Profitability measures the ability of an entity to generate enough
income (profit) in excess of its revenue, assets, operating costs, and shareholders' equity during a specific period of time.
Performance Outcome 2018 2019 2020 2021
Gross Profit/(loss)Margin(%) 77 79 66 58
Operating Profit/(Loss) Margin(%) 38 43 35 23
Net Profit/(Loss) Margin (%) 35 34 31 22
Return on Equity(%) 13 11 10 6
Return on Capital Employed(%) 16 15 14 8
Liquidity or Shor-term Solvency Measures: Liquidity assessment is concerned with the
ability of the business to meet its short-term financial obligations as they fall due as well as
short term emergencies.
Performance Outcome 2018 2019 2020 2021
Current Ratio(Times)=Current Assets/Current
Liabilities
2.9 3.1 2.9 2.5
Quick Ratio (Times) 1.3 1.6 1.9 1.2
Cost of Sales Ratio(%) 23 21 34 42
Operational Efficiency Measures: Operational efficiency assesses the efficiency with
which particular resources are used within the business for the period under review. It is a
measure of Management's ability to generate sales and other resources from capital employed or assets it currently has.
Performance Outcome 2018 2019 2020 2021
Inventory Turnover 0.2 0.1 0.3 0.2
Fixed Asset Turnover 0.4 0.3 0.3 0.3
Accounts Receivables Recovery Days 156 295 363 265
Accounts Payables
Solvency Assessment Measures: Solvency assessment measures the proportion of capital
employed which is accounted for by long-term fixed-interest debt.
Report on the Audited Financial Statement of the TDC for 2019 and 2020
Performance Outcome 2018 2019 2020 2021
Capital Gearing Ratio(%) (0.34) 0.00 0.00 0.00
Debt-to-Equity Ratio(%) 0.00 0.00 0.00 0.00
Interest Cover(Times) - - - -
Shareholder Value Measures: Measures is how well a company is performing
in relation to share price and dividends.
Performance Outcome 2018 2019 2020 2021
Dividend Pay-out Ratio - 5 - -
Dividend Yield
Earnings Per Share 24 26 28 19
Going Concern Measures: Going Concern assessment is conducted to determine the
overall financial risk of the entity and the prospects or otherwise of survival in the
foreseeable future.
Performance Outcome 2018 2019 2020 2021
Multiple Discriminant Analysis(MDA)
X1=Working Capital/Total Assets 0.6 0.6 0.6 0.6
X2=Retained Earnings/Total Assets 0.4 0.4 0.4 0.4
X3=EBIT/Total Assets 0.4 0.4 0.3 0.2
X4=Market Value of Equity/Total Liabilities 1.7 1.8 1.5 1.2
Ranking Member of the
Committee (Dr Kwabena Donkor):
Mr Speaker, I beg to second the
Motion ably moved by the Hon Vice
Chairman of the Committee on behalf
of the Committee, and in doing so, I
would like to dwell on an issue that I
believe this House should take note
and find a way of cleaning up.
Mr Speaker, TDC happens to be
one of those corporations converted
into a limited liability company. The
objects of the company, the articles of
incorporation, and others go with the
conversion to a limited liability
company, yet, if you look at the TDC,
they still derive their mission, so to
say, from L.I. 469 and 1468.
Legislative Instruments underpin a
parent Act, so having converted from
a corporation to a company, what the
two L.I.s captured when it was a
corporation, ought to have been
transferred or modified in one way or
the other into the objects of the company
or the articles of incorporation at the
Registrar-General's Department. We
still have a company registered as a
limited liability company, but still
depends on an L. I; an L.I. that
underpins a parent's act which is no longer operational. That is one of the
issues arising out of these
conversions that I believe the
appropriate Ministries and this House
must clean up to bring consistency.
Mr Speaker, having said that I
also want to draw the attention of the
House to the question of dividends.
The State sets up businesses. If we go
through the Seven-year Development
Plan, some of its objectives include
the State setting them up initially, and
when these companies stand on their
feet, the State privatises or transfers
them to indigenous Ghanaian
interest. It was one of the objectives
of Plan, but some of these companies
are set up as commercial organi-
sations with a profit motive. Those
that are set up with commercial bias
are expected to pay dividends to the
share holder that happens to be the
Ghanaian State.
The TDC happens to be one of
the very well-run State-Owned
enterprise in this country, and I am
proud of the good work the
management has done. However, The
TDC, as profitable as it is, has not
paid dividends to the Ghanaian State.
