TWO QUESTIONS IS NEEDED TO BE GENERATED FROM THIS CASE STUDY. EACH QUESTION CONSIST OF 50 MARKS EACH.

STRATEGIC CASE STUDY This case consists of two questions BACKGROUND The Company was registered as Cheetah Investments Limited on 3rd June 2015 and was incorporated as a limited liability company on 7th May 2016. It received its certificate to commence business on 25th September 2016. The company was registered with 20,000,000 shares of no par value out of which 5,000,000 shares has been issued equally to the initial shareholders or promoters, Asebu Amanfi and Asebi Boakye. They decided that each shareholder should nominate his adult child to be appointed as a member of the Board of Directors. They will at all time maintain four individuals as members of the Board and the Chairmanship will alternate between the two shareholders every two years. Asebu Amanfi decided to nominate his daughter aged 18 years, who has just been admitted to a University appointed as a member of the Board of Directors. Asebi decided to nominate his daughter aged 25 years, who has finished a course in animal husbandry in a college in in Guanduanaland and has just returned to Ghana, to be appointed as a member of the Board of Directors. They appointed a mutual friend who has been the lead person in assisting them to set up the Hotel as Company Secretary. The question of who should be the Managing Director has come up in most of the shareholders discussions but no firm decision has been taken. They are of the view that the Hotel does not need a Managing Director at this stage of its development. Each of them can play that role as and when needed. The company was certified and licensed to operate as a Hotel under the name GHANA GOLDEN ONYX HOTEL (GGOH) by the Ghana Tourist Board on 1st January 2017. GGOH became operational on 18 January 2019. The company's vision is to be the leading business destination hotel in Ghana and indeed in Africa providing world class hospitality services to its clients. Its marketing catchword is "Local in Character, International in Outlook". The mission of the Hotel is to offer unforgettable home away from home lifestyle experience to their guests and all who find themselves on its premises. GGOH became the preferred lodging place for staff of International Organisations and pleasure seekers because of its unique brand of Chalets and Water Front standard rooms. SERVICES GGOH provides the following services: Rooms, Bar and Restaurant, Conferences and Meetings, Fitness Centre, Health Spa, Business Centre and other services. Rooms There are two (2) exquisite executive deluxe with each consisting of 3 bedrooms and two bathrooms, including a master suite bathroom with Jacuzzis/shower combo. There are also two (2) Apartments available to clients. There are Nine (9) fully furnished business executive rooms or Villas and each consists of 3 bedrooms, 2 bathrooms, guest washroom, spacious living area, modern open-plan appliance-fitted kitchen, formal dining area, basement garage, combined laundry & storage room, and backyard space for relaxation and entertainment. The Upper Level of each fully furnished business executive wing has a porch, a walk- in closet with full-length mirrored doors, a spacious end suite sky-lit bathroom, with a two-seater Jacuzzi, and a separate shower. The upper level houses a storage facility, and also features a vaulted ceiling, with wood beams, elegant chandelier lighting, and a beautiful balustrade staircase leading to the lower level. Each fully furnished Business Executive house has broadband Internet, as well as terrestrial, satellite and pay-per-view television. A telephone and an intercom system, independent air conditioning, Page 1 of 9 water storage and a prepaid utility system (electricity and water) are part of the standard features in each house. There are 18 serviced suites consisting of 4 standard suites, 4 superior suites, 2 executive suites, 4 deluxe and 4 premium deluxe suites. All suites have appliance fitted kitchenettes, a closet with full length mirrored doors, writing desks, wired and wireless internet and terrestrial, satellite and pay per view flat screen television. The GGOH Food & Beverage team assist guests who need groceries for self-catering. They help guest prepare a list of items they require, within their advised budget, and have the items delivered to their suite, apartment or executive house. The complete grocery shopping service includes preparation of ingredients by a member of the cuisine team, to make self-catering session truly hassle free. Bar and Restaurant This 40 seater restaurant overlooks the picturesque swimming pool. The Restaurant provides an intimate atmosphere for lunch and dinner experience. With an array of delectable dishes, sumptuous salads and divine desserts, it offers food for every mood and occasion. Notable among the menu are Shrimp Cocktail - a hors d'oeuvre of spicy shrimps in an aromatic cocktail sauce, sublime Chicken Aurora - a delicately spiced serving of boneless chicken, in a creamy mushroom and carrot sauce, served with saut potatoes or curried rice and an unforgettable Fish Menuniere - fish fillet in a garlic-lime sauce, together with pineapple rice. Another unique feature is a rich menu called Black Lives Matter - a rich chocolate dessert that takes clients on another journey of culinary and gastronomic discovery. The Restaurant also provides Buffet services for the working class who want a change to a reasonably priced luxury location. Conference and Meeting The meeting room is set up to accommodate up to 20 people for board meetings, but is also easily reconfigured for other uses. The 2 Conference rooms with seating capacity of 40 each have audio-visual facilities and Internet services. GGOH Courtyard is used as a Car Park. Outdoor events are therefore not possible and as such request for such services are turned down. Fitness Centre With industry-leading fitness equipment, GGOH's state-of-the-art fitness facilities provide the perfect opportunity to get in shape, and stay in shape. Opened 7 days a week, the gym has membership plans varying from individual monthly to corporate annual memberships. Residents of GGOH have complimentary use of the gym. A team of experienced fitness coaches guide clients through a systematic regime of training, advice on the most effective weight loss, muscle toning, muscle gain and cardio programs. They monitor client's progress carefully, and vary the regimes accordingly to fitness expectations. Health Spa GGOH's Spa provides a distinctive combination of beauty services and body therapy. The tranquil spa environment offers Jests an oportu to pamper both body and senses. Experienced beauty therapists provide guidance to help clients choose the appropriate therapy. Page 2 of 9 Clients can take a relaxed bath in a Jacuzzi, and enjoy Swedish massage to feel energized. It's full body super scrub, followed by a thermal clay mud with foam wash and body butter massage leaves a client in a blissful state of relaxation. The signature Facial treatment combines double cleansing, double exfoliation and extra extractions with a blissful micro- buff back polish, and is great for clogged pores, dull