Tesco 2014 Annual Report Download - page 118

Download and view the complete annual report

Please find page 118 of the 2014 Tesco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 147

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147

At the year end, 77% (2013: 76%) of investments were quoted on a recognised stock exchange or held in cash or assets readily convertible to cash and are
therefore considered to be liquid.
The plan assets include £3m (2013: £2m) of the Group’s transferable financial instruments. In addition, the plan assets include £158m (2013: £289m) relating
to property used by the Group. In addition, Group property with net carrying value of £416m (2013: £416m) has been held as security in favour of the Scheme.
Movement in pension deficit during the financial year
Changes in the fair value of defined benefit pension assets are as follows:
2014
£m
2013*
£m
Opening fair value of defined benefit pension assets 7,206 6,169
Interest income 372 338
Return on plan assets greater than discount rate 253 219
Contributions by employer 531 486
Additional contribution by employer** 4180
Actual member contributions 12 10
Foreign currency translation (14) 9
Benefits paid (240) (205)
Closing fair value of defined benefit pension assets 8,124 7, 20 6
* Restated – As per Note 1, the amended IAS 19 requires retrospective restatement of net interest amount to be calculated by applying the discount rate to the net defined
benefit liability. There is no movement in the pension asset as asset outperformance is taken to return on plan assets greater than discount rate.
**
The contributions are agreed by the Company and Trustees at each triennial valuation. As part of the 2011 triennial valuation, the Company agreed with the Trustee to
increase security and, on top of the normal contributions, made an additional contribution of £180m to the Scheme on 30 March 2012.
Changes in the present value of defined benefit pension obligation are as follows:
2014
£m
2013
£m
Opening defined benefit pension obligation (9,584) (8,041)
Current service cost (542) (482)
Interest cost (478) (411)
Losses on change of financial assumptions (938) (830)
Losses on change of demographic assumptions (6) –
Experience (losses)/gains (22) 1
Foreign currency translation 25 (16)
Benefits paid 240 205
Actual member contributions (12) (10)
Closing defined benefit pension obligation (11, 317 ) (9,584)
The amounts that have been charged to the Group Income Statement and Group Statement of Comprehensive Income for the year ended 22February 2014
are set out below:
2014
£m
2013*
£m
Analysis of the amount charged to operating profit:
Current service cost (542) (482)
Total charge to operating profit (542) (482)
Analysis of the amount (charged)/credited to finance (cost)/income:
Interest on defined benefit pension assets 372 338
Interest on defined benefit pension obligation (478) (411)
Net pension finance cost (Note 5) (106) (73)
Total charge to the Group Income Statement (648) (555)
Analysis of the amount recognised in the Group Statement of Comprehensive Income:
Return on plan assets greater than discount rate 253 219
Experience (losses)/gains on defined benefit pension obligation (22) 1
Demographic assumption losses on defined benefit pension obligation (6) –
Financial assumption losses on defined benefit pension obligation (938) (830)
Foreign currency translation 11 (7)
Total losses recognised in the Group Statement of Comprehensive Income (702) (617)
* Restated – As per Note 1, the amended IAS 19 requires retrospective restatement of net interest amount to be calculated by applying the discount rate to the net defined
benefit liability. There is no movement in the pension asset as asset outperformance is taken to return on plan assets greater than discount rate.
Note 26 Post-employment benefits continued
Other information
Governance Financial statementsStrategic report
Tesco PLC Annual Report and Financial Statements 2014 115