver 
on brand standards or react to 
changes in consumer demand 
or existing or new competitor 
activity
  loss of market share
  loss of sales leading to a 
shortfall in proﬁts
  improvements being made at 
store level through better store 
operations staff training and 
store standards
  new website launched in the uk
  new customer satisfaction 
programme launched
  structured pricing policy and 
strategy
  product range and pricing being 
adapted to meet customer 
demand
  international expansion leads 
to overexposure in certain 
territories
  the group becomes vulnerable 
to key markets
  strong franchise operations 
work closely with international 
franchisees
  credit insurance against key 
franchisee recoverables 
manufacturing 
and product
  the group fails to meet its 
reputation for quality  safety 
and integrity
  damage to brand reputation 
and customer conﬁdence would 
impact sales
  signiﬁcant group investment in 
product quality management 
resource
  high standards communicated 
throughout supply chain
  inhouse responsible sourcing 
team working in bangladesh 
india and china
  global code of conduct 
communicated and applied to 
head ofﬁcesuppliersfranchisees
  failure to invest properly in 
product innovation
  new products and innovation 
are a key driver of sales
  the group maintains an ongoing 
investment strategy in new 
products
  launches of new products and 
ranges planned for fy13
people and 
infrastructure
  organisational change and 
headcount reductions lead to 
erosion of corporate knowledge
  the ‘transformation and growth’ 
plan falls behind schedule
  development and approval of 
key business objectives for all 
employees from top down with 
quarterly reviews to monitor 
employee performance
  legacy it systems fail to meet 
business requirements
  adverse impact on performance 
and ability to meet key targets 
  comprehensive it review 
planned
  failure or increase in costs of 
the group’s logistics or global 
distribution network
  the uk business or international 
franchisees do not meet 
customer demand leading 
to loss in sales
  erosion of margin
  regular review and audit of 
distribution network
  strengthened and dedicated 
expert distribution team
mothercare plc annual report and accounts 2012  25 
business review corporate responsibility
governance and targets
the corporate responsibility steering committee is 
chaired by tim ashby our group general counsel and 
company secretary who has been with mothercare 
since 2010 the steering committee reports directly to 
the plc board and is supported by a small central 
team and external experts
in 200708 we set seven targets to be achieved by 
2013 published on wwwmothercareplccom these 
targets and our current performance are shown in 
the table on the next page shaded blue we are 
currently in the process of setting our next set of targets 
to cover the period spanning our ‘transformation and 
growth’ plan and beyond and we will report on them 
in due course
average length of service of 
store staff
mothercare
2011 51 yrs
2010
2012
54 yrs
60 yrs
elc
2011 52 yrs
2010
2012
51 yrs
58 yrs
 
our staff both at mothercare and 
elc continue to have a close 
afﬁnity with the brands which is 
reﬂected in their length of service
corporate responsibility underpins our core 
relationships for today and the future
  communities – parents and children
  the people who work for us
  our suppliers who make and distribute 
our products
  the environment
our aim is to be the deﬁnitive onestopshop 
for mothers across the world for product value 
and service
this report gives an overview of our activities over 
the last 12 months and provides an update on the 
targets we set ourselves in 2007
highlights
in 201112 the mothercare group
  exceeded its targets in buildings emissions 
transport emissions and waste recycling
  had average service of storebased staff of 
nearly six years at both mothercare and elc 
stores
  had 53 per cent of senior management positions 
below executive committee level ﬁlled by women
  was ranked seventh in the reputation institute’s 
survey
26  mothercare plc annual report and accounts 2012 buildings emissions – target achieved
we met our buildings emissions target in fy2011 
and have exceeded our target this year by 
nine percentage points
this was in part due to the ongoing store closures a 
milder winter and our swindon warehouse being fully 
rented out we have also seen a 17 per cent reduction 
in electricity consumption and a 30 per cent reduction 
in gas consumption at our daventry distribution 
centre these reductions were driven by greater use 
of thermostat control dimmer switches and a 
reduction in weekend working we have also seen 
a small beneﬁt from the reduction in defra’s emission 
factors for both electricity and gas
it is encouraging to note that our stores improved 
their energy performance per sq ft by 34 per cent 
during the year
transport emissions – target achieved
we exceeded our target by 5 percentage points in 
fy2011 and have seen a further improvement partly 
due to store closures but also from more effective 
stock control ensuring that the right products are 
at the right place at the right time overall we have 
achieved a 33 per cent reduction in carbon emissions 
from our transport ﬂeet since 200708
waste recycling – target achieved
we redoubled our efforts during the year to reduce 
waste and increase recycling at both our stores and 
our distribution centres our elc warehouse at 
daventry was able to achieve zero waste to landﬁll 
during the year
communities – parents and children
we believe that parenting and raising children is an 
essential foundation for the society we live in and that 
healthy babies parents and families beneﬁt us all 
we are committed to helping parents through the 
work we do by providing education and information to 
parents in the community our born to care partnership 
with save the children and charitable donations 
made through the mothercare group foundation
awards received 
during the year elc was awarded the ‘best toy shop’ 
at ‘tommy’s let’s get baby friendly awards 2012’ 
mothercare won ‘best maternity basics’ at the 
‘pregnancy  birth bloom awards 2012’
children’s play facilities 
in recognition of the importance of play in the 
development of children we have created a small 
soft play area in a number of our stores the areas 
are signposted and support the ethos of playtime 
which we continue to hold every tuesday at 11am 
across our elc stores and elc inserts in larger 
key performance indicators
200708 
baseline
201112 
performance
2013 target 
baseline
progress 
against target 
baseline
buildings energy use m kwh 712 575 – –
transport fuel used m litres 26 17 – –
transport mileage m miles 61 43 – –
carbon emissions tonnes of which 40400 30200 – –
buildings 33500 25600 15 24
transport 6900 4600 20 33
packaging used tonnes 11500 9300 – –
packaging per £100 kg uk only 200 170 40 15
solid wooden products recycled or forest 
stewardship council wood not collected  50 sourced not available
carrier bags used m uk only 174 111 50 36
recycled waste tonnes uk only not collected 3800 75 recycled 86 recycled 
total fundraising £k 100 760 1000 76 achieved
of which
direct donations £k 100 32 32 –
employee fundraising £k not collected 728 – –
 data collection for 2012 in progress performance will be available in the autumn
mothercare plc annual report and accounts 2012  27 
business review corporate responsibility 
continued
mothercare stores these playtimes are hosted by 
staff and include painting modelling colouring and 
singing nursery rhymes and involve parents and 
carers also
baby and me events 
our larger mothercare stores hold baby and me 
events for expectant mums and dads who receive 
advice and guidance on different aspects of 
parenting these events have proved to be 
extremely popular
charitable giving 
mothercare’s total direct giving to charity last year 
was £32324 with £27324 to the mothercare group 
foundation and £5000 to save the children during 
the year the mothercare group foundation was able 
to make grants of £124360
people who work for us
mothercare retains its caring culture which is clear in 
the loyalty we enjoy from our staff the average length 
of service for our storebased staff is high at 60 years 
for mothercare and 58 years for elc it is also not 
unusual to come across staff members with 10 15 and 
even 20 years of service the longest serving employee 
at mothercare has clocked up 41 years while at elc 
the number is equally impressive at 29 years
in addition we take equal opportunities seriously and 
aim to reward and promote talent where appropriate 
as a result we are proud to say that 53 per cent of 
senior management positions below executive 
committee level are held by women
in a year when mothercare has undergone signiﬁcant 
change we were ranked seventh in the survey 
conducted by the reputation institute the study 
measures the reputations of over 250 companies in 
the uk and is part of a larger study of over 2000 
companies globally the research conducted by the 
reputation institute indicates that strong reputations 
are based on the concepts of admiration trust good 
feeling and overall esteem that stakeholders have 
towards a company
people making our products
responsible sourcing remains a key focus for 
mothercare – we aim to reduce the risk of brand
damaging allegations by monitoring our supply base 
gaining a better understanding of the complex issues 
that affect workers and ultimately working to provide 
better workplaces for them our responsible sourcing 
code of conduct and implementation policy are 
available online at wwwmothercareplccom 
our responsible sourcing team is made up of 12 
dedicated professionals located regionally in our 
head and sourcing ofﬁces they work directly with 
our suppliers and factories to understand the issues 
in the supply chain and improve working conditions 
their work is complemented by the thirdparty 
audit information we obtain through sedex  
wwwsedexglobalcom by using our own internal 
team and thirdparty audit information we increase 
the visibility we have over the supply chain which 
allows us to focus on gaining transparency and 
working with the factory to make improvements
the more work we do in this area the more complex 
issues we unravel which are often industrywide issues 
and not limited to individual factories in order to 
tackle these sorts of issues we continue to be 
active members of the ethical trading initiative  
wwwethicaltradeorg this platform allows us to 
have dialogue with other retailers nongovernmental 
organisations and trade unions and to work together 
on programmes that tackle endemic issues that 
cannot be resolved by individual retailers
going forward the mothercare responsible sourcing 
programme has to adapt to a changing business 
environment as a result of this the team is in the midst 
of developing a ﬁveyear strategy which will cement 
current global practices and fully embed responsible 
sourcing in the daytoday culture of the mothercare 
business before expanding and undertaking 
aspirational work in the later years of the strategy 
this will allow us to maintain the high standard of our 
current work whilst helping us to plan for the future 
it will also provide the team with measurable goals 
to achieve and track progress
the focus of the responsible sourcing team is on the 
ﬁrst tier of our supply base where we believe we have 
the greatest inﬂuence and ability to bring about 
change in 201112 96 per cent of our supply base was 
registered on sedex and thirdparty audit information 
was provided for 88 per cent of factories in addition 
to this our inhouse team visited 80 per cent of our 
direct supply base to offer help and guidance on 
noncompliance resolution 
the second and third tiers of our supply base 
eg spinning mills homeworkers etc are investigated 
on a project basis or as part of our involvement with 
eti working groups such as the group to tackle the 
sumangali scheme in south india which exists in 
spinning mills over which we as an individual retailer 
have very limited inﬂuence this approach allows us 
to target our resources effectively and develop best 
practice which we then work to implement in a wider 
context at a later stage
28  mothercare plc annual report and accounts 2012 case study – collaborative factory improvement 
projects in india and bangladesh
mothercare is participating in the responsible and 
accountable garment sector rags challenge  
fund set up by the department for international 
development dfid we are working with ﬁve other 
retailers on the beneﬁt for business and workers 
bbw project which focuses on improving the 
management systems of readymade garment 
manufacturers demonstrating the business beneﬁts 
of providing better jobs and providing the tools and 
knowhow to create change 
the goal of the project is to make responsible 
business and efﬁcient production the norm in the 
indian and bangladesh garment export 
manufacturing sectors the objectives are to 
support factories to
  introduce and sustain productivity and quality 
improvements
  have a more stable and satisﬁed workforce
  provide better remuneration packages for workers
  ensure that workers do not work excessive hours
  ensure that workers are able to communicate 
their views
the project is delivered in two phases 
  phase one november 2010 – february 2012  
consists of building management skills and 
improving working conditions in 10 pilot factories  
in india and bangladesh 
  phase two consists of training and implementation 
support for 100 factories commencing march 2012
mothercare has two key factories involved in 
phase one both of whom have achieved very 
encouraging results including signiﬁcant 
improvements in productivity absenteeism and 
turnover we are particularly pleased by the shift in 
the factory owners’ way of thinking about their 
business and their workers some examples of 
improvements 
india factory 
  productivity up by over 20 per cent in the 
mothercare factory vs less than 15 per cent over 
the whole project group in india
  absenteeism down by over 50 per cent vs  
less than 40 per cent for the overall india  
project group 
  labour turnover down by over 70 per cent vs 
40 per cent for the overall india project group 
  average hourly rate of pay up by 8 per cent vs 
20 per cent drop in the overall india project group 
  average working hours down by over 6 per cent
bangladesh factory 
  efﬁciency up by 7 per cent 
  absenteeism has reduced by over 75 per cent vs 
55 per cent in the overall bangladesh project 
group 
  basic pay of the lowest paid worker has increased 
by over 9 per cent vs 25 per cent in the overall 
bangladesh project group
  average working hours reduced by over 30 per 
cent vs 17 per cent in the overall bangladesh 
project group
the feedback from the factories involved has been 
very positive 
“ this is the ﬁrst time  
i have come across  
an opportunity for 
supervisors to partake 
in a factory development 
project i feel more 
important and 
recognised”
 supervisor at our factory in india
mothercare plc annual report and accounts 2012  29 
business review board of directors 
5
6
7 1
2 4
3
1 alan parker 
 
r
 
n
 
f 
chairman
appointed august 2011  
executive chairman of mothercare plc 
from 17 november 2011 to 30 april 2012 
nonexecutive director of kesa electrical 
plc jumeirah international llc and 
justice holdings limited president and 
chairman of the british hospitality 
association formerly chief executive of 
whitbread plc and managing director 
emea of holiday inn
2 simon calver f
  
 
chief executive
appointed april 2012  
formerly chief executive of loveﬁlm 
international ceo of video island 
president and chief operating ofﬁcer 
of riverdeep inc vice president and 
general manager of home and small 
business uk and ireland dell computer 
corporation and vice president 
international sales operations 
pepsico inc
3 neil harrington 
  
f 
finance director
appointed january 2006  
nonexecutive director and audit 
committee chair at mcbride plc 
formerly finance director of george 
clothing uk a division of asda stores 
limited chief financial and admin 
ofﬁcer of global george a division of 
walmart stores inc finance director of 
barclaycard international a division of 
barclays bank plc and group financial 
controller of french connection group 
plc on 25 april 2012 the company 
announced the resignation of neil 
harrington chartered accountant
4 bernard cragg a
 
r
 
n
 
f 
senior nonexecutive director
appointed march 2003  
senior nonexecutive director of 
workspace group plc nonexecutive 
director of astro all asia networks plc 
and progressive digital media group 
plc formerly group finance director 
and chief financial ofﬁcer of carlton 
communications plc chairman of 
imate plc and datamonitor plc and  
a nonexecutive director of bristol  
west plc and arcadia group plc 
chartered accountant
5 amanda mackenzie a
 
r
 
n
 
f 
nonexecutive director
appointed january 2011  
chief marketing and communications 
ofﬁcer of aviva plc a member of aviva’s 
executive committee executive sponsor 
for diversity and chair of the operational 
risk committee member of lord davies 
committee  
memberships key
a audit committee
r  remuneration  
committee
n  nomination  
committee
f full board member
steering group to increase the number 
of women on corporate boards 
president of the marketing society 
board member of the national youth 
orchestra and chair of front foot for the 
advertising association
6 richard rivers a
 
r
 
n
 
f 
nonexecutive director
appointed july 2008  
formerly chief of staff and head of 
corporate strategy at unilever  
a nonexecutive director of channel 4 
television corporation and lumene  
oy and a member of the advisory 
board of wpp
7 david williams a
 
r
 
n
 
f 
nonexecutive director
appointed august 2004  
chair of operating partners of duke 
street capital llp the original factory 
shop ltd natures way foods ltd and 
wagamama ltd nonexecutive director 
of the royal london mutual insurance 
group ltd formerly chairman of simple 
ltd avebury taverns ltd sandpiper ltd 
wyevale garden centres plc and ideal 
shopping direct plc adelie food 
holdings ltd and oasis dental 
healthcare ltd formerly governor  
of london business school  
30  mothercare plc annual report and accounts 2012 executive committee
2
5 3
6
1 simon calver 
chief executive
see opposite page for biography
2 tim ashby 
group general counsel and  
company secretary
appointed may 2010 
formerly region counsel for europe
africa at yum brands inc owners of 
kfc pizza hut and taco bell senior 
international counsel pepsico inc 
solicitor denton wilde sapte
3 jerry cull
 