lifeless skin and fine lines. Manicure and pedicure treatments, together with styling by hair stylists, nail technicians and make- up artists give clients a dazzling appearance and blooming radiance. The Spa also offers male grooming services. One can expect a look that is sharp and refined from barbers and stylists. The Groom Facial, with its customized double mask, exfoliation, steam treatment, and face and neck massage, is an absolute must before that once-in-a-lifetime occasion, all in all- a truly royal spa experience. The Spa Boutique retails skincare, make-up and hair products from premium brands. Also available here are top brands in male grooming. The boutique is the reception for bookings, appointments and information on spa services. The Spa Gift Certificates are also sold at the reception. Spa assistants help clients select the appropriate spa gift treatment or customize a unique one. Business Centre GGOH Business Centre handles any Secretarial service from photocopying, printing (black and white and colour), lamination etc. GGOH in addition operate the following business lines: Swimming, Laundry and Patisserie. MANAGEMENT TEAM GGOH is managed by the following management team: Shareholder: Asebu Amanfi Asebu Amanfi, a self-styled successful businessman, studied Civil Engineering at KUMASI LEGON. He started his career with an IT Consulting Company in the United States after securing an opportunity to work in an exchange programme. He later joined an IT Company in India before branching into IT accessories dealership. He successfully owned and managed this business and made good money until he met his friend, Asebi Boakye. In a conversation with the friend, he realised that they both have a passion for the hospitality business. Shareholder: Asebi Boakye Asebi Boakye is a highly successful entrepreneur and business mogul who studied Graphic Designing at KUMASI LEGON. He left for the USA just after school and started a car export and import business. He also undertook short courses on entrepreneurship and mentorship in a business school in the United States. Marketing Manager: Abdulai Alhassan Abdulai Alhassan is an experienced Business Development/Marketing professional with several years of Service and Product development experience gained in Multi-national organisations with increasing level of seniority. He has a Bachelor of Science degree in Economics and also holds an MBA in Finance. He also has expertise in Trade valuation/classification of goods and general cargo surveys, customer service training, motivation, research and development, resource planning, performance monitoring and review. Finance Manager: Nutifafa Amenuveveye Page 3 of 9 Nutifafa Amenuveveye is a Chartered Accountant (CA) and has obtained professional experience from both public practice and industry. He managed the day-to-day activities of the accounting and finance department of a key player in the IT business sector. He also spent five years in an International audit practice, where he obtained an in-depth understanding of both internal and external auditing procedures and issues, both locally and on the international sphere. He is a seasoned trainer and teacher with a track record of delivering excellent training courses HOSPITALITY INDUSTRY IN GHANA Ghana's hospitality industry is 4th in ranking for profitability in Africa. Ghana is located on the West Coast of Africa between Cote d'Ivoire and Togo. Although the country has a good economy, aspects of the hospitality industry are rather expensive, especially hotel accommodation and internal and external flights. The reason they are expensive is due to the cost of electricity and water and Investors need to recoup their investment as soon as possible. However, since there are lot of international travelers who fly into Ghana for training and meetings, this has become a serious market for Ghana. One of the main reasons for the growth in the hospitality business is the growth of the mining industry in Ghana. Workers who come into the country to work in the local mines and galamsey (illegal mining) business are starting to look for food and entertainment in these areas, which is creating a spin-off business boom. The natural resource mining has brought wealth domestically, creating a larger middle class, which is rare in Africa. Other reasons why this industry has taken off are the stable government and economy, which infers more safety, and the growing middle class in Ghana. Due to the tourism potential and the ability for growth, large hotel chains opened hotels in the year 2016 in Ghana, with other chains opening hotels in 2017. The government has intensified its efforts to clamp down on illegal mining due to environmental concerns and with the support from Civil Society Organisations, this economic activity has seen a downturn in outlook. The advantages right now for Ghana are that the economy is in a serious growth trajectory. New hotels are being built, investments are being received, and domestic and international travels have been on the rise. All of these aspects are conducive for a large hospitality future. Ghana earns almost the same amount of business from international travellers as it does from domestic travellers. This means money is being spent and earned equally in Ghana, which is a positive sign. Additionally, Ghana has a variety of tourist attractions such as natural attractions, parks and waterfalls, and they also have castles that can be visited. For foreign travellers, Ghana is also a safer way to visit Africa, since it is not known for high levels of corruption or violence, and the Ghanaian people are friendly and outgoing in helping others. They have love for foreigners. Ghana's democracy has been stable since 1992 and the country practise multi-party democracy. The hospitality industry in Ghana covers a diverse range of establishments providing hospitality services in the form of accommodation, food and beverage, conferencing and entertainment. The industry is a vital and important component of the Ghanaian economy. It has gained popularity over the past decade when Ghana became the gate way to Africa and has contributed immensely to the Ghanaian economy. The accommodation subsector includes hotels, Motels, Apartments and similar places providing short-term accommodation which covers all aspects of the provision of accommodation at camping grounds, caravan parks, guest and holiday houses, flats, student residences and youth hostels. The hotel subsector comprises hotels, resorts and serviced apartments. Hotels and resorts are establishments which are licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. Page 4 of 9 Nutifafa Amenuveveye is a Chartered Accountant (CA) and has obtained professional experience from both public practice and industry. He managed the day-to-day activities of the accounting and finance department of a key player in the IT business sector. He also spent five years in an International audit practice, where he obtained an in-depth understanding of both internal and external auditing procedures and issues, both locally and on the international sphere. He is a seasoned trainer and teacher with a track record of delivering excellent