mothercare plc annual report and accounts 2013
mothercare plc
annual report and accounts 2013
transformation
and growth
good progress
wwwmothercareplccom wwwmothercareplccom wwwmothercareplccom financial highlights
worldwide network sales
£11851m 19 
mar12 £11633m
mar11
mar13
£11370m
£11851m
uk sales
£4997m 92
international sales
£6854m 118
nb the above figures are on a comparable nonstatutory 52 vs 52 week 
basis and exclude australia and new zealand on a statutory 52 vs 
53 week basis and including australia and new zealand worldwide 
network sales were down 03 uk sales were down 108 and 
international sales were up 84
group sales
£7494m 78
mar12 £8127m
mar11
mar13
£7936m
£7494m
uk sales
£4997m 108
international sales
£2497m 12
nb the above figures are on a statutory 52 vs 53 week basis and 
include australia and new zealand for all of fy2012 and from 1 april  
2012 to 30 january 2013 for fy2013 on a comparable 52 vs 52 week basis 
and excluding australia and new zealand group sales were down 
60 uk sales were down 92 and international sales were up 12
operating profit
£83m 4188
mar12 £16m
mar11
mar13
£285m
£83m
uk operating loss
£217m reduced by 121
international operating profit
£420m 203
corporate expenses
£78m 26
nb the above figures are on a statutory 52 vs 53 week basis 
and include australia and new zealand for all of fy2012 and 
from 1 april 2012 to 30 january 2013 for fy2013 the impact 
excluding australia and new zealand is not material
space across the world
41525k sq ft 35
stores
1324 47
mar12 40142 sq ft
mar11
mar13
37452 sq ft
41525 sq ft
uk space
18052k 72
stores
255 180
nb the above figures are on a comparable nonstatutory 52 vs 52 week 
basis and exclude australia and new zealand including australia and 
new zealand space across the world was down 18 uk space was 
down 72 and international space was up 28
international space
23473 135
stores
1069 121 	 mothercare plc annual report and accounts 2013 1
overview
overview
our brands 01
at a glance 02
our mission 04
chairman’s statement 14
chief executive’s statement 16
our business model 21
business	 review
business review 22
financial review 24
kpis – financial and nonfinancial 28
risks – principal risks and uncertainties 30
corporate responsibility 33
governance
board of directors 38
executive committee 39
corporate governance 40
directors’ report 48
remuneration report and chairman’s statement 52
appendix to the remuneration report 63
financial	 statements
directors’ responsibilities statement 68
independent auditor’s report to the  
members of mothercare plc 69
consolidated income statement 70
consolidated statement of  
comprehensive incomeexpense 70
consolidated balance sheet 71
consolidated statement of changes in equity 72
consolidated cash flow statement 73
notes to the consolidated  
financial statements 74
company	 financial 	 statements	
independent auditor’s report on the  
company financial statements 115
company balance sheet 116
notes to the company financial statements 117
fiveyear record 120
shareholder information 121
for more information visit 
wwwmothercareplccom
our	 brands contents
mothercare
	
