Tesco 2002 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 23 February 2002.
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, Slovak Republic, Thailand, South
Korea and Taiwan. A review of the business is contained in the Annual
Review and Summary Financial Statement 2002 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 £2,881m to £25,654m,
representing an increase of 12.7%. Group profit on ordinary activities
before taxation, net loss on disposal of fixed assets and goodwill
amortisation was £1,221m compared with £1,070m for the previous
year, an increase of 14.1%. Including net loss on disposal of fixed
assets and goodwill amortisation, Group profit on ordinary activities
before taxation was £1,201m.The amount allocated to the employee
profit-sharing scheme this year was £48m as against £44m last year.
After provision for tax of £371m, minority interests of nil and
dividends, paid and proposed, of £390m, profit retained for the
financial year amounted to £440m.
DIVIDENDS
The Directors recommend the payment of a final dividend of 3.93p
per ordinary share to be paid on 28 June 2002 to members on the
Register at the close of business on 19 April 2002.Together with the
interim dividend of 1.67p per ordinary share paid in December 2001,
the total for the year will be 5.60p compared with 4.98p for the
previous year, an increase of 12.4%.
TANGIBLE FIXED ASSETS
Capital expenditure amounted to £2,027m compared with £1,944m
the previous year. In the Directors’ opinion, the properties of the
Group have a market value in excess of the book value of £9,484m
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
24 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 2002.
Sir Terry Leahy, Mr J Gildersleeve, Mr T J R Mason and Mr D T
Potts retire from the Board by rotation and being eligible offer
themselves for re-election.
The service contracts of Sir Terry Leahy, Mr J Gildersleeve, Mr T J
R Mason and Mr D T Potts are terminable on two years’ notice from
the company.
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 10 to 14.
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, the savings-related share
option scheme (Save-As-You-Earn) and the Partnership Share Plan
(Buy-As-You-Earn).
directors’ report