Tesco 1998 Annual Report Download - page 25

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2 3
Note 3 Employee profit-sharing
This represents the amount allocated to the trustees of the profit-sharing scheme and is based on the UK profit after interest before net
loss on disposal of fixed assets and taxation.
Cost of sales includes distribution costs and store operating costs. Integration costs and employee profit-sharing are included within
administration expenses.
Integration costs totalling £95m have been charged, reflecting the need to reorganise and integrate the Irish operations purchased from
Associated British Foods plc.These include £35m relaunch costs, £12m redundancy costs, £28m asset write-downs and £20m for
other integration costs.
Note 2 Analysis of operating profit
Turnover excluding VAT
Cost of sales
Gross profit
Administration expenses
Operating profit/(loss)
Discontinued
operations
£m
595
570
25
14
11
Continuing
operations
£m
13,292
12,276
1,016
253
763
1998
Total
£m
16,452
15,217
1,235
418
817
Discontinued
operations
£m
537
524
13
15
(2)
Acquisitions
£m
1,028
954
74
120
(46)
£m
14,887
13,739
1,148
283
865
1997
Total
£m
13,887
12,846
1,041
267
774
Note 4 Profit on ordinary activities before taxation
Profit on ordinary activities is stated after charging/(crediting) the following:
Depreciation
Operating lease costs (a)
Auditors’ remuneration (b)
Employment costs (note 5)
Net loss on disposal of fixed assets (c)
a) Operating lease costs include £19m for hire of plant and machinery (1997 – £18m).
b) Auditors’ remuneration amounted to £0.5m (1997 – £0.5m) and includes £0.1m (1997 – £0.1m) for the company. The auditors
also received £1.6m (1997 – £0.6m) in respect of non-audit services of which £0.5m (1997 – £0.4m) related to overseas operations.
These fees were principally in respect of acquisitions and Group restructuring.
c) Net loss on disposal of fixed assets has been arrived at after the offset of profits of £8m (1997 – £37m).
1998
£m
358
137
–
1,642
(1)
1997
£m
317
124
–
1,354
–
Continuing operations