our aim at mothercare is to be the world’s leading mother 
and baby specialist our products are designed to meet 
the needs of motherstobe babies and children up to  
the age of eight our clothing ranges which account for  
53 per cent of worldwide network sales include maternity 
and offer mothers a broad range of products from entry 
level prices for everyday value to more premium ranges 
our home  travel offer which accounts for 26 per cent of 
worldwide network sales aims to meet the needs of baby 
from birth we sell our products through multichannel 
retail and wholesale operations in the uk and through 
franchise operations across our international markets in  
the middle east and africa europe asia and latin america
mothercare	 stores
 a uk – in town 99
 a uk – oot 97
 a international 719
oot  out of town
early	 learning	 centre	
early learning centre aims to provide children up to 
the age of eight with toys that nurture and encourage 
learning through play the range is predominately 
ownbrand which is designed and sourced through 
our facilities in hong kong the early learning centre 
range is sold through our multichannel retail and 
wholesale operations in the uk and through franchise 
and wholesale operations across our international 
markets in the middle east and africa europe asia 
and latin america
elc	 stores
 a uk – in town 59
 a uk – inserts in  
mothercare stores 127 
note the figure above refers  
to inserts in 97 oot mothercare  
stores and 30 in town  
mothercare stores
 a international 350 2	 mothercare plc annual report and accounts 2013
	 uk	losses	were	reduced	to	£217	million
	 our	strategy	is	to	close	lossmaking	stores
	 and	reduce	operating	costs	mitigating
the	ongoing	challenge	of	weak	consumer
	 spending	conditions	in	the	uk
 a our strategy to transform the uk and return it to profi tability is making 
good progress we closed 56 stores during the year and took out 
operating costs meeting the targets we set ourselves a year ago
 a total uk sales were down 108 per cent down 92 per cent on a 
comparable 52 vs 52 week basis at £4997 million likeforlike sales 
were down 36 per cent helped by direct in home which was up 
40 per cent on a comparable basis
uk	sales
at	a	glance
	uk
	 store	sales
	 £3405m
uk store sales down 146 
mar12 £3987m
mar11
mar13
£4366m
£3405m
during the year we reduced space in the 
uk by 72 per cent closing 141k sq ft or 
56 stores our mothercare store format is 
larger with 196 stores covering 1711k sq ft 
compared to our early learning centre 
elc format with 59 stores covering 
94k sq ft which is where our store closure 
programme is concentrated our strategy 
to reduce space further to 1700k sq ft 
or 200 stores and reduce the operating 
cost base by £20 million by march 2015 is 
progressing well
	direct
	 £1277m
uk direct sales down 18 
mar12 £1300m
mar11
mar13
£1290m
£1277m
total direct sales were down 18 per cent 
during the year with direct in home sales 
of £938 million up 23 per cent and direct in 
store sales of £339 million down 115 per 
cent direct in home has benefi ted from 
the migration to a new online platform as 
well as improved navigation content 
and delivery options for our customers 
next day ‘click and collect’ is now 
available to all mothercare stores is free 
for our customers and now makes up 
circa 20 per cent of direct in home sales 
clothing 35
home  travel 38
toys 27
wholesale
	 £315m
uk wholesale sales up 06 
mar12 £313m
mar11
mar13
£216m
£315m
uk wholesale sales were up 06 per cent 
miniclub our strategic partnership with 
boots continues to perform well we 
continue to look for opportunities to extend 
the elc range to wholesale without 
impacting our store or direct sales 	 mothercare plc annual report and accounts 2013 3
overview
	direct
	 na
base for international direct building well
over the last year we have laid the 
foundations for a robust multichannel 
offering for our franchise partners 
we now have a scalable online platform 
that can be rolled out with ease in 
multiple languages and currencies 
most of our franchise partners operate 
in markets where multichannel is still 
in its infancy and so developing the 
infrastructure is crucial we now have 
transactional ecommerce sites in 
ireland indonesia kuwait and russia 
in addition our partner in china has 
a transactional site on tmall china’s 
largest online site our aim remains 
to have a multichannel offer for all 
our major markets by march 2015
	 international	sales
clothing 66
home  travel 18
toys 16
international
store	sales
	 £7210m
international store sales up 83 
mar12 £6655m
mar11
mar13
£5615m
£7210m
we now have 1069 stores covering 
2347k sqft of space with mothercare 
stores accounting for 845 per cent of 
space retail sales through our franchise 
partners’ stores were up 83 per cent at 
£7210 million we are encouraged by 
the growth opportunities offered by our 
international markets and believe we 
can grow space in line with the level 
achieved during fy2013
 a europe – 433 stores 28 countries 
space 44 per cent
 a middle east and africa – 309 stores 
14 countries space 159 per cent
 a asia – 290 stores 12 countries space 
237 per cent
 a latin america – 37 stores six countries 
space 1760 per cent
wholesale
	 £77m
international wholesale sales up 116 
mar12 £69m
mar11
mar13
£94m
£77m
we believe that there is an opportunity 
to extend the reach of elc through 
wholesale but only in those markets 
where we do not already have a 
presence through franchise stores 
this is a small part of our overall 
international business but does offer 
interesting growth opportunities
	 our	international	business	delivered	another	
year	of	growth	on	a	comparable	basis	
space	was	up	135	sales	were	up	15	
in	constant	currency	and	profi 	ts	were	
up	203	
 a our strategy to grow our international business remains unchanged we continue 
to see growth opportunities in both new and existing markets where our franchise 
partners are moving to larger stores while embarking on multichannel strategies
 a total international sales were up 84 per cent at £7287 million up 118 per cent 
at £6854 million on a comparable 52 vs 52 week basis and excluding australia 
and new zealand adjusting for the eurozone where consumer confi dence 
remains depressed all our regions delivered doubledigit sales growth 
and positive likeforlike sales growth which was up 56 per cent during 
the year 4	 mothercare plc annual report and accounts 2013
our	 mission
our	 aim	 is	 to	 be	 the	 world’s	 leading	 mother	
and	 baby	 specialist	 making	 life	 easier	 for	
families	 the	 world	 over	 with	 improved	 value	
choice	 service	 and	 delivery
our brands mothercare and early 
learning centre have a strong resonance 
with parents the world over it is our 
intention to build on our position as the 
leading mother and baby specialist 
and this is what our threeyear 
transformation and growth plan 
seeks to do
a year into the plan we have made 
good progress we have improved 
value choice service and delivery for 
our customers both in store and online 
we have reduced losses in the uk  
and grown our international business 
resulting in an increase in underlying 
profit before tax
international	 growth
our international business delivered 
profit growth of 203 per cent highlighting 
the strength of this business this is 
testament to the strength of the team 
and their relationship with our franchise 
partners the world over
our international business continues to 
see good growth opportunities across 
all our regions the growth opportunities 
in our newer markets is clear to see 
but even our longer established markets 
are benefiting from the trend of moving 
to larger units whilst also establishing 
multichannel offers ahead of other 
retailers in the region
uk	 losses	 reduced
we have made progress towards our 
aim of returning the uk to profitability 
with losses reduced by 121 per cent 
during the year we reduced space by 
72 per cent by closing 56 lossmaking 
stores refurbished stores in edmonton 
nottingham and dudley improved 
value across clothing and home  
travel introduced new and innovative 
products like innosense xpedior and 
extended the range of happyland 
characters relaunched our online 
platform and invested in service  
these are initiatives that we will build  
on in the years ahead
transformation	 and	 growth	 plan
we have made a good start with our 
transformation and growth plan and 
will build on these themes
 a operate a lean retail structure
 a return the uk to profitability
 a international growth and 
 a build a multichannel business 	 mothercare plc annual report and accounts 2013 5
overview
our	strategy	for	
transformation	
and	growth
1
lean	retail
read	more	
on	page	6
our	aim	is	to	improve	operational	effi 	ciencies	
by	reducing	nonstore	operating	costs	tightly	
managing	working	capital	and	cash	and	
building	on	the	scale	of	our	sourcing	operations
2
restore	uk	profi 	tability
read	more
on	page	8
our	aim	is	to	return	the	uk	to	profi 	tability	by	
stabilising	likeforlike	sales	and	reducing	
store	occupancy	costs
3
international	growth
read	more
on	page	10
our	aim	is	to	continue	to	drive	doubledigit	
sales	and	profi 	t	growth	by	growing	space	
both	in	new	and	existing	markets	while	also	
maintaining	midsingle	digit	likeforlike	
sales	growth
4
multichannel	
worldwide
read	more
on	page	12
our	aim	is	to	give	our	customers	the	world	
over	a	multichannel	offering	allowing	them	
to	shop	at	mothercare	and	early	learning	
centre	in	the	way	that	suits	them	best	 6	 mothercare plc annual report and accounts 2013
	 good	progress
	 lean	retail
lean	retail	means	delivering	operational	
effi 	ciencies	and	substantial	nonstore	cost	
reductions	tightly	managing	cash	and	
working	capital	and	building	the	scale	
of	our	sourcing	operations
56
uk	stores	exited	
in	fy201213
	8
reduction	in	
working	capital
£59m
reduction	in	
nonstore	costs
6	 mothercare plc annual report and accounts 2013 	 mothercare plc annual report and accounts 2013 7
overview
our	international	business	is	now	larger	
than	the	uk	accounting	for	circa	60	per	
cent	of	space	and	retail	sales	worldwide	
network	sales	were	down	03	per	cent	as	
international	network	sales	were	up
84	per	cent	while	uk	sales	were	down	
108	per	cent	this	ongoing	change	in	the	
structure	of	our	business	necessitates	a	
change	in	our	operational	structure	to	
ensure	the	effi 	cient	use	of	our	capital	and	
resources	accordingly	the	transformation	
and	growth	plan	envisages	a	change	
over	the	three	years	of	the	plan
reduce	uk	nonstore	costs	by	£20	million	per	annum	
on	an	annualised	basis
the transformation and growth plan identifi ed circa 
£20 million of nonstore operating costs that could be 
eliminated over the course of the plan we met our fi rst 
target to reduce operating cost by £8 million on an 
annualised basis and expect to reduce these costs by 
a further £7 million on an annualised basis for the current year
we have also continued to focus on driving down our 
working capital requirements and accordingly we have 
reduced working capital by 8 per cent during the year
sourcing	effi 	ciencies
leveraging buying volumes has helped us deliver 
greater value for our customers both in the uk and 
across our international markets whilst it is easy to see 
how international volumes have grown with retail sales 
growth of 150 per cent in constant currency uk volumes 
too have grown particularly in clothing the successful 
relaunch of blooming marvellous during autumnwinter 
2012 aw12 resulted in a 16 per cent increase in units 
bought for springsummer 2013 ss13 while the value 
range also launched for aw12 saw a 30 per cent 
increase in the number of options bought for ss13
category	mix
as expected toys now make up 27 per cent of total uk 
sales refl ecting the continued closure of early learning 
centre stores we would expect clothing to continue to 
benefi t from the initiatives taken over the last year and 
for home  travel to begin to reap the benefi ts of the 
launch of innosense our ownbrand complete feeding 
range and xpedior our ownbrand pushchair and 
travel system we will continue to build on the level 
of product innovation delivered over the last year
service	 dedication	to	customers
we launched our in store customer survey for both 
mothercare and early learning centre a year ago 
scores for both have improved as we have taken 
on board their feedback our customers value the 
investment in value across all our ranges increased 
choice with new products improved staff knowledge 
as we have invested in training and better online 
and delivery experience for all our customers 
we have only recently extended the customer survey 
to our online business and we would expect to see 
similar levels of improvement as a result 8	 mothercare plc annual report and accounts 2013
fy201213
‘my	 customer’	 was	
successfully	 launched	 	
for	 both	 in	 store	 and	
online	 customers
255	 	
uk	 stores
–	 196	 mothercare
–	 59	 early	 learning	 centre
value	 range	 and	 	
price	 reductions	
across	 clothing
121
uk	 losses	 reduced	
during	 fy201213
	 good	 progress
	 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 	 mothercare plc annual report and accounts 2013 9
overview
national	coverage
our aim is to be the leading mother and baby specialist 
and to do so we will need to ensure our customers 
have easy access to our stores we expect to have 
circa 200 stores by march 2015 which will crucially act 
as a collection point as part of our multichannel offer 
for our customers the importance of our store network 
is clear during the year circa 20 per cent of all direct in 
home orders were collected from a mothercare store
we have made good progress and have closed 56 
lossmaking stores during the year as a result we 
now operate from 255 stores 196 mothercare and 
59 early learning centre across the uk
value	 reacting	to	competitive	pressure
our customers were clear in their feedback 
we needed to improve our value credentials if we 
were going to retain their loyalty we listened during 
the year we reduced pricing for clothing twice by 
low doubledigit per cent while also introducing a 
‘value’ range of clothing in home  travel our 
price match strategy has worked well towards 
improving our value perception
returning	the	uk	to	profi 	tability	is	crucial	
to	our	threeyear	plan	over	the	year	
we	reduced	uk	losses	by	121	per	cent	
to	£217	million	we	will	continue	to	build	
on	the	initiatives	taken	over	the	last	
year	to	ensure	we	continue	to	make	
good	progress	against	this	goal
increase	value	and	innovation	across	our	
product	ranges
we have signifi cantly improved value for our customers 
over the last year we reduced prices across all our 
clothing ranges by low doubledigit per cent for both 
aw12 and ss13 relaunched blooming marvellous at 
improved price points and introduced a value range 
for our customers our price match strategy has helped 
to improve our value perception across home  travel 
we have also launched innovative new products like 
innosense and xpedior that will help reestablish 
our position as the leading mother and baby specialist 
whilst also helping us to manage margins our toy 
ranges have also seen over 30 per cent newness 
over both aw12 and ss13 which have gone a long 
way towards rebuilding early learning centre’s 
position as the place to go to for educational toys
enhance	customer	service	and	improve	
instore	environment
last year we invested heavily in retraining staff in 
areas such as car seat fi tting and bra fi tting we have 
continued specialist training of staff in collaboration 
with manufacturers to ensure our customers get the 
service they deserve we launched an in store customer 
survey at the beginning of the year which has allowed 
us insight into areas that needed improvement we 
have listened to customer feedback and our customer 
scores have improved over the year we have recently 
extended this service to direct and hope to be able to 
deliver similar improvements for our online customers 
as well 10	 mothercare plc annual report and accounts 2013
135
space	 growth
150
sales	 growth	 in	
constant	 currency
	 		 203
profit	 growth
	 good	 progress
	 international	 growth
international	 growth	 means	 increasing	
sales	 in	 existing	 markets	 targeting	 new	
markets	 and	 focusing	 on	 key	 growth	
regions	 –	 china	 india	 the	 middle	 east	
latin	 america	 and	 russia 	 mothercare plc annual report and accounts 2013 11
overview
our international growth strategy is based on growing 
space both in new and existing markets whilst the 
opportunity is easy to see in our less developed 
markets like latin america russia china and india 
our more mature markets like those in the middle east 
are benefi ting from the move to new space last year 
all four of our regions delivered growth both in terms 
of space and revenues
notwithstanding the issues faced by our eurozone 
markets our franchise partners in europe grew space 
by 44 per cent during the year the continued strength 
of our eastern european markets and in particular 
russia have more than compensated for the eurozone 
weakness the middle east and africa which is our 
oldest market grew space by 159 per cent as the 
move to larger stores continued to underpin growth 
in these markets in asia excluding australia and new 
zealand space was up 237 per cent latin america 
our newest region also continues to offer strong 
growth opportunities underpinned by very solid 
partnerships which resulted in space growth of 
176 per cent albeit from a low base
it is also encouraging to note that international 
likeforlike sales grew by 56 per cent during the year 
highlighting that these markets are far from maturity
our joint ventures in the ukraine china and india are 
expected to break even during the current year further 
helping to improve growth for our international markets
choice	refi 	ning	our	sourcing	and	logistics
we expect to see continued growth in volumes 
as our international business grows in addition 
the recent improvements in value across clothing 
have helped to increase volumes we aim to 
leverage our relationships with our suppliers to 
ensure that we continue to deliver the best value for 
our customers we have also improved the delivery 
options for our customers so that they can get the 
best service possible with quicker delivery to both 
store and home
our	international	business	now	operates	
across	60	markets	with	1069	stores	and	
23	million	sq	ft	which	is	up	135	per	cent	
over	the	previous	year	as	a	result	sales	
were	up	118	per	cent	up	150	per	cent	in	
constant	currency	while	profi 	ts	were	up	
203	per	cent	during	the	year 12	 mothercare plc annual report and accounts 2013
fy201213
uk	 website	 relaunched
26
direct	 sales	 in	 the	 uk
115
new	 	
international	 	
stores
5
international	 	
markets	 with	 	
operational	 	
websites
140000
downloads	 of	 new	 	
mobile	 app
good	 progress
	 multichannel
multichannel	 means	 launching	 new	
ecommerce	 platforms	 in	 the	 uk	 and	 all	
major	 overseas	 markets	 growing	 both	
online	 revenues	 and	 store	 sales 	 mothercare plc annual report and accounts 2013 13
overview
new	uk	platform
our new online platform for the uk was launched just 
over a year ago on 1 may 2012 it has allowed us to 
make signifi cant changes to the shopping experience 
and our customers are noticing the difference the 
success of this transition is clear in the 182 per cent 
growth in direct in home sales experienced over the 
last quarter of the year in november 2012 we launched 
our mobile app which has been downloaded circa 
140000 times and was voted ‘best mobile app 2013’ 
by mobile retail awards we will also be launching 
an android app to further help our customers access 
our products in the way most convenient to them
in may 2013 we made next day ‘click and collect’ 
available through all our mothercare stores this 
service is free for customers and already makes up 
circa 20 per cent of direct in home sales whilst direct 
in home has been a great success there is still more to 
be done to improve the performance of our direct in 
store sales this is a priority for fy201314 and our task 
will be to return this aspect of sales back to growth
deliver	 launching	the	new	online	platform
our new online platform was launched a year ago 
in the uk and has signifi cantly improved the customer 
experience a great platform also needs great 
delivery if it is going to work over the last year we 
have changed carrier shortened delivery times and 
made next day delivery both free and possible to all 
uk mothercare stores we will work hard to incrementally 
improve service for our customers but already direct 
in home sales were up 182 per cent during the last 
quarter of the year indicating the success to date
store sales this is a priority for fy201314 and our task store sales this is a priority for fy201314 and our task 
will be to return this aspect of sales back to growth will be to return this aspect of sales back to growth
multichannel	is	core	to	our	strategy	both	
for	the	uk	and	across	our	international	
businesses	direct	already	accounts	for	
26	per	cent	of	total	uk	sales	with	circa	
20	per	cent	of	all	direct	in	home	orders	
collected	from	a	mothercare	store	our	
aim	is	to	offer	our	customers	convenience	
allowing	them	to	shop	the	way	that	suits	
them	best	
international	websites
as part of our threeyear transformation and growth 
plan we said that we wanted to have transactional 
sites in all major markets by march 2015 over the 
last year we have been busy putting in place a fully 
scalable online platform that can easily be rolled 
out to multiple markets in multiple languages and 
currencies we have tested the capabilities of the 
platform and believe that it can now be readily 
implemented they key to success is ensuring that 
our partners have the right infrastructure in place 
over the last year this has been a priority for us and 
our partners are prepared for the challenge ahead 
our franchise partners in ireland kuwait indonesia and 
russia – both for mothercare and early learning centre 
– have successfully rolled out transactional websites in 
addition our partner in china has an online site up and 
running on tmall the largest online trading site in china 
and will be looking to launch its own site in due course
we have made good progress so far and look forward 
to rolling out to more markets over the course of the 
next two years
wholesale
miniclub our partnership with boots uk continues 
to perform well it is the only wholesale arrangement 
we have for clothing in addition we are looking at 
the opportunity to grow early learning centre through 
selected wholesale arrangements both in the uk 
and overseas where we do not already have 
a presence 14	 mothercare plc annual report and accounts 2013
chairman’s	
statement
it has been a busy year in the 
transformation of mothercare plc 
i am pleased to say that the group’s 
profi tability has improved from last year 
in line with market expectations for the 
fi rst phase of our transformation and 
growth plan this has been achieved 
against a backdrop of considerable 
change in the organisation 
 a simon calver started as our chief 
executive on 30 april 2012 and has 
brought about a fundamental change 
in many parts of the company and its 
culture he has led formidably from 
the front in putting our customers back 
into the heart of everything we do 
 a simon has appointed fi ve new 
members to his executive committee 
during the year culminating with the 
arrival of matt smith as the chief 
financial offi cer in march 2013 this 
has allowed for a thorough evaluation 
of the way the organisation is structured 
the group is now more customer 
focused and effi cient as we restore 
the profi tability of the uk business 
and continue to grow internationally 
 a i welcome lee ginsberg angela brav 
and imelda walsh as new non
executive directors all have commercial 
expertise which will complement 
mothercare’s business lee has 
replaced bernard cragg as the 
chairman of the audit committee 
and imelda walsh will become chair 
of the remuneration committee after 
the annual general meeting in july
 a on behalf of the board i should like 
to thank bernard cragg and david 
williams both of whom retired after 
nine years as nonexecutive directors 
and chairman of the audit and 
remuneration committees respectively 
for their considerable and insightful 
contributions to the business
 a our international business has continued 
to grow with strong likeforlike sales 
expansion into new countries and 
supported by growth in retail space 
and the development of an online 
platform from our franchise partners
 a our uk business is focusing on 
providing quality and value to our 
customers both online and in our 
stores where customers receive the 
expert help that our store colleagues 
can provide over the year it has 
reduced losses by rationalising its 
cost base and closing over 50 
lossmaking stores
 a the business is reshaping itself to 
meet the changes in shopping habits 
of customers and the online 
experience and delivery that 
customers expect
 a we have launched exciting new 
products such as the innosense 
feeding range and the xpedior 
pushchair and new value clothing 
ranges all of which have been well 
received by our customers
alan	parker	cbe
chairman
“	 the	group	is	now	more	customer	
focused	and	effi 	cient	as	we	restore	
the	profi 	tability	of	the	uk	business	
and	continue	to	grow	internationally”	
space	across	the	world
2012
2011
4229k sq ft
3862k sq ft
2013 4152k sq ft
on a statutory basis 	 mothercare plc annual report and accounts 2013 15
overview
i recognise that the group still has a long 
way to meet all the objectives of its three
year transformation and growth plan 
but each of these developments is 
signifi cant i am confi dent that my 
board will provide the appropriate 
governance and oversight of the group 
and this will be a critical factor to 
delivering success
finally mothercare is all about 
partnership and i would like to thank 
all those involved with our great brands 
the contribution of our store colleagues 
at mothercare and elc has been 
excellent as has that of our head offi ce 
in the uk and our overseas sourcing 
offi ces again i recognise the strength 
of support that the whole group has 
received from its franchise partners 
around the world which gives us the 
inspiration to improve year on year
alan	parker	cbe
chairman
47	skus	
21	new	designs
innosense	launched	in	the	uk	
in	january	2013
blooming	
marvellous
relaunched	in	aw12	has	seen	
markdowns	reduced
20	of	uk	
clothing
value	range	launched	during	aw12	
and	is	now	in	its	second	season
£250
xpedior	is	a	3in1	travel	system	
launched	in	the	uk	in	march	2013 16	 mothercare plc annual report and accounts 2013 16 16 mothercare plc annual report and accounts 2013 mothercare plc annual report and accounts 2013
“	 we	have	improved	value	choice	service	
and	delivery	for	our	customers	both	in	
store	and	online	and	these	are	themes	
that	we	will	continue	to	build	on	in	the	
years	ahead”
chief	executive’s	
statement
overview
one year into our threeyear 
transformation and growth plan we 
have made good progress but this is 
only the start of what we can achieve 
in our threeyear plan we outlined four 
things we needed to do
1	operate	a	lean	retail	structure
2	return	the	uk	to	profi 	tability
3	drive	international	growth	and
4	build	a	multichannel	business
i am pleased to say we have made 
progress against all of these 
we have improved value choice service 
and delivery for our customers both in 
store and online and these are themes 
that we will continue to build on in the 
years ahead most importantly i am 
pleased to say that we now have a full 
executive team that will lead mothercare 
on the journey we started a year ago 
the team brings together expertise in 
product development merchandising 
marketing and retail management both 
in the uk and internationally all of 
which is underpinned by a strong 
fi nance and people capability
this executive team structure now 
refl ects the global nature of our business 
our operating model needs to ensure 
we develop the right products for all our 
customers at the right price and in the 
right quantities every transaction with 
each customer in all of our markets 
needs to help them on their special 
journey of parenthood we now operate 
from 41 million sq ft globally and have 
1324 stores across 61 countries nearly 
60 per cent of worldwide network sales 
are generated outside the uk which 
mirrors our footprint in terms of space 
our business is dependent on sourcing 
from asia and includes countries like china 
india and bangladesh as a mother and 
baby specialist at mothercare we take the 
safety and wellbeing of all those involved 
in the manufacture of our products very 
seriously we have an ethical sourcing 
policy and a team in place which regularly 
inspects all factory premises and ensures 
that our suppliers’ factories are safe and fi t 
for purpose recent events in bangladesh 
highlight the importance of improving 
standards whilst our suppliers are not 
impacted we have signed up to the 
accord on fire and building safety in 
bangladesh to support the improvement 
in the safety and conditions of all those 
employed in the manufacture of goods
our people are fantastic ambassadors for 
our brands and when we do things well 
our customers respond very positively as 
a true specialist we are uniquely placed 
with parents and need to continue to 
make the most of this advantage globally 
when we offer better value unit sales 
increase signifi cantly when we introduce 
product innovation with new launches like 
innosense xpedior and a new happyland 
toy range our customers switch to us and 
when we improve our in store experience 
our customers are delighted these results 
a year into our transformation and growth 
plan have shown progress but there 
remains a lot to do and signifi cantly 
more opportunity ahead
group	results	seeing	improved	profi 	t	
before	tax
worldwide network sales were down 
03 per cent at £12284 million for the 
year fy2012 £12324 million with total 
international sales up 84 per cent at 
£7287 million fy2012 £6724 million 
and total uk sales down 108 per cent 
at £4997 million fy2012 £5600 million 
group sales which refl ect total uk sales 
and revenues from our international 
partners declined 78 per cent at 
£7494 million fy2012 £8127 million 
on a comparable basis worldwide 
network sales were up 19 per cent and 
group sales were down 60 per cent
simon	calver
chief executive
worldwide	network	sales
2012
2011
£12324m
£11581m
2013 £12284m 	 mothercare plc annual report and accounts 2013 17
overview
space across both our uk and international 
businesses was down 18 per cent during 
the year with international space up 28 per 
cent at 23 million sq ft and the uk down 
72 per cent at 18 million sq ft adjusting for 
australia and new zealand where all 
74 stores 02 million sq ft were closed 
during the year total space was up 
34 per cent with international space 
up 135 per cent and uk space down 
72 per cent
in january we announced that the directors 
of mothercare australia limited in which 
mothercare plc through its subsidiary 
mothercare finance limited had a minority 
23 per cent shareholding had taken 
the decision to place the business into 
administration having assessed various 
potential strategies the administrators 
decided to close the business as a result 
all 74 stores in australia and new zealand 
have now been closed
group underlying profi t before tax was 
up at £83 million fy2012 £16 million 
with international profi ts up 203 per cent 
at £420 million fy2012 £349 million uk 
losses reduced to £217 million fy2012 
£247 million and corporate expenses 
broadly fl at at £78 million fy2012 
£76 million after exceptional items 
and other nonunderlying charges of 
£298 million fy2012 £1045 million the 
reported loss before tax was reduced to 
£215 million fy2012 £1029 million these 
exceptional costs are £156 million for uk 
property restructuring £111 million for 
australia £43 million for onerous leases 
and £47 million for other restructuring costs
we end the year with net debt of 
£324 million fy2012 £201 million which 
partly refl ects the investment in stock for 
new product lines across clothing and 
home  travel this is well within our 
committed banking facilities of £90 
million which cover the life of our 
threeyear plan and expire in may 
2015 no dividend has been declared 
for fy2013
international	profi 	ts	up	over	20	per	cent
fy201213
52	weeks	to
30mar13
fy201112
53	weeks	to
31mar12
	change
vs	last	year
international retail sales £7210m £6655m 83
international wholesale sales £77m £69m 116
total international sales £7287m £6724m 84
underlying profi t £420m £349m 203
our international business continues 
to deliver encouraging growth in terms 
of space and revenues with profi ts 
up 203 per cent to £420 million
international now trades from 23 million 
sq ft with 1069 stores across 60 countries 
during the year our international partners 
opened 115 stores and some with our 
help made further progress towards 
establishing multichannel businesses 
our partners now have transactional 
online sites in indonesia ireland kuwait 
and two in russia for both early learning 
centre and mothercare in addition our 
partner in china has a transactional site 
on tmall the largest online trading 
platform in china and will in time have 
its own online platform we now have 
a global ecommerce platform in place 
which will be rolled out to help our 
franchise partners develop their 
multichannel strategies the growth 
opportunities in our newer markets is 
clear but even our longer established 
markets are benefi ting from the trend 
of moving to larger units whilst also 
establishing multichannel offers 
ahead of other retailers in the region
our continuing international business 
is impacted by an ongoing weaker 
performance from our eurozone markets 
which has been offset by a stronger 
performance from our eastern european 
markets particularly russia all four of 
our regions saw positive growth in both 
likeforlike and retail sales despite the 
negative contribution from our eurozone 
markets international saw likeforlike 
sales growth of 56 per cent
europe is still our largest market with 
433 stores in 28 countries a net 24 stores 
were opened and space grew by 
44 per cent which indicates that this 
region still continues to see growth 
opportunities despite the continuing 
eurozone challenges
the middle east and africa is our oldest 
region and has 309 stores in 14 countries 
a net 19 stores were opened and space 
grew by 159 per cent refl ecting the 
ongoing transition to larger stores as the 
business matures this increase in space 
means our franchise partners in these 
markets are taking advantage of a 
greater proportion of our product offering 
to increasingly become the onestopshop 
for mums in these markets 18	 mothercare plc annual report and accounts 2013
chief	 executive’s	
statement
continued
asia remains a high growth market with 
290 stores across 12 countries india and 
china continue to deliver rapid growth 
and our partners in the region excluding 
australia and new zealand opened 46 
stores and increased space by 237 per 
cent during the year the year also saw 
the closure of all 74 stores in australia 
and new zealand as mothercare 
australia limited was put into 
administration by its directors
latin america now has 37 stores in six 
countries it is early days with some  
new partners here but the results so  
far are very encouraging we have  
also identified great quality potential 
new partners for further rollout in the 
region and have confidence in the 
opportunity ahead
total international sales were up 84 per 
cent at £7287 million fy2012 £6724 million 
with international wholesale sales up 116 
per cent at £77 million fy2012 £69 million 
and international retail sales up 83 per 
cent at £7210 million fy2012 £6655 million 
reported international sales of £2497 million 
were down 12 per cent during the year
on a comparable basis total international 
sales were up 150 per cent in constant 
currency for the year whilst in sterling 
terms revenues were up 118 per cent
international profit growth has remained 
robust at 203 per cent to £420 million 
fy2012 £349 million with retail profits  
of £434 million fy2012 £381 million  
and joint venture losses reduced to  
£14 million fy2012 loss of £32 million
our international results are testament 
to the hard work and knowledge 
offered by our international team and 
the strength of the relationships they 
have with our franchise partners 
we work closely with all our partners 
who offer invaluable local knowledge 
and expertise they help us leverage 
the benefits that our brands and 
products offer i am pleased to say  
that we continue to see good growth 
opportunities across all our regions
uk	 losses	 reduced	 as	 planned
fy201213
52	 weeks	 to	
30mar13
fy201112	
53	 weeks	 to
31mar12
	 change
vs	 last	 year
uk direct sales £1277m £1300m 18
uk retail sales including direct £4682m £5287m 114
uk wholesale sales £315m £313m 06
total uk sales £4997m £5600m 108
underlying loss £217m £247m 121
against the backdrop of continuing 
pressure on the uk consumer we are 
making progress towards reducing 
losses in the uk over the last 12 months 
we have closed 56 lossmaking stores 
refurbished our edmonton nottingham 
and dudley stores improved value 
across clothing and home  travel 
introduced new and innovative product 
like innosense xpedior and extended 
the range of happyland toy characters 
relaunched our online platform and 
invested in service these initiatives are 
beginning to have a beneficial impact 
and we will build on these themes over 
the years ahead
we have over the last year reduced  
our uk footprint by 72 and now 
operate from 18 million sq ft with 255 
stores 196 mothercare and 59 early  
learning centre we closed 56 stores 
13 mothercare and 43 early learning 
centre ahead of our target of circa 50 
as we were able to negotiate deals with 
our landlords while also closing stores 
as their leases came up for renewal
as expected these store closures have 
impacted uk sales which were down 
108 per cent at £4997 million fy2012 
£5600 million on a comparable basis 
total uk sales were down 92 per cent  
this decline in storebased sales was 
mitigated by the improvement in direct 
in home sales of £938 million up 23 per 
cent on a statutory basis and up 40 per 
cent on a comparable basis the migration 
to a new online platform together with 
the improvement in navigation content 
and delivery options has delivered 
good results but there is more to do
in may 2013 we made ‘click and collect’ 
available through all our mothercare 
stores this service is free and allows 
customers to order from home and 
collect from any mothercare store the 
very next day and makes up circa 20 
per cent of direct in home sales our 
iphone mobile app which we launched 
at the end of november 2012 has been 
downloaded circa 140000 times and 
was voted ‘best mobile app 2013’ by 
mobile retail awards we will also be 
launching an android app to further 
help our customers access our products 
in the most convenient way to them we 
are becoming more competitive online 
and offering the services that many 
other businesses have been doing for 
some time whilst our direct in home 
sales have responded well to the 
improvements we have made during 
the last year direct in store sales have 
been disappointing and at £339 million 
were down 115 per cent this is an area 
that we will be focusing on during the 
year ahead together total direct sales 
were down 18 per cent at £1277 million 
uk wholesale sales of £315 million were 
up 06 per cent miniclub our partnership 
with boots continues to perform well 
and we are beginning to make progress 
towards extending the early learning 
centre range as a wholesale offer 
where appropriate
we have refurbished some of our larger 
stores and have gained real insight into 
what works for our customers and we 
will use these insights as we continue  	 mothercare plc annual report and accounts 2013 19
overview
255
we	 have	 reduced	 uk	 space	 by	 72	 	
and	 now	 have	 255	 stores	 in	 the	 uk
182
direct	 in	 home	 responded	 well	 to	 the	
transition	 to	 a	 new	 online	 platform	 and	
improved	 delivery	 options	 with	 182	
growth	 in	 q4
1069
we	 grew	 space	 by	 135	 excluding	 australia	
and	 new	 zealand	 and	 now	 have	 1069	
stores	 across	 60	 international	 markets
56
international	 continues	 to	 see	 growth	
from	 both	 new	 and	 existing	 markets	 	
with	 likeforlike	 sales	 growth	 of	 56
to reshape our store portfolio building 
on our experiences from last year we 
have just completed refurbishing leeds 
and plan at least a further two stores  
in the year ahead a year since the 
investment in our edmonton store 
customers are reacting well as it is  
still performing ahead of the rest  
of the store portfolio
we have made good progress with 
clothing reducing overall pricing by  
low doubledigit per cent for two 
successive seasons now we launched 
the value range for aw12 which sold 
out soon after it was launched and 
prompted reordering of product for  
the first time in several years we 
increased both the range and volume 
for ss13 such that our value range now 
makes up circa 20 per cent of the clothing 
ranges we relaunched ‘blooming 
marvellous’ for aw12 offering our 
customers better maternity quality 
fashion and value and have seen 
reduced levels of markdown at the 
premium end of our clothing range  
we launched ‘little bird’ by jools  
oliver which complements ‘baby k’  
by myleene klass
home  travel is the more challenging  
of our product categories thirdparty 
branded product makes up approximately 
50 per cent of the range and so is more 
exposed to competitive pricing pressure 
our work with key brands and price 
matching has improved our price 
perception on these products but we 
aim to move the sales mix towards our 
ownbrand ranges we have started  
the process by introducing new and 
innovative ownbrand products that are 
relevant to our customers this will also  20	 mothercare plc annual report and accounts 2013 20 20 mothercare plc annual report and accounts 2013 mothercare plc annual report and accounts 2013
chief	executive’s	
statement
continued
help us reestablish our credentials as 
the leading mother and baby specialist 
in the uk in january we launched 
innosense a complete feeding range 
with 47 skus 21 of which were newly 
designed key items include a breast 
pump with three adjustable positions 
a wideneck bottle with an offcentre 
teat and clever stacking design of the 
lozenge shaped steriliser in march 2013 
we launched the xpedior our own
brand pram and pushchair travel system 
which at £250 is very competitively 
priced it complements the orb which 
was launched in november last year 
this is just the beginning and we aim 
to continue the good work started over 
the last 12 months
our early learning centre range has 
also been improved early learning 
centre is synonymous with learning and 
our aw12 ranges saw a complete refresh 
with many new products focusing on 3d 
playing aimed at encouraging fi ne 
motor skills and handeye coordination 
innovation and newness particularly in 
ownbrand have been a key area of 
focus new product accounted for over 
30 per cent of our own brand ranges for 
aw12 and ss13 in addition the relaunch 
of our happyland toy characters 
making them collectable items for 
children at affordable prices has also 
delivered good results
our customers want more than great 
product at great prices they want 
better service and they also want us to 
engage more frequently with them 
we have extended our customer survey 
to direct and so are able to build a 
complete picture of how our customers 
view us both in store and online earlier 
this year we were an offi cial partner 
of the highly successful channel 4 
series ‘one born every minute’ with 
an average of 34 million viewers per 
episode many of whom were either 
looking forward to a birth or had 
welcomed a baby into their families 
in the previous 12 months our weekly 
twitter parties during the show offered 
customers the opportunity to get advice 
from our expert midwife and proved 
very popular we are also engaging 
more readily with opinionforming groups 
and last month in april 2013 i held my 
fi rst direct qa session with mumsnet
whilst we still have a long way to go 
i am encouraged by the progress we 
have made in the uk over the last year 
we are taking positive action by closing 
lossmaking stores driving effi ciency 
across the organisation creating more 
excitement in store and making step 
changes in our product ranges and 
architecture we are laying the foundation 
for a stronger more relevant and more 
responsive business for our customers
summary	and	outlook
my fi rst year as chief executive of 
mothercare has been both exciting 
and challenging i have overseen the 
fi rst steps towards returning mothercare 
to its rightful position as the leading 
multichannel mother and baby 
specialist both in the uk and across 
all our 60 international markets 
importantly with a full executive team 
now in place i can look forward to 
building on the progress made over 
the last 12 months i am also pleased 
to announce my new arrival nieve 
elizabeth who came into the world 
in december and is already a great 
tester for all our new innovations
£83m
group	underlying	profi 	t	before	tax	
improved	to	£83m	fy201112	£16m 	 mothercare plc annual report and accounts 2013 21
overview
however trading conditions and consumer 
confi dence remain weak in the uk and 
eurozone in the uk we will continue with 
our strategy to manage the business to 
cash margins while closing lossmaking 
stores and taking out nonstore costs 
our efforts to engage more effectively with 
our customers while also investing in value 
choice service and delivery will help us 
mitigate some of the impact of continued 
weak consumer confi dence our 
international markets with the exception 
of the eurozone continue to offer good 
growth opportunities and we will continue 
to drive this part of the business forward 
aggressively in line with the last year
against this backdrop i believe that we 
have made solid progress implementing 
our threeyear transformation and 
growth plan we have great people 
in the business and i thank them for all 
their efforts i believe the work done 
over the last year has put mothercare 
on a fi rmer footing which i and all
the teams in the business look forward 
to building on in the years ahead
simon	calver
chief executive
our	business	model
our business is fully integrated across all our 61
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 life cycle of 
our product ranges which we manage across our 
global offi ces 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 effi ciently 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 22	 mothercare plc annual report and accounts 2013
business	review
uk
“	 we	must	remain	entirely	focused	on	the	
customer	if	we	are	to	succeed	in	the	uk”
it has been a busy year with good 
progress made towards achieving our 
goal of returning the uk to profi tability 
losses were reduced by 121 per cent 
compared to last year as the benefi ts 
of the initiatives taken began to have 
a positive impact on the uk business 
whilst there is more to be done 
i am pleased with what we have 
achieved so far
at the beginning of the year we said 
we were going to close circa 50 stores 
allowing us to eliminate £3 million of 
losses at store contribution level while 
also reducing nonstore operating costs 
by £8 million we have met our cost 
targets and exceeded the store closure 
target with 56 stores 13 mothercare and 
43 early learning centre closed during 
the year our aim is to maintain a 
national presence in the uk which is 
central to our multichannel strategy 
as part of this strategy we transitioned 
to a new online platform in may last 
year and have improved delivery 
options for all our customers the results 
have been encouraging with direct in 
home growing by 182 per cent during 
the last quarter of the year we also 
refurbished our stores in edmonton 
nottingham and dudley which are 
performing ahead of the rest of the 
store estate and aim to refurbish at least 
a further two this year in addition to 
leeds already completed
if we are going to succeed in the uk 
we must be entirely focused on our 
customers we know from customer 
surveys that we need to improve our 
value credentials we have listened 
and in clothing we have improved 
value across all our ranges while also 
relaunching our more ontrend maternity 
range ‘blooming marvellous’ at keener 
price and launching our highly successful 
‘value’ range for children’s clothing our 
price match strategy in home  travel 
has allowed us to improve value in this 
segment where as much as 50 per cent 
of the range is easily comparable 
branded products the launch of 
ownbrand products like innosense
and xpedior in home  travel will 
also allow us to improve value while 
reestablishing our credentials as the 
leading mother and baby specialist in 
the uk in addition our early learning 
centre ranges have seen signifi cant 
progress with new products focused 
on encouraging learning through play 
while keeping prices down
so as you can see we have made 
signifi cant progress during the year 
we have improved value across clothing 
and home  travel introduced new 
and innovative ownbrand products in 
home  travel and toys relaunched our 
online platform and invested in service 
while also refurbishing three stores and 
closing 56 lossmaking stores this is 
a good start and i look forward to 
building on these themes in the 
year ahead
matt	stringer
commercial director – uk
matt	stringer
commercial director 
– uk
uk	space
2012
2011
1946k sq ft
2017k sq ft
2013 1805k sq ft
	36
uk	likeforlike	sales	supported	by	the	
return	to	growth	of	direct	in	home	of	
182	during	the	last	quarter	of	the	year 	 mothercare plc annual report and accounts 2013 23
business	review
international	space
2012
2011
2283k sq ft
1845k sq ft
2013 2347k sq ft
	56
international	now	has	1069	stores	across	
60	markets	and	likeforlike	sales	remain	
positive	at	56
international
“	 our	international	business	is	well	
diversifi 	ed	resulting	in	another	year	
of	solid	doubledigit	growth	for	both	
sales	and	profi 	ts”
our international business continues 
to grow from a very solid base built 
up over the last 10 years the results 
are a testament to the strength of 
our relationships with our franchise 
partners and the hard work put in 
by our international team
we now have 23 million sq ft across 
both the mothercare and early learning 
centre brands with 1069 stores in 60 
countries space was up 28 per cent on 
a statutory basis excluding australia and 
new zealand and on a comparable 
and ongoing basis space was up 135 
per cent which along with 56 per cent 
likeforlike sales growth saw international 
retail sales grow by 15 per cent in constant 
currencies as planned profi ts were up 
203 per cent at £420 million
the diversifi ed nature of our international 
business meant we were able to deliver 
these results despite weaker trading 
conditions in the eurozone and our 
australian associate going into 
administration regardless of these 
issues both europe and asia grew 
space and retail sales last year it is 
encouraging to note that all four of our 
regions continue to offer exciting growth 
opportunities while it is easy to see 
the growth opportunities offered by 
our less mature markets like those in 
latin america russia china and india 
we believe there remains plenty of 
opportunity even in our more 
mature markets
the middle	east	and	africa is our oldest 
region where we have had a presence 
for over 30 years even here we can 
expect to see doubledigit space and 
sales growth as we benefi t from the trend 
towards larger stores and the move to 
a multichannel format over the term of 
our transformation and growth plan
europe our largest region is expected 
to see continued growth as russia our 
largest international market remains 
far from maturity and compensates for 
eurozone weakness asia is also far from 
maturity with markets like china and 
india still growing their footprint our 
joint ventures in these markets are 
expected to turn profi table over the 
course of our threeyear plan we have 
been in latin	america for just over a 
year but already we have made 
signifi cant progress and are now 
in six markets 
the outlook remains very favourable 
with our partners fully committed to the 
brands i look forward to leveraging 
these relationships and growing our 
international business in the years ahead
jerry	cull
managing director – international
jerry	cull
managing director 
– international 24	 mothercare plc annual report and accounts 2013
financial	 review
results	 summary
group underlying profit before tax increased 
by £67 million to £83 million 201112 £16 million 
underlying profit excludes exceptional items and 
other nonunderlying items which are analysed 
below after these nonunderlying items the 
group recorded a pretax loss of £215 million 
201112 loss of £1029 million underlying profit 
from operations before interest and the ifrs 2 
sharebased payments charge increased by 
£99 million to £125 million
income	 statement
£ million
52	 weeks	
ended		
30	 march
2013
53	 weeks	
ended	
31	 march
2012
revenue 7494 8127
underlying	 profit	 from	
operations	 before	 interest	
and	 sharebased	 payments 125 26
sharebased payments 09 06
net finance costs 33 04
underlying	 profit	 before	 tax 83 16
exceptional items and unwind 
of discount on exceptional 
provisions 357 1045
noncash foreign currency 
adjustments 69 20
amortisation of intangible 
assets 10 20
loss	 before	 tax 215 1029
underlying eps – basic 62p 18p
eps – basic 249p 1052p
53rd	 week	 in	 2012
the year ended 30 march 2013 contains 52 weeks 
compared to 53 weeks for the year ended 31 march 
2012 the financial statements and this review have 
therefore been prepared on this basis
for information on a more comparable 52 week basis
 a group sales were down 63 per cent to £7494 million  
2012 £7996 million
 a uk sales were down 92 per cent to £4997 million  
2012 £5503 million
 a international revenue was up 02 per cent  
to £2497 million 2012 £2493 million
 a group profit before exceptional items and taxation 
was up £68 million to £83 million 2012 £15 million
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
nonunderlying	 items
underlying profit before tax excludes the following 
nonunderlying items
 a 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
 a amortisation of intangible assets excluding software
exceptional	 items
 a australian associate writeoff costs of £111 million 
 a net losses on disposal or termination of property 
interests of £138 million
 a onerous lease provision for the uk business  
of £43 million
 a store impairment provision in relation to the uk 
business of £18 million
 a restructuring costs of the uk and head office 
organisation of £42 million
exceptional items in 201112 included £91 million 
restructuring costs of the uk business £226 million net 
losses on disposal or termination of property interests 
£115 million onerous lease provision for the uk business 
£38 million store impairment provision in relation to the 
uk business £550 million goodwill and intangible 
assets impairment in relation to uk share of goodwill 
and other intangibles arising on the acquisition of elc 
£28 million impairment of investment in australian 
associate £04 million share of restructuring costs in  
the australian associate business and £08 million 
sharebased payments credit resulting from the 
uk restructure 	 mothercare plc annual report and accounts 2013 25
business review
results	 by	 segment
the primary segments of mothercare plc are the uk 
business and the international business
£ million – 
revenue
52	 weeks	 to		
30	 march	
2013
53	 weeks	 to	
31	 march	
2012
uk 4997 5600
international 2497 2527
total 7494 8127
£ million –  
underlying profitloss
52	 weeks	 to		
30	 march	
2013
53	 weeks	 to	
31	 march	
2012
uk 217 247
international 420 349
corporate 78 76
profit	 from	 operations	 before	
sharebased	 payments 125 26
sharebased payments 09 06
net finance costs 33 04
underlying	 profit	 before	 tax 83 16
uk retail sales have declined year on year due to  
store closures and declining likeforlike sales across 
the store estate partially offset by increases in our 
direct in home business profit has benefited from  
the property strategy with the continued exit from 
lossmaking stores and tight cost control
international has benefited from increased royalties 
driven from higher network sales and overhead cost 
savings international profit also includes losses in joint 
ventures and associates which have reduced during 
the year
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 £09 million 201112 
£06 million in relation to the company’s long term 
incentive schemes there are five main types of 
longterm sharebased incentive scheme being the 
long term incentive plan 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 charges as calculated under ifrs 2 are theoretical 
calculations based on a number of marketbased 
factors and estimates about the future including 
estimates of mothercare’s future share price future 
profitability and tsr in relation to the general retailers 
as a result it is difficult to estimate or predict reliably 
future charges
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
52	 weeks	
ended	
30	 march	
2013
53	 weeks	
ended		
31	 march	
2012
52	 weeks	
ended	
30	 march	
2013
53	 weeks	
ended		
31	 march	
2012
uk retail sales 4682 5287 4682 5287
uk wholesale sales 315 313 315 313
total uk sales 4997 5600 4997 5600
international retail sales 2420 2458 7210 6655
international wholesale sales 77 69 77 69
total international sales 2497 2527 7287 6724
group	 salesgroup	 network	 sales 7494 8127 12284 12324
 estimated 26	 mothercare plc annual report and accounts 2013
financial	 review
continued
financing	 and	 taxation
financing represents interest payable on borrowings and costs relating to bank facility fees and the unwinding 
of discounts on provisions
the underlying tax charge comprises current and deferred tax the effective tax rate is 337 per cent 201112 nil 
per cent the effective tax rate is higher than the standard tax rate of 24 per cent mainly due to the writeoff  
of a deferred tax asset the tax charge in some areas of business has been offset by allowable tax losses  
an underlying tax charge of £28m 201112 £nil has been included for the period and in total the tax charge  
was £05m 201112 credit of £111m
pensions
during the year the group’s defined benefit pension schemes have been closed to future accrual 
details of the income statement net charge total cash funding and net assets and liabilities are as follows
as	 per	 amendments		
to	 ias	 19 as	 reported
£ million
201314	
new	 ias
201213	
new	 ias 201213 201112
income	 statement
service cost 01 24 24 23
running costs 10 08 – –
return on assetsinterest on liabilities 28 26 10 02
gains on curtailment – 33 33 02
net charge 39 25 01 19
cash	 funding
regular contributions – 20 20 19
deficit contributions 62 52 52 61
total cash funding 62 72 72 80
balance	 sheet
fair value of schemes’ assets 2348 2348 2173
present value of defined benefit obligations 2964 2964 2700
net liability na 616 616 527
 estimate
the estimated net charge for the year 201314 presented above has been prepared applying the amended 
version of ias 19 which will be applied for the first time in 201314 the key changes are
 a the expected return on assets is replaced by interest on the assets calculated using the discount rate 
impact of c£24 million
 a running costs currently accounted for as a deduction to the expected return on assets will be reported as 
a separate cost
 a these changes will result in the 201213 result being restated with the net charge associated with the defined 
benefit pension scheme increasing from £01 million to £25 million 	 mothercare plc annual report and accounts 2013 27
business review
in consultation with the independent actuaries to the schemes the key market rate assumptions used in the 
valuation are as follows
201213 201112
201213
sensitivity
201213
sensitivity
£	 million
discount rate 46 49 –01 –70 
–005 –35 
inflation – rpi 34 33 –01 –62 
inflation – cpi 24 23 –01 –62 
the sensitivity of the ias 19 valuation to a 01 per cent 
and 005 per cent movement in the discount rate is  
set out in the table above
balance	 sheet	 and	 cash	 flow
the balance sheet includes identifiable intangible 
assets arising on the acquisition of early learning 
centre of £74 million and goodwill of £268 million  
this relates to the international business 
the group continues to generate operating cash with 
cash generated from operations of £93 million income 
taxes of £25 million were paid in the year resulting in 
net cash flow from operating activities of £68 million
we have made further investment in our joint ventures 
during the year to drive the growth in international 
including £11 million in china and £07 million in india
after investing £162 million of capital expenditure £127 
million net of lease incentives received receiving property 
proceeds of £22 million the net debt position at the 
year end is £324 million 201112 net debt of £201 million
going	 concern
details of this can be found on page 41 within the 
corporate governance report
capital	 additions
total capital additions in the year were £125 million 
201112 £260 million including £30 million for software 
intangibles and £78 million invested in uk stores 
landlord contributions of £35 million 201112 £35 
million were received partially offsetting the outflow 
net capital expenditure after landlord contributions 
was £90 million 201112 £225 million 
earnings	 per	 share	 and	 dividend
basic underlying earnings per share were 62 pence 
compared to 18 pence last year the board has 
concluded that given the cash investment required  
to deliver the transformation and growth strategy the 
company will not pay a final dividend for 201213  
the total dividend for the year is nil pence per share 
201112 20 pence 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 reported sales represent approximately 
33 per cent of group sales total international sales 
represent approximately 59 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
the group has drawn down £50 million on its term 
borrowing facility following the group refinancing on  
11 april 2012 the group now hedges all of the floating 
interest rate on this term facility using interest rate swaps 
these financial instruments are accounted for as a cash 
flow hedge with changes in the fair value of the financial 
instrument that are designated as effective recognised in 
comprehensive income and any ineffective portion 
recognised immediately in the income statement
shareholders’	 funds
shareholders’ funds amount to £388 million a 
decrease of £339 million in the year driven largely  
by the exceptional provisions required for the uk 
property transformation and restructuring and the 
impairment of the investment in the australian 
associate this represents £044 per share compared  
to £082 per share at the previous year end
accounting	 policies	 and	 standards
there are no new standards affecting the reported 
results and financial position 28	 mothercare plc annual report and accounts 2013
kpis	 –	 financial	
and	 nonfinancial
measuring	 our	
performance
kpis	 –	 financial	
and	 nonfinancial
measuring	 our	
performance
international	 profits
mar12 £349m
mar11
mar13
£275m
£420m
our strategy of growing space both in new and existing 
markets has resulted in another year of doubledigit 
sales and profit growth for international excluding 
australia and new zealand space was up 135 per cent 
retail sales were up 150 per cent in constant currency 
and profits were up 203 per cent during the year
£420m
international	 space
mar12 2068k sq ft
mar11
mar13
1768k sq ft
2347k sq ft
fy201213 was impacted by the closure of all stores 
in australia and new zealand adjusting for these 
closures our international franchise partners 
opened 115 stores and increased space by  
135 per cent to 2347k sq ft during the year
2347k	 sq	 ft
average	 length	 of	 service	
of	 storebased	 employees
mothercare
mar12 60 years
mar11
mar13
51 years
64 years
early	 learning	 centre
mar12 58 years
mar11
mar13
52 years
58 years
all members of store staff continue to feel a strong 
connection with both our brands – mothercare and 
early learning centre this close connection is clear 
in the continued longevity of store staff which is 
higher than the average for other retailers 
64	 years
women	 in	 senior	
management	 positions
mar12 53
mar11
mar13
54
49
the proportion of women in senior management 
positions below executive committee level has 
reduced to 49 per cent 17 out of 35 but still remains 
above average as we have reassessed our needs 
as a business there has been some change and 
we continue to strive to offer a fair and flexible 
working environment that is conducive to  
working mums
49 	 mothercare plc annual report and accounts 2013 29
business	review
mothercare plc annual report and accounts 2013 mothercare plc annual report and accounts 2013 29 29
uk	profi 	tslosses
mar12 loss of £247m
mar11
mar13
profit of £111m
loss of £217m
uk losses were reduced by 121 per cent during the 
year making progress towards our goal of 
returning the uk to profi tability by march 2015
£217m
uk	store	numbers
mar12 311 stores
mar11
mar13
373 stores
255 stores 196 mothercare and 59 elc
209 mothercare and 102 elc
212 mothercare 
and 161 elc
we have made good progress towards our target 
of reducing our store base to circa 200 stores by 
march 2015 during the year we closed 56 stores 
13 mothercare and 43 early learning centre and 
ended the year with 255 stores 
255	stores
uk	operating	
cost	reduction	of	£20m
mar14 £7m
mar15
mar13
£5m
£8m
our threeyear transformation and growth plan 
envisages reducing operating costs by £20 million 
on an annualised basis we said we would reduce 
costs by £8 million on an annualised basis for 
fy201213 and we have achieved this target
✓ 30	 mothercare plc annual report and accounts 2013
risks
principal	 risks	 	
and	 uncertainties
risk impact mitigation
financial
 a the group fails to meet  
the financial targets set out 
in the transformation and 
growth plan
 a potential breach of 
covenants contained in 
bank facility agreements 
leading to event of default
 a detailed monthly 
monitoring of financial 
performance against 
plan targets
 a alternative financing 
options to supplement 
bank facility
 a restructured head office 
and uk stores teams
 a lfl sales in the uk do not 
meet expectations under 
the transformation and 
growth plan
 a poor business performance 
may mean that financial 
targets are not met
 a loss of supplier confidence
 a loss of market share
 a reshaped uk 
business team
 a new price and value 
strategy supported by 
promotional activity and 
loyalty programme
 a direct to customer channels 
including ‘click and collect’
 a unforeseen additional 
cash funding to support 
international joint 
venture operations 
 a diverts cash away from the 
uk business
 a may delay uk 
business turnaround
 a joint ventures submit 
business plans and 
management reports 
monthly to the company
 a attendance at joint venture 
company board meetings
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 on the group and 
to ensure that adequate mitigation is in place 
in order to manage risk effectively the executive 
committee see page 39 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 this 
programme ensures so far as practicably possible 
that the appropriate risk management processes are 
identified controls established residual risks evaluated 
and that the necessary monitoring action and risk 
avoidance measures taken elements of the programme 
are reviewed by the internal audit function during the 
course of each financial 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 	 mothercare plc annual report and accounts 2013 31
business review
risk impact mitigation
financial	
continued
 a uk store rationalisation 
programme becomes 
difficult to achieve in 
current market conditions
 a greater than anticipated 
costs of closure
 a reduces cash available 
to uk business
 a 201213 targets met which 
demonstrates a record of 
past performance over 
two years
 a dedicated and experienced 
property team 
 a uncertainty in the macro 
economic environment – 
particularly the 
eurozone economies
 a fluctuations and uncertainty 
in exchange rates
 a weak uk consumer 
confidence continues may 
delay business turnaround
 a underperforming 
international business in 
affected regions
 a increase in cost of goods 
impacts margin
 a potential for increase in 
bad debts
 a product range and pricing 
being adapted to meet 
customer demand
 a strong franchise partners 
close working relationship 
with franchisees ensures 
early awareness of any 
financial issues
 a credit insurance in place 
and tested
 a limited exposure to 
eurozone economies
 a roll out franchisee 
online offerings
operational
 a the uk business fails 
to deliver on brand 
standards or react to 
changes in consumer 
demand or existing or 
new competitor activity
 a loss of market share 
 a loss of sales leading 
to a shortfall in profits
 a improvements being made 
at store level through better 
store operations staff 
training and store standards
 a customer satisfaction 
programme launched 
and embedded
 a structured pricing policy 
and strategy
 a product range and pricing 
being adapted to meet 
customer demand
 a international expansion 
leads to overexposure in 
certain territories
 a the group becomes 
vulnerable in key markets
 a strong franchise operations 
work closely with 
international franchisees
 a credit insurance against 
key franchisee recoverables 
in place and tested
 a major supply chain or 
logistics disruption resulting 
from geopolitical events
 a product supply is halted 
or severely impacted
 a the group sources 
products from a number 
of different regions 32	 mothercare plc annual report and accounts 2013
risks
principal	 risks	 	
and	 uncertainties
continued
risk impact mitigation
manufacturing	 	
and	 product
 a the group fails to meet its 
reputation for quality 
safety and integrity
 a the group fails to ensure 
that its supplier base 
operates to the appropriate 
standards of safety
 a damage to brand 
reputation and customer 
confidence would 
impact sales
 a significant group investment 
in product quality 
management resource
 a high standards 
communicated throughout 
supply chain
 a inhouse responsible 
sourcing team working 
in bangladesh india 
and china 
 a global code of conduct 
communicated and 
applied through the system
 a focus shifted to pre
despatch quality checks
 a failure to invest properly in 
product innovation
 a lack of new product and 
innovation would directly 
impact sales
 a the group maintains 
an ongoing investment 
strategy in new products
 a launch of new products 
and ranges delivered in 
fy201213 with further 
planned launches in 
fy201314
people	 and	
infrastructure
 a organisational change 
and headcount reductions 
lead to erosion of 
corporate knowledge
 a the transformation 
and growth plan falls 
behind schedule
 a indepth organisational 
review to ensure any change 
is managed efficiently and 
with minimum disruption  
to business
 a development and approval 
of key business objectives 
for all employees from 
top down with quarterly 
reviews to monitor 
employee performance
 a legacy it systems fail to 
meet business requirements
 a adverse impact on 
performance and ability 
to meet key targets
 a comprehensive 
it review defined
 a failure or increase in costs 
of the group’s logistics or 
global distribution network
 a the uk business or 
international franchisees 
do not meet customer 
demand leading to 
loss in sales
 a erosion of margin
 a regular review and audit of 
distribution network
 a strengthened and 
dedicated expert 
distribution team 	 mothercare plc annual report and accounts 2013 33
business review
our corporate responsibility strategy reflects our 
mission to be the leading global mother and baby 
specialist we aim to ensure that we conduct ourselves 
responsibly not just for our customers but also for 
all those involved with getting our products to our 
customers and the wider communities that these 
people live and work in this is reflected in the 
relationships we have with our stakeholders
 a communities – parents and children
 a the people who work for us
 a our suppliers who make and distribute our products
 a the environment
this report aims to give an overview of our activities 
over the last year and gives an update on the 
fiveyear target we set ourselves at the end of 200708
highlights
during fy201213 mothercare plc
 a continued to exceed its fiveyear targets in building 
emissions transport emissions and waste recycling
 a maintained average length of service for store 
based staff at six years for both mothercare and 
early learning centre
 a continued to recognise diversity of talent with 49 per 
cent of senior managers below board level filled  
by women
 a was ranked eighth in the reputation institute’s 
annual survey
 a won over 25 awards across both mothercare and 
early learning centre brands
governance	 and	 target
the strategic direction of our corporate responsibility 
programme is managed by the corporate 
responsibility steering committee which is chaired 
by tim ashby our group general counselcompany 
secretary the importance of corporate responsibility 
is reflected in the structure of this committee which 
consists of directors from product development 
sourcing logistics retail operations and property 
this committee reports to the board and is supported 
by the corporate responsibility team
targets	 for	fy201213
at the end of fy200708 mothercare plc set itself 
seven targets that were to be achieved by fy201213 
published on wwwmothercareplccom these targets 
along with their performance are set out in the table 
below shaded blue
key	 performance	 indicators
fy200708	
baseline
fy201213	
performance
fy201213		
target
progress	
against	 target
building energy use m kwh 712 552 – –
transport fuel used m litres 26 13 – –
transport mileage m miles 61 35 – –
carbon emissions tonnes  
of which
40400 27300 – – 
buildings 33500 24100 15 28
transport 6900 3200 20 54
packaging used tonnes 11500 8500 – –
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 97 50 45
recycled waste tonnes uk only not collected 2900 75 recycled 92 recycled 
total fundraising £k 100 359 1000 36 achieved
of which
direct donations £k 100 59 – –
employee fundraising £k not collected 300 – –
corporate		
responsibility 34	 mothercare plc annual report and accounts 2013
building	 emissions	–	 target	 exceeded
we met our building emissions target in fy201011 
and have since exceeded the target for both fy201112 
and the current year fy201213 the final outcome 
is 13 percentage points ahead of the target we set 
in fy200708
this was achieved in part due to the planned store 
closures and the closure of our swindon warehouse 
and was also achieved despite the much colder winter 
this year there was an increase in gas consumption 
year on year due to the colder winter but this was 
offset by a significant decrease in electricity usage 
both in our stores and warehouses 
transport	 emissions	–	 target	 exceeded
we exceeded our target in fy201011 by five percentage 
points and have since continued to make further 
improvements
over the last 12 months we have continued to 
improve our fleet efficiency reducing the number 
of miles travelled transporting our product by 
19 percentage points 
taken together we have achieved a 54 per cent 
reduction in co
2
 emissions from our transport fleet 
since fy200708 this is attributable to consolidating 
our mothercare and early learning centre fleets a 
reduction in store numbers implementing new delivery 
schedules to increase vehicle fill and new driver 
training initiatives to improve fuel efficiency
waste	 recycling	–	 target	 exceeded
over the last year our store waste to landfill reduced 
from 490 tonnes to 254 tonnes this largely resulted 
from the closure of smaller elc stores which tend to 
produce more waste than our larger mothercare stores 
stores have continued to focus on reducing waste
waste to landfill from our distribution centres has 
remained static over the year the group has continued 
to improve its performance recycling 92 per cent of  
its waste up from 86 per cent the previous year
where ongoing targets have not been achieved they 
have been incorporated into new kpis for fy201415 
this includes packaging where since the fy200708 
baseline the packaging handled has reduced by  
26 per cent but not achieved the fiveyear target set  
for fy1213 
new	 targets
the last set of targets were set at the end of fy200708 
and covered the fiveyear period to fy201213  
we have set ourselves new targets that reflect our 
business and are in keeping with our transformation 
and growth plan that runs to the end of fy201415 we 
will be measuring our performance against seven 
criteria – four existing targets have been updated 
while three new targets have been added for 
fy201415 we are focusing indicators on those areas 
where we believe we can make the most change both 
in the uk and overseas the new targets are in the 
table below
key	 performance	 indicator objective	 of	 kpi fy201415	target
extending	 existing	 targets
carbon emissions 
from buildings
continue to reduce carbon emissions from our buildings 5 per annum 
carbon from transport continue to reduce carbon emissions from transporting 
our products
5 per annum 
packaging continue to reduce the packaging per £100 of goods  
we sell
1 per annum 
waste 
 
