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1 END -OF -S UMMER EXAMINATION SUMMER 2020/2021 ACADEMIC YEAR DATE: AUGUST 2021 COURSE CODE: CS 456 COURSE TITLE: ADVANCED SYSTEM ANALYSIS AND DESIGN CASE STUDY LECTURER NAME: FRANCIS AVEVOR INSTRUCTIONS TO CANDIDATES ANSWER ALL QUESTIONS CASE STUDY DIVE STITURE IMPLEM ENTATION COMMITTEE (DIC) PROJECT The Divestiture Process a. Listing of SOEs to be divested The Government of Ghana pro vide s the Divestiture Implementation Committee (DIC) with a list of enterprises slated for di ve stiture . DIC opens a file for e ach such company. All documentation and corresp ond ence prepared or received in 2 connection with the enterprise is placed on this file . Enterprises listed for divestitur e are categorized by the Ministry of Finance (principally on the basis of employee numbe rs) into small, medium, and large. In most cases, the divestiture of large and medium enterprises is outsourced to consultants. Small enterprises are either outsourced, or divested by DIC . b. Advertisements Bid documents are prepared for th e particular St ate Owned Enterprise (SOE), and the SOE is advertised for sale . Ad vert s s hould appear in at least 2 leading Ghanaian newspapers each week for 3 c ons ecutive weeks. Adverts may also appear in foreign publications . c. Bidding i. Obtaining bid documents Investor s interested in a particul ar SO E contact the secretariat , and after filling in an application form , pa yin g a non-refundabl e bid fee (¢1,000 for local investors , and $400 f or foreign inve stor s), a nd signin g a confidentiality undertaking , they are provided with the relevant bid document s. The bid document i s mad e up of • bid pr ocedur es ; • a draft s ale and purch ase ag ree ment ; • a memorandum cont ainin g th e profile of the SOE ; • an independent valuation report (¢ 1 ,000 for local investors, and $300 for foreigners) ; • fixed a sset s v aluation report (where sale of as sets i s the mode of dive stiture) ; • share valuation report (where sale of shares is the mode of divestiture). ii. Form of bids Investors bids sh ould comprise of a qualification statement made up of 1. De tails about the b idder , including (as relevant) : a. the b idder ‘s full name , address and contact details ; b. deta ils of the bidder’s directors and shareholders ; c. detail s of the bidder’s existing business ; d. financial periods; and 2. T he bidd er’s business plan for t he enterprise, including, by way of example : 3 a. plan s for the development of the enterprise (with regard to both its rehabilitation and , as relevant , down -sizing of expansion) and the timin g of th e i mplementation of those plan ; b. in tentions with regard to emplo yment, proposed staff training pr og rammes and proposals for staff participation in the enterprise ; c. ma rketin g approach and initiatives proposed for the enterprise , includin g export prospects and anticipated opportunities to expand beyond traditional or exis ting markets; d. imp act on the local community (particularly where the ent erpri se has tra diti onally provided social services and/or infr astructur e) ; e. impac t on co mpetition and the regulatory environment ; a nd f. enviro nm ent impact ; 3. Co nfirm ation that th e of fer for the assets or , as the ca se m ay be, shares of th e enterp rise is no t subjec t to an y co nditions ; a. an y imp ortant points of principles arising from th e draft sa le and purc hase ag ree ment ; a nd b. co nfir m ation th at the bidder will compl y with th e bid pr ocedur es . c. Th e bid pr oced ur es mu st state the requi site cont ent s of th e bu siness pl an as s pecific ally a nd clearly as is possible in the circum stances. T he details ment ioned in 3 a bove will not be applicable to all enterpri ses. 4. A price bid . a. the price off er ed f or the as sets or , as th e case m ay be, s hares of th e ent erprise (cl ea rly indicating the proposed currency of p ay ment ); b. if the o ffer is not on the basis of cash in full o n completion , the pr ecise timing of any deferred payments ; c. in the event of deferred paym ents , details of the security proposed to be given ; d. a detailed explanation o f how th e bidder inte nds to finance th e acquisition. In the ca se o f a n o ffer made from existing resources , the bidder will be expected to provide written confirmation from its b an k or fin ancial adviser th at th e necessa ry f und s w ill b e av ailable. In th e case of a n offer not m ade f ro m ex istin g res our ces , th e bidder will be expec ted to provide written confirm ation from its arr ange rs o r providers of fin ance that arrangem ents h ave bee n m ade, or wi ll b e m ade, to provide th e necessary finance ; a nd 5. Co nfirmat ion th at the b idd er h as no t d one, and w ill n ot do , a t any time an y of the followin g: 4 a. commun icat ed to a person o ther th an DIC the a m ount or appro xim ate amount of the pric e offe red (o