VMA Limited is a supplier of office equipment in Newport. The company is also listed on the London stock exchange.
The traditional company has a board of directors comprising two executive directors and two non-executive directors. It also has two sub-committees, which are the audit committee and nomination committee. The Audit committee is made up of two non-executive directors whilst the nomination committee is made up of two executive directors and one non-executive director. Currently, Sir Williams, the CEO, is responsible for remuneration of the directors.
The board of directors is planning to bid for a contract amounting to £5million for the provision of office equipment to government schools across Newport for the next five years. However the directors are worried about the company’s liquidity position as this might affect the chances of securing the contract.
As the management trainee with a MBA, you have been tasked by the board to prepare a bid proposal based on the following financial information:
1. Administration expenses include £290,000 which is depreciation of non current assets during the year. 2. The company sold an asset which had a net book value of £310,000 for £80,000. 3. During the year the entity acquired non-current assets costing £1,900,000. 4. A dividend of £700,000 was declared during the year.
Preparation of report addressed to the board of directors which includes the following: (a) Statement of Cashflows and its evaluation; (30%)
(b) An assessment of the company’s working capital management and; (10%)
(c) An evaluation of the company’s compliance with the corporate governance code. (10%)
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