Corporate Finance Report: Computershare and Evolution Mining Analysis

This report provides a comprehensive analysis of corporate finance principles, focusing on two companies: Computershare Limited and Evolution Mining Limited. The report begins by outlining the objectives of both companies, including wealth maximization, profit maximization, and ethical practices. It then delves into a comparative analysis of their annual reports, assessing their financial performance and adherence to ethical standards. The report further examines the concepts of present value, future value, and equivalent annual cost through investment analysis, including calculations for Investment A and Investment B. The analysis considers the impact of interest rates on investment decisions. The conclusion emphasizes the importance of wealth maximization aligned with ethical considerations and social responsibility. The report uses financial data to demonstrate how both companies strive to achieve their organizational objectives, including wealth creation, and provides a clear understanding of corporate financial strategy and investment analysis.

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Authors Note:

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Contents
Introduction:....................................................................................................................................2
Part A:..............................................................................................................................................2
Computershare Limited:..............................................................................................................2
Evolution Mining Limited:..........................................................................................................4
Part B:............................................................................................................................................11
Conclusion:....................................................................................................................................14
References:....................................................................................................................................15

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Introduction:
Wealth maximization and profit maximization are the two primary objectives of business
organizations. However, since a business organization operates within the society, it has certain
responsibilities towards the society and environment. Wealth and profit maximization objectives
have to be achieved but not at the expense of environmental issues and unethical practices.
Computershare Limited and Evolution Mining Limited are the two companies selected for the
purpose of assessment of its annual reports to find out whether they have practiced ethically to
achieve wealth and profit maximization.
Part A:
Company objectives:
A stock share company, Computershare Limited provides stock related and corporate trust
services in Australia and other parts of the world. As per the information contained in the official
website of the company as well as in annual reports of the company, the objectives of the
company explained here.
Computershare Limited:
Creating value:
Creating value through top quality stock transfer, corporate trust and other such services is one of
the main objectives of the company. Creating value for the shareholders as well as customers is
the main objective of the company. This will help in maximizing the wealth of the shareholders
of the company.
Maximizing profit:

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Maximizing profit of the company is another important objective as it will help the company to
sustain its operations in the long run. Maximizing profit is possible to be achieved by reducing
the cost of business operations (Computershare.com, 2019).
Complying with environmental issues:
Computershare has committed towards improving the environment by using clean and
sustainable energy. As an artificial but social person it is the responsibility of the company to
improve the environment by conserving natural resources and the management as can be seen in
the Board of Directors’ report.
Ethical practices:
The company has clear goal of using ethical practices to achieve its objectives. No unethical
practices shall be allowed and strict actions shall be taken against anyone found to have
committed unethical practices. The company aims to be an ethical supplier and it has achieved
operational efficiency by being and ethical supplier over the years (BROWN, 2009).
Providing employees with all necessary facilities:
The company has a standard policy to provide its employees and workers suitable working
condition. The workplace should be conducive for employees and workers to discharge their
duties and functions towards the organization. Ensuring safety and security to the workers and
employees of the company is a compulsory objective of the company.
No discrimination against women and gender equality:

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The mission statement of the company clearly states that the company will never discriminate
employees and workers on the basis of their gender and will treat everybody equally irrespective
of their gender, caste, religion and other social attributes.
Social responsibility:
Social responsibilities of the company include spending on social welfare and awareness to
improve the quality of lives in and around the country in which the company operates. It is an
important objective for the company and must be taken seriously while assessing the overall
performance of the company.
Evolution Mining Limited:
Wealth and profit maximization:
Maximizing the wealth of the shareholders as well as profit maximization are the two common
objectives of all business organizations. Evolution Mining Limited also have the same objectives
in these regard.
Environment sustainable business operations:
The company is in the business of gold mining and considering the immense environmental
effects of mining it is of huge priority for the company to ensure environment sustainable
business operations.
Conservation of energy and use of clean energy:
Conservation of energy and use of clean energy are again part of overall business objectives of
the company. Instituting technologically advanced equipment within the mines to produce
required energy is an important objective of the company (Evolutionmining.com.au, 2019).