drive up recycling of our own waste 
 
maintain at 90
introducing	 new	 targets
including international 
in targets
extend our approach to corporate responsibility to 
our overseas operations
water in our supply chain look for ways to reduce water usage particularly 
in areas of particular stress
supply chain transparency look further and deeper into our supply chain 
improving product traceability and control
corporate		
responsibility
continued 	 mothercare plc annual report and accounts 2013 35
business	review
these targets will ensure we continue to operate 
in a responsible manner taking into account the 
communities which are affected by our operations 
they will also lay the basis for future investment after 
the completion of the transformation and growth plan
communities	–	parents	and	children
we believe that parenting and raising children is an 
essential foundation for the society that we live in and 
that healthy babies parents and families benefi t us all 
we are committed to helping parents through the work 
we do providing education and information to parents 
in the community our ‘born to care’ partnership with 
save the children staff fundraising efforts and charitable 
donations made through the mothercare group 
foundation highlight our commitment to this area
awards	received
over the last year the group received over 25 awards 
for mothercare and early learning centre these 
awards refl ect the contribution we make to helping 
parents and their babies amongst many others we 
received awards for best changing facilities best family 
friendly retailer best steriliser for innosense and best 
learning and developmental toy for elc’s cash register
mumspace	stores
we now have four stores in the uk with additional 
facilities and space to hold instore activities for 
pregnant women parents and their children we work 
with a wide range of companies and local independent 
teachers to provide pregnancy yoga baby massage 
free support groups for new mums dance and music 
classes for toddlers the stores are located in edmonton 
dudley southampton and leeds in edmonton we 
also have a costa coffee café and a tea monkey 
café in our leeds store 
children’s	play	areas
our larger stores with mumspace have an extended 
play area for young children with a variety of lifesize 
elc happyland themed castles windmills and trains 
the aim is to allow children the opportunity to let their 
imaginations go wild and play in a friendly and safe 
environment in addition we have a caterpillar 
reading corner for quieter times
baby	and	me	events	
‘baby and me’ events take place in over 100 of our 
larger mothercare stores at least three times a year 
the store team gives essential advice on those baby 
products of most interest to fi rst time parents on issues 
like infant car seat safety and fi tting pushchairpram 
choices sleep safety and essential nursery furniture 
and our expert bra measuring service we also invite 
local antenatal teachers midwives and other baby 
organisations to the event to advise new parents 
about what is available locally and where they can 
get support after their baby arrives 
national	breastfeeding	week – the royal college 
of midwives and mothercare work in partnership to 
promote national breastfeeding week every year 
we work with the rcm to support midwives and help 
mothers get the right and most uptodate advice 
about breastfeeding every year we actively promote 
breastfeeding week within the community and in 
mothercare stores around the uk midwives health 
visitors and breastfeeding supporters frequently take 
advicestands in our stores during the week to talk to 
mums about all aspects of feeding and to encourage 
pregnant women to consider breastfeeding their 
babies we encourage midwife advice points in 
areas where the breastfeeding rates are particularly 
low mothercare has been a rcm alliance partner 
since 2010 
charitable	giving – mothercare’s total direct giving to 
charity last year was £59000 to the mothercare group 
foundation in addition to this direct giving mothercare 
was able to raise around £300000 through staff 
fundraising for our global charity partnership with 
save the children this takes our fundraising total 
over the life of this partnership to £1129000 a fi gure 
of which we are all incredibly proud  36	 mothercare plc annual report and accounts 2013
corporate	 	
responsibility
continued
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 64 years 
for mothercare and 58 years for elc we have many 
staff members with 10 15 and even 20 years of service 
we take equal opportunities very seriously and aim 
to reward and promote talent where appropriate 
as a result we are proud to say that 49 per cent of 
senior management positions below board level  
are held by women
in another year of significant change mothercare 
was ranked eighth in the annual ‘reptrak pulse 2013’ 
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 indicates that 
customers are focusing not just on products and 
services but also areas such as corporate governance 
and corporate citizenship
people	 making	 our	 products
responsible sourcing is a key focus for mothercare 
our aim is to reduce the risk of poor working conditions 
by monitoring our supply base gaining a better 
understanding of the complex issues that affect 
workers and working to provide better workplaces 
for them our responsible sourcing code of conduct 
and implementation policy is available online  
wwwmothercareplccom 
our responsible sourcing team is made up of 
eight dedicated professionals located regionally in 
sourcing offices who report in to the senior corporate 
responsible manager the team works directly with 
the suppliers and factories that we source from in 
bangladesh china and india to understand the issues 
and help to make improvements to working conditions 
in the supply chain
we ensure that all factory premises are inspected at 
least once a year and often our teams make additional 
visits as their regional location enables them to do so 
most of our suppliers own the factory premises that 
our products are produced in which enables us to 
inspect the entire building and not just the area in 
which our products are manufactured
recent events in bangladesh highlight the importance 
of these issues and whilst we were not impacted we 
have signed up to the accord on fire and building 
safety in bangladesh to support the improvement in 
the safety and rights of all those employed in the 
manufacture of goods in that country
in addition to the work with suppliers and factories 
noted above our team works closely with sedex 
and the ethical trading initiative eti our corporate 
responsibility team works in conjunction with third 
party audit information obtained through sedex 
wwwsedexglobalcom by using thirdparty audit 
information and our own internal team we aim to 
increase the visibility we have over the supply chain 
which then allows us to focus on gaining transparency 
and working with factories to make improvements
the more work we do in this area the more complex 
are some of the issues that we unravel the issues are 
often industrywide and are 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 enables 
us to have dialogue with other retailers non
governmental organisations and trade unions and to 
work together on programmes that tackle endemic 
issues that can’t be resolved by individual retailers
the responsible sourcing team is in the first year of 
implementing a fiveyear strategy which aims to 
cement current global practices and continue its work 
to embed responsible sourcing in the daytoday 
culture of the mothercare business before expanding 
and undertaking aspirational work in the latter years 
of the strategy this strategy should allow us to 
maintain the high standard of our current work whilst 
helping us to plan for the future good progress is 
being made against the first year targets of this 
strategy and the team is about to launch a new 
supplier engagement programme with selected key 
factories that will build capacity in factory 
management team and allow them to improve 
working conditions on a daytoday basis 
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 fy201213 96 per cent of our supply base was registered 
on sedex and thirdparty audit information was 
provided for 84 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  	 mothercare plc annual report and accounts 2013 37
business review
mothercare continues to work with other brands and 
retailers through the platform of the eti to understand 
and remedy the issues found deeper in the supply 
chain eg spinning mills homeworkers etc we have 
targeted our resources at the specific areas of 
spinning mills in south india and homeworkers in 
china as we know that these industries have specific 
issues that we can begin to address by working 
together in doing so we have been able to develop 
methods for dealing with such issues in collaboration 
with others and in our own supply chains 
case	 study	 –	 homeworker	 project	 in	 north	 china
moses baskets are a popular choice for new parents 
the world over it is one of the first purchases made by 
new parents and mothercare sells tens of thousands of 
moses baskets every year through its 1324 stores and 
online in the uk and across its 60 international markets
moses basket making is an artisan industry and baskets 
are handwoven by home workers in northern china 
this artisanal skill is passed from mother to daughter 
in shandong province the weaving materials come 
from local farms usually owned or worked by the 
families themselves the materials are a byproduct 
of corn production which means basket weaving is 
sustainable reduces waste and gives families in the 
region an extra income particularly during the cold 
winter months when agricultural work is not available 
it is however a skill that is in decline as young people 
in china continue to migrate to larger towns and cities 
in search of better paid work cities like qing dao or 
shanghai are attractive to the younger generation 
as they can get better paid factory work while also 
experiencing city living the average age of basket 
weavers is 5060 and the number of basket weavers 
available to make moses baskets is declining rapidly 
looking to ensure the continuation of this valuable 
industry our responsible sourcing team worked with 
sourcing managers in shanghai and local consultants 
elevate formerly infact global partners to fully 
understand the supply chain an important part of this 
work included understanding the lives of homeworkers 
why they work how much they earn and what could 
be done to make basket weaving more appealing 
as a result we have 
 a signed contracts with all of our suppliers including 
the subcontractor and the middle men who collect 
these baskets from homeworkers 
 a simplified the delivery routes to save time and money
 a reduced the working hours for workers at the 
subcontractor by over 9 and increased their  
pay by over 50
 a developed a training video to show homeworkers 
how to weave baskets more efficiently the average 
time spent weaving a basket has since been 
reduced by over 20 enabling them to earn more 
money in less time 
 a increased the price paid for the baskets so some 
homeworkers are earning up to 50 more per 
month from basket weaving 
by doing this work we have improved the quality and 
the availability of baskets while also attracting new 
and younger workers into the supply chain the defect 
rate for baskets from these homeworkers has reduced 
by over 50 the impact on cash flow has been 
beneficial and wastage has also been reduced  
this will allow mothercare to continue buying moses 
baskets from these workers for many years to come 
this project has provided a model for mothercare 
to use in other areas of the supply chain and has 
proved that it is possible to improve working conditions 
alongside commercial concerns such as quality 
and delivery 
“ the quality of moses baskets has really improved 
in 2012 the main defect areas such as deformed 
baskets broken ribs loose weaving and size issues 
are much less common now mainly due to the efforts 
made by both mothercare and our supplier”
mothercare sourcing manager shanghai
“ i feel i worked faster than before i can complete 
a basket in 10 hours in 2011 now i think i can complete 
a basket in 8 hours”
homeworker based in linqu shandong province 38	 mothercare plc annual report and accounts 2013
board	of	directors
1 3 5 7
2 4 6 8
committee	memberships	key
 audit committee    remuneration committee    nomination committee    full board member
1	alan	parker	cbe	 	
	 	 	
