Tesco 2013 Annual Report Download - page 71

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Tesco PLC Annual Report and Financial Statements 2013
OVERVIEW BUSINESS REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS
General information
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 and
Turkey. The Group also provides retail banking and insurance services
through its subsidiary, Tesco Bank. Following a strategic review, the
Group has decided to dispose of its US operations.
Group results Group revenue (excluding VAT) rose by £0.9 billion to
£64.8 billion, representing an increase of 1.4%. Group profit before
tax decreased by £2,078 million to £1,960 million. Profit for the year
was £120 million, of which £124 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 5 July 2013 to members
on the Register at the close of business on 26 April 2013. Together
with the interim dividend of 4.63p per ordinary share paid in December
2012, the full year dividend will be maintained at 14.76p per ordinary
share (2011/12: 14.76p).
Fixed assets Capital expenditure (excluding business combinations)
amounted to £3.0 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 £22.9 billion which
has been included in these financial statements.
Share capital, control of the Company and significant agreements
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 120.
No shareholder holds securities carrying special rights with regards
to control of the Company. There are no restrictions on voting rights
or the transfer of securities in the Company and the Company is not
aware of any agreements between holders of securities that result
in such restrictions.
The Company was authorised by shareholders at the 2012 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.
While the Company has contractual and other arrangements with
numerous third parties in support of its business activities, none
of the arrangements is individually regarded as essential to the
Company’s business.
Company’s shareholders The Company has been notified of the
following significant holdings of voting rights in its shares as at
23 February 2013 and as at the date of this report:
% of issued share
capital as at
23February 2013
% of issued share
capital as at the
date of this report
Berkshire Hathaway Inc. 5.08 5.08
Norges Bank 5.00 5.00
Blackrock, Inc. 4.96 4.96
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; Tim Mason; Laurie McIlwee;
Dame Lucy Neville-Rolfe CMG; Deanna Oppenheimer; David Potts;
and Jacqueline Tammenoms Bakker. The biographical details
of the present Directors are set out on pages 24 and 25 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
44 to 66.
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 We know that our colleagues are key
to the delivery of our Core Purpose: We make what matters better,
together. We regularly listen and respond to our colleagues through
various channels to ensure that we know how they are feeling and
they are involved in key decisions that affect them. Internal
communications are designed to ensure that employees are well
informed about the business of the Group.
Everyone is welcome at Tesco and this is essential to how we do
business. Our Values underpin the development of fair and inclusive
policies to encourage engagement and drive inspiring behaviours
so that colleagues can be their best and contribute to really make
a difference. We are committed to improving the skills, knowledge
and well-being of our colleagues. The Group’s selection, training,
development and promotion policies ensure equal opportunities
for all colleagues 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 of
our decisions are based on merit.
Colleagues are encouraged to become involved in the financial
performance of the Group through a variety of voluntary share schemes.