managing director – international
appointed december 2005  
with the group for over 30 years 
director of international and head of 
mothercare’s franchise business since 
1995  formerly regional manager at 
mothercare various roles at bhs 
including head of bhs international
4 neil harrington 
finance director
see opposite page for biography
5 mike logue 
managing director – uk
appointed august 2011  
formerly commercial director for non 
food and managing director of asda 
living at asda managing director of 
gamestation various operational roles 
at marks and spencer throughout the 
uk and in hong kong
6 sue malti 
group hr director
appointed december 2006  
formerly hr director at rhm rank 
hovis mcdougal group hr director at 
the thresher group various hr and 
commercial roles at marks and spencer 
19841990
1
4
mothercare plc annual report and accounts 2012  31 
governance corporate governance 
the company believes that by seeking to achieve a high standard  
of corporate governance in all of the activities undertaken by the 
group the group’s reputation and performance will be enhanced  
in addition it will also promote and beneﬁt the interests of investors 
customers staff and other stakeholders to this end and save as 
described below the company considers that it has complied 
throughout the 53week period ended on 31 march 2012 with the 
relevant provisions set out in the uk corporate governance code 
published by the financial reporting council frc in 2010 having 
applied the main and supporting principles set out in sections a to e 
of the code 
the board
the leadership of the mothercare plc business is provided by the 
mothercare plc board it operates on a unitary basis and ordinarily 
comprises the nonexecutive chairman four independent  
nonexecutive directors and two fulltime executive directors being 
the group chief executive and the finance director during  
the past year ian peacock retired as chairman and alan parker  
was appointed as the new chairman with effect from 15 august 2011 
following ben gordon’s resignation as chief executive with effect 
from 17 november 2011 alan parker took on the role of parttime 
executive chairman until 30 april 2012 being the period during which 
the company was without a chief executive alan parker worked 
three days a week for and did not become chief executive of the 
company in his capacity as executive chairman alan parker 
initiated the structural and operational review of the business had 
the executive committee reporting to him directly and reshaped the 
executive management team alan parker relinquished his position 
as executive chairman on the same day that simon calver 
commenced as chief executive it is noted that this was a technical 
breach of the uk corporate governance code requirement to 
separate the responsibilities of running the company and running 
the board even though alan parker did not become chief executive
a key element of the board’s responsibility is monitoring and 
reviewing the effectiveness of the company’s system of internal 
control and the nonexecutive directors challenge and scrutinise its 
effectiveness and integrity the company has continued to maintain 
a system of internal control within an executive management structure 
with deﬁned lines of responsibility and delegation of authority within 
prescribed ﬁnancial and operational limits the system of internal 
control is based on ﬁnancial operational compliance and risk 
control policies and procedures together with regular reporting of 
ﬁnancial performance and measurement of key performance 
indicators risk management planning budgeting and forecasting 
procedures are also in place together with formal capital investment 
and appraisal arrangements
following his appointment the chairman instigated a detailed 
externally facilitated evaluation of the board using wickland 
westcott and its effectiveness and operation the review was 
positive but suggested recommendations to improve further the 
overall effectiveness of the board its composition and its interaction 
with the executive committee and which are now being 
implemented by the board 
“ having been a chief executive for 
many years i recognise and ﬁrmly 
believe in the importance of good 
corporate governance and the  
beneﬁts that it brings – to the 
company its shareholders and its 
management we carried out a 
thorough evaluation of the board 
a few months ago which i will use 
to establish a clear framework of 
objectives and governance of the 
company over the next few years”
 alan parker cbe 
 chairman
32  mothercare plc annual report and accounts 2012 going concern
the directors have reviewed the going concern 
principle in the light of the guidance provided by the 
frc the group’s business activities and the factors 
likely to affect its future development are set out in the 
business review the ﬁnancial position of the group its 
cash ﬂows liquidity position and borrowing facilities 
are set out in the ﬁnancial review on pages 18 to 21 
in addition notes 21 and 22 to the ﬁnancial statements 
include the group’s objectives policies and processes 
for managing its capital its ﬁnancial risk management 
objectives details of its hedging arrangements and its 
exposure to credit and liquidity risks
the group’s objective with respect to managing 
capital is to maintain a balance sheet structure that  
is both efﬁcient in terms of providing long term returns 
to shareholders and safeguards the group’s ability  
to continue as a going concern as appropriate  
the group can choose to adjust its capital structure  
by varying the amount of dividends paid to 
shareholders returns of capital to shareholders 
issuing new shares or the level of capital expenditure 
a review of the business performance is set out in the 
ﬁnancial review trading in the period has been 
impacted by the economic downturn in the uk with 
a reduction in the underlying result of the uk business 
leading to an underlying loss for the period of 
£247 million 2011 proﬁt of £111 million the international 
business continues to expand generating an 
underlying proﬁt for the period of £349 million 
2011 £275 million
as noted in the chief executive’s review we have 
performed a structural and operational review 
of the size and scope of our business in the uk 
the ‘transformation and growth’ plan aims to stabilise 
likeforlike sales and margin reduce uk central costs 
close additional stores to focus on a core portfolio 
of circa 200 stores and launch combined online and 
instore customer options with a new website and 
in international accelerate expansion with more 
store openings in both new and existing countries 
and 30 new overseas websites the resulting strategy 
will deliver a transformation of the uk business 
together with increased international growth in the 
next three years
at the year end the group had committed secured 
bank facilities of £80 million with an average interest 
rate of 14 per cent above libor which were due to 
expire in may 2014 it also had an uncommitted 
unsecured bank overdraft facility of £10 million on 
11 april 2012 the group reﬁnanced the banking facilities 
with the support of its two existing banks hsbc and 
barclays increasing the level of committed facilities 
from £80 million to £90 million at an interest rate range  
of 35 per cent to 40 per cent above libor and 
extending the term to 31 may 2015 see note 21 these 
facilities provide additional liquidity and covenant 
headroom to accommodate the new threeyear 
strategy the covenants in the new facilities are tested 
quarterly and are based around gearing ﬁxed 
charge cover and guarantor cover 
the committed bank facility was drawn down by  
a maximum of £40 million during the period and at  
the year end the group had a net debt balance of 
£201 million funded by a drawdown against the 
facility of £10 million £10 million of committed  
overdraft and £19 million of uncommitted overdraft 
net of £18 million of cash
the current challenging economic conditions 
particularly the difﬁcult consumer and retail 
environment create uncertainty around the level  
of demand for the group’s products however with 
the new strategy in place the long term contracts  
with its franchisees around the world long standing 
relationships with many of its suppliers and other 
mitigating actions available the directors believe that 
the group is well placed to manage its business risks 
successfully despite the uncertain economic outlook
the group’s latest forecasts and projections which 
incorporate the execution of the new strategy have 
been sensitivitytested for reasonably possible 
adverse variations in trading performance this 
indicates the group will operate within the terms of its 
borrowing facilities and covenants for the foreseeable 
future to the extent that future trading is worse than a 
reasonably possible downside which the directors do 
not consider a likely scenario then there are mitigating 
diversity
the importance of improving the diversity 
balance including gender on boards of uk 
listed companies is recognised currently the 
mothercare plc board excluding the executive 
directors comprises one woman and four men 
and the senior executive management team 
including the executive directors has one woman 
and four men the company believes it is well 
positioned to meet the challenge of improving 
gender diversity and expects to have women 
representing 25 per cent of its board by january 
2013 and an increased percentage of women 
on the executive committee by the same time 
as at 31 march 2012 53 per cent of the senior 
management positions the two grades below 
executive committee were held by women
mothercare plc annual report and accounts 2012  33 
governance corporate governance   
continued
actions available which enable the group to continue 
to operate within the terms of the borrowing facilities 
and covenants for the foreseeable future
after considering the forecasts sensitivities and 
mitigating actions available to management the 
directors have a reasonable expectation that the 
company and the group have adequate resources to 
continue in operational existence for the foreseeable 
future accordingly the ﬁnancial statements are 
therefore prepared on the going concern basis
risk management
the effective management of risks within the group is 
essential to underpin the delivery of its objectives and 
strategy the board is responsible for ensuring that 
risks are identiﬁed and appropriately managed 
across the group and has delegated to the audit 
committee responsibility for reviewing the group’s 
internal controls including the systems established to 
identify assess manage and monitor risks the 
company has an internal audit function which reports 
through the group general counsel and company 
secretary to the audit committee the activities of the 
internal audit function are supplemented by external 
resources as necessary the external auditors also 
report to the audit committee on the efﬁciency of 
controls as part of the audit
the principal risks and uncertainties facing the 
company are set out on pages 24 and 25
the programme of speciﬁc risk management activity 
of the company’s uk operations continued during the 
year across the activities of both brands under this 
programme individual stores are tested against a risk 
assessment model that emphasises health and safety 
ﬁre safety and internal process compliance
the board believes that the system of internal control 
described can provide only reasonable and not 
absolute assurance against material misstatement  
or loss during the course of its review of the system  
of internal control the board has not identiﬁed nor 
been advised of any failings or weaknesses which  
it has determined to be signiﬁcant therefore 
a conﬁrmation in respect of necessary actions 
has not been considered appropriate
bribery act 2010
the bribery act 2010 which came into force on 1 july 
2011 consolidates previous legislation and introduces 
amongst other things a new corporate offence of 
“failure to prevent bribery” noncompliance with this 
act could expose the group to unlimited ﬁnes and 
other consequences 
accordingly the group has introduced additional 
measures into the business to reinforce its zero 
tolerance approach to bribery and corruption  
the group global code of conduct with speciﬁc 
reference to the bribery act was issued to all non
store level employees both in the uk and overseas 
the group’s position on bribery and corruption has 
been explained to suppliers and franchisees at 
conferences and to its joint venture partners  
the group maintains a global “whistleblower”  
hotline accessible in many languages
shareholder relations
the company maintains regular dialogue with 
institutional shareholders following presentation of the 
ﬁnancial performance of the business to the investing 
communities opportunities for dialogue take place 
at least six times a year formal meetings are held 
following the announcement of the half and full year 
results with telephone conversations and ad hoc 
meetings following our four trading statements 
during such meetings the board is able to put 
forward its objectives for the business and discuss 
performance against those objectives and develop 
an understanding of the views of major shareholders 
the outcome of meetings with major shareholders is 
reported by the chief executive at board meetings 
on a periodic basis
the company seeks to reach a wider audience by 
the use of its website wwwmothercareplccom and 
with a view to encouraging full participation of those 
unable to attend the agm provides an opportunity 
for shareholders to ask questions of their board 
through the internet at wwwmothercareplccom 
or by email to investorrelationsmothercarecom 
the company provides electronic voting facilities 
through wwwsharevotecouk those shareholders 
who wish to use this facility should review the notes 
and procedures set out in the notice of meeting
the board and directors
the board of mothercare plc meets regularly and 
maintains overall control of the group’s affairs through 
a schedule of matters reserved for its decision these 
include setting the group strategy the approval of the 
annual budget and ﬁnancial statements major 
acquisitions and disposals authority limits for capital 
and other expenditure and material treasury matters 
details of the terms of reference of the board’s 
committees are also set out in the corporate 
governance section of the company’s website 
at wwwmothercareplccom
the nonexecutive directors are independent and free 
from any business or other relationship that could 
interfere with their judgement although bernard 
cragg was appointed a nonexecutive director of the 
company in march 2003 and has now served over 
nine years in that role he will retire as a nonexecutive 
director and senior independent director and chair of 
34  mothercare plc annual report and accounts 2012 the audit committee in december 2012 the board 
considers that bernard cragg remains independent 
until his retirement the nonexecutive directors do not 
participate in any bonus share option or pension 
scheme of the company 
the business commitments of each member of the 
board are set out in the biographical details on 
page 30 notwithstanding such commitments 
each member of the board is able to allocate 
sufﬁcient time to the company to discharge hisher 
responsibilities effectively
the board considers that the balance achieved 
between executive and nonexecutive directors 
during the period was appropriate and effective 
for the control and direction of the business 
the board is assisted by committees that it has 
established with written terms of reference the roles 
of the remuneration audit and nomination committees 
are set out below the audit remuneration and 
nomination committees comprised the four non
executive directors with the chairman additionally 
serving on the remuneration and nomination 
committees a record of the meetings held during the 
year of the board its committees and the attendance 
by individual directors is set out at page 37
the board has delegated daytoday and business 
management control of the group to the executive 
committee the executive committee ordinarily 
consists of the group chief executive finance director 
the managing directors of the uk and international 
businesses other operational directors within the 
group and the group general counsel and 
company secretary
throughout the period the board has been supplied 
with information and papers submitted at each board 
meeting which ensures that the major aspects of the 
group’s affairs are reviewed regularly in accordance 
with a rolling agenda and programme of work 
all directors whether executive or nonexecutive 
have unrestricted access to the group general counsel 
and company secretary and executives within the 
group on any matter of concern to them in respect 
of their duties in addition new directors are given 
appropriate training on appointment to the board 
appropriate time is made during the year for 
continuing training on relevant topics concerning the 
functioning of the board and the obligations of 
directors the company has undertaken to reimburse 
legal fees to the directors if circumstances should arise 
in which it is necessary for them to seek separate 
independent legal advice in furtherance of their duties 
in accordance with the articles of association onethird 
of the directors are required to offer themselves for 
reelection every year from 2013 the board has 
resolved that all directors should offer themselves for 
reelection notwithstanding that it is a requirement of 
the uk corporate governance code for ftse 350 
companies that the directors do so every year
the board is of the opinion that the directors seeking 
reelection at the agm have continued to give 
effective counsel and commitment to the company 
and accordingly should be reappointed during the 
year the senior independent director did not carry out 
an annual performance review of the chairman who 
was appointed in august 2011 but will do so next year 
directors’ interests and indemnity arrangements
at no time during the year did any director hold a 
material interest in any contract of signiﬁcance with 
the company or any of its subsidiary undertakings 
other than a thirdparty indemnity provision between 
each director and the company and service 
contracts between each executive director and the 
company the company has purchased and 
maintained throughout the year directors’ and 
ofﬁcers’ liability insurance in respect of itself and its 
directors the directors also have the beneﬁt of the 
indemnity provision contained in the company’s 
articles of association these provisions which are 
qualifying thirdparty indemnity provisions as deﬁned 
by section 236 of the companies act 2006 were in 
force throughout the year and are currently in force 
details of directors’ remuneration service contracts 
and interests in the shares of the company are set out 
in the directors’ remuneration report
the company also provides an indemnity for the 
beneﬁt of each person who was a director of 
mothercare pension trustees limited which is a 
corporate trustee of the company’s occupational 
pension schemes in respect of liabilities that may 
attach to them in their capacity as directors of that 
corporate trustee these provisions which are 
qualifying pension scheme indemnity provisions as 
deﬁned in section 235 of the companies act 2006 were 
in force throughout the year and are currently in force
directors’ conﬂicts of interest
the board has maintained procedures whereby 
potential conﬂicts of interests are reviewed regularly 
these procedures have been designed so that the 
board may be reasonably assured that any potential 
situation where a director may have a direct or 
indirect interest which may conﬂict or may possibly 
conﬂict with the interests of the company are 
identiﬁed and where appropriate dealt with in 
accordance with the companies act 2006 and the 
company’s articles of association the board has 
not had to deal with any conﬂict during the period
mothercare plc annual report and accounts 2012  35 
governance corporate governance   
continued
committees
david williams 
chairman remuneration committee
the remuneration committee chaired during the 
year by david williams comprises the chairman 
and the nonexecutive directors it establishes the 
remuneration policy generally approves speciﬁc 
arrangements for the chairman and the executive 
directors and reviews and comments upon the 
proposed arrangements for senior executives so as 
to ensure consistency within the overall remuneration 
policy and group strategy the terms of reference of 
the committee are set out on the company’s website 
full disclosure of the company’s remuneration policy 
and details of the remuneration of each director is set 
out in the remuneration report on pages 42 to 49 and 
in appendix a on pages 50 to 52 during the period no 
director was and procedures are in place to ensure 
that no director is involved in deciding or determining 
his or her own remuneration
alan parker 
chairman nomination committee
the nomination committee chaired by alan parker 
following his appointment during the year comprises 
all of the nonexecutive directors the terms of 
reference of the committee are set out on the 
company’s website the committee makes proposals 
on the size structure composition including diversity 
and appointments to the board it carries out the 
selection process and agrees the terms of 
appointment of nonexecutive directors ordinarily 
an external search agency is used to assist in the 
identiﬁcation of suitable candidates for board 
appointments the nomination committee also 
reviews succession planning on an annual basis 
the company’s position on diversity balance is set 
out earlier in this report 
bernard cragg 
chairman audit committee
the audit committee was chaired during the year  
by bernard cragg the senior nonexecutive director 
the remit of the audit committee is to review the 
scope and issues arising from the audit and matters 
relating to ﬁnancial control it also assists the board in 
its review of corporate governance and in the 
presentation of the company’s ﬁnancial results 
through its review of the interim and full year accounts 
before approval by the board focusing in particular 
on compliance with accounting principles changes in 
accounting practice and major areas of judgement 
the full terms of reference are set out under the 
corporate governance section of the website at  
wwwmothercareplccom 
the audit committee comprises the four nonexecutive 
directors the group general counsel and company 
secretary acts as secretary to the committee bernard 
cragg is a chartered accountant with considerable 
ﬁnancial and varied commercial experience
the committee met four times during the period 
no speciﬁc remuneration of the nonexecutive 
directors is ascribed to membership of the audit 
committee other than a supplement of £5000 paid 
to bernard cragg in respect of his chairmanship of 
the committee 
the main activities of the audit committee in the  
53 weeks ended 31 march 2012
during the period the audit committee has
  reviewed the ﬁnancial statements both in the interim 
report and full year report and accounts having in 
both cases received a report from the external 
auditors on their review and audit of the respective 
reports and accounts
  assisted the board in its detailed review of the going 
concern principle underpinning the results of the 
group for the period in the light of the financial 
reporting council’s additional guidance on going 
concern and liquidity risk 
  considered the output of the procedures used to 
evaluate and mitigate risk within the group
  reviewed the effectiveness of the group’s internal 
controls and disclosures made in the annual report
  considered the management letter from the external 
auditors on their review of the effectiveness of 
internal control
  agreed the fees and terms of appointment of the 
external auditors
  reviewed both the committee’s and the external 
auditor’s effectiveness
  agreed the work plan of the internal audit function 
and reviewed the resultant output from that plan 
and
  reviewed and assessed the group’s compliance with 
corporate governance principles
the audit committee reviews annually the 
independence of the external audit ﬁrm and the 
individuals carrying out the audit by receiving 
36  mothercare plc annual report and accounts 2012 assurances from and assessing the audit ﬁrm against 
best practice principles the committee seeks to 
balance the beneﬁts of continuity of audit personnel 
and the need to assure independence through 
change of audit personnel by agreeing with the audit 
ﬁrm staff rotation policies there are no contractual 
obligations restricting the committee’s choice of 
external auditors
in any event the external auditors are required to 
rotate the audit partner responsible for the audit 
every ﬁve years the current lead audit partner has 
been in place for ﬁve years and is being replaced 
once the accounts for the year have been ﬁnalised 
and approved 
in addition a policy in respect of nonaudit work by 
the audit ﬁrm is in effect the general principle is that 
the audit ﬁrm should not be requested to carry out 
nonaudit services on any activity of the company 
where they may in the future be required to give an 
audit opinion and the nature of any nonaudit work 
must be approved by the committee the committee 
has assisted the board in the assessment of the 
adequacy of the resourcing plan for the internal 
audit function in respect of the activities of the 
function the committee has received reports upon 
the work carried out and the results of the 
investigations including management responses 
their adequacy and timeliness
a review was also held of the effectiveness of the 
audit committee and the external auditors during  
the year it was considered that the work of the audit 
committee during the year was effective measured 
against its terms of reference and general audit 
committee practice in respect of the auditor 
effectiveness review it was considered that the 
external auditors had carried out their obligations  
in an effective and appropriate manner
as a result of its work during the year the committee 
has concluded that it has acted in accordance  
with its terms of reference and has ensured the 
independence of the external auditors by enquiry  
of them and reviewing the report issued by the 
auditors regarding their independence and the  
nonaudit services provided by the auditors and  
the safeguards relating thereto the company did 
not pay any nonaudit fees to the auditors on a 
contingent basis nonaudit fees incurred in the year 
are set out in note 7 the chairman of the committee 
will be available at the agm to answer any questions 
on the work of the committee
director attendance
director attendance statistics for the 53week period ended 31 march 2012
committee
director board audit nomination remuneration
maximum number of meetings 9 4 7 7
alan parker

