Tesco 2003 Annual Report Download - page 7

TESCO PLC 5
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 22 February 2003.
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,Taiwan and Malaysia. A review of the business
is contained in the Annual Review and Summary Financial
Statement 2003 which is published separately and, together
with this document, comprises the full Tesco PLC Annual
Report and Financial Statements.
GROUP RESULTS Group sales including VAT rose by £2,959m
to £28,613m, representing an increase of 11.5%. Group
underlying profit on ordinary activities before taxation, net
loss on disposal of fixed assets, integration costs and goodwill
amortisation was £1,401m compared with £1,221m for the
previous year, an increase of 14.7%. Including net loss on
disposal of fixed assets, integration costs and goodwill
amortisation, Group profit on ordinary activities before
taxation was £1,361m.The amount allocated to the employee
profit-sharing scheme this year was £51m as against £48m
last year. After provision for tax of £415m, minority interests
of nil and dividends, paid and proposed, of £443m, profit
retained for the financial year amounted to £503m.
DIVIDENDS The Directors recommend the payment of a final
dividend of 4.33p per ordinary share to be paid on 27 June
2003 to members on the Register at the close of business
on 22 April 2003.Together with the interim dividend of 1.87p
per ordinary share paid in November 2002, the total for the
year will be 6.20p compared with 5.60p for the previous year,
an increase of 10.7%.
TANGIBLE FIXED ASSETS Capital expenditure amounted
to £2,134m compared with £2,027m the previous year.
In the Directors’opinion, the properties of the Group have
a market value in excess of the book value of £10,955m
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.
directors’ report
TESCO PERSONAL FINANCE (TPF)TPF lending is
predominantly to individuals through its credit card and
unsecured personal loan products. Risk is managed by
adopting industry best practices and drawing upon the
expertise and systems of the Royal Bank of Scotland.
As a result TPF have developed a portfolio of credit
products with strong asset quality.
INSURANCE We have taken the decision to purchase Assets,
Earnings and Combined Liability protection from the open
insurance market at a ‘catastrophe’level only.The risk not
transferred to the insurance market is retained within the
business up to various limits, with the balance self insured
on a multinational basis by use of our captive insurance
company,Tesco Insurance Limited, Guernsey (Assets/
Earnings/Combined Liability). Subsequent to the year end
Combined Liability has been transferred to a new captive
insurance company, Valiant Insurance Company Limited, ROI.
PENSIONS Tesco policy is to base pension funding decisions
on a three-yearly actuarial valuation.The latest full actuarial
valuation of the Tesco PLC Pension Scheme was carried out
as at 31 March 2002.This formed the basis of our decision
to increase funding levels.The results of the valuation can
be seen in note 26(a).
In line with accounting standards, a separate FRS 17
valuation has been performed as at the Group year end
date. The FRS 17 disclosures can be found in note 26(b).
OTHER INFORMATION Additional financial and
non-financial information, including Press Releases and year
end presentations can be accessed on our website,
www.tesco.com/corporateinfo