Steps in Prepn of Proj Rep

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TIPS FOR PREPARATION OF

PROJECT REPORT


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INDEX Opportunity in Project Finance Consultancy

Phases of Project Financing

Why Project Report ? Promoter Analysis (KYC)

Analysis of Project

Contents of Project Report

Technical Details

Market Analysis Assessment of Term Loan

Assessment of Working Capital

Types of Working Capital Facilities

Ratio Analysis

Security offered SWOT Analysis

Excel Sheets

Enclosures

Other Factors


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OPPORTUNITY IN PROJECT FINANCE

CONSULTANCY

Globalization of EconomiesGlobal Village

Economic Development In India, particularly in

Gujarat


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PHASES OF PROJECT FINANCING

Appraisal of Client & project

Preparation of project report

Liaison

Post sanction functions


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WHY PROJECT REPORT?

Visual & virtual imagination of existing and /orproposed project.

Project report explains in detail various aspects of

project

Helps marketing of the project:- For amalgamation or foreign

collaboration or to find partner.

For sanction of loans

For IPO etc. fund raising

Obtaining technical permissions e.g.

pollution permission, Government

approval for foreign collaboration.


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PROMOTER ANALYSIS (KYC)

Interview

Education & Experience

knowledge about project

Technical -1. Location 2. process 3. Know howcapacity 4. products. 5. Market

Commercial

Financial requirement of the project

Components of cost of project i.e. land,building, plant & machinery.

Whether size & scale of the proposed project

fits the client.


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CONTD

Reference: Quality of the reference via whom client

has come.

Find out reference from client and try to inquire.

Market reputation


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FURTHER VERIFICATION Enquiry from present banker

Verification of bank statements

Conduct of A/C

Reflection of existing business in the bank

Discipline of exiting limits

Frequent overdraw

Verification of financials of last 3 years IT returns of promoters

Financials of existing/ associate concerns

Credit rating in case of existing units

Shifting/Take over from other banks

Eligibility for additional finance Eligibility for corporate loan etc.

Verification of proofs of property

Justify the capacity to raise the capital vis a vis networth of promoters

overall conclusion about client & Project


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ANALYSIS OF PROJECT

Nature of Industry

-Banks approach towards industry-

e.g. Building construction.

- Present market Scenario

vis a vis promoters capability.


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CONTD

Types of project

A. Grass root or new project:

a. Venture project

b. Traditional Project

c. Promoter with Existing industry.

B. Existing Project

a. Going for Expansion -same Location

- New Locationb. Backward Integration- Captive consumption

c. Forward IntegrationCaptive consumption

d. Diversification


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CONTENTS OF PROJECT REPORT

Title page

Index

Executive summary or Project in brief

History of the Company

Details of promoters

Associate concerns

Common promoters

Nature of activity

Bank details including Loans availed

Financial summary


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TECHNICAL DETAILS

Details of products

Uses of the products

Manufacturing Process

Others Raw Materials Requirements

Power & fuel requirements

Raw materials details

Manpower analysis

Quality control

Pollution control

Locational Advantages


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MARKET ANALYSIS

Industrial scenario

Demand Supply Data

Competition vis a vis Promoters Capabilities

Prospective CustomerMarketing Strategy


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ASSESSMENT OF TERM LOAN

Cost of Project

Land

Building

Plant & machinery Utilities

Preliminary & preoperative Exps

Contingencies

Margin for Working Capital


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CONTDMeans of Finance

Promoters Equity

Reserves & Surplus

Term Loan

Unsecured Loan Others

Financials Requirements in brief

Concession in processing charges Concession in Interest rate


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ASSESSMENT OF WORKING CAPITAL

Working capital cycle

Holding periods ofInventory, Receivables,

Creditors

-Past Trends of the company-Industry Trends

-Economic conditions

-Growth trend in turnover

-Projected Holding periods Fund based & Non fund based limits


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TYPES OF WORKING CAPITAL

FACILITIES

Fund Based

Cash Credit

Overdraft

Bills FinanceExport-Finance

Non-Fund Based

Letter of Credit

Guarantees


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CONTD

Working Capital Computations:

1. CMA based

2. Cash Budgeting (especially for Seasonal business lines)

3. Turnover Method


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RATIO ANALYSIS

For Term Loan

Debt service coverage Ratio

Break Even Analysis

Pay Back Period IRR

For Working Capital

Current Ratio

Debt Equity Ratio

Profitability Ratio

Sensitivity Analysis


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SECURITIES OFFERED

Primary security

Collateral security

Adequacy of collateral security

Description of Assets

Title Clearance

Valuation


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SWOT ANALYSIS

Strength

Weakness

Opportunity

Threats


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EXCEL SHEETS

Assumption of Profitability

Cost of Project & Means of Finance

Projections of Profitability & Repayment

Analysis of Balance sheet

Assessment of Working Capital

Workings of different ratio

Workings of different components of Profitabilitye.g. Depreciation, Tax etc.

Fund Flow Statement


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ENCLOSURES

Registrations

Land Papers

Building Plan with estimate

Plant & Machineries quotations

Income Tax Returns of last 3 years

Financials of the company & Associates

concernsProofs of assets & Liability of Promoters

Other details


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OTHERS FACTORS

Consortium Finance

Technical Economic Viability

External Credit rating

Sanctioning Powers of the bankbeing approached

Format & Presentation

Charts & pictures

Use of Internet Use of programsword, excel,

Power point presentation


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THANK YOU

Documents

Steps in Prepn of Proj Rep