6 355
ian peacock

4 233
bernard cragg 9 4 7 6
ben gordon

4 na na na
neil harrington 9 na na na
amanda mackenzie 9 4 7 7
richard rivers 9 4 7 7
david williams 9 4 7 7
notes
ben gordon and neil harrington attended meetings of the audit and remuneration committees upon the invitation of the respective chairmen 
ian peacock and alan parker attended meetings of the audit committee on the same basis during their respective periods as chairman of the 
company in addition to the board meetings above there were two ad hoc board meetings which approved the interim and full year report and 
accounts respectively and which were constituted by the board from those members available at that time having considered the views of the 
whole board beforehand 
 denotes that the director either was appointed or retiredresigned during the year and thus was not eligible to attend all meetings
mothercare plc annual report and accounts 2012  37 
governance  
the directors present their report on the affairs of  
the group together with the ﬁnancial statements  
and auditors’ report for the 53week period ended  
31 march 2012 the corporate governance statement 
set out on pages 32 to 37 forms part of this report 
the chairman’s statement on pages 8 and 9 gives 
further information on the work of the board during 
the period the principal activity of the group is as 
a specialist multichannel retailer franchisor and 
wholesaler of products for motherstobe babies 
and children under the mothercare and early 
learning centre brands 
business review
the principal companies within the mothercare group 
for the period under review were mothercare plc the 
‘company’ mothercare uk limited and chelsea 
stores holdings ltd which own the mothercare and 
early learning centre brands respectively the 
companies act 2006 requires the directors’ report to 
contain a review of the business and a description of 
the principal risks and uncertainties facing the group 
a review of the business strategy and a commentary 
on the performance of the group is set out in the 
performance highlights our group overview 
chairman’s statement chief executive’s statement 
the business review and ﬁnancial review the principal 
risks facing the business are detailed in the corporate 
governance report these disclosures form part of this 
report the directors’ report is prepared for the 
members of the company and should not be relied 
upon by any other party or for any other purpose 
where the directors’ report including the 
performance highlights our group overview business 
review ﬁnancial review kpis corporate responsibility 
report directors’ remuneration report and corporate 
governance report contain forwardlooking 
statements these are made by the directors in good 
faith based on the information available to them at 
the time of their approval of this report these 
statements will not be updated or reported upon 
further during the year unless the company is under  
a legal obligation to do so consequently such 
statements should be treated with caution due to the 
inherent uncertainties including both economic and 
business risk factors underlying such forwardlooking 
statements or information
the group’s use of ﬁnancial instruments the risk 
management objectives and exposures are set 
out in the notes to the ﬁnancial statements and 
the corporate governance report on page 32
going concern
the accounts have been prepared under the going 
concern principle for full details please see the 
corporate governance report on page 33
dividend
the directors are not recommending the payment of 
a ﬁnal dividend an interim dividend of 2p per share 
was paid in february 2012 2011 64p per share 
making a total of 2p per share 2011 total of 183p 
per share for the year
the trustees of the mothercare employee trust who 
held 440394 shares and mothercare employees’  
share trustee limited which held 3151 shares waived 
their entitlement to receive dividends in respect of 
these shares
shares
as at 23 may 2012 the company’s issued share capital 
was 88637086 ordinary shares of 50p each all 
carrying voting rights details of the change in the 
company’s issued share capital during the year is 
set out in note 25 no shares were held in treasury
the company has one class of ordinary shares 
each share carries the right to one vote at general 
meetings of the company there are no speciﬁc 
restrictions on the size of a holding in the company 
nor on the transfer of shares which are both governed 
by the general provisions of the company’s articles of 
association and legislation the directors are not 
aware of any agreements between shareholders  
that may result in restrictions on the transfer of shares 
or on voting rights
details of the company’s employee share schemes 
are set out in the remuneration report the trustees 
of the mothercare employee trust and mothercare 
employees’ share trustee limited abstain from voting 
their shareholding in the company
directors’ report
38  mothercare plc annual report and accounts 2012 substantial shareholdings
as at 30 april 2012 the company has been advised of or is aware of the following interests above 3 per cent in 
the company’s ordinary share capital
holder
number of 
shares
percentage 
of issued 
share 
capital
mg investment management ltd 12973149 1464
dc thomson  company ltd 9313522 1051
fidelity international limited 7064133 797
allianz global investors 6553148 740
aberdeen asset managers limited 6042805 682
capital group of companies 5248433 592
financière de l’echiquier fr 3496800 395
acquisition of own shares
the company was given a general approval at the 
agm in july 2011 to purchase up to 10 per cent of its 
shares in the market this authority expires after the 
agm on 19 july 2012 the authority has not been used 
during the year
signiﬁcant agreements and change of control
the group has entered into one signiﬁcant agreement 
in the past year this is a multi currency term and 
revolving facilities agreement dated 11 april 2012 in 
respect of a £90000000 credit facility with barclays 
bank plc and hsbc bank plc for general business 
purposes this supersedes the multi currency revolving 
facilities agreement entered into by the group with 
barclays bank plc and hsbc bank plc on 16 may 2011
there are a number of agreements that alter or 
terminate upon a change of control such as 
commercial contracts bank loan agreements and 
employee share plans the only one of these which 
is considered to be signiﬁcant in terms of likely impact 
on the business of the group as a whole is the multi 
currency term and revolving facilities agreement 
referred to above under which a change of control 
of the company would entitle the banks to cancel the 
facility and require the repayment of all outstanding 
amounts on a minimum of 30 days’ notice 
other than early vesting under the group’s long term 
incentive plans the directors are not aware of any 
agreements between the company and its directors 
or employees that provide for compensation for loss 
of ofﬁce or employment that would occur because of 
a takeover bid whether successful or not there are no 
special contractual payments associated with a 
change of control of the company
directors
with regard to the appointment and replacement of 
directors the company is governed by its articles of 
association the uk corporate governance code 
the companies act and related legislation the 
articles may be amended by special resolution of 
the shareholders the business of the company is 
managed by the board who may exercise all the 
powers of the company subject to the provision of 
the articles of association the companies act and 
any ordinary resolution of the company 
the following directors served during the 53week 
period ended 31 march 2012
name appointment
alan parker executive chairman 17 november 2011 to 30 april 2012 chairman and nonexecutive 
director 15 august – 16 november 2011 and from 30 april 2012 chairman of the 
nomination committee from 15 august 2011
ian peacock chairman and chairman of the nomination committee until 15 august 2011  
nonexecutive director retired 31 october 2011 
bernard cragg senior independent nonexecutive director and chairman of the audit committee 
ben gordon executive director until 17 november 2011
neil harrington executive director
amanda mackenzie independent nonexecutive director 
richard rivers independent nonexecutive director
david williams independent nonexecutive director and chairman of the remuneration committee
simon calver was appointed as chief executive on 30 april 2012
mothercare plc annual report and accounts 2012  39 
governance directors’ report  
continued
in accordance with the company’s articles of 
association david williams and bernard cragg retire 
by rotation from the board following the conclusion of 
the agm on 19 july 2012 and stand for reelection  
alan parker and simon calver are standing for 
election having been appointed since the last agm 
biographical details of all of the directors indicating 
their experience and qualiﬁcations are set out on 
page 30 in light of the number of changes to the 
board over the past year the required election of alan 
parker and simon calver at the agm the forthcoming 
retirement as a director of bernard cragg after more 
than nine years as a director and the announced 
resignation of neil harrington it has been decided  
to defer the retirement and reelection of all directors 
until the annual general meeting of the company in 
2013 notwithstanding that it is a requirement of the uk 
corporate governance code for ftse 350 companies 
that the directors do so every year
details of directors’ service arrangements are set 
out in the remuneration report on page 47
a statement of directors’ interests in the shares of 
mothercare plc and of their remuneration is set out 
on pages 49 and 50 respectively a statement 
of directors’ interests in contracts and indemnity 
arrangements is set out on page 35
employees
the company involves all of its employees in the 
delivery of its strategy it regularly discusses with all  
its employees its corporate objectives and business 
performance as well as the economic environments 
in which the company trades through its business 
sectors this is achieved through the company 
magazine ‘small talk’ to be replaced by an 
employee communications website regular 
brieﬁngs bulletins email and video presentations
the company aspires to develop a loyal and high 
performing team through the development of its 
culture and values as part of this development 
process it measures the capabilities of the group’s 
employees ascertains their development needs  
and develops and implements programmes 
designed to ensure that the critical skills required  
for the development of both the individual and the 
group are attained 
the group’s remuneration strategy is set out in the 
remuneration report which includes details of the 
various incentive schemes and share plans operated 
by the group
the group is an equal opportunities employer and 
ensures that recruitment and promotion decisions in 
all of its companies are made solely on the basis of 
suitability for the job disabled people are given due 
consideration for employment opportunities and  
if employees become disabled every effort is made 
to retain them by providing relevant support
during the year it became necessary to carry out  
a consultation process affecting certain roles at the 
company’s head ofﬁce in watford and to make 
redundancies in some of its overseas ofﬁces the 
company recognises the impact of such processes  
on its employees and this process was carried out 
thoroughly and professionally and in compliance  
with relevant laws and regulations
pensions
the group operates pension schemes for those of its 
employees who wish to participate details of the 
pension charge is set out in note 29 the board is 
mindful that further changes to elements of its pension 
provision will be inevitable given the proposed tax 
and autoenrolment requirements introduced over the 
past year the company has commenced a series of 
reviews to seek a practical solution to these changes
payment of suppliers
payments to merchandise suppliers are made in 
accordance with general conditions of purchase 
which are communicated to suppliers at the 
beginning of the trading relationship it is the group’s 
policy to make payments to nonmerchandise 
suppliers unless otherwise agreed within the period 
set out in the supplier’s invoice or within 60 days from 
the date of invoice
the amount owed to trade creditors at the end of the 
ﬁnancial year represented nil days 2011 nil days of 
average daily purchases during the year for the 
company and 53 days 2011 62 days for the group
fixed assets
changes in tangible ﬁxed assets are shown in note 16 
to the accounts a valuation of the group’s freehold 
and long leasehold properties excluding rack rented 
properties was carried out by external valuers as at 
december 2009 the basis of the valuation is existing 
use value in respect of properties primarily occupied 
by the group and on the basis of market value in 
respect of investment properties both bases being in 
accordance with the practice statements contained in 
the rics appraisal and valuation manual a further 
internal valuation of the freehold properties was 
carried out as at april 2012 on the same basis this 
adjusted valuation of the freehold properties resulted 
in a surplus over their net book value of £2201773
40  mothercare plc annual report and accounts 2012 corporate citizenship
the group’s corporate social responsibility ethos and 
details of the programmes that it runs in its business 
relationships around the world are set out on pages 
26 to 29 during the year the group reissued its global 
code of conduct to all its ofﬁce employees both in 
the uk and overseas
auditors
in the case of each of the persons who were directors 
of the company at the date when this report was 
approved
   so far as each of the directors is aware there is no 
relevant audit information as deﬁned in the 
companies act 2006 of which the company’s 
auditors are unaware and
  each of the directors has taken all the steps that he
she ought to have taken as a director to make 
himselfherself aware of any relevant audit 
information as deﬁned and to establish that the 
company’s auditors are aware of that information
this conﬁrmation is given and should be interpreted in 
accordance with the provisions of section 418 2 of the 
companies act 2006
a resolution proposing the reelection of deloitte llp 
as auditors to the company will be put to the agm
charitable and political donations
the company made no donations during the year to 
the mothercare group foundation total cash 
charitable donations for the year ended 31 march 2012 
were £32324 2011 £282161
it is the company’s policy not to make political 
donations
post balance sheet events
post balance sheet events are disclosed in note 31
annual general meeting 
the 2012 annual general meeting will be held on 
thursday 19 july 2012 at 1000am in the conference 
suite at the company’s head ofﬁce at cherry tree 
road watford hertfordshire wd24 6sh
the notice of the meeting and a prepaid form of 
proxy for the use of shareholders unable to come to 
the agm but who wish to vote or to put any questions 
to the board of directors are enclosed with this annual 
report for those shareholders who elected to receive 
paper copies the company wishes to encourage as 
many shareholders as possible to vote electronically 
those shareholders who have elected to or now wish 
to participate in electronic voting may register their 
vote in respect of resolutions to be proposed to the 
agm at wwwsharevotecouk to use the facility 
shareholders will need their voting id task id and 
shareholder reference number from their proxy form 
and register at wwwshareviewcouk for full details 
on how to use this facility please see the notice  
of meeting
shareholders may also submit questions via email to 
investorrelationsmothercarecom the chairman will 
respond in writing to questions received
as in previous years a copy of the chairman’s 
opening statement to the meeting together with a 
resumé of questions and answers given at the 
meeting will be prepared following the agm this will 
be made available to shareholders on request to the 
group general counsel and company secretary at 
the company’s head ofﬁce
the notice of meeting gives explanatory notes on the 
business to be proposed at the meeting
by order of the board
tim ashby
group general counsel and company secretary 
23 may 2012
mothercare plc annual report and accounts 2012  41 
governance  
david williams 
chairman remuneration committee
remuneration committee chairman’s statement
during the last 12 months we have seen a signiﬁcant 
reduction in the group’s proﬁtability primarily as a 
result of the deterioration in the trading results of the 
uk business and consequent impact on the share 
price over the same period we have initiated 
important leadership changes including the 
appointment of a new chairman and chief executive 
and further changes to the management team are 
planned all of this has been against the background 
of the development of the ‘transformation and 
growth’ plan essential to the future of mothercare as 
outlined elsewhere in this annual report 
we are operating in a rapidly changing environment 
for executive pay in the uk which is now a high proﬁle 
and sensitive matter reﬂecting the company’s 
performance during the year there were no increases 
in the salary levels of executive directors which remain 
at 200809 levels further no annual bonus payments 
were paid and awards made under the performance 
share plan psp and executive incentive plan eip 
relating to the performance over the threeyear 
period ending 31 march 2012 did not vest however 
awards made under the executive incentive plan eip 
for the threeyear period to 26 march 2011 did vest 
reﬂecting the group’s relative performance as against 
other general retailers over that period details are set 
out in the remuneration report
given the company’s current position it is now an 
opportune time to break with the past and to put in 
place a remuneration strategy and arrangements 
which are better aligned with the current debate 
on remuneration and most importantly reﬂect 
mothercare’s plans for ‘transformation and growth’ 
in the future the psp and eip plans which operated 
in the past and delivered signiﬁcant reward to 
executives and shareholders as mothercare 
increased in value in both absolute terms and relative 
to other retailers are no longer appropriate not least 
because they cannot be supported by the company’s 
current ﬁnancial position and future business strategy 
the committee is determined that as well as adopting 
aspects of best practice such as deferral of bonuses 
remuneration should also provide a strong link 
between reward and sustainable performance for 
shareholders set against this mothercare is in a 
challenging situation and undergoing signiﬁcant 
management change remuneration must be 
sufﬁciently attractive to allow us to recruit retain and 
motivate a new senior management team with the 
skills and capability to navigate our current situation 
and deliver the ‘transformation and growth’ plan so 
we can meet our future aspirations 
in january 2012 the remuneration committee 
appointed new consultants to help review the 
company’s executive remuneration arrangements 
our intention was to bring forward a framework for 
approval at the annual general meeting however 
it has become clear that more time is required to 
enable a full and effective consultation with our 
shareholders on the new arrangements this will allow 
our proposals to be properly set within the context of 
the ‘transformation and growth’ plan we have just 
announced and will also give us time to reﬂect 
investor views properly in our proposals 
the committee expects to consult further on future 
long term incentive proposals over the summer once 
the new strategy has been fully articulated and 
digested by investors in the meantime the committee 
will operate a short term incentive plan with ﬁnancial 
and nonﬁnancial performance measures linked to 
the business plan this is important to enable simon 
calver our new chief executive to reinforce the 
focus of his management team to deliver the 
business turnaround
these are clearly challenging times for executive pay 
in general and mothercare in particular your board  
is putting the building blocks in place for sustained 
‘transformation and growth’ with new senior 
leadership at the company being a critical 
component we look forward to receiving your 
support for the remuneration report at the annual 
general meeting
david williams
chairman remuneration committee
remuneration report
42  mothercare plc annual report and accounts 2012 introduction and remuneration policy statement
our remuneration policy is to provide competitive 
remuneration packages that will help recruit retain 
and motivate executives of the required calibre to 
meet the group’s strategic objectives we aim to 
ensure that the policy is appropriate to the group’s 
needs and rewards executives for achieving relevant 
performance criteria the committee monitors 
the group’s compliance with the uk corporate 
governance code provisions and institutional 
investor guidelines for directors’ remuneration
during the year the committee has reconsidered the 
group’s remuneration policy and its short term and 
long term incentive plans to ensure that it has a 
structure in place which supports its threeyear 
business plan during this review the committee 
considered the appropriateness of the existing policy 
and incentive plans from a strategic and business 
perspective and also took into account views 
expressed by shareholders current market practice 
regulatory changes and corporate governance 
requirements the outcome of the review was that the 
existing incentive plans are no longer considered to 
be appropriate and that revised arrangements were 
necessary as a consequence the company is actively 
consulting with shareholders and will be proposing 
a new long term incentive plan for approval by 
shareholders in due course and will also be making 
some amendments to its short term incentive plan with 
effect from the 201213 ﬁnancial year
the revised policy will support and be aligned with 
the company’s ‘transformation and growth’ plan 
detailed in the chief executive’s statement both 
from a structural and strategic perspective it will also 
take into account best practice and will provide the 
company with the ability to retain motivate and 
attract key executives to support the company 
through its next stage in development 
the key design principles of the revised incentive 
arrangements will be as follows
  executive directors and senior employees will be 
given the opportunity to earn highly competitive 
levels of reward for exceptional delivery of the 
‘transformation and growth’ plan over the medium 
to long term subject to the proviso that excessive 
or undeserved remuneration should not be paid
  the company must have the ability to retain and 
attract talent of an appropriate calibre to execute 
the business strategy in a highly challenging 
environment and reﬂecting the future aspirations 
of the company
  the performance metrics should be closely aligned 
to the company’s strategic objectives and the 
targets chosen will represent an accurate measure 
of performance against the success of meeting  
the objectives
  the structures will reﬂect best practice guidelines 
wherever possible and will be developed in full 
consultation with investors
accordingly this report will address both the policy 
and plans that have been in place during the year 
and details of the revised policy and amended short 
term incentive plan
the remuneration report
this report to shareholders has been prepared in 
accordance with the companies act 2006 the act 
and the relevant regulations relating to directors’ 
remuneration the requirements of the listing rules  
of the uk listing authority and the uk corporate 
governance code at the annual general meeting  
on 19 july 2012 shareholders will be asked to approve 
this report as well as the share matching awards for 
the chairman
the relevant section of the act and regulations require 
the auditors to report on certain elements of this 
report and to state whether in their opinion these 
elements have been properly prepared in 
accordance with the act the audited sections include 
directors’ share options the psp and eip awards 
including that set out in appendix a on page 50 
emoluments and compensation payments as set 
out in table 1a and pension arrangements set out 
in table 2 of appendix a
the remuneration committee
composition of the remuneration committee 
the remuneration committee comprises the 
independent nonexecutive directors and the 
chairman of the mothercare plc board who in the 
view of the directors was deemed to be independent 
upon appointment david williams is chairman of the 
committee with bernard cragg amanda mackenzie 
and richard rivers serving throughout the year 
ian peacock served until his retirement in october 2011 
and alan parker has served since his appointment 
in august 2011
the committee’s principal duty is the determination of 
the remuneration for the executive directors approval 
of the pay and beneﬁts of the members of the 
executive committee and oversight of remuneration 
policy for management below executive director and 
executive committee members to ensure that such 
remuneration is consistent with delivery of the business 
strategy and value creation for shareholders 
mothercare plc annual report and accounts 2012  43 
governance remuneration report 
continued
the committee met seven times during the year and  
each member’s attendance at these meetings is  
set out on page 37 of the corporate governance 
report the committee’s detailed terms of reference 
are available on the mothercare website at  
wwwmothercareplccom
advisers to the remuneration committee
the committee retained certain external organisations 
to assist them in their work during the year the 
committee has also consulted the chief executive 
human resources director and group general counsel 
and company secretary as appropriate no executive 
was present for discussions of their own remuneration
as at 31 march 2012 the committee’s advisers were
person or organisation services provided
pricewaterhousecoopers 
llp
advice on the new 
incentive schemes 
executive remuneration 
and remuneration 
benchmarking
lane clark  peacock llp pensions advice
dla piper llp legal services principally 
in respect of employment 
contracts
lane clark  peacock llp does not provide any other 
services to the company and does not have any 
other connections with the company however dla 
piper llp provides general legal advice to the group 
and pwc llp provides certain other advice and non
audit services to the group
during the period 1 april 2011 to 31 december 2011 
kepler associates ltd advised the committee on 
executive remuneration and remuneration 
benchmarking with effect from january 2012 the 
committee has been advised by pwc on these issues
performance graph
the performance graph below shows the group’s tsr 
against the return achieved by the ftse 250 index 
mothercare plc entered the ftse 250 on 30 june 2008 
but returned to the ftse smallcap index on 
19 december 2011 the performance graph below 
shows performance against the ftse 250 index and 
the ftse all share general retailers index the graph 
shows the ﬁve ﬁnancial years to 31 march 2012
the indices were chosen on the basis that mothercare 
was a constituent of both the ftse 250 and ftse 
general retailers indices the group’s performance 
against the ftse all share general retailers index 
determines the level of vesting of awards under the 
executive incentive plan
fiveyear total shareholder return
march 07 march 08 march 09 march 10 march 11 march 12
180
120
60
0
£100 invested on 26 march 2007
ftse all share ftse 250 index ftse asx general retailers mothercare
44  mothercare plc annual report and accounts 2012 directors’ remuneration
current
the executive directors’ ﬁxed annual remuneration 
comprises a base salary which is normally reviewed 
in april each year and beneﬁts they also receive 
variable remuneration through an annual bonus 
scheme and the group’s long term incentive plans 
eip and psp the group made no awards to the 
executive directors under any other long term 
incentive scheme during the year although they are 
entitled to participate in the save as you earn share 
option scheme which is open to all employees but 
excluding nonexecutive directors 
the remuneration of the nonexecutive directors 
comprises ﬁxed annual fees expenses incurred on 
group business are reimbursed when claimed non
executive director fees are reviewed periodically and 
set at levels to reﬂect the time commitment and 
responsibilities of the nonexecutive directors the fees 
of the nonexecutive directors are determined by the 
chairman and executive directors on behalf of the 
board the nonexecutive directors do not participate 
in the group pension annual bonus plan or any long 
term incentive scheme the chairman’s remuneration 
is determined by the remuneration committee without 
the chairman present as an inducement for alan 
parker to become chairman the company agreed 
to implement a share matching scheme under which 
it would match the shares purchased by him up to a 
maximum value and subject to certain performance 
criteria being met details of this scheme which is 
subject to shareholder approval are set out later 
in this report
future
the executive directors’ ﬁxed annual remuneration 
will still comprise a base salary which is normally 
reviewed in april each year and beneﬁts the variable 
elements of remuneration will be delivered through  
a short term incentive plan and a long term incentive 
plan all elements of the variable remuneration will  
be assessed against both ﬁnancial and nonﬁnancial 
performance criteria further details are set out below
ordinarily the company would report on the balance 
between the ﬁxed and performance based 
compensation awarded to its executive directors 
however one of the executive directors neil 
harrington has submitted his resignation and will  
not receive variable compensation in this ﬁnancial 
year and the payment of variable compensation  
to the other executive director is subject to the 
ﬁnalisation of a new long term incentive plan in 
consultation with shareholders
salary
each executive director’s salary is considered 
individually by the remuneration committee taking 
account of individual performance and potential 
pay positioning relative to comparable roles 
particularly at other retailers and also companies 
of similar size in other sectors pay elsewhere in the 
company and advice from the independent 
remuneration consultants base salary is the only 
element of remuneration used in determining 
pensionable earnings under the mothercare 
executive pension scheme with the exception of 
increases in salary to reﬂect increased responsibilities 
the group maintained 201112 salary levels at 200809 
levels consequently the salaries for ben gordon 
prior to his departure and neil harrington remained 
at £600000 and £265400 per annum respectively 
simon calver has been appointed as chief executive 
with effect from 30 april 2012 his salary is £500000 
per annum this represents a material reduction 
to the level of the previous incumbent to reﬂect the 
company’s ﬁnancial position in setting simon calver’s 
salary the remuneration committee took a range of 
factors into account most importantly the level of 
salary deemed necessary to attract an individual of 
a calibre with the necessary skills required to develop 
and lead the ‘transformation and growth’ plan in 
order for the business to meet its future aspirations 
the committee also took into consideration 
competitive levels of salary in the retail sector 
taking into account mothercare’s current market 
capitalisation no change to neil harrington’s salary 
is proposed for the year 201213
short term incentive plan stip
current annual bonus
the annual cash bonus scheme for executive directors 
is based on the achievement of group ﬁnancial 
targets and the delivery of stretching personal targets 
tied to key business objectives financial and personal 
targets are set annually by the remuneration 
committee for the year 201112 the committee decided 
that the annual bonus pbt measure should include 
measures of operating cash ﬂow working capital 
and other key performance indicators consequently 
it was decided that 75 per cent of the bonus 
opportunity would be linked to group pbt and the 
remaining 25 per cent to these other performance 
measures the individual performance multipliers 
would apply to both elements any bonus awarded 
would be paid entirely in cash as the targets were not 
met no bonus was paid for the year
mothercare plc annual report and accounts 2012  45 
governance ben gordon resigned during the year and did not 
receive a bonus although the maximum bonus 
opportunity at the start of the year was 135 per cent 
of salary neil harrington’s bonus opportunity is a 
maximum of 115 per cent of salary he received no 
performance related bonus for the year ended 
31 march 2012 2011 £nil 
future stip
with effect from 201213 a number of amendments will 
be made to the stip the key amendments and 
rationale are as follows
  the maximum bonus potential for the chief executive 
will be reduced to 125 per cent of salary and for the 
finance director will be 100 per cent of salary
  the performance metrics will be aligned to the 
company’s ‘transformation and growth’ plan and 
its key focus areas over the next 12 months both 
ﬁnancial and strategic measures – based on a 
balanced scorecard approach – will be used with 
a weighting of 75 per cent ﬁnancial and 25 per cent 
strategic measures strategic measures will include 
customer satisfaction surveys
  payment under the stip will be subject to an 
overriding ﬁnancial measure based on the 
company’s net quarterly cashdebt position which 
will ensure that stip payments are not made where 
the ﬁnancial position of the company does not 
support it and when they are unjustiﬁed
  for the executive directors and other members of 
the executive committee 30 per cent of any stip 
payment earned will be deferred into shares in the 
company for a threeyear period by paying a 
signiﬁcant portion of any stip in shares executives’ 
focus on long term value creation and the degree 
of alignment with shareholders will be increased
  during the deferral period in line with best practice 
the shares are subject to claw back in exceptional 
circumstances such as ﬁnancial misstatement
 proﬁt share scheme
in addition to the annual bonus scheme the group 
has operated a proﬁt share scheme all group 
employees other than participants in the annual 
bonus scheme or the new proposed stip with at  
least six months’ service are eligible to participate 
in this scheme
long term incentive plan
current 
a the performance share plan psp
the group’s performance share plan was approved 
by shareholders in 2006 under the psp conditional 
awards of shares of up to 100 per cent of salary 
in exceptional circumstances 200 per cent of salary 
are made to selected executives as determined by 
the remuneration committee each year conditional 
awards were made to the wider executive team 
through awards made in may and november details 
of executive directors’ historical awards are set out in 
appendix a on page 50
vesting of shares to an individual is conditional upon 
the achievement of the cumulative threeyear growth 
in group pbt 20 per cent of an award vests if 
mothercare’s threeyear pbt growth is 5 per cent pa 
and 100 per cent of an award will vest if mothercare’s 
threeyear pbt per share growth is at least 15 per cent 
each year with straightline vesting in between 
dividends accrue and are paid on shares that vest 
if the performance threshold of 5 per cent pa pbt per 
share growth is not met the award lapses pbt per 
share was chosen as the remuneration committee 
believed that pbt was a good measure of 
mothercare’s ﬁnancial performance it is highly visible 
internally and is regularly monitored and reported 
for the threeyear performance period to 26 march 
2011 mothercare’s proﬁt before tax decreased 
accordingly the awards granted in 2008 did not vest 
this was also the case for awards granted in 2009 
which did not vest by reference to the threeyear 
performance ended 31 march 2012
in september 2008 the remuneration committee and 
the board approved an extension of the psp to key 
executives in the overseas markets in which it 
operates principally china hong kong and india 
the nature of the securities laws in certain countries 
makes it impractical for individuals to receive shares 
in the company upon vesting of conditional awards 
as envisaged by the psp scheme consequently the 
scheme approved for overseas participants grants 
conditional awards over ‘notional shares’ in the 
company these notional shares are hedged within 
the employee trust such that individual participants 
may receive a cash award equivalent to the growth in 
value of the notional shares under the award in all 
other respects including maximum award limits 
performance conditions etc the overseas scheme is 
equivalent to that operated for ukbased executives
b the executive incentive plan eip 
the group’s executive incentive plan was approved 
by shareholders in 2006 under the eip selected senior 
executives are eligible to receive a percentage of 
‘surplus value created’ over a threeyear performance 
period ‘surplus value created’ is deﬁned as group 
tsr outperformance of the ftse allshare general 
retailers index index multiplied by the average 
market capitalisation of the group over the 
remuneration report 
continued
46  mothercare plc annual report and accounts 2012 threemonth period immediately prior to the start of 
the ﬁnancial year in which the grant date falls the 
committee believed this relative tsr performance 
condition provided alignment with shareholders’ long 
term interests as well as supporting the motivation 
and retention of the management team however as 
noted elsewhere in this report the committee has  
reconsidered the suitability of the eip scheme and will 
be proposing its replacement in due course
at the vesting date the committee retains discretion to 
defer up to 50 per cent of an award into shares for a 
further year following a minor reﬁnement approved 
by the committee to the eip in 2009 in order to provide 
additional alignment with shareholders’ interests 
awards from 2009 onwards will be settled wholly in 
shares rather than up to 50 per cent as provided in 
the original scheme the eip was also amended to 
allow an executive to extend the period of deferral  
by awarding the deferred element as nilcost options 
eip awards have been made in each year since 
inception in 2006 the award criteria made to 
executive directors is set out in eip table 1 in 
appendix a page 50 
during the threeyear performance period to  
26 march 2011 mothercare’s total shareholder return 
outperformed the ftse general retailers index by 
3829 per cent mothercare 4878 per cent general 
retailers 1049 per cent 
with regard to the eip award that vested in march 
2011 the remuneration committee decided to exercise 
its discretion to defer the maximum 50 per cent of the 
vested amount into shares these share awards will 
not be released until june 2012 and therefore the value 
of the deferred shares to which the executive directors 
will be entitled will not be known until that date details 
are set out in appendix a on page 50 
no eip awards vested in relation to the performance 
ended 27 march 2012 
future
long term incentive plan
as explained earlier in this report the committee has 
reconsidered the applicability of the existing psp and 
eip in light of the group’s performance in the past two 
years and the longer term business objectives and 
performance targets set out by the chief executive in 
this report 
the outcome of the review was that the psp and eip 
are no longer considered to be appropriate and that 
revised arrangements were necessary in order to 
support the company in delivering its threeyear 
business plan and to have regard to changing 
market  practices the company is currently working 
with its key shareholders to devise an appropriate 
long term incentive plan which will be implemented 
in due course 
the executive share option scheme esos
the mothercare plc 2000 share option plan
under the rules of the mothercare 2000 share option 
plan no further options can be granted 
shareholding guidelines
executive directors are expected to build up a 
shareholding equal to 100 per cent of their basic 
salaries after three years in position under the 
proposed terms of the short term incentive plan 
outlined above 30 per cent of any payments would 
be deferred in shares for a threeyear period and 
would count towards this shareholding obligation 
at their net of tax value
details of the shares held by the directors as at  
31 march 2012 are provided below 
service contracts
executive directors
executive directors’ service contracts are rolling 
contracts that require 12 months’ notice by either 
the company or executive to terminate the 
contract mitigation provisions are included in 
any severance agreement
ben gordon the former chief executive resigned 
from the company on 17 november 2011 having 
commenced with the group on 2 december 2002  
his service agreement provided for liquidated 
damages on termination by the group for basic salary 
equivalent to the unexpired portion of the notice 
period and the fair value of the beneﬁts to which he 
may be entitled including pension credits but not 
bonus or long term incentives accordingly ben 
gordon received a payment equal to his basic salary 
in lieu of notice for the period from 17 november 2011 
to 9 october 2012 ben gordon also received his 
contractual entitlement to the beneﬁts of any share 
awards under the performance share plan and 
executive incentive plan which had vested before  
11 october 2011 and these are set out in appendix a 
on page 50
nonexecutive directors
alan parker is entitled to six months’ salary on 
termination of his service agreement dated 2 august 
2011 by the group bernard cragg richard rivers 
david williams and amanda mackenzie have service 
agreements with the group that may be terminated 
upon one month’s notice their service agreements 
were entered into on 26 march 2003 27 may 2008 
2 july 2004 and 1 january 2011 respectively
mothercare plc annual report and accounts 2012  47 
governance as at 31 march 2012 the annual salaryfees payable 
to the chairman in his nonexecutive capacity were 
£200000 the senior nonexecutive director £60000 
the chairman of the remuneration committee £55000 
and the other nonexecutive directors £50000
as an inducement for alan parker to become 
chairman and related to his service agreement the 
company agreed to implement a share matching 
scheme under which it would grant 60000 
performance related share options if alan parker 
purchased and held shares in the company in the 
vesting period to the value of £200000 the chairman 
purchased these shares and the company granted 
60000 options with a nominal exercise price which 
vest in august 2014 subject to certain performance 
criteria being met for the grant to vest in full the 
company total shareholder return over the threeyear 
performance period must be greater than or equal to 
the total shareholder return of the ftse 250 excluding 
certain mining and investment companies plus 50 per 
cent if the company’s performance is below tsr 
index the award will not vest the chairman must 
retain his shareholding for the performance period
in accordance with the uk corporate governance 
code and the listing rules the implementation of the 
share matching plans for alan parker are subject to 
shareholder approval and have been proposed as 
resolution 10 on the notice of meeting
executive chairman
following the resignation of ben gordon with effect 
from 17 november 2011 alan parker became executive 
chairman and agreed to spend three days per week 
in this role until a new chief executive was appointed 
alan parker did not act as a chief executive of the 
company following simon calver’s appointment with 
effect from 30 april 2012 alan parker stood down as 
executive chairman on the same date for the six 
months’ duration of his role as executive chairman 
and to reﬂect the material increase in the time spent 
on behalf of the group alan parker received an extra 
fee of approximately £200000 the company also 
agreed to an extension of the share matching 
arrangement awarded to alan parker on his 
appointment as chairman the company agreed to 
match additional investment in the company by alan 
parker on a 0351 companyalan parker basis up to 
a maximum further investment of £400000 the 
vesting of this additional match is subject to the same 
performance criteria as the initial share matching 
scheme and the award will not vest if the 
performance criteria are not satisﬁed as described 
above the implementation of this plan is subject to 
shareholders’ approval
external appointments and other commitments of  
the directors
the other business commitments of the directors are 
set out within their biographical details on page 30 
an executive director may take one external 
appointment as a nonexecutive director subject to the 
approval of the board the director may retain any fees 
from such a role neil harrington is a nonexecutive 
director of mcbride plc from which he currently receives 
an annual fee of £40000
pension arrangements 
neil harrington is a member of the mothercare 
executive pension scheme neil harrington participates 
in the pension builder career average section of the 
mothercare executive pension scheme pension accrues 
at one fortyﬁfth of pensionable salary subject to a 
notional earnings cap of £185400 the normal 
retirement age is 65 years contributions by neil 
harrington are set at 8 per cent of pensionable salary
the committee regularly reviews the ﬁnancial impact to 
the company of pension provision given the regulatory 
changes expected in october 2012 a further review of 
the effect of these changes on the company pension 
schemes is underway in the meantime in order to 
control the cost of pensions the group has agreed 
with the trustees of the executive pension scheme the 
introduction of a capped accrual section which limits 
annual accrual in excess of cpi inﬂation to £3125 per 
annum and has agreed with the individuals affected 
to pay a salary supplement of up to £16000 per annum 
to compensate for their reduced accrual 
those directors and senior executives subject to the 
earnings cap and who participated in the furbs 
arrangements now receive a cash salary supplement 
equivalent to the former furbs payment for investment 
in an investment vehicle of their own choice further 
pension detail is given in table 2 of appendix a on 
page 50
for further details of the pension provision within the 
group during the year see the directors’ report on 
page 38
for further details on the cost of pensions to the  
group including the statements required by ias 19  
see note 29
emoluments and compensation payments
the emoluments including pension contributions for 
executive directors for the year ended 31 march 2012 
and  the salaries paid to the management level below 
the board are set out in tables 1a and 1b of appendix a 
on page 50
remuneration report 
continued
48  mothercare plc annual report and accounts 2012 beneﬁcial interests of the directors
the beneﬁcial interests of the directors in the share 
capital of the group are set out in the table below 
this table does not show outstanding option or 
incentive awards these are dealt with in the relevant 
section of this report
interest held at 
31 march 2012 
or appointment 
if later
number
interest held at 
26 march 2011 
or appointment 
if later
number
alan parker 210400 –
bernard cragg 20000 20000
neil harrington 100000 66022
richard rivers 29000 8000
david williams 71300 38300
amanda mackenzie 25760 –
tim ashby and david williams are shareholders and 
directors of mothercare employees’ share trustee 
limited which held 3151 mothercare shares in trust on 
31 march 2012 3151 on 26 march 2011 a separate trust 
the mothercare employee trust held 440394 shares 
on 31 march 2012 2458079 shares on 26 march 2011
the executive directors are also deemed to have an 
interest in shares held by mothercare employees’ 
share trustee limited and the mothercare employee 
trust as potential beneﬁciaries 
there have been no movements in directors’ interests 
beneﬁcial or nonbeneﬁcial between 31 march 2012 
and 23 may 2012
approved by the board on 23 may 2012 and signed on 
its behalf by
david williams
chairman remuneration committee
mothercare plc annual report and accounts 2012  49 
governance appendix to the remuneration report
appendix a
table 1a
directors’ emoluments
total emoluments including pension contributions in the 53 weeks ended 31 march 2012 were £7460000 2011 – £7815000
salaryfees 
£000
performance 
bonus 
£000
beneﬁts 
£000
incentive 
schemes’ 
vesting 
£000
compensation 
for loss of ofﬁce 
£000
total 
remuneration 
excl pensions 
£000
pension 
contributions 
£000
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
executive directors
alan parker 272––––––––– 272–––
ben gordon 380 600 – – 9 13 3968 4586 658 – 5015 5199 23 32
neil harrington 265 265 – – 12 11 1411 1794 – – 1688 2070 34 32
nonexecutive 
directors
ian peacock 108 180 –––––––– 108 180 ––
bernard cragg 60 60–––––––– 60 60––
amanda mackenzie 50 8–––––––– 50 8––
richard rivers 50 50 –––––––– 50 50 ––
david williams 55 55––– –– 55 55––
karren brady – 20––––––––– 20––
note 
beneﬁts typically include a company car medical insurance and other similar beneﬁts
i  in addition to the pension contributions for ben gordon set out above a sum of £63810 was paid to ben gordon for the 53 weeks ended 31 march 2012 and 
£82170 was paid for the 52 weeks ended 26 march 2011 as a salary supplement referred to in page 48 following the discontinuance of the furbs scheme
ii  in addition to the pension contributions for neil harrington set out above a sum of £40854 was paid to neil harrington for the 53 weeks ended 31 march 2012 
and £26923 is paid for the 52 weeks ended 26 march 2011 as an employer contribution directly to a sipp following the discontinuance of the furbs scheme 
included within the current year amount paid is a supplement of £16000 given in return for voluntarily capping the pension accrual at £140625
iii  alan parker was nonexecutive chairman from 15 august 2011 to 17 november 2011 with a fee of £200000 per annum from 18 november 2011 he assumed the 
role of executive chairman with a fee of £600000 per annum on 30 april 2012 mr parker reverted to the role of nonexecutive chairman and his fee reverted 
back to £200000 per annum
iv  ben gordon’s incentive scheme vesting in 2012 includes £441000 relating to early vesting as a result of his resignation
table 1b
aggregate directors’ remuneration
the total amounts for directors’ remuneration were as follows
2012 
£000
2011 
£000
emoluments 1261 1262
compensation for loss of ofﬁce 658 –
amounts receivable under long term incentive schemes 5379 6380
money purchase pension contributions 162 173
total 7460 7815
50  mothercare plc annual report and accounts 2012 table 1c
the following table sets out the number of individuals within the salary bands for the management level directly below 
the board
salary band 2012 2011
250001 – 300000 – 1
200001 – 250000 – –
150001 – 200000 6 5
100001 – 150000 2 1
75001 – 100000 – 1
50001 – 75000 – –
table 2
pensions
the disclosure of the directors’ beneﬁts accrued in the mothercare executive pension scheme and money purchase beneﬁts 
under the appropriate funded unapproved retirement beneﬁts scheme are set out below
deﬁned beneﬁts for final salary scheme £000
money 
purchase
accrued beneﬁts in mothercare executive pension 
scheme transfer value as at 
group 
contri
butions
at 26 
march 
2011
change 
during 
year
at 31 
march 
2012
change 
during 
year net 
of inﬂation
transfer 
value of 
change in 
year net 
of inﬂation
26 march 
2011
change 
during 
year
director 
contri
butions
31 march 
2012
ben gordon 340 35 375 17 2336 447822 206725 – 654547 63811
neil harrington 208 39 247 28 3296 181698 127529 – 309227 40854
calculation is consistent with applicable professional actuarial guidelines of accrued beneﬁt
note 
the transfer values represent a liability to the group and not a sum paid or due to be paid to the individual the amounts shown as director contributions were 
made under salary sacriﬁce arrangements and are shown for reasons of transparency
performance share plan
conditional awards held by executive directors under the psp are as follows
director
27 march 
2011 
number
granted 
during year 
number
lapsed 
during year 
number grant date
vestinglapse 
date
vested 
during year 
number
gains on 
exercise 
2012 
£
31 march 
2012 
number
ben gordon 240802 – 240802 16 june 2008 16 june 2011 – – –
115384 – 115384 25 may 2010 11 october 2011 – – –
– 135135 135135 24 may 2011 11 october 2011 – – –
total 356186 135135 491321 – – –
neil harrington 79886 – 79886 16 june 2008 16 june 2011 – – –
38278 – – 25 may 2010 25 may 2013 – – 38278
– 44831 – 24 may 2011 24 may 2014 – – 44831
total 118164 44831 79886 – – 83109
the above awards were granted as nilcost options
mothercare plc annual report and accounts 2012  51 
governance appendix to the remuneration report
continued
executive incentive plan
conditional award percentages of surplus value made to executive directors are as follows
 of surplus value to which participant entitled
surplus value ben gordon neil harrington
£0m to £50m 10 04
£50m to £75m 15
1
06
1
over £75m 20
2
08
2
1 percentage applies only on up to £25 million of surplus value created above £50 million
2 percentage applies only on surplus value created in excess of £75 million
eip cash and share determinations made under the eip during the year
2008 cycle total surplus value created £12898 million
name
vesting 
date
cash 
amount 
paid £
deferred 
into shares 
number
reference 
share price
ben gordon
 1
6 june 2011 977255 228224 428p
neil harrington
 2
6 june 2011 390904 91290 428p
1  ben gordon’s deferred shares vested following his resignation from the company vesting occurred on 31 january 2012 on the date of the vesting the share 
price was 193p in addition 745610 deferred shares related to the 2007 scheme vested during the year at a reference share price of 342p
2  neil harrington’s deferred shares will vest on 6 june 2012 and the value of the deferred shares to which he will be entitled will not be known until that date 
in addition 298244 deferred shares related to the 2007 scheme vested during the year at a reference share price of 342p
directors’ share matching scheme
director 26 march 2011 granted grant date vest date 31 march 2011
alan parker – 60000
1
2 august 2011 1 august 2014 60000
–54997
2
17 november 2011 16 november 2014 54997
1  during the year the chairman was granted 60000 performance related share options with a nominal exercise price as a condition of this award the chairman 
was required to purchase and hold shares in the company over the vesting period for a value of £02 million at 31 march 2012 the chairman had purchased the 
required value of shares
2  upon assuming the role of executive chairman the chairman was granted 54997 performance related share options with a nominal exercise price as a 
condition of this award the chairman was required to purchase and hold shares in the company over the vesting period for a value of £04 million at 31 march 
2012 the chairman had purchased £02 million of shares in the company the above disclosure assumes the remainder of shares will be purchased during the 
agreed purchase period
52  mothercare plc annual report and accounts 2012 mothercare plc annual report and accounts 2012  53 
financial statements
financial statements
contents
54 directors’ responsibilities statement
55 independent auditor’s report to the  
members of mothercare plc
56 consolidated income statement
56 consolidated statement of comprehensive 
income
57 consolidated balance sheet
58 consolidated statement of changes in equity
59 consolidated cash ﬂow statement
60 notes to the consolidated ﬁnancial statements
98 company ﬁnancial statements
99 independent auditor’s report on the  
company ﬁnancial statements
100 company balance sheet
101 notes to the company ﬁnancial statements
104 five year record
105 shareholder information 54  mothercare plc annual report and accounts 2012
directors’ responsibilities statement
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
responsibility statement 
we conﬁrm that to the best of our knowledge
    the ﬁnancial statements prepared in accordance 
with the relevant ﬁnancial reporting framework 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 and
    the management report which is incorporated into 
the directors’ 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
by order of the board on 23 may 2012 and signed on 
its behalf by
neil harrington
finance director
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 judgments 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 mothercare plc annual report and accounts 2012  55 
financial statements
we have audited the group ﬁnancial statements 
of mothercare plc for the 53 weeks ended  
31 march 2012 which comprise the consolidated 
income statement the consolidated statement of 
comprehensive income the consolidated balance 
sheet the consolidated cash ﬂow statement the 
consolidated statement of changes in equity and the 
related notes 1 to 31 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 
nonﬁnancial 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 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 loss for the 
53 weeks 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 and article 4 
of the ias regulation
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
under the companies act 2006 we are required 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
under the listing rules we are required to review
    the directors’ statement contained within the 
corporate governance report in relation to going 
concern
    the part of the corporate governance statement 
relating to the company’s compliance with the nine 
provisions of the uk corporate governance code 
speciﬁed for our review and
    certain elements of the report to shareholders by the 
board on directors’ remuneration
other matter
we have reported separately on the parent company 
ﬁnancial statements of mothercare plc for the 53 weeks 
ended 31 march 2012 and on the information in the 
directors’ remuneration report that is described as 
having been audited 
nicola mitchell fca senior statutory auditor
for and on behalf of deloitte llp 
chartered accountants and statutory auditor 
london 
23 may 2012
independent auditor’s report to  
the members of mothercare plc 56  mothercare plc annual report and accounts 2012
53 weeks ended 31 march 2012 52 weeks ended 26 march 2011
note
underlying
1
 £ million
non
underlying
2
 £ million
total
 £ million
underlying
1
 £ million
non
underlying
2
 £ million
total 
£ million
revenue 4 5 8127 – 8127 7936 – 7936
cost of sales 7684 20 7704 7216 161 7377
gross proﬁt 443 20 423 720 161 559
administrative expenses before 
sharebased payments 385 109 494 391 36 427
sharebased payments 28 06 08 02 22 – 22
administrative expenses 391 101 492 413 36 449
lossproﬁt from retail operations before 
sharebased payments 58 129 71 329 197 132
lossproﬁt from retail operations 7 52 121 69 307 197 110
lossproﬁt on disposaltermination of 
property interests – 226 226 –02 02
exceptional and nonunderlying items 6 – 693 693 –––
share of results of joint ventures 
and associates 13 14 32 04 36 18 – 18
lossproﬁt from operations before  
sharebased payments 26 1052 1026 311 195 116
lossproﬁt from operations 20 1044 1024 289 195 94
net ﬁnance costs 8 04 01 05 04 02 06
lossproﬁt before taxation 16 1045 1029 285 197 88
taxation 9 – 111 111 73 50 23
lossproﬁt for the period attributable to 
equity holders of the parent 16 934 918 212 147 65
lossearnings per share
basic 11 18p 1052p 247p 76p
diluted 11 18p 1052p 242p 74p
1 before items described in note 2 below
2  includes exceptional items proﬁtloss on disposaltermination of property interests restructuring costs impairment charges provision for onerous leases and 
other nonunderlying items of amortisation of intangible assets excluding software and the impact of noncash foreign currency adjustments under ias 39 and 
ias 21 as set out in note 6 to the consolidated ﬁnancial statements
all results relate to continuing operations
consolidated statement of comprehensive income
for the 53 weeks ended 31 march 2012
note
53 weeks
ended
31 march
2012
£ million
52 weeks
ended
26 march
2011
£ million
other comprehensive expenseincome – actuarial lossgain on deﬁned beneﬁt pension schemes 29 212 165
tax relating to components of other comprehensive income 9 41 43
exchange differences on translation of foreign operations 01 12
net lossgain recognised in other comprehensive income 172 110
lossproﬁt for the period 918 65
total comprehensive expenseincome for the period attributable to equity holders of the parent 1090 175
consolidated income statement
for the 53 weeks ended 31 march 2012 mothercare plc annual report and accounts 2012  57 
financial statements
note
31 march
2012
£ million
26 march
2011
£ million
noncurrent assets
goodwill 15 268 686
intangible assets 15 221 385
property plant and equipment 16 863 911
investments in joint ventures 13 68 32
investment in associate 14 32 72
deferred tax asset 17 176 69
1628 2155
current assets
inventories 18 991 1160
trade and other receivables 19 747 625
cash and cash equivalents 20 18 153
1756 1938
total assets 3384 4093
current liabilities
trade and other payables 23 1238 1301
borrowings 21 19 –
current tax liabilities 01 10
currency derivative liabilities 22 13 27
short term provisions 24 245 56
1516 1394
noncurrent liabilities
trade and other payables 23 290 323
borrowings 21 200 –
retirement beneﬁt obligations 29 527 376
long term provisions 24 124 72
1141 771
total liabilities 2657 2165
net assets 727 1928
equity attributable to equity holders of the parent
share capital 25 443 443
share premium account 62 59
other reserve 508 508
own shares 25 21 90
translation reserves – 01
retained lossearnings 265 1007
total equity 727 1928
approved by the board and authorised for issue on 23 may 2012 and signed on its behalf by
neil harrington
finance director
consolidated balance sheet
as at 31 march 2012 58  mothercare plc annual report and accounts 2012
consolidated statement of changes in equity
for the 53 weeks ended 31 march 2012
equity attributable to equity holders of the parent
share 
capital
£ million
share 
premium 
account
£ million
other
 reserve
1
£ million
own 
shares
£ million
translation 
reserve
£ million
retained 
earnings
£ million
total 
equity
£ million
balance at 27 march 2011 443 59 508 90 01 1007 1928
total comprehensive expenseincome 
for the period –––– 01 1089 1090
issue of equity shares – 03–––– 03
credit to equity for equitysettled  
sharebased payments
 
