Office of the Municipal Manager Supply Chain Management

TEL: 045 808 4662 /63 /54 /55 PRIVATE BAG X 7121 FAX: 045 839 2437 QUEENSTOWN, 5320

Email: chdmquotations@chrishanidm.gov.za Closing Time: 16:00 Enq: Andile Feleni Date: 05 October 2016 REQUEST FOR FORMAL WRITTEN QUOTATION Kindly furnish me with a written quotation for the supply of the goods/services as detailed in the enclosed schedule. The quotation must be submitted on the letterhead of your business and can either be faxed or deliver by hand within seven working days.

The following conditions will apply:

x Price(s) quoted must be valid for at least thirty (30) days from date of your offer. x Price(s) quoted must be firm, must be inclusive of VAT and furnish your CSD

number. x For all transactions exceeding R15 000, must be accompanied by a valid Tax

Clearance Certificate or PIN, BEE Certificate, Declaration form (MBD 4.1) and a Confirmation of Banking Details.

x First preference will be given to the service provider who is registered in Central Supplier Database.

x Supplier must attach the MBD 6.2 declaration certificate for local content. x The link www.csd.gov.za

PREFERENTIAL PROCUREMENT POLICY FRAMEWORK ACT (PPPFA) WILL BE AWARDED AS FOLLOWS: Price -80 PPPFA -20 ______________________________________ Total -100 Failure to comply with these conditions may invalidate your offer. Yours faithfully ------------------ SIGNATURE Queries contact: 045 808 4662 / 4703

CHRIS HANI DISTRICT MUNICIPALITY 2

Please supply us with your bank details in your quotation. Please Fax them to this number 045 839 2437. TERMS OF REFERENCE TO CONDUCT FULL DUE DILIGENCE OF CALA ABATTOIR.

1. BACKGROUND

The district municipality embarked on the project to establish the abattoir in the area of Cala

town in Sakhisizwe Local Municipality. The project has been ongoing for over a period of

more than five years. It’s the intention of the District Municipality to ensure the functionality of the asset and address all the issues experienced in the finalization of the project.

2. OBJECTIVES OF ASSIGNMENT

The main objectives of the assignment are to conduct a comprehensive due diligence and

valuation of the assets and construct short-term, medium-term and long-term

recommendations to operationalise and commercialise the asset in order to assist the District

Municipality, Farmers and and potential investors to assess the Abattoir’s potential capital, throughput (livestock) requirements.

The Consultant should review the valuation of all material assets and liabilities technically on

the balance sheet (taking account of contingent liabilities) and in particular should undertake the following tasks:

2.1 Conduct a comprehensive Technical due diligence.

2.2 Conduct a comprehensive Market due diligence.

2.3 Conduct a comprehensive Business Plan due diligence.

2.4 Conduct a comprehensive Legal due diligence. NB: the above shall be delivered based on the methodologies explained in the “3. Scope of Services and Methodology”;

3. SCOPE OF SERVICES AND METHODOLOGY

The due diligence processes and analysis in order to achieve the objectives of the assignment related to the loan portfolio analysis the consultant is required to:

3.1 TECHNICAL DUE DILIGENCE Review and pronounce on:

3.1.1 Review of all related Acts, Rules & Regulations, Policies & Procedures,

System Manuals of related and guiding the establishment of abattoirs in

South Africa.

3.1.2 Permits and licenses required.

3.1.3 Capacity and skills required and availability.

3.1.4 Facility requirements (building plans, floor plans).

CHRIS HANI DISTRICT MUNICIPALITY 3

3.1.5 Comprehensive assessment of maintenance plan for both building and

equipment, including replacement of equipment; 3.2 FINANCIAL DUE DILIGENCE Review and pronounce on:

3.2.1 Financial projections for the entire contract period (ten years), viz:

x Balance sheet

x Income statement Cash flow projections

3.2.2 Investment plan.

3.2.3 Risk management plan.

3.2.4 Financial conditions.

3.3 MANAGEMENT DUE DILIGENCE Review and pronounce on:

3.3.1 Corporate management structure and management system.

3.3.2 Management policies.

3.3.3 Business capability- its policies, practices and resources to execute the

production.

3.3.4 Internal control mechanism.

3.3.5 Overall performance.

3.3.6 Mobilisation plan for the recruitment and placement of staff.

3.4 OPERATIONAL DUE DILIGENCE Review and pronounce on:

3.4.1 Operationalisation project plan with timelines for the large-livestock

abattoir;

x Detailed plan with costing and timelines for the operationalization of the

abattoir (starting up equipment in production area).

3.4.2 Sourcing plan for the acquisition of livestock from the local and feed, with

relevant letters of intent.

