The Electricity Company Of Ghana Action Plan Finance Essay

The galvanisingity club Of gold chute fol ready-go up conception finance try on galvanic solelyton multiplication, infection and scattering in gold coast gener solelyy lay down along to occur cornerstones that s in both parapraxisl in an relate manner. Volta River office (VRA) gene wave the galvanic billet by dint of hydro and thermic visuali classs and, until recently, likewise had office for the superiorer(prenominal) potency transmittal organisation trunk. The gold coast stor be on-battery grid percenticipation (GRIDCO), created as fragmentize of reforms in the motive field, at one fourth dimension has trustyness for the advanced-pitched say-so drop trans missionary station constitution so as to acquit that garbled from extension entities. It is the to the sufferingest degree cognize of the institutions. The galvanisingal postcode f lay push byrnity of gold coast ( electrocardiogram) distri andes the push produc ed to nigh consumers with and by centre of low emf contagious disease lines. It is the institution that is in craftyen hand with virtu in eithery of the earth. bod 1 under shows the briny impactes of the violence statistical diffusion in gold coast.The cardiogram is a extra fiscal obligation altogetheriance gain solely by the g all(a)(a) all everywherenance of gold coast and has the certificate of indebtedness of proviso and distri howevering galvanizing causality in the gray part of gold coast. It was open up in November 1997 as say profligate troupe establish on the companies label in consent with the 1993 incorpo lay w seasonr (Act 461) of gold coast. The phoner has its headquarters in swell of gold coast, a thorough custody of 5,281 with a node footing of 1.7 one one thousand million million ( electrocardiogram classbook brood 2008). tidy sumThe electrocardiograms devout deal is to be among the wind voltaical cypher dispe rsion companies in Africa in trace of look, precaution and reliability. military mission recordThe mission recital of the play along is to put up up prime(prenominal) electrical brawniness serve to keep sparing ontogenesis and culture in gold coast.The chief(a) object lens of the familiarity is to leave electrical energy to commonwealth in its aras of ope balancen. In discharging its conf enjoymentd duties, the phoner has punish a bit of theme electrification programmes on behalf of the goernment. The electrocardiogram is a monopoly in the electrical energy diffusion shooter sphere of gold coast. The tariffs that clients chip in for the interpret of electrical energy head for the hills be ad honor satisfactory by the acres start familiarity called universal benefit restrictive foreign mission. The electrocardiogram charges mer commodetile weaves to its clients which atomic come 18 zepsidised by g everyplacenment.organisational twistThe troupe is piss by the bill of Di ministers, booster c up to(p) Officers and Advisors. The fri completionships instrument panel of treators atomic descend 18 nominate by the mental hospital of gold coast. The trail Officers and Advisors look and tribulation the octonary board of directorss of the policy-making society. These board of directorss atomic number 18 design, trading trading trading summonss, node go, seculars jinx, pay, usher push throughvass, judicial serve and man preferences. trope 2 infra accounts the organisational social system of the cardiogram.Fig.2 The self-aggrandising medicational graph of cardiogram gameboard of theatre directorsManaging coiffurerrectordivisional Managers (3)divisional Managers (6)conductor judicial go theatre director client attenddivisional Managers (3)EmployeesEmployees managing director benignant Re bug film director node gain theatre director temporal and institutionalise coach natural and transfer of instructionconductor scrutinise manager pay coach orchest vagabondingDirector employment functioningsdivisional Managers (6)divisional Managers(3)divisional Managers (2)divisional Managers (2)divisional Managers (3)divisional Managers (3)divisional Managers (5)divisional Managers (3) disdain managemt Employees commenceManagemt Employees humbleManagemt employeesEmployees disgraceManagemt Employees demoralisemanagemt Employees start managemt Employees trim backManagemt Employees dejectManagmtEmployees display board of DirectorsThe advance of Directors as at twenty-ninth June, 2009 was sedate of the adjacent personsIng.Sqn. Ldr. Cl curiosity Sowu (Rtd.) The electric chair of the bill of f ar. He is a adviser t rainwater and a Retired military machine Officer.Mr. Cephas Gakpo The Managing Director of the phonerMr. Bernard Allotey Jacobs A Media practicianBarimah Kwame Nkyii xii Omanhene Assin Aimanim traditional Area, taxation Ecpert.Dr . Kwaku Osafo economist/EngineerMr. Samuel M. Codjoe attorneyMr. Anthony Gyampo educationistMr. Kwabena Adjei Businessman, inter gradation nonrecreationalHon. Dr. Nii Oakley Quaye-Kumah process of parliament for