Tesco 2004 Annual Report Download - page 13

TESCO PLC 11
Managing health and safety and supply chain standards Health
and safety standards are very important. The company is
committed to providing a safe shopping and working environment
for customers, staff and contractors.
The company has established policies, procedures and training
to identify and minimise the risks inherent in a retail and
distribution business.
The safety of our products is regarded as the highest priority.
The company has established, over many years, a comprehensive
due diligence process supported by technical and product
development standards and procedures. This assurance covers
staff training, providing guidance for and auditing of suppliers,
to ensure they supply quality products for the Tesco brand.
The company has conducted a comprehensive risk analysis of
products, suppliers and factories upon which our audit
programme is based. Auditing is carried out on both a routine
and unannounced basis. Supply chain risks can include, for
example, a failure of standards relating to product safety, quality,
animal welfare and worker welfare.
Technical, due diligence and crisis management procedures are
regularly reviewed in the light of the latest scientiÞc research and
expert opinion, to ensure that these risks are managed effectively.
In-house experts are used as well as external advisors to look
for and analyse emerging issues, so that appropriate action can
be taken.
RELATIONS WITH STAKEHOLDERS Tesco listens to customers, staff,
investors, Non-Governmental Organisations, suppliers and other
key stakeholders. Understanding what customers want is vital
to the business and the Board are committed to continuing this
listening, and extending it to other important stakeholders.
The Board recognises and attaches a high importance to
maintaining a good dialogue with shareholders in order to
understand shareholder views and communicate appropriately any
signiÞcant company developments.This shareholder communication
is mainly co-ordinated by the Investor Relations department.
During the year, Executive Directors have met with 97 of the
companys leading shareholders representing over 54% of the
issued shares of the company. While the focus of dialogue is
with institutional shareholders, to whom regular presentations
are made on company direction, care is exercised to ensure
that any price-sensitive information is released to all shareholders,
institutional and private, at the same time, in accordance with
the Financial Services Authority requirements.
The Board regards the Annual General Meeting as an opportunity
to communicate directly with all shareholders. The whole Board
attends the meeting and is available to answer questions from
shareholders present.
Each year end, every shareholder may choose to receive a full
Annual Report and Financial Statements or an abbreviated Annual
Review and Summary Financial Statement. At the half-year, all
shareholders receive an Interim Report. These reports, together
with publicly-made trading statements, are available on the
Groups website, www.tesco.com/corporateinfo
PENSION FUNDS The UK pension scheme is a defined benefit
scheme which has over 127,000 members and over 10,000
pensioners. Note 27 in the Report and Accounts sets out the
Groups pension arrangements in detail.
For the year ended February 2004, the Trustee Company Board
comprised one Executive Director, Mr R S Ager, four senior
managers and four members appointed from staff and
pensioners. Following Mr R S Agers retirement, the new Group
Company Secretary, Ms L Neville-Rolfe, will take up his role on
the Trustee Company Board. Management of the assets is
delegated to a number of independent fund managers. These
fund managers have discretion to invest in shares of Tesco PLC,
but only to the proportional weighting of the shares in the
total market. Details of pension commitments are set out in
note 27 to the financial statements on pages 49 to 51.
PROVISIONS IN THE COMBINED CODE Throughout the year ended
28 February 2004, the company has been in compliance with all
of the Code Provisions set out in Section 1 of the 1998 Combined
Code on Corporate Governance, except as with regard to
provision B.1.7 on the length of Directors service agreements,
details of which are set out in the Report of the Directors on
Remuneration on page 16. The Remuneration Committee has
reviewed these contracts and the Board is moving to one-year
contracts in line with market practice.