chairman
appointed in august 2011 
executive chairman of mothercare plc 
from 17 november 2011 to 30 april 2012 
nonexecutive chairman of darty plc 
and nonexecutive independent director 
of burger king worldwide inc president 
and chairman of the british hospitality 
association formerly chief executive of 
whitbread plc and managing director 
emea of holiday inn
2	simon	calver	
			 	
chief executive offi cer
appointed in april 2012 
formerly chief executive of lovefi lm 
international ceo of video island 
president and chief operating offi cer 
of riverdeep inc vice president and 
general manager of home and small 
business uk and ireland dell computer 
corporation vice president international 
sales operations pepsico incand 
vice president pepsicola uk ltd 
3	matt	smith	
			
	
chief financial offi cer
appointed in march 2013 
formally finance director of argos part 
of home retail group plc matt has 
spent ten years in senior fi nancial roles 
at home retail group and also had 
responsibility for supply chain 
distribution and it prior to home 
retail group matt worked at 
kpmg both in london and sydney 
becoming a director in its corporate 
fi nance department matt is a 
chartered accountant
4	angela	brav	
	 	 	
	
nonexecutive director
appointed in january 2013 
chief executive offi cer of intercontinental 
hotels group plc angela has held 
various senior roles within the group 
since joining in 1991 including senior vice 
president americas franchise operations 
and applied technology senior vice 
president applied technology for the 
americas region senior vice president 
integrated technology solution and 
senior vice president quality and 
service angela has also worked at 
ihg’s headquarters in brussels belgium 
and guadalajara mexico 
5	lee	ginsberg	 	
	 	 	
nonexecutive director 
appointed in july 2012 
chief financial offi cer of domino’s pizza 
group plc a position he has held for 
over eight years previously group 
finance director of holmes place plc
6	amanda	mackenzie	 	
	 	 	
nonexecutive director
appointed in january 2011 
chief marketing and communications 
offi cer of aviva plc a member of aviva’s 
executive committee and executive 
sponsor for diversity a member of lord 
davies’ steering group to increase the 
number of women on boards president 
of the marketing society and a board 
member of the national youth orchestra
7	richard	rivers	 	
	 	 	
nonexecutive director
appointed in july 2008 
formerly chief of staff and head of 
corporate strategy at unilever a non
executive director of channel 4 television 
corporation and lumene oy and a 
member of the advisory board of wpp
8	david	williams	 	
	 	 	
nonexecutive director
appointed in august 2004 chair of 
operating partners of duke street 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 the london business school  	 mothercare plc annual report and accounts 2013 39
business	review
executive	committee
3 5 7
4 6 8
1	simon	calver
chief executive offi cer
see	opposite	page	for	biography
2	matt	smith	
	
