Tesco 2002 Annual Report Download - page 40

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38 TESCO PLC notes to the financial statements continued
NOTE 27 Pensions continued
The assets in the schemes and the expected rates of return at 23 February 2002 were:
Long-term Market
rate of value
expected return £m
Equities 7.7% 1,002
Bonds 5.8% 433
Property 6.4% 91
Other 4.4% 48
Total market value of assets 1,574
Present value of scheme liabilities (1,758)
Deficit in the scheme (184)
Related deferred tax asset – full provision basis (FRS 19) 57
Net pension liability (127)
Group net assets
Net assets excluding pension liability 5,566
Pension liability (127)
Net assets including pension liability 5,439
Group reserves
Profit and loss reserve excluding pension liability 3,136
Pension liability (127)
Profit and loss reserve including pension liability 3,009
Had the company adopted FRS 17 in full for the year ended 23 February 2002, the profit and loss charge is not expected to have been
materially different from the current cost under SSAP 24 shown above.
NOTE 28 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 23 February 2002 of £6.9m, which was determined in accordance with the advice of qualified actuaries, is being spread
forward over the service lives of relevant employees and £0.3m (2001 – £1.0m) has been charged to the profit and loss account. An accrual of £5.3m
(2001 – £5.0m) 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 29 Capital commitments
At 23 February 2002 there were commitments for capital expenditure contracted for but not provided of £674m (2001 – £725m), principally
relating to the overseas store development programme.
NOTE 30 Contingent liabilities
Certain bank loans and overdraft facilities of joint ventures have been guaranteed by Tesco PLC. At 23 February 2002, the amounts
outstanding on these facilities were £12m (2001 – £12m).
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.