Evaluation of Pan African Resources plc ltd.

Finance & Strategic
Management
1

Contents
INTRODUCTION...........................................................................................................................1
CORPORATE GOVERNANCE STATUS & CHALLENGES......................................................1
CAPITAL INVESTMENT PROJECTS..........................................................................................3
COMPANY’S SOURCES OF FINANCE......................................................................................4
COMPANY’S BUSINESS PERFORMANCE...............................................................................5
COMPANY’S STOCK PERFORMANCE...................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
2

INTRODUCTION
In this project report, an evaluation and examination of Pan African Resources plc ltd. has
been done with respect to organisational accomplishments and achievements. Pan African
Resources is a medium level gold producer and African focused. The company has its
headquarters in UK. The company was registered and incorporated under the companies act of
1985 in England & Wales. The company is regarded as one of the lowest cash-cost producers in
gold. Also, there are several subsidiaries of the company which are involved in similar business
related to mining. This project reports aims at evaluation of corporate governance status and
challenges faced by the company and the existing and projected capital investment projects of
the company. The project aims at understanding and determining the company’s sources of
finance including short-term and long-term finance requirements. The company’s financial
3

performance is being evaluated by using various ratios calculated on the basis of financial
information of the company (Bailey, 2017). This project also aims at evaluation of the share
performance of the company from an investor’s point of view.
CORPORATE GOVERNANCE STATUS & CHALLENGES
Corporate governance structure:
Board of directors of the company are responsible for an organisation’s corporate
governance and ensuring smooth operations in an ethical and moral manner. The governing body
for corporate governance is responsible for considering the environmental impact of the
company’s operation and ensuring that the operations of the company have no bad effect on the
business surroundings and environment. It is the duty of the board of directors and the governing
body to make sure that the company remains ethical, integral and disciplined in its business
conducts (Cornish, 2013). Pan African Resources has constituted an independent board of 6
members which consists independent directors, chief executive officers and other top
management members of the company. Executive and non-executive directors have an equal
number in the board. All the board of directors of the company have vast experience and
knowledge in the industry which makes the decision-making process of the company very rich
and coherent. Independent directors constitute about 67% of the board which ensure no conflict
due to personal decisions while taking any operational decision. Right to vote is equally granted
to every board member which removes any possibility of personal conflict. Along with the board
of directors, there are 4 committees namely ethics committee, remuneration committee, audit
committee and social committee which help the board in taking vital operational decisions and
controlling the business activities. Each committee is vital in providing guidance to the board
members in terms of corporate governance and has ensured proper discharge of its duties and
conduct over the years. To ensure the independence of its directors, the company evaluates every
director in terms of his relationships and character which might hinder the independence. Term
period of a director is limited to 9 years and the company follows both U.K. legislature and S.A.
legislature. The firm has experienced satisfaction in terms of the independence of its directors in
the recent past ensuring better corporate governance.
Corporate governance challenges:
The company has always shown commitment to provide the best standards of governance in
operations of the business. The business is being conducted by the board of directors with the
4