Marks and Spencer

Factors that may affect the Issuer's ability to fulfil its obligations under Notes issued under the Programme Economic and political conditions Marks and Spencer plc and its subsidiaries (the Group) has no control over changes in inflation and interest rates, foreign currency exchange rates and controls, or other economic factors affecting its business such as household and consumer spending. Similarly political, legal or regulatory changes are all beyond the Group's control. Any one of these factors could affect the Group's financial results.

Economic factors:

Due to the recession in England, prices have been raised, especially in the supermarkets. However, because Marks and Spencer hit recession the prices have been increasing. Recession is a make or break for a business, it can determine whether the business can overcome the recession or hit rock bottom. When prices increase in Marks and Spencer customers will depart from the company and divert to cheaper supermarkets, which will lead to loss of profit, loss of regular customers etc. Shareholders could also be affected with the recession , the reason is that shareholders only receive a profit if the organisation makes a profit, if the business profit is decreasing the shareholders profit will also be decreasing. Other economic factor includes taxation, unemployment and inflation. In the set up of a modern market economy, there are many factors, which contribute to unemployment. Causes of unemployment are varied and it may be due to the following factors:

• Rapid changes in technology

• Inflation

• Disability

• Willingness to work

• Attitude towards employers

Business interruption:

A major incident or terrorism event incapacitating management, systems or stores could impact on the Group's ability to trade.

Market competition:

The Group operates in a fiercely competitive market. Any one or more of limited product appeal, price, Architecture, availability, unattractive in-store environment, inaccessibility to the market due to store locations relative to others, or failure to grow selling space in line with the market, could have a difficult Impact on the Group's financial results.

Brand:

The vast majority of Marks and Spencer products are own brand, with the Marks and Spencer brand being one of the strongest in the UK. It has by five core brand values: Quality, Value, Service, Innovation and Trust. Failure to protect the Marks and Spencer brand proposition and loss of trust and confidence in the Group and its products could affect operations in a number of ways. These could range from, but are not limited to, a decline in our customer base through to impact on partnerships with our suppliers, or our ability to recruit and retain the best staff. Product sabotage such as needles in kidswear packaging or Foods contamination could also lead to a loss of trust in our goods and therefore affect the Group's financial results.

Social factor:

The company is also looking at how stores can be made more environmentally friendly and in particular the materials used when fitting out stores, for example using flooring made from natural rubber. The company is also looking to source electricity from environmentally friendly sources. In some stores considerable savings are achieved via a combination of powering the store with green renewable