Tesco 2015 Annual Report Download - page 73

We are committed to providing an inclusive environment at work
in which people are treated with respect. We believe that having
people from diverse backgrounds, with different experiences and
talents is a real strength for our business.
Our colleagues are our most valuable asset. Promoting and supporting
skills and development is at the core of what we do and we provide
many training and learning programmes to give everyone the support,
resources and opportunities they need to be the best they can be.
Our 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 decisions are based on merit.
We believe it is essential for our colleagues to have a voice. By really
listening to our colleagues it enables us to understand what really
matters to them and respond to make it better. We use a variety
of communication channels to regularly engage, consult, inform
and connect with our teams so that the views of our colleagues
can be taken into account when key decisions are made that affect
them and to ensure that our colleagues are aware of the financial
and economic factors affecting the Group’s performance.
We actively encourage colleagues to become involved in the
financial performance of our business through a variety of voluntary
share schemes.
Political donations
The Group did not make any political donations (2013/14: £nil)
or incur any political expenditure during the year (2013/14: £nil).
Compliance with the Groceries (Supply Chain Practices) Market
Investigation Order 2009 and the Groceries Supply Code of Practice
(the ‘Code’)
The Code places obligations on grocery retailers with a turnover
greater than £1 billion to maintain a Code compliance programme,
which includes training staff and providing information to the
Competition and Markets Authority. In addition, the Code sets
out a number of provisions which relate to different aspects of
the relationship between a retailer and supplier.
The Code establishes an overarching principle that retailers must deal
with their suppliers fairly and lawfully. Specific obligations include
giving reasonable notice in circumstances such as changes to supply
chain procedures and when ceasing or significantly reducing
purchases from a supplier. The Code also contains a number of
provisions relating to payments by suppliers, including obligations
for retailers to pay suppliers without delay and a prohibition on
certain types of payments, such as those for shrinkage.
Regrettably, we have concluded that there have been a number of
instances of probable breaches of the Code which fall short of the
high standards we expect to uphold in our dealings with our suppliers.
We are taking effective action to prevent this arising again. We are
fundamentally changing the way we work with our suppliers to
deliver a more sustainable and collaborative business model for
everyone in the supply chain. In addition, we are significantly
up-weighting our Code compliance programme. The programme
will include comprehensive new starter training and annual refresher
training (which is delivered through both e-learning and in-person
training), improved guidance and processes, ‘deep dive’ audits
throughout the year, bi-annual compliance declarations and
disciplinary action where necessary.
We have continued our positive engagement with the Groceries Code
Adjudicator (GCA), Christine Tacon, and her office. Specifically, we
are in ongoing dialogue with the GCA around the probable breaches
of the Code we have identified and our proposed remedial actions.
Our Code Compliance Officer has also continued to take an active
and visible role during the year and we have proactively engaged
the supply base through supplier training events. This year we have
seen an increase in suppliers raising Code issues. Eighteen Code-
related complaints were raised by suppliers this year, and (as at the
date of this report) we have resolved all but one complaint through
discussion with the suppliers concerned. We are continuing to discuss
the final matter with the relevant supplier. We have had twelve
instances where complaints were referred to the Code Compliance
Officer, although in none of those instances was a formal dispute
raised as all matters were resolved directly with the supplier. The Code
Compliance Officer regularly reports to our Compliance Committees
and Audit Committee.
Going concern
The Directors consider that the Group and the Company have
adequate resources to remain in operation for the foreseeable future
and have therefore continued to adopt the going concern basis
in preparing the financial statements.
Events after the Balance Sheet date
On 20 March 2015, the Group regained sole ownership of 21 stores,
previously held in a joint venture with British Land. The Group received
British Land’s share of the 21 stores and cash of £96 million. In
exchange, British Land took sole ownership of three shopping centres,
three retail parks and three standalone stores which were held in two
joint ventures between the two companies as at the Balance Sheet
date. The Group will continue to lease the stores at these sites at
market rents which are not subject to RPI-indexed increases.
Directors’ statement of disclosure of information to auditors
Having made the requisite enquiries, the Directors in office at the
date of this Annual Report and Financial Statements have each
confirmed that, so far as they are aware, there is no relevant audit
information (as defined by Section 418 of the Companies Act 2006)
of which the Group’s auditors are unaware, and each of the Directors
has taken all the steps he/she ought to have taken as a Director to
make himself/herself aware of any relevant audit information and
to establish that the Group’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of Section 418 of the Companies Act 2006.
Cautionary statement regarding forward-looking information
Where this document contains forward-looking statements, these
are made by the Directors in good faith based on the information
available to them at the time of their approval of this report. These
statements should be treated with caution due to the inherent risks
and uncertainties underlying any such forward-looking information.
The Group cautions investors that a number of factors, including
matters referred to in this document, could cause actual results
to differ materially from those contained in any forward-looking
statement. Such factors include, but are not limited to, those
discussed under ‘Principal risks and uncertainties’ on pages 22
to 25 of this Annual Report.
By order of the Board
Paul Moore
Company Secretary
5 May 2015
71Tesco PLC Annual Report and Financial Statements 2015
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