Tesco plc Annual Report and Financial Statements 2012

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Notes to the Group financial statements Note 6 Taxation continued Certain deferred tax assets and liabilities have been offset and analysed as follows: Deferred tax assets 23 48 Deferred tax liabilities (1,160) (1,094) (1,137) (1,046) No deferred tax is recognised on unremitted earnings of overseas subsidiaries and joint ventures, on the grounds that the Group is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future. The temporary difference unrecognised at the year end amounted to £3.4bn (2011: £3.0bn). The deferred tax on unremitted earnings at 25 February 2012 is estimated to be £161m (2011: £90m) which relates to taxes payable on repatriation and dividend withholding taxes levied by overseas tax jurisdictions. UK tax legislation relating to company distributions provides for exemption from tax for most repatriated profits, subject to certain exceptions. Unrecognised deferred tax assets Deferred tax assets in relation to continuing operations have not been recognised in respect of the following items (because it is not probable that future taxable profits will be available against which the Group can utilise the benefits): Deductible temporary differences 29 19 Tax losses 484 403 513 422 As at 25 February 2012, the Group has unused trading tax losses from continuing operations of £1,523m (2011: £1,309m) available for offset against future profits. A deferred tax asset has been recognised in respect of £110m (2011: £109m) of such losses. No deferred tax asset has been recognised in respect of the remaining £1,413m (2011: £1,200m) due to the unpredictability of future profit streams. Included in unrecognised tax losses are losses of £479m that will expire in 2016 (2011: £390m in 2015) and £879m that will expire between 2017 and 2032 (2011: £744m between 2016 and 2031). Other losses will be carried forward indefinitely. Note 7 Discontinued operations and non-current assets classified as held for sale 2012 £m 2012 £m 25 February 2012 £m 2011 £m 2011 £m 26 February 2011 £m Assets of the disposal group 65 – Non-current assets classified as held for sale 445 431 Total assets of the disposal group and non-current assets classified as held for sale 510 431 Total liabilities of the disposal group (69) – Total net assets classified as held for sale 441 431 The non-current assets held for sale consist mainly of properties in the UK and Thailand due to be sold within one year. Discontinued operations The tables below show the results of the discontinued operations in relation to the Group’s decision to sell its operations in Japan which are included in the Group Income Statement, Group Balance Sheet and Group Cash Flow Statement respectively. 52 weeks ended 25 February 2012 £m 52 weeks ended 26 February 2011 £m Revenue 436 476 Cost of sales * (539) (541) Administrative expenses (23) (36) Loss arising on property related items (1) (5) Finance costs (1) – Loss before tax on discontinued operations (128) (106) Taxation (14) – Loss for the year from discontinued operations (142) (106) Loss per share impact from discontinued operations Basic (1.77p) (1.33p) Diluted (1.76p) (1.31p) * Including operating lease expense of £27m (2011: £32m). 108 Tesco PLC Annual Report and Financial Statements 2012
OVERVIEW STRATEGIC REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS Note 7 Discontinued operations and non-current assets classified as held for sale continued 52 weeks ended 25 February 2012 £m 52 weeks ended 26 February 2011 £m Non-GAAP measure: underlying loss before tax Loss before tax on discontinued operations (128) (106) Adjustments for: Restructuring and other one-off costs Restructuring costs 23 9 Store impairment cost relating to fair value of assets of the disposal group 57 – Intangible asset impairment cost relating to fair value of assests of the disposal group 20 – 100 9 IAS 36 ‘Impairments of Assets’ – impairment of goodwill arising on acquisitions – 55 Underlying loss before tax on discontinued operations (28) (42) Balance Sheet 25 February 2012 £m Assets of the disposal group Inventories 16 Trade and other receivables 43 Cash and cash equivalents 6 Total assets of the disposal group 65 Liabilities of the disposal group Trade and other payables (68) Borrowings (1) Total liabilities of the disposal group (69) Total net liabilities of the disposal group (4) Future minimum rentals payable under non-cancellable operating leases associated with operations in Japan amount to £113m. Cash Flow Statement 52 weeks ended 25 February 2012 £m 52 weeks ended 26 February 2011 £m Net cash flows from operating activities (53) (50) Net cash flows from investing activities 6 (27) Net cash flows from financing activities 46 73 Net cash flows from discontinued operations (1) (4) Note 8 Dividends 2012 2011 pence/share £m pence/share £m Amounts recognised as distributions to owners in the financial year: Final dividend for the prior financial year 10.09 811 9.16 730 Interim dividend for the current financial year 4.63 369 4.37 351 14.72 1,180 13.53 1,081 Proposed final dividend for the current financial year 10.13 815 10.09 812 The proposed final dividend was approved by the Board of Directors on 17 April 2012 and is subject to the approval of shareholders at the Annual General Meeting. The proposed dividend has not been included as a liability as at 25 February 2012, in accordance with IAS 10 ‘Events After the Balance Sheet Date’. It will be paid on 6 July 2012 to shareholders who are on the Register of members at close of business on 27 April 2012. Tesco PLC Annual Report and Financial Statements 2012 109
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Annual Report and Financial Stateme
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Trading profit £529m 14% of Group
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OVERVIEW Chairman’s statement Cha
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OVERVIEW Chief Executive’s review
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OVERVIEW Click & Collect Click & Co
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OVERVIEW Our KPIs measure how we ar
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OVERVIEW Financial review Laurie Mc
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OVERVIEW US trading loss £(142)m
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OVERVIEW Board of Directors Governa
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OVERVIEW Principal risks Reputation
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Page 123 and 124: OVERVIEW Note 17 Loans and advances
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Page 157 and 158: Financial calendar Financial year e
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Tesco plc Annual Report and Financial Statements 2012

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