 ––––– 05 05
shares transferred to employees 
on vesting ––– 69– 69 –
dividends paid ––––– 119 119
balance at 31 march 2012 443 62 508 21 – 265 727
for the 52 weeks ended 26 march 2011
equity attributable to equity holders of the parent
share 
capital
£ million
share 
premium 
account
£ million
other
 reserve
1
£ million
own 
shares
£ million
translation 
reserve
£ million
retained 
earnings
£ million
total 
equity
£ million
balance at 28 march 2010 441 49 508 89 13 962 1884
total comprehensive income for 
the period –––– 12 187 175
issue of equity shares 02 10 –––– 12
credit to equity for equitysettled  
sharebased payments ––––– 26 26
purchase of own shares – – – 14 – – 14
shares transferred to employees 
on vesting ––– 13– 13 –
dividends paid ––––– 155 155
balance at 26 march 2011 443 59 508 90 01 1007 1928
1 the other reserve relates to shares issued as consideration for the acquisition of early learning centre on 19 june 2007 mothercare plc annual report and accounts 2012  59 
financial statements
note
53 weeks
ended
31 march
2012
£ million
52 weeks
ended
26 march
2011
£ million
net cash ﬂow from operating activities 26 56 271
cash ﬂows from investing activities
interest received 09 01
purchase of property plant and equipment 217 166
purchase of intangibles – software 32 52
purchase of intangibles – other – 31
proceeds from sale of property plant and equipment 23 33
investments in joint ventures and associates 57 105
net cash used in investing activities 274 320
cash ﬂows from ﬁnancing activities
interest paid 13 06
new bank loans raised 200 –
equity dividends paid 119 155
issue of ordinary share capital 03 12
purchase of own shares – 14
net cash raisedused in ﬁnancing activities 71 163
net decrease in cash and cash equivalents 147 212
cash and cash equivalents at beginning of period 153 385
effect of foreign exchange rate changes 07 20
net debtcash and cash equivalents at end of period 01 153
consolidated cash ﬂow statement
for the 53 weeks ended 31 march 2012 60  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
1 general information
mothercare plc is a company incorporated in great 
britain under the companies act 2006 the address 
of the registered ofﬁce is given in the shareholder 
information on page 105 the nature of the group’s 
operations and its principal activities are set out in 
note 5 and in the overview and business review on 
pages 1 and 16 to 17
these ﬁnancial statements are presented in uk 
pounds sterling because that is the currency of the 
primary economic environment in which the 
group operates
2 signiﬁcant accounting policies
basis of presentation
the group’s accounting period covers the 53 weeks 
ended 31 march 2012 the comparative period covered 
the 52 weeks ended 26 march 2011 
basis of accounting
the group’s ﬁnancial statements have been prepared 
in accordance with international financial reporting 
standards ifrs adopted for use in the european 
union international financial reporting 
interpretations committee ifric and with those parts 
of the companies act 2006 applicable to companies 
reporting under ifrs they therefore comply with 
article 4 of the eu ias regulation
new standards affecting presentation  
and disclosure
there are no new standards in the year affecting the 
presentation and disclosure of the ﬁnancial statements
new standards affecting the reported results and 
ﬁnancial position
there are no new standards in the year affecting the 
reported results and ﬁnancial position
new standards not affecting the reported results nor 
the ﬁnancial position 
the following new and revised standards and 
interpretations have been adopted in these ﬁnancial 
statements their adoption has not had any signiﬁcant 
impact on the amounts reported in these ﬁnancial 
statements but may impact the accounting for future 
transactions and arrangements
   ias 24 2009 ‘related party disclosures’
 
  improvements to ifrss 2010
 
  amendments to ifric 14 nov 2009 ‘prepayments 
of a minimum funding requirement’
   ifric 19 ‘extinguishing financial liabilities with 
equity instruments’
new standards in issue but not yet effective
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 and in some cases had not yet been 
adopted by the eu
    amendments to ifrs 7 ‘disclosures – transfers of 
financial assets’
    amendments to ifrs 7 ‘disclosures – offsetting 
financial assets and financial liabilities’
   ifrs 9 ‘financial instruments’
 
  ifrs 10 ‘consolidated financial statements’
 
  ifrs 11 ‘joint arrangements’
   ifrs 12 ‘disclosure of interests in other entities’
 
  ifrs 13 ‘fair value measurement’
 
   ias 1 amended ‘presentation of items in other 
comprehensive income’
    amendments to ias 12 ‘deferred tax recovery of 
underlying assets’
   ias 19 revised ‘employee beneﬁts’
 
  ias 27 revised ‘separate financial statements’
 
