The directors present their Annual Report to shareholders on the
affairs of the group together with the audited consolidated
financial statements of the group for the 52 weeks ended 25
February 1995.
Principal activity and business review
The principal activity of the group is the operation of food
stores and associated activities in the United Kingdom, France
and Hungary. A review of the business can be found here.
Group results
Group turnover excluding VAT rose by £1,501m to £10,101m, representing
an increase of 17.5%. Group profit on ordinary activities before
taxation for the year was £551m compared with £435m for the
previous year. The amount allocated to the employee profit
sharing scheme this year was £25m as against £23m for last year.
After provision for tax of £170m and dividends, paid and
proposed, of £177m, profit retained for the financial year
amounted to £203m.
Dividends
The directors recommend the payment of a final dividend of 5.90p
per ordinary share to be paid on 3 July 1995 to members on the
Register at the close of business on 12 May 1995. Together with
the interim dividend of 2.70p per ordinary share paid in
November 1994, the total for the year comes to 8.60p compared
with 7.75p for the previous year, an increase of 11.0%.
Tangible fixed assets
Capital expenditure amounted to £771m compared with £779m during
the previous year. Changes in fixed assets are summarised in
note 10 to the financial statements. In the directors' opinion,
the properties of the group have a market value in excess of the
book value of £4,566m included in these financial statements.
Share capital
The authorised and issued share capital of the company, together
with details of the shares issued during the period, are shown
in note 20 on page 46. The company issued 72,965,971 ordinary
shares during the year in partial consideration for the purchase
of Wm Low & Company PLC.
Company's shareholders
An analysis of the company's shareholders is shown on page 56.
So far as the company
is aware, at the date of this report Prudential Corporation
holds 67,474,046 ordinary shares (3.3% of the total) on behalf
of itself and others. The company is not aware of any other
ordinary shareholders with interests of 3% or more.
Directors and their interests
The names and biographical details of the present directors
may be found here.
Sir Ian MacLaurin, Mr R S Ager and Dr M G Jones retire from the
Board by rotation according to the company's Articles of
Association. Being eligible, they offer themselves for
re-election. Mr M Darnell, Mr J M F Padovan and Mr D C Tuffin
retired from the Board on 20 May 1994.
Mrs L James and Mr T J R Mason were appointed as directors on 6
February 1995. In accordance with the company's Articles of
Association, they retire and, being eligible, offer themselves
for re-election. Mr T P Leahy was appointed Deputy Managing
Director on 6 February 1995.
The service contracts of Sir Ian MacLaurin, Mr R S Ager, Mrs L
James and Mr T J R Mason are terminable on two years' notice
from the company. Dr M G Jones does not have a service contract
of more than one
year's duration.
The interests of directors and their immediate families in the
shares of Tesco PLC, along with details of directors' share
options, are set out in note 22.
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.
Directors' and officers' liability insurance
Directors' and
officers' liability insurance was in force throughout the
financial year ended 25 February 1995.
Employment policies
The group depends on the skills and commitment of its employees
in order to achieve its objectives. Company staff at every level
are encouraged to make their fullest possible contribution to
Tesco success.
A key business priority is to provide First Class Service to
the customer. Ongoing training programmes seek to ensure that
employees understand the company's customer service objectives
and strive to achieve them.
The group's selection, training, development and promotion
policies ensure equal opportunities for all employees regardless
of gender, marital status, race, age or disability. All
decisions are based on merit.
Internal communications are designed to ensure that employees
are well informed about the business of the group. These include
a staff magazine, videos and staff briefing sessions. Staff
attitudes are frequently researched through surveys and store
visits and management seeks to respond positively to the needs
of employees.
Employees are encouraged to become involved in the financial
performance of the group through a variety of schemes -
principally the Tesco employee profit sharing scheme and the
savings-related share option scheme.
Employee profit sharing
The company has established a discretionary trust for the
benefit of employees. Known as The Tesco Employee Trust, its
main role is to purchase shares in order to satisfy the
requirements of the group's profit sharing scheme. The trustee
is Barclays Private Bank & Trust (Isle of Man) Limited.
Political and charitable donations
Contributions to community projects and to charity via the Tesco
Charity Trust amounted to £403,000 (1994 - £285,000). There were
no political donations.
Income and Corporation Taxes Act 1988
The company is not a close company for the purposes of this Act.
This status has not changed from 25 February 1995 to the date of
this report.
Auditors
Price Waterhouse have expressed their willingness to continue in
office. In accordance with section 384 of the Companies Act
1985, a resolution proposing the re-appointment of Price
Waterhouse as auditors of the company will be put to the Annual
General Meeting.
Annual General Meeting
A separate circular accompanying the Annual Report and Accounts
explains the special business to be considered at the Annual
General Meeting on 9 June 1995.
This report was approved by the Board on 10 April 1995.
By Order of the Board
Rowley Ager Secretary Tesco PLC
10 April 1995 Registered Number: 445790
