You are Alex Larsen, the senior non-executive director of CC.

CC has been invited to tender for the

contract for the construction of the new road in Betal, as the preferred partner of Betal’s government.
CC’s finance team has drawn up financial forecasts for the project. However, you have doubts about
the contract and you want it to be discussed thoroughly at CC’s next board meeting. You are
particularly concerned with whether CC will be able to fulfil the criteria stated by Betal’s transport
minister.

Prepare a briefing paper for the board meeting, which:

(a) Analyses the financial and non-financial issues which will affect the final decision of whether to
accept the contract to build the road in Betal. Note: A recommendation is NOT required. (18 marks)
11 points

Financial factors:

We have avoided speculative projects and concentrated on larger projects with high margins and
advantageous contract terms. We believe that these are projects which can unlock new opportunities
for CC. Low price will be an important criterion when choosing the contractor. We shall also want the
contractor to carry out the work efficiently, with its timetable being as short as possible, to ensure
that disruption during construction will be kept to a minimum. The government will guarantee any
debt finance that the contractor needs to fund the project

depressing results in Alphia continues to be losses from the contract for the construction of the road
between Phi City and Tautown.

The board is considering specifying a minimum profit margin of 8% for most projects

Failure to maintain liquidity and meet loan repayment and covenant requirements will jeopardise CC’s
ability to win new contracts.

CC aims to maintain a capital structure which balances equity and debt, and ensures liquidity and
working capital requirements are met.

Non financial factors:

In Betal, there is a large range of mountains (the Isnardi mountains) which separates its Eastern
region from the rest of the country

The quality and value of the newer projects have been enhanced by a more focused approach to
tendering.

Professional skills marks are available for demonstrating analysis skills in identifying information
which is relevant to the decision. (4 marks)

SiteSmart initiative will improve our project management in all aspects. It will result in more effective
deployment of business resources, reducing wasted time and enhancing our competitiveness by
reducing project lead time
CC is obliged to report the $300,000 fines it paid as a result of injuries to employees arising from
failures to remedy dangerous conditions on site.

safety manager has made recommendations for enhanced site safety procedures which will be
implemented on current and future contracts

failure of projects to meet time, budget and quality requirements represents a fundamental threat to
CC’s business. Such failure can arise from unrealistic plans, failure to assess progress properly and lack
of effective reporting. CC’s SiteSmart initiative will be focused on improving project delivery

impact on some villages in the mountains and the damage to the habitats of a number of species of
wildlife.

(b) Discusses the difficulties CC may face in fulfilling the criteria stated by Desmond Otieno, the
transport minister of Betal. (8 marks) 5 pointts

concentrated on larger projects with high margins and advantageous contract terms.

The board is considering specifying a minimum profit margin of 8% for most projects

Low price will be an important criterion when choosing the contractor. We shall also want the
contractor to carry out the work efficiently, with its timetable being as short as possible, to ensure
that disruption during construction will be kept to a minimum. 

We are getting 10.5% profit margin (21000/19000)

The Progress payments from Betal’s government are scheduled in 4 payments.

concerns expressed about the impact on some villages in the mountains and the damage to the
habitats of a number of species of wildlife

limit its environmental footprint while it constructs the road. It will be required to base its
construction plans on mitigating the environmental impact of the road when it opens

CC has enhanced its programme for reducing carbon emissions. CC is focusing on reduction of energy
and fuel consumption. CC also aims to minimise the disruption to communities and the natural
environment

Professional skills marks are available for demonstrating commercial acumen in identifying difficulties
for CC arising from the criteria which Desmond Otieno has stated. (2 marks)

CC has been awarded the contract to build the road in Betal. It is now January 20X2 and planning for
the project has started. You are Jo Issa, the project manager for the construction of the road in Betal.
You have just been appointed project manager, as the original project manager left CC suddenly one
month ago. Oliver Wesonga, the junior member of the project team, began to draft the project
initiation document during the time when no-one was acting as project manager. He has prepared for
your review the outline contents of the project initiation document, and a summary of the section in
it on the operational issues affecting the project.
Prepare a memo addressed to Oliver Wesonga which critically evaluates the outline contents and the
summary of operational issues in the project initiation document which he has prepared and
recommends improvements. (14 marks)

EX 5

Project initiation document is a document highlighting the overview of a project to be taken and this
should include Purpose, Objective, stakeholders, dileverables, constraints, scope, risks etc.