th er th an in co nfid ence to the bidd er’s advisers) ; b. entered into any a rr ange m ent w ith any other perso n that he shall r ef rain fr om bidding or as t o th e a m ount of a ny pr ice to be of fered ; c. offered or a greed t o pay o r giv e, or paid or g ive n, any valuable consideration directl y o r indir ectl y to a ny perso n f or doing or h av in g don e, or causin g or h aving ca use d t o be done, a ny ac t or omissi on in r elation to the price offered by th e bi dd er o r any oth er bid . iii. Evaluat ion of Bids This is a two s tage pr ocess: • evalu atio n of qu alification statement s; and • co mp aris on of pri ce bid s. DIC o pens pr ic e bid s f rom onl y bid de rs w hose qua lific ation state m ent s DIC acc ept s. In the event of e qual pr ice bids, preference i s g iven t o Gh anaia ns. iv. Reject ion of b ids : Bids wil l be rej ect ed on th e fo llowi ng g round s: • rece ive d af ter clos in g date an d tim e; • appropri ate fee not p aid ; • received from p ers on wh o ca nvasse d DIC m emb er; and • r eceive d from SOE o r a body a lli ed to a n SO E. Exceptions under which bids may be accepted include where the assets concerned compr ise non -industr ial land and buildings , with no on -going business , and the bidding SOE re quire s a dd ition al o ffice ac commodation. d. Negotiations DIC wi ll w rite to the winnin g bidder , and each other bidder , to inform them o f th e results of t he bid. Ne gotiat ions will th en start wi th the w inning bidder . Should he fail to satisfy DIC demands , the n ext hi ghes t c onfo rmin g bidder will be invited to negotiate . e. Approvals A fter DIC Se cretariat has agree d t he ter ms of the sale with t he winning bidder , the d iv es tit ure w ill be co nsidered by t he DIC members. DIC member s, if they a re satisf ied w ith the sale , will submit a letter of 5 recommendation to the P res ident’s Office for app rova l. If either DIC or t he President ‘s Off ice ra ises concer ns concernin g the bid , a letter is se nt to the bidder and further ne gotiat ions m ay take place . If the Preside nt’s Office grant s th e ap prova l, DIC w ill se nd a letter to th e bidd er in vitin g h im to sign t he sale and purchase docu mentation . Th e Executive Secre tary of DIC wi ll sig n on behalf of DIC and th e gove rnment. f. Pa yments i. Mode of Finance This cou ld either be with • investo rs ow n re source . or • loan from a fi nanc ial in stit uti on (DIC m ay take sec urit y ove r th e as se t unt il ful l pay ment is receive d). In th e c as e of instalments , for some loans , interest is paid on the diminishing balance. ii. Terms of Payment Payment could either be • outr ig ht , or • by instalments. iii. Payment timing • paym ent of less than 50% of the pr ice offered ; or • d ef erred payment due 3 years after completion. DIC prefer s outr ight pa yment, but will consider deferred payment . Deferred con siderations should be secured by a guarantee from a bank or other person o f suffici ent financial standing . If such guarantee is not available , DIC may c onsid er takin g s ecurit y ov er the assets or , shares of the enterprise until full payment is receive d. iv. Interest Interest on deferre d p ay m ent s is as follow s: • Ghanaia ns: relevant Ghanaian Treasur y Bill R ate • No n G hana ians: relevant London Interbank Offer R ate p lu s 2% . v. D ivestitu re Proceeds This will be paid to the appropriate DIC bank account . The Proposed System The Board of Directors of DIC has received funding from Government of Ghana 6 to commission the development of a robust and user -friendly web -based syst em that DIC will use for its operations. REQUIRED : Part 2: DUE BY LAST SUNDAY BEFORE END -OF -SUMMER EXAMS 1. Discuss the system development methodology that you would adopt for this project and justify your choice. 2. Construct data flo w diagrams (including a context level diagram, a level 0 diagram, and several child diagrams) that show important, representative parts of the Divestiture Implementation Committee (DIC) System. 3. Identify five data files that will be used in the Divestitur e Implementation Committee (DIC) System; and construct a comprehensive Data Dictionary for each of the f ive data files you have identified. 4. Construct use -case diagrams, sequence diagrams, and class diagrams for the proposed Divestiture Implementation Com mittee (DIC) System. 5. Construct object diagrams, activity diagrams and communication diagrams for the proposed Divestiture Implementation Committee (DIC) System. 6. Design five reports that should be generated from the Divestiture Implementation Commit tee (DIC) System. 7. Discuss the testing strategies/techniques that you would use on this project; and provide a table of test criteria and corresponding test data for the testing . AP [10 marks] CR (20 marks) CR (10 marks) CR[30 marks] CR[3 0 marks ] CR[10 marks] EV [10 marks] [Total: 12 0 Marks] 7 END OF QUESTION PAPER