   ias 28 revised ‘investments in associates and 
joint ventures’
    amendments to ias 32 ‘offsetting financial assets 
and financial liabilities’ 
   amendments to ias 12 ‘deferred tax recovery of 
underlying assets’
the directors anticipate that the adoption of these 
standards and interpretations in future periods will 
have no material impact on the group’s ﬁnancial 
statements when the relevant standards come into 
effect except as follows
   ias 19 revised will impact the measurement of the 
various components representing movements in the 
deﬁned beneﬁt pension obligation and associated 
disclosures but not the group’s total obligation 
following the adoption of ias 19 revised effective 
from periods starting after 1 january 2013 the net 
retirement beneﬁt obligation in the balance sheet will 
not be impacted but the net ﬁnance cost of pensions 
within the income statement will increase this will 
reduce proﬁt for the year and accordingly increase 
other comprehensive income
the ﬁnancial statements have been prepared on the 
historical cost basis except for the revaluation of 
ﬁnancial instruments and on the going concern basis 
as described in the going concern statement in the  mothercare plc annual report and accounts 2012  61 
financial statements
goodwill
goodwill arising on consolidation represents the 
excess of the cost of acquisition over the group’s 
interest in the fair value of the identiﬁable assets and 
liabilities of a subsidiary associate or jointly controlled 
entity at the date of acquisition
goodwill is initially recognised as an asset at cost 
and is subsequently measured at cost less any 
accumulated impairment losses goodwill which is 
recognised as an asset is reviewed for impairment 
at least annually any impairment is recognised 
immediately in proﬁt or loss and is not 
subsequently reversed
for the purposes of impairment testing goodwill 
is allocated to each of the group’s cashgenerating 
units expected to beneﬁt from the synergies of the 
combination cashgenerating units to which goodwill 
has been allocated are tested for impairment 
annually or more frequently when there is an 
indication that the unit may be impaired if the 
recoverable amount of the cashgenerating unit is less 
than the carrying amount of the unit the impairment 
loss is allocated ﬁrst to reduce the carrying amount 
of any goodwill allocated to the unit and then to the 
other assets of the unit prorata on the basis of the 
carrying amount of each asset in the unit 
an impairment loss recognised for goodwill is not 
reversed in a subsequent period
on disposal of a subsidiary associate or jointly 
controlled entity the attributable amount of goodwill 
is included in the determination of the proﬁt or loss 
on disposal
revenue recognition
revenue is measured at the fair value of the 
consideration received or receivable and represents 
amounts receivable for goods and services provided 
in the normal course of business net of discounts 
vat and other sales related taxes
sales of goods are recognised when goods are 
delivered and title has passed sales to international 
franchise partners are recognised when the signiﬁcant 
risks and rewards of ownership have transferred 
which is on dispatch
royalty revenue is recognised on an accruals basis 
in accordance with the substance of the relevant 
agreement provided that it is probable that the 
economic beneﬁts will ﬂow to the group and the 
amount of revenue can be measured reliably 
royalty arrangements that are based on sales and 
other measures are recognised by reference to the 
underlying arrangement
corporate governance report on page 32 
the principal accounting policies are set out below
basis of consolidation
the consolidated ﬁnancial statements incorporate 
the ﬁnancial statements of the company and entities 
controlled by the company its subsidiaries made 
up to 31 march 2012 control is achieved where the 
company has the power to govern the ﬁnancial and 
operating policies of an investee entity so as to obtain 
beneﬁts from its activities
the results of subsidiaries acquired or disposed of 
during the ﬁnancial year are included in the 
consolidated income statement from the effective 
date of acquisition or up to the effective date of 
disposal as appropriate
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 intragroup transactions balances income and 
expenses are eliminated on consolidation
business combinations
the acquisition of subsidiaries is accounted for using 
the purchase method the cost of the acquisition is 
measured at the aggregate of the fair values at the 
date of exchange of assets given liabilities incurred 
or assumed and equity instruments issued by the 
group in exchange acquisition related costs are 
recognised in proﬁt and loss as incurred the 
acquiree’s identiﬁable assets liabilities and contingent 
liabilities that meet the conditions for recognition 
under ifrs 3 2008 ’business combinations’ are 
recognised at their fair value at the acquisition date 
except for noncurrent assets or disposal groups that 
are classiﬁed as held for sale in accordance with ifrs 
5 ’noncurrent assets held for sale and discontinued 
operations’ which are recognised and measured at 
fair value less costs to sell and deferred tax assets or 
liabilities or assets related to employee beneﬁt 
arrangements are recognised and measured in 
accordance with ias 12 ‘income taxes’ and ias 19 
‘employee beneﬁts’ respectively
goodwill arising on acquisition is recognised as an 
asset and initially measured at cost being the excess 
of the cost of the business combination over the 
group’s interest in the net fair value of the identiﬁable 
assets liabilities and contingent liabilities recognised 
if after reassessment the group’s interest in the net fair 
value of the acquiree’s identiﬁable assets liabilities 
and contingent liabilities exceeds the cost of the 
business combination the excess is recognised 
immediately in the income statement  62  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
interest income is accrued on a time basis by 
reference to the principal outstanding and at the 
effective interest rate applicable which is the rate 
that exactly discounts estimated future cash receipts 
through the expected life of the ﬁnancial asset to that 
asset’s net carrying amount
proﬁt from retail operations
proﬁt from retail operations represents the proﬁt 
generated from normal retail trading prior to any 
gains or losses on property transactions it also 
includes the volatility arising from accounting for 
derivative ﬁnancial instruments under ias 39 ‘financial 
instruments recognition and measurement’ as the 
group has not adopted hedge accounting
underlying earnings
the group believes that underlying proﬁt before tax 
and underlying earnings provides additional useful 
information for shareholders the term underlying 
earnings is not a deﬁned term under ifrs and may 
not therefore be comparable with similarly titled proﬁt 
measurements reported by other companies it is not 
intended to be a substitute for ifrs measures of proﬁt 
as the group has chosen to present an alternative 
earnings per share measure a reconciliation of this 
alternative measure to the statutory measure required 
by ifrs is given in note 11
to meet the needs of shareholders and other external 
users of the ﬁnancial statements the presentation of 
the income statement has been formatted to show 
more clearly through the use of columns our 
underlying business performance which provides 
more useful information on underlying trends 
the adjustments made to reported results are 
as follows
exceptional items
due to their signiﬁcance or oneoff nature certain 
items have been classiﬁed as exceptional the gains 
and losses on these discrete items such as proﬁts
losses on the disposaltermination of property 
interests impairment charges restructuring costs and 
other nonoperating items can have a material 
impact on the absolute amount of and trend in the 
proﬁt from operations and the result for the period 
therefore any gains and losses on such items are 
analysed as nonunderlying on the face of the income 
statement further details of the exceptional items are 
provided in note 6
noncash foreign currency adjustments
the group has taken the decision not to adopt hedge 
accounting under ias 39 ‘financial instruments 
recognition and measurement’ the effect of not 
applying hedge accounting under ias 39 means that 
the reported results reﬂect the actual rate of 
exchange ruling on the date of a transaction 
regardless of the cash ﬂow paid by the group at the 
predetermined rate of exchange in addition any 
gain or loss accruing on open contracts at a reporting 
period end is recognised in the result for the period 
regardless of the actual outcome of the contract on 
closeout whilst the impacts described above could 
be highly volatile depending on movements in 
exchange rates this volatility will not be reﬂected in 
the cash ﬂows of the group which will be based on 
the hedged rate in addition foreign currency 
monetary assets and liabilities are revalued to the 
closing balance sheet rate under ias 21 ‘the effects of 
changes in foreign exchange rates’ the adjustment 
made by the group therefore is to report its underlying 
performance consistently with the cash ﬂows 
reﬂecting the hedging which is in place
amortisation of intangible assets
the balance sheet includes identiﬁable intangible 
assets which arose on the acquisition of the early 
learning centre and blooming marvellous and are 
amortised on a straightline basis over their expected 
economic lives the average estimated useful life of the 
assets is as follows
trade name – 10 to 20 years 
customer relationships – 5 to 10 years
the amortisation of these intangible assets does not 
reﬂect the underlying performance of the business
unwinding of discount on exceptional provisions
where property provisions are charged to 
exceptional items the associated unwinding of the 
discount on these provisions is classiﬁed as 
nonunderlying
joint ventures and associates
joint ventures and associates are accounted for using 
the equity method whereby the interest in the joint 
venture or associate is initially recorded at cost and 
adjusted thereafter for the post acquisition change in 
the group’s share of net assets less any impairment in 
the value of individual investments the proﬁt or loss of 
the group includes the group’s share of the proﬁt or 
loss of the joint ventures and associates
any excess of the cost of acquisition over the group’s 
share of the net fair value of the identiﬁable assets 
liabilities and contingent liabilities recognised at 
the date of acquisition is recognised as goodwill 
the goodwill is included within the carrying amount 
of the investment and is assessed for impairment as 
part of that investment  mothercare plc annual report and accounts 2012  63 
financial statements
where a group entity transacts with an associate or 
joint venture of the group proﬁts and losses are 
eliminated to the extent of the group’s interest in the 
relevant associate or joint venture
leasing
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
the group as lessor
rental income from operating leases is recognised 
on a straightline basis over the term of the relevant 
lease initial direct costs incurred in negotiating and 
arranging an operating lease are added to the 
carrying amount of the leased asset and recognised 
on a straightline basis over the term of the leases 
the group as lessee
assets held under ﬁnance leases are recognised as 
assets of the group at their fair value or if lower at 
the present value of the minimum lease payments 
each determined at the inception of the lease the 
corresponding liability to the lessor is included in the 
balance sheet as a ﬁnance lease obligation lease 
payments are apportioned between ﬁnance charges 
and reduction of the lease obligation so as to achieve 
a constant rate of interest on the remaining balance 
of the liability finance charges are charged directly 
against income unless they are directly attributable 
to qualifying assets in which case they are capitalised
rentals payable under operating leases are charged 
to income on a straightline 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 
straightline basis over the lease term
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 
functional currency 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 nonmonetary assets and liabilities 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 nonmonetary items that 
are measured in terms of historical cost in a foreign 
currency are not retranslated 
exchange differences arising on the settlement of 
monetary items and on the retranslation of monetary 
items are included in the income statement exchange 
differences arising on nonmonetary items carried 
at fair value are included in the proﬁt or loss for 
the period except for differences arising on the 
retranslation of nonmonetary items in respect of 
which gains and losses are recognised directly in 
equity for such nonmonetary items any exchange 
component of that gain or loss is also recognised 
directly in equity
in order to hedge its exposure to certain foreign 
exchange risks the group enters into forward 
contracts see below for details of the group’s 
accounting policies in respect of such derivative 
ﬁnancial instruments
for the purpose of presenting consolidated ﬁnancial 
statements the assets and liabilities of the group’s 
foreign operations are translated at exchange rates 
prevailing on the balance sheet date income and 
expense items are translated at the average 
exchange rates for the period unless exchange 
rates ﬂuctuate signiﬁcantly during that period in 
which case the exchange rates at the date of 
transactions are used exchange differences arising 
if any are classiﬁed within other comprehensive 
income accumulated in equity in the group’s 
translation reserve such translation differences are 
recognised as income or as expenses in the period 
in which the operation is disposed of
retirement beneﬁt costs
payments to deﬁned contribution retirement beneﬁt 
schemes are charged as an expense as they fall due
for deﬁned beneﬁt schemes the cost of providing 
beneﬁts is determined using the projected unit credit 
method with actuarial valuations being carried out at 
each balance sheet date actuarial gains and losses 
are recognised in full in the period in which they occur 
they are recognised outside of the income statement 
and presented in other comprehensive income
past service cost is recognised immediately to the 
extent that the beneﬁts are already vested and 
otherwise is amortised on a straightline basis over the 
average period until the beneﬁts become vested 64  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
the retirement beneﬁt obligation recognised in the 
balance sheet represents the present value of the 
deﬁned beneﬁt obligation as adjusted for 
unrecognised past service cost and as reduced by 
the fair value of scheme assets any asset resulting 
from this calculation is limited to past service cost 
plus the present value of available refunds and 
reductions in future contributions to the scheme
in consultation with the independent actuaries to 
the schemes the valuation of the retirement beneﬁt 
obligations has been updated to reﬂect current 
market discount rates and also considering whether 
there have been any other events that would 
signiﬁcantly affect the pension liabilities the impact 
of these changes in assumptions and events has 
been estimated in arriving at the valuation of the 
retirement beneﬁt obligations
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 ﬁnancial 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 ﬁnancial 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 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 other 
comprehensive income in which case the deferred tax 
is also dealt with in other comprehensive income
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
property plant and equipment
property plant and equipment is carried at cost less 
accumulated depreciation and any recognised 
impairment losses
depreciation is charged so as to write off the cost or 
valuation of assets other than land and assets in 
course of construction over their estimated useful 
lives using the straightline method on the 
following bases
freehold buildings – 50 years
fixed equipment in freehold buildings – 20 years
leasehold improvements – the lease term
fixtures ﬁttings and equipment – 3 to 20 years
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
intangible assets – software
where computer software is not an integral part of a 
related item of computer hardware the software is 
classiﬁed as an intangible asset the capitalised costs 
of software for internal use include external direct 
costs of materials and services consumed in 
developing or obtaining the software and payroll and 
payrollrelated costs for employees who are directly 
associated with and who devote substantial time to 
the project capitalisation of these costs ceases no 
later than the point at which the software is 
substantially complete and ready for its intended 
internal use these costs are amortised on a straight
line basis over their expected useful lives which is 
normally ﬁve years mothercare plc annual report and accounts 2012  65 
financial statements
impairment of tangible and intangible assets 
excluding goodwill
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 cashgenerating unit to which the asset belongs 
an intangible asset with an indeﬁnite useful life is 
tested for impairment at least annually and whenever 
there is an indication that an asset may be impaired
recoverable amount is the higher of fair value less 
costs to sell and value in use in assessing value in use 
the estimated future cash ﬂows are discounted to their 
present value using a pre tax discount rate that 
reﬂects current market assessments of the time value 
of money and the risks speciﬁc to the asset for which 
the estimates of future cash ﬂows have not 
been adjusted
if the recoverable amount of an asset or cash
generating unit is estimated to be less than its 
carrying amount the carrying amount of the asset or 
cashgenerating 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 or cashgenerating 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 or cashgenerating unit in 
prior years a reversal of an impairment loss is 
recognised as income immediately
inventories
inventories are stated at the lower of cost and net 
realisable value cost comprises direct materials and 
where applicable direct labour costs and those 
overheads that have been incurred in bringing the 
inventories to their present location and condition 
cost is calculated using the weighted average cost 
formula net realisable value represents the estimated 
selling price less all estimated costs of completion 
and costs to be incurred in marketing selling 
and distribution
financial instruments
financial assets and liabilities are recognised on the 
group’s balance sheet when the group becomes a 
party to the contractual provisions of the instrument
trade receivables
trade receivables are measured at initial recognition 
at fair value and are subsequently measured at 
amortised cost using the effective interest rate method 
appropriate allowances for estimated irrecoverable 
amounts are recognised in the income statement 
when there is objective evidence that the asset is 
impaired the allowance recognised is measured as 
the difference between the asset’s carrying amount 
and the present value of estimated future cash ﬂows 
discounted at the effective interest rate computed at 
initial recognition
cash and cash equivalents
cash and cash equivalents comprise cash in 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 change in value
financial liabilities and equity
financial liabilities and equity instruments are 
classiﬁed according to the substance of the 
contractual arrangements entered into an equity 
instrument is any contract that evidences a residual 
interest in the assets of the group after deducting all 
of its liabilities
bank borrowings
interestbearing bank loans and overdrafts are 
initially measured at fair value 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 to the income 
statement using the effective rate interest method and 
are added to the carrying amount of the instrument 
to the extent that they are not settled in the period in 
which they arise
trade payables
trade payables are initially measured at fair value 
and are subsequently measured at amortised cost 
using the effective interest rate method
equity instruments
equity instruments issued by the company are 
recorded as the proceeds are received net of direct 
issue costs
derivative ﬁnancial instruments
the group uses forward foreign currency contracts to 
mitigate the transactional impact of foreign currencies 
on the group’s performance the group’s ﬁnancial risk 
management policy prohibits the use of derivative 
ﬁnancial instruments for speculative or trading 
purposes and the group does not therefore hold 
or issue any such instruments for such purposes  66  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
2 signiﬁcant accounting policies continued
derivative ﬁnancial instruments that are economic 
hedges that do not meet the strict ias 39 ‘financial 
instruments recognition and measurement’ hedge 
accounting rules are accounted for as ﬁnancial assets 
or liabilities at fair value through proﬁt or loss and 
hedge accounting is not applied forward foreign 
currency contracts are recognised initially at fair 
value which is updated at each balance sheet date 
changes in the fair values are recognised in the 
income statement
embedded derivatives
derivatives embedded in other ﬁnancial instruments 
or other host contracts are treated as separate 
derivatives when their risks and characteristics are not 
closely related to those of the host contracts and the 
host contracts are not measured at fair value through 
proﬁt or loss
market risk
the group is exposed to market risk primarily related 
to foreign exchange and interest rates the group’s 
objective is to reduce where it deems appropriate 
to do so ﬂuctuations in earnings and cash ﬂows 
associated with changes in interest rates foreign 
currency rates and of the currency exposure of certain 
net investments in foreign subsidiaries it is the group’s 
policy and practice to use derivative ﬁnancial 
instruments to manage exposures of ﬂuctuations on 
exchange rates the group only sells existing assets 
or enters into transactions and future transactions 
in the case of anticipatory hedges that it conﬁdently 
expects it will have in the future based on past 
experience the group expects that any loss in value 
for these instruments generally would be offset by 
increases in the value of the underlying transactions
foreign exchange rate risk
foreign exchange risk is the risk that the fair value of 
future cash ﬂows of a ﬁnancial instrument will ﬂuctuate 
because of the changes in foreign exchange rates the 
group uses uk pounds sterling as its reporting currency 
as a result the group is exposed to foreign exchange 
rate risk on ﬁnancial assets and liabilities that are 
denominated in a currency other than uk sterling 
primarily in us dollars and hong kong dollars
consequently it enters into various contracts that 
reﬂect the changes in the value of foreign exchange 
rates to preserve the value of assets commitments 
and anticipated transactions the group also uses 
forward contracts and options primarily in us dollars
provisions
provisions are recognised when the group has a 
present obligation as a result of a past event and 
it is probable that the group will be required to settle 
that 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
sharebased payments
the group has applied the requirements of ifrs 2 
‘sharebased payments’
the group issues cashsettled and equitysettled 
sharebased payments to certain employees 
equitysettled sharebased payments are measured 
at fair value at the date of grant the fair value 
determined at the grant date of the equitysettled 
sharebased payments is expensed on a straightline 
basis over the vesting period based on the group’s 
estimate of shares that will eventually vest and 
adjusted for the effect of non marketbased vesting 
conditions updated at each balance sheet date
fair value is measured by use of the valuation 
technique considered to be most appropriate for 
each class of award including blackscholes 
calculations and monte carlo simulations 
the expected life used in the formula is adjusted 
based on management’s best estimate for the 
effects of nontransferability exercise restrictions 
and behavioural considerations
for cashsettled sharebased payments a liability 
equal to the portion of the goods or services received 
is recognised at the current fair value determined at 
each balance sheet date with any changes in fair 
value recognised in proﬁt or loss for the year
the group also provides employees with the ability to 
purchase the group’s ordinary shares at 80 of the 
current market value within an approved save as you 
earn scheme the group records an expense based 
on its estimate of the 20 discount related to shares 
expected to vest on a straightline basis over the 
vesting period
onerous leases
present obligations arising out of 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
3 critical accounting judgements and key sources of 
estimation uncertainty
in the process of applying the group’s accounting 
policies which are described in note 2 management 
has made the following judgements that have the 
most signiﬁcant effect on the amounts recognised in 
the ﬁnancial statements mothercare plc annual report and accounts 2012  67 
financial statements
the key assumptions concerning the future and other 
key sources of estimation uncertainty at the balance 
sheet date 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
retirement beneﬁts
retirement beneﬁts are accounted for under ias 19 
‘employee beneﬁts’ for deﬁned beneﬁt plans 
obligations are measured at discounted present 
value whilst plan assets are recorded at fair value 
because of changing market and economic 
conditions the expenses and liabilities actually arising 
under the plans in the future may differ materially from 
the estimates made on the basis of these actuarial 
assumptions the plan assets are partially comprised 
of equity and ﬁxedincome instruments therefore 
declining returns on equity markets and markets for 
ﬁxedincome instruments could necessitate additional 
contributions to the plans in order to cover future 
pension obligations also higher or lower withdrawal 
rates or longer or shorter life of participants may have 
an impact on the amount of pension income or 
expense recorded in the future 
the interest rate used to discount postemployment 
beneﬁt obligations to present value is derived from 
the yields of senior highquality corporate bonds at 
the balance sheet date these generally include 
aarated securities the discount rate is based on the 
yield of a portfolio of bonds whose weighted residual 
maturities approximately correspond to the duration 
necessary to cover the entire beneﬁt obligation 
pension and other postretirement beneﬁts are 
inherently long term and future experience may differ 
from the actuarial assumptions used to determine the 
net charge for ‘pension and other postretirement 
charges’ note 29 to the consolidated ﬁnancial 
statements describes the principal discount rate 
earnings increase and pension retirement beneﬁt 
obligation assumptions that have been used to 
determine the pension and postretirement charges in 
accordance with ias 19 the calculation of any charge 
relating to retirement beneﬁts is clearly dependent on 
the assumptions used which reﬂects the exercise of 
judgement the assumptions adopted are based on 
prior experience market conditions and the advice of 
plan actuaries
at 31 march 2012 the group’s pension liability was 
£527 million 2011 £376 million further details of the 
accounting policy on retirement beneﬁts are provided 
in note 2
impairment of stores’ property plant and equipment
stores’ property plant and equipment see note 16 
are reviewed for impairment on a periodic basis and 
whenever events or changes in circumstances indicate 
that the related carrying amounts may not be 
recoverable such circumstances or events could 
include a pattern of losses involving the ﬁxed asset 
a decline in the market value for a particular store 
asset and an adverse change in the business or 
market in which the store asset is involved 
determining whether an impairment has occurred 
typically requires various estimates and assumptions 
including determining what cash ﬂow is directly 
related to the potentially impaired asset the useful life 
over which cash ﬂows will occur their amount and the 
asset’s residual value if any estimates of future cash 
ﬂows and the selection of appropriate discount rates 
relating to particular assets or groups of assets involve 
the exercise of a signiﬁcant amount of judgement
further details of the accounting policy on the 
impairment of stores’ property plant and equipment 
are provided in note 2
impairment of goodwill
determining whether goodwill is impaired requires an 
estimation of the value in use of the cashgenerating 
units to which goodwill has been allocated the value 
in use calculation requires the group to estimate 
future  cash ﬂows expected to arise from the cash
generating unit a suitable long term growth rate and 
a suitable discount rate in order to calculate present 
value the carrying amount of goodwill at the balance 
sheet date was £268 million 2011 £686 million
property provisions
descriptions of the provisions held at the balance 
sheet date are given at note 24 these provisions 
are estimates and the actual costs and timing of 
future cash ﬂows are dependent on future events 
any differences between expectations and the actual 
future liability are accounted for in the period when 
such determination is made
onerous leases
provisions has been made in respect of leasehold 
properties for vacant partly let and loss making 
trading stores and costs relating to early learning 
centre’s supply chain warehouse for the shorter of the 
remaining period of the lease and the period until in 
the directors’ opinion they will be able to exit the lease 
commitment the amount provided is based on the 
future rental obligations together with other ﬁxed 
outgoings net of any sublease income and in the 
case of trading stores the expected future shortfall 
in contribution to cover the ﬁxed outgoings 68  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
3 critical accounting judgements and key sources of estimation uncertainty continued
in determining the provision the cash ﬂows have been discounted on a pre tax basis using a risk free rate of return signiﬁcant 
assumptions are used in making these calculations and changes in assumptions and future events could cause the value of 
these provisions to change
allowances against the carrying value of inventory
the group reviews the market value of and demand for its inventories on a periodic basis to ensure that recorded inventory is 
stated at the lower of cost and net realisable value in assessing the ultimate realisation of inventories the group is required to 
make judgements as to future demand requirements and to compare these with current inventory levels factors that could 
impact estimated demand and selling prices are timing and success of product ranges see note 18
allowances against the carrying value of trade receivables
using information available at the balance sheet date the group reviews its trade receivable balances and makes 
judgements based on an assessment of past experience debt ageing and known customer circumstance in order to 
determine the appropriate level of allowance required to account for potential irrecoverable trade receivables see note 19
4 revenue
an analysis of the group’s revenue all of which relates to continuing operations is as follows
53 weeks
ended
31 march
2012
£ million
52 weeks
ended
26 march
2011
£ million
revenue 8127 7936
interest revenue 09 01
total revenue 8136 7937
5 segmental information
ifrs 8 requires operating segments to be identiﬁed on the basis of internal reports about components of the group that 
are regularly reported to the group’s board in order to allocate resources to the segments and assess their performance 
the group’s reporting segments under ifrs 8 are uk and international
uk comprises the group’s uk store and wholesale operations catalogue and online sales the international business comprises 
the group’s franchise and wholesale revenues outside the uk the unallocated corporate expenses represent board and 
company secretarial costs and other head ofﬁce costs including audit professional fees insurance and head ofﬁce property
53 weeks ended 31 march 2012
uk
£ million
international
£ million
unallocated
corporate
expenses
£ million
consolidated
£ million
revenue
external sales 5600 2527 – 8127
result
segment result underlying 247 349 76
26
sharebased payments underlying 06
noncash foreign currency adjustments 20
amortisation of intangible assets 20
exceptional items 1044
loss from operations 1024
net ﬁnance costs 05
loss before taxation 1029
taxation 111
loss for the period 918 mothercare plc annual report and accounts 2012  69 
financial statements
52 weeks ended 26 march 2011
uk
£ million
international
£ million
unallocated
corporate
expenses
£ million
consolidated
£ million
revenue
external sales 5872 2064 – 7936
result
segment result underlying 111 275 75
311 
sharebased payments 22
noncash foreign currency adjustments 138
amortisation of intangible assets 23
exceptional items 34
proﬁt from operations 94
net ﬁnance costs 06
proﬁt before taxation 88
taxation 23
proﬁt for the period 65
revenues are attributed to countries on the basis of the customer’s location the largest international customer represents 
approximately 138 2011 99 of group international sales 
53 weeks ended 31 march 2012
uk
£ million
international
£ million
consolidated
£ million
other information
capital additions 201 59 260
depreciation and amortisation 178 50 228
balance sheet
assets
segment assets 2031 1158 3189
unallocated corporate assets 195
consolidated total assets 3384
liabilities
segment liabilities 1760 137 1897
unallocated corporate liabilities 760
consolidated total liabilities 2657
in addition to the depreciation and amortisation reported above impairment losses of £94 million £418 million and 
£132 million 2011 £nil were recognised in respect of property plant and equipment goodwill and intangible assets 
respectively these impairment losses were attributable to the uk segment 70  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
5 segmental information continued
52 weeks ended 26 march 2011
uk
restated
£ million
international
restated
£ million
consolidated
£ million
other information
capital additions 217 40 257
depreciation and amortisation 196 34 230
balance sheet
assets
segment assets 2778 1093 3871
unallocated corporate assets 222
consolidated total assets 4093
liabilities
segment liabilities 1698 54 1752
unallocated corporate liabilities 413
consolidated total liabilities 2165
capital additions and depreciation and amortisation have been restated to separately identify those items that form part of the international segment
corporate assets not allocated to uk or international represent current tax assetsliabilities deferred tax assetsliabilities 
cash at bank and in hand currency derivative assetsliabilities and retirement beneﬁt obligations
6 exceptional and other nonunderlying items
due to their signiﬁcance or oneoff nature certain items have been classiﬁed as exceptional or nonunderlying as follows
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
exceptional items
restructuring costs in cost of sales 20 –
restructuring costs included in administrative expenses 71 36
store property plant and equipment impairment included in administrative expenses 38 –
sharebased payment credit included in administrative expenses 08 –
onerous lease provision 115 –
lossproﬁt on disposaltermination of property interests 226 02
goodwill and intangible assets impairment see note 15 550 –
impairment of investment in associate see note 14 28 –
share of restructuring cost in associate 04 –
total exceptional items 1044 34
other nonunderlying items
noncash foreign currency adjustments under ias 39 and ias 21
1
20 138
amortisation of intangibles
1
20 23
unwinding of discount on exceptional property provisions included in ﬁnance costs 01 02
exceptional and other nonunderlying items 1045 197
1 included in nonunderlying cost of sales is a charge of £nil million 2011 charge of £161 million mothercare plc annual report and accounts 2012  71 
financial statements
restructuring costs in cost of sales
during the 53 weeks ended 31 march 2012 the warehouse previously supplying the early learning centre online business was 
closed and the business transferred into the warehouse supporting the mothercare online business this rationalisation of 
warehouses led to a oneoff integration cost of £20 million 2011 £nil
restructuring costs in administration expenses
during the 53 weeks ended 31 march 2012 a charge of £71 million 2011 £36 million was recognised relating to a substantial 
head ofﬁce restructuring and group reorganisation included within this expense are redundancy payments including some 
senior executives curtailment gain on the deﬁned beneﬁt pension scheme and professional and advisory fees in connection 
with the new strategic plan
store property plant and equipment impairment included in administration expenses
during the 53 weeks ended 31 march 2012 the group has made provision of £38 million 2011 £nil for store impairment where 
the carrying value of property plant and equipment is higher than the net realisable value and value in use
sharebased payment credit included in administrative expenses
during the 53 weeks ended 31 march 2012 a credit of £08 million was recognised in respect of leavers from the executive 
incentive share schemes
onerous lease provision
a provision of £115 million has been made for onerous leases relating to vacant sublet and trading properties having taken 
into consideration the results for the year the christmas trading activity and the continued pressure on the uk store portfolio 
onerous lease provisions have been recognised where there is an expected shortfall in the store contribution to cover the 
ﬁxed rental obligations a discount rate of 23 has been used in calculating the provision being the risk free rate
lossproﬁt on disposaltermination of property interests
during the 53 weeks ended 31 march 2012 a net charge of £226 million 52 weeks ended 2011 a net credit of £02 million 
has been recognised in lossproﬁt from operations relating to losses on disposaltermination of property interests relating 
to the store reduction programme announced in may 2011 in april 2012 the group announced further store closures and 
these related costs will be provided for in the next ﬁnancial year 
goodwill and intangible assets impairment
the group has carried out a review to determine whether there is any indication that the goodwill and intangible assets have 
suffered any impairment loss it has been determined that the uk business does not generate sufﬁcient cash ﬂows to support 
the value of the goodwill and intangible assets allocated to the uk segment and consequently an impairment loss of 
£550 million has been charged
impairment of investment in associate
the group has carried out a review of its investment in associate and written the investment down to recoverable amount 
at 31 march 2012 £28 million charge
share of restructuring cost in associate
during the year the australian associate undertook a signiﬁcant integration and rebranding of three separate mother 
and baby chains into a single cohesive mothercare brand mothercare’s share of these costs of £04 million 2011 £nil is 
included and has been treated as exceptional 72  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
7  lossproﬁt from retail operations
lossproﬁt from retail operations has been arrived at after chargingcrediting
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
net total foreign exchange gainslosses 52 74
cost of inventories recognised as an expense 4918 4335
releasewrite down of inventories to net realisable value 05 10
depreciation of property plant and equipment 162 166
amortisation of intangible assets – software 46 41
amortisation of intangible assets – other included in nonunderlying cost of sales 20 23
impairment of property plant and equipment 38 –
underlying loss on disposal of property plant and equipment 07 –
net rent of properties 654 682
amortisation of lease incentives 52 59
hire of plant and equipment 19 19
staff costs including directors
wages and salaries including cash bonuses excluding sharebased payment charges 858 879
social security costs 53 55
pension costs see note 29 25 41
sharebased payment creditcharges see note 28 02 22
exceptional costs included in cost of sales see note 6 20 161
exceptional costs included in administrative expenses see note 6 71 36
an analysis of the average monthly number of full and parttime employees throughout the group including executive 
directors is as follows
53 weeks 
ended 
31 march 
2012
number
52 weeks 
ended 
26 march 
2011
number
number of employees comprising
uk stores 5890 6390
head ofﬁce 779 772
overseas 274 278
total 6943 7440
full time equivalents 4350 4650
details of directors’ emoluments share options and beneﬁcial interests are provided within the remuneration report on 
pages 42 to 49
for the 53 weeks ended 31 march 2012 proﬁt from retail operations is stated after a nonunderlying net credit of £20 million 
2011 £138 million charge to cost of sales as a result of noncash foreign currency adjustments under ias 39 and ias 21 mothercare plc annual report and accounts 2012  73 
financial statements
the analysis of auditor’s remuneration is as follows
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
fees payable to the company’s auditor for the audit of the company’s annual accounts 01 01
fees payable to the company’s auditor for other services to the group
the audit of the company’s subsidiaries pursuant to legislation 02 02
total audit fees 03 03
corporate ﬁnance services – 02
tax advisory services – 01
other services 02 –
total nonaudit fees 02 03
the nature of tax services comprises corporation tax advice and compliance services
the corporate ﬁnance fees were in connection with investments and potential investments other services of £02 million 
include fees in connection with restructuring and the review of the group’s interim statement
fees payable to deloitte llp and their associates for nonaudit services to the company are not required to be disclosed 
because the consolidated ﬁnancial statements are required to disclose such fees on a consolidated basis
the policy for the approval of nonaudit fees together with an explanation of the services provided is set out on page 37 
in the corporate governance report
8 net ﬁnance costs
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
interest receivable 09 01
interest and bank fees on bank loans and overdrafts 13 05
unwinding of discounts on provisions
1
01 02
net ﬁnance costs 05 06
1 nonunderlying charge of £01 million 2011 £02 million of unwinding of discount on exceptional provisions see note 6 74  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
9  taxation
the creditcharge for taxation on lossproﬁt for the period comprises
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
current tax
current year 21 81
adjustment in respect of prior periods 24 08
45 73
deferred tax see note 17
current year 65 50
change in tax rate in respect of prior periods 05 06
adjustment in respect of prior periods 04 06
66 50
creditcharge for taxation on lossproﬁt for the period 111 23
uk corporation tax is calculated at 26 2011 28 of the estimated assessable lossproﬁt for the period taxation for other 
jurisdictions is calculated at the rates prevailing in the respective jurisdictions
the creditcharge for the period can be reconciled to the lossproﬁt for the period before taxation per the consolidated 
income statement as follows
53 weeks 
ended 
31 march 
2012
£ million
52 weeks 
ended 
26 march 
2011
£ million
lossproﬁt for the period before taxation 1029 88
lossproﬁt for the period before taxation multiplied by the standard rate of corporation tax in the 
uk of 26 2011 28 267 25
effects of
expenses not deductible for tax purposes 154 10
change in tax rate 02 10
impact of overseas tax rates 02 07
utilisation of tax losses not previously recognised against capital gains 03 01
adjustment in respect of prior periods 20 14
impact of writeoff of prior year deferred tax asset 19 –
creditcharge for taxation on lossproﬁt for the period 111 23
in addition to the amount credited to the income statement deferred tax relating to retirement beneﬁt obligations amounting 
to £41 million has been credited directly to other comprehensive income 2011 £43 million charge mothercare plc annual report and accounts 2012  75 
financial statements
10 dividends
53 weeks ended  
31 march 2012
52 weeks ended  
26 march 2011
pence per 
share £ million
pence per 
share £ million
amounts recognised as distributions to equity holders in the period
final dividend for the prior period 119p 101 113p 99
interim dividend for the current period 20p 18 64p 56
119 155
in line with the announcement made with the trading statement on 12 april 2012 the company will not pay any dividend until 
the ‘transformation and growth’ plan is delivering beneﬁts and accordingly no ﬁnal dividend has been declared for the 
53 weeks ended 31 march 2012
11 earnings per share
53 weeks 
ended 
31 march 
2012 
million
52 weeks 
ended 
26 march 
2011 
million
weighted average number of shares in issue 872 858
dilution – option schemes for underlying results only 17 18
diluted weighted average number of shares in issue 889 876
£ million £ million
earnings for basic and diluted earnings per share 918 65
exceptional and other nonunderlying items note 6 1045 197
tax effect of above items 111 50
underlying earnings 16 212
pence pence
basic earnings per share 1052 76
basic underlying earnings per share 18 247
diluted earnings per share 1052 74
diluted underlying earnings per share 18 242
12 subsidiaries
a list of the group’s signiﬁcant investments in subsidiaries all of which are wholly owned including the name and country 
of incorporation is given in note 3 to the company ﬁnancial statements all subsidiaries are included in the consolidation 76  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
13 investments in joint ventures
53 weeks 
ended 
31 march 
2012 
 