chief financial offi cer
see	opposite	page	for	biography
3	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
4	jude	bridge
group brand and marketing director
appointed december 2012
formerly director of marketing 
campaigns and communications at 
save the children director of marketing 
communications at ms board account 
director at publicis international brands 
director at united biscuits
5	philippe	dayraud
group product development and 
sourcing director
appointed september 2012
formerly chief product offi cer of pimkie 
international international ladies fashion 
chain with over 750 shops globally chief 
product offi cer of kiabi for six years 
together with various product and 
sourcing executive roles
6	louise	palmer
group people director
appointed november 2012
formerly a partner at the inzito 
partnership premium executive 
search fi rm and a founder of 7days 
specialist organisational improvement 
consultancy head of organisation 
design at british airways
7	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
8	matt	stringer
uk commercial director
appointed february 2013 
formerly managing director of 
carphone warehouse various roles 
at ms including international 
operations director and head of gm 
stock management and new buying 40	 mothercare plc annual report and accounts 2013
corporate	
governance
the company believes that establishing 
and maintaining a high standard of 
corporate governance in all of the 
group’s activities will enhance its 
reputation and performance and 
promote and benefi t the interests of 
investors customers staff franchise 
partners and other stakeholders to this 
end and save as described below the 
company considers that it has complied 
throughout the 52week period ended 
on 30 march 2013 with the relevant 
provisions set out in the uk corporate 
governance code published by the 
financial reporting council frc 
wwwfrcorguk in 2010 having applied 
the main and supporting principles set 
out in sections a to e of the code the 
company is aware that changes have 
been proposed by the 2012 uk 
corporate governance code but these 
do not apply to this year’s annual report 
the financial reporting council is 
encouraging early compliance of the 
new code and consequently certain 
elements of the 2012 code have been 
applied in this report
the	board
the leadership of the mothercare plc 
business is provided by the mothercare 
plc board the board operates on a 
unitary basis and ordinarily comprises 
the nonexecutive chairman fi ve 
independent nonexecutive directors 
and two fulltime executive directors 
being the chief executive offi cer and 
the chief financial offi cer during the 
past year and for the reasons set out 
in last year’s annual report alan parker 
operated as executive chairman until 
30 april 2012 when simon calver arrived 
as the chief executive on the same date 
in his time as executive chairman alan 
parker worked three days a week for 
and did not become chief executive of 
the company it is noted that this was 
a technical breach of the uk corporate 
governance code requirement to 
separate the responsibilities of running 
“	 good	corporate	governance	is	critical	
we	have	used	last	year’s	board	evaluation	
and	simon	calver’s	arrival	to	be	clear	on	
our	objectives	and	to	provide	appropriate	
guidance	to	the	company”
the company and running the board 
even though alan parker did not 
become chief executive upon simon 
calver’s arrival the board agreed the 
process by which the chairman returned 
to his nonexecutive role and defi ned 
the separate roles and responsibilities 
of the chairman and chief executive 
the chairman is responsible for 
leadership of the board with particular 
emphasis on its effective operation 
the highest standards of corporate 
governance and the board’s oversight 
of the business and delivery of its 
strategy the role of simon calver as 
the chief executive offi cer is to lead 
the business and manage it within the 
authorities delegated by the board
there were several changes to the 
board during the year lee ginsberg 
became a nonexecutive director on 
2 july 2012 bernard cragg stepped 
down as the senior independent 
director and chair of the audit 
committee on 23 november 2012 and 
retired on 31 december 2012 after nine 
years as a nonexecutive director 
consequently on 23 november 2012 
lee ginsberg became chair of the audit 
committee and richard rivers became 
the senior independent director angela 
brav joined the company as a non
executive director on 1 january 2013 
and matt smith joined the company as 
its chief financial offi cer on 25 march 
2013 the company has also announced 
that 1 after serving nine years as a 
nonexecutive director david williams 
is stepping down as chair of the 
remuneration committee and will be 
retiring on 31 may 2013 and 2 imeld
a walsh is appointed as a new non
executive director with effect from 1 june 
2013 and will assume the role of chair of 
the remuneration committee following 
completion of the company’s annual 
general meeting in july
alan	parker	cbe
chairman
alan	parker	cbe 	 mothercare plc annual report and accounts 2013 41
governance
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
during the previous year the chairman 
instigated a detailed externally 
facilitated evaluation of the board  
and its effectiveness and operation  
the conclusions of the review presented 
to the board in march 2012 were 
positive in addition the review provided 
recommendations to improve further 
the overall effectiveness of the board 
its composition and its interaction with 
the business these included
 a promoting greater interaction between 
the board and the executive committee
 a reflecting the international 
and global nature of the business
 a ensuring that there is a clear transition 
of the chairman from executive to 
nonexecutive following simon 
calver’s appointment
 a increasing the number of women 
on the board particularly to reflect 
the nature of the mothercare and 
elc business
the board has implemented these 
changes it receives more frequent 
presentations from the members of  
the executive committee there is a more 
formal strategy process attended by  
all members of the executive committee 
and the board and individual members 
of the board and executive committee 
meet throughout the year outside 
the structure of board meetings the 
chairman has made several visits to  
the group’s international franchise 
partners including trips to the middle 
east and china and members of the 
board will attend this year’s international 
franchise partner meeting in singapore 
the board ensured that the roles of the 
chairman and the new group chief 
executive were clear and distinct 
following simon calver’s arrival 
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 24 to 27 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
diversity
the importance of improving  
the diversity balance including 
gender on boards of uk listed 
companies is recognised following 
imelda walsh’s appointment on  
1 june 2013 the mothercare plc 
board including the executive 
directors comprises three women 
and five men and the executive 
committee excluding the executive 
directors has two women and four 
men the company believes it is 
well positioned to support gender 
diversity at all senior levels and as 
at 30 march 2013 49 of the senior 
management positions the two 
grades below executive committee 
were held by women  
2012 53 per cent
board	 evaluation	 –	
recommendations	 included
 a greater interaction 
between the board and 
the executive committee
 a reflect the international and 
global nature of the business
 a clear transition of the chairman 
from executive to nonexecutive
 a increase the number of women 
on the board
“in addition to the formal 
recommendations i am pleased 
with the quality of information 
discussion and debate that we 
have at our board meetings” 
alan	 parker 42	 mothercare plc annual report and accounts 2013
corporate	
governance	
continued
resulting strategy will deliver a 
transformation of the uk business 
together with increased international 
growth over the same period
at the year end the group had 
committed secured bank facilities with 
hsbc and barclays of £90 million at an 
interest rate range of 35 per cent to  
40 per cent above libor until 31 may 
2015 see note 21 these facilities provide 
sufficient liquidity and covenant 
headroom to accommodate the three 
year strategy the covenants in the 
facilities are tested quarterly and are 
based around gearing fixed charge 
cover and guarantor cover 
the maximum net debt balance during 
the period was £552 million and at the 
year end the group had a net debt 
balance of £324 million funded by 
a drawdown against the loan facility  
of £50 million net of £176 million of cash
the continued challenging economic 
conditions particularly the difficult 
consumer and retail environment create 
uncertainty around the level of demand 
for the group’s products however after 
one year of the transformation and 
growth plan which is supported by 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 
continued execution of the transformation 
and growth plan assume a stabilisation 
of gross margin and likeforlike revenues 
within uk stores continued retail sales 
growth within the international business 
and an improvement in working capital 
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 
actions available which would 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 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 uk retail 
sales have declined year on year due to 
store closures and declining likeforlike 
sales across the store estate partially 
offset by increases in our direct in home 
business profit has benefited from the 
property strategy with the continued 
exit from lossmaking stores and tight 
cost control the international business 
continues to expand generating an 
underlying profit for the period of  
£420m fy2012 £349m 
the group continues to implement 
the conclusions of the structural and 
operational review of the size and scope 
of its business that was carried out in 
early 2012 and announced as the 
threeyear transformation and growth 
plan the focus remains to stabilise like 
forlike sales and margin reduce the uk 
central costs close additional uk stores 
to focus on 200 profitable stores 
accelerate international expansion with 
more store openings in both new and 
existing countries and launch 
combined online and in store customer 
options with a new website in the uk 
and 30 new overseas websites the  	 mothercare plc annual report and accounts 2013 43
governance
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 counselcompany 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 30 to 32
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
for many years the company has 
applied its risk management principles 
to its international business for example 
by carrying out audits of its franchise 
partners and taking out trade insurance 
against key franchise receivables  
the company has additional controls  
in place with its joint venture partners 
however in january 2013 the company’s 
associate in australia mothercare 
australia limited in which the group 
held 23 per cent of the share capital 
was placed in voluntary administration 
by its directors the administrators did 
not find a buyer of the business as a 
going concern and consequently sold 
the stock in the business in an orderly 
manner at the same time as winding 
down the business mothercare australia 
limited operated 74 stores in australia 
and new zealand 
the group sources its products primarily 
from india china and bangladesh 
and the group has sourcing offices in 
each of these countries in addition  
some furniture products are supplied 
from vietnam the sourcing offices 
are responsible for ensuring that 
appropriate governance standards are 
observed by the suppliers used by the 
group and has a dedicated corporate 
responsibility team more details are 
set out in the corporate responsibility 
section of this report on pages 33 to 37
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 actions has not been 
considered necessary
bribery	 act	 2010
the bribery act 2010 which came into 
force on 1 july 2011 consolidated 
previous legislation and introduced 
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 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 nonstore level employees both 
in the uk and overseas and is reviewed 
on an annual basis 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 four 
times a year following the announcement 
of the half and full year results and 
trading statements at the agm and 
post christmas 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 investorrelations
mothercarecom 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  44	 mothercare plc annual report and accounts 2013
corporate	
governance	
continued
disclosure controls and procedures in 
the company and their evaluation for 
the appropriateness of the disclosures 
made and for compliance with the 
group’s share trading rules it reports to 
the board through the chief executive
the board has delegated daytoday 
and business management control of 
the group to the executive committee 
the executive committee ordinarily 
consists of the chief executive chief 
financial officer the managing director 
of the international businesses and the 
uk commercial director a global 
product and sourcing director the 
global brand and marketing director 
the group people director and the 
group general counselcompany 
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 
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 including meetings with 
principal advisers to the company and 
have a formal induction process which 
continues following their appointment 
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 uk corporate 
governance code from 2013 the board 
has resolved that all directors should offer 
themselves for reelection each 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 
richard rivers as the senior 
independent director evaluated the 
performance review of the chairman 
having taken the opinions of the other 
directors before doing so and the 
chairman and the board together 
evaluated the performance of the 
group chief executive
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 
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 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 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 38 
notwithstanding such commitments 
each member of the board is able 
to allocate sufficient time to the 
company to discharge his or her 
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 
including the remuneration audit and 
nomination committees as set out 
below these committees comprised  
the five nonexecutive 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 47
the board has established a disclosure 
committee which is responsible for the 
establishment and maintenance of  	 mothercare plc annual report and accounts 2013 45
governance
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 ltd 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
committees
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 the 
executive committee and other 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 52 to 61 and in the 
appendices on pages 62 to 66 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
the	 nomination	 committee chaired  
by alan parker 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 an external 
search agency is ordinarily used to assist 
in the identification of suitable candidates 
for board appointments the nomination 
committee reviews succession planning 
of board members and the executive 
committee on an annual basis the 
company’s position on diversity  
balance is set out earlier in this report
the	 audit	 committee was chaired 
during the year by bernard cragg until 
23 november 2012 and by lee ginsberg 
from that date 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 five 
nonexecutive directors the group 
general counselcompany secretary 
acts as secretary to the committee 
both bernard cragg and lee ginsberg 
are chartered accountants with 
considerable financial and varied 
commercial experience
the committee met three times during 
the period with a fourth meeting 
deferred from march taking place in 
early april 2013 no specific remuneration 
of the nonexecutive directors is ascribed 
to membership of the audit committee 
other than a supplement of £5000 
per annum paid to bernard cragg and 
lee ginsberg pro rated for the period 
in respect of which they acted as chair 
of the committee  46	 mothercare plc annual report and accounts 2013
corporate	
governance	
continued
the	 main	 activities	 of	 the	 audit	
committee	 in	 the	 52	 weeks	 ended	
30	 march	 2013
during the period the audit 
committee has
 a 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
 a 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 
 a considered the output of the 
procedures used to evaluate and 
mitigate risk within the group
 a reviewed the effectiveness of the 
group’s internal controls and 
disclosures made in the annual report
 a considered the management letter 
from the external auditors on their 
review of the effectiveness of  
internal control
 a agreed the fees and terms of 
appointment of the external auditors
 a reviewed both the committee’s and 
the external auditor’s effectiveness
 a agreed the work plan of the internal 
audit function and reviewed the 
resultant output from that plan and
 a reviewed and assessed the group’s 
compliance with corporate 
governance principles
in addition the audit committee has 
reviewed the contents of this year’s 
annual report and accounts and 
advised the board that in its view taken 
as a whole the report is fair balanced 
and understandable and provides the 
information necessary for shareholders 
to assess the group’s performance 
business model and strategy the  
audit committee reviews annually the 
independence of the external audit firm 
and the individuals carrying out the 
audit by receiving 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 this rotation occurred last year 
and this is the first year the current lead 
audit partner has been in place 
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
the audit committee considered its 
effectiveness and that of the external 
auditors 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 in note 7 the chairman of 
the committee will be available at the 
agm to answer any questions on the 
work of the committee 	 mothercare plc annual report and accounts 2013 47
governance
director	 attendance
director attendance statistics at meetings for the 52week period ended 30 march 2013
committee
director board audit nomination remuneration
maximum	 number	 of	 meetings 8 3 2 6
alan parker 8 3 2 6
bernard cragg 4 5 3 3 1 1 4 4
richard rivers 8 3 2 6
david williams 6 3 2 5
amanda mackenzie 7 3 2 5
angela brav 3 3 0 0 1 1 2 2
lee ginsberg 5 5 1 1 2 2 3 3
simon calver 8 3 2 6
matt smith 0 0 0 0 0 0 0 0
neil harrington 2 2 1 1 0 0 1 1
  denotes that the director was appointed or retiredresigned during the year and thus was not eligible to attend all meetings the numbers in brackets show the 
maximum number of meetings which could have been attended by those who were not appointed for the full year
notes
 a simon calver attended meetings of the audit nomination and remuneration committees upon the invitation of the respective chairmen of those committees 
 a alan parker attended meetings of the audit committee upon the invitation of the chair of that committee
 a 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  48	 mothercare plc annual report and accounts 2013
directors’	 report
going	 concern
the accounts have been prepared under the going 
concern principle for full details please see the 
corporate governance report on page 41
dividend
the directors are not recommending the payment of a 
final dividend for the year and no interim dividend was 
paid during the year fy2012 interim dividend 2 pence 
per share final dividend nil total for the year 2 pence 
per share
shares
as at 22 may 2013 the company’s issued share  
capital was 88664380 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 abstain from voting 
its shareholding in the company
substantial	 shareholdings
as at 30 april 2013 the company has been advised  
by or is aware of the following interests above 3 in 
the company’s ordinary share capital
holder
number	 of	
shares
	percentage	
of	 issued	
share	
capital
mg investment 
management ltd 14187334 1600
fil limited  fmr llc 10148676 1145
allianz global investors 9370317 1057
d c thomson 9313522 1050
capital group companies inc 5248433 592
aberdeen asset management 
group 3738146 422
financiere de l’echiquier fr 3550448 400
aberforth partners 3133141 353
the directors present their report on the affairs of  
the group together with the financial statements  
and auditors’ report for the 52week period ended 
30 march 2013 the corporate governance statement 
set out on pages 40 to 47 forms part of this report  
the chairman’s statement at page 14 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 
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
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 
risks 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
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 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 the business review and 
financial review on pages 2 to 29 the principal risks 
and uncertainties facing the business are detailed in 
the corporate governance report at page 40 and the 
section on risks at page 30 these disclosures form part 
of this report 
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 40 	 mothercare plc annual report and accounts 2013 49
governance
acquisition	 of	 own	 shares
the company was given a general approval at the 
agm in july 2012 to purchase up to 10 per cent of its 
shares in the market this authority expires after the 
agm on 18 july 2013 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 multicurrency 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 amended and restated 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 
multicurrency 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 2006 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 52week 
period ended 30 march 2013
name appointment
alan parker executive chairman 17 november 
2011 to 30 april 2012 chairman 
and nonexecutive director from 
30 april 2012 chairman of the 
nomination committee 
angela brav independent nonexecutive director 
from 1 january 2013
simon calver executive director from 30 april 2012
bernard cragg senior independent nonexecutive 
director until 23 november 2012 and 
chairman of the audit committee until 
23 november 2012 
lee ginsberg independent nonexecutive director 
from 2 july 2012 and chairman  
of the audit committee from  
23 november 2012
neil harrington executive director until 20 july 2012
amanda 
mackenzie
independent nonexecutive director 
richard rivers independent nonexecutive director 
and senior independent director  
with effect from 23 november 2012
matt smith executive director  
from 25 march 2013
david williams independent nonexecutive 
director and chairman of the 
remuneration committee  
due to retire on 31 may 2013
in accordance with the requirement of the uk corporate 
governance code for ftse 350 companies at the 
annual general meeting of the company in july 2013 
all the directors currently appointed shall retire and 
offer themselves for reelection
details of directors’ service arrangements are set out 
in the remuneration report on page 58
a statement of directors’ interests in the shares of 
mothercare plc and of their remuneration is set out 
on pages 60 and 63 respectively a statement of 
directors’ interests in contracts and indemnity 
arrangements is set out on page 44 50	 mothercare plc annual report and accounts 2013
directors’	 report	
continued
a new defined contribution scheme the legal  general 
worksave mastertrust was made available to all 
employees from 31 march 2013 and is the designated 
scheme for autoenrolment of workers from 1 may 2013 
the ‘autoenrolment staging date’ for the mothercare 
group the two existing stakeholder schemes were 
closed to future contributions from 31 march 2013
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 2012 nil days of 
average daily purchases during the year for the 
company and 57 days 2012 53 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 £2269413
corporate	 citizenship
the group’s corporate responsibility ethos and  
details of the programmes that it runs in its business 
relationships around the world are set out on  
pages 33 to 37 during the year the group reissued its 
global code of conduct to all its office employees both 
in the uk and overseas and obtained certificates of 
compliance from its employees
global	 code	 of	 conduct	–	 key	 themes
 a relations with employees customers suppliers 
and franchise partners
 a shareholders and corporate governance
 a responsible sourcing
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 performance 
as well as the economic environments in which the 
company trades through its business sectors this is 
achieved through the company employee website 
‘small talk’ regular briefings by the chief executive 
and other executive committee members 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 under review 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 a further 
organisation review is underway resulting in another 
consultation process at the watford office and the 
company has engaged with those employees 
affected the company recognises the impact of 
such processes on its employees and each process 
was carried out thoroughly and professionally and 
in compliance with relevant laws and regulations
in fy201213 following a period of consultation with  
the membership the company closed its two defined 
benefit pension schemes the mothercare staff  
pension scheme and the mothercare executive 
pension schemes to future accrual from 31 march 2013 
details of the pension charge are set out in note 29 	 mothercare plc annual report and accounts 2013 51
governance
auditors
in the case of each of the persons who were 
directors of the company at the date when this 
report was approved
 a 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
 a each of the directors has taken all the steps that  
heshe 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 made by the mothercare group 
foundation for the year ended 30 march 2013 were 
£30000 2012 £32324
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 2013 annual general meeting will be held on 
thursday 18 july 2013 at 300pm 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 counselcompany 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 
22 may 2013 52	 mothercare plc annual report and accounts 2013
remuneration	
report
remuneration	 committee	
chairman’s	 statement
in last year’s annual report we 
announced the details of our threeyear 
transformation and growth plan which 
addressed the challenges faced by the 
group following a significant reduction in 
its profitability the previous year our 
performance against this plan is set out 
elsewhere in this annual report
since his arrival as ceo simon calver 
has made significant changes to his 
executive committee and senior 
management and has recruited the 
team that will deliver the targets set out 
in the plan the remuneration committee 
has worked closely with simon calver as 
he assembled this team to ensure that 
the remuneration arrangements are in 
line with its remuneration policy
i said last year that the change in the 
company’s financial position the 
considerable changes required at 
executive committee level and the 
current environment surrounding 
executive remuneration meant that it 
was the right time to reassess and put  
in place a new remuneration policy
during the year we proposed a new 
long term incentive plan ltip which was 
radically different from the previous 
schemes performance would be linked 
much more directly to the company’s 
performance and would incorporate  
far more stretching targets before 
payments are received and reduce 
materially the total amount that could 
be received under the schemes most 
importantly any new policy would 
reflect mothercare’s plans under the 
transformation and growth plan
we consulted widely with shareholders 
in the development of the new ltip 
following which we made a number of 
alterations to the scheme before putting 
it to all shareholders for approval we 
held a general meeting in december 
2012 at which the new long term 
incentive plan was put to shareholders 
i am delighted to say that we received 
support from approximately 87 of the 
shares voted which in turn represented 
about 75 of the share capital of the 
company for the first awards the 
performance targets relate to share 
price and group profit before tax at the 
end of the threeyear performance 
period which expires at the end of 
march 2015
we believe that to attract and retain the 
best talent and to foster the long term 
growth and success of any business in 
the right way it is critical that there should 
be a clear remuneration strategy that is 
attractive both to shareholders and to the 
group’s management and its employees
we now have such a strategy supporting 
mothercare’s aspirations for the 
foreseeable future and specifically  
to deliver the transformation and 
growth plan
this is my last year as chairman of the 
remuneration committee i have been 
a director of mothercare plc now for 
nine years and i am retiring at the end 
of may 2013 with the new ltip and  
short term incentive plan structure the 
company now has a new and powerful 
remuneration framework that will 
underpin its growth in the future and 
allow simon calver to deliver results 
last year we received strong support 
from shareholders for the remuneration 
report at the general meeting with 94 
of proxy votes cast in favour we look 
forward to receiving your endorsement 
of this year’s remuneration report at the 
annual general meeting
david	 williams	
chairman remuneration committee
david	 williams
remuneration  
committee 
chairman
“	 the	 company	 now	 has	 a	 new	 and	
powerful	 remuneration	 framework	
that	 will	 underpin	 its	 future	 growth” 	 mothercare plc annual report and accounts 2013 53
governance
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 and senior 
management 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
the most important development during 
the year was the introduction of the new 
long term incentive plan which was 
approved by shareholders at general 
meeting in december 2012 the 
committee consulted with shareholders 
as part of this process and made a 
number of alterations to the scheme 
before putting it to all shareholders for 
approval at the general meeting the 
company received support from 
approximately 87 per cent of the shares 
voted which in turn represented about 
75 per cent of the share capital of the 
company in relation to the first awards 
the performance targets relate to share 
price and group profit before tax at the 
end of the threeyear performance 
period which expires at the end of 
march 2015 
the revised ltip will be applied to 
support the company’s progress 
against the transformation and  
growth plan in such a way that
 a 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
 a the company is able to attract and 
retain talent of an appropriate calibre 
to execute the business strategy in a 
highly challenging environment and 
reflecting the future aspirations of 
the company
 a the performance metrics are 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
this report will address both the policy 
applicable to the coming year and 
plans that have been in place during 
the year under review 
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 2010 at the annual general 
meeting on 18 july 2013 shareholders will 
be asked to approve this report the 
company is aware that changes have 
been proposed by the department for 
business innovation and skills in terms  
of the construct of and disclosures to be 
included in remuneration reports whilst 
these changes will apply to the 
company’s 2014 remuneration report 
rather than this current report the 
company is committed to the principle 
of transparency in remuneration 
disclosure and regard has been given 
to the spirit of the draft regulations in 
preparing this report 
the relevant sections 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 elements include directors’ 
share options the psp and eip awards 
including that set out in appendix a on 
pages 62 to 66 ltip awards 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 was chairman of the committee 
during the year the other committee 
members during the year were
angela brav from 1 january 2013
bernard cragg until 31 december 2012
lee ginsberg from 2 july 2012
amanda mackenzie
richard rivers
it should be noted that david williams  
is retiring as a nonexecutive director of 
the company on 31 may 2013 and will 
retire as chairman of the remuneration 
committee on the same date richard 
rivers will act as the interim chair of the 
remuneration committee pending the 
arrival of imelda walsh as the new 
nonexecutive director to assume the 
role also the board has agreed in 
principle to establish a remuneration 
committee which comprises some but 
not all the nonexecutive members of 
the board and this will be put in place 
during fy201314 54	 mothercare plc annual report and accounts 2013
remuneration	
report	
continued
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 senior management below executive 
director and executive committee members to ensure 
that such remuneration is consistent with the delivery 
of the business strategy and value creation for 
shareholders the committee met six times during  
the year and each member’s attendance at these 
meetings is set out on page 47 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 
group people director and group general counsel
company secretary as appropriate no executive was 
present for discussions of their own remuneration
as at 30 march 2013 the committee’s advisers were
person	 or	 organisation services	 provided
pricewaterhousecoopers 
llp pwc
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
all the advisers are considered to be independent 
lane clark  peacock llp does not provide any other 
services to the company and does not have any other 
connections with the company dla piper llp provides 
general legal advice to the group and pwc llp provides 
certain other advice and nonaudit services to the group 
pwc is a member of the remuneration consultants 
group and adheres to the voluntary code of practice in 
relation to the advice it provides to the committee
directors’	 remuneration
nonexecutive	 directors the remuneration of the 
nonexecutive directors comprises fixed annual fees 
expenses incurred on group business are reimbursed 
when claimed in accordance with the group’s business 
expenses policy nonexecutive 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 there were 
no changes to the nonexecutive fees during the year 
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 
executive	 directors the executive directors’ fixed 
annual remuneration comprises 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 
are and will continue to be assessed against both 
financial and nonfinancial performance criteria 
as noted already in this report there have been 
significant changes to the structure of both the short and 
long term incentive plans over the past year which 
have been coupled with the arrival of simon calver 
and matt smith as the ceo and cfo respectively  	 mothercare plc annual report and accounts 2013 55
governance
remuneration
the table below summarises the key elements of the remuneration package applicable to the executive directors  
it describes the applicable policy as well as how that policy was implemented during 201213 to the extent that any  
changes in implementation of the policy will be made in 201314 this is also noted
component	 policy operation	 in	 201213
salary level fixed annually by remuneration committee 
taking into account number of factors
 a individual performance and potential
 a median rate paid by retailer led  
comparator group
 a pay elsewhere in the group
 a advice from remuneration consultants 
both executive directors joined the group 
during the year  their annual salary levels are
 a simon calver £500000
 a matt smith £325000
pension contribution to provide a competitive retirement benefit
base salary is the only element of remuneration 
used to determine pensionable earnings
for 201213
 a simon calver – 15 base salary
 a matt smith – 15 base salary
stipannual bonus the stip applies to all nonstore employees
incorporates both financial 75 and strategic 
25 measures aligned to the transformation 
and growth plan
payment under the stip is subject to an 
overriding financial measure based on the 
company’s net quarterly cashdebt position to 
ensure that payments are not made where the 
underlying financial position of the company 
does not support it
simon calver can earn up to 125 of base 
salary and matt smith can earn up to 100  
of base salary for achievement of annual 
performance metrics 
for executive directors and members of the 
executive committee 30 of any payment 
earned will be deferred into shares in the 
company for 3 years and subject to a risk of 
forfeiture in the case of resignation during this 
period and to claw back in exceptional 
circumstances such as financial misstatement
for 201213
 a 75 of the bonus is based on internal financial 
measures
 a 25 of the bonus is based on strategic 
measures such as customer satisfaction 
survey results
 a a bonus payment of 11 of bonusable salary 
was approved by the remuneration 
committee and paid to the executive 
committee senior management and 
nonstore employees of the company
 a this resulted in a payment to simon calver  
of £68750 of which £20625 is deferred into 
shares  matt smith who joined on 25 march 
2013 received no bonus for the year 56	 mothercare plc annual report and accounts 2013
remuneration	
report	
continued
component	 policy operation	 in	 201213
ltip a mechanism to attract retain and motivate 
executive directors and other senior 
management over the long term
annual awards to be granted under the ltip
performance conditions for 201213 ltip 
participants in the ltip will earn up to 50 of the 
award if the share price reaches the targets 
shown in the table below
it will earn up to 50 of the award if the 201415 
group profit before tax reaches the targets 
shown in the table below
fy15
share
price
vesting	 	
	 of	 	
max
fy15
group
pbt
vesting	 	
	 of	 	
max
£3 0 £23m 0
£4 30 £34m 30
£5 60 £45m 60
£6 90 £60m 90
£7 100 £70m 100
in addition the uk business must break even in
the financial year ending on  28 march 2015 or  
27 march 2016
the share price and group profit before tax 
elements will be measured independently
201213 ltip grants 
 a simon calver 778816 shares
 a matt smith 224991 shares
these shares will vest to the extent that the 
performance conditions and shareholding 
requirements are met and the other conditions 
of the award are achieved 
initial award
 a simon calver – 300 base salary 
 a matt smith – 200 base salary 
ongoing award levels
level	 	 of		salary
ceo 200
cfo 175
executive committee 150
senior executives 55
key employees 40
stretching corporate performance metrics over  
the 3 year performance period ending on  
28 march 2015 which supports the execution  
of the transformation and growth plan
vesting
 a 50 after 3 years 
 a 50 after 4 years
 a conditional upon the executive building up  
a minimum shareholding requirement failing 
which the vesting level will be reduced 	 mothercare plc annual report and accounts 2013 57
governance
total	 compensation	 to	 executive	 directors
details of the remuneration received by the executive directors in 201213 is set out in appendix a to this 
remuneration report in 201213 simon calver received approximately 89 per cent of his remuneration as fixed 
salary and pension contribution and approximately 11 per cent of which 30 per cent is deferred as variable 
salary matt smith who joined on 25 march 2013 received 100 of his remuneration as fixed salary 
the company did not make any payments or grant any awards during the year to compensate simon calver 
for any loss of benefits that he may have received at his previous employment however the company agreed 
to compensate matt smith for an amount equal to the value of the bonus he would have received from his 
former employer in his final year of employment a payment of £255000 will be made in fy201314 of which 30 
per cent will be deferred into nil cost share options which vest after three years subject to the conditions of the 
stip scheme this payment is subject to a clawback provision which will be repaid by matt smith on a pro rata 
basis if he leaves the company within two years
simon	 calver
total	 compensation
fixed salarypension 89
stip 75
deferred stip 35
matt	 smith
total	 compensation
fixed salarypension 100
shortterm	 incentive	 plan	 stip
under	 the	 stip
 a the maximum bonus potential for the ceo is 125 per 
cent of salary and for the cfo and other members 
of the executive committee is 100 per cent of salary 
the maximum bonus potential for other members of 
the company above store level range from 5 per 
cent to 50 per cent of salary
 a the performance metrics are aligned to the 
company’s transformation and growth plan  
and include both financial and strategic measures 
weighting 75 per cent financial 25 per cent 
strategic strategic measures include such 
measures as customer satisfaction surveys
 a payment under the stip during the year was subject 
to an overriding financial measure based on the 
company’s net quarterly cashdebt position so  
that stip payments would not be paid where the 
underlying financial position of the company does 
not support it
 a 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  58	 mothercare plc annual report and accounts 2013
remuneration	
report	
continued
performance conditions participants in the fy201213 
ltip will earn up to 50 per cent of the award if the share 
price reaches the targets shown in the table below and 
will earn up to 50 per cent of the award if the fy201415 
group profit before tax reaches the targets shown in the 
table below
fy15
share
price
vesting
	 of	 max
fy15
group
pbt
vesting
	 of	 max
£3 0 £23m 0
£4 30 £34m 30
£5 60 £45m 60
£6 90 £60m 90
£7 100 £70m 100
in addition the uk business must break even in
the financial year ending on  28 march 2015 or  
27 march 2016
the share price and group profit before tax elements 
will be measured independently
vesting of awards for the ceo cfo and executive 
committee members is conditional upon the executive 
building up a minimum shareholding requirement 
within three years from the commencement of the 
scheme 100 per cent of salary for the ceo 50 per  
cent for cfo and 25 per cent for executive committee 
members where shareholding requirements are  
not met then the vesting level will be reduced for full 
vesting the shareholding requirement must be met  
in full
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 
service	 contracts	 and	 payments	 on	 termination
nonexecutive	 directors
nonexecutive directors receive a fee of £50000 
per annum additional fees are paid to the senior 
independent director and chairs of the audit 
and remuneration committee as detailed in the 
table opposite
alan parker is entitled to six months’ salary on 
termination by the company of his service agreement 
dated 2 august 2011 angela brav lee ginsberg 
amanda mackenzie richard rivers and david 
williams have service agreements with the company 
that may be terminated upon one month’s notice 
as at 30 march 2013 the annual salaryfees payable 
to the chairman and the nonexecutive directors are 
as follows
for a threeyear period these shares will be forfeited 
by any member of the executive committee who 
resigns during the deferral 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
 a during the deferral period in line with best practice 
the shares are subject to clawback in exceptional 
circumstances such as financial misstatement 
in order for the stip to pay out in full the company 
must achieve stretch targets for each of the performance 
measures in fy201213 the company did not achieve  
in full its internal targets but it did meet the measures  
in part and accordingly a 11 per cent bonus was 
approved by the remuneration committee 
long	 term	 incentive	 plan	 ltip
last year the company introduced a new ltip as a 
recognisable and competitive reward structure with 
which to attract retain and motivate the executive 
committee and senior management and this was 
approved by shareholders in general meeting in 
december 2012 the scheme comprises an annual 
award of nilcost options which vest based on the 
achievement of stretching corporate performance 
metrics supporting the execution of the transformation 
and growth plan the vesting of share awards 
is conditional upon the achievement of the 
performance conditions a minimum shareholding 
requirement being met by members of the executive 
committee and sustainable corporate performance 
over the longer term all awards under the ltip will be 
settled in shares the remuneration committee has the 
power to reduce the vesting levels of awards in certain 
circumstances
in the first year of the award the maximum award 
granted to simon calver was 300 per cent of salary 
and to matt smith 200 per cent of salary both of these 
awards were considered necessary in order for the 
company to recruit these two key executive directors 
matt smith’s award is pro rated to reflect his joining 
date as a percentage of the threeyear performance 
period the following table sets out the proposed 
award levels for subsequent years
level 	 of	 salary
ceo 200
cfo 175
executive committee 150
senior executives 55
key employees 40 	 mothercare plc annual report and accounts 2013 59
governance
name start	 date notice	 period
fees	 per	 annum		
at	 30	 march	 2013
alan parker 2 august 2011 6 months £200000
angela brav 1 january 2013 1 month £50000
lee ginsberg 2 july 2012 1 month £55000 note 1
amanda mackenzie 1 january 2011 1 month £50000
richard rivers 27 may 2008 1 month £55000 note 2
david williams 2 july 2004 1 month £55000 note 3
notes
1 lee ginsberg receives a supplement of £5000 per annum as chair of the audit committee
2 richard rivers receives a supplement of £5000 per annum as senior independent director
3 david williams receives a supplement of £5000 per annum as chair of the remuneration committee
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 match the shares 
purchased by alan parker on a 11 basis up to a 
maximum value of £200000 the chairman 
purchased shares to the maximum value 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 
tsr 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 the tsr index the award will  
not vest the chairman must retain his shareholding  
for the performance period as reported last year  
the company agreed to an extension of this share 
matching arrangement awarded to the chairman  
on his appointment as executive chairman a position 
held on an interim basis until the appointment of  
simon calver as ceo 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 this plan was approved by  
83 per cent of proxy votes cast by shareholders at the 
company’s annual general meeting in july 2012
executive	 directors
simon calver was appointed as ceo with effect from 
30 april 2012 matt smith was appointed as cfo with 
effect from 25 march 2013 executive directors’ service 
contracts are rolling contracts that require 12 months’ 
notice by either the company or executive to 
terminate the contract in the case of termination 
the service contracts provide for payment in lieu of 
notice and include mitigation provisions that apply  
to the executive director
in july 2012 neil harrington left the company having 
resigned as a director details of the emoluments 
earned by neil harrington are set out in the appendices 
to this report on pages 62 to 66 neil harrington 
received no payment following his resignation and 
any unvested share awards lapsed
external	 appointments	 and	 other	 commitments	
of	 the	 directors
the other business commitments of the directors are 
set out within their biographical details on page 38 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 currently neither simon calver nor matt smith 
are nonexecutive directors with another organisation
pension	 arrangements	
the committee regularly reviews the financial impact 
to the company of pension provision given the 
regulatory changes in october 2012 a further review  
of the effect of these changes on the company 
pension schemes was carried out 
in fy201112 in order to control the cost of pensions the 
group agreed with the trustees of the executive pension 
scheme the introduction of a capped accrual section 
which limited annual accrual in excess of cpi inflation 
to £3125 per annum and agreed with the individuals 
affected to pay a salary supplement of up to £16000 
per annum to compensate for their reduced accrual 
in fy201213 following a period of consultation with the 
membership the company closed its two defined 
benefit pension schemes the mothercare staff pension 
scheme and the mothercare executive pension  60	 mothercare plc annual report and accounts 2013
remuneration	
report	
continued
schemes to future accrual from 31 march 2013  
details of the pension charge are set out in note 29
a new defined contribution scheme the legal  general 
worksave mastertrust was made available to all 
employees from 31 march 2013 and is the designated 
scheme for autoenrolment of workers from 1 may 2013 
the ‘autoenrolment staging date’ for the mothercare 
group the two existing stakeholder schemes were 
closed to future contributions from 31 march 2013
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 63 this information is still relevant because 
neil harrington was a director during the year
simon calver and matt smith receive 15 per cent of 
their base salary as a pension contribution from the 
company which is paid into a personal pension plan 
they do not participate in any furbs arrangements
for further details of the pension provision within the 
group during the year see the directors’ report on 
page 50
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 30 march 2013 
and the salaries paid to the management level below 
the board are set out in tables 1a and 1b of appendix a 
on pages 62 and 63
shareholding	 guidelines
executive directors are expected to build up a 
shareholding in the company and this is reflected  
in the terms of the ltip after three years the ceo  
and cfo as the executive directors should hold a 
shareholding equal to 100 per cent and 50 per cent  
of their basic salaries respectively rising to 150 per 
cent and 100 per cent respectively thereafter shares 
can be purchased directly or through a nominee also 
under the proposed terms of the shortterm 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 the deferred shares are 
subject to clawback and risk of forfeiture
details of the shares held by the directors as at 
30 march 2013 are provided later in this report 
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	
30	 march	 2013
number
interest	 held	 at	
31	 march	 2012	
or	 date	 of	
appointment		
if	 later	
number
alan parker 232554 210400
richard rivers 29000 29000
david williams 71300 71300
amanda mackenzie 25760 25760
simon calver 188310 –
matt smith 0 –
lee ginsberg 0 –
angela brav 0 –
tim ashby and david williams are shareholders and 
directors of mothercare employees’ share trustee 
limited which held 3151 mothercare shares in trust on 
30 march 2013 31 march 2012 3151 shares a separate 
trust the mothercare employee trust held 105346 
shares on 30 march 2013 31 march 2012 440394 shares
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  	 mothercare plc annual report and accounts 2013 61
governance
there have been no movements in directors’ interests beneficial or nonbeneficial between 30 march 2013 and 
22 may 2013
performance	 graph
the performance graph below shows the group’s tsr against the return achieved by the ftse250 index 
mothercare plc entered the ftse250 on 30 june 2008 but returned to the ftse smallcap index on 19 december 
2011 the performance graph below shows performance against the ftse250 index and the ftse all share 
general retailers index the graph shows the five financial years to 30 march 2013
the indices were chosen on the basis that mothercare was a constituent of both the ftse250 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
tsr	 performance	 over	 the	 last	 five	 years	 rebased	 to	 100
  mar 13  mar 08  mar 09  mar 10  mar 11  mar 12
ftse all share ftse 250 index mothercare ftse asx general retailers
250
200
150
100
50
0
source datastream
approved by the board on 22 may 2013 and signed on its behalf by
david	 williams	
chairman remuneration committee 62	 mothercare plc annual report and accounts 2013
appendix	 to	 the	
remuneration	
report
appendix	a
table	 1a
directors’	 emoluments
total emoluments including pension contributions in the 52 weeks ended 30 march 2013 were £1613000 
2012 £7460000
salaryfees	 	
£000
performance	
bonus	 	
£000
benefits	 	
£000
incentive	
schemes’	
vesting	 	
£000
compensation	
for	 loss	 	
of	 office	 	
£000
total	
remuneration	
excl	 pensions
pension	
contributions	
£000
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
executive	 directors
alan parker
i
251 272 – – – – – – – – 251 272 – –
simon calver
ii
462 – 48 – 1 – – – – – 511 – 69 –
matt smith
iii
6 – – – – – – – – – 185 – 1 –
neil harrington
v
96 265 – – 4 12 206 1411 – – 306 1688 17 34
ben gordon
iv
– 380 – – – 9 – 3968 – 658 – 5015 – 23
ian peacock – 108 – – – – – – – – – 108 – –
nonexecutive	
directors
angela brav 13 – – – – – – – – – 13 – – –
bernard cragg 45 60 – – – – – – – – 45 60 – –
lee ginsberg 43 – – – – – – – – – 43 – – –
amanda 
mackenzie 50 50 – – – – – – – – 50 50 – –
richard rivers 50 50 – – – – – – – – 50 50 – –
david williams 55 55 – – – – – – – – 55 55 – –
note benefits typically include a company car medical insurance and other similar benefits
i  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 alan parker reverted to the role of nonexecutive 
chairman and his fee reverted back to £200000 per annum
ii  in addition to the bonus paid to simon calver set out above a further amount of £20625 representing 30 per cent of the total bonus of £68750 
to be paid to simon calver was deferred into nil cost share options which vest after three years subject to the conditions of the stip scheme 
iii  included within his total remuneration matt smith will receive a payment of £178500 as compensation for the value of the bonus he would 
have received from his former employer in his final year of employment a further amount of £76500 representing 30 per cent of the total 
compensation of £255000 will be deferred into nil cost share options which vest after three years subject to the conditions of the stip scheme
iv  ben gordon resigned as chief executive with effect from 17 november 2011 ben gordon’s salary was £600000 per annum and the amount in 
the table shows the salary payable in fy12 up to the date of his resignation together with the amount paid by way of compensation for loss of 
office in addition to the pension contribution set out above in fy12 a sum of £63810 was paid to ben gordon for the 53 weeks ended 31 march 
2012 as a salary supplement following the discontinuance of the furbs scheme ben gordon’s incentive scheme vesting in fy12 includes 
£441000 relating to early vesting as a result of his resignation
v  in addition to the pension contributions for neil harrington set out above a sum of £16510 is paid for the 52 weeks ended 30 march 2013  
and £40854 was paid to neil harrington for the 53 weeks ended 31 march 2012 as an employer contribution directly to a sipp following the 
discontinuance of the furbs scheme included within this payment is an amount paid as a supplement of £16000 per annum given in  
return for voluntarily capping the pension accrual at £140625 	 mothercare plc annual report and accounts 2013 63
governance
table	 1b
aggregate	 directors’	 remuneration
the total amounts for directors’ remuneration were as follows
2013		
£000
2012		
£000
emoluments 1303 1261
compensation for loss of office 0 658
amounts receivable under long term incentive schemes 206 5379
money purchase pension contributions 104 162
total 1613 7460
table	 1c
the following table sets out the number of individuals at the year end within the salary bands for the 
management level directly below the board
salary	 band 2013 2012
250001 – 300000 0 0
200001 – 250000 3 2
150001 – 200000 3 2
100000 – 150000 0 0
50001 – 100000 0 0
0 – 50000 0 0
	