training courses HOSPITALITY INDUSTRY IN GHANA Ghana's hospitality industry is 4th in ranking for profitability in Africa. Ghana is located on the West Coast of Africa between Cote d'Ivoire and Togo. Although the country has a good economy, aspects of the hospitality industry are rather expensive, especially hotel accommodation and internal and external flights. The reason they are expensive is due to the cost of electricity and water and Investors need to recoup their investment as soon as possible. However, since there are lot of international travelers who fly into Ghana for training and meetings, this has become a serious market for Ghana. One of the main reasons for the growth in the hospitality business is the growth of the mining industry in Ghana. Workers who come into the country to work in the local mines and galamsey (illegal mining) business are starting to look for food and entertainment in these areas, which is creating a spin-off business boom. The natural resource mining has brought wealth domestically, creating a larger middle class, which is rare in Africa. Other reasons why this industry has taken off are the stable government and economy, which infers more safety, and the growing middle class in Ghana. Due to the tourism potential and the ability for growth, large hotel chains opened hotels in the year 2016 in Ghana, with other chains opening hotels in 2017. The government has intensified its efforts to clamp down on illegal mining due to environmental concerns and with the support from Civil Society Organisations, this economic activity has seen a downturn in outlook. The advantages right now for Ghana are that the economy is in a serious growth trajectory. New hotels are being built, investments are being received, and domestic and international travels have been on the rise. All of these aspects are conducive for a large hospitality future. Ghana earns almost the same amount of business from international travellers as it does from domestic travellers. This means money is being spent and earned equally in Ghana, which is a positive sign. Additionally, Ghana has a variety of tourist attractions such as natural attractions, parks and waterfalls, and they also have castles that can be visited. For foreign travellers, Ghana is also a safer way to visit Africa, since it is not known for high levels of corruption or violence, and the Ghanaian people are friendly and outgoing in helping others. They have love for foreigners. Ghana's democracy has been stable since 1992 and the country practise multi-party democracy. The hospitality industry in Ghana covers a diverse range of establishments providing hospitality services in the form of accommodation, food and beverage, conferencing and entertainment. The industry is a vital and important component of the Ghanaian economy. It has gained popularity over the past decade when Ghana became the gate way to Africa and has contributed immensely to the Ghanaian economy. The accommodation subsector includes hotels, Motels, Apartments and similar places providing short-term accommodation which covers all aspects of the provision of accommodation at camping grounds, caravan parks, guest and holiday houses, flats, student residences and youth hostels. The hotel subsector comprises hotels, resorts and serviced apartments. Hotels and resorts are establishments which are licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. Page 4 of 9 Serviced apartments are establishments which mostly comprise self-contained units at the same location and which are available on a unit/apartment basis to the general public for a minimum of one night. The units have full cooking facilities (i.e. hot plates and oven/microwave), refrigerator and a bath/shower and other facilities. All bed linen and towels supplied and daily servicing (cleaning and bed making) is available through the on-site management. The subsector also includes private hotels and guest houses with facilities which are not licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath/shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. MARKETING STRATEGY The Marketing Manager Mr. Abdulai Alhassan penned down the following as their marketing strategy. GGOH will aggressively market to both international and local clients. At the moment our client base is heavily tilted towards the needs of foreign clients especially Americans who are used to the Villas and Apartment hospitality services. Our customers are now looking for a different lodging experience that is less expensive in a beautiful ambience. There is therefore the need to build enough suites to meet the increasing demand from our patrons. GGOH will therefore like to secure funding to expand facilities to cater for the need for at least 60 suites and a 100 capacity multipurpose conference facility. The suite will cost a little more than what is currently being charged but we will offer our customers all the services they need to make their stay memorable. We will offer a food shop that will be able to take special orders daily. Each evening, guests can gather in the GGOH's compound where there is a swimming pool, drinks and light music. The competitive edge of GGOH is the service. Our team is properly service oriented and some among the management team have many years' experience in service delivery. Each member of the management team has had training in customer service. The staff members have also been trained on all aspects of customer service to make our guest feel pampered. Customer service is an issue of concern for visitors to third world countries like Ghana and this has been noticed by management and has been placed on a high priority. The culture of not paying attention to details sometimes upset foreigners. Giving preference to foreigners over locals also upsets the middle class. The Restaurant will add local dishes to the menu. GGOH will also consider outsourcing the non-core business units and concentrate on rooms, bar and restaurant activities. The Car Park will be converted to an outdoor conference set up to cater for large capacity events. Customers will be asked to park outside the GGOH. GGOH'S FINANCIALS Cheetah Investments Limited (CIL) in January 2017 contracted a foreign currency loan of $3,000,000 from ABSTRACT Bank Ghana Limited (ABGL) to complete the GGOH building project. This was after the initial promoters, Asebi Boakye and Asebu Amanfi, had invested $1,000,000 ($500,000 each) in the GGOH building project. However the project took two more years before completion. Meanwhile the interest and principal payments accrued before the business could commence and also earn enough to pay back its financial obligations. This loan has accrued to a total of $3,500,000 Page 5 of 9 as at December 2018 when the GGOH Project was completed. To secure enough funds to pay back part of the loan, CIL has proposed to sell three (3) of the nine (9) villas to ABSTRACT Investments Ltd (AIL), an investment wing of ABGL for $1,000,000. AIL has proposed to dispose of the three Villas to ready buyers at $400,000 per unit. CIL having the first right of purchase has negotiated with AIL to buy back the three Villas at $350,000 per unit, a total of $1,050,000 if after two years, there is no ready buyer. Operations for the first year have been very difficult. To maintain good customer service, Management decided to purchase supplies from first class groceries and supermarkets. These are mostly purchased on cash and carry basis. The GGOH Management System has no inventory component. The store keeper uses both manual and excel spreadsheet to manage inventory items. The Rooms, Food and Beverages components of the GGOH Management System have inadequate controls over access rights. GGOH had struggled within the year 2019 to pay salaries regularly because of cash flow challenges. ABGL in consultation with their shareholders and the promoters of GGOH, decided to freeze interest payment for the year 2019 and spread the interest payment over the remaining credit years thus extending the period from 5 years to 6 years. Assumptions The Finance Manager, Nutifafa Amenuveveye has prepared the following financial projections based on the 2019 actual financial performance. The underlying assumptions are: The year 2020 financial performance would be significantly different from 2019 financial results. This is as a result of effective and efficient internal control systems to be put in place by management. For example occupancy rates and revenue for the years 2020 to 2025 are as follows: Rooms The rooms are currently made up of 31 with 50 beds. To be very conservative, he used the average occupancy rate of 55% to project revenues for rooms for the years 2020 to 2025. Below is detailed occupancy rates per day used per room: OCCUPANCY RATE Rate # Rooms 4 Deluxe 4 Premium 4 Standard 4 Superior 2 Executive 2 Apartment 2 Executive Deluxe 9 Villa $ 2020 2021 2022 2023 2024 2025 180 50% 50% 55% 65% 65% 65% 160 40% 45% 50% 60% 60% 60% 100 60% 70% 70% 75% 75% 80% 120 70% 70% 70% 70% 70% 70% 160 70% 70% 70% 70% 70% 70% 300 40% 40% 40% 40% 40% 40% 450 20% 20% 20% 20% 20% 20% 400 55% 55% 55% 55% 55% 55% This will translate into total revenue of $1,396,656 in 2020. This will rise over the years until the expansion project becomes operational in 2025. The increase year on year will rise significantly as more rooms are added. The above targets will be achieved through a concerted marketing strategy detailed in a comprehensive marketing plan. Bar and Restaurant Page 6 of 9 Bar and Restaurant income is made up of Food and Beverages, Events i.e., Conferences and Meetings and Pool Bar Sales. Income from Bar and Restaurant is projected to be 17% of Room Revenue. This is because the performance of this business unit depends on occupancy. The first year 2019 figures suggests that Food and Beverages Income will be 40% of Bar and Restaurant. By the same projections, Events - Conferences and Meetings income is expected to be 50% of Bar and Restaurant income. Also Pool Bar Income is projected to be 20% of Events - Conferences and Meetings income. Events - Conferences and Meetings income is related to income generated by Bar and Restaurant during conferences and meetings. To attract more clients, conference and meeting rooms are for free and all catering are done by the Bar and Restaurant unit. With the expansion of facilities expected to be operational in the year 2025, income from this business unit will increase significantly. Pool Bar stock is well patronised during Happy Hour weekly event organised by GGOH on Friday evenings. Many residents in GGOH's catchment area have made the Pool Bar a destination of choice during evenings. Other Income Other Income is made up of the following: Health Spa, Patisserie, Fax, Gym, Internet Cafe, Laundry, Printing, Swimming, Photocopy and Buffet. The assumptions for the above business units are as follows: Business Unit Projection Basis Health Spa The Spa business unit will be outsourced in the year 2020 to one of the already established companies to run an outlet at GGOH and pay a monthly rent of $200. Patisserie Patisserie income is projected to be 7% of Bar and Restaurant income. Patisseries are mainly served for breakfast and so are directly linked to occupancy Fax Insignificant Gym Gym Income is projected to be $566.67 per month. Gym service is given out as complimentary for room guest. Income is therefore expected from members of the Gym Club. Internet Cafe Internet service is also given as complimentary except for walk-in clients. It is however expected that income from this business unit will be $33.33 per month. Laundry At the moment most of the rooms have their own Laundry Machine. Printing Insignificant Swimming Swimming income is expected to generate $625 per month. There will be a package for school children to learn how to swim during weekends and holidays. With an Olympic trainer as the instructor, we expect to generate enough funds to take care of the monthly cost of operations. Photocopy Insignificant Buffet Weekend buffet modeled along the same business line as Happy Hour is expected to start in 2020. This is expected to bring in an income equivalent to 8.3% of Bar and Restaurant revenue. General and Administrative Expenses General and Administrative Expenditure assumptions are based on 2019 figures. Page 7 of 9 Expenditure Projection Basis (Average) Legal fees $2,000 per month Miscellaneous Expenses $1,000 per month Wellness Expense-Pool $100 per month Facilities Expense-Laundry $500 per month Facilities Expense-Plumbing $500 per month Facilities Expense-Electricals $500 per month Building Repairs & Maintenance $3,000 per month Facilities Expense Toiletries $1,300 per month Cleaning $800 per month Water $400 per month Electricity $2,500 per month Fuel Expense (Genset) $2,500 per month Facilities Expense - Other $1,000 per month Wellness expense- Health Spa $83.33 per month. This expenditure will be incurred if shareholders decide to run the spa as a business unit Wellness Expense-Gym $300 per month Wellness Centre Expense - Other $83.33 per month F&B Expense- Banquets $83.33 per month Patisserie Expense 50% of patisserie income Other Kit en Purchases $100 per month Food 50% of bar and restaurant income Beverages 33% of food expenditure Food & Beverage Expense - Other 7% of food expenditure Commissions - Room revenue $1,400 per month Transportation $800 per month Communications $1,200 per month Donations $300 per month Printing & Stationery $1,100 per month Insurance Premiums $4,000 per month Fuel Expense (Staff Bus) $500 per month Employee Meals $600 per month Employee Medical $600 per month Payroll $14,950 per month Vehicle Repairs & Maintenance $400 per month Marketing $1,200 per month Newspapers $50 per month Payroll GGOH is expected to reduce the number of staff from 78 to 51 for efficient running of GGOH. The following are the category of staff: Page 8 of 9 # 1 2 1 2 1 1 3 1 5 Category of Staff Marketing Accounts Cashier Night Auditor IT Marketing Front Desk Chef Cook Waiter Steward Bar Man Room Attendant Cleaner Maintenance Officer Driver Wellness Concierge Security 6 2 1 6 5 1 2 2 2 4 3 51 AVERAGE EXCHANGE RATE: 2016 - $1 = GHS4.20 2017 - $1 = GHS4.50 2018 - $1 = GHS4.80 2019 - $1 = GHS5.60 2020 - $1 = GHS5.70 2021 - $1 = GHS5.90 2022 - $1 = GHS6.10 2023 - $1 = GHS6.60 2024 - $1 = GHS7.20 2025 - $1 = GHS7.50 Page 9 of 9 STRATEGIC CASE