Tesco 2013 Annual Report Download - page 88

84 Tesco PLC Annual Report and Financial Statements 2013
Notes to the Group financial statements
Note 2 Segmental reporting
The Group’s reporting segments are determined based on the Group’s internal reporting to the Chief Operating Decision Maker (‘CODM’).
The CODM has been determined to be the Executive Committee as it is primarily responsible for the allocation of resources to segments and
the assessment of performance of the segments.
During the year, the Group completed the exit of Japan operations (previously reported as part of the Asia segment). The Group made its decision
to sell Fresh and Easy in the US on 12 February 2013 (previously reported in the US segment). Accordingly, these operations have been treated
as discontinued as described in more detail in notes 1 and 7. The segment results do not include any amounts for these discontinued operations.
The segment assets and other segment information sets out continuing operations separately from discontinued operations.
The CODM now considers the principal activities of the Group to be:
• Retailing and associated activities in:
– the UK;
– Asia – China, India, Malaysia, South Korea, Thailand; and
– Europe – Czech Republic, Hungary, Poland, Republic of Ireland, Slovakia, Turkey
• Retail banking and insurance services through Tesco Bank in the UK.
The CODM uses trading profit, as reviewed at monthly Executive Committee meetings, as the key measure of the segments’ results as it reflects
the segments’ underlying trading performance for the financial year under evaluation. Trading profit is a consistent measure within the Group.
Segment trading profit is an adjusted measure of operating profit and measures the performance of each segment before profits/losses arising on
property-related items, the impact on leases of annual uplifts in rent and rent-free periods, intangible asset amortisation charges and costs arising
from acquisitions, and goodwill impairment and restructuring and other one-off costs. The IAS 19 pension charge is replaced with the ‘normal’ cash
contributions for pensions. An adjustment is also made for the fair value of customer loyalty awards.
Inter-segment revenue between the operating segments is not material.
The segment results, the reconciliation of the segment measures to the respective statutory items included in the Group Income Statement, the
segment assets and other segment information are as follows:
Year ended 23 February 2013
At constant exchange rates*UK
£m
Asia
£m
Europe
£m
Tesco
Bank
£m
Total at
constant
exchange
£m
Foreign
exchange
£m
Total
at actual
exchange
£m
Continuing operations
Sales including VAT (excluding IFRIC 13) 48,216 12,334 11,6 09 1,021 73,180 (817) 72,363
Revenue (excluding IFRIC 13) 43,579 11,498 10,005 1,021 66,103 (705) 65,398
Effect of IFRIC 13 (491) (36) (48) –(575) 3(572)
Revenue 43,088 11,462 9,957 1,021 65,528 (702) 64,826
Trading profit 2,272 665 353 191 3,481 (28) 3,453
Trading margin†5.2% 5.8% 3.5% 18.7% 5.3% –5.3%
Year ended 23 February 2013
At actual exchange rates** UK
£m
Asia
£m
Europe
£m
Tesco
Bank
£m
Total
at actual
exchange
£m
Continuing operations
Sales including VAT (excluding IFRIC 13) 48,216 12,317 10,809 1,021 72,363
Revenue (excluding IFRIC 13) 43,579 11,479 9, 319 1,021 65,398
Effect of IFRIC 13 (491) (36) (45) –(572)
Revenue 43,088 11,443 9,274 1,021 64,826
Trading profit 2,272 661 329 191 3,453
Trading margin†5.2% 5.8% 3.5% 18.7% 5.3%
* Constant exchange rates are the average actual periodic exchange rates for the previous financial year.
** Actual exchange rates are the average actual periodic exchange rates for that financial year.
† Trading margin is based on revenue excluding the accounting impact of IFRIC 13.