table	2
pensions
the disclosure of the director’s 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	
contributions
at	 31	 march	
2012
change	
during	
year
as	 at	 30	
march	
2013
change	
during	 	
year	 	
net	of	
inflation
transfer	
value	of	
change	 in	
year	 net	of	
inflation
31	 march	
2012
change	
during	
year
director	
contributions
30	 march	
2013
neil harrington 247 18 265 13 447 309 51 0 360 166
 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 64	 mothercare plc annual report and accounts 2013
appendix	 to	 the	
remuneration	
report	
continued
performance	 share	 plan
conditional awards held by executive directors under the psp are as follows
director
31	 march	
2012	
number
granted	
during	 year	
number
lapsed	
during	 year	
number grant	 date lapse	 date
vested	
during	 year	
number
gains	 on	
exercise	
2013	
£
30	 march	
2013	
number
neil harrington 38278 – 38278 25 may 2010 20 july 2012 – – –
44831 – 44831 24 may 2011 20 july 2012 – – –
total 83109 – 83109 – – –
note
1 the above awards were granted as nilcost options 
2 neil harrington left the company on 20 july 2012
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 neil harrington
£0m to £50m 04
£50m to £75m 06
1
over £75m 08
2
note
1 percentage applies only on up to £25m of surplus value created above £50m
2 percentage applies only on surplus value created in excess of £75m
eip	 cash	 determinations	 made	 during	 the	 year
the 2010 cycle did not vest as the performance conditions were not met during the reference period ending 
30 march 2013
2008 cycle total surplus value created £12898 million
name vesting	 date
cash	 amount	
paid	£
deferred	
shares	 vested	
number
reference	
share	 price
neil harrington
1
6 june 2012 192850 91290 21125
1  the 2008 cycle vested in 2011 and the details of the award were disclosed in last year’s annual report in accordance with the scheme rules  
50 per cent of the award was deferred into shares which vested on 6 june 2012 the table above sets out the value of the deferred shares which 
were sold by neil harrington on 7 june 2012 	 mothercare plc annual report and accounts 2013 65
governance
ltip
conditional awards held by executive directors under the ltip are as follows
director
31	 march	
2012	
number
granted	
during	 year	
number
lapsed	
during	 year	
number grant	 date
vesting		
lapse	 date
vested	
during	 year	
number
gains	 on	
exercise	
2013	
£
30	 march	
2013	
number
simon calver – 778816 – 11 march 2013 31 march 2015 – – 778816
matt smith – 224991 – 25 march 2013 31 march 2015 – – 224991
total – 1003807 – – – 1003807
the above awards were granted as nilcost options
directors’	 share	 matching	 award
director
31	 march	 2012	
number	 of	
shares granted grant	 date vest	 date
30	 march	 2013	
number	 of	
shares
alan parker 60000 60000
1
2 august 2011 1 august 2014 60000
54997 54997
2
17 november 2011 16 november 2014 54997
notes
1  during fy2012 the chairman was granted 60000 performancerelated 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 £02m at 30 march 2013 the 
chairman had purchased the required value of shares
2  upon assuming the role of executive chairman in fy2012 the chairman was granted 54997 performancerelated 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 £04m at 30 march 2013 the chairman had purchased £03m of shares in the company  66	 mothercare plc annual report and accounts 2013
appendix	 to	 the	
remuneration	
report	
continued
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 three
month 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 
no eip awards vested in relation to the performance 
ended 30 march 2013 
pension
neil harrington was a member of the mothercare 
executive pension scheme and participated in the 
pension builder career average section of the 
mothercare executive pension scheme pension 
accrued 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 were set at 8 per cent of 
pensionable salary
appendix	 b
neil harrington resigned as group finance director 
and left the company on 20 july 2012 consequently 
this report contains the following information regarding 
the performance share plan and executive incentive 
plan which were approved by shareholders in 2006 
as neil harrington was a participant during the year 
the current executive directors have not been granted 
awards under the psp or eip following neil harrington’s 
resignation any unvested awards due to him under 
the psp or eip schemes have lapsed details of historical 
awards held by neil harrington are set out in 
appendix a on page 64
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 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 per annum 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 per annum pbt per share 
growth is not met the award lapses 
for the threeyear performance period to 30 march 
2013 mothercare’s profit before tax decreased 
accordingly the awards granted in fy200910 did  
not vest  	 mothercare plc annual report and accounts 2013 67
financial statements
financial	 statements
contents
68 directors’ responsibility statement
69 independent auditor’s report to the  
members of mothercare plc
70 consolidated income statement
70 consolidated statement of  
comprehensive income
71 consolidated balance sheet
72 consolidated statement of changes in equity
73 consolidated cash flow statement
74 notes to the consolidated financial statements
company	 financial	 statements
115 independent auditor’s report on the company 
financial statements
116 company balance sheet
117 notes to the company financial statements
120 fiveyear record
121 shareholder information 68	 mothercare plc annual report and accounts 2013
directors’	 responsibilities	 statement
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
 a select suitable accounting policies and then apply 
them consistently
 a make judgements and accounting estimates that 
are reasonable and prudent
 a state whether applicable uk accounting standards 
have been followed subject to any material 
departures disclosed and explained in the financial 
statements and
 a 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
 a properly select and apply accounting policies
 a present information including accounting policies  
in a manner that provides relevant reliable 
comparable and understandable information 
 a 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
 a make an assessment of the company’s ability to 
continue as a going concern
the directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the company’s transactions and disclose with 
reasonable accuracy at any time the financial position 
of the company and enable them to ensure that the 
financial statements comply with the companies act 
2006 they are also responsible for safeguarding the 
assets of the company and hence for taking 
reasonable steps for the prevention and detection  
of fraud and other irregularities
the directors are responsible for the maintenance  
and integrity of the corporate and financial 
information included on the company’s website 
legislation in the united kingdom governing the 
preparation and dissemination of financial statements 
may differ from legislation in other jurisdictions
responsibility	 statement	
we confirm that to the best of our knowledge
 a 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
 a the chairman’s statement chief executive’s 
statement business review financial review and 
the directors’ report include 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 and 
 a the directors consider that the annual report and 
accounts taken as a whole is fair balanced and 
understandable and gives shareholders the 
information needed to assess the group’s 
performance business model and strategy
by order of the board on 22 may 2013 and signed on  
its behalf by
simon	 calver
chief executive officer 
matt	 smith
chief financial officer 	 mothercare plc annual report and accounts 2013 69
financial statements
independent	 auditor’s	 report	 to	
the	 members	 of	 mothercare	 plc
we have audited the group financial statements of 
mothercare plc for the 52 weeks ended 30 march 2013 
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
 a give a true and fair view of the state of the group’s 
affairs as at 30 march 2013 and of its loss for the  
52 weeks then ended
 a have been properly prepared in accordance with 
ifrss as adopted by the european union and
 a 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
 a certain disclosures of directors’ remuneration 
specified by law are not made or
 a we have not received all the information and 
explanations we require for our audit
under the listing rules we are required to review
 a the directors’ statement contained within the 
corporate governance report in relation to  
going concern 
 a 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
 a 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 52 weeks 
ended 30 march 2013 and on the information in the 
directors’ remuneration report that is described as 
having been audited 
  
ian	 waller	 senior	 statutory	 auditor
for and on behalf of deloitte llp 
chartered accountants and statutory auditor 
london uk 
22 may 2013 70	 mothercare plc annual report and accounts 2013
consolidated	 income	 statement
for	 the	 52	 weeks	 ended	 30	 march	 2013
52	 weeks	 ended	 30	 march	 2013 53 weeks ended 31 march 2012
note
underlying
1
	£	 million
non
underlying
2
	£	 million
total
	£	 million
underlying
1
 £ million
non
underlying
2
 £ million
total 
£ million
revenue 4 5 7494 – 7494 8127 – 8127
cost of sales 7020 57 6963 7684 20 7704
gross profit 474 57 531 443 20 423
administrative expenses 344 59 403 391 101 492
profitloss	 from	 retail	 operations 7 130 02 128 52 121 69
loss on disposaltermination of property 
interests 6 – 138 138 – 226 226
other exceptional items 6 – 154 154 – 693 693
share of results of joint ventures and 
associates 1314 14 – 14 32 04 36
loss	 from	 operations 116 294 178 20 1044 1024
net finance costs 8 33 04 37 04 01 05
loss before taxation 83 298 215 16 1045 1029
taxation 9 28 23 05 – 111 111
loss	 for	 the	 period	 attributable	 to	 equity	
holders	 of	 the	 parent 55 275 220 16 934 918
lossearnings per share
basic 11 62p 249p 18p 1052p
diluted 11 61p 249p 18p 1052p
1 before items described in note 2 below
2 includes exceptional items profitloss on disposaltermination of property interests restructuring costs impairment charges and 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	 incomeexpense
for	 the	 52	 weeks	 ended	 30	 march	 2013
note
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
other comprehensive expense – actuarial loss on defined benefit pension schemes 29 160 212
cash flow hedges losses arising in the period 03 –
tax relating to components of other comprehensive income 9 30 41
exchange differences on translation of foreign operations 06 01
net loss recognised in other comprehensive incomeexpense 127 172
loss for the period 220 918
total	 comprehensive	 expense	 for	 the	 period	 attributable	 to	 equity	 holders	 of	 the	 parent 347 1090 	 mothercare plc annual report and accounts 2013 71
financial statements
consolidated	 balance	 sheet
as	 at	 30	 march	 2013
note
30	 march	
2013	
£	 million
31 march 
2012 
£ million
noncurrent assets
goodwill 15 268 268
intangible assets 15 197 221
property plant and equipment 16 696 863
investments in joint ventures 13 80 68
investment in associate 14 – 32
deferred tax asset 17 217 176
1458 1628
current assets
inventories 18 1106 991
trade and other receivables 19 581 747
current tax assets 10 –
derivative financial instruments 22 73 –
cash and cash equivalents 20 176 18
1946 1756
total	 assets 3404 3384
current liabilities
trade and other payables 23 1233 1238
borrowings 21 35 19
current tax liabilities 05 01
derivative financial instruments 22 03 13
short term provisions 24 214 245
1490 1516
noncurrent liabilities
trade and other payables 23 281 290
borrowings 21 465 200
retirement benefit obligations 29 616 527
long term provisions 24 164 124
1526 1141
total	 liabilities 3016 2657
net	 assets 388 727
equity attributable to equity holders of the parent
share capital 25 443 443
share premium account 62 62
other reserve 62 508
own shares 25 06 21
translation and hedging reserve 03 –
retained deficit 176 265
total	 equity 388 727
approved by the board and authorised for issue on 22 may 2013 and signed on its behalf by
simon	 calver	 matt	 smith
chief executive officer chief financial officer 72	 mothercare plc annual report and accounts 2013
consolidated	 statement	 of	 changes	 in	 equity
for	 the	 52	 weeks	 ended	 30	 march	 2013
equity attributable to equity holders of the parent
share 
capital  
£ million
share 
premium 
account  
£ million
other
 reserve
1
£ million
own  
shares  
£ million
translation 
and 
hedging 
reserve  
£ million
retained 
earnings  
£ million
total		
equity		
£	 million
balance	 at	1	 april	 2012 443 62 508 21 – 265 727
other comprehensive expense for  
the period – – – – 03 130 127
loss for the period – – – – – 220 220
total comprehensive incomeexpense 
for the period – – – – 03 350 347
transfer between reserves – – 446 – – 446 –
credit to equity for equitysettled 
sharebased payments – – – – – 08 08
shares transferred to employees on vesting – – – 15 – 15 –
balance	 at	 30	 march	 2013 443 62 62 06 03 176 388
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
other comprehensive expense for  
the period – – – – 01 171 172
loss for the period – – – – – 918 918
total comprehensive expense 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
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 2013 73
financial statements
consolidated	 cash	 flow	 statement
for	 the	 52	 weeks	 ended	 30	 march	 2013
note
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012 
restated 
£ million
net	 cash	 flow	 from	 operating	 activities 26 68 56
cash flows from investing activities
interest received – 09
purchase of property plant and equipment 132 217
purchase of intangibles – software 30 32
proceeds from sale of property plant and equipment 22 23
investments in joint ventures and associates 18 57
net	 cash	 used	 in	 investing	 activities 158 274
cash flows from financing activities
interest paid 28 13
facility fees paid 14 –
bank loans raised 300 200
equity dividends paid – 119
issue of ordinary share capital – 03
net	 cash	 raised	 in	 financing	 activities 258 71
net	 increasedecrease	 in	 cash	 and	 cash	 equivalents 168 147
cash and cash equivalents at beginning of period 01 153
effect of foreign exchange rate changes 09 07
net	 cash	 and	 cash	 equivalentsdebt	 at	 end	 of	 period 176 01
 the cash flow statement for the 53 weeks ended 31 march 2012 has been restated to give a better understanding of the movement in provisions and their impact on 
exceptional items 74	 mothercare plc annual report and accounts 2013
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 121 the nature of the group’s 
operations and its principal activities are set out in 
note 5 and in the business review on pages 22 to 39
these financial statements are presented in uk 
pounds sterling because that is the currency of the 
primary economic environment in which the group 
operates foreign operations are included in 
accordance with the policies set out in note 2
2	 significant	 accounting	 policies
basis of presentation
the group’s accounting period covers the 52 weeks 
ended 30 march 2013 the comparative period 
covered the 53 weeks ended 31 march 2012 
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
adoption	 of	 new	 and	 revised	 standards
in the current year the following new and revised 
standards and interpretations have been adopted 
and have affected the amounts reported in these 
financial statements
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
 a amendments to ias 12 ‘deferred tax recovery  
of underlying assets’
 a ifrs 7 amended ‘financial instruments disclosures’
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
 a amendments to ias 1 ‘presentation of items of other 
comprehensive income’
 a annual improvements to ifrss – 20092011 cycle
 a amendments to ifrs 7 and ias 32 ‘disclosures 
– offsetting financial assets and financial liabilities’
 a ifrs 9 ‘financial instruments’
 a ifrs 10 ‘consolidated financial statements’
 a ifrs 11 ‘joint arrangements’
 a ifrs 12 ‘disclosure of interests in other entities’
 a ifrs 13 ‘fair value measurement’
 a amendments to ifrs 10 ifrs 12 and ias 27 
‘investment entities’ 
 a ias 19 revised ‘employee benefits’
 a ias 27 revised ‘separate financial statements’
 a ias 28 revised ‘investments in associates and 
joint ventures’ 
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
 a 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 impact 
of these changes is shown within the financial review
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 
corporate governance report on page 40 the 
principal accounting policies are set out on the  
following pages 	 mothercare plc annual report and accounts 2013 75
financial statements
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 30 march 2013 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 acquisitionrelated 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 
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 pro 
rata 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 salesrelated 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 despatch
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 76	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
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 provision for onerous leases 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 
2	 significant	 accounting	 policies	 continued 	 mothercare plc annual report and accounts 2013 77
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 
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
hedge accounting
the group designates its interest rate swaps as  
cash flow hedges at the inception of the hedge 
relationship the group documents the relationship 
between the hedging instrument and the hedged 
item along with its risk management objectives and its 
strategy for undertaking various hedge transactions 
changes in the fair value of financial instruments 
designated as effective are recognised in the 
comprehensive income statement and any ineffective 
portion is recognised immediately in the income 
statement amounts previously recognised in other 
comprehensive income and accumulated in equity  
are reclassified to profit and loss in the periods when 
the hedged item is recognised in profit or loss in the 
same line of the income statement as the recognised 
hedged item
movements in the hedging reserve in equity are 
detailed in note 22  78	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
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
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 writeoff 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
2	 significant	 accounting	 policies	 continued 	 mothercare plc annual report and accounts 2013 79
financial statements
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 straightline basis over their expected 
useful lives which is normally five years
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 on hand 
and demand deposits and other shortterm 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 80	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
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 and interest rate swaps  
to mitigate the risk of movements in interest rates 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 
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 the interest rate swaps in place  
are considered an effective cashflow hedge and  
are accounted for by recognising the gainloss  
on the hedge through reserves rather than the  
income statement removing volatility within 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
interest rate risk
the group has drawn down on its term borrowing 
facility following the group refinancing the group  
now hedges all of the floating interest rate on this term 
facility using interest rate swaps 
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 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
2	 significant	 accounting	 policies	 continued 	 mothercare plc annual report and accounts 2013 81
financial statements
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
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 30 march 2013 the group’s pension liability was  
£616 million 2012 £527 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 cashgenerating 
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 2012 £268 million 82	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
3	 critical	 accounting	 judgements	 and	 key	 sources	 of	 estimation	 uncertainty	 continued 
property	 provisions
descriptions of the provisions held at the balance sheet date are given in 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
provision has been made in respect of leasehold properties for vacant partly let and lossmaking 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 in determining the provision the cash flows have been discounted 
on a pretax basis using a riskfree 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
52	 weeks	
ended		
30	 march	
2013	
£	 million
53 weeks 
ended  
31 march 
2012 
£ million
revenue 7494 8127
interest revenue note 8 02 09
total	 revenue 7496 8136 	 mothercare plc annual report and accounts 2013 83
financial statements
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 web 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
52	 weeks	 ended	 30	 march	 2013
uk		
£	 million
international		
£	 million
unallocated	
corporate	
expenses		
£	 million
consolidated		
£	 million
revenue
external sales 4997 2497 – 7494
result
segment result underlying 217 420 78 125
sharebased payments 09
noncash foreign currency adjustments nonunderlying 69
amortisation of intangible assets nonunderlying 10
exceptional items note 6 353
loss	 from	 operations 178
net finance costs including £04 million nonunderlying 37
loss before taxation 215
taxation 05
loss	 for	 the	 period 220
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 06
noncash foreign currency adjustments nonunderlying 20
amortisation of intangible assets nonunderlying 20
exceptional items note 6 1044
loss	 from	 operations 1024
net finance costs including £01 million nonunderlying 05
loss before taxation 1029
taxation 111
loss	 for	 the	 period 918 84	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
5	 segmental	 information	 continued
revenues are attributed to countries on the basis of the customer’s location the largest international customer represents 
approximately 152 2012 138 of group sales
52	 weeks	 ended	 30	 march	 2013
uk	
£	 million
international	
£	 million
consolidated	
£	 million
other information
capital additions 106 19 125
depreciation and amortisation 175 39 214
balance sheet
assets
segment assets 2047 964 3011
unallocated corporate assets 393
consolidated total assets 3404
liabilities
segment liabilities 2323 34 2357
unallocated corporate liabilities 659
consolidated total liabilities 3016
in addition to the depreciation and amortisation reported above impairment losses of £40 million £nil million and £01 million 
2012 impairment losses of £94 million £418 million and £132 million were recognised in respect of property plant and 
equipment goodwill and intangible assets respectively these impairment losses were attributable to the uk segment
53 weeks ended 31 march 2012
uk 
restated
£ million
international 
restated
£ 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
 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 	 mothercare plc annual report and accounts 2013 85
financial statements
6	 exceptional	 and	 other	 nonunderlying	 items
due to their significance or oneoff nature certain items have been classified as exceptional or nonunderlying as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
exceptional items
 restructuring costs in cost of sales 02 20
 restructuring costs included in administrative expenses 40 71
 store property plant and equipment impairment included in administrative expenses 18 38
 sharebased payment chargecredit included in administrative expenses 01 08
 onerous lease provision 43 115
 loss on disposaltermination of property interests 138 226
 goodwill and intangible assets impairment see note 15 – 550
 impairment of investment in and receivables due from associate 111 28
 restructuring cost in associate – 04
 restructuring costs in finance costs 04 –
total	 exceptional	 items 357 1044
other nonunderlying items
 noncash foreign currency adjustments under ias 39 and ias 21
1
69 20
 amortisation of intangibles
1
10 20
 unwinding of discount on exceptional property provisions included in finance costs – 01
exceptional	 and	 other	 nonunderlying	 items 298 1045
1 included in nonunderlying cost of sales is a credit of £ 59 million 2012 £nil million
restructuring costs in cost of sales
during the 52 weeks ended 30 march 2013 further costs of £02 million have been incurred in respect of the rationalisation in the 
prior year of the group’s online warehousing operations 2012 £20 million was incurred in relation to the same rationalisation  
restructuring costs in administration expenses
during the 52 weeks ended 30 march 2013 a charge of £40 million 2012 £71 million was recognised relating to further head 
office restructuring the impact of the writeoff of redundant it system assets partly offset by a curtailment gain arising on the 
closure of the group’s defined pension scheme see note 29
store property plant and equipment impairment included in administration expenses
during the 52 weeks ended 30 march 2013 the group has made provision of £18 million 2012 £38 million 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 charge included in administrative expenses
during the 52 weeks ended 30 march 2013 a £01 million charge was recognised in respect of leavers from the executive 
incentive share schemes 2012 credit of £08 million
onerous lease provision 
a provision of £43 million has been made for onerous leases relating to vacant sublet and trading properties having taken 
into consideration the results for the year and the continued pressure on the uk store portfolio 2012 £115 million 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 18 has been used in calculating the provision being the riskfree rate
loss on disposaltermination of property interests
during the 52 weeks ended 30 march 2013 a net charge of £138 million 2012 £226 million has been recognised in loss from 
operations relating to losses on disposaltermination of property interests relating to the store reduction programme 
announced in april 2012  86	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
6	 exceptional	 and	 other	 nonunderlying	 items	 continued
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 no further impairment is required 2012 £550 million
impairment of investment in associate
mothercare owned approximately 23 in mothercare australia limited a listed company in australia which was treated as  
an associate in the consolidated accounts of mothercare plc following a significant and sustained deterioration of local 
trading conditions in australia the group made a provision of £106 million at the time of the interim statement covering  
the remaining value of its investment in and other receivables due from mothercare australia limited following unsuccessful 
negotiations with potential buyers the directors of mothercare australia limited placed the business into voluntary 
administration in january 2013 since then further costs of £05 million have been incurred in respect of storage additional 
freight and additional legal costs
7	 profitloss	 from	 retail	 operations
profitloss from retail operations has been arrived at after creditingcharging
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
net total foreign exchange gains 120 52
cost of inventories recognised as an expense 4587 4918
write downrelease of inventories to net realisable value 17 05
depreciation of property plant and equipment 158 162
amortisation of intangible assets – software 46 46
amortisation of intangible assets – other included in nonunderlying cost of sales 10 20
impairment of property plant and equipment 18 38
loss on disposal of property plant and equipment 04 07
net rent of properties 542	 654
amortisation of lease incentives 49 52
hire of plant and equipment 13 19
staff costs including directors
 wages and salaries including cash bonuses excluding sharebased payment charges 772 858
 social security costs 45 53
 pension costs see note 29 41 25
 sharebased payment chargescredit see note 28 09 02
exceptional costs included in cost of sales see note 6 02 20
exceptional costs included in administrative expenses see note 6 40 71 	 mothercare plc annual report and accounts 2013 87
financial statements
an analysis of the average monthly number of full and parttime employees throughout the group including executive 
directors is as follows
52	 weeks	
ended		
30	 march	
2013	
number
53 weeks 
ended  
31 march 
2012  
number
number of employees comprising
uk stores 5264 5890
head office 711 779
overseas 251 274
6226 6943
full time equivalents 3959 4350
details of directors’ emoluments share options and beneficial interests are provided within the remuneration report on  
pages 52 to 66
for the 52 weeks ended 30 march 2013 profit from retail operations is stated after a nonunderlying net credit of £69 million 
2012 £20 million credit to cost of sales as a result of noncash foreign currency adjustments under ias 39 and ias 21
the analysis of auditor’s remuneration is as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ 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
tax compliance services 01 –
other services – 02
total nonaudit fees 01 02
other services were £nil million 2012 £02 million includes 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 46  
in the corporate governance report 88	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
8	 net	 finance	 costs
52	 weeks	
ended		
30	 march	
2013	
£	 million
53 weeks 
ended  
31 march 
2012 
£ million
interest receivable 02 09
interest and bank fees on bank loans and overdrafts 39 13
unwinding of discounts on provisions – 01
net	 finance	 costs 37 05
9	 taxation
the chargecredit for taxation on loss for the period comprises
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
current tax
 current year 14 21
 adjustment in respect of prior periods 03 24
17 45
deferred tax see note 17
 current year 11 65
 change in tax rate in respect of prior periods – 05
 adjustment in respect of prior periods 01 04
12 66
chargecredit	 for	 taxation	 on	 loss	 for	 the	 period 05 111
uk corporation tax is calculated at 24 2012 26 of the estimated assessable loss for the period taxation for other 
jurisdictions is calculated at the rates prevailing in the respective jurisdictions 	 mothercare plc annual report and accounts 2013 89
financial statements
the chargecredit for the period can be reconciled to the loss for the period before taxation per the consolidated income 
statement as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
loss for the period before taxation 215 1029
loss for the period before taxation multiplied by the standard rate of corporation tax in the uk of 24 
2012 26 52 267
effects of
 expenses not deductible for tax purposes 51 154
 change in tax rate 01 02
 impact of overseas tax rates 05 02
 utilisation of tax losses not previously recognised against capital gains – 03
 adjustment in respect of prior periods 02 20
 impact of writeoff of prior year deferred tax asset 08 19
chargecredit	 for	 taxation	 on	 loss	 for	 the	 period 05 111
in addition to the amount charged to the income statement deferred tax relating to retirement benefit obligations amounting 
to £30 million has been credited directly to other comprehensive income 2012 £41 million
10	 dividends
52	 weeks	 ended		
30	 march	 2013
53 weeks ended  
31 march 2012
pence	 per	
share £	 million
pence per 
share £ million
amounts	 recognised	 as	 distributions	 to	 equity	 holders	 in	 the	 period
final dividend for the prior period 	 nil	 – 119p 101
interim dividend for the current period nil – 20p 18
– 119
the directors are not recommending the payment of a final dividend for the year 2012 £nil and no interim dividend was paid 
during the year 2012 20 pence per share 90	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
11	 earnings	 per	 share
52	 weeks	
ended		
30	 march	
2013		
million
53 weeks 
ended  
31 march 
2012  
million
weighted	 average	 number	 of	 shares	 in	 issue 885 872
dilution – option schemes for underlying results only 11 17
diluted	 weighted	 average	 number	 of	 shares	 in	 issue 896 889
£	 million £ million
loss	 for	 basic	 and	 diluted	 earnings	 per	 share 220 918
 exceptional and other nonunderlying items note 6 298 1045
 tax effect of above items 23 111
underlying	 earnings 55 16
pence pence
basic	 loss	 per	 share 249 1052
basic	 underlying	 earnings	 per	 share	 62 18
diluted	 loss	 per	 share 249 1052
diluted	 underlying	 earnings	 per	 share	 61 18
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
  	 mothercare plc annual report and accounts 2013 91
financial statements
13	 investments	 in	 joint	 ventures
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
investments at start of period 68 32
additions 18 45
share of loss 06 09
investments	 at	 end	 of	 period 80 68
summary aggregate financial results and position of joint ventures
current assets 225 149
noncurrent assets 72 48
total assets 297 197
current liabilities 133 82
noncurrent liabilities – –
total liabilities 133 82
total joint venture revenue 453 255
total loss for the period 20 31
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
during the year the group made additional investments in mothercaregoodbaby china retail limited of £11 million  
rhea retail private limited £05 million and juno retail private limited £02 million 92	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
14	 investments	 in	 associate
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
investment at start of period 32 72
additions – 15
share of loss 08 27
impairment 24 28
investment	 at	 end	 of	 period – 32
summary financial results and position of associates
current assets – 179
noncurrent assets – 156
total assets – 335
current liabilities – 177
noncurrent liabilities – 34
total liabilities – 211
total revenue for the period 148 511
total loss for the period 27 113
details of the associate are as follows
place of 
incorporation
proportion of 
ownership 
interest  