STUDY This case consists of two questions BACKGROUND The Company was registered as Cheetah Investments Limited on 3rd June 2015 and was incorporated as a limited liability company on 7th May 2016. It received its certificate to commence business on 25th September 2016. The company was registered with 20,000,000 shares of no par value out of which 5,000,000 shares has been issued equally to the initial shareholders or promoters, Asebu Amanfi and Asebi Boakye. They decided that each shareholder should nominate his adult child to be appointed as a member of the Board of Directors. They will at all time maintain four individuals as members of the Board and the Chairmanship will alternate between the two shareholders every two years. Asebu Amanfi decided to nominate his daughter aged 18 years, who has just been admitted to a University appointed as a member of the Board of Directors. Asebi decided to nominate his daughter aged 25 years, who has finished a course in animal husbandry in a college in in Guanduanaland and has just returned to Ghana, to be appointed as a member of the Board of Directors. They appointed a mutual friend who has been the lead person in assisting them to set up the Hotel as Company Secretary. The question of who should be the Managing Director has come up in most of the shareholders discussions but no firm decision has been taken. They are of the view that the Hotel does not need a Managing Director at this stage of its development. Each of them can play that role as and when needed. The company was certified and licensed to operate as a Hotel under the name GHANA GOLDEN ONYX HOTEL (GGOH) by the Ghana Tourist Board on 1st January 2017. GGOH became operational on 18 January 2019. The company's vision is to be the leading business destination hotel in Ghana and indeed in Africa providing world class hospitality services to its clients. Its marketing catchword is "Local in Character, International in Outlook". The mission of the Hotel is to offer unforgettable home away from home lifestyle experience to their guests and all who find themselves on its premises. GGOH became the preferred lodging place for staff of International Organisations and pleasure seekers because of its unique brand of Chalets and Water Front standard rooms. SERVICES GGOH provides the following services: Rooms, Bar and Restaurant, Conferences and Meetings, Fitness Centre, Health Spa, Business Centre and other services. Rooms There are two (2) exquisite executive deluxe with each consisting of 3 bedrooms and two bathrooms, including a master suite bathroom with Jacuzzis/shower combo. There are also two (2) Apartments available to clients. There are Nine (9) fully furnished business executive rooms or Villas and each consists of 3 bedrooms, 2 bathrooms, guest washroom, spacious living area, modern open-plan appliance-fitted kitchen, formal dining area, basement garage, combined laundry & storage room, and backyard space for relaxation and entertainment. The Upper Level of each fully furnished business executive wing has a porch, a walk- in closet with full-length mirrored doors, a spacious end suite sky-lit bathroom, with a two-seater Jacuzzi, and a separate shower. The upper level houses a storage facility, and also features a vaulted ceiling, with wood beams, elegant chandelier lighting, and a beautiful balustrade staircase leading to the lower level. Each fully furnished Business Executive house has broadband Internet, as well as terrestrial, satellite and pay-per-view television. A telephone and an intercom system, independent air conditioning, Page 1 of 9 water storage and a prepaid utility system (electricity and water) are part of the standard features in each house. There are 18 serviced suites consisting of 4 standard suites, 4 superior suites, 2 executive suites, 4 deluxe and 4 premium deluxe suites. All suites have appliance fitted kitchenettes, a closet with full length mirrored doors, writing desks, wired and wireless internet and terrestrial, satellite and pay per view flat screen television. The GGOH Food & Beverage team assist guests who need groceries for self-catering. They help guest prepare a list of items they require, within their advised budget, and have the items delivered to their suite, apartment or executive house. The complete grocery shopping service includes preparation of ingredients by a member of the cuisine team, to make self-catering session truly hassle free. Bar and Restaurant This 40 seater restaurant overlooks the picturesque swimming pool. The Restaurant provides an intimate atmosphere for lunch and dinner experience. With an array of delectable dishes, sumptuous salads and divine desserts, it offers food for every mood and occasion. Notable among the menu are Shrimp Cocktail - a hors d'oeuvre of spicy shrimps in an aromatic cocktail sauce, sublime Chicken Aurora - a delicately spiced serving of boneless chicken, in a creamy mushroom and carrot sauce, served with saut potatoes or curried rice and an unforgettable Fish Menuniere - fish fillet in a garlic-lime sauce, together with pineapple rice. Another unique feature is a rich menu called Black Lives Matter - a rich chocolate dessert that takes clients on another journey of culinary and gastronomic discovery. The Restaurant also provides Buffet services for the working class who want a change to a reasonably priced luxury location. Conference and Meeting The meeting room is set up to accommodate up to 20 people for board meetings, but is also easily reconfigured for other uses. The 2 Conference rooms with seating capacity of 40 each have audio-visual facilities and Internet services. GGOH Courtyard is used as a Car Park. Outdoor events are therefore not possible and as such request for such services are turned down. Fitness Centre With industry-leading fitness equipment, GGOH's state-of-the-art fitness facilities provide the perfect opportunity to get in shape, and stay in shape. Opened 7 days a week, the gym has membership plans varying from individual monthly to corporate annual memberships. Residents of GGOH have complimentary use of the gym. A team of experienced fitness coaches guide clients through a systematic regime of training, advice on the most effective weight loss, muscle toning, muscle gain and cardio programs. They monitor client's progress carefully, and vary the regimes accordingly to fitness expectations. Health Spa GGOH's Spa provides a distinctive combination of beauty services and body therapy. The tranquil spa environment offers Jests an oportu to pamper both body and senses. Experienced beauty therapists provide guidance to help clients choose the appropriate therapy. Page 2 of 9 Clients can take a relaxed bath in a Jacuzzi, and enjoy Swedish massage to feel energized. It's full body super scrub, followed by a thermal clay mud with foam wash and body butter massage leaves a client in a blissful state of relaxation. The signature Facial treatment combines double cleansing, double exfoliation and extra extractions with a blissful micro- buff back polish, and is great for clogged pores, dull lifeless skin and fine lines. Manicure and pedicure treatments, together with styling by hair stylists, nail technicians and