Tesco 1999 Annual Report Download - page 40

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38 TESCO PLC ANNUAL REPORT 1999
Note 27 Post-retirement benefits other than pensions
The company operates a scheme offering post-retirement healthcare benefits. The cost of providing for these benefits has been
accounted for on a basis similar to that used for defined benefit pension schemes.
The liability as at 24 February 1996 of £10m, which was determined in accordance with the advice of qualified actuaries, is being
spread forward over the service lives of relevant employees and £1m (1998 – £1m) has been charged to the profit and loss account.
An amount of £3m (1998 – £4m) is being carried in the balance sheet. It is expected that payments will be tax deductible, at the
company’s tax rate, when made.
Note 28 Capital commitments
At 27 February 1999 there were commitments for capital expenditure contracted for but not provided of £260m (1998 – £214m).
Note 29 Contingent liabilities
Certain bank loans and overdraft facilities of joint ventures have been guaranteed by Tesco PLC. At 27 February 1999, the amounts
outstanding on these facilities were £15m (1998 – £15m).
The company has irrevocably guaranteed the liabilities as defined in Section 5(c) of the Republic of Ireland (Amendment Act) 1986
of various subsidiary undertakings incorporated in the Republic of Ireland.
Notes to the financial statements continued
Note 30 Related party transactions
During the year there were no material transactions or amounts owed or owing with any of the Group’s key management or
members of their close family.
During the year the Group traded with its five joint ventures, Shopping Centres Limited, BLT Properties Limited, Tesco British Land
Property Partnership, Tesco Personal Finance Group Limited and Tesco Personal Finance Life Limited. The main transactions during
the year were:
i) Equity funding of £28m (£26m in Tesco Personal Finance Group Limited and £2m in Tesco Personal Finance Life Limited).
ii) Equity funding of £21m and the sale of two properties to Tesco British Land Property Partnership worth £33m. Additionally the
Group made rental payments of £13m (1998 – nil) to Tesco British Land Property Partnership.
iii) The Group made rental payments of £3m (1998 – £3m) and £11m (1998 – £9m) to Shopping Centres Limited and BLT
Properties Limited respectively. In addition, BLT Properties Limited purchased a property from Spenhill Properties Limited (a fellow
Group company) for £7m.
iv) The Group has charged Tesco Personal Finance Limited (a 100% subsidiary of Tesco Personal Finance Group Limited) an amount
totalling £10m in respect of services, loan interest and assets transferred, of which £9m was outstanding at 27 February 1999. Tesco
Personal Finance Limited received fees totalling £11m from the Group for managing certain financial products, £3m of which was
outstanding at 27 February 1999.
v) The Group made loans totalling £20m to Tesco Personal Finance Group Limited.