FINANCIAL RESOURCE MANAGEMENT

Financial Resources Management

Financial Resources Management

Introduction

The study is related to the regulatory and corporate governance framework of UK stock market listed company that is Tesco PLC. Tesco is engaged in retailing and associated activities. Tesco's core UK segment consists of four different store formats that are Metro, Express, Extra and Superstore as well as one trial format called Homeplus. Tesco's non-Food segment includes merchandise such as including clothing, electrical, home entertainment, beauty and health, stationery, soft furnishings and cook shop, and seasonal goods such as barbecues and garden furniture in the summer. Tesco's retailing services segment consists of several operations, including Tesco Personal Finance, Tesco.com and Tesco Telecoms. Tesco's international segment operates in thirteen markets outside the United Kingdom that is in Asia, Europe, including North America and India.

Tesco is one of the leading food and grocery retailers in the world. The company has operations in 14 countries spread across Europe, Asia and North America. It is headquartered in Hertfordshire, the UK, and employs 492,714 people. The company recorded revenues of £ 60,931 million (approximately $ 94,193.2 million) during the financial year ended February 2011 (FY2011), an increase of 7.1 % over FY2010. The operating profit of the company was £ 3,811 million (approximately $ 5,891.4 million) in FY2011, an increase of 10.2 % over FY2010. The net profit was £ 2,655 million (approximately $ 4,104.4 million) in FY2011, an increase of 14.1 % over FY2010.

Regulatory and Corporate Governance Framework

Tesco promote the highest standards of corporate governance in their business and support the Commission's aim of ensuring effective corporate governance across EU companies. However, Tesco believe that the existing "comply or explain" approach under the UK Corporate Governance Code (the "Code"), which forms the foundation of the governance regime for listed companies in the UK (coupled with the Companies Act 2006 and the listing regime), works very well and Tesco do not believe that it is necessary or appropriate for detailed prescriptive EU regulation to be put in place.

Tesco support the ambition of achieving a level playing field for corporate governance throughout the EU, but believe that it is important to maintain flexibility for individual member states in how they achieve an effective governance framework. That flexibility has been provided very effectively through "comply or explain" in the UK.

Unlisted Companies

Tesco believe that caution is needed when considering extending the corporate governance framework to unlisted companies. Tesco feel that this would place an unnecessary additional burden on small companies. Furthermore, many of these businesses are subsidiaries of EU companies operating outside of the EU and this could result in overlapping frameworks which could unnecessarily complicate the existing governance structures.

Boards of Directors

Diversity

Tesco consider that the building of an effective board is a matter for the directors and the shareholders, who should have the flexibility to define the roles of directors and select the appropriate people to best meet the needs of the business.

Tesco believe that boards benefit from having a balance of members with a broad ...