THE END

Sir Stuart Rose thanks the audience for attending to generous applause as 'Always look on the Brightside of Life' is played on the loudspeakers to shareholders as they leave.

Shareholder Vote

The vote for the remuneration package to Marc is carried by 91.4 pct. A vote to re-elect Sir Stuart Rose as a member of the board until 2011 is also carried by over 96 pct, whilst the board offers its 'sincere' thanks to Stuart for carrying the role of Chairman since November 2004. Finally, Resolution 13 and 15 are passed authorising the company to purchase its own shares, and make political donations.

Salary, service and free plastic bags...

A couple of quickfire suggestions/questions here, one is regarding Marc's salary - "How can you justify it?" asks the shareholder.

Stuart replies that the company is not paying Marc £15 million but this is only if he does well. "I sincerely hope he does do well - as a shareholder too - I want to receive value...I am confident and hope that the board will be able to look favourably on this decision in the future."

Regarding the general customer service within store, Rose agrees with the shareholder that after once attempting to get coffee from their in-store cafe it did take 'rather a long time'. Rose adds that "I have failed, I hope Mr Bolland will succeed." as the shareholder mentions that Marc's well-known eye for detail is exactly what is needed if the company wants to move forward.

Finally, a last customer advises M&S to introduce free plastic bags in order to increase its offering to customers who pay a premium to shop there.

Independence

A very relevant question comes from a senior attendee worrying over the 'state of affairs' of British companies being taken over by foreigners. Regarding the country's 'independence' the shareholder says that 'it is a disgrace' that BP shareholders are fighting each other as they consider a takeover. "It might disappoint you to know my father was Russian" says Sir Stuart Rose. "I absolutely hope that Marks & Spencer's stays independent, but there are no absolutes in life" he replies, adding he's sure Marc will do a capable job.

'Last year's Primark?'

More queries regarding quality follow on with shoes, underwear and 'long trousers' all highlighted as being 'like last year's Primark'...Rose tells them that 'they've never been in one of their stores' if they think like that. A more serious questions follows on the company's business model and whether they use outsourcing to fulfil their requirements. Taken by the board, the reply is that outsourcing is 'tightly monitored' to ensure compliance.

Question time

After facing some light-hearted questions about why most of the gingerbread men in in-store cafes are sold with their heads 'decapitated'. Stuart starts to face some more testing ones on the deeper state of affairs at Marks & Spencers. International development being the first one, Sir Stuart apologises for the withdrawal of the brand from profitable trading areas over recent years but says that Marc will be responsible for winning them back. He adds that he does not think the company has 'gone backwards' and is doing some of the best trading in years. Another question comes in regarding the state of their 'bread' which the shareholder says is not as good as Tesco's and Sainsbury's. A further question about the quality of socks which fall apart, Sir Stuart says he cannot believe it......"if it fell apart when you bought them it would have come to my attention" he adds.

Rebuttal to the City

"Can we not persuade the City - who are only interested in buying and selling shares to stop bothering us?" says one rather bothered attendant - who dislikes the City getting involved in trying to run the company, "You're the best chairman we've ever had," he says to applause from the audience. Sir Stuart smiles. "I did speak to one journalist years ago about this," he replies, "Marks & Spencer's is obviously a company that many people care about." he says in response.

Quality an issue?

Question from a shareholder worried about quality being compromised with over £400 million of cost cuts to improve margins. "I'm very distressed" responds Sir Stuart to her question, but adds that returns are at their lowest levels ever!

Marc's remuneration package

Before questioning begins, Chief financial officer of Marks & Spencer outlines the remuneration package for Marc Bolland - a sore point for some shareholders - "We face increasing pressure from the City to deliver, Marc's previous position was also subject to a large bonus," he explains....

'Never been keener, never been fitter'

Sir Stuart continues his emphasis on the modernisation programme adding that in 1999-2004 'We were standing still'. He added that the modernisation programme has added billions on sales, returned £4.6 million in shareholder value paid out in dividends, and increased margins. Mentioning the challenges ahead, Stuart says admits it could be difficult but M&S have 'never been keener, never been fitter'.

Public or private?

Bolland and Rose both make comments now. Marc says that as a CEO with marketing experience, M&S offers one of these unique brands that are 'very, very rare' he says adding how precious it is because of the 'customers that trust it'. Rose meanwhile talks of how when he arrived this company was on the verge of deciding whether to be 'public or private' - "We decided to do a modernisation of the stores and keep it public." he added, spending over £2bn in this programme and £7bn on IT. "Some have criticised us for it, but I think they're frankly short-sighted," he added.

Online Shopping

Stuart announces Marks & Spencer's online push, "Shoppers can now buy from online, pick up from store, or deliver to their home and in May we became the first retailer to offer online ordering through your mobile phone." he says boastfully - M&S Direct had a strong quarter with sales up 49%.

'Capital Expenditure'

Sir Stuart Rose reviews the accounts with a significant mention that M&S are going to reduce capital expenditure in the current climate. "We think it's prudent," says Sir Stuart announcing that debt has been reduced and the new store modernisation programme reduced although new space will still be added.

2:00pm Sir Stuart Rose declares this meeting open as applause interrupts him - "We'll be here all night if it goes on like this." says Sir Stuart as shareholders cannot contain their admiration. "We'll also be taking questions." he adds. Sir Stuart introduces his board, including Martha Lane Fox, UK digital champion who is like Stuart is stepping down by invitation.

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