Tesco 2008 Annual Report Download - page 94

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Note 28 Related party transactions continued
Transactions between the Group and the Group’s pension plans are disclosed in note 24.
Tesco Stores Limited is a member of one or more partnerships to whom the provisions of the Partnerships and Unlimited Companies (Accounts)
Regulations 1993 (‘Regulations’) apply. The accounts for those partnerships have been consolidated into these accounts pursuant to Regulation 7
of the Regulations.
On 20 March 2007, the Group formed a property joint venture with The British Land Company PLC. The limited partnership contains 21 superstores
which have been sold from and leased back to Tesco. The Group sold assets for net proceeds of £652m (approximating to market value) to the joint
venture which had a net bookvalue of approximately £350m. The Group’s share of the profit realised from this transaction is included within profit
arising on property-related items in 2007/8.
On 20 December 2006, the Group formed a property joint venture with British Airways Pension Fund. The limited partnership contains 16 superstores
which have been sold from and leased back to Tesco. The Group sold assets for net proceeds of £454m (approximating to market value) to the joint
venture which had a net bookvalue of £233m. The Group’s share of the profit realised from this transaction is included within profit arising on
property-related items in 2006/7. Another smaller transaction was completed during the year with Morley where £73m of assets were transferred.
iii) Transactions with key management personnel
Only members of the Board of Directors of Tesco PLC are deemed to be key management personnel. It is the Board who have responsibility for planning,
directing and controlling the activities of the Group. Key management personnel compensation is disclosed in the audited part of the Directors’
Remuneration Report.
During the year, there were no other material transactions or balances between the Group and its key management personnel or members of their
close family.
Note 29 Reconciliation of profit before tax to net cash generated from operations
2008 2007
£m £m
Profit before tax 2,803 2,653
Net finance costs 63 126
Share of post-tax profits of joint ventures and associates (75) (106)
Profit on sale of investments in associates –(25)
Operating profit 2,791 2,648
Operating loss of discontinued operation –(4)
Depreciation and amortisation 992 878
Profit arising on property-related items (188) (92)
Net impairment/(reversal of impairment) of property, plant and equipment (10) 19
Adjustment for non-cash element of pensions charge 121 (113)
Share-based payments 199 185
Increase in inventories (376) (420)
Increase in trade and other receivables (71) (81)
Increase in trade and other payables 641 512
Decrease in working capital 194 11
Cash generated from operations 4,099 3,532
Tesco PLC Annual Report and
Financial Statements 2008
92
Notes to the Group financial statements continued
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