TESCO Annual Report 2011 Coursework Example | Topics and Well Written Essays - 1500 words

TESCO Annual Report 2011 - Coursework Example It has particularly realized that for this relationship to materialize it has to continue to be grounded by ethical business practices. In doing so it has established a code of ethics for its staff, which basically set the standards for business behavior within it. In realization of the impossibility of covering every aspect of its activities, TESCO has instead set out principles of business ethics that have to be applied by every team member of TESCO. These sets of principles are in form of laws, policies, local customs and regulations, all of which lays down some of the crucial duties and responsibilities that have been placed on the employees, whenever they might be based. An important component of this code of ethics is the so-called â€Å"protector Line† which is basically an anonymous and confidential helpline that allow staffs to report any wrongdoing that they might encounter in course of their day to day activities from their colleagues. Code of Ethic This code of eth ics also contains modalities on how to raise queries on compliance with the code of ethics where need arises. It is this code of ethics that reinforces TESCO’s commitment in doing business in a way that make a positive contribution to each and every stakeholder in the company. TESCO has always endeavored to work within the British Code of Advertising, Sale Promotion and Direct Marketing. It’s standard contracts that include standard terms and condition guides all its business transactions with external parties like suppliers. TESCO has however faced accusation of price fixing in the past. In this regard, I am referring to the 2007 investigation by the UK Office of Fair Trading (OFT) over accusation of acting as part a cartel with a number of UK hypermarkets (Asda, Safeway, Salisbury and Morrison) in fixing butter, cheese, and milk prices, an accusation that it still rebuff even after a number of its co-accused admitted acting against consumer interests. I have heard on the news that the retail industry has been performing badly because of the ongoing global financial crisis. How serious are the elements of risk faced by Tesco Plc? Do you think the company will improve in the future? The group policy of TESCO is not to use derivatives for the trading purposes; rather some derivatives do not qualify for hedging financial risk which is brought about by global financial crisis. This is because if the hedge is designated where losses and gains on the instrument offset the overall group income. Considering TESCO group, it had a liability relating to the future purchase of minority shareholding of its subsidiary which was purchased during the year. This strategy was aimed at hedging over the risk of global financial crisis. Other than the above strategies, the company would considerable hedge against, foreign exchange risk, credit risk as well as interest rate risk. Therefore, considering the above strategies adopted by the company then it is likely to improve in the future. Do you have any insights from the financial press on this? The main aim of preparing financial statements is to inform the public about the performance of the company so that they can make appropriate investment decisions s whether to invest or not to do so based on their personal decision. The fact that the financial press published the weaknesses that firms are experiencing the global financial crisis, then this was sufficient information to be relied upon in making any decision. What sort of audit opinion