£ million
52 weeks
 ended 
26 march
2011
restated
£ million
investments at start of period 32 17
additions 45 24
share of loss 09 09
investments at end of period 68 32
summary aggregate ﬁnancial results and position of joint ventures
current assets 149 117
noncurrent assets 48 54
total assets 197 171
current liabilities 82 90
noncurrent liabilities – 09
total liabilities 82 99
total joint venture revenue 255 92
total loss for the period 31 31
 the prior year has been restated to separately analyse joint ventures and associates see note 14
details of the joint ventures are as follows
 place of 
incorporation
 proportion 
of 
ownership 
interest 
proportion 
of voting 
power held

mothercaregoodbaby china retail limited hong kong 30 50
rhea retail private limited india 30 30
juno retail private limited india 30 30
wadicare limited cyprus 30 30
on 1 november 2011 the group acquired a 30 share of the share capital of wadicare limited a company registered in 
cyprus for £2 million plus associated acquisition costs this company has purchased the shares of mb group limited ukraine 
which trades through the former mothercare and early learning centre franchises in ukraine
during the year the group made additional investments in mothercaregoodbaby china retail limited of £13 million 
rhea retail private limited £05 million and juno retail private limited £04 million mothercare plc annual report and accounts 2012  77 
financial statements
14 investments in associate
53 weeks  
ended  
31 march  
2012  
£ million
52 weeks
 ended 
26 march
2011
restated
£ million
investment at start of period 72 –
additions 15 81
share of loss 27 09
impairment 28 –
investment at end of period 32 72
summary ﬁnancial results and position of associates
current assets 179 210
noncurrent assets 156 135
total assets 335 345
current liabilities 177 138
noncurrent liabilities 34 13
total liabilities 211 151
total revenue for the period
1
511 187
total loss for the period
1
113 36
 the prior year has been restated to separately analyse joint ventures and associates
1 the period shown above relates to the 12 months ended 31 december 2011 comparative is the six months post acquisition to 31 december 2010
details of the associate is as follows
place of 
incorporation 
proportion 
of 
ownership 
interest 