make- up artists give clients a dazzling appearance and blooming radiance. The Spa also offers male grooming services. One can expect a look that is sharp and refined from barbers and stylists. The Groom Facial, with its customized double mask, exfoliation, steam treatment, and face and neck massage, is an absolute must before that once-in-a-lifetime occasion, all in all- a truly royal spa experience. The Spa Boutique retails skincare, make-up and hair products from premium brands. Also available here are top brands in male grooming. The boutique is the reception for bookings, appointments and information on spa services. The Spa Gift Certificates are also sold at the reception. Spa assistants help clients select the appropriate spa gift treatment or customize a unique one. Business Centre GGOH Business Centre handles any Secretarial service from photocopying, printing (black and white and colour), lamination etc. GGOH in addition operate the following business lines: Swimming, Laundry and Patisserie. MANAGEMENT TEAM GGOH is managed by the following management team: Shareholder: Asebu Amanfi Asebu Amanfi, a self-styled successful businessman, studied Civil Engineering at KUMASI LEGON. He started his career with an IT Consulting Company in the United States after securing an opportunity to work in an exchange programme. He later joined an IT Company in India before branching into IT accessories dealership. He successfully owned and managed this business and made good money until he met his friend, Asebi Boakye. In a conversation with the friend, he realised that they both have a passion for the hospitality business. Shareholder: Asebi Boakye Asebi Boakye is a highly successful entrepreneur and business mogul who studied Graphic Designing at KUMASI LEGON. He left for the USA just after school and started a car export and import business. He also undertook short courses on entrepreneurship and mentorship in a business school in the United States. Marketing Manager: Abdulai Alhassan Abdulai Alhassan is an experienced Business Development/Marketing professional with several years of Service and Product development experience gained in Multi-national organisations with increasing level of seniority. He has a Bachelor of Science degree in Economics and also holds an MBA in Finance. He also has expertise in Trade valuation/classification of goods and general cargo surveys, customer service training, motivation, research and development, resource planning, performance monitoring and review. Finance Manager: Nutifafa Amenuveveye Page 3 of 9 Nutifafa Amenuveveye is a Chartered Accountant (CA) and has obtained professional experience from both public practice and industry. He managed the day-to-day activities of the accounting and finance department of a key player in the IT business sector. He also spent five years in an International audit practice, where he obtained an in-depth understanding of both internal and external auditing procedures and issues, both locally and on the international sphere. He is a seasoned trainer and teacher with a track record of delivering excellent training courses HOSPITALITY INDUSTRY IN GHANA Ghana's hospitality industry is 4th in ranking for profitability in Africa. Ghana is located on the West Coast of Africa between Cote d'Ivoire and Togo. Although the country has a good economy, aspects of the hospitality industry are rather expensive, especially hotel accommodation and internal and external flights. The reason they are expensive is due to the cost of electricity and water and Investors need to recoup their investment as soon as possible. However, since there are lot of international travelers who fly into Ghana for training and meetings, this has become a serious market for Ghana. One of the main reasons for the growth in the hospitality business is the growth of the mining industry in Ghana. Workers who come into the country to work in the local mines and galamsey (illegal mining) business are starting to look for food and entertainment in these areas, which is creating a spin-off business boom. The natural resource mining has brought wealth domestically, creating a larger middle class, which is rare in Africa. Other reasons why this industry has taken off are the stable government and economy, which infers more safety, and the growing middle class in Ghana. Due to the tourism potential and the ability for growth, large hotel chains opened hotels in the year 2016 in Ghana, with other chains opening hotels in 2017. The government has intensified its efforts to clamp down on illegal mining due to environmental concerns and with the support from Civil Society Organisations, this economic activity has seen a downturn in outlook. The advantages right now for Ghana are that the economy is in a serious growth trajectory. New hotels are being built, investments are being received, and domestic and international travels have been on the rise. All of these aspects are conducive for a large hospitality future. Ghana earns almost the same amount of business from international travellers as it does from domestic travellers. This means money is being spent and earned equally in Ghana, which is a positive sign. Additionally, Ghana has a variety of tourist attractions such as natural attractions, parks and waterfalls, and they also have castles that can be visited. For foreign travellers, Ghana is also a safer way to visit Africa, since it is not known for high levels of corruption or violence, and the Ghanaian people are friendly and outgoing in helping others. They have love for foreigners. Ghana's democracy has been stable since 1992 and the country practise multi-party democracy. The hospitality industry in Ghana covers a diverse range of establishments providing hospitality services in the form of accommodation, food and beverage, conferencing and entertainment. The industry is a vital and important component of the Ghanaian economy. It has gained popularity over the past decade when Ghana became the gate way to Africa and has contributed immensely to the Ghanaian economy. The accommodation subsector includes hotels, Motels, Apartments and similar places providing short-term accommodation which covers all aspects of the provision of accommodation at camping grounds, caravan parks, guest and holiday houses, flats, student residences and youth hostels. The hotel subsector comprises hotels, resorts and serviced apartments. Hotels and resorts are establishments which are licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. Page 4 of 9 Nutifafa Amenuveveye is a Chartered Accountant (CA) and has obtained professional experience from both public practice and industry. He managed the day-to-day activities of the accounting and finance department of a key player in the IT business sector. He also spent five years in an International audit practice, where he obtained an in-depth understanding of both internal and external auditing procedures and issues, both locally and on the international sphere. He is a seasoned trainer and teacher with a track record of delivering excellent training courses HOSPITALITY INDUSTRY IN GHANA Ghana's hospitality industry is 4th in ranking for profitability in