Tesco 2004 Annual Report Download - page 34

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32 TESCO PLC
NOTE 1 Prior year adjustment
The Group has revised its accounting policy for turnover in accordance with FRS 5 Application Note G Revenue Recognition
(issued November 2003). The principal adjustments are to report turnover net of vouchers and on a commission-only basis for
mobile phone airtime sales. The impact of the change in policy is to restate 2003 turnover and cost of sales by £333m. There
is no impact on reported proÞt or cash ßow.
NOTE 2 Segmental analysis of sales, turnover, proÞt and net assets
The Groups operations of retailing and associated activities and property development are carried out in the UK, Republic
of Ireland, Hungary, Poland, Czech Republic, Slovakia, Turkey, Thailand, South Korea, Taiwan, Malaysia and Japan. The results for Asia
and the rest of Europe, excluding the Republic of Ireland, are for the year ended 31 December 2003.
2004 2003
Sales Turnover Net Sales Turnover Net
including excluding Operating operating including excluding Operating operating
VAT VAT proÞt assets VAT VAT proÞt assets
restated restated
£m £m £m £m £m £m £m £m
Continuing operations
UK 26,876 24,760 1,526 8,990 23,101 21,309 1,297 8,445
Rest of Europe 3,834 3,385 184 1,856 3,007 2,664 141 1,658
Asia 2,847 2,669 122 1,234 2,172 2,031 71 1,193
33,557 30,814 1,832 28,280 26,004 1,509
Integration (45) (4)
Goodwill amortisation (52) (21)
Operating proÞt 1,735 1,484
Share of operating proÞt from joint ventures 97 70
and associates
Net loss on disposal of Þxed assets (9) (13)
Net interest payable (223) (180)
ProÞt on ordinary activities before taxation 1,600 1,361
Operating margin (prior to goodwill
amortisation and integration costs) 5.9% 5.8%
12,080 11,296
Net debt (note 20) (4,090) (4,737)
Net assets 7,990 6,559
Inter-segmental turnover between the geographical areas of business is not material. Turnover is disclosed by origin. There is no
material difference in turnover by destination.
The Groups share of turnover in the joint ventures, which is not included in the numbers above, is £236m (2003  £193m).
Group sales including VAT were £33,557m (2003  £28,280m). The gross transaction value, which includes the non-commission
element of mobile phone airtime and lottery sales, was £34,360m (2003  £28,819m).
NOTES TO THE FINANCIAL STATEMENTS