Tesco 2004 Annual Report Download - page 48

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46 TESCO PLC
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTE 25 Reserves
Group Company
2004 2003 2004 2003
£m £m £m £m
Share premium account
At start of period 2,465 2,004 2,465 2,004
Premium on issue of shares less costs 851 422 851 422
Scrip dividend election 154 39 154 39
At end of period 3,470 2,465 3,470 2,465
Other reserves
At 28 February 2004 and 22 February 2003 40 40  
ProÞt and loss account
At start of period 3,649 3,136 430 255
(Loss)/gain on foreign currency net investments (157) 22 (2)
Issue of shares (25) (12)
Retained proÞt for the Þnancial year 584 503 255 175
At end of period 4,051 3,649 683 430
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 proÞt and loss account for Tesco PLC, whose result for the year
is shown above, has not been presented in these Þnancial statements.
The cumulative goodwill written-off against the reserves of the Group as at 28 February 2004 amounted to £718m (2003 
£718m). During the year, the qualifying employee share ownership trust (QUEST) subscribed for 30 million, 0.4% of called-up
share capital at 28 February 2004 (2003  41 million, 0.6%), shares from the company. The amount of £25m (2003  £12m)
shown above represents contributions to the QUEST from subsidiary undertakings.
NOTE 26 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 Þve 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 Þve-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 Þve 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 Þve-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.