Tesco 2011 Annual Report Download - page 62

Company’s shareholders The Company has been notified as at
the date of this report that Blackrock, Inc. owns 5.48%, Legal & General
Investment Management Limited owns 3.99% and Berkshire Hathaway
Inc. owns 3.02% of the issued share capital of the Company.
Articles of Association The Company’s Articles of Association
may only be amended by special resolution at a General Meeting of
theshareholders.
Directors and their interests The Directors who served during
the year were: Charles Allen CBE; Richard Brasher; Gareth Bullock;
Patrick Cescau; Stuart Chambers; Philip Clarke; Karen Cook; Rodney
Chase CBE; Harald Einsmann; Ken Hanna; Andrew Higginson; Ken
Hydon; SirTerry Leahy; Tim Mason; Laurie McIlwee; Lucy Neville-Rolfe
CMG; David Potts; David Reid; and Jacqueline Tammenoms Bakker.
The biographical details of the present Directors are set out on pages
60 and 61 of this Annual Report. All our Directors will be seeking
re-election at the 2011 AGM in accordance with the UK Corporate
Governance Code.
The interests of Directors and their immediate families in the shares of
Tesco PLC, along with details of Directors’ share options, are contained
in the Directors’ remuneration report set out on pages 74 to 91.
At no time during the year did any of the Directors have a material
interest in any significant contract with the Company or any of its
subsidiaries. A qualifying third-party indemnity provision as defined
in Section 234 of the Companies Act 2006 is in force for the benefit
of each of the Directors and the Company Secretary (who is also a
Director of certain subsidiaries of the Company) in respect of liabilities
incurred as a result of their office, to the extent permitted by law. In
respect of those liabilities for which directors may not be indemnified,
the Company maintained a directors’ and officers’ liability insurance
policy throughout the financial year.
Employment policies The Group depends on the skills and
commitment of its employees in order to achieve its objectives.
Ongoing training programmes seek to ensure that employees
understand the Group’s customer service objectives and strive to
achieve them. The Group’s selection, training, development and
promotion policies ensure equal opportunities for all employees
regardless of factors such as gender, marital status, race, age, sexual
preference and orientation, colour, creed, ethnic origin, religion or
belief, disability or trade union affiliation. All decisions are based on
merit. Internal communications are designed to ensure that employees
are well informed about the business of the Group. Employees are
encouraged to become involved in the financial performance of the
Group through a variety of schemes, principally the Tesco employee
profit-sharing scheme (Shares in Success), the savings-related share
option scheme (Save As You Earn) and the partnership share plan
(Buy As You Earn).
Principal activity, business review and future developments The
principal activity of the Group is retailing and associated activities in the
UK, China, the Czech Republic, Hungary, the Republic of Ireland, India,
Japan, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and
the US. The Group also provides retail banking and insurance services
through its subsidiary, Tesco Bank.
Group results Group revenue (excluding VAT) rose by £4 billion to
£60.9 billion, representing an increase of 7.1%. Group profit before
tax increased by £359 million to £3,535 million. Profit for the year was
£2,671 million, of which £2,655 million was attributable to equity
holders of the parentcompany.
Dividends The Directors recommend the payment of a final dividend
of 10.09p per ordinary share, to be paid on 8 July 2011 to members on
the Register at the close of business on 3 May 2011. Together with the
interim dividend of 4.37p per ordinary share paid in December 2010,
the total dividend for the year will be 14.46p compared with 13.05p for
the previous year, an increase of 10.8%.
Fixed assets Capital expenditure (excluding business combinations)
amounted to £3.7 billion compared with £3.1 billion the previous year.
In the Directors’ opinion, the properties of the Group have an open
market value well in excess of the book value of £26 billion which has
been included in these financial statements.
Share capital and control of the Company Details of the Company’s
share capital, including changes during the year in the issued share
capital and details of the rights attaching to the Company’s ordinary
shares, are set out in note 29 on page 140. Details of shares held by the
Company’s Employee Benefit Trusts are shown in note 27 on page 135.
No shareholder holds securities carrying special rights with regards to
control of the Company and there are no restrictions on voting rights.
The Company was authorised by shareholders at the 2010 AGM to
purchase its own shares in the market up to a maximum of
approximately 10% of its issued share capital. No shares were
purchased under that authority during the financial year and the
Company is seeking to renew the authority at the forthcoming AGM
within the limits set out in the notice of that meeting.
Shares held by the Company’s Employee Share Incentive Plan Trust,
International Employee Benefit Trust and Tesco Ireland Share Bonus
Scheme Trust rank pari passu with the shares in issue and have no
special rights. Voting rights and rights of acceptance of any offer
relating to the shares held in these trusts rests with the trustees, who
may take account of any recommendation from the Company. Voting
rights are not exercisable by the employees on whose behalf the shares
are held in trust.
The Company is not party to any significant agreements that would
take effect, alter or terminate following a change of control of the
Company. The Company does not have agreements with any Director
or Officer that would provide compensation for loss of office or
employment resulting from a takeover, except that provisions of the
Company’s share plans may cause options and awards granted under
such plans to vest on a takeover.
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— TESCO PLC Annual Report and Financial Statements 2011
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BUSINESS REVIEW
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