Tesco 2003 Annual Report Download - page 12

10 TESCO PLC
corporate governance continued
Managing health and safety and supply chain standards
Health and safety standards are very important; the company
is committed to providing a safe shopping and working
environment for customers, staff and contractors.
The company has established policies, procedures and
training to identify and minimise the risks inherent in a retail
and distribution business.
The safety of our products carries the highest
responsibility and priority. We have established, over many
years, a comprehensive due diligence process supported
by technical and product development standards and
procedures.This assurance covers staff training, providing
guidance and auditing suppliers to ensure they supply
quality products for the Tesco brand.
We have conducted a comprehensive risk analysis
of products, suppliers and factories upon which our audit
programme is based. Auditing is carried out on both a
routine and unannounced basis.
Supply chain risks can include, for example, a failure
of standards relating to product safety, quality, and animal
welfare and worker welfare.
We review regularly our technical, due diligence and
crisis management procedures in the light of the latest
scientific research and expert opinion, to ensure that these
risks are managed effectively.
We use in-house experts as well as external advisors
to look for and analyse emerging issues so that appropriate
action can be taken.
RELATIONS WITH SHAREHOLDERS The Board attaches a
high importance to maintaining good relationships with all
shareholders and, primarily through the Investor Relations
department, ensures that shareholders are kept informed
of significant company developments.
During the year, Executive Directors have met with 72 of
our leading shareholders representing over 53% of the issued
shares of the company. While the focus of dialogue is with
institutional shareholders to whom regular presentations are
made on company direction, care is exercised to ensure that
any price-sensitive information is released to all shareholders,
institutional and private, at the same time in accordance with
the Financial Services Authority requirements.
The Board regards the Annual General Meeting as an
opportunity to communicate directly with all shareholders.
The whole Board attends the meeting and is available to
answer questions from shareholders present.
Each year end, every shareholder may choose to
receive a full Annual Report and Financial Statements
or an abbreviated Annual Review and Summary Financial
Statement. At the half year, all shareholders receive an
Interim Report.These reports, together with publicly-made
trading statements, are available on the Group’s website,
www.tesco.com/corporateinfo
PENSION FUNDS The assets of the pension funds established
for the benefit of the Group’s employees are held separately
from those of the Group. A trustee company manages both
the Tesco PLC Pension Scheme and the remaining assets of
the Tesco PLC Money Purchase Pension Scheme.
The Tesco PLC Pension Scheme is a defined benefit
scheme which has over 120,000 contributory members
and nearly 10,000 pensioners.The Trustee Company Board
comprises one Executive Director, Mr R S Ager, four senior
managers and four members appointed from staff and
pensioners. Management of the assets is delegated to a
number of independent fund managers. These fund managers
have discretion to invest in shares of Tesco PLC, but only to
the proportional weighting of the shares in the total market.
Details of pension commitments are set out in note 26
to the financial statements on pages 47 to 49.
PROVISIONS IN THE COMBINED CODE Throughout the
year ended 22 February 2003 the company has been in
compliance with all of the Code Provisions set out in Section 1
of the Combined Code on Corporate Governance, except as
with regard to provision B.1.7 on the length of Directors’
service agreements, details of which are set out in the report
of the Directors on remuneration on pages 12 to 21.