Underlying pre-tax profits for the 53 weeks to February 28 totalled £3.13bn and were up 8.8%.
Revenues (excluding VAT) were £54.3bn, which was an increase of 13.4% on the previous year.
UK sales including VAT amounted to £41.5bn, up 7.4%, and international sales to £17.7bn, up 29%.
Terry Leahy, chief executive, said: "At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions."
Tesco is moving forward with its "Discounter" range of own brands introduced last year, which it described as "successful". It is currently rolling out the concept to its European stores.
The range may be the reason why Tesco has stopped losing so much spend to German rival Aldi, according to a report today in The Times based on confidential industry "switching" data gathered by TNS Worldpanel.
The data also shows Tesco is winning customers back from Morrison's, but is now losing more to Asda and Sainsbury's.
The company's US venture Fresh & Easy made a higher than expected annual loss of £142m, because of the pound's fall against the dollar and higher overhead costs, and Tesco expects to lose a similar amount in the current year.
Fresh & Easy is now trading from 115 stores and is expected to open around 60 more this more after Tesco decided to maintain rather than accelerate its rate of expansion due to the economic downturn.
The US chain is introducing more affordable products, larger pack sizes and more grocery and frozen food in order to meet demand from customers looking to make household budgets.