Tesco 2005 Annual Report Download - page 6

Operating and financial review continued
IFRS We are well advanced with our preparations
for the adoption of International Financial
Reporting Standards (IFRS) for our 2005/06
financial reporting. As communicated at our
IFRS presentation in February 2005, the main
changes to our profit and shareholders’ funds
will arise from accounting changes for share-
based payments, goodwill, pensions, deferred
tax, financial instruments and fixed assets.
Details of the presentation can be found on
our website www.tesco.com/corporate
In May 2005 we will issue 2004/05 financial
information restated for IFRS. We estimate that
the adoption of IFRS will have a small impact
on 2004/05 statutory profit after tax (between
zero and £30m). This impact excludes the effect
of IAS 32 and IAS 39, where Tesco has elected to
take a one year exemption on these standards,
as allowed under IFRS.
Year end Convergence We announced in
September 2004 that we had taken a decision
to align our UK and International accounting
periods, due to the increasing contribution our
international businesses make to Group results.
We will do this for the 2006 year end, which will
be on 2 April 2006. Thereafter, the timetable
will be as follows:
• Half year – last Sunday in
September/first Sunday in October
• Year end – first Sunday in April
• 13 week quarters, with trading
updates for Q1 and Q3 (Q3 to
include Christmas trading period).
Employees With over 353,000 staff in 13
countries, and a further 14,000 retail employees
working in our joint venture in China, we
play an important role in creating employment,
fostering skills and generating economic
development. This year alone our UK workforce,
already the largest in the UK private sector, grew
by 14,000 and we also created 12,000 jobs in
our international operations.
Our people are our most important asset.
Looking after our people so that they can look
after our customers is one of the core values of
our business. We are committed to providing
market-leading working conditions for our staff
and we encourage our suppliers to do the same.
In the UK we offer staff an attractive benefits
package, including wages that are amongst the
highest in our industry, flexible hours and leave,
profit sharing, subsidised meals, childcare
vouchers and an award-winning pension scheme.
Staff with more than 12 months’ service receive
10% discount on their shopping at Tesco.
Shares in Success Almost a third of Tesco’s
shareholders – over 86,000 people – are
members of staff. Our Shares in Success
scheme this year gave £65m worth of shares
to employees across the Group. In addition,
our Save-as-You-Earn scheme, which gives
employees the opportunity to buy shares at a
20% discount, resulted in a further £104m worth
of shares being issued to staff during the year.
Pensions We are convinced our award-winning
defined benefit pension scheme helps us to
attract and retain the best staff. The UK scheme
has nearly 137,000 members – nearly 60% of
eligible staff. All eligible staff are encouraged
to join the scheme as soon as they join Tesco.
Approximately 1,200 staff join the scheme
every month.
The last full actuarial valuation of the main
Tesco PLC Pension Scheme was carried out as
at 31 March 2002 and the next valuation will
be performed as at 31 March 2005.
Ahead of the 2005 three-yearly full actuarial
valuation of the scheme, which will be completed
this autumn, the Group has paid an additional cash
contribution into the scheme of £200m to
strengthen significantly its funding position. We
will review the level of contributions to the scheme
when the actuarial valuation has been completed.
Details of the last full actuarial valuation can be
seen in note 27(a). In line with accounting
standards, a separate FRS 17 valuation has been
performed as at the Group year end date. The
FRS 17 disclosures can be found in note 27(b).
Training and Development We are committed
to developing our people to bring out the best
in everyone. Our staff have access to training
programmes and a personal development plan,
with six-monthly reviews, to ensure they have the
right skills to do their job. This commitment is
equally important in our international businesses,
where we aim to build local workforce skills and
promote from within.
4Tesco PLC
NUMBER OF INTERNATIONAL
HYPERMARKETS
152 102 68
01 02 03
194
04
273
05
INTERNATIONAL
UNDERLYING OPERATING
PROFIT
£m
212 119 74
01 02 03
306
04
370
05
TESCO PERSONAL FINANCE
PRE-TAX PROFIT POST
MINORITY INTEREST
£m
96 40
6
01 02 03
160
04
202
05