Companies pay dividends, unless the
shareholder decides to reinvest and if
they decide to reinvest in the
company, there should be a
resolution by the shareholder. This
has not happened, and I believe the
Minister for Public Enterprises and
this House should take a cue and
ensure that companies — particularly when the nation is in such dire needs,
companies that are profitable and
have huge cash mountains, as we say
in finance, pay appropriate dividends
to the Ghanaian State.
Mr Speaker, your Committee has
noted with great concern on page 6,
paragraph 25 and again in our
conclusion of the Report. There is the
question of the cash mountain. When
we have huge sums of moneys sitting
in bank accounts, in normal business,
that is not an efficient way of using
cash. It is therefore not surprising that
your Committee raised this issue, and
we believe the management of the
TDC should take due cognisance of
this and invest in short term
securities. Their explanation is that
they need the cash reserves available
so that should some property become
available, they would not be found
wanting when they want to buy it.
Having this huge cash reserves and
earning very little in bank interest is
not the most efficient way of using
the state resources.
Mr Speaker, I would also want to
applaud the management of the TDC.
In paragraphs 22 and 23 of your
Report, the TDC, as a going concern,
is assured, looking at the financials
that we examined. It has strong
financials and we are happy to see a
State-Owned company with that.
Mr Speaker, our Committee only
looked at the financials; we limited
our authority to the audited
financials. In terms of operations and
policy, I believe the appropriate
Committee would look at that. The
TDC is well-run, but there can be
further improvement, particularly in
the management of cash reserves, and
also the urgent need to pay dividends
to the shareholder who happens to be
the state of Ghana.
Mr Speaker, thank you for the
opportunity.
Question proposed.
Mr George Kwabena Obeng
Takyi (NPP — Manso- Nkwanta): Mr Speaker, thank you for the
opportunity to contribute to the Motion.
Mr Speaker, looking at the
accounts and performance of the TDC, it shows that the company is outstanding in dealing with its resources. If I may look at its background and make my case, paragraph 9 of the Report states, among other things, the objective of the corporation:
i. “To acquire land for real
estate, development and management.
ii. Planning, development, and
construction of towns and cities in and outside Ghana.
iii. Development and manage-
ment of commercial and industrial areas.
iv. Consultancy services”
Mr Speaker, the TDC has shown
that it has the capacity to make profit, and when you look at the revenues in paragraph 14 of the Report, it shows that over the years, the company has been making good revenue where its revenue increased at good rates. At the same time, its liquidity is very dynamic and efficient. They are
making good use of their current assets and current liabilities which shows that the company is efficiently managing its working capital to sustain its operation for a good period of time.
It also has a good solvency
position because the company is not indebted to anybody. It does not have any debt over burden, and is therefore of itself to carry all its activities and be in a good shape, so its going concern is also assured.
However, one area that is very
important, linking it to their objectives, is the huge accumulation of cash as observed by the Hon Ranking Member. The TDC has a very huge amount of money in its cash account, but their objectives show that they have to acquire land and develop cities and towns in and outside Ghana. On that note, the performance of the TDC would not be complete if they are sluggish in making good use of their cash resources. It means that the company has not been effective enough in turning round its cash resources.
The TDC can make good use by
establishing other hostels, residential areas, and cities that could earn them
more, and they would also pay more to the Government in terms of dividends and taxes. Therefore, if they are sluggish in making good use of some of these financial resources, then it means that management, in this case, is not showing signs of how dynamic it is to turn things around and diversify the company's operation in other areas. It should not be that the company limits itself to only Tema; it should also look at other areas.
Mr Speaker, ending on this note,
I would like to urge the House that even though the TDC is doing well, we should not pamper them with this limited area. Rather, they should go ahead and diversify their operations and get to other areas. Even if they have to go outside Ghana, they should diversify, extend their tentacles, and do more for Mother Ghana so that Ghana would also see that we have a star.
Mr Speaker, I thank you for the
opportunity given me to contribute to this Motion.
Mr Rockson-Nelson Etse Kwami
Dafeamekpor (NDC — South Dayi): Mr Speaker, I thank you for the chance to add my voice regarding the Motion on the Floor for the adoption of the Report in question.
Mr Speaker, in doing so, may I
draw the attention of the Committee's leadership to some corrections. I have
discovered that the information
contained in paragraph 9 to 12 was
taken from the website of the entity,
TDC. In line 3, after the word “land”, it should be “uses”, not “cases” so that it reads: “… about 63 square miles of public land for various land
uses”.
We see in paragraph 10 that TDC
was given a 125-year lease term. Mr
Speaker, statutorily, no entity can
have more than a 99-year leasehold,
so that information is inaccurate. It is
stated on their website like that, but
as a House of record, we have
enacted the law to say that no interest
in land can be held for more than 99
years, even for indigenous people; so,
we need to amend that information.