3.4.3 Operationalisation plan for the environmentally controlled livestock areas.

3.4.4 Sourcing plan for acquiring additional livestock around the district, province

in order to operate the abattoir to its full capacity;

3.4.5 Detailed process plan.

3.5 MARKET DUE DILIGENCE Review and pronounce on:

3.5.1 Marketing plan for all abattoir products and or with relevant letters of intent.

3.5.2 Comprehensive start-up plan with proper costing.

3.5.3 Identification and proposals on future market

CHRIS HANI DISTRICT MUNICIPALITY 4

3.6 LEGAL DUE DILIGENCE Review and pronounce on:

3.6.1 Has there be any signed any non-competition agreements (or agreements

with such clauses in them) with any other party.

3.6.2 Has the company signed any exclusivity agreements (i.e. to not work with

competitors of any of its customers) or agreements with such clauses in

them.

3.6.3 What NDA’s are currently in force?

3.6.4 Has the company ever been subject to legal proceedings, or the threat of

them? If so, provide details.

3.6.5 Are there any other non-standard legal agreements the company has

entered into, which may affect the value of the company?

3.7 RISKS DUE DILIGENCE Review and pronounce on: 3.7.1 What are the key risks to the business? 3.7.2 What plans exist to mitigate these risks?

3.7.3 Are there any further key risks identified?

4. DELIVERABLES & TIMING

As the main deliverable of this assignment the Consultant will produce a full version of the report under both above mentioned Scenarios by October 31, 2016.

The report will:

x contain an Executive Summary incorporating the Consultant’s key conclusions; x address all areas as referred to under Scope and Methodology;

x be comprehensive, precise and accurate, presenting the Consultant’s findings,

analysis and conclusions in a clear and concise way; and

x where appropriate, include detailed information in appendices (to include inter alia

the samples of loans reviewed and a one-page summary.

x The Consultant is to deliver 2 copies of the final report in hard copies and an

electronic copy. x The report shall be done in English.

x Please note that the DM may share the report to existing controlling shareholders

as well as to potential new investors

5. CONSULTANTS PROFILE

x The Consultant shall be a multi-skilled team of individuals proposed by the firm.

x At least 5 experts should be working on the assignment for 5 weeks’ maximum.

CHRIS HANI DISTRICT MUNICIPALITY 5

x Fluency in English is a requirement, knowledge of local language a bonus.

x Key experts are expected to be:

• One Team Leader for the due diligence component with significant

professional experience in managing similar assignments;

• At least senior experts with relevant qualifications and significant (at least 5

years) professional experience related to Environmental, Geological,

Quantity Surveying, Civil Engineering, Electrical, Economics, Accounting,

Health & Safety, Financial, Portfolio Analysis Asset Valuations;

Organisational Development.

x A firm with a proven recent experience in conduct comprehensive due diligence

within the last 12 months will receive a preference.

x A firm with a proven recent experience in abattoir development within the last 12

months will receive a preference.

x Preference will be given to a local qualified firm.

x A BBEEE and Tax compliance are a requirement.

6. RFQ ASSESSMENT CRITERIA

CRITERIA FOR FUNCTIONALITY (100 points)

Capacity

Human Resources 15

20

a Organogram of the team (Scoring: Commercial Consultant = 2, Agricultural/Agricultural Economics=2, Project Manager=2, Civil/Electrical Engineer, Quantity Surveyor)

8

b Suitable skill mix of the team (Scoring: 3/3=9 points, 2/3=7 points, 1/3 and below = 0 points) 7

F i nancial Resources 5

a Submission of latest signed Audited annual financial statements. 5

Qualifications

a Qualifications in relevant (Scoring: Commercial Consultant = 2, Agricultural/Agricultural Economics=2, Project Manager=2, Civil/Electrical Engineer, Quantity Surveyor). (Scoring: Doctorate = 20 points, Masters = 15 points, Honours = 10 points, Degree only = 5 point, Diploma=1 points)

20 30

b Professional Body Certification for the mandatory professions 10

Experience & Track Record

Years of Relevant Experience in similar projects – development facilitation , trade deals, commercial legal contracts 10

30

a 5-7 years 10

b 3-5 years 6

c Below 3 years 3

Track Record 20

a 5 similar projects 20

b 4 similar projects 15

c 3 similar projects 10

d 2 similar projects and below 5

Methodology 20

CHRIS HANI DISTRICT MUNICIPALITY 6

CRITERIA FOR FUNCTIONALITY (100 points)

a Understanding of Terms of Reference and CHDM needs 5

b Project Plan for Implementation and itemized billing 5

c Proposed methodology 10

Total Points 100

For any queries please contact Mr Madleni Dawethi on 045 807 4800.