Operational issues is an important part of the Project initiation document of Betal. Looking at the
issues in the PID, only time, costs and other risk constraints are linked however in the case of Betal
there should be other important risks to amphasise on.

Other operational risks would include the fact that betal is situated in a mountanious region and we
have expertise in flat lands.

Professional skills marks are available for demonstrating scepticism skills in discussing shortcomings
with the outline contents and summary of operational issues in the project initiation document and
recommending improvements. (4 marks)

Q3

It is now July 20X2, three months after CC began construction of the new road in Betal. You are Pat
Singh, a consultant employed by CC’s board. You have just left the emergency meeting regarding the
incident at the construction site and are responding to the requests made by CC’s chairman, Imena
Bhudia, at the end of the meeting.

Prepare:

(a) A confidential memo for Imena Bhudia, chairman of CC, which discusses the ethical and
reputational concerns raised at the meeting. (10 marks)

Exhibit 6

Two protesters were seriously injured last night after they broke into one of the construction sites for
the new road through the Isnardi mountains. The break-in is an escalation of the recent protests
against the new road.

CC has an audit committee (the committee), comprised entirely of independent non-executive

directors, in line with international governance best practice

CEO statement: We are mindful of the economic benefits which improved infrastructure will bring,
but also want to address concerns about adverse impacts on the environmen
CC is responsible for minimising the risks of hazards and dangers to employees and others arising
from its operations. The health and safety manager’s principal responsibilities include maintaining
health and safety documentation, organising training and accreditation for staff, reviewing health and
safety reports and monitoring compliance in conjunction with internal audit.

$300,000 fines it paid as a result of injuries to employees arising from failures to remedy dangerous
conditions on site. The health and safety manager has made recommendations for enhanced site
safety procedures which will be implemented on current and future contract

followed by a 

The contract only states that the security post should be manned at all times

security staff said that they’d reported it to their managers, but no-one from Sholin Security appears
to have contacted us

Apparently lighting was one of the things picked up by Li Kurata, our health and safety manager, when
he visited the site two months ago. Staff said that the lighting was going to be fixed before internal
audit’s visit planned for next month

He’d also fallen over on a patch of oil, which hadn’t been mopped up.

our lawyers have advised us not to make any statement that we are responsible and that the police
and health and safety authorities will be looking at the site over the next few days

That’s all correct. Of course we shouldn’t admit to any responsibility for the injuries.

Professional skills marks are available for demonstrating scepticism skills by challenging the
comments made at the emergency meeting. (2 marks)

(b) A summary for CC’s board to review assessing the control weaknesses discussed at the emergency
meeting, stating for each control weakness its consequence and recommendation for improvements.
(14 marks)

Control weakness and it's consequences. recommendation

No security staffs were on site when the protesters entered the site and additionally no-one from
Sholin Security appears to have contacted CC.

Protester who was injured ran across an unlit service road and the van collided with him.
Li’s been off sick for the last six weeks, and no immediate replacement was placed by the CC's board.

One of the protestors had also fallen over on a patch of oil, which hadn’t been mopped up.

The health and safety manager visited the site two months ago, however he should be be frequently
visiting the site.

Professional skills marks are available for demonstrating evaluation skills by basing explanations of
significant control weaknesses on the information provided and recommending appropriate
improvements. (4 marks)

(c) A briefing paper for CC’s next board meeting, advising the board of the advantages for CC of
establishing a separate risk committee. (8 marks)

This breifing paper 

Independence:

Timely identifications of risks:

Effective assessment of risks:

Monitor and review of risks:

Professional skills marks are available for demonstrating commercial acumen skills in identifying
benefits that would be relevant to CC in establishing a separate risk committee. (2 marks)

Q4

It is now October 20X2, six months after CC began construction of the new road in Betal. You are Pat
Singh, a consultant employed by CC’s board.
Burton Vadher, CC’s chief executive, has asked you to help him to prepare for the next board meeting,
which will discuss investment in big data analytics and offering long-term infrastructure management
for roads in Omegland, Alphia and Betal.

Prepare TWO presentation slides, together with accompanying notes, for the chief excecutive to
present to the board which:

Discusses the benefits and the costs to CC of investing in big data analytics; Evaluates the possible
opportunity to undertake long-term infrastructure management of roads in the three countries. (8
marks)

We also see the effective use of big data as an important goal. We shall be looking to upgrade our
systems to take full advantage of it

Professional skills marks are available for demonstrating communication skills in presenting the points
in the slides concisely and for supporting notes which will make the issues clear to the board. (2
marks)