proportion of 
voting power 
held  

mothercare australia limited australia 230 230
mothercare owned approximately 23 in mothercare australia limited a listed company in australia which was treated  
as an associate in the consolidated accounts of mothercare plc following a significant and sustained deterioration of local 
trading conditions in australia the group made a provision of £106 million at the time of the interim statement covering  
the remaining value of its investment in and other receivables due from mothercare australia limited following unsuccessful 
negotiations with potential buyers the directors of mothercare australia limited placed the business into voluntary 
administration in january 2013
as at 30 march 2013 mothercare australia limited was being managed by the administrators and the company does not  
have access to the financial information of mothercare australia limited and therefore the summary financial position has  
not been provided 	 mothercare plc annual report and accounts 2013 93
financial statements
15	 goodwill	 and	 intangible	 assets	
intangible assets
goodwill  
£ million
trade name  
£ million
customer 
relationships 
£ million
software  
£ million
software 
under 
development 
£ million
total  
£ million
cost
as at 27 march 2011 686 286 57 264 – 607
additions – – – 32 – 32
exchange differences – 02 – – – 02
as at 1 april 2012 686 288 57 296 – 641
transfers from property plant and equipment – – – 41 – 41
additions – – – 28 02 30
disposals – – – 101 – 101
as	 at	 30	 march	 2013 686 288 57 264 02 611
amortisation and impairment losses
as at 27 march 2011 – 50 31 141 – 222
impairment losses 418 120 12 – – 132
amortisation – 13 07 46 – 66
as at 1 april 2012 418 183 50 187 – 420
impairment losses – 01 – – – 01
amortisation – 09 01 46 – 56
disposals – – – 63 – 63
as	 at	 30	 march	 2013 418 193 51 170 – 414
net book value
as at 26 march 2011 686 236 26 123 – 385
as at 31 march 2012 268 105 07 109 – 221
as	 at	 30	 march	 2013 268 95 06 94 02 197
goodwill trade name and customer relationships relate to the acquisition of 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 2012 nil and international £268 million  
2012 £268 million these segments 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 88 2012 983 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 three year period cash flows beyond the three year period assume a 2 growth 
rate 2012 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 94	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
15	 goodwill	 and	 intangible	 assets	 continued
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 and intangible assets would be 
reduced to a lower amount 
software
software additions include £09 million 2012 £15 million of internally generated intangible assets
at 30 march 2013 the group had entered into contractual commitments for the acquisition of software amounting to £04 million 
2012 £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 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 1 april 2012 102 1217 2097 108 3524
transfers – – 68 68 –
transfers to software – – – 41 41
additions – 47 35 13 95
disposals 23 259 1131 – 1413
as	 at	 30	 march	 2013 79 1005 1069 12 2165
accumulated depreciation and impairment
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 1 april 2012 26 938 1697 – 2661
charge for period – 43 115 – 158
impairment – 21 19 – 40
disposals 01 258 1131 – 1390
as	 at	 30	 march	 2013 25 744 700 – 1469
net book value
as at 26 march 2011 94 313 480 24 911
as at 31 march 2012 76 279 400 108 863
as	 at	 30	 march	 2013 54 261 369 12 696
the net book value of leasehold properties includes £256 million 2012 £275 million in respect of short leasehold properties  
£18 million of the impairment on property plant and equipment has been included within nonunderlying administration 
expenses and the remaining £22 million is included within loss on disposaltermination of property interests 	 mothercare plc annual report and accounts 2013 95
financial statements
at 31 march 2013 the group had entered into contractual commitments for the acquisition of property plant and equipment 
amounting to £17 million 2012 £36 million
freehold land and buildings with a carrying amount of £54 million 2012 £76 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
shortterm 
timing 
differences  
£ million
retirement 
benefit 
obligations  
£ million
share
based 
payments  
£ million
intangible 
assets  
£ million
losses  
£ million
total  
£ million
at 27 march 2011 21 34 97 19 60 – 69
creditcharge to income 05 45 12 19 40 07 66
credit to other comprehensive income – – 41 – – – 41
at 1 april 2012 16 79 126 – 20 07 176
creditcharge to income 24 04 14 02 02 02 12
transfer to current tax – – – – – 01 01
credit to other comprehensive income – – 30 – – – 30
at	 30	 march	 2013 08 75 142 02 18 08 217
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
30	 march	
2013		
£	 million
31 march 
2012  
£ million
deferred tax assets 271 234
deferred tax liabilities 54 58
217 176
at the balance sheet date the group has unused tax losses of £36 million 2012 £28 million available for offset against future 
profits a deferred tax asset has been recognised of £08 million in respect of £36 million 2012 £07 million in respect of  
£28 million of such losses  
at the reporting date deferred tax liabilities of £02 million 2012 £08 million relating to withholding taxes have not been 
provided in respect of the aggregate amount of unremitted earnings of £110 million 2012 £59 million in respect of subsidiaries 
and joint ventures no liability has been recognised because the group being in a position to control the timing of the 
distribution of intragroup dividends has no intention to distribute intragroup 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 30 march 2013 the group has unused capital losses of £6360 million 2012 £6625 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 96	 mothercare plc annual report and accounts 2013
notes	 to	 the	 consolidated	 financial	 statements
continued
18	 inventories
30	 march	
2013		
£	 million
31 march 
2012  
£ million
gross value 1172 1040
allowance against carrying value of inventories 66 49
finished	 goods	 and	 goods	 for	 resale 1106 991
the amount of writedown of inventories to net realisable value recognised within net income in the period is £17 million  
2012 net income of £05 million
19	 trade	 and	 other	 receivables
30	 march	
2013		
£	 million
31 march 
2012  
£ million
trade receivables gross 389 488
allowance for doubtful debts 18 16
trade receivables net 371 472
prepayments and accrued income 174 190
other receivables 36 71
trade	 and	 other	 receivables	 due	 within	 one	 year 581 733
30	 march	
2013		
£	 million
31 march 
2012  
£ million
trade	 and	 other	 receivables	 due	 after	 more	 than	 one	 year – 14
the following summarises the movement in the allowance for doubtful debts
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012 
£ million
balance at beginning of period 16 14
charged in the period 02 02
balance	 at	 end	 of	 period 18 16
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
with the exception of australia 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 	 mothercare plc annual report and accounts 2013 97
financial statements
the ageing of the group’s current trade receivables is as follows
30	 march	
2013		
£	 million
31 march 
2012  
£ million
trade receivables gross 389 502
allowance for doubtful debts 18 16
trade receivables net 371 486
of which trade receivables gross comprise
amounts not past due on the reporting date 352 441
amounts past due 
 less than one month 20 13
 between one and three months 07 22
 between three and six months 06 12
 greater than six months 04 14
allowance for doubtful debts
amounts not past due on the reporting date 05 03
 less than one month 02 –
 between one and three months – –
 between three and six months 05 03
 greater than six months 06 10
trade	 accounts	 receivable	 net	 carrying	 amount 371 486
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 shortterm bank deposits with an original maturity of three 
months or less the carrying amount of these assets approximates their fair value 98	 mothercare plc annual report and accounts 2013
21	 borrowing	 facilities
the group had outstanding borrowings at 30 march 2013 of £500 million 2012 £219 million 
committed	 borrowing	 facilities	
the group 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 comprise a £50 million term loan and a £40 million revolving credit facility of which £10 million  
is available to be utilised in the form of an overdraft at the year end £50 million had been drawn down against the facility as a 
term loan the term loan carries a fixed interest rate at 40 per annum over libor the group hedges all of this floating interest 
rate risk using an interest rate swap exchanging variable rate interest for fixed rate interest
30	 march		
2013	
£	 million
31 march  
2012 
£ million
borrowings
 unsecured borrowings at amortised cost
 bank overdrafts net of cash in transit – 19
 secured borrowings at amortised cost
 committed facility 500 200
 amount due for settlement within one year 35 19
 amount due for settlement after one year 465 200
total borrowings 500 219
weighted average interest rate paid  468 224
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 group manages its capital to ensure that entities in the group will be able to continue as a going concern 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
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 and through the natural offset of 
sales and purchases denominated in foreign currency
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
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 99
financial statements
international sales represent 33 2012 31 of group sales of these sales 35 2012 23 were invoiced in foreign currency 
the group purchases product in foreign currencies representing approximately 51 2012 46 of purchases 
the following table provides an overview of the notional value of derivative financial instruments outstanding at year end by 
maturity profile
30	 march	
2013	
£	 million
31 march 
2012 
£ million
foreign currency forward exchange contracts
not later than one year 1185 1107
after one year but not more than five years 61 95
1246 1202
the carrying amount of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting 
date is as follows
liabilities assets
30	 march	
2013	
£	 million
 31 march 
2012 
£ million
30	 march	
2013	
£	 million
 31 march 
2012 
£ million
us dollar 40 50 62 144
euro – 02 04 24
hong kong dollar 37 20 07 04
indian rupee 10 02 19 12
chinese renminbi 03 06 02 02
bangladeshi taka – – 02 –
australian dollar – – 03 –
singapore dollar – – 01 01
90 80 100 187
the total amounts of outstanding forward foreign currency contracts to which the group has committed is as follows
30	 march	
2013	
£	 million
31 march 
2012 
£ million
at notional value 1246 1202
at fair value – less than one year 69 11
at fair value – more than one year 04 01
total fair value 73 12
at 30 march 2013 the average hedged rate for outstanding forward foreign currency contracts is 161 for us dollars there  
were no forward contracts in place for any other currencies at the year end these contracts mature between april 2013 and  
april 2014 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 £nil million 2012 £01 million below notional value 100	mothercare plc annual report and accounts 2013
22	 risks	 arising	 from	 financial	 instruments	 continued
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
30	 march		
2013	
£	 million
31 march  
2012 
£ million
us dollar impact 69 99
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 £176 million and derivative financial assets
the average credit period on trade receivables was 19 days 2012 21 days based on total group revenue the average credit 
period on international trade receivables based on international revenue was 57 days 2012 67 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 and monitoring covenant compliance and headroom 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 term loan and the revolving credit facility the group’s 
sensitivity to interest rates has decreased during the current period mainly due to the use of interest rates swaps to swap 
floating rate debt to fixed rate debt under interest rate swaps the group agrees to exchange the difference between fixed 
and floating rate interest amounts calculated on agreed notional principal amounts the fair value of interest rate swaps at 
the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk 
inherent in the contact and is disclosed below the average interest rate is based on the outstanding balances at the end of 
the financial year
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 101
financial statements
the total amounts of term borrowings on which outstanding interest rate swap contracts have been taken out and to which the 
group is committed is as follows
30	 march		
2013	
£	 million
31 march  
2012 
£ million
notional value of term borrowings 500 –
interest rate swaps at fair value 03 –
average contract fixed 
interest rate
notional  
principal value fair value
30	 march	
2013	

31 march 
2012 

30	 march	
2013	
£	 million
31 march 
2012 
£ million
30	 march	
2013	
£	 million
31 march 
2012 
£ million
tranche 1 1131 – 200 – 02 –
tranche 2 1040 – 200 – 01 –
tranche 3 069 – 100 – – –
500 – 03 –
the interest rate swaps settle on a quarterly basis the floating rate on the interest rate swaps is three months libor the group 
settles the difference between the fixed and floating rate on a net basis 
all interest rate swap contracts exchanging floating rate interest for fixed rate interest are designated and effective as cash 
flow hedges to reduce the group’s cash flow exposure resulting from variable interest rates on the term loan during the period 
the hedge was considered 100 effective in hedging the fair value exposure to interest rate movements
23	 trade	 and	 other	 payables
30	 march	
2013	
£	 million
31 march 
2012 
£ million
current liabilities
trade payables 703 710
payroll and other taxes including social security 18 23
accruals and deferred income 434 437
vat payable 28 20
lease incentives 50 48
1233 1238
noncurrent liabilities
lease incentives 281 290
trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs the average 
credit period taken for trade purchases is 57 days 2012 53 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 102	 mothercare plc annual report and accounts 2013
24	 provisions
30	 march		
2013	
£	 million
31 march  
2012 
£ million
current liabilities
property provisions 205 241
other provisions 	 09	 04
short	 term	 provisions 214 245
noncurrent liabilities
property provisions 154 120
other provisions 10 04
long	 term	 provisions 164 124
property provisions 359 361
other provisions 19 08
total	 provisions 378 369
the movement on total provisions is as follows
property  
provisions  
£ million
 other  
provisions  
£ million
total  
provisions  
£ million
balance at 1 april 2012 361 08 369
utilised in period 169 02 171
charged in period 208 13 221
released in period 41 – 41
balance	 at	 30	 march	 2013 359 19 378
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 two financial years
other provisions represent provisions for uninsured losses £15 million hence the timing of the utilisation of these provisions is uncertain 
and provisions for an onerous support contract for a decommissioned it project £04 million which is expected to be utilised over the 
next four financial years
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 103
financial statements
25	 share	 capital
52	 weeks	
ended		
30	 march	
2013	
number	 of	
shares
53 weeks 
ended  
31 march 
2012 
number of 
shares
52	 weeks	
ended		
30	 march	
2013	
£	 million
53 weeks 
ended  
31 march 
2012 
£ million
issued and fully paid
ordinary shares of 50 pence each
balance at beginning of period 88636762 88540219 443 443
issued under the mothercare sharesave scheme 16655 96543 – –
balance	 at	 end	 of	 period 88653417 88636762 443 443
further details of employee and executive share schemes are given in note 28
the own shares reserve of £06 million 2012 £21 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 108497 2012 443545 with a market value at 30 march 2013 of £03 million 2012 £07 million 
26	 reconciliation	 of	 cash	 flow	 from	 operating	 activities
52	 weeks	
ended		
30	 march	
2013	
£	 million
53 weeks 
ended  
31 march 
2012
 restated
£ million
profitloss	 from	 retail	 operations 128 69
adjustments for
depreciation of property plant and equipment 158	 162
amortisation of intangible assets 56	 											 66
impairment of property plant and equipment and intangible assets 19 38
losses on disposal of property plant and equipment and intangible assets 42 07
profit on nonunderlying noncash foreign currency adjustments 69 20
equitysettled sharebased payments 08 05
movement in provisions 154 80
cash payments for nonunderlying property disposals and other exceptional items – 07
amortisation of lease incentives 49 52
lease incentives received 35 35
payments to retirement benefit schemes 72 80
charge to profit from operations in respect of retirement benefit schemes 01 19
operating	 cash	 flow	 before	 movement	 in	 working	 capital 103 24
increasedecrease in inventories 117 185
decreaseincrease in receivables 85 98
increasedecrease in payables 22 96
cash	 generated	 from	 operations 93 15
income	 taxes	 paid	 received			 25 41
net	 cash	 inflow	 from	 operating	 activities 68 56
 the cash flow statement for the 53 weeks ended 31 march 2012 has been restated to give a better understanding of the movement in provisions and their impact on 
exceptional items 104	 mothercare plc annual report and accounts 2013
26	 reconciliation	 of	 cash	 flow	 from	 operating	 activities	 continued
1 april  
2012  
£ million
cashflow  
£ million
foreign 
exchange  
£ million
	 30	 march	
2013		
£	 million
cash and cash equivalents 18 149 09 176
net overdrafts 19 19 – –
cash	 and	 cash	 equivalentsdebt 01 168 09 176
27	 operating	 lease	 arrangements
the group as lessee
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
amounts recognised in cost of sales for the period
minimum lease payments paid 553 674
contingent rents 04 04
minimum sublease payments received 02 05
net	 rent	 expense	 for	 the	 period 555 673
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 noncancellable 
operating leases which fall due as follows
30	 march		
2013		
£	 million
31 march  
2012  
£ million
not later than one year 592 652
after one year but not more than five years 1778 1956
after five years 1492 1857
total	 future	 minimum	 lease	 payments 3862 4465
at the balance sheet date the group had contracted with subtenants for the following future minimum lease payments
30	 march		
2013		
£	 million
31 march  
2012  
£ million
not later than one year 14 14
after one year but not more than five years 27 36
after five years 14 18
total	 future	 minimum	 lease	 payments 55 68
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 105
financial statements
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 equitysettled and at year end for those due to be cashsettled the estimated number of shares that  
will vest and the vesting period of each award
the underlying charge for sharebased payments is £09 million 2012 £06 million including national insurance of  
which £08 million 2012 £05 million was equitysettled the exceptional charge for sharebased payments of £01 million  
2012 £08 million credit arises in respect of leavers from the executive incentive share schemes at 30 march 2013 the  
liability in the balance sheet is £02 million related to the expected national insurance charge when sharebased payment 
schemes vest 2012 £01 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
g long term incentive plan 
details of the share schemes that the group operates are provided in the directors’ remuneration report on pages 52 to 66
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
52	 weeks	
ended		
30	 march	
2013	
number	 of	
shares
53 weeks 
ended  
31 march 
2012 
number of 
shares
balance at beginning of period 326p 30000 30000
lapsed during the period 335p 7500 –
balance	 at	 end	 of	 period 324p 22500 30000
the options outstanding at 30 march 2013 had a weighted average remaining contractual life of 14 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 days prior to the offer date less 20
the share options can be applied for during a twoweek period in the year of invitation and savings are placed in an 
employee save as you earn bank account held on trust for a threeyear period 106	 mothercare plc annual report and accounts 2013
28	 sharebased	 payments	 continued
the number of shares outstanding under the save as you earn schemes is as follows
weighted	
average	
exercise	
price
52	 weeks	
ended		
30	 march	
2013	
number	 of	
shares
53 weeks 
ended  
31 march 
2012 
number of 
shares
balance at beginning of period 139p 3186791 768613
granted during period 242p 299407 2752739
forfeited during period 126p 234320 34216
exercised during period 123p 16655 96543
cancelled in the period 130p 197200 161811
expired during period 225p 444211 41991
balance	 at	 end	 of	 period 138p 2593812 3186791
the shares outstanding at 30 march 2013 had a weighted average remaining contractual life of 25 years and ranged in price 
from 115p to 497p
the fair value of save as you earn share options is calculated based on a blackscholes model with the following assumptions
grant date
december 
2012
december 
2011
december 
2009 
number of options granted 299407 2752739 230951
share price at grant date 340p 159p 676p
exercise price 242p 115p 497p
expected volatility  500 431 300
riskfree rate 046 058 300
expected dividend yield nil 300 300
time to expiry 325 years 325 years 325 years
fair value of option 1585p 564p 1729p
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 2010 and 2011 schemes  
are a wholly equitysettled 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
market capitalisation at award date £4490m £5627m
expected mothercare share price volatility 300 300
expected index volatility 300 300
riskfree rate 238 268
correlation between mothercare and the index 500 500
time to expiry 3 years 3 years
fair value at grant date £18m £30m
fair value at 30 march 2013 £01m nil 
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 107
financial statements
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
52	 weeks	
ended		
30	 march	
2013	
number	 of	
shares
53 weeks 
ended  
31 march 
2012 
number of 
shares
balance at beginning of period 1051318 1332889
awarded during period – 994807
lapsed during period 376361 1276378
balance	 at	 end	 of	 period 674957 1051318
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 no cumulative charge 
has been recognised
grant date
november 
2011
may  
2011
november 
2010
june  
2010
number of shares awarded 376154 618653 62992 578863
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
52	 weeks	
ended		
30	 march	
2013	
number	 of	
shares
53 weeks 
ended  
31 march 
2012 
number of 
shares
balance at beginning of period 109709 167290
lapsed during period 18577 57581
vested during period 53481 –
balance	 at	 end	 of	 period 37651 109709
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 1 year 2 years 108	 mothercare plc annual report and accounts 2013
28	 sharebased	 payments	 continued
f share matching scheme
during the year ended 31 march 2012 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
december 
2011
december 
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 2 years 2 years
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
g long term incentive plan 2012
in march 2013 the group announced the first awards under the mothercare plc 2012 long term incentive plan this scheme 
provides the opportunity for executive directors and senior employees to earn awards which will vest in whole or part subject 
to the achievement of stretching corporate performance conditions supporting the transformation and growth plan the 
performance conditions relate to the group profit before tax and share price performance in addition the uk business  
must break even in the financial year ending 2015 or 2016 the performance period is from 1 april 2012 to 28 march 2015 and  
the performance conditions will be tested in relation to the financial year 2015 results to determine what percentage of the 
shares vest no consideration is payable for the grant of these awards  
grant date
march  
2013
march  
2013
pbt awards
share price 
awards
number of shares awarded 1152153 1152154
share price at date of grant 289p 289p
exercise price nil nil
expected volatility 578 578
riskfree rate 028 028
expected dividend yield nil nil
fair value of shares granted 289p 130p
average time to expiry 25 years 25 years
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 109
financial statements
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 the income statement of £05 million 2012 £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
on 1 october 2012 mothercare began consultation with members of the mothercare staff pension scheme and the mothercare 
executive pension schemes to
 a close the mothercare staff  executive pension schemes to future accrual of benefits from 30 march 2013
 a break any final salary link so the pension will be based on pensionable salary staff scheme or final pensionable salary 
executive scheme as defined in the scheme rules as at 30 march 2013
 a introduce a replacement pension scheme with a different contribution structure
this consultation ended on 18 january 2013 having given all representations made due consideration the company felt it had 
no option but to make the changes above in order to best protect the benefits that members have already accumulated in 
the schemes therefore the mothercare staff pension scheme and the mothercare executive pension schemes have been 
closed with effect from 30 march 2013 
the most recent full actuarial valuations as at march 2011 were updated as at 30 march 2013 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 ending 30 march 2013 disclosed a net defined pension deficit of £616 million  
2012 £527 million
the major assumptions used in the updated actuarial valuations were
30	 march	
2013
31 march 
2012
discount rate 46 49
inflation rate – rpi 34 33
inflation rate – cpi 24 23
future pension increases 33 32
expected rate of salary increases note 1 na 33
expected return on schemes’ assets note 2 na 60
analysed between
 equities na 73
 bonds na 47
 property na 53
 alternative assets na 63
 other assets na 47
1 following the closure of the scheme to future benefit accrual a salary increase assumption is not required
2 as a result of changes to ias 19 which will be effective for the year ended march 2014 an expected return assumption at 30 march 2013 is not applicable as this will 
not be used to measure the return on assets going forward 110	 mothercare plc annual report and accounts 2013
29	 retirement	 benefit	 schemes	 continued
the overall expected rate of return on assets above is calculated as the weighted average of the expected returns of each 
class 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
the mortality assumptions used are the saps tables published by the cmi allowing for future improvements in line with the 
cmi 2010 projections with a long term annual rate of improvement of 1
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 –70 
rate of price inflation – 01 – 62
life expectancy  1 year  93
amounts expensed in the income statement in respect of the defined benefit schemes are as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012 
 £ million
current service cost 24 23
interest cost 132 135
expected return on schemes’ assets 122 137
gains on curtailment 33 02
01 19
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 £122 million 2012 a gain of £137 million with a resulting actuarial gain  
of £59 million 2012 loss of £85 million
there was an actuarial loss of £219 million 2012 a loss of £127 million relating to the defined benefit obligations 
the amount recognised in other comprehensive income for the period ended 30 march 2013 is a loss of £160 million 2012 a loss 
of £212 million
the total cumulative actuarial loss recognised in other comprehensive income is £693 million 2012 £533 million
the amount included in the balance sheet arising from the group’s obligations in respect of its defined benefit retirement 
schemes is as follows
30	 march	
2013		
£	 million
31 march 
2012 
£ million
present value of defined benefit obligations 2964 2700
fair value of schemes’ assets 2348 2173
liability	 recognised	 in	 balance	 sheet 616 527
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 111
financial statements
movements in the present value of defined benefit obligations were as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
at beginning of period 2700 2460
service cost 24 23
gains on curtailments 33 02
interest cost 132 135
contribution from scheme members 12 15
actuarial losses 219 127
benefits paid 90 58
at	 end	 of	 period 2964 2700
movements in the fair value of schemes’ assets were as follows
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
at beginning of period 2173 2084
expected return on schemes’ assets 122 137
actuarial gainslosses 59 85
company contributions 72 80
members’ contributions 12 15
benefits paid 90 58
at	 end	 of	 period 2348 2173
the analysis of the fair values of the schemes’ assets and the expected rates of return at each balance sheet date were 
30	 march	
2013		
per	 cent
30	 march	
2013		
£	 million
31 march 
2012  
per cent
31 march 
2012  
£ million
equities na 847 73 846
bonds na 765 47 631
property na 211 53 245
alternative assets na 472 63 337
other assets na 53 47 114
2348 2173
as a result of changes to ias 19 which will be effective for the year ending march 2014 an expected return assumption at  
30 march 2013 is not required 112	 mothercare plc annual report and accounts 2013
29	 retirement	 benefit	 schemes	 continued
the history of experience adjustments is as follows
52	 weeks	
ended		
30	 march	
2013
53 weeks 
ended  
31 march 
2012
52 weeks 
ended  
26 march 
2011
52 weeks 
ended  
27 march 
2010
52 weeks 
ended  
28 march 
2009
present value of defined benefit obligations 	 £2964m £2700m £2460m £2521m £1756m
fair value of schemes’ assets £2348m £2173m £2084m £1970m £1502m
deficit in the schemes £616m £527m £376m £551m £254m
experience adjustments on schemes’ liabilities £219m £127m £190m £660m £19m
percentage of schemes’ liabilities 74 47 77 262 11
experience adjustments on schemes’ assets £59m £85m £25m £339m £449m
percentage of schemes’ assets 25 39 12 172 299
the estimated amount of cash contributions expected to be paid to the schemes during the 52 weeks ending 29 march 2014 is 
£62 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
52	 weeks	 ended	 30	 march	 2013
sales	 of	
goods	
£	 million
purchase	 of	
goods	
£	 million
amounts	
owed	 by	
related	
parties	
£	 million
amounts	
owed	 to	
related	
parties	
£	 million
joint	 ventures	 and	 associates 215 – 58 –
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 –
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 at the year 
end a provision of £08 million 2012 £08 million has been made for doubtful debts in respect of the amounts owed by related 
parties an amount of £82 million 2012 £nil has been written off in respect of amounts owed by related parties see note 14 
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 52 to 66
notes	 to	 the	 consolidated	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 113
financial statements
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
shortterm employee benefits 31 36
post employment benefits 03 05
compensation for loss of office 07 22
sharebased payments 04 05
45 68
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
as part of the transformation and growth plan an indepth organisational review was conducted to streamline the group’s 
structure and processes  as a result of the potential restructuring a number of employees in the head office in the uk and the 
overseas sourcing offices are in consultation there are likely to be additional exceptional costs of approximately £5 million in 
respect of the implementation of this review and these will be charged in the next financial year
there were no other events after the balance sheet date 114	 mothercare plc annual report and accounts 2013
company	 financial	 statements
contents
115 independent auditor’s report on the company 
financial statements
116 company balance sheet
117 notes to the company financial statements 	 mothercare plc annual report and accounts 2013 115
financial statements
we have audited the parent company financial 
statements of mothercare plc for the 52 weeks ended 
30 march 2013 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
 a give a true and fair view of the state of the 
company’s affairs as at 30 march 2013
 a have been properly prepared in accordance with 
united kingdom generally accepted accounting 
practice and
 a 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
 a the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance 
with the companies act 2006 and
 a 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
 a 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
 a 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
 a certain disclosures of directors’ remuneration 
specified by law are not made or
 a 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 52 weeks ended 
30 march 2013
ian	 waller	 senior	 statutory	 auditor
for and on behalf of deloitte llp 
chartered accountants and statutory auditor 
london uk 
22 may 2013
independent	 auditor’s	 report	 on	 the	 company	 	
financial	 statements 116	 mothercare plc annual report and accounts 2013
note
30	 march	
2013	
£	 million
31 march 
2012 
£ million
fixed assets
investments in subsidiary undertakings 3 1711 2149
1711 2149
current assets
debtors 4 801 504
cash at bank and in hand and time deposits 580 03
1381 507
creditors – amounts falling due within one year 5 1451 741
net	 current	 liabilities 70 234
total	 assets	 less	 current	 liabilities 1641 1915
creditors – amounts falling due after more than one year 5 465 200
net	 assets 1176 1715
capital and reserves attributable to equity interests
called up share capital 6 443 443
share premium 7 62 62
other reserve 7 62 508
own shares 7 06 21
hedging reserve 7 03 –
profit and loss account 7 618 723
equity	 shareholders’	 funds 8 1176 1715
approved by the board on 22 may 2013 and signed on its behalf by
 
