Tesco 2005 Annual Report Download - page 63

Tesco PLC 61
Note 28 Post-retirement benefits other than pensions
The company operates a scheme offering post-retirement healthcare benefits. The cost of providing these benefits has been
accounted for on a similar basis to that used for defined benefit pension schemes.
The liability as at 26 February 2005 of £7.4m, which was determined in accordance with the advice of qualified actuaries, is being
spread forward over the service lives of relevant employees. £0.6m has been charged to the profit and loss account and £0.4m of
benefits were paid. An accrual of £5.6m (2004 – £5.4m) is being carried in the balance sheet. It is expected that payments will be
tax deductible, at the company’s tax rate, when made.
Note 29 Capital commitments
At 26 February 2005 there were commitments for capital expenditure contracted for, but not provided, of £416m (2004 – £501m),
principally relating to the store development programme.
Note 30 Contingent liabilities
The company has irrevocably guaranteed the liabilities as defined in section 5(c) of the Republic of Ireland (Amendment Act)
1986, of various subsidiary undertakings incorporated in the Republic of Ireland.
Tesco Personal Finance, in which the Group owns a 50% joint venture share, has commitments, described in its own financial
statements as at 31 December 2004, of formal standby facilities, credit lines and other commitments to lend, totalling £5.2bn
(2004 – £4.6bn). The amount is intended to provide an indication of the volume of business transacted and not of the underlying
credit or other risks.
There are a number of contingent liabilities that arise in the normal course of business which if realised are not expected to result
in a material liability to the Group.
Note 31 Related party transactions
During the year, there were no material transactions or amounts owed or owing with any of the Group’s key management
or members of their close family.
During the year the Group traded with it’s joint ventures: Shopping Centres Limited, BLT Properties Limited, Tesco BL Holdings
Limited, Tesco British Land Property Partnership, Tesco Personal Finance Group Limited, Tesco Home Shopping Limited,
dunnhumby Limited, Tesco Mobile Limited, Nutri Centres Limited, Taiwan Charn Yang Developments Limited, Retail Property
Company Limited, Tesco Card Services Limited, Tesco Property Partnership ELP and Hymall. During the year the Group also traded
with it’s five associates: Broadfields Management Limited, Clarepharm Limited, GroceryWorks Holdings Inc., Hussmann (Hungary)
Kft and Greenergy Fuels Limited. The main transactions during the year were:
(i) Equity funding of £3m (2004 – £20m) in joint ventures and £4m (2004 – £8m) in associates.
(ii) The Group made net loans to joint ventures of £10m. The Group repaid £1m (2004 – £1m) of loans from joint ventures.
(iii) The Group has balances due from joint ventures and associates of £136m (2004 – £120m) as at 26 February 2005.
The Group has outstanding balances due to joint ventures and associates of £29m (2004 – £10m) as at 26 February 2005.
(iv) The Group made purchases of £456m (2004 – £72m) from joint ventures and associates.
(v) The Group has charged joint ventures and associates an amount totalling £761m (2004 – £63m) during the year in respect
of services, loan interest and assets transferred.
(vi) Tesco Stores Limited is a member of one or more partnerships to whom the provisions of the Partnerships and Unlimited
Companies (Accounts) Regulations 1993 apply (‘Regulations’). The accounts for those partnerships have been consolidated
into these accounts pursuant to regulation 7 of the Regulations.