proportion 
of voting 
power held 

mothercare australia limited australia 230 230
at 31 march 2012 the group undertook an impairment review of the investment carrying value a discounted cash ﬂow forecast 
was used based on two years of forecasts extended out a further two years using planned growth rates a pre tax discount 
rate of 983 was used the impairment review indicated that the cost of investment was worth more than the recoverable 
amount at 31 march 2012 and therefore the group has made an impairment provision of £28 million the reporting date of 
mothercare australia limited is 30 june 2012 the group has equity accounted for mothercare australia limited for 12 months 
ended 31 december 2011 as the data for the ﬁnal three months to 31 march 2012 has not been made available yet and is price 
sensitive as mothercare australia limited is a public company 78  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
15 goodwill and intangible assets 
intangible assets
goodwill 
£ million
trade 
name 
£ million
customer 
relationships 
£ million
software 
£ million
total 
£ million
cost
as at 27 march 2010 686 252 57 212 521
additions – 31 – 52 83
exchange differences – 03 – – 03
as at 27 march 2011 686 286 57 264 607
additions – – – 32 32
exchange differences – 02 – – 02
as at 31 march 2012 686 288 57 296 641
amortisation and impairment losses
as at 27 march 2010 – 35 23 100 158
amortisation – 15 08 41 64
as at 27 march 2011 – 50 31 141 222
impairment losses 418 120 12 – 132
amortisation – 13 07 46 66
as at 31 march 2012 418 183 50 187 420
net book value
as at 27 march 2010 686 217 34 112 363
as at 26 march 2011 686 236 26 123 385
as at 31 march 2012 268 105 07 109 221
goodwill trade name and customer relationships relate to the acquisition of the early learning centre on 19 june 2007 
gurgle limited on 8 september 2009 and blooming marvellous on 7 july 2010 trade name and customer relationships 
are amortised over a useful life of 1020 and 510 years respectively
impairment of goodwill
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
goodwill acquired through the business combination has been allocated to the two groups of cashgenerating units cgus 
that are expected to beneﬁt from that business combination being uk £nil 2011 £418 million and international £268 million 
2011 £268 million which are also reporting segments these represent the lowest level within the group at which goodwill is 
monitored for internal management purposes
the recoverable amounts of the cgus are determined from value in use calculations with a discounted cash ﬂow model 
being used to calculate this amount the key assumptions for the value in use calculation are those regarding the discount 
rates growth rates and expected changes to selling prices management has used a pre tax discount rate of 983 
2011 104 which reﬂects the time value of money and risks related to the cgus the cash ﬂow projections are based on 
ﬁnancial budgets and forecasts approved by the board covering a threeyear period cash ﬂows beyond the threeyear 
period assume a 2 growth rate 2011 2 which does not exceed the long term growth rate for the market in which the 
group operates the value in use calculations use this growth rate to perpetuity
the group has conducted sensitivity analysis on the impairment test of the international cgu with reasonable possible 
changes in key assumptions there is no indication that the carrying amount of goodwill would be reduced to a lower amount
at 26 march 2011 goodwill of £418 million was allocated to the uk business segment and £268 million to the international 
business the uk segment has experienced a fall in demand during the year the group has therefore revised its cash ﬂow 
forecast for the uk business segment and goodwill and intangibles has seen a reduction to its recoverable amount through 
recognition of an impairment loss against goodwill £418 million trade name £120 million and customer relationships 
£12 million mothercare plc annual report and accounts 2012  79 
financial statements
forecasts show that in overall terms the goodwill and intangibles acquired with the early learning centre has signiﬁcantly 
more value than that recorded in the books as the group has more than doubled the number of stores within international and 
the uk segments combined since acquisition however at the time of acquisition early learning centre was predominantly a 
uk business resulting in the majority of goodwill being allocated to the uk whilst the international business for early learning 
centre has subsequently grown very rapidly it is not possible to offset the surplus in international goodwill against the deﬁcit in 
uk goodwill 
software
software additions include £15 million 2011 £16 million of internally generated intangible assets
at 31 march 2012 the group had entered into contractual commitments for the acquisition of software amounting to 
£03 million 2011 £03 million
16 property plant and equipment
properties including 
ﬁxed equipment
freehold 
£ million
leasehold 
£ million
fixtures 
ﬁttings 
equipment 
£ million
assets in 
course of 
construction 
£ million
total 
£ million
cost
as at 27 march 2010 147 1130 1998 17 3292
transfers – – 17 17 –
additions – 70 80 24 174
exchange differences – – 01 – 01
disposals 27 24 48 – 99
as at 27 march 2011 120 1176 2046 24 3366
transfers 06 06 24 24 –
additions – 53 67 108 228
exchange differences – – 01 – 01
disposals 12 18 39 – 69
as at 31 march 2012 102 1217 2097 108 3524
accumulated depreciation and impairment
as at 27 march 2010 26 825 1502 – 2353
charge for period 01 58 107 – 166
exchange differences – – 01 – 01
disposals 01 20 42 – 63
as at 27 march 2011 26 863 1566 – 2455
charge for period 01 48 113 – 162
impairment 01 40 53 – 94
exchange differences – – 01 – 01
disposals 02 13 34 – 49
as at 31 march 2012 26 938 1697 – 2661
net book value
as at 27 march 2010 121 305 496 17 939
as at 26 march 2011 94 313 480 24 911
as at 31 march 2012 76 279 400 108 863
the net book value of leasehold properties includes £275 million 2011 £311 million in respect of short leasehold properties 
£38 million of the impairment on property plant and equipment has been included within nonunderlying administration 
expenses and the remaining £56 million is included within loss on disposaltermination of property interests 80  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
16 property plant and equipment continued
at 31 march 2012 the group had entered into contractual commitments for the acquisition of property plant and equipment 
amounting to £36 million 2011 £50 million
freehold land and buildings with a carrying amount of £76 million 2011 £94 million have been pledged to secure the group’s 
borrowing facility see note 21 the group is not allowed to pledge these assets as security for other borrowings
17  deferred tax assets and liabilities
the following are the major deferred tax assets and liabilities recognised by the group and movements thereon in the current 
and prior reporting period
 accelerated 
tax 
depreciation 
£ million
short term 
timing 
differences 
£ million
retirement 
beneﬁt 
obligations 
£ million
share
based 
payments 
£ million
intangible 
assets 
£ million
losses 
£ million
total 
£ million
at 27 march 2010 40 16 154 18 69 – 79
chargecredit to income 19 35 14 01 09 – 50
transfer to current tax – 17 –––– 17
charge to other comprehensive income – – 43 – – – 43
at 27 march 2011 21 34 97 19 60 – 69
creditcharge to income 05 45 12 19 40 07 66
charge to other comprehensive income –– 41––– 41
at 31 march 2012 16 79 126 – 20 07 176
certain deferred tax assets and liabilities have been offset where the group has a legally enforceable right to do so 
the following is the analysis of the deferred tax balances after offset for ﬁnancial reporting purposes
31 march  
2012 
£ million
26 march  
2011 
£ million
deferred tax assets 234 184
deferred tax liabilities 58 115
176 69
at the balance sheet date the group has unused tax losses of £28 million 2011 £nil available for offset against future proﬁts 
a deferred tax asset has been recognised of £07 million in respect of £28 million 2011 £nil of such losses there are no 
unrecognised tax losses
at the reporting date deferred tax liabilities of £08 million 2011  £04 million relating to withholding taxes have not been 
provided in respect of the aggregate amount of unremitted earnings of £59 million 2011  £34 million in respect of 
subsidiaries no liability has been recognised because the group being in a position to control the timing of the distribution of 
intra group dividends has no intention to distribute intra group dividends in the foreseeable future that would trigger 
withholding tax there are no unremitted earnings in connection with interests in associates and joint ventures 
at 31 march 2012 the group has unused capital losses of £6625 million 2011 £6652 million available for offset against future 
capital gains no asset has been recognised in respect of the capital losses as it is not considered probable that there will 
be future taxable capital gains the capital losses may be carried forward indeﬁnitely mothercare plc annual report and accounts 2012  81 
financial statements
18 inventories
31 march 
2012 
£ million
26 march 
2011 
£ million
underlying 1040 1214
allowance against carrying value of inventories 49 54
finished goods and goods for resale 991 1160
the amount of write down of inventories to net realisable value recognised as net income in the period is £05 million 
2011 cost of £10 million
19  trade and other receivables
31 march  
2012 
£ million
26 march  
2011 
£ million
trade receivables gross 488 524
allowance for doubtful debts 16 14
trade receivables net 472 510
prepayments and accrued income 190 80
other receivables 71 35
trade and other receivables due within one year 733 625
31 march 
2012 
£ million
26 march 
2011 
£ million
trade and other receivables due after more than one year 14 –
the following summarises the movement in the allowance for doubtful debts
53 weeks 
ended 
31 march 
2012 
£ million
52 weeks 
ended 
26 march 
2011 
£ million
balance at beginning of period 14 17
chargedreleased in the period 02 03
balance at end of period 16 14
the group’s exposure to credit risk inherent in its trade receivables is discussed in note 22 the group has no signiﬁcant 
concentration of credit risk the group operates effective credit control procedures in order to minimise exposure to overdue 
debts and where possible also carries insurance against the cost of bad debts the insurance counterparties involved in 
transactions are limited to high quality ﬁnancial institutions before accepting any new credit customer the group obtains 
a credit check from an external agency to assess the credit quality of the potential customer and then sets credit limits on 
a customer by customer basis
the historical level of customer default is minimal and as a result the ‘credit quality’ of year end trade receivables is 
considered to be high 82  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
19  trade and other receivables continued
the ageing of the group’s current trade receivables is as follows
31 march  
2012 
£ million
26 march  
2011 
£ million
trade receivables gross 502 524
allowance for doubtful debts 16 14
trade receivables net 486 510
of which trade receivables gross comprise
amounts neither impaired nor past due on the reporting date 441 455
amounts past due 
less than one month 13 24
between one and three months 22 17
between three and six months 12 16
greater than six months 14 12
allowance for doubtful debts
amounts neither impaired nor past due on the reporting date 03 03
less than one month – –
between one and three months – –
between three and six months 03 08
greater than six months 10 03
trade accounts receivable net carrying amount 486 510
provisions for doubtful trade accounts receivable are established based upon the difference between the receivable value 
and the estimated net collectible amount the group establishes its provision for doubtful trade accounts receivable based 
on its historical loss experiences and an analysis of the counterparty’s current ﬁnancial position 
the average credit period taken on sales of goods is disclosed in note 22 no interest is charged on trade receivables 
however the right to charge interest on outstanding balances is retained 
the directors consider that the carrying amount of trade and other receivables approximates their fair value
20 cash and cash equivalents
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 their fair value
21 borrowing facilities
the group had outstanding borrowings at 31 march 2012 of £219 million 2011 £nil
overdraft
the group has an unsecured overdraft facility of £100 million which bears interest at 10 above bank base rates £19 million 
of this facility net of cash in transit was drawn down at 31 march 2012
committed borrowing facilities 
the group also had £80 million of committed secured borrowing facilities available at 31 march 2012 with an average interest 
rate of 143 above libor in respect of which all conditions precedent have been met the ﬁnal maturity date of this facility 
was 31 october 2013 £20 million of this facility was drawn down at 31 march 2012  mothercare plc annual report and accounts 2012  83 
financial statements
the group has subsequently agreed a reﬁnancing of its banking facilities as of 11 april 2012 with its two existing banks 
increasing the level of committed facilities from £80 million to £90 million and extending the term to 31 may 2015 at an interest 
rate range of 35 to 4 above libor these facilities further strengthen the group’s ﬁnancial position and provide additional 
liquidity and covenant headroom to accommodate the new threeyear strategy further information is included within the 
corporate governance statement
31 march 
2012 
£ million
26 march 
2011 
£ million
borrowings
unsecured borrowings at amortised cost
bank overdrafts net of cash in transit 19 –
secured borrowings at amortised cost
committed facility 200 –
total borrowings 219 –
amount due for settlement within one year 19 –
amount due for settlement after one year 200 –
total borrowings 219 –
weighted average interest rate paid 224 216
22 risks arising from ﬁnancial instruments
a terms conditions and risk management policies
the board approves treasury policies and senior management directly controls daytoday operations within these policies 
the major ﬁnancial risks to which the group is exposed relate to movements in foreign exchange rates and interest rates 
where appropriate cost effective and practicable the group uses ﬁnancial instruments and derivatives to manage these 
risks no speculative use of derivatives currency or other instruments is permitted the group’s ﬁnancial risk management 
policy is described in note 2 
the following table provides an overview of the notional value of derivative ﬁnancial instruments outstanding at year end by 
maturity proﬁle
31 march  
2012 
£ million
26 march  
2011 
£ million
foreign currency forward exchange contracts
not later than one year 1107 1392
after one year but not more than ﬁve years 95 –
1202 1392
foreign currency option contracts
not later than one year – 61
– 61
the group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising 
the returns to stakeholders through the optimisation of the debt and equity balance the capital structure of the group consists 
of net debt which includes borrowings disclosed in note 21 after deducting cash and cash equivalents and equity attributable 
to equity holders of the parent comprising issued capital reserves and retained earnings as disclosed in the statement of 
changes in equity 84  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
22 risks arising from ﬁnancial instruments continued
b foreign currency risk management
the group incurs foreign currency risk on sales and purchases whenever they are denominated in a currency other than the 
functional currency this risk is managed through holding derivative ﬁnancial instruments
the group uses forward foreign currency contracts to reduce its cash ﬂow exposure to exchange rate movements primarily on 
the us dollar the group has not hedge accounted for its forward foreign currency contracts under the requirements of ias 39 
therefore derivative ﬁnancial instruments have been recognised as assets and liabilities measured at their fair values at the 
balance sheet date and changes in their fair values have been recognised in the income statement these arrangements are 
designed to address signiﬁcant foreign exchange exposures on forecast future purchases of goods for the following year and 
are renewed on a revolving basis as required
derivatives embedded in nonderivative host contracts have been recognised separately as derivative ﬁnancial instruments 
when their risks and characteristics are not closely related to those of the host contract and the host contract is not stated at 
its fair value with changes in its fair value recognised in the income statement
international sales represent 31 2011 26 of group sales of these sales 23 2011 19 were invoiced in foreign currency 
the group purchases product in foreign currencies representing approximately 46 2011 42 of total purchases
the carrying amount of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting 
date is as follows
liabilities assets
31 march 
2012 
£ million
 26 march 
2011 
£ million
31 march 
2012 
£ million
 26 march 
2011 
£ million
us dollar 50 65 144 58
euro 02 03 24 21
hong kong dollar 20 30 04 04
indian rupee 02 03 12 15
chinese renminbi 06 03 02 01
singapore dollar – – 01 04
80 104 187 103
the total amounts of outstanding forward foreign currency contracts to which the group has committed is as follows
31 march 
2012 
£ million
26 march 
2011 
£ million
at notional value 1202 1392
at fair value 12 27
at 31 march 2012 the average hedged rate for outstanding forward foreign currency contracts is 158 for us dollars there 
were no forward contracts in place for any other currencies at the year end these contracts mature between april 2012 and 
may 2013 the fair value of foreign currency forward contracts is measured using quoted foreign exchange rates and yield 
curves from quoted rates matching the maturities of the contracts and they therefore are categorised within level 2 of the fair 
value hierarchy set out in ifrs 7
the fair value of embedded derivatives is a liability of £01 million 2011 £nil million mothercare plc annual report and accounts 2012  85 
financial statements
currency sensitivity analysis
the group’s foreign currency ﬁnancial assets and liabilities are denominated mainly in us dollars the following table details 
the impact of a 10 increase in the value of pounds sterling against the us dollar a negative number indicates a net 
decrease in the carrying value of assets and liabilities and a corresponding loss in nonunderlying proﬁt where pounds 
sterling strengthens against the us dollar
31 march 
2012 
£ million
26 march 
2011 
£ million
us dollar impact 99 125
c credit risk
credit risk is the risk that a counterparty may default on their obligation to the group in relation to lending hedging 
settlement and other ﬁnancial activities the group’s credit risk is primarily attributable to its trade receivables the group 
has a credit policy in place and the exposure to counterparty credit risk is monitored the group mitigates its exposure to 
counterparty credit risk through minimum counterparty credit guidelines diversiﬁcation of counterparties working within 
agreed counterparty limits and trade insurance and bank guarantees where appropriate
the carrying amount of the ﬁnancial assets represents the maximum credit exposure of the group the carrying amount is 
presented net of impairment losses recognised the maximum exposure to credit risk comprises trade receivables as shown 
in note 19 and cash and cash equivalents of £18 million
the average credit period on trade receivables was 21 days 2011 23 days based on total group revenue the average credit 
period on international trade receivables was 67 days 2011 82 days
d liquidity risk
ultimate responsibility for liquidity risk management rests with the board of directors which has built an appropriate liquidity 
risk management framework for the management of the group’s short medium and long term funding and liquidity 
management requirements the group manages liquidity risk by maintaining adequate reserves banking facilities and 
reserve borrowing facilities by continuously monitoring forecast and actual cash ﬂows and matching the maturity proﬁles 
of ﬁnancial assets and liabilities included in note 21 is a description of additional undrawn facilities that the group has at its 
disposal to further reduce liquidity risk
e interest rate risk
the principal interest rate risk of the group arises in respect of its sterling borrowings the group’s borrowing facilities at 143 
over libor expose the group to cash ﬂow interest rate risk the interest exposure is monitored by management but due to 
low interest rate levels during the period no interest rate hedging has been undertaken
going forward under the new banking arrangements the group intends to use derivative contracts to manage its interest 
rate risk 86  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
23 trade and other payables
31 march  
2012 
£ million
26 march  
2011 
£ million
current liabilities
trade payables 710 775
payroll and other taxes including social security 23 20
accruals and deferred income 437 426
vat payable 20 40
lease incentives 48 40
1238 1301
noncurrent liabilities
lease incentives 290 323
trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs 
the average credit period taken for trade purchases is 53 days 2011 62 days the group has ﬁnancial risk management 
policies in place to ensure that all payables are paid within the credit timeframe
the directors consider that the carrying amount of trade payables approximates to their fair value
24 provisions
31 march 
2012 
£ million
26 march 
2011 
£ million
current liabilities
property provisions 241 52
other provisions 04 04
short term provisions 245 56
noncurrent liabilities
property provisions 120 68
other provisions 04 04
long term provisions 124 72
property provisions 361 120
other provisions 08 08
total provisions 369 128 mothercare plc annual report and accounts 2012  87 
financial statements
the movement on total provisions is as follows
property 
provisions 
£ million
other 
provisions 
£ million
total 
provisions 
£ million
balance at 27 march 2011 120 08 128
utilised in period 87 04 91
charged in period 340 04 344
released in period 13 – 13
unwinding of discount 01 – 01
balance at 31 march 2012 361 08 369
property provisions principally represent the costs of store disposals or closures relating to the optimisation of the uk portfolio 
which involves the closure of mothercare and early learning centre stores and provisions for onerous lease costs provisions 
for onerous leases have been made for vacant partly let and trading stores for the shorter of the remaining period of the 
lease and the period until the group will be able to exit the lease commitment for trading stores the amount provided is 
based on the shortfall in contribution required to cover future rental obligations together with other ﬁxed outgoings 
the majority of this provision is expected to be utilised over the next three ﬁnancial years
other provisions principally represent provisions for uninsured losses hence the timing of the utilisation of these provisions 
is uncertain
25 share capital
53 weeks 
ended 
31 march 
2012 
number of 
shares
52 weeks 
ended 
26 march 
2011 
number of 
shares
53 weeks 
ended  
31 march 
2012 
£ million
52 weeks 
ended 
26 march 
2011 
£ million
issued and fully paid
ordinary shares of 50 pence each
balance at beginning of period 88540219 88116381 443 441
issued under the mothercare 2000 executive share option plan – 71394 – –
issued under the mothercare sharesave scheme 96543 352444 – 02
balance at end of period 88636762 88540219 443 443
further details of employee and executive share schemes are given in note 28
the own shares reserve of £21 million 2011 £90 million represents the cost of shares in mothercare plc purchased in the 
market and held by the mothercare employee trusts to satisfy options under the group’s share option schemes see note 28 
the total shareholding is 443545 2011 2461230 with a market value at 31 march 2012 of £07 million 2011 £117 million  88  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
26 reconciliation of cash ﬂow from operating activities
53 weeks 
ended  
31 march 
2012 
£ million
52 weeks 
ended  
26 march 
2011 
£ million
lossproﬁt from retail operations 69 110
adjustments for
depreciation of property plant and equipment 162 166
amortisation of intangible assets – software 46 41
amortisation of intangible assets – other 20 23
impairment of property plant and equipment 94 –
lossesproﬁts on disposal of property plant and equipment 230 09
proﬁtloss on nonunderlying noncash foreign currency adjustments 20 138
equitysettled sharebased payments 05 26
movement in property provisions 127 57
movement in other provisions – 01
amortisation of lease incentives 52 59
lease incentives received 35 96
payments to retirement beneﬁt schemes 80 46
charge to proﬁt from operations in respect of retirement beneﬁt schemes 19 35
operating cash ﬂow before movement in working capital 57 481
decreaseincrease in inventories 185 239
increase in receivables 98 48
decreaseincrease in payables 129 137
cash utilisedgenerated from operations 15 331
income taxes receivedpaid 41 60
net cash outﬂowinﬂow from operating activities 56 271
27 march 
2011 
£ million
cash ﬂow 
£ million
foreign 
exchange 
£ million
31 march 
2012 
£ million
cash and cash equivalents 153 128 07 18
net overdrafts –19 – 19
net cash and cash equivalentsdebt 153 147 07 01 mothercare plc annual report and accounts 2012  89 
financial statements
27  operating lease arrangements
the group as lessee
53 weeks 
ended  
31 march 
2012 
£ million
52 weeks 
ended  
26 march 
2011 
£ million
amounts recognised in cost of sales for the period
minimum lease payments paid 674 704
contingent rents 04 04
minimum sublease payments received 05 07
net rent expense for the period 673 701
contingent rent relates to store properties where an element of the rent payable is determined with reference to 
store turnover
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
31 march 
2012 
£ million
26 march 
2011 
£ million
not later than one year 652 725
after one year but not more than ﬁve years 1956 2125
after ﬁve years 1857 2141
total future minimum lease payments 4465 4991
at the balance sheet date the group had contracted with subtenants for the following future minimum lease payments
31 march 
2012 
£ million
26 march 
2011 
£ million
not later than one year 14 12
after one year but not more than ﬁve years 36 30
after ﬁve years 18 43
total future minimum lease payments 68 85
28 sharebased payments
an expense is recognised for sharebased payments based on the fair value of the awards at the date of grant for those 
awards due to be equity settled and at year end for those due to be cash settled the estimated number of shares that will 
vest and the vesting period of each award
the underlying charge for sharebased payments is £06 million 2011 £22 million including national insurance of which 
£05 million 2011 £26 million was equitysettled the exceptional credit for sharebased payments of £08 million 2011 £nil 
arises in respect of leavers from the executive incentive share schemes at 31 march 2012 the liability in the balance sheet is 
£01 million related to the expected national insurance charge when sharebased payment schemes vest 2011 £09 million
these charges relate to the following schemes 
a executive share option scheme 
b save as you earn schemes 
c executive incentive plan 
d performance share plan 
e deferred shares scheme 
f share matching scheme
details of the share schemes that the group operates are provided in the directors’ remuneration report on pages 42 to 49 90  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
28 sharebased payments continued
for each scheme expected volatility was determined with reference to the 90day volatility of the group’s share price over 
the previous three years the expected life used in each model has been adjusted based on management’s best estimate 
for the effects of nontransferability exercise restrictions and behavioural considerations the dates of exercise are not 
disclosed as it is not deemed practicable to do so
a executive share option scheme
share options may be granted to executives and senior managers at a price equal to the average quoted market price of the 
group’s shares on the date of grant the options vest after three years conditional on the group’s share price exceeding 3 
per annum compound growth over the vesting period if the options remain unexercised after a period of 10 years from the 
date of grant they expire furthermore options are forfeited if the employee leaves the group before the options vest
the number of options outstanding under the executive share option scheme is as follows
weighted 
average 
option  
price
53 weeks 
ended  
31 march 
2012 
number  
of shares
52 weeks 
ended  
26 march 
2011 
number  
of shares
balance at beginning of period 326p 30000 111407
forfeited during period – 24838
exercised during period – 56569
balance at end of period 326p 30000 30000
the options outstanding at 31 march 2012 had a weighted average remaining contractual life of 23 years and ranged in price 
from 284p to 335p
b save as you earn schemes
the employee save as you earn schemes are open to all employees and provide for a purchase price equal to the daily 
average market price on the date of grant less 20
the shares can be purchased during a two week period each year and are placed in the employee save as you earn trust 
for a threeyear period
the number of shares outstanding under the save as you earn schemes is as follows
weighted 
average 
exercise 
price
53 weeks 
ended  
31 march 
2012 
number of 
shares
52 weeks 
ended  
26 march 
2011 
number of 
shares
balance at beginning of period 308p 768613 1243132
granted during period 115p 2752739 –
forfeited during period 299p 34216 124129
exercised during period 276p 96543 349944
cancelled in the period 370p 161811 –
expired during period 305p 41991 446
balance at end of period 139p 3186791 768613
the shares outstanding at 31 march 2012 had a weighted average remaining contractual life of three years and ranged in 
price from 115p to 497p mothercare plc annual report and accounts 2012  91 
financial statements
the fair value of save as you earn share options is calculated based on a blackscholes model with the 
following assumptions
grant date
december 
2011
december 
2009
december 
2008
number of options granted 2752739 230951 635038
share price at grant date 159p 676p 237p
exercise price 115p 497p 237p
expected volatility 431 300 300
risk free rate 058 300 200
expected dividend yield 300 300 350
time to expiry 325 years 325 years 325 years
fair value of option 564p 1729p 411p
the resulting fair value is expensed over the service period of three years on the assumption that 20 of options will lapse 
over the service period as employees leave the group
c executive incentive plan
the executive incentive plan is a conditional award based on surplus value created over a threeyear performance period 
the surplus value is calculated as the difference between the total shareholder return of mothercare and that of the ftse 
allshare general retailers index multiplied by mothercare’s market capitalisation the 2009 2010 and 2011 schemes are a 
wholly equity settled scheme where some of the shares can be delivered on vesting and the remainder deferred
the fair value of the executive incentive plan award is calculated using a binomial model with the following assumptions at 
grant date 
grant date may 2011 june 2010 may 2009
market capitalisation at award date £4490m £5627m £3384m
expected mothercare share price volatility 300 300 300
expected index volatility 300 300 300
risk free rate 238 268 370
correlation between mothercare and the index 500 500 500
time to expiry 3 years 3 years 3 years
fair value at grant date £18m £30m £18m
fair value at 26 march 2012 £01m nil nil 
d performance share plan
the performance share plan is a conditional award of shares based on the expected growth in mothercare’s proﬁt before 
taxation over three years the number of shares outstanding under the performance share plan is as follows
53 weeks 
ended
31 march 
2012
number of 
shares 
52 weeks 
ended
26 march 
2011
number of
shares
balance at beginning of period 1332889 1430838
awarded during period 999807 641855
lapsed during period 1276378 235805
vested during period – 503999
balance at end of period 1051318 1332889 92  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
28 sharebased payments continued
the fair value of the plan award is calculated based on mothercare’s estimate of future proﬁt per share growth at the current 
time the group’s forecasts suggest that the performance share plan is not expected to pay out and consequently the fair 
value is nil
grant date
november 
2011 may 2011
november 
2010 june 2010
number of shares awarded 376154 618653 62992 578863
share price at date of grant 137p 446p 522p 520p
exercise price nil nil nil nil
time to expiry 3 years 3 years 3 years 3 years
fair value per share 137p 446p 522p 520p
e deferred shares scheme
the deferred shares scheme is a conditional award of shares determined on historic company performance the number of 
shares outstanding under the deferred shares scheme is as follows
53 weeks 
ended 
31 march 
2012 
number of 
shares
52 weeks 
ended
26 march 
2011
number of 
shares
balance at beginning of period 167290 –
awarded during period – 192119
lapsed during period 57581 24829
vested during period – –
balance at end of period 109709 167290
grant date june 2010 june 2010
number of shares awarded 96060 96060
fair value price at date of grant 557p 557p
exercise price nil nil
time to expiry 2 years 3 years
f  share matching scheme
during the year the chairman was granted 60000 options with a nominal exercise price which vest in august 2014 to enable 
maximum vesting the company total shareholder return over the threeyear performance period must be greater than or 
equal to the total shareholder return of the ftse 250 plus 50 as a condition of this award the chairman was required to 
purchase shares in the company for a value of £02 million and must continue to hold these shares over the performance 
period at the date of grant the fair value of these awards was less than £01 million
upon assuming the role of executive chairman the chairman was granted a further 54997 options with a nominal exercise 
price which vest in november 2014 to enable maximum vesting the company total shareholder return over the threeyear 
performance period must be greater than or equal to the total shareholder return of the ftse 250 plus 50 as a condition of 
this award the chairman is required to purchase shares in the company for a value of £04 million and must continue to hold 
these shares over the performance period at the date of grant the fair value of these awards was less than £01 million
grant date dec 2011 dec 2011
number of shares awarded 60000 54997
share price at date of grant 155p 155p
fair value price at date of grant 116p 116p
exercise price nil nil
time to expiry 3 years 3 years mothercare plc annual report and accounts 2012  93 
financial statements
the shares were granted in two tranches with expiry in august and november 2014
the resulting fair value is expensed over the service period of three years
29  retirement beneﬁt schemes
deﬁned contribution schemes
the group operates deﬁned contribution retirement beneﬁt schemes for all qualifying employees of early learning centre 
limited and mothercare uk limited
the total cost charged to income of £06 million 2011 £06 million represents contributions due and paid to these schemes by 
the group at rates speciﬁed in the rules of the plan
deﬁned beneﬁt schemes
the group has operated two deﬁned beneﬁt pension schemes for employees of mothercare uk limited during the period
on 28 march 2004 the ﬁnal salary schemes were closed to new entrants and a ‘career average’ scheme was introduced to 
replace it existing members were asked to either increase their contributions from an average of 48 to an average of 68 
or accrue future beneﬁts on a ‘career average’ basis
in 2009 the ‘career average’ schemes were closed to new entrants
the pension scheme assets are held in a separate trustee administered fund to meet long term pension liabilities to past and 
present employees the trustees of the fund are required to act in the best interest of the fund’s beneﬁciaries
for the protection of members’ interests the group has appointed three trustees two of whom are independent of the group 
to maintain this independence the trustees and not the group are responsible for appointing their own successors
the most recent full actuarial valuations were carried out as at 31 march 2008 actuarial valuations of the mothercare staff 
and executive pension schemes were undertaken as at 31 march 2011 discussions are underway between the company 
and the trustees with the aim of signing off the actuarial valuations and recovery plans by 30 june 2012 the most recent full 
actuarial valuations were updated as at 31 march 2012 for the purpose of these disclosures with the advice of professionally 
qualiﬁed actuaries the present value of the deﬁned beneﬁt obligation the related current service cost and the past service 
cost were measured using the projected unit credit method
the ias 19 valuation conducted for the period ended 31 march 2012 disclosed a net deﬁned pension deﬁcit of £527 million 
2011 £376 million
the major assumptions used in the updated actuarial valuations were
31 march 
2012
26 march 
2011
discount rate 49 55
inﬂation rate – rpi 33 35
inﬂation rate – cpi 23 28
future pension increases 32 34
expected rate of salary increases 33 35
expected return on schemes’ assets 60 70
analysed between
equities 73 83
bonds 47 51
property 53 63
alternative assets 63 73
other assets 47 51
the overall expected rate of return on assets is calculated as the weighted average of the expected returns from each of the 
asset classes the returns quoted above are net of investment management expenses but before adjustment to allow for the 
expected administrative and other expenses of running the schemes 94  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
29  retirement beneﬁt schemes continued
the mortality assumptions used are the saps tables published by the cmi allowing for future improvements in line with the 
medium cohort projection and a 1 ﬂoor
age 65 now age 45 now
staff pension scheme
male 864 877
female 882 898
executive pension scheme
male 885 898
female 893 909
the effects of movements in the principal assumptions used to measure the scheme liabilities for every change in the relevant 
assumption are set out below
assumption
change in 
assumption
impact on 
scheme 
liabilities 
£ million
discount rate  01 60 
rate of price inﬂation  01  53
life expectancy  1 year  81
amounts expensed in the income statement in respect of the deﬁned beneﬁt schemes are as follows
53 weeks 
ended
31 march 
2012
£ million
52 weeks 
ended
26 march 
2011
£ million
current service cost 23 29
interest cost 135 141
expected return on schemes’ assets 137 135
gains on curtailment 02 –
19 35
current service cost interest cost and expected return on schemes’ assets have been included in underlying administrative 
expenses and the curtailment gain is included within nonunderlying administrative expenses
the expected return on scheme assets was a gain of £137 million 2011 a gain of £135 million with a resulting actuarial loss of 
£85 million 2011 loss of £25 million
there was an actuarial loss of £127 million 2011 a gain of £190 million relating to the deﬁned beneﬁt obligations 
the amount recognised in other comprehensive income for the year ended 31 march 2012 is a loss of £212 million 2011 a gain 
of £165 million
the total cumulative actuarial loss recognised in other comprehensive income is £533 million 2011 £321 million mothercare plc annual report and accounts 2012  95 
financial statements
the amount included in the balance sheet arising from the group’s obligations in respect of its deﬁned beneﬁt retirement 
schemes is as follows
31 march 
2012
£ million
26 march 
2011
£ million
present value of deﬁned beneﬁt obligations 2700 2460
fair value of schemes’ assets 2173 2084
liability recognised in balance sheet 527 376
movements in the present value of deﬁned beneﬁt obligations were as follows
53 weeks 
ended
31 march 
2012
£ million
52 weeks 
ended
26 march 
2011
£ million
at beginning of period 2460 2521
service cost 23 29
gains on curtailments 02 –
interest cost 135 141
contribution from scheme members 15 17
actuarial lossesgains 127 190
beneﬁts paid 58 58
at end of period 2700 2460
movements in the fair value of schemes’ assets were as follows
53 weeks 
ended
31 march 
2012
£ million
52 weeks 
ended
26 march 
2011
£ million
at beginning of period 2084 1970
expected return on schemes’ assets 137 135
actuarial losses 85 25
company contributions 80 45
members’ contributions 15 17
beneﬁts paid 58 58
at end of period 2173 2084
the analysis of the fair values of the schemes’ assets and the expected rates of return at each balance sheet date were
31 march 
2012

