Tesco 2012 Annual Report Download - page 52

General information
Company’s shareholders The Company has been notified of
the following significant holdings ofvoting rights in its shares as at
25 February 2012 and as at the date ofthis report:
% of issued share
capital as at
25February 2012
% of issued share
capital as at the date
of this report
Berkshire Hathaway Inc. 5.08 5.08
Blackrock, Inc. 4.96 4.96
Norges Bank No notification 4.01
Legal & General Investment
Management Limited
3.99 3.99
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: Richard Brasher; Sir Richard Broadbent; Gareth Bullock;
Patrick Cescau; Stuart Chambers; Philip Clarke; Karen Cook; Ken
Hanna; Andrew Higginson; Ken Hydon; Sir Terry Leahy; Tim Mason;
Laurie McIlwee; Lucy Neville-Rolfe CMG; David Potts; Sir David Reid;
and Jacqueline Tammenoms Bakker. The biographical details of the
present Directors are set out on pages 38 and 39 of this Annual Report.
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 64 to 86.
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 and
we strive to ensure that our company Values are reflected in our
policies. 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 everyone is welcome and 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 voluntary 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, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and
the US. The Group also provides retail banking and insurance services
through its subsidiary, Tesco Bank. The Group is currently in the process
of disposing of its Japan operations.
Group results Group revenue (excluding VAT) rose by £4 billion to
£64.5 billion, representing an increase of 6.8%. Group profit before
taxincreased by £194 million to £3,835 million. Profit for the year was
£2,814 million, of which £2,806 million was attributable to equity
holders of the parent company.
Dividends The Directors recommend the payment of a final dividend
of 10.13p per ordinary share, to be paid on 6 July 2012 to members on
the Register at the close of business on 27 April 2012. Together with
the interim dividend of 4.63p per ordinary share paid in December
2011, the full year dividend will be 14.76p compared with 14.46p for
the previous year, an increase of 2.1%.
Fixed assets Capital expenditure (excluding business combinations)
amounted to £3.8 billion compared with £3.7 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 £27.7 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 27 on page 136. No shareholder holds
securities carrying special rights with regards to control of the
Companyand there are no restrictions on voting rights.
During the financial year, the Company purchased and cancelled
70.8million ordinary shares of 5p each in the capital of the Company,
representing 0.9% of its issued share capital as at 25 February 2012,
fora total consideration of £290 million (including expenses). The
shares were purchased in order to offset dilution resulting from the
issue of shares in connection with the Company’s employee share
incentive schemes. The Company was subsequently authorised by
shareholders at the 2011 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. 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, Tesco Ireland Share Bonus
Scheme Trust and Tesco Employee Share 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.
48 Tesco PLC Annual Report and Financial Statements 2012