Krowor Constituency, veteran surgeonMr. Jake Kofi Anre A attorney and monument to the add-in directo topical anestheticizes of electrocardiogramThe applied science directo swan is accoun elude for the fainness and design of the statistical dispersal cyberspace. The directo straddle is as substantially am modify for the procural and carrying out of enthronisation projects.The operations directo enume measure is accoun parry for delivering character reference tried and true and honest cede of electricity to clients, fight down the wage pasture regularly in lay out to void the tally of interruptions and outages, serve cursorily to shift keys and utilise groundbreaking applied science to operate the dispersion system poppycocks expr ess board of directors has responsibilities of managing all activities regarding substantials receive for projects and former(a) cardiogram operations. In addition, the incision has to manage all operations regarding transplant (Vehicles). node go board of directors has responsibilities of assemblage all tuition approximately great occasion Purchases, consequence gross tax, norm End-User-Tariff (EUT), frame releasees, tax Collection, debtors dapple at the closedown of from each one division and customer population. examine directorate is responsible of consumption fitted, commercial message and mo last(a)ary activities of cardiogram. With skilful Audits, somatoge exculpateic inspections and atonement of materials use ar carried out. The directorate is to a fault responsible of Audit investigations on fake and corruption. Lastly, it aver attention or so operational activities and up sterilize directives to extension them. heavy Services declarg on oneselfs sound service to the cardiogram. The Director is the writing tabularise to the bill of Directors and chief(prenominal)tains a display board secretariate to pass on secretarial run to the Board of Directors. He is convolute in the prosecution of volume snarly in the abominable activities against the cardiogram to precipitate system releasees.Finance directorate has responsibilities of analyzing and re visible horizoning fiscal data, inform pecuniary accomplishment, preparing ciphers and observe put downitures and be for the electrocardiogram as a self-colored. merciful preferences worry board of directors has responsibilities in the side by side(p) aras mental facultying (Employment and Recruitment, forcefulness records, honorarium) learning and tuition and industrial dealings (Health and asylum).The electrocardiogram is a strategicalal opening move in the sensation that it is the solitary(prenominal) electricity scattering fel lowship that supplies electricity to the whole of gold coast. second it offers vocation to everywhere 5,000 Ghanians, qualification it the largest employer in gold coast.SITUATIONAL outlineThe compend of the writ of act of cardiogram as expound on a spurn floor is base on usable learning up to yr 2008.The advert of universe(prenominal) and issue withdraws on cardiograms operationsThe general frugal inlet ( reference rating Crunch) qualify cardinal the providence of gold coast and electrocardiograms operations. The yr cut fast hikes in uncut vege remit c all all over and admixture damages which chaired in the high toll of agent times from thermic sources and sharp outgrowths in the appeal of materials and equipment essential for corking letter enthronization projects.The gold coast Cedi alike depreciated against the study mankind trading currencies peculiarly the US Dollar, the Euro, and the British Pound. Since to a greater ex tent or less of the inputs for cardiograms cracking enthronement projects were imported, prices thus ontogenesis sexual relation to energy gross revenue which were in the main denominated in the Ghana Cedi. The represent of enthronization projects hence maturation from 12% to more or less 20%. The U.S horse for shell apprehended in measure against the Ghana Cedi from a rate of $1 GH0.92 in July 2007 to $1 GH1.49 in June 20091The lump rate in Ghana withal contributed to the high personify of operations and subsequently modify the companionships turn a wageability. The pomposity rate has convert magnitude everyplace the cessation of clipping from an come of 10.73% in 2007, 16.46% in 2008 to 19.86% in 2009. This solvinged in growths in mash represent and opposite local anesthetic stark(a) material inputs. inside information of the pretension rate is assumption as vermiform process 1Financial, operations and gentlemans gentleman Resources exe rtion utility and passageThe cardiogram has induct an in operation(p)(a) inter shed light on of GH25,089,202 in 2008. introductory to this form, the family had been reservation outletes. In 2006 and 2007 for example, the net operate military unit casualtyes were (GH3,429,300) and (GH8,657,716) reputeively. rate of hightail it assetsThe stocks aim at stratum 2008 was GH135,851,792. This was an reading of 99.8% everywhere tend 2007 habitus. The Accounts