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Environmental protection measures:
One of most important objectives for the company is to use advanced technology and equipment
to protect the environment. Ensuring that the harmful impact of mining is reduced to minimum
all necessary measures must be taken by the company.
Ethical supplier:
Ethical supplier of gold across the globe is one of objectives of the company as it is important to
ensure that the gold extracted from the mine are sold in the market at correct price as it has a
huge demand in all the emerging, developed and under developed markets.
Safety and security of the employees:
The employees must be provided with safe and secure work environment to ensure mining
operations are carried out properly and there is no harm to the employees and workers in the
mine (Ceil, 2012).
Gender equality:
Gender equality:
Ensuring gender equality is part of the overall culture of the company. It is one of the most
important objectives of the company to ensure there is no discrimination within the company on
the basis of gender or for that matter any other social issues.
Responsibility towards the society:
Ensuring equal distribution of property, increasing awareness about social cause contributing to
other social causes is an essential element of overall objectives of the company (Efni, 2017).

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Reconciliation of shareholders’ wealth maximization:
An extract of the annual report of Evolution Mining Limited is attached below.
In the vision and strategy of Evolution Mining Limited it can be clearly seen that the company’s
vision is to inspire create Australia’s top gold mining company by maximizing the wealth of the
shareholders. Providing returns to the shareholders of the company via dividend and capital
appreciation will be helpful in maximizing the wealth of the shareholders (G.K, 2015).
Relevance to shareholders’ wealth maximization:
In case of Evolution Mining Limited the shareholders’ wealth maximization is to maximize the
value for the shareholders. It is pretty relevant to the company as the company is continuously
looking to improve its performance by using the organization resources to maximize the profit.
However, distinction between profit and wealth maximization must be understood (Prempeh and

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Odartei-Mills, 2015). Profit maximization is a very narrow concept whereas wealth
maximization is a much broad in its concept as it talks about wealth and not profit. Shareholders’
wealth whether increased or decreased in the last year can be assessed from the statement of
changes in equity of the company. The extract of statement of changes in equity during the year
2017 and 2018 is provided below.
The above extract shows how the shareholders’ wealth have increased over the last two years.
Thus, there is definitely reconciliation between the increase in shareholders’ wealth and

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shareholders’ wealth maximization. Increase in shareholders wealth is a clear indication of
successful implementation of organizational objectives by the management. Wealth
maximization is about increasing the value of business through different steps to increase the
value of shares held by the shareholders. Thus, reconciliation of wealth maximization with the
other objectives of an organization is not contradictory. The management takes necessary steps
to improve the business functions to create value for the business. Creation of value for the
business is in line with the concept of wealth maximization. The highlights of 2018 financial
year as given in the Annual report of the company shows that the company has number of
different objectives which ave all contributed to the cause of wealth maximization (Rubin, 2013).

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All the above achievements of business are in line with value creation for the business to
increase the value of the shares held by the shareholders to achieve the objective of wealth
maximization.
Computershare Limited:
The annual report of the company for 2018 shall be thoroughly assessed to understand the
financial achievements of the company along with operational success or lack of it to determine
whether the objective of wealth maximization can be reconciled.

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The above is an extract from the statement of Chairman of the company, i.e. Simon Jones stating
that the company has recorded its highest profit ever in the financial year 2018 along with fastest
rate of growth in earnings since 2009.

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The key financial metrics of the company as can be seem have all showed significant
improvement in 2018 compared to previous years. In fact management revenue, management
EBITDA, management EPS and statutory EPS all are at their highest in 2018 since 2009. This is
clearly an indicative of increase in the value of business to support the objective of wealth
maximization (Sharfman, 2012).
Part B:
Sub part 1 and 2:
Present value and future value of two cash flows:
Investment A 0 1 2 3 4 5
Cash Flows 5000 4000 3000 2000 1000
Present Value
individual years
Present Value ? 4545.4545 3305.785 2253.94
4
1366.027 620.9213
Future Value ? 4545.4545 7851.24 10105.1
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11471.21 12092.13
Equivalent Annual
Cost (annuity)
? 454.54545 694.2149 746.055
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633.9731 379.0787
Investment B 0 1 2 3 4 5