Tesco 2003 Annual Report Download - page 46

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44 TESCO PLC
NOTE 24 Reserves
Group Company
2003 2002 2003 2002
£m £m £m £m
Share premium account
At 23 February 2002 2,004 1,870 2,004 1,870
Premium on issue of shares less costs 422 80 422 80
Scrip dividend election 39 54 39 54
At 22 February 2003 2,465 2,004 2,465 2,004
Other reserves
At 22 February 2003 and 23 February 2002 40 40 – –
Profit and loss account
At 23 February 2002 3,136 2,721 255 242
Gain on foreign currency net investments 22 12 – 2
Issue of shares (12) (37) – –
Retained profit for the financial year 503 440 175 11
At 22 February 2003 3,649 3,136 430 255
Other reserves comprise a merger reserve arising on the acquisition of Hillards plc in 1987.
In accordance with section 230 of the Companies Act 1985 a profit and loss account for Tesco PLC, whose result for the
year is shown above, has not been presented in these financial statements.
The cumulative goodwill written off against the reserves of the Group as at 22 February 2003 amounted to £718m
(2002 – £718m). During the year, the qualifying employee share ownership trust (QUEST) subscribed for 41 million
(2002 – 51 million) shares from the company.The amount of £12m (2002 – £37m) shown above represents contributions
to the QUEST from subsidiary undertakings.
NOTE 25 Share options
Company schemes
The company had six principal share option schemes in operation during the year:
i The savings-related share option scheme (1981) permits the grant to employees of options in respect of ordinary shares
linked to a building society/bank save-as-you-earn contract for a term of three or five years with contributions from
employees of an amount between £5 and £250 per four-weekly period. Options are capable of being exercised at the end
of the three and five-year period at a subscription price not less than 80% of the middle-market quotation of an ordinary
share immediately prior to the date of grant.
ii The Irish savings-related share option scheme (2000) permits the grant to Irish employees of options in respect of ordinary
shares linked to a building society/bank save-as-you-earn contract for a term of three or five years with contributions from
employees of an amount between €12 and €320 per four-weekly period. Options are capable of being exercised at the
end of the three and five-year period at a subscription price not less than 75% of the middle-market quotation of an
ordinary share immediately prior to the date of grant.
iii The executive share option scheme (1984) permitted the grant of options in respect of ordinary shares to selected
executives.The scheme expired after ten years on 9 November 1994. Options were generally exercisable between three
and ten years from the date of grant at a subscription price determined by the Board but not less than the middle-market
quotation within the period of 30 days prior to the date of grant. Some options have been granted at a discount of 15%
of the standard option price but the option holder may take advantage of that discount only if, in accordance with investor
protection ABI guidelines, certain targets related to earnings per share are achieved.
notes to the financial statements continued