Tesco plc Annual Report and Financial Statements 2012

More documents

Recommendations

Info

Notes to the Group financial statements Note 11 Property, plant and equipment continued Land and buildings £m Cost At 27 February 2010 23,385 8,398 31,783 Foreign currency translation (257) (153) (410) Additions (b) 2,577 697 3,274 Acquisitions through business combinations 22 24 46 Reclassification (673) 301 (372) Classified as held for sale (110) – (110) Disposals (1,465) (176) (1,641) At 26 February 2011 23,479 9,091 32,570 Accumulated depreciation and impairment losses At 27 February 2010 2,700 4,880 7,580 Foreign currency translation (21) (55) (76) Charge for the year 412 782 1,194 Impairment losses for the year 20 3 23 Reversal of impairment losses for the year (38) – (38) Reclassification (199) 3 (196) Classified as held for sale (29) – (29) Disposals (140) (146) (286) At 26 February 2011 2,705 5,467 8,172 Net carrying value (c)(d) At 26 February 2011 20,774 3,624 24,398 At 27 February 2010 20,685 3,518 24,203 Construction in progress included above (e) At 26 February 2011 1,267 196 1,463 (b) (c) (d) (e) See page 113 for footnotes. Impairment of property, plant and equipment The Group has determined that for the purposes of impairment testing, each store is a cash-generating unit. Cash-generating units are tested for impairment if there are indications of impairment at the balance sheet date. Recoverable amounts for cash-generating units are mainly based on value in use, which is generally calculated from cash flow projections for five to twenty years using data from the Group’s latest internal forecasts, the results of which are reviewed by the Board. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Management estimate discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the cash-generating units. Changes in selling prices and direct costs are based on past experience and expectations of future changes in the market. The forecasts are extrapolated beyond five years based on estimated long-term growth rates of 1% to 5% (2011: 2% to 5%). The pre-tax discount rates used to calculate value in use range from 6% to 17% (2011: 6% to 14%) depending on the specific conditions in which each store operates. On a post-tax basis, the discount rates ranged from 5% to 13% (2011: 6% to 12%). These discount rates are derived from the Group’s post-tax weighted average cost of capital, as adjusted for the specific risks relating to each geographical region. The impairment losses relate to stores whose recoverable amounts do not exceed the asset carrying values. In all cases, impairment losses arose due to stores performing below forecasted trading levels. The reversal of previous impairment losses arose principally due to improvements in stores’ performances over the last year, which increased the net present value of future cash flows. 114 Tesco PLC Annual Report and Financial Statements 2012 Other (a) £m Total £m
OVERVIEW Note 12 Investment property STRATEGIC REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS Cost At beginning of the year 2,092 1,919 Foreign currency translation (9) (35) Additions 14 24 Acquisitions through business combinations 96 – Reclassification 44 197 Classified as held for sale 23 (2) Disposals (7) (11) At end of the year 2,253 2,092 Accumulated depreciation and impairment losses At beginning of the year 229 188 Foreign currency translation (2) (3) Charge for the year 39 31 Impairment losses for the year 2 2 Reclassification (6) 11 At end of the year 262 229 Net carrying value at end of the year 1,991 1,863 The estimated fair value of the Group’s investment property is £4.3bn (2011: £4.4bn). This fair value has been determined by applying an appropriate rental yield to the rentals earned by the investment property. A valuation has not been performed by an independent valuer. Note 13 Group entities Principal subsidiaries The Group consolidates its subsidiary undertakings and its principal subsidiaries are: Business activity Share of issued ordinary share capital and voting rights 2012 £m 2011 £m Country of incorporation and principal country of operation Tesco Stores Limited Retail 100% England One Stop Stores Limited * Retail 100% England Tesco Ireland Limited Retail 100% Republic of Ireland Tesco-Global Stores Privately Held Co. Limited Retail 100% Hungary Tesco Polska Sp. z o.o. Retail 100% Poland Tesco Stores C R a.s. Retail 100% Czech Republic Tesco Stores S R a.s. Retail 100% Slovakia Tesco Kipa Kitle Paza rlama Ticaret ve Gide Sanai A.S¸. * Retail 95% Turkey Homeplus Co., Limited Retail 100% South Korea Homeplus Tesco Co., Limited Retail 100% South Korea Ek-Chai Distribution System Co. Limited