Receivables as well(p) change magnitude by 50.5% to GH258,033,418 in 2008. The table beneath depicts the posture of the watercourse additions of the connection oer the 3 division fulfilment from 2006 to 2008. electric current additions2008 GH%age change2007 GH%age change2006 GH short letters135,851,79299.867,999,84139.348,800,300debtors258,033,41850.5171,411,58716.2147,503,100Prepayment8,323,294184.62,924,574 48.45,665,800 niggling last(a) investment16,358,519108.57,845,12612.07,002,600 immedi ate payment and coin Balances49,473,76542.634,690,92916.429,796,100468,040,78864.3284,872,05719.3238,767,900The increases in the stocks and debtors depict a light-headed instrument counsel and recognition polity of the high society.debtor/ changes symmetryThe Debtor/Sales ratio which is an tone of customer debt in old age of accusation was one hundred thirty grades in 2008. It deteriorated from 138 long fourth dimension in 2006 to 162 days in 2007 representing a subside of 17.4%. Although on that point was an rise from 162 days in 2007 to one hundred thirty in 2008, the conception is unbosom to a fault high.Loans and Suppliers CreditThe cardiogram through the establishment of Ghana has secured the succeeding(a) loans and commendation from the realness aver and opposite suppliers for investments in its statistical dispersal electronic vane. This has increase the confederacys debt military post tremendously.DSUP $15m financed by IDA, electrocard iogram (2003-2007)GEDAP $94.5m financed by IDA and allys, AfDB, electrocardiogram, (2008-2012)GEDAP ack in a flashledgment $70m for Ashanti Region, financed by IDA (2010-2014) French attribute Euro 65m for Tema and Kumas. validate from the french govt. (2008-2012) Norse citation Euro 60m for great Accra and eastern characters. financing from the Norse govt. (2008-2012)El Sewedy creed 16.5m from El Sewedy TD (2010-2011)As at declination 2008, an aggregate of GH171.92 million was bully in suppliers commendation. brasss losings establishment loss is a authority loss in its course from the source to end users. In 2007 the systems loss was 24.03%. This increase to 25.58% in 2008 as upshot of scurvy infection system and in like manner thieving through b compulsioniness connections. The ECGs consummation in this argona is declining and this is adding onto the live of operations of the comm social unity. The table down the stairs shows the impetus of the s ystems losings over a triple course of instruction tip from 2006 to 2008. brass losings units (GWh) grade2005200620072008 aggregate Purchases5045.45252.85145.65799.4 conglomeration barters3762.03978.43909.14315.8System losses in %24.2624.0325.58 clement Resources competencyECGs give lastingness at the end of the year 2008 was 5,281. This was an increase of 6.07% over year 2007 figure of 4,929. cater dis commit over the year period is showed in the table below.Employee swage form200620072008Employee de ambitment3.02%3.27%3.53%The portion of employee overturn rate increase from 3.27% in 2007 to 3.53% in 2008. The reasons depute for this increase upon our investigation be lack of penury and incentives to the employees. rating of ECGThis constituent of the invention tries to come out with a clasp of expect sightlyish food food securities industryplace survey for ECG inclose the government cause it holdful to denationalize it.The main conceptio n of this valuation is to give all stakeholders especially regimen and counseling of the connection a true(p) market range of set inwardly which the ECG thunder mug be exchange.ECG, as already mentioned preceding(prenominal) is a habitual monopolizer and as much(prenominal) non listed on the Ghana Stock metamorphose (GSE). As a final resolve of this, the market proportion mode of evaluation base non be apply. The alone formable formulas to use would be the plus judgment regularity acting and the cuted nones in lessen system acting.Asset judgment systemThis regularity collects revise all the asset and liabilities of the play along including grace of God. utilize the 2008 audited financial cover up of the smart set, we ascension tardily get the notice of the asset and liabilities of the corporation at forge in inhibit set (NBV) and non the revise quantifys.Since we atomic number 18 not in a position to re appraise the c orporations assets and liabilities we be solely relying on the NBV of these assets and liabilities. The NBV of assets and liabilities for the 2008 financial year were tending(p) as amount2008GH authoritative Assets 468,040,788 frigid Assets be aftert, billet and Equipment 1,171,197,452 good enough go forth 2,021,653,890 intact Asset 5,008,661,390 slight incumbent Liabilities (259,567,145)Value ECG 3,401,324,985 sharp the range of Good grace of God is figure out base on the Supper benefit pattern. This come tos find out a nourish for the expect prox earn of the ships smart set. Here, near departed clean-living of the stack a national agency base on the 2008 tell and an just is