Tesco 2008 Annual Report Download - page 55

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Tesco PLC Annual Report and
Financial Statements 2008 53
Note 2 Segmental reporting
The Board has determined that the primary segmental reporting format is geographical, based on the Group’s management and internal reporting
structure. Secondary information is reported by a single business segment, retail and associated activities.
The UK reporting segment includes the start-up operations in the United States of America (US), which are not material. The results of the US business
will be reported as a separate reporting segment within International from our interim results for 2008/9.
The Rest of Europe reporting segment includes the Republic of Ireland, Hungary, Poland, the Czech Republic, Slovakia and Turkey.
The Asia reporting segment includes Thailand, South Korea, Malaysia, China and Japan. Following its disposal during 2006/7, the Taiwanese business
(previously included within the Asia segment) was classified as a discontinued operation in the prior year.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly interest-bearing borrowings and taxation related assets/liabilities.
Inter-segment turnover between the geographical areas of business is not material.
Geographical segments
Rest of
UK Europe Asia Total
Year ended 23 February 2008 £m £m £m £m
Continuing operations
Revenue
Sales (excluding VAT) to external customers 34,874 6,872 5,552 47,298
Result
Segment operating profit 2,097 400 294 2,791
Share of post-tax profit of joint ventures and associates 75 – – 75
Net finance costs (63)
Profit before tax 2,803
Taxation (673)
Profit for the year 2,130
Reconciliation of operating profit to trading profit
Rest of
UK Europe Asia Total
£m £m £m £m
Operating profit 2,097 400 294 2,791
Adjustments for:
(Profit)/loss arising on property-related items (186) (5) 3 (188)
IAS 19 Income Statement charge for pensions 446 5 10 461
‘Normal’ cash contributions for pensions (328) (3) (9) (340)
IAS 17 ‘Leases’ – impact of annual uplifts in rent and rent-free periods 21 – 6 27
Trading profit 2,050 397 304 2,751
Trading margin 5.9% 5.8% 5.5% 5.8%