simon	 calver
chief executive officer
matt	 smith
chief financial officer
company registration number 1950509
company	 balance	 sheet
as	 at	 30	 march	 2013 	 mothercare plc annual report and accounts 2013 117
financial statements
1	 significant	 accounting	 policies
basis of presentation
the company’s accounting period covers the 52 weeks ended 30 march 2013 the comparative period covered the 53 weeks 
ended 31 march 2012
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 52 weeks ended 30 march 2013 and the preceding 53 weeks ended 31 march 2012 
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 73
financial instruments
financial assets and liabilities are recognised on the company’s balance sheet when the company becomes a party to the 
contractual provisions of the instrument
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 loss for the 52 weeks ended 30 march 2013 was £544 million 2012 profit of £575 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
30	 march	
2013		
£	 million
31 march 
2012  
£ million
cost of investments less amounts written off £1530 million 2012 £1530 million 1502 1494
loans to subsidiary undertakings 655 655
2157 2149
notes	 to	 the	 company	 financial	 statements 118	 mothercare plc annual report and accounts 2013
3	 investments	 in	 subsidiary	 undertakings	 continued
£ million
cost
at 1 april 2012 2149
sharebased payments to employees of subsidiaries 08
at 30 march 2013 2157
impairment
at 1 april 2012 –
charged during the period 446
at 30 march 2013 446
net	 book	 value 1711
following an impairment review of the carrying value of investments an impairment charge of £446 million has been 
recognised in relation to subsidiary undertakings this charge has subsequently been transferred from the profit and loss 
account to the other reserve
4	 debtors
30	 march	
2013		
£	 million
31 march 
2012  
£ million
amounts due from subsidiary undertakings 792 498
other debtors 09 06
801 504
5	 creditors	
creditors amounts due within one year
30	 march	
2013		
£	 million
31 march 
2012  
£ million
amounts due to subsidiary undertakings 1407 569
bank loans and overdrafts 35 158
derivative financial instruments 03 –
accruals and other creditors 06 14
1451 741
creditors amounts due after more than one year
30	 march	
2013		
£	 million
31 march 
2012  
£ million
bank loans and overdrafts 465 200
465 200
notes	 to	 the	 company	 financial	 statements
continued 	 mothercare plc annual report and accounts 2013 119
financial statements
6	 called	 up	 share	 capital
number of 
shares £ million
issued and fully paid
ordinary shares of 50p each
balance at 1 april 2012 88636762 443
issued under the mothercare sharesave scheme 16655 –
balance	 at	 30	 march	 2013 88653417 443
further details of employee and executive share schemes are provided in note 28 to the consolidated financial statements
7	 reserves
share 
premium  
£ million
other 
reserve  
£ million
own  
shares  
£ million
hedging 
reserve 
£ million
profit and 
loss account 
£ million
balance at 1 april 2012 62 508 21 – 723
transfer of reserves – 446 – – 446
cash flow hedges losses arising in the period – – – 03 –
fair value of sharebased payments – – – – 08
shares transferred to employees on vesting – – 15 – 15
loss for the financial year – – – – 544
balance	 at	 30	 march	 2013 62 62 06 03 618
the own shares reserve of £06 million 2012 £21 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 108497 2012 443545 with a market value at 30 march 2013 of  
£03 million 2012 £07 million
included in the loss for the 52 weeks ended 30 march 2013 was an impairment charge against investments in subsidiary 
undertakings of £446 million and a provision against amounts due from subsidiary undertakings of £65 million
8	 reconciliation	 of	 equity	 shareholders’	 funds
52	 weeks	
ended		
30	 march	
2013		
£	 million
53 weeks 
ended  
31 march 
2012  
£ million
equity shareholders’ funds brought forward 1715 1251
cash flow hedges losses arising in the period 03 –
dividends – 119
shares issued – 03
fair value of sharebased payments 08 05
retained lossprofit for the period 544 575
equity	 shareholders’	 funds	 carried	 forward 1176 1715
  120	 mothercare plc annual report and accounts 2013
2013		
£	 million
2012  
£ million
2011  
£ million
2010  
£ million
2009  
restated
4
  
£ million
summary	 of	 consolidated	 income	 statements
revenue 7494 8127 7936 7664 7236
underlying
1
 profit from operations before interest 116 20 289 376 370
nonunderlying
2
 items 294 1044 195 44 61
interest net 37 05 06 07 11
lossprofit before taxation 215 1029 88 325 420
taxation 05 111 23 89 118
lossprofit for the financial year 220 918 65 236 302
basic lossearnings per share 249p 1052p 76p 280p 362p
basic underlying earnings per share 62p 18p 247p 315p 320p
summary	 of	 consolidated	 balance	 sheets
deferred tax asset 217 176 69 79 08
other noncurrent assets 1241 1452 2086 2005 1976
net current assets 456 240 544 706 579
retirement benefit obligations 616 527 376 551 254
other noncurrent liabilities 910 614 395 355 334
total net assets 388 727 1928 1884 1975
other	 key	 statistics
share price at year end 3150p 1660p 4740p 6010p 3865p
net debtcash to equity 835 276 79 204 125
capital expenditure 162 249 218 242 228
depreciation and amortisation 214 228 230 205 220
rents 542 654 682 691 710
number of uk stores 255 311 373 387 405
number of international stores
3
1069 1028 894 728 609
uk selling space 000’s sq ft 1805 1946 2017 2008 2007
international selling space 000’s sq ft
3
2347 2283 1845 1538 1294
average number of employees 6226 6943 7440 7452 7715
average number of full time equivalents 3959 4350 4650 4486 4653
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
3 international stores are owned by franchise partners joint ventures and associates
4 restated for amendments to ias 38
fiveyear	 record
unaudited 	 mothercare plc annual report and accounts 2013 121
financial statements
shareholder	 analysis
a summary of holdings as at 28 march 2013  
is as follows
mothercare ordinary shares
number of 
shares  
million
number of 
shareholders
banks insurance 
companies and  
pension funds 63530 5
nominee companies 74727344 591
other corporate holders 10007867 104
individuals 3854676 22754
88653417 23454
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
share	 price	 data
2013 2012
share price at 28 march 2013  
30 march 2012 31500p 16600p
market capitalisation £2793m £1471m
share price movement  
during the year
 high 36200p 47720p
 low 15200p 12730p
all share prices are quoted at the midmarket closing 
price for capital gains tax purposes
 a 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
 a 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
2013
annual general meeting 18 july
announcement of interim results 21 november
2014
preliminary announcement of results  
for the 52 weeks ending 29 march 2014 end may
issue of report and accounts midjune
annual general meeting midjuly
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 plus network extras 
overseas 440121 415 7042 
wwwequiniticom
shareholder	 information 122	 mothercare plc annual report and accounts 2013
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 plus network extras lines are open 
830 am to 530 pm monday to friday 
stockbrokers
the company’s stockbrokers are
jpmorgan cazenove  co 
25 bank street 
canary wharf 
london e14 5jp 
telephone 020 7742 4000
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
shareholder	 information
continued 	 mothercare plc annual report and accounts 2013 123
notes
  124	 mothercare plc annual report and accounts 2013
notes
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wwwmerchantcantoscom
printed by park communications on fsc
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park is emas certified its environmental management system 
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containing 50 recycled fibre 25 post consumer and 25 
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ecf process mothercare plc
cherry tree road
watford
hertfordshire
wd24 6sh
t 01923 241000
f 01923 206376
wwwmothercareplccom
registered in england number 1950509
mothercare plc annual report and accounts 2013


Summary:
 16	 mothercare plc annual report and accounts 2013 16 16 mothercare plc annual report and accounts 2013 mothercare plc annual report and accounts 2013
“	 we	have	improved	value	choice	service	
and	delivery	for	our	customers	both	in	
store	and	online	and	these	are	themes	
that	we	will	continue	to	build	on	in	the	
years	ahead”
chief	executive’s	
statement
overview
one year into our threeyear 
transformation and growth plan we 
have made good progress but this is 
only the start of what we can achieve 
in our threeyear plan we outlined four 
things we needed to do
1	operate	a	lean	retail	structure
2	return	the	uk	to	profi 	tability
3	drive	international	growth	and
4	build	a	multichannel	business
i am pleased to say we have made 
progress against all of these 
we have improved value choice service 
and delivery for our customers both in 
store and online and these are themes 
that we will continue to build on in the 
years ahead most importantly i am 
pleased to say that we now have a full 
executive team that will lead mothercare 
on the journey we started a year ago 
the team brings together expertise in 
product development merchandising 
marketing and retail management both 
in the uk and internationally all of 
which is underpinned by a strong 
fi nance and people capability
this executive team structure now 
refl ects the global nature of our business 
our operating model needs to ensure 
we develop the right products for all our 
customers at the right price and in the 
right quantities every transaction with 
each customer in all of our markets 
needs to help them on their special 
journey of parenthood we now operate 
from 41 million sq ft globally and have 
1324 stores across 61 countries nearly 
60 per cent of worldwide network sales 
are generated outside the uk which 
mirrors our footprint in terms of space 
our business is dependent on sourcing 
from asia and includes countries like china 
india and bangladesh as a mother and 
baby specialist at mothercare we take the 
safety and wellbeing of all those involved 
in the manufacture of our products very 
seriously we have an ethical sourcing 
policy and a team in place which regularly 
inspects all factory premises and ensures 
that our suppliers’ factories are safe and fi t 
for purpose recent events in bangladesh 
highlight the importance of improving 
standards whilst our suppliers are not 
impacted we have signed up to the 
accord on fire and building safety in 
bangladesh to support the improvement 
in the safety and conditions of all those 
employed in the manufacture of goods
our people are fantastic ambassadors for 
our brands and when we do things well 
our customers respond very positively as 
a true specialist we are uniquely placed 
with parents and need to continue to 
make the most of this advantage globally 
when we offer better value unit sales 
increase signifi cantly when we introduce 
product innovation with new launches like 
innosense xpedior and a new happyland 
toy range our customers switch to us and 
when we improve our in store experience 
our customers are delighted these results 
a year into our transformation and growth 
plan have shown progress but there 
remains a lot to do and signifi cantly 
more opportunity ahead
group	results	seeing	improved	profi 	t	
before	tax
worldwide network sales were down 
03 per cent at £12284 million for the 
year fy2012 £12324 million with total 
international sales up 84 per cent at 
£7287 million fy2012 £6724 million 
and total uk sales down 108 per cent 
at £4997 million fy2012 £5600 million 
group sales which refl ect total uk sales 
and revenues from our international 
partners declined 78 per cent at 
£7494 million fy2012 £8127 million 
on a comparable basis worldwide 
network sales were up 19 per cent and 
group sales were down 60 per cent
simon	calver
chief executive
worldwide	network	sales
2012
2011
£12324m
£11581m
2013 £12284m 	 mothercare plc annual report and accounts 2013 17
overview
space across both our uk and international 
businesses was down 18 per cent during 
the year with international space up 28 per 
cent at 23 million sq ft and the uk down 
72 per cent at 18 million sq ft adjusting for 
australia and new zealand where all 
74 stores 02 million sq ft were closed 
during the year total space was up 
34 per cent with international space 
up 135 per cent and uk space down 
72 per cent
in january we announced that the directors 
of mothercare australia limited in which 
mothercare plc through its subsidiary 
mothercare finance limited had a minority 
23 per cent shareholding had taken 
the decision to place the business into 
administration having assessed various 
potential strategies the administrators 
decided to close the business as a result 
all 74 stores in australia and new zealand 
have now been closed
group underlying profi t before tax was 
up at £83 million fy2012 £16 million 
with international profi ts up 203 per cent 
at £420 million fy2012 £349 million uk 
losses reduced to £217 million fy2012 
£247 million and corporate expenses 
broadly fl at at £78 million fy2012 
£76 million after exceptional items 
and other nonunderlying charges of 
£298 million fy2012 £1045 million the 
reported loss before tax was reduced to 
£215 million fy2012 £1029 million these 
exceptional costs are £156 million for uk 
property restructuring £111 million for 
australia £43 million for onerous leases 
and £47 million for other restructuring costs
we end the year with net debt of 
£324 million fy2012 £201 million which 
partly refl ects the investment in stock for 
new product lines across clothing and 
home  travel this is well within our 
committed banking facilities of £90 
million which cover the life of our 
threeyear plan and expire in may 
2015 no dividend has been declared 
for fy2013
international	profi 	ts	up	over	20	per	cent
fy201213
52	weeks	to
30mar13
fy201112
53	weeks	to
31mar12
	change
vs	last	year
international retail sales £7210m £6655m 83
international wholesale sales £77m £69m 116
total international sales £7287m £6724m 84
underlying profi t £420m £349m 203
our international business continues 
to deliver encouraging growth in terms 
of space and revenues with profi ts 
up 203 per cent to £420 million
international now trades from 23 million 
sq ft with 1069 stores across 60 countries 
during the year our international partners 
opened 115 stores and some with our 
help made further progress towards 
establishing multichannel businesses 
our partners now have transactional 
online sites in indonesia ireland kuwait 
and two in russia for both early learning 
centre and mothercare in addition our 
partner in china has a transactional site 
on tmall the largest online trading 
platform in china and will in time have 
its own online platform we now have 
a global ecommerce platform in place 
which will be rolled out to help our 
franchise partners develop their 
multichannel strategies the growth 
opportunities in our newer markets is 
clear but even our longer established 
markets are benefi ting from the trend 
of moving to larger units whilst also 
establishing multichannel offers 
ahead of other retailers in the region
our continuing international business 
is impacted by an ongoing weaker 
performance from our eurozone markets 
which has been offset by a stronger 
performance from our eastern european 
markets particularly russia all four of 
our regions saw positive growth in both 
likeforlike and retail sales despite the 
negative contribution from our eurozone 
markets international saw likeforlike 
sales growth of 56 per cent
europe is still our largest market with 
433 stores in 28 countries a net 24 stores 
were opened and space grew by 
44 per cent which indicates that this 
region still continues to see growth 
opportunities despite the continuing 
eurozone challenges
the middle east and africa is our oldest 
region and has 309 stores in 14 countries 
a net 19 stores were opened and space 
grew by 159 per cent refl ecting the 
ongoing transition to larger stores as the 
business matures this increase in space 
means our franchise partners in these 
markets are taking advantage of a 
greater proportion of our product offering 
to increasingly become the onestopshop 
for mums in these markets 18	 mothercare plc annual report and accounts 2013
chief	 executive’s	
statement
continued
asia remains a high growth market with 
290 stores across 12 countries india and 
china continue to deliver rapid growth 
and our partners in the region excluding 
australia and new zealand opened 46 
stores and increased space by 237 per 
cent during the year the year also saw 
the closure of all 74 stores in australia 
and new zealand as mothercare 
australia limited was put into 
administration by its directors
latin america now has 37 stores in six 
countries it is early days with some  
new partners here but the results so  
far are very encouraging we have  
also identified great quality potential 
new partners for further rollout in the 
region and have confidence in the 
opportunity ahead
total international sales were up 84 per 
cent at £7287 million fy2012 £6724 million 
with international wholesale sales up 116 
per cent at £77 million fy2012 £69 million 
and international retail sales up 83 per 
cent at £7210 million fy2012 £6655 million 
reported international sales of £2497 million 
were down 12 per cent during the year
on a comparable basis total international 
sales were up 150 per cent in constant 
currency for the year whilst in sterling 
terms revenues were up 118 per cent
international profit growth has remained 
robust at 203 per cent to £420 million 
fy2012 £349 million with retail profits  
of £434 million fy2012 £381 million  
and joint venture losses reduced to  
£14 million fy2012 loss of £32 million
our international results are testament 
to the hard work and knowledge 
offered by our international team and 
the strength of the relationships they 
have with our franchise partners 
we work closely with all our partners 
who offer invaluable local knowledge 
and expertise they help us leverage 
the benefits that our brands and 
products offer i am pleased to say  
that we continue to see good growth 
opportunities across all our regions
uk	 losses	 reduced	 as	 planned
fy201213
52	 weeks	 to	
30mar13
fy201112	
53	 weeks	 to
31mar12
	 change
vs	 last	 year
uk direct sales £1277m £1300m 18
uk retail sales including direct £4682m £5287m 114
uk wholesale sales £315m £313m 06
total uk sales £4997m £5600m 108
underlying loss £217m £247m 121
against the backdrop of continuing 
pressure on the uk consumer we are 
making progress towards reducing 
losses in the uk over the last 12 months 
we have closed 56 lossmaking stores 
refurbished our edmonton nottingham 
and dudley stores improved value 
across clothing and home  travel 
introduced new and innovative product 
like innosense xpedior and extended 
the range of happyland toy characters 
relaunched our online platform and 
invested in service these initiatives are 
beginning to have a beneficial impact 
and we will build on these themes over 
the years ahead
we have over the last year reduced  
our uk footprint by 72 and now 
operate from 18 million sq ft with 255 
stores 196 mothercare and 59 early  
learning centre we closed 56 stores 
13 mothercare and 43 early learning 
centre ahead of our target of circa 50 
as we were able to negotiate deals with 
our landlords while also closing stores 
as their leases came up for renewal
as expected these store closures have 
impacted uk sales which were down 
108 per cent at £4997 million fy2012 
£5600 million on a comparable basis 
total uk sales were down 92 per cent  
this decline in storebased sales was 
mitigated by the improvement in direct 
in home sales of £938 million up 23 per 
cent on a statutory basis and up 40 per 
cent on a comparable basis the migration 
to a new online platform together with 
the improvement in navigation content 
and delivery options has delivered 
good results but there is more to do
in may 2013 we made ‘click and collect’ 
available through all our mothercare 
stores this service is free and allows 
customers to order from home and 
collect from any mothercare store the 
very next day and makes up circa 20 
per cent of direct in home sales our 
iphone mobile app which we launched 
at the end of november 2012 has been 
downloaded circa 140000 times and 
was voted ‘best mobile app 2013’ by 
mobile retail awards we will also be 
launching an android app to further 
help our customers access our products 
in the most convenient way to them we 
are becoming more competitive online 
and offering the services that many 
other businesses have been doing for 
some time whilst our direct in home 
sales have responded well to the 
improvements we have made during 
the last year direct in store sales have 
been disappointing and at £339 million 
were down 115 per cent this is an area 
that we will be focusing on during the 
year ahead together total direct sales 
were down 18 per cent at £1277 million 
uk wholesale sales of £315 million were 
up 06 per cent miniclub our partnership 
with boots continues to perform well 
and we are beginning to make progress 
towards extending the early learning 
centre range as a wholesale offer 
where appropriate
we have refurbished some of our larger 
stores and have gained real insight into 
what works for our customers and we 
will use these insights as we continue  	 mothercare plc annual report and accounts 2013 19
overview
255
we	 have	 reduced	 uk	 space	 by	 72	 	
and	 now	 have	 255	 stores	 in	 the	 uk
182
direct	 in	 home	 responded	 well	 to	 the	
transition	 to	 a	 new	 online	 platform	 and	
improved	 delivery	 options	 with	 182	
growth	 in	 q4
1069
we	 grew	 space	 by	 135	 excluding	 australia	
and	 new	 zealand	 and	 now	 have	 1069	
stores	 across	 60	 international	 markets
56
international	 continues	 to	 see	 growth	
from	 both	 new	 and	 existing	 markets	 	
with	 likeforlike	 sales	 growth	 of	 56
to reshape our store portfolio building 
on our experiences from last year we 
have just completed refurbishing leeds 
and plan at least a further two stores  
in the year ahead a year since the 
investment in our edmonton store 
customers are reacting well as it is  
still performing ahead of the rest  
of the store portfolio
we have made good progress with 
clothing reducing overall pricing by  
low doubledigit per cent for two 
successive seasons now we launched 
the value range for aw12 which sold 
out soon after it was launched and 
prompted reordering of product for  
the first time in several years we 
increased both the range and volume 
for ss13 such that our value range now 
makes up circa 20 per cent of the clothing 
ranges we relaunched ‘blooming 
marvellous’ for aw12 offering our 
customers better maternity quality 
fashion and value and have seen 
reduced levels of markdown at the 
premium end of our clothing range  
we launched ‘little bird’ by jools  
oliver which complements ‘baby k’  
by myleene klass
home  travel is the more challenging  
of our product categories thirdparty 
branded product makes up approximately 
50 per cent of the range and so is more 
exposed to competitive pricing pressure 
our work with key brands and price 
matching has improved our price 
perception on these products but we 
aim to move the sales mix towards our 
ownbrand ranges we have started  
the process by introducing new and 
innovative ownbrand products that are 
relevant to our customers this will also  20	 mothercare plc annual report and accounts 2013 20 20 mothercare plc annual report and accounts 2013 mothercare plc annual report and accounts 2013
chief	executive’s	
statement
continued
help us reestablish our credentials as 
the leading mother and baby specialist 
in the uk in january we launched 
innosense a complete feeding range 
with 47 skus 21 of which were newly 
designed key items include a breast 
pump with three adjustable positions 
a wideneck bottle with an offcentre 
teat and clever stacking design of the 
lozenge shaped steriliser in march 2013 
we launched the xpedior our own
brand pram and pushchair travel system 
which at £250 is very competitively 
priced it complements the orb which 
was launched in november last year 
this is just the beginning and we aim 
to continue the good work started over 
the last 12 months
our early learning centre range has 
also been improved early learning 
centre is synonymous with learning and 
our aw12 ranges saw a complete refresh 
with many new products focusing on 3d 
playing aimed at encouraging fi ne 
motor skills and handeye coordination 
innovation and newness particularly in 
ownbrand have been a key area of 
focus new product accounted for over 
30 per cent of our own brand ranges for 
aw12 and ss13 in addition the relaunch 
of our happyland toy characters 
making them collectable items for 
children at affordable prices has also 
delivered good results
our customers want more than great 
product at great prices they want 
better service and they also want us to 
engage more frequently with them 
we have extended our customer survey 
to direct and so are able to build a 
complete picture of how our customers 
view us both in store and online earlier 
this year we were an offi cial partner 
of the highly successful channel 4 
series ‘one born every minute’ with 
an average of 34 million viewers per 
episode many of whom were either 
looking forward to a birth or had 
welcomed a baby into their families 
in the previous 12 months our weekly 
twitter parties during the show offered 
customers the opportunity to get advice 
from our expert midwife and proved 
very popular we are also engaging 
more readily with opinionforming groups 
and last month in april 2013 i held my 
fi rst direct qa session with mumsnet
whilst we still have a long way to go 
i am encouraged by the progress we 
have made in the uk over the last year 
we are taking positive action by closing 
lossmaking stores driving effi ciency 
across the organisation creating more 
excitement in store and making step 
changes in our product ranges and 
architecture we are laying the foundation 
for a stronger more relevant and more 
responsive business for our customers
summary	and	outlook
my fi rst year as chief executive of 
mothercare has been both exciting 
and challenging i have overseen the 
fi rst steps towards returning mothercare 
to its rightful position as the leading 
multichannel mother and baby 
specialist both in the uk and across 
all our 60 international markets 
importantly with a full executive team 
now in place i can look forward to 
building on the progress made over 
the last 12 months i am also pleased 
to announce my new arrival nieve 
elizabeth who came into the world 
in december and is already a great 
tester for all our new innovations
£83m
group	underlying	profi 	t	before	tax	
improved	to	£83m	fy201112	£16m