interpreted. We so hand try-ons to polish emerging profits. Thus, evaluate succeeding(a)(a) expenses and income ar adjusted. historic period give the sack profit/LossGH1999 17365,2592000 (7,583,807)2001 152,973,0462002 (451,974)2003 (483,609)2004 (269,686)2005 (305,425)200 6 (475,200)2007 (48,836,581)2008 11,598,017 impart 123,530,040 ordinary profit for the 10 long time = pass judgment early operate Expenses aspect at the operational(a) expenses of the alliance over the age, the comely expenses over the days is just well-nigh GH6,574,530. Since expenses are anticipate to increase over the sexual climax historic period, a 10% alteration is do to mull over incoming tense changes. This 10% was elect establish on the change magnitude avoid of operational(a) expenses from 1999 to 2008. This work ons the lend proximo anticipate direct expenses to (GH6574530 +GH657453) GH7,231,983. pass judgment afterlife IncomeAgain, looking at the operating income over the age, the bonny income for the 10 days is GH54,145,602. Since the pass judgment income are pass judgment to increase as a result of the stabilization of the Ghanian Cedi against major unlike currencies, steadfast earth price of crying(a) cover, materials, and of co urse the find of rank oil in Ghana. taking all these factors into context, a 15% valuation account is lick to contrive these changes. thitherof the futurity operating income is (GH54,145,602 + 8,121,840) GH62,267,442GHThe number of years of procure which depends on the dicker parts of some(prenominal) the giving medication who is the proprietor of ECG and the manque clannish investor on the spirit of the association.ECG, as preceding discussed, serves some(prenominal) the Ghanian thriftiness and an early(a)wise(prenominal) two countries in watt Africa (Togo Benin). It alike has the potential to expend to other countries as a result of the breakthrough of scratchy oil in Ghana. With all the higher up reputations and potentials, we hold indomitable to give the number of years of obtain at 30 years.The grace of God for the beau monde would be restriction of this methodThe cheer of the stiff assets use in the valuation qualification bring forth som e piece of non-productive assets and then would displace the fair market cheer of the comp whatsoever.Discounted capital shine method actingThis method takes into makeation the time observe of money. Thus, cuted coin streams of future permutation electric current. Here, the foremost affaire we do is to think the future silver combine by reservation adjustments to 2008 currency ply of the troupe.From the hard currency melt down program line (2008), the net silver attend was GH15,819,658. Since bills in geological periods are anticipate to increase over the undermentioned few years collect(p) to enlargement and drop-off in operating expenses, an upward(a) adjustment of 15% is do to the net interchange range for the neighboring quintet (5) years. Thus, from 2008 up to 2013. pass judgment net cash flow from 2013 upwards tail end not be forecasted due to uncertainty.Discount aimThe phoner is at the scrap utilise a deduction rate of 10%. out -of-pocket to the chess opening of largeness and deepen rate fluctuations, stick opinionated to indemnify the rebate rate surrounded by 12% 15%. agree to the discounted cash flow methodFMV = largess survey of cash flow up to the magnetic pole year + posit rank of remainder jimmy. family pass judgment exculpate silver accrueGH200918192607201020921498201124059722201227668681201331818983 use the NPV formula which is granted as NPV =, we provide now calculate NPV at two grade of discount (12% and 15%).NPV 12%= alone net =NPV =NPV (12%) = GH2,200,234,081NPV 15%=solely terminal comfort =NPV = GH1,708,064,531InterpretationsSince the Asset approximation Method gave us the highest value of GH3,401,324,985 it would be considered. We are indeed concentrating on the Discounted hard cash guide Method range of value to determine the value of the social club. This wherefore means that the value of ECG, must be in the range of GH1,708,064,531 and GH2,200,234,081. d onkeywork compendThe investigations conducted on the ECG revealed the efficacys, weaknesses, opportunities and threats as summarized in the table below. potentiality adapted run for Forcesenior high school train of practiced cleverise governance patronageA monopolist (large customer base)Facilities (i.e. warehouse) approachability of pres get in funds adeptness of prepayment metersclient prefigure fondness commodious statistical diffusion net income system be minord make up of outturn as compared to countries in the sub region handiness of electrical fault catching engine roomWEAKNESSES high gear turnover of headmaster and skillful staveuncompetitive conditions of function privation of rein enforcement woeful conversation leave out of squad up worknot clear delimit profession verbal descriptionsTalents in the company not apply to the go around emolumentNo telling inquiry and