Sustainability Report 2009 - The Co-operative

British sourced, traditional Hampshire breed pigs on one of
The Co-operative Food’s supplier farms.
Tax
The Co-operative operates within a clearly defined Tax Strategy
and Policy that has been approved by the Board and which is
central to tax governance within the business. The policy covers
The Co-operative’s approach to tax compliance, planning and the
management of risks associated with tax. The Co-operative does
not enter into what it considers to be aggressive tax planning and
is particularly mindful of the reputational risks associated with
undertaking such planning 23 .
The Co-operative’s 2009 tax payments and credits are detailed
in the Annual Report and Accounts. The 2009 tax charge on
continuing business was £114.4m (2008: £2.9m credit) excluding
£6.4m (2008: £52.1m credit) relating to tax attributable to
Co-operative Insurance policyholders’ returns. The charge
including tax relating to policyholders was £121.8m (2008:
£55.0m credit). The effective tax rate is 38.8% compared
with a standard rate of 28% 24 .
A revised Co-operative Bank Ethical Policy, launched at the
beginning of 2009, following extensive consultation with customers
(page 40), contains a new policy position on corporate payment
of tax. As such, from 2009, The Co-operative Bank has operated
a policy not to finance organisations that take an irresponsible
approach to the payment of tax in the least developed countries.
Value added
Economic value added expresses the contribution to national
wealth made by a commercial organisation, and seeks to illustrate
how a range of stakeholders can benefit from such wealth creation.
For example, economic value can be dispersed to: employees
in the form of salaries; the State in the form of taxes; charitable
causes in the form of donations; and owners in the form of profit,
dividend and reserves.
added 25
402
812 Central & Eastern
North
723
North West &
North Midlands
Value
Scotland &
Northern Ireland
739
South East
2007
South
2008
West
2009
£m £m £m
1,355
Wales
892 Operating profit = Profit before
tax 26 + gross interest cost less gains
(or plus losses) arising from sale/
disposal of businesses or assets.
158.0 r
991
284.4 r 465.5
Employee costs = Total
employment costs (wages and
salaries, social security and
pension costs).
Depreciation and amortisation
= Depreciation on owned assets
and assets held under financial
leases + amortisation of intangible
assets + impairment of property,
plant and equipment; goodwill and
intangible assets.
1,246.4 1,313.5 1,701.4
259.0 298.2 390.2
Significant items 142.6 113.0 95.9
Value added 1,806.0 r 2,009.1 r 2,653.0
Distribution of value added 2009: total £2,653.0m 27
435.7
116.1
11.3
97.1
384.1
1,608.7
Employee wages and
pension benefits
Payments to
Government
Distributed to members
Paid to the community
Paid to providers
of capital
Set aside for capital
maintenance and
future growth
In order to demonstrate the productivity and efficiency of business
operations and enable benchmarking against competitors in these
areas, regardless of company size, two further measures can be
calculated based on value-added information: Labour Productivity
(P1) 28 ; and Wealth Creation Efficiency (P2) 29 .
Performance benchmark
The Co-operative’s 30 P1 was £23,400 in 2009 (2008:
£24,600), and its P2 was 136% (2008: 135%). The
Department for Innovation, Universities and Skills’ 2009 Value
Added Scoreboard presents results for the UK’s top 800
companies by value added 31 . Of the food and drug retailers
listed, the average P1 is £20,387 and average P2 is 134.2%.
Banks score significantly higher on both measures, due to the
nature of their business, with an average P1 of £109,744 and
an average P2 of 204.6%.
Delivering value Membership and co-operation Economic impact Employees Customers Public policy
The Co-operative Group Sustainability Report 2009 97