Africa. Ghana is located on the West Coast of Africa between Cote d'Ivoire and Togo. Although the country has a good economy, aspects of the hospitality industry are rather expensive, especially hotel accommodation and internal and external flights. The reason they are expensive is due to the cost of electricity and water and Investors need to recoup their investment as soon as possible. However, since there are lot of international travelers who fly into Ghana for training and meetings, this has become a serious market for Ghana. One of the main reasons for the growth in the hospitality business is the growth of the mining industry in Ghana. Workers who come into the country to work in the local mines and galamsey (illegal mining) business are starting to look for food and entertainment in these areas, which is creating a spin-off business boom. The natural resource mining has brought wealth domestically, creating a larger middle class, which is rare in Africa. Other reasons why this industry has taken off are the stable government and economy, which infers more safety, and the growing middle class in Ghana. Due to the tourism potential and the ability for growth, large hotel chains opened hotels in the year 2016 in Ghana, with other chains opening hotels in 2017. The government has intensified its efforts to clamp down on illegal mining due to environmental concerns and with the support from Civil Society Organisations, this economic activity has seen a downturn in outlook. The advantages right now for Ghana are that the economy is in a serious growth trajectory. New hotels are being built, investments are being received, and domestic and international travels have been on the rise. All of these aspects are conducive for a large hospitality future. Ghana earns almost the same amount of business from international travellers as it does from domestic travellers. This means money is being spent and earned equally in Ghana, which is a positive sign. Additionally, Ghana has a variety of tourist attractions such as natural attractions, parks and waterfalls, and they also have castles that can be visited. For foreign travellers, Ghana is also a safer way to visit Africa, since it is not known for high levels of corruption or violence, and the Ghanaian people are friendly and outgoing in helping others. They have love for foreigners. Ghana's democracy has been stable since 1992 and the country practise multi-party democracy. The hospitality industry in Ghana covers a diverse range of establishments providing hospitality services in the form of accommodation, food and beverage, conferencing and entertainment. The industry is a vital and important component of the Ghanaian economy. It has gained popularity over the past decade when Ghana became the gate way to Africa and has contributed immensely to the Ghanaian economy. The accommodation subsector includes hotels, Motels, Apartments and similar places providing short-term accommodation which covers all aspects of the provision of accommodation at camping grounds, caravan parks, guest and holiday houses, flats, student residences and youth hostels. The hotel subsector comprises hotels, resorts and serviced apartments. Hotels and resorts are establishments which are licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. Page 4 of 9 Serviced apartments are establishments which mostly comprise self-contained units at the same location and which are available on a unit/apartment basis to the general public for a minimum of one night. The units have full cooking facilities (i.e. hot plates and oven/microwave), refrigerator and a bath/shower and other facilities. All bed linen and towels supplied and daily servicing (cleaning and bed making) is available through the on-site management. The subsector also includes private hotels and guest houses with facilities which are not licensed to operate a public bar and which provide accommodation on a room/suite basis, with a bath/shower and other facilities in most guest rooms, but which do not have full cooking facilities (i.e. hot plates and oven/microwave) in most guest rooms. MARKETING STRATEGY The Marketing Manager Mr. Abdulai Alhassan penned down the following as their marketing strategy. GGOH will aggressively market to both international and local clients. At the moment our client base is heavily tilted towards the needs of foreign clients especially Americans who are used to the Villas and Apartment hospitality services. Our customers are now looking for a different lodging experience that is less expensive in a beautiful ambience. There is therefore the need to build enough suites to meet the increasing demand from our patrons. GGOH will therefore like to secure funding to expand facilities to cater for the need for at least 60 suites and a 100 capacity multipurpose conference facility. The suite will cost a little more than what is currently being charged but we will offer our customers all the services they need to make their stay memorable. We will offer a food shop that will be able to take special orders daily. Each evening, guests can gather in the GGOH's compound where there is a swimming pool, drinks and light music. The competitive edge of GGOH is the service. Our team is properly service oriented and some among the management team have many years' experience in service delivery. Each member of the management team has had training in customer service. The staff members have also been trained on all aspects of customer service to make our guest feel pampered. Customer service is an issue of concern for visitors to third world countries like Ghana and this has been noticed by management and has been placed on a high priority. The culture of not paying attention to details sometimes upset foreigners. Giving preference to foreigners over locals also upsets the middle class. The Restaurant will add local dishes to the menu. GGOH will also consider outsourcing the non-core business units and concentrate on rooms, bar and restaurant activities. The Car Park will be converted to an outdoor conference set up to cater for large capacity events. Customers will be asked to park outside the GGOH. GGOH'S FINANCIALS Cheetah Investments Limited (CIL) in January 2017 contracted a foreign currency loan of $3,000,000 from ABSTRACT Bank Ghana Limited (ABGL) to complete the GGOH building project. This was after the initial promoters, Asebi Boakye and Asebu Amanfi, had invested $1,000,000 ($500,000 each) in the GGOH building project. However the project took two more years before completion. Meanwhile the interest and principal payments accrued before the business could commence and also earn enough to pay back its financial obligations. This loan has accrued to a total of $3,500,000 Page 5 of 9 as at December 2018 when the GGOH Project was completed. To secure enough funds to pay back part of the loan, CIL has proposed to sell three (3) of the nine (9) villas to ABSTRACT Investments Ltd (AIL), an investment wing of ABGL for $1,000,000. AIL has proposed to dispose of the three Villas to ready buyers at $400,000 per unit. CIL having the first right of purchase has negotiated with AIL to buy back the three Villas at $350,000 per