Tesco 2015 Annual Report Download - page 139

The movement of tier 1 capital during the financial year is analysed as follows:
2015
£m
2014
£m
At beginning of the year 913 705
Share capital and share premium –140
Profit attributable to shareholders 131 115
Other reserves 14 1
Ordinary dividends (50) (100)
Movement in material holdings 311
Increase in intangible assets 25 (30)
Other – Tier 1 (1) –
At end of the year, excluding CRD IV adjustments 1,035 842
CRD IV adjustment – deferred tax liabilities related to intangible assets 6–
CRD IV adjustment – movement in material holdings –32
CRD IV adjustment – other –39
At end of the year, including CRD IV adjustments 1,041 913
It is the Group’s policy to maintain a strong capital base, to expand it as appropriate and to utilise it efficiently throughout its activities to optimise the return
to shareholders while maintaining a prudent relationship between the capital base and the underlying risks of the business. In carrying out this policy, the
Group has regard to the supervisory requirements of the PRA.
Note 34 Lease commitments
Finance lease commitments – Group as lessee
The Group has finance leases for various items of plant, equipment, fixtures and fittings. There are also a small number of buildings which are held under
finance leases. The fair value of the Group’s lease obligations approximate to their carrying value.
Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments,
are as follows:
Minimum lease payments
Present value of net
minimum lease payments
2015
£m
2014
£m
2015
£m
2014
£m
Within one year 20 12 10 6
Greater than one year but less than five years 70 49 35 14
After five years 167 185 96 101
Total minimum lease payments 257 246 141 121
Less future finance charges (116) (125)
Present value of minimum lease payments 141 121
Analysed as:
Current finance lease payables 10 6
Non-current finance lease payables 131 115
141 121
Operating lease commitments – Group as lessee
Future minimum rentals payable under non-cancellable operating leases are as follows:
2015
£m
2014
£m
Within one year 1,324 1,334
Greater than one year but less than five years 4,686 4,676
After five years 9,697 9,911
Total minimum lease payments 15,707 15,921
Future minimum rentals payable under non-cancellable operating leases after five years are analysed further as follows:
2015
£m
2014
£m
Greater than five years but less than ten years 4,243 4,250
Greater than ten years but less than fifteen years 2,853 2,894
After fifteen years 2,601 2,767
Total minimum lease payments – after five years 9,697 9,911
The Group has used operating lease commitments discounted at 7% (2014: 7%) of £9,353m (2014: £9,419m) in its calculation of total indebtedness.
Operating lease payments represent rentals payable by the Group for certain of its retail, distribution and office properties and other assets such as motor
vehicles. The leases have varying terms, purchase options, escalation clauses and renewal rights. Purchase options and renewal rights, where they occur,
are at market value. Escalation clauses are in line with market practices and include inflation linked, fixed rates, resets to market rents and hybrids of these.
Note 33 Tesco Bank capital resources continued
137Tesco PLC Annual Report and Financial Statements 2015
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