31 march 
2012
£ million
26 march 
2011

26 march 
2011
£ million
equities 73 846 83 948
bonds 47 631 51 573
property 53 245 63 261
alternative assets 63 337 73 301
other assets 47 114 51 01
2173 2084 96  mothercare plc annual report and accounts 2012
notes to the consolidated ﬁnancial statements
continued
29  retirement beneﬁt schemes continued
the history of experience adjustments is as follows
53 weeks 
ended
31 march 
2012
52 weeks 
ended
26 march 
2011
52 weeks 
ended
27 march 
2010
52 weeks 
ended
28 march 
2009
52 weeks 
ended
29 march 
2008
present value of deﬁned beneﬁt obligations £2700m £2460m £2521m £1756m £1673m
fair value of schemes’ assets £2173m £2084m £1970m £1502m £1811m
deﬁcitsurplus in the schemes £527m £376m £551m £254m £138m
experience adjustments on schemes’ liabilities £127m £190m £660m £19m £351m
percentage of schemes’ liabilities 47 77 262 11 210
experience adjustments on schemes’ assets £85m £25m £339m £449m £269m
percentage of schemes’ assets 39 12 172 299 149
the estimated amount of cash contributions expected to be paid to the schemes during the 52 weeks ending 30 march 2013 
is £52 million
30 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 joint ventures and associates are disclosed below
trading transactions
during the year group companies entered into the following transactions with related parties who are not members of 
the group
53 weeks ended 31 march 2012
sales of 
goods
£ million
purchase of 
goods
£ million
amounts 
owed by 
related 
parties
£ million
amounts 
owed to 
related 
parties
£ million
joint ventures and associates 220 – 99 –
52 weeks ended 26 march 2011
sales of 
goods
£ million
purchase of 
goods
£ million
amounts 
owed by 
related 
parties
£ million
amounts 
owed to 
related 
parties
£ million
joint ventures and associates 143 – 84 –
sales of goods to related parties were made at the group’s usual cost prices
the amounts outstanding are unsecured and will be settled in cash no guarantees have been given or received a provision 
of £08 million 2011 £08 million has been made for doubtful debts in respect of the amounts owed by related parties mothercare plc annual report and accounts 2012  97 
financial statements
remuneration of key management personnel
the remuneration of the operating board including executive and nonexecutive 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 in the audited part of the remuneration report 
on pages 42 to 49
53 weeks 
ended
31 march 
2012
£ million
52 weeks 
ended
26 march 
2011
£ million
short term employee beneﬁts 28 37
post employment beneﬁts 04 04
compensation for loss of ofﬁce 16 –
sharebased payments 04 18
52 59
mothercare pension scheme
details of other transactions and balances held with the two pension schemes are set out in note 29
other transactions with key management personnel
there were no other transactions with key management personnel
31 events after the balance sheet date
on 11 april 2012 the group agreed the reﬁnancing of its banking facilities with the support of its existing banks hsbc and 
barclays increasing the level of committed facilities from £80 million to £90 million and extending the term to 31 may 2015 
see note 21
on 12 april 2012 the group announced a further reduction in the uk store portfolio reshaping the uk around a proﬁtable core 
of 200 stores the group will now close 111 stores 36 mothercare and 75 early learning centres over the next three years to 
march 2015 the costs associated with the additional store closures announced in april 2012 will be provided for in the next 
ﬁnancial year
there were no other events after the balance sheet date 98  mothercare plc annual report and accounts 2012
company ﬁnancial statements
contents
99 independent auditor’s report on the  
company ﬁnancial statements
100 company balance sheet
101 notes to the company ﬁnancial statements mothercare plc annual report and accounts 2012  99 
financial statements
independent auditor’s report on the  
company ﬁnancial statements
we have audited the parent company ﬁnancial 
statements of mothercare plc for the 53 weeks ended 
31 march 2012 which comprise the parent company 
balance sheet and the related notes 1 to 8 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 
nonﬁnancial 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 
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 matters prescribed by the 
companies act 2006
in our opinion
   the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance 
with the companies act 2006 and
   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 and the 
part of the directors’ remuneration report to be 
audited 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 matter
we have reported separately on the group ﬁnancial 
statements of mothercare plc for the 53 weeks ended 
31 march 2012
nicola mitchell fca senior statutory auditor
for and on behalf of deloitte llp 
chartered accountants and statutory auditor 
london 
23 may 2012 100  mothercare plc annual report and accounts 2012
company balance sheet
as at 31 march 2012
note
31 march 
2012
£ million
 26 march  
 2011 
 restated
£ million
fixed assets
investments in subsidiary undertakings 3 2149 2144
2149 2144
current assets
debtors 4 504 390
cash at bank and in hand and time deposits 03 04
507 394
creditors – amounts falling due within one year 5 741 1287
net current liabilities 234 893
total assets less current liabilities 1915 1251
creditors – amounts falling due after more than one year 5 200 –
net assets 1715 1251
capital and reserves attributable to equity interests
called up share capital 6 443 443
share premium 7 62 59
other reserve 7 508 508
own shares 7 21 90
proﬁt and loss account 7 723 331
equity shareholders’ funds 8 1715 1251
 the prior year balance sheet has been restated to reallocate bank loans and overdrafts within creditors and to reanalyse intercompany debtors and creditors
approved by the board on 23 may 2012 and signed on its behalf by
neil harrington
finance director
company registration number 1950509 mothercare plc annual report and accounts 2012  101 
notes to the company ﬁnancial statements
financial statements
1 signiﬁcant accounting policies
basis of presentation
the company’s accounting period covers the 53 weeks ended 31 march 2012 the comparative period covered the 52 weeks 
ended 26 march 2011
basis of accounting
the separate ﬁnancial statements of the company are presented as required by the companies act 2006 they have been 
prepared under the historical cost convention and on the going concern basis as described in the going concern statement 
in the corporate governance report and in accordance with applicable united kingdom law and united kingdom generally 
accepted accounting standards the principal accounting policies are presented below and have been applied consistently 
throughout the 53 weeks ended 31 march 2012 and the preceding 52 weeks ended 26 march 2011
investments
fixed asset investments are shown at cost less provision for impairment
taxation
current tax including uk corporation tax and foreign 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
cash ﬂow statement
the company is exempt from the requirement of frs 1 revised to include a cash ﬂow statement as part of its company 
ﬁnancial statements because it prepares a consolidated cash ﬂow statement which is shown on page 59
related parties
the company has taken advantage of paragraph 3 c of financial reporting standard 8 related party disclosures not to 
disclose transactions with group entities or interests of the group qualifying as related parties
2 proﬁt and loss account
as permitted by section 408 of the companies act 2006 no separate proﬁt and loss account is presented for the company 
the company’s proﬁt for the 53 weeks ended 31 march 2012 was £575 million 2011 proﬁt of £148 million the auditor’s 
remuneration for audit and other services is disclosed in note 7 to the consolidated ﬁnancial statements
3 investments in subsidiary undertakings
investments in the company’s balance sheet consist of its investments in subsidiary undertakings
the company’s signiﬁcant subsidiaries all of which are wholly owned are as follows
principal activity country of incorporation
mothercare uk limited retailing company united kingdom
mothercare procurement limited sourcing company hong kong
early learning centre limited retailing company united kingdom
the company’s investment in its subsidiary undertakings is as follows
31 march 
2012
£ million
26 march 
2011
£ million
cost of investments less amounts written off £1530 million 2011 £1530 million 1494 1489
loans to subsidiary undertakings 655 655
2149 2144 102  mothercare plc annual report and accounts 2012
notes to the company ﬁnancial statements
continued
3 investments in subsidiary undertakings continued
£ million
cost
at 27 march 2011 2144
sharebased payments to employees of subsidiaries 05
at 31 march 2012 2149
provisions for impairment
at 27 march 2011 and 31 march 2012 –
net book value 2149
4 debtors
31 march 
2012
£ million
 26 march  
 2011 
 restated
£ million
amounts due from subsidiary undertakings 498 388
other debtors 06 02
504 390
 the prior year balance sheet has been restated to reanalyse intercompany debtors and creditors
5 creditors
creditors amounts falling due within one year
31 march 
2012
£ million
 26 march  
 2011 
 restated
£ million
amounts due to subsidiary undertakings 569 895
bank loans and overdrafts 158 385
accruals and other creditors 14 07
741 1287
 the prior year balance sheet has been restated to reanalyse intercompany debtors and creditors
creditors amounts falling due after more than one year
31 march 
2012
£ million
26 march 
2011 
£ million
bank loans and overdrafts 200 –
200 – mothercare plc annual report and accounts 2012  103 
financial statements
6 called up share capital
number of 
shares £ million
issued and fully paid
ordinary shares of 50p each
balance at 27 march 2011 88540219 443
issued under the mothercare sharesave scheme 96543 –
balance at 31 march 2012 88636762 443
further details of employee and executive share schemes are provided in note 28 to the consolidated ﬁnancial statements
the own shares reserve of £21 million 2011 £90 million represents the cost of shares in mothercare plc purchased in the 
market and held by the mothercare employee trusts to satisfy options under the group’s share option schemes see note 28 
to the consolidated ﬁnancial statements the total shareholding is 443545 2011 2461230 with a market value at 31 march 2012 
of £07 million 2011 £117 million
7  reserves
share 
premium
£ million
other 
reserve
£ million
own shares
£ million
proﬁt 
and loss 
account
£ million
balance at 27 march 2011 59 508 90 331
net premium on shares issued 03–––
fair value of sharebased payments – – – 05
shares transferred to employees on vesting – – 69 69
dividends ––– 119
proﬁt for the ﬁnancial year – – – 575
balance at 31 march 2012 62 508 21 723
included in the proﬁt for the year was a dividend from a subsidiary undertaking of £596 million
8 reconciliation of equity shareholders’ funds
53 weeks 
ended
31 march 
2012
£ million
52 weeks 
ended
26 march 
2011
£ million
equity shareholders’ funds brought forward 1251 1234
dividends 119 155
shares issued 03 12
fair value of sharebased payments 05 26
purchase of own shares – 14
retained proﬁt for the period 575 148
equity shareholders’ funds carried forward 1715 1251 104  mothercare plc annual report and accounts 2012
five year record
unaudited
2012
£ million
2011
£ million
2010
£ million
2009
restated
4
£ million
2008
restated
4
£ million
summary of consolidated income statements
revenue 8127 7936 7664 7236 6768
underlying
1
 proﬁt from operations before interest 20 289 376 370 385
nonunderlying
2
 items 1044 195 44 61 341
interest net 05 06 07 11 01
lossproﬁt before taxation 1029 88 325 420 45
taxation 111 23 89 118 44
lossproﬁt for the ﬁnancial year 918 65 236 302 01
basic lossearnings per share 1052p 76p 280p 362p 01p
basic underlying earnings per share 18p 247p 315p 320p 345p
summary of consolidated balance sheets
deferred tax assetliability 176 69 79 08 44
other noncurrent assets 1452 2086 2005 1976 2008
net current assets 240 544 706 579 263
retirement beneﬁt obligations 527 376 551 254 20
other noncurrent liabilities 614 395 355 334 277
total net assets 727 1928 1884 1975 1970
other key statistics
share price at year end 1660p 4740p 6010p 3865p 4000p
net debtcashequity 276 79 204 125 115
capital expenditure 249 218 242 228 204
depreciation and amortisation 228 230 205 220 197
rents 654 682 691 710 712
number of uk stores 311 373 387 405 425
number of international stores
3
1028 894 728 609 494
uk selling space 000’s sq ft 1946 2017 2008 2007 2070
international selling space 000’s sq ft
3
2283 1845 1538 1294 1040
average number of employees 6943 7440 7452 7715 7626
average number of full time equivalents 4350 4650 4486 4653 4244
1  before items described in note 2 below
2  includes exceptional items proﬁtloss on disposaltermination of property interests impairment charges restructuring costs impairment charges provision 
for onerous leases and other nonunderlying items of amortisation of intangible assets excluding software and the impact of noncash foreign currency 
adjustments under ias 39 and ias 21 as set out in note 6 to the consolidated ﬁnancial statements
3  international stores are owned by franchise partners joint ventures and associates
4 restated for amendments to ias 38 2008 balance sheet only mothercare plc annual report and accounts 2012  105 
shareholder information
financial statements
shareholder analysis
a summary of holdings as at 30 march 2012 is 
as follows
mothercare ordinary shares
number of 
shares million
number of 
shareholders
banks insurance 
companies and 
pension funds 417546 7
nominee companies 73342826 721
other corporate holders 10252241 121
individuals 4624149 23249
88636762 24098
as can be seen from the above analysis many shares 
are registered in the name of a nominee company 
as the legal owner the underlying holder of shares 
through a nominee account is the beneﬁcial owner 
of these shares being entitled to the capital value 
and the income arising from them an analysis of 
these nominee holdings shows that the largest 
underlying holders are pension funds with unit 
trusts and insurance companies the other major 
types of shareholder
individual shareholders owning 500 or more 
mothercare shares are entitled to a 10 discount in 
deﬁned denominations on up to £500 of merchandise 
in mothercare and early learning centre stores in the 
uk if an individual shareholding of 500 or more 
shares is not on the share register but is held through 
a nominee or trustee the book of vouchers can 
nevertheless be obtained eligible shareholders can 
request a voucher booklet by sending their name 
address and shareholder account number by email 
to investorrelationsmothercarecom or by writing to 
the registered ofﬁce
share price data
2012 2011
share price at 30 march 2012 
26 march 2011 16600p 47400p
market capitalisation £1471m £4197m
share price movement 
during the year
high 47720p 62750p
low 12730p 46650p
all share prices are quoted at the midmarket closing 
price for capital gains tax purposes
   the market value on 31 march 1982 of one ordinary 
share in british home stores plc is 155p and of one 
ordinary share in habitat mothercare plc is 133p and
   the market value of each mothercare plc 50p 
ordinary share immediately following the reduction 
of capital and consolidation for the purpose of 
allocating base cost between such shares and the 
shares disposed of as a result of the reduction is 135p
registrars and transfer ofﬁce
equiniti limited aspect house spencer road 
lancing west sussex bn99 6da
financial calendar
2012
annual general meeting 19 july
announcement of interim results 20 november
2013
payment of interim dividend february
preliminary announcement of  
results for the 52 weeks ending 
30 march 2013 end may
issue of report and accounts mid june
annual general meeting mid july
payment of ﬁnal dividend mid august
registered ofﬁce and head ofﬁce
cherry tree road watford hertfordshire wd24 6sh 
telephone 01923 241000 
wwwmothercareplccom 
registered number 1950509
group general counsel and company secretary
tim ashby
registrars
administrative enquiries concerning shareholders 
in mothercare plc for such matters as the loss of a 
share certiﬁcate dividend payments or a change 
of address should be directed in the ﬁrst instance 
to the registrars
equiniti limited 
aspect house spencer road lancing  
west sussex bn99 6da 
telephone 0871 384 2013 calls to this number 
are charged at 8p per minute from a bt landline 
other telephony providers’ costs may vary 
lines are open 0830 to 1730 monday to friday 
wwwequiniticom 106  mothercare plc annual report and accounts 2012
shareholder information
continued
postal share dealing service
a postal share dealing service is available through 
the company’s registrars for the purchase and sale 
of mothercare plc shares further details can be 
obtained from equiniti on 0871 384 2248 calls to this 
number are charged at 8p per minute from a bt 
landline other telephony providers’ costs may vary 
lines are open 0830 to 1730 monday to friday
stockbrokers
the company’s stockbrokers are
jpmorgan cazenove  co limited 
20 moorgate london ec2r 6da 
telephone 020 7155 5155
numis securities limited 
the london stock exchange building 
10 paternoster square 
london ec4m 7lt 
telephone 020 7260 1000
sharegift
shareholders with a small number of shares the 
value of which makes it uneconomic to sell them 
may wish to consider donating them to charity 
through sharegift a registered charity administered 
by the orr mackintosh foundation the share transfer 
form needed to make a donation may be obtained 
from the mothercare plc registrars equiniti limited
further information about sharegift is available from 
wwwsharegiftorg or by telephone on 020 7930 3737 mothercare plc annual report and accounts 2012  107 
financial statements
notes 108  mothercare plc annual report and accounts 2012
notes designed and produced by merchantcantos
wwwmerchantcantoscom
printed by park communications on fsc
®
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park is an emas certiﬁed carbonneutral
®
 company and its 
environmental management system is certiﬁed to iso14001 
100 of the inks used are vegetable oil based 95 of press 
chemicals are recycled for further use and on average 99 
of any waste associated with this production will be recycled
this document is printed on amadeus coated 50 silk a paper 
containing 50 recycled ﬁbre 25 post consumer and 25 
pre consumer and 50 virgin ﬁbre sourced from well 
managed sustainable fsc
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in this product is bleached using an elemental chlorine free 
ecf process mothercare plc
cherry tree road
watford
hertfordshire
wd24 6sh
t 01923 241000
f 01923 206376
wwwmothercareplccom
registered in england number 1950509


Summary:
 group results
worldwide network sales grew by 64 per cent to £12324 million 
2011 £11581 million driven by the growth of our international 
business but tempered by the continued decline seen in the uk 
group sales which reﬂect uk revenues and the payments we 
receive from our international partners were up 24 per cent to 
£8127 million 2011 £7936 million
the decline in proﬁts in the 53 week period has however been 
disappointing with a reduction in underlying proﬁt before tax to 
£16 million down from £285 million last year international has 
continued to grow rapidly but the uk has struggled in the face 
of a challenging economic backdrop and an increasingly 
competitive environment
underlying proﬁt before tax declined to £16 million 2011 £285 million 
with exceptional charges and other nonunderlying items of 
£1045 million 2011 £197 million resulting in reported losses before 
tax of £1029 million 2011 proﬁt of £88 million
the nonunderlying charge of £1045 million includes £1044 million of 
exceptional items including a noncash write down of uk goodwill 
and other intangibles already announced in the ﬁrst half together 
with a provision for restructuring costs to deliver the ‘transformation 
and growth’ plan
whilst over 70 per cent of the exceptional charges are noncash items 
the decline in uk proﬁtability and the need to fund an additional 
quarterly rent payment due to the 53rd week in this ﬁnancial year 
have resulted in a yearend net debt position of £201 million 2011 net 
cash position of £153 million over the next three years we will be 
incurring cash restructuring costs of circa £35 million in total we 
recently reﬁnanced our banking facilities to fund the ‘transformation 
and growth’ plan increasing committed facilities to £90 million 
extending the term to may 2015 and resetting bank covenants 
see financial review for more details
as we announced in april the board has decided to suspend the 
dividend until the ‘transformation and growth’ plan delivers a 
marked improvement in our results there will therefore be no ﬁnal 
dividend payment this year which means the payout for the full year 
is 20p per share
chief executive’s statement
“ we need to bring the customer with us 
they need to be at the centre of every 
decision we make as a team this is 
our most important delivery yet”
 simon calver 
 chief executive
1339 stores
across 59 markets
10  mothercare plc annual report and accounts 2012 international results
total international sales were up 178 per cent to £6724 million 
2011 £5709 million with total reported sales up 224 per cent to 
£2527 million 2011 £2064 million international underlying operating 
proﬁts were up 269 per cent to £349 million 2011 £275 million this 
proﬁt comprised franchise proﬁts of £381 million and joint venture 
and associate startup losses of £32 million
we now have three joint ventures and an associate while our new 
joint venture in the ukraine is proﬁtable our joint ventures in india 
and china and our australian associate are startup operations and 
as such have made in total a £32 million loss for the period we see 
our equity stakes in these markets as an important investment in 
future growth opportunities
we have laid the foundations with our franchise partners that will 
see an acceleration in revenue and proﬁt growth we remain the 
only specialist mother and baby retailer in this position in the 
world today
we have great franchise partners many of which i have already 
had the pleasure of meeting they have such enthusiasm and 
passion for our brands and are excited by their potential in each 
of their countries
group revenues
24
helped by international group 
sales continued to grow
our business model
our business is fully integrated across all our 59 countries 
our international markets operate on a franchise model 
which means store operations are managed by our 
partners while in the uk we manage our stores directly it is 
important to know that these differences in who manages 
stores and the sale of our products means that there is no 
difference in the lifecycle of our product ranges which we 
manage across our global ofﬁces in the uk india china 
hong kong and more recently bangladesh
the product cycle starts at the concept stage where we 
consider our existing ranges global trends and customer 
needs we then test these concepts through customer 
focus groups this gives us great insight into price points 
and the best pricing architecture thus allowing us to arrive 
at relevant ranges at the good better best price points 
at the design stage we are always considering how we 
can help our customers by meeting their needs but also by 
considering the quality that our customers have come to 
expect from mothercare
once we have product ready for our stores merchandisers 
across all our markets consider the ranges and place their 
orders it is our job then to source efﬁciently and ensure 
product is manufactured to our high standards we then 
distribute product to all our markets ensuring timely 
delivery while also ensuring store staff across all our 
markets are trained in how best to sell our products
product design
manufacture
distribution
consumer feedback
sourcing
uk international
product concept
2011 £7936m
2010
2012
£7664m
£8127m
mothercare plc annual report and accounts 2012  11 
overview chief executive’s statement
continued
uk results
total uk sales were down 46 per cent at £5600 million 2011 
£5872 million with a likeforlike sales decline of 62 per cent total 
direct sales were up 08 per cent at £1300 million 2011 £1290 million 
with direct in home down 17 per cent at £917 million and direct in 
store up 73 per cent at £383 million our wholesale channel grew by 
449 per cent to £313 million
trading conditions in the uk deteriorated as we moved through the 
year although we have gained some market share in home  travel 
the market was particularly weak and while we have gained some 
market share sales were impacted by the reduction in the overall 
size of the market we have managed stock levels very tightly over 
the year through additional promotions and offers and as a result 
we ended the third quarter with a clean stock position and a 
reduced gross margin which was as expected down 500 basis 
points for the full year the uk segment of the mothercare group 
recorded a loss of £247 million 2011 proﬁt of £111 million for the year
our brands
the mothercare and the early learning centre brands resonate 
strongly with mothers across the globe the strength of the 
international business and franchise partners has allowed us to 
grow robustly and is a clear indication of the relevance of both 
brands in our overseas and uk markets we now have 1339 stores 
worldwide across 59 markets – 409 in europe 318 in asia 311 in the 
uk 290 in the middle east and africa and 11 in latin america 
following our recent launch in the uk over 80 per cent of expectant 
mothers continue to visit our stores and our challenge is to convert 
more of these visitors to loyal long term customers
mothercare was founded in 1961 and has since its earliest days 
endeavoured to offer motherstobe new mothers and their babies 
and children up to the age of eight innovative and quality products 
at great value that are relevant to their lives our ranges include 
products for feeding bathing travel equipment maternity wear and 
associated product children’s clothing furniture bedding and toys 
whilst we remain an important source of information and support for 
motherstobe and new mothers i realise that we can do a lot more 
these improvements will become increasingly apparent to our 
customers as we move through our threeyear ‘transformation and 
growth’ plan
early learning centre was founded in 1971 and has its roots in a mail 
order business that today includes 462 stores worldwide the internet 
and a small but growing wholesale business elc aims to provide 
babies and children up to the age of eight years nurturing toys 
that encourage learning and development in a fun and 
supportive manner
our strategy
we have over the last few months completed a thorough review of 
our business both uk and international this review forms the basis 
of our ‘transformation and growth’ plan which is essential to deliver 
uk proﬁtability and accelerate international growth the group’s 
task is to deliver this over the next three years
actions already taken
in international we opened our ﬁrst stores in latin america we also 
took our ﬁrst steps towards a multichannel offer with transactional 
websites for early learning centre in russia and australia and for 
worldwide network sales
64
our scale continues to grow with 
worldwide network sales up
elc 36 per cent newness aw 2011
stores 86
direct 11
 
 
 wholesale 3
 
 
 
12  mothercare plc annual report and accounts 2012 mothercare in kuwait ireland and australia with mothercare 
indonesia launching in june 2012
in the uk we continued our store rationalisation plan and ended the 
year with 311 stores on 1 may 2012 we launched our new website
our senior management team continues to be strengthened 
mike logue our uk managing director has been with the business 
since august 2011 and is building a strong uk team to assist him 
in the task ahead i joined on 30 april 2012 and jerry cull our 
international managing director who has been with the business 
for over 30 years continues to drive international forward
i would like to take this opportunity to thank alan parker our 
chairman who stepped up to an executive role for his leadership 
of the business over the last few months our review is now complete 
and i have a clear strategy in the ‘transformation and growth’ plan 
which we will implement over the next three years it is in essence a 
simple plan – accelerate international growth while returning the uk 
to proﬁtability through cost reduction and transformation this will be 
our most important delivery yet in addition the customer will return 
to the centre of everything that we do our success will be driven by 
our ability to reconnect with them converting more into shoppers 
both online and instore
our strategy is based on the four cornerstones of
  lean retail
  restore uk proﬁtability
  accelerate international growth
  multichannel worldwide
summary
i am excited to have joined the mothercare group as chief executive 
and i am conﬁdent about the opportunities ahead worldwide 
network sales are up 64 per cent and our brands remain as relevant 
to our customers today as they ever have been i have been fully 
involved in the formulation of the ‘transformation and growth’ plan 
and i know that it is both the right plan and one which the team and 
i can deliver
we have a long way to go and the plan to bring the uk business 
back to acceptable levels of proﬁtability will take three years we 
need to invest in ecommerce be ruthless with our nonstore cost 
base and use our scale and growth worldwide to drive sourcing 
economies and pass these savings onto the customers to improve 
our value for money around the world everything we do will 
enhance customer value experience and loyalty in each of our 
59 countries my team and i are up for the challenge and whilst 
there is much to do in this difﬁcult economic climate i look forward 
to delivering the ‘transformation and growth’ plan as a team this 
will be our most important delivery yet
simon calver 
chief executive
uk oot stores
35
our space in sq ft was down 
35 per cent as we migrated to 
larger oot stores during the year
2011 98
2010
2012
87
103
mothercare plc annual report and accounts 2012  13 
overview chief executive’s statement
‘transformation and growth’ plan 
the four cornerstones
1 lean retail
lean retail means delivering 
operational efﬁciencies and 
substantial nonstore cost reductions 
tightly managing cash and working 
capital and building on the scale of 
our sourcing operations
reduce uk nonstore costs by 
£20 million per annum annualised
our infrastructure is larger than we 
require given our new smaller uk 
operating base we have identiﬁed 
£20 million of annualised costs that 
can be taken out of the business over 
the next three years from areas like 
distribution head ofﬁce costs and 
payroll work has already begun 
in this area and we have taken action 
to reduce uk head ofﬁce payroll 
costs by 16 per cent
in addition we reduced uk stock 
levels by 12 per cent during fy201112 
and plan to continue to drive down 
our working capital requirements
sourcing efﬁciencies
our buying volumes continue to grow 
despite the recent decline seen in the 
uk international growth of circa 20 
per cent provides us with a strong 
base from which to underpin 
negotiations with our supplier base to 
reduce costs that we can pass on to 
our customers in lower prices further 
driving growth
category mix
clothing and home  travel are 
expected to grow as a percentage 
of sales as early learning centre 
stores are closed in the uk which will 
help to underpin our gross margins 
an increased focus on innovation 
should also help to drive sales of 
ownbrand product and again 
increase margin these changes 
in category mix are expected to 
lower prices whilst maintaining 
gross margins
2 restore uk  
proﬁtability
restoring uk proﬁtability means 
delivering proﬁtable growth through 
targeted and speciﬁc actions aimed 
at stabilising likeforlike sales and 
reducing signiﬁcantly store 
occupancy costs
national coverage
we have identiﬁed that circa 200 
stores in the uk is the optimum size for 
mothercare supported by online and 
wholesale business this will offer the 
best national coverage of mother and 
baby specialists in the uk these 
stores will not only be a place for 
shopping customer service and 
advice but will also offer our ‘collect 
in store’ service whereby online 
orders can be collected from stores 
the target 200 stores chain is based 
around our proﬁtable mothercare out 
of town stores key mothercare in town 
stores and early learning centres in 
key strategic locations the target 200 
store portfolio is currently proﬁtable 
the stores to be closed currently lose 
circa £13 million per annum and these 
stores will be closed by 2015
increase value and innovation across 
our product ranges
we have lost ground in terms of our 
value perception and we need to 
change this we aim to have a clear 
pricing architecture with good better 
and best ranges all offering value to 
the customer in terms of quality and 
price an increase in ownbrand and 
thirdparty exclusivity over the term of 
the plan will also help to improve our 
value credentials
in addition over the next few quarters 
we will continue to launch new and 
innovative products focused on solving 
the needs of mums and babies
enhance customer service and 
improve instore environment
we are investing in additional training 
for all store staff and will have started 
with specialist ﬁtters for car seats 
and bras in all our stores at all times 
we have also begun instore 
investment focusing on ﬁtting rooms 
and baby feeding and changing 
facilities which are important to 
our mums
customer satisfaction measurement 
by store has recently been introduced 
and will further help us to track daily 
store level performance it is essential 
that in all of our markets we set not 
follow the standards of service that 
mothers expect to retain the trust of 
our customers
14  mothercare plc annual report and accounts 2012 3 accelerate  
international 
growth
accelerating international growth 
means increasing sales in existing 
markets targeting new markets and 
focusing on key growth regions – 
china india the middle east and 
latin america
mothercare is a brand with truly 
global reach our international 
business continues to go from strength 
to strength we have great franchise 
partners and proven concepts for 
mothercare and early learning centre 
across the emerging markets which 
will drive space and revenue growth 
of approximately 20 per cent per 
annum over the term of the plan
we are now in four regions and each 
is delivering strong growth for us 
europe which includes eastern 
europe and the middle east and 
africa our two largest and oldest 
regions are expected to deliver 
growth of 10 per cent per annum asia
paciﬁc is expected to grow by 20 per 
cent per annum while our newest 
region latin america is expected to 
grow by over 100 per cent per annum 
albeit from a lower base our business 
is well balanced and each region 
beneﬁts from some high growth 
markets in particular we believe 
saudi arabia russia china india and 
latin america will drive growth over 
the term of the plan overall we 
expect international retail sales to 
grow by 20 per cent per annum over 
the next three years to march 2015
our joint ventures in the ukraine 
china and india and our australian 
associate are all on track to be 
proﬁtable by march 2014
4 multichannel 
worldwide
multichannel worldwide means 
launching new ecommerce platforms 
in the uk and all major overseas 
markets growing both online revenues 
and store sales and putting 
mothercare back into the lead
new uk platform
in line with the plan we launched our 
new uk ecommerce platform for both 
direct to home and instore ordering 
on 1 may 2012 the new website is a 
step change from the old legacy one 
with richer product content improved 
search capabilities and better visibility 
for search engines however this is just 
the start but it has enabled us to have 
and use the tools commonplace 
across the industry to drive conversion 
and sales mothers are becoming 
much more informed and for many of 
our categories signiﬁcant research is 
done online before customers visit our 
stores having a great website will 
therefore grow both online revenues 
and instore sales as the number one 
baby website we have a large 
amount of trafﬁc to our site and can 
increase conversion by doing the 
basics well thereafter we will begin to 
build long relationships with our 
customers growing with them as their 
family does
we have launched a new website in 
the uk and will build the capability to 
become one of the leading online 
players in the uk over the next three 
years we will be redeveloping and 
reconﬁguring our delivery network 
our technology teams and our loyalty 
and retention tools but we can and 
will get there
international websites
in addition we will lead the move to 
multichannel in our international 
markets with fully operational websites 
in ﬁve markets our existing platform 
has now been tested and is easily 
scalable across all our markets 
we aim to have transactional websites 
across our major markets over the 
term of the plan many of which will 
be some of the ﬁrst such sites in their 
markets in any category
wholesale
mini club our wholesale arrangement 
with boots uk for clothing has been 
a great success in addition to this we 
have a small but growing wholesale 
business for elc product both in the 
uk and internationally we have over 
the last few months successfully 
trialed with several retailers 
wholesale is a great format for 
growing our reach for elc and we 
would expect this element of our 
revenues to grow over the term of 
the plan
mothercare plc annual report and accounts 2012  15 
overview