Seprod Ltd Business Research

UNIVERSITY OF TECHNOLOGY, JAMAICA

SCHOOL OF BUSINESS ADMINISTRATION

CORPORATE FINANCE

GROUP MEMBERS

RENARDO LOBBAN 1406880

MARIO WRIGHT 1401070

CHERYL COBOURNE 1608310

MELANIE LEE 0704357

RAKEESHA RAMUS 1003309

JEANETT SCOTT 1303503

LECTURER: MR. SAMUEL PARKES

DATE: JULY 22, 2017

TABLE OF CONTENT

• Corporate Governance Analysis

• Stockholder Analysis

• Risk and Return

• Measuring Investment Returns

• Capital Structure Choices

• Optimal Capital Structure

• Mechanics of Moving to the optimal

• Dividend Policy

• A Framework for Analyzing Dividends

• Valuation

• Appendix

• Management Report

• Reference

1. Corporate Governance Analysis

Separation of control and ownership

Seprod Ltd has separation between management and ownership. We can infer from the annual report that the company is run by corporate officers who are appointed by shareholders through board of directors to run the company’s operations on their behalf. The company’s management dedicated pages 4-6 of the annual report to inform the shareholders of the company’s performance, strategic plans, recent company engagements, company’s expected performance and so forth.

In Seprod’s 2016 annual report, management has written to shareholders to inform them on the outcome of operations and possible changes that might influence the company’s operations. Among other things, the company’s management has written to its shareholders; a summary of the ended year activities, changes in regulations that affect the company’s operations, the current year’s performance, and company’s achievement so far, adopted strategies and the company’s outlook. This shows that the company’s management are very responsive to the shareholders they represent.

Potential conflict of interest

Seprod Limited majority shareholder is Musson Limited who has over 4 board members on Seprod Executive board including the Chief Executive Officer Chief Finance Officer And Chief Investment Officer this is an overwhelming shareholder presence in Seprod and may present conflict of interest in making sure decisions are made to benefit Musson Limited the majority shareholder. The Chief Executive Officer is the chairman of the board at Seprod which may raise suspicion as to the influence he has on board decisions. There was no evaluation of the CEO who was appointed a year ago though the annual report shows the business is performing there’s no measure to show the president is performing which may also raise suspicion.