unit, a total of $1,050,000 if after two years, there is no ready buyer. Operations for the first year have been very difficult. To maintain good customer service, Management decided to purchase supplies from first class groceries and supermarkets. These are mostly purchased on cash and carry basis. The GGOH Management System has no inventory component. The store keeper uses both manual and excel spreadsheet to manage inventory items. The Rooms, Food and Beverages components of the GGOH Management System have inadequate controls over access rights. GGOH had struggled within the year 2019 to pay salaries regularly because of cash flow challenges. ABGL in consultation with their shareholders and the promoters of GGOH, decided to freeze interest payment for the year 2019 and spread the interest payment over the remaining credit years thus extending the period from 5 years to 6 years. Assumptions The Finance Manager, Nutifafa Amenuveveye has prepared the following financial projections based on the 2019 actual financial performance. The underlying assumptions are: The year 2020 financial performance would be significantly different from 2019 financial results. This is as a result of effective and efficient internal control systems to be put in place by management. For example occupancy rates and revenue for the years 2020 to 2025 are as follows: Rooms The rooms are currently made up of 31 with 50 beds. To be very conservative, he used the average occupancy rate of 55% to project revenues for rooms for the years 2020 to 2025. Below is detailed occupancy rates per day used per room: OCCUPANCY RATE Rate # Rooms 4 Deluxe 4 Premium 4 Standard 4 Superior 2 Executive 2 Apartment 2 Executive Deluxe 9 Villa $ 2020 2021 2022 2023 2024 2025 180 50% 50% 55% 65% 65% 65% 160 40% 45% 50% 60% 60% 60% 100 60% 70% 70% 75% 75% 80% 120 70% 70% 70% 70% 70% 70% 160 70% 70% 70% 70% 70% 70% 300 40% 40% 40% 40% 40% 40% 450 20% 20% 20% 20% 20% 20% 400 55% 55% 55% 55% 55% 55% This will translate into total revenue of $1,396,656 in 2020. This will rise over the years until the expansion project becomes operational in 2025. The increase year on year will rise significantly as more rooms are added. The above targets will be achieved through a concerted marketing strategy detailed in a comprehensive marketing plan. Bar and Restaurant Page 6 of 9 Bar and Restaurant income is made up of Food and Beverages, Events i.e., Conferences and Meetings and Pool Bar Sales. Income from Bar and Restaurant is projected to be 17% of Room Revenue. This is because the performance of this business unit depends on occupancy. The first year 2019 figures suggests that Food and Beverages Income will be 40% of Bar and Restaurant. By the same projections, Events - Conferences and Meetings income is expected to be 50% of Bar and Restaurant income. Also Pool Bar Income is projected to be 20% of Events - Conferences and Meetings income. Events - Conferences and Meetings income is related to income generated by Bar and Restaurant during conferences and meetings. To attract more clients, conference and meeting rooms are for free and all catering are done by the Bar and Restaurant unit. With the expansion of facilities expected to be operational in the year 2025, income from this business unit will increase significantly. Pool Bar stock is well patronised during Happy Hour weekly event organised by GGOH on Friday evenings. Many residents in GGOH's catchment area have made the Pool Bar a destination of choice during evenings. Other Income Other Income is made up of the following: Health Spa, Patisserie, Fax, Gym, Internet Cafe, Laundry, Printing, Swimming, Photocopy and Buffet. The assumptions for the above business units are as follows: Business Unit Projection Basis Health Spa The Spa business unit will be outsourced in the year 2020 to one of the already established companies to run an outlet at GGOH and pay a monthly rent of $200. Patisserie Patisserie income is projected to be 7% of Bar and Restaurant income. Patisseries are mainly served for breakfast and so are directly linked to occupancy Fax Insignificant Gym Gym Income is projected to be $566.67 per month. Gym service is given out as complimentary for room guest. Income is therefore expected from members of the Gym Club. Internet Cafe Internet service is also given as complimentary except for walk-in clients. It is however expected that income from this business unit will be $33.33 per month. Laundry At the moment most of the rooms have their own Laundry Machine. Printing Insignificant Swimming Swimming income is expected to generate $625 per month. There will be a package for school children to learn how to swim during weekends and holidays. With an Olympic trainer as the instructor, we expect to generate enough funds to take care of the monthly cost of operations. Photocopy Insignificant Buffet Weekend buffet modeled along the same business line as Happy Hour is expected to start in 2020. This is expected to bring in an income equivalent to 8.3% of Bar and Restaurant revenue. General and Administrative Expenses General and Administrative Expenditure assumptions are based on 2019 figures. Page 7 of 9 Expenditure Projection Basis (Average) Legal fees $2,000 per month Miscellaneous Expenses $1,000 per month Wellness Expense-Pool $100 per month Facilities Expense-Laundry $500 per month Facilities Expense-Plumbing $500 per month Facilities Expense-Electricals $500 per month Building Repairs & Maintenance $3,000 per month Facilities Expense Toiletries $1,300 per month Cleaning $800 per month Water $400 per month Electricity $2,500 per month Fuel Expense (Genset) $2,500 per month Facilities Expense - Other $1,000 per month Wellness expense- Health Spa $83.33 per month. This expenditure will be incurred if shareholders decide to run the spa as a business unit Wellness Expense-Gym $300 per month Wellness Centre Expense - Other $83.33 per month F&B Expense- Banquets $83.33 per month Patisserie Expense 50% of patisserie income Other Kit en Purchases $100 per month Food 50% of bar and restaurant income Beverages 33% of food expenditure Food & Beverage Expense - Other 7% of food expenditure Commissions - Room revenue $1,400 per month Transportation $800 per month Communications $1,200 per month Donations $300 per month Printing & Stationery $1,100 per month Insurance Premiums $4,000 per month Fuel Expense (Staff Bus) $500 per month Employee Meals $600 per month Employee Medical $600 per month Payroll $14,950 per month Vehicle Repairs & Maintenance $400 per month Marketing $1,200 per month Newspapers $50 per month Payroll GGOH is expected to reduce the number of staff from 78 to 51 for efficient running of GGOH. The following are the category of staff: Page 8 of 9 # 1 2 1 2 1 1 3 1 5 Category of Staff Marketing Accounts Cashier Night Auditor IT Marketing Front Desk Chef Cook Waiter Steward Bar Man Room Attendant Cleaner Maintenance Officer Driver Wellness Concierge Security 6 2 1 6 5 1 2 2 2 4 3 51 AVERAGE EXCHANGE RATE: 2016 - $1 = GHS4.20 2017 - $1 = GHS4.50 2018 - $1 = GHS4.80 2019 - $1 = GHS5.60 2020 - $1 = GHS5.70 2021 - $1 = GHS5.90 2022 - $1 = GHS6.10 2023 - $1 = GHS6.60 2024 - $1 = GHS7.20 2025 - $1 = GHS7.50 Page 9 of 9