Retail 86% ** Thailand Tesco Stores (Malaysia) Sdn Bhd Retail 70% Malaysia Tesco Japan Co. Limited Retail 100% Japan Tesco Management (Shanghai) Co., Limited Retail 100% People’s Republic of China Dobbies Garden Centres Limited Retail 100% Scotland Fresh & Easy Neighborhood Market Inc Retail 100% US Tesco Personal Finance Group Limited * (trading as Tesco Bank) Financial Services 100% Scotland Tesco Distribution Limited Distribution 100% England Tesco Property Holdings Limited Property 100% England Tesco International Sourcing Limited Purchasing 100% Hong Kong dunnhumby Limited Data Analysis 100% England ELH Insurance Limited Self-insurance 100% Guernsey Valiant Insurance Company Limited Self-insurance 100% Republic of Ireland * Held by the Parent Company (all other principal subsidiaries are held by an intermediate subsidiary). ** The Group has 86% of voting rights and 39% of issued ordinary share capital in Ek-Chai Distribution System Co. Limited. The accounting period ends of the subsidiary undertakings consolidated in these financial statements are on or around 25 February 2012. A full list of the Group’s subsidiary undertakings will be annexed to the next Annual Return filed at Companies House. There are no significant restrictions on the ability of subsidiary undertakings to transfer funds to the parent, other than those imposed by the Companies Act 2006. Tesco PLC Annual Report and Financial Statements 2012 115
Page 1 and 2:
Annual Report and Financial Stateme
Page 3 and 4:
Trading profit £529m 14% of Group
Page 5 and 6:
OVERVIEW Chairman’s statement Cha
Page 7 and 8:
OVERVIEW Chief Executive’s review
Page 9 and 10:
OVERVIEW STRATEGIC REVIEW PERFORMAN
Page 11 and 12:
Page 13 and 14:
OVERVIEW Strategy in action IN THIS
Page 15 and 16:
OVERVIEW Quality and innovation STR
Page 17 and 18:
OVERVIEW Clothing The UK clothing m
Page 19 and 20:
OVERVIEW Click & Collect Click & Co
Page 21 and 22:
OVERVIEW Smaller format stores Smal
Page 23 and 24:
OVERVIEW Fresh & Easy: progress in
Page 25 and 26:
OVERVIEW Savings and loans New prod
Page 27 and 28:
Page 29 and 30:
OVERVIEW Business model -- Core act
Page 31 and 32:
Page 33 and 34:
OVERVIEW Our KPIs measure how we ar
Page 35 and 36:
OVERVIEW Group strategy: To be an o
Page 37 and 38:
OVERVIEW Financial review Laurie Mc
Page 39 and 40:
OVERVIEW US trading loss £(142)m
Page 41 and 42:
OVERVIEW Board of Directors Governa
Page 43 and 44:
OVERVIEW Board of Directors STRATEG
Page 45 and 46:
OVERVIEW Principal risks Reputation
Page 47 and 48:
OVERVIEW Principal risks Product sa
Page 49 and 50:
OVERVIEW Principal risks Credit ris
Page 51 and 52:
OVERVIEW Financial risks review STR
Page 53 and 54:
Page 55 and 56:
OVERVIEW Governance structures STRA
Page 57 and 58:
OVERVIEW Length of service of each
Page 59 and 60:
Page 61 and 62:
OVERVIEW Remuneration Committee Rem
Page 63 and 64:
OVERVIEW A Board visit is organised
Page 65 and 66:
Page 67 and 68: OVERVIEW The areas covered by the C
Page 69 and 70: OVERVIEW STRATEGIC REVIEW PERFORMAN
Page 71 and 72: OVERVIEW Remuneration policy for Ex
Page 73 and 74: OVERVIEW Share ownership guidelines
Page 75 and 76: OVERVIEW As announced in January 20
Page 77 and 78: OVERVIEW Performance measures and p
Page 79 and 80: OVERVIEW Aligning pay with performa
Page 81 and 82: OVERVIEW Chairman The Remuneration
Page 83 and 84: OVERVIEW Governance Oversight Commi
Page 99 and 100: OVERVIEW Note 1 Accounting policies
Page 107 and 108: OVERVIEW Note 2 Segmental reporting
Page 109 and 110: OVERVIEW Note 3 Income and expenses
Page 111 and 112: OVERVIEW Note 6 Taxation continued
Page 115 and 116: OVERVIEW Note 10 Goodwill and other
Page 117: OVERVIEW Note 11 Property, plant an
Page 121 and 122: OVERVIEW Note 13 Group entities con
Page 123 and 124: OVERVIEW Note 17 Loans and advances
Page 125 and 126: OVERVIEW Note 20 Borrowings Current
Page 127 and 128: OVERVIEW Note 21 Financial instrume
Page 129 and 130: OVERVIEW Note 21 Financial instrume
Page 131 and 132: OVERVIEW Note 22 Financial risk fac
Page 133 and 134: OVERVIEW Note 22 Financial risk fac
Page 135 and 136: OVERVIEW Note 24 Provisions continu
Page 137 and 138: OVERVIEW Note 25 Share-based paymen
Page 139 and 140: OVERVIEW Note 26 Post-employment be
Page 141 and 142: OVERVIEW Note 27 Called up share ca
Page 145 and 146: OVERVIEW Note 34 Leasing commitment
Page 149 and 150: OVERVIEW Note 2 Auditor remuneratio
Page 151 and 152: OVERVIEW Note 9 Borrowings STRATEGI
Page 153 and 154: OVERVIEW Note 11 Share-based paymen
Page 157 and 158: Financial calendar Financial year e
show all

Tesco plc Annual Report and Financial Statements 2012

Create successful ePaper yourself

Delete template?

Save as template?