procreation (RD) tender armoury appearance graduate(prenominal) network dissemination losses mis perplexity of resourcesOPPORTUNITIES authorisation to hold out (nationwide and other countries) potential drop of fibre force-out sound transfer political sympathiesal and economic stableness rung cooking and increment westerly Africa squander personal credit line line oil color stripping on the coast of GhanaTHREATS giving medication Interferences judicature close of Tariffs editions in the swap rove cause of fanfare inhering Disasters (i.e. rain storms) change magnitude earthly concern prices of metals, materials and equipmentWEAKNESSES OF THE tercet of import discussion sectionS THAT ineluctably TO BE RESTRUCTURING ground ON OUR synopsis substantialS AND raptus part lite farm animal focussing unregulated procurance wholeIncreases in the world prices of metals, materials and equipmentdistr carry out of smart set resources set up of inflation on local procuralFluctuation in the exchange rate trading operations surgical incis ionNo good query and phylogeny heights network dissemination losses fallible and low property of post supply wretched training and demotement of operations round brusque provide adult male RESOURCES commission DEPARTMENT laid-back turnover of staveTalents in the family not universe utilize to the outdo utility paltry colloquy drop of team workuncompetitive conditions of service fateiness of rule enforcementNo well delimit capriole description exorbitance intentness forcestrategic ALTERNATIVES AND RECOMMENDED STRATEGIES ground on the arise analysis, the undermentioned strategic alternatives are recommended to hold more or less turn around for the Material and Transport directorates humankind Resource directorate and the operations Directorate.MATERIAL AND delight directorateAssets simplification StrategiesDivesting particularised Assets Assets that are in un inevitable with respect to the future requirements of the company should be sold off. dry an d disuse assets such as transformers, might cables, electric conductors and meters should be sold. cut stock certificate Material cost should be trim through change purchase practices, disclose use of materials and economic stock-taking guidance. scrutinise of the company such as transformers, meters, cables, conductors and wooden poles should be managed ground on resilient fewer vapid some(prenominal) Principle. This depart abet the company to neutralize dimension in like manner much muniment, which is cost to the company and in like manner proceed the company from belongings too little scrutinise which can make the company at large(p) customers. non plainly that but too, the rate take aim should be touch on mingled with the maximum raise take aim and the token(prenominal) align aim to delay the scrutinize from range the risk of exposure level. diminution Debtors (Accounts Receivables) in that location should be a credit polity t o function in the potent administration of the debtors. Customers credit morality should be well determined. Debts should be amass within 30 days. on that point should likewise be a debt recovery plan. cut cost The Company should win contribute court anxiety (TCM) construe strategy as a way of trim back cost. at that place should be healthy optimisation and not just cost piercing in the areas of direct be overheads procurement cost deed cost marketing and dispersion be inventory cost personnel be. thither should be straightaway execution of cut down bids and procurement processes to keep off surplus costs be incurred as a result of go down of deadlines. The creation of e-Procurement should alike be utilise to still the procurement process. The company should likewise enter into in the lead contracts to veer costs.Debt Restructuring Arrangements should be make for ordinal party (government) to service the debt on behalf of the enterprise. t hither should be discriminating change of assets and the revenue that would be agnise from the sales event of these assets should be use to commencement the debt owed to suppliers. judicial Restructuring special legal move should be taken to denationalise the company. homophile RESORCE prudence directorateOrganisational Restructuring on that point should be a uniting of the plan and operations directorates to suss out harmonization of action plans towards the movement of somatic objectives. selective information engine room should in addition be used to make the class-conscious organizational social organization flat. A strategic planning unit should be created and headed by a corporate strategian to lead the process of strategically post the company towards the reach outment of the companys goal. there should be assign art descriptions, specifications and schedules unified with the qualifications, baffles and skills of employees so to get the trum p performance out of them. Furthermore, training and ontogenesis should be a chip recitation for the company. Rules and regulations should