Mr Speaker, it is interesting that yesterday, this matter cropped up in respect of GIHOC Distilleries and has also come up in respect of TDC. The Committee noted correctly that in 2017, TDC was converted into a limited liability company, but I was hoping that the Committee would have told us the process because the process of the conversion is very important. It appears that even
though it is on paper that the company has been converted, every other document relative to TDC still appears to be a corporation: Therefore, it is important that, like the Hon Ranking Member of the Committee intimated, we put our house in order in respect of this matter.
I also find it very interesting that
as part of the mandate of TDC, they are to acquire land outside of the country and build real estates, and so I was hoping that the Committee would interrogate whether indeed TDC owns some property outside of the country, and whether those landed property have houses and estates in the name of TDC.
Mr Speaker, may I further state
that the Hon Member for Manso- Nkwanta, Mr Obeng Takyi, sought to praise TDC pursuant to the information in paragraph 11, but I am worried. TDC has piled up money in excess of GH₵163 million, and yet, we have people in Tema looking for low-cost accommodation to occupy while the mandate of TDC is to acquire or put up residential accommodation for workers. Why then does the company pile up money and renege on its mandate while people go round looking for simple
accommodation to lay their heads? The Committee's Report indicates clearly that they have a very comfortable bank balance; so, they should, as a matter of urgency, apply those funds and put-up low-cost housing facilities for workers in and around Tema and Ashaiman. In any case, that is their mandate.
I am also interested in the fact
that apart from its core mandate, TDC is also supposed to engage in planning the development and construction of towns. The informa- tion now is that Tema has lost its beauty and shine as arguably the most planned city in this country, in addition to Akosombo. What has happened to that aspect of TDC's mandate in maintaining the planned nature of Tema? Today, structures spring up anywhere within the municipality of Tema. The company should not only be interested in working and making profits, but the core mandate of making sure that the physical nature and plan of Tema remains intact because that is what brings the ambience of the industrial city.
Mr Speaker, may I conclude by
saying that TDC, indeed, is doing well, but we would want it to keep helping the country in the provision
of other facilities, including assistance to the Ministry of Health. During this critical era of managing the COVID- 19 crisis, the company should be able to support.
I did not see any information on
their corporate social responsibility. I do not know how much budget they have devoted to that. Mr Speaker, although I am not the Hon Member for Tema West, I have a few constituents who are residents of Tema West. I hear that the Tema General Hospital, which should be one of the focal landmark structures in Tema, is not in the best of shapes and TDC, being the parent company that manages Tema as a city, should pay attention to and assist the hospital by extending financial assistance so that it can play its proper role within the Tema-Ashaiman enclave.
Mr Speaker, with these words, I
urge the House to adopt the Report as presented.
I thank you for the opportunity.
Mr Isaac Ashai Odamtten
(NDC — Tema East): Mr Speaker, I thank you for the opportunity to
contribute to the Motion before us.
Mine is just to add to what the Hon
Member for South Dayi, Mr
Dafeamekpor, mentioned relating to
the mandate of the TDC supporting
corporate social responsibility or
being corporately responsible in the
Tema enclave. That sits well in the
item numbered (v) of paragraph 11,
“the consultancy services”.
Mr Speaker, we have a lot of developmental projects going on within the Tema enclave, and we expect that the capacity that TDC has would reflect in the projects that we see under both education and health, with a special mention of the Tema General Hospital. What we see in the Tema General Hospital is a haphazard planning of the hospital, and I think that the call by the Hon Member for South Dayi is in place, except to add that with the conversion of TDC into a company, we cannot hold TDC as wholly accountable for the management of the city of Tema. As it is in our laws, it is the District Assembly or the Metropolitan Assembly that has political and administrative jurisdiction or oversight over Tema. I say this because, now that TDC is a company, what we expect is that TDC must advance its core business as enshrined in its new legislation to
cede the administration of the city to the relevant authority, which is the Metropolitan Assembly.
Mr Speaker, again, the key responsibilities of TDC, including maintenance of street lights, some road works, drainages and sewer, have shifted to the Metropolitan Assembly. Howbeit, the funds that must follow these responsibilities are not moving because TDC still receives ground rent, which must support the administration of the city and must also help in maintaining the sewer and other utility services in Tema. If we juxtapose this with the performance of TDC, we could then say that the company is earning from the old Tema city, yet it does not contribute to the maintenance of the city.
Mr Speaker, I would like to put on record that once TDC is a company, it ought to function as a company, go to where it can compete, and leave the administration of the city, as well as the resources that inure to it for the administration of the city, to the Metropolitan Assembly.