Tesco 2001 Annual Report Download - page 9

TESCO PLC 7
The Directors present their annual report to shareholders on the
affairs of the Group together with the audited consolidated financial
statements of the Group for the 52 weeks ended 24 February 2001.
Principal activity and business review
The principal activity of the Group is the operation of food stores
and associated activities in the UK, Republic of Ireland, France,
Hungary, Poland, Czech Republic, Slovakia,Thailand, South Korea and
Taiwan. A review of the business is contained in the Annual Review
and Summary Financial Statement 2001 which is published separately
and, together with this document, comprises the full Tesco PLC
Annual Report and Financial Statements.
Group results
Group turnover excluding VAT rose by £2,192m to £20,988m,
representing an increase of 11.7%. Group profit on ordinary activities
before taxation, integration costs, loss on disposal of fixed assets and
goodwill amortisation was £1,070m compared with £955m for the
previous year, an increase of 12.0%. Including loss on disposal of fixed
assets and goodwill amortisation, Group profit on ordinary activities
before taxation was £1,054m. The amount allocated to the employee
profit-sharing scheme this year was £44m as against £41m last year.
After provision for tax of £288m, minority interests of £1m and
dividends, paid and proposed, of £340m, profit retained for the
financial year amounted to £427m.
Dividends
The Directors recommend the payment of a final dividend of 3.50p
per ordinary share to be paid on 29 June 2001 to members on the
Register at the close of business on 20 April 2001. Together with
the interim dividend of 1.48p per ordinary share paid in December
2000, the total for the year comes to 4.98p compared with 4.48p for
the previous year, an increase of 11.2%.
Tangible fixed assets
Capital expenditure amounted to £1,944m compared with £1,488m
the previous year. In the Directors’ opinion, the properties
of the Group have a market value in excess of the book value of
£8,241m included in these financial statements.
Share capital
The authorised and issued share capital of the company, together
with details of the shares issued during the period, are shown in
note 23 to the financial statements.
Company’s shareholders
The company is not aware of any ordinary shareholders with
interests of 3% or more.
Directors and their interests
The names and biographical details of the present Directors are
set out in the separately published Annual Review and Summary
Financial Statement 2001.
Mr C L Allen, Mr P A Clarke, Dr H Einsmann and Mr G F Pimlott
retire from the Board by rotation and being eligible offer themselves
for re-election.
Mrs V Morali being appointed during the year will also retire and
offer herself for re-election.
The service contract of Mr P A Clarke is terminable on two
years’ notice from the company.
Mr C L Allen, Dr H Einsmann, Mr G F Pimlott and Mrs V Morali
do not have service contracts.
The interests of Directors and their immediate families in the
shares of Tesco PLC, along with details of Directors’ share options,
are contained in the report of the Directors on remuneration set out
on pages 12 to 16.
At no time during the year did any of the Directors have a
material interest in any significant contract with the company or any
of its subsidiaries.
Employment policies
The Group depends on the skills and commitment of its employees
in order to achieve its objectives. Staff at every level are encouraged to
make their fullest possible contribution to Tesco success.
A key business priority is to provide First Class Service to
the customer. Ongoing training programmes seek to ensure that
employees understand the Group’s customer service objectives and
strive to achieve them.
The Group’s selection, training, development and promotion
policies ensure equal opportunities for all employees regardless of
gender, marital status, race, age or disability. All decisions are based
on merit.
Internal communications are designed to ensure that employees
are well informed about the business of the Group. These include a
staff magazine called Tesco Today, videos and staff briefing sessions.
Staff attitudes are frequently researched through surveys and
store visits, and management seeks to respond positively to the
needs of employees.
Employees are encouraged to become involved in the financial
performance of the Group through a variety of schemes, principally
the Tesco employee profit-sharing scheme and the savings-related
share option scheme.
DIRECTORS’ REPORT