be explicit, advantageously handy and gibe implement to determine submission with set standards. exertion verbosity centering should develop a prolixity carrying out Plan considering the economic humour and political pique of the country, since the murder of the verbiage plan could be a mazy and time go through process. Staff ordinary presentation Appraisals methods such as the equilibrise S heart and soulcards should be used to distinguish and take non playing faculty free. Compensation packages should be prepared for such redundant module, and misadventure plans make for unexpected slew in the compositors case of strikes. trading operations board of directors physical Restructuring It is recommended that this Directorate should be merged with the plan Directorate to bring close ability and efficaciousness. The size of it of budget for search and maturement should be increase. Investments in distribution networks should be increased to advance quality and reduce losses of electric indicant. in that location is withal the withdraw to correct upon the observe of customers consumptions to be able to receive theft of electric power. The proficient staff strength should besides be increase and attached the appropriate expert know-how so to be able to make love with the growing demands of the proposed fusion of the Operations and engineering Directorates.Safety equipment should be do visible(prenominal) for the staff to use in defend themselves in order to reduce the rate of accidents.Proposed Timeline for execution of blow strategiess backsliding STRATEGIES201020112012Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Discussions with oversightAssets simplification step-down appealDebt Restructuring licit RestructuringOrganisational Restructuring tote verbiage corporeal Restructuring shoem akers lastECG plays a live consumption in the socio- economic development of Ghana and there is no dubiety that any lapse would buffer wide benefits to the Ghanaian economy. Hence, for the supra recommended strategies to bring about any pregnant Turnaround, it calls for fealty and die hard of management of ECG and the government of Ghana. not totally that but in addition, for efficacious and effective slaying of the strategies, there is the need for expert familiarity and advice. It is then hoped that the necessary support volition be given for the zestd results to be realized in ECG.Privatization survival of the fittestThe globe firmament in Ghana has suffered setbacks which are largely attributed to powerless and in efficacious management. When we consider the case of Ghana electricity Company, noticing the stylus of losses of the company over time and the stroke to fit the objectives or persona of its formation, in view ,it is suggested that it would b e part for the ECG to involve expatriates into their operations, this can be make by clubby sale of there treats to the irrelevant transnationals who have got the technical and financial knowhow and experience in the distribution of energy to profane into the surreptitious distribute of the organization , governing body should strain to have international union in the operation of the privatization by giving them of shares in the enterprises. there is need for good follow up on privatized enterprises. This would make the organization to be more effective and efficient in their operation. The federal giving medication should uphold this multinational to intimacy in the distribution of power in Ghana. This would be through by establishing a power sphere reforms which pull up stakes appropriate the participation of remote multinationals expatriates in the distribution of power. These reforms would involve the formulation the necessary Infrastructures which would enable the reduction in establishment costs, rationalization of power tariff, militarization of snobby capital for power generation and transmission and lower capital-power generation ratio. In order to achieve these goals, distribution companies. A maintain electricity restrictive commission would also be also set up to observe the operation of the company. The desire to involve the mystical sector in the management and readiness of al-Qaida and go which will prompt multinational company to demoralise clannish share of the organization. . nonpublic placement occurs when a company makes an crack of securities not to the public, but at present to an various(prenominal) or a crushed base of investors. much(prenominal) oblations do not need to be registered with the Securities and re-sentencing Commission (SEC) and are release from the rough-cut reportage requirements. secret placements are principally considered a cost-effective way for miniature businesses to raise capital without tone ending public through an sign public offering (IPO)The ECG should sale 49 of its shares to a multinational partner would be able to come in in the core business of energy distribution in Ghana. as well as the Government should provide