Feasibility Studies and DPRs

Project Description

We prepare feasibility reports and detailed project reports (DPR) specific to the sectors to meet client’s business requirements. Key component of  feasibility studies covers following

  • Product with capacity to be built up and processes involved
  • Project location
  • Cost of the Project and Means of financing thereof
  • Availability of utilities
  • Technical arrangements
  • Market Prospects and Selling arrangements
  • Environmental aspects
  • Profitability projections and Cash flows for the entire repayment period of financial assistance

Technical Feasibility

  • Technology and manufacturing process : Proven/new technology, basis of selection of technology, competing technologies, performance data of plants based on the technology, details of licensor of technology, process flow chart and description
  • Location  of  the  Project : Locational  advantage,  availability  of  raw  material  and  other  utilities,
  • infrastructure facilities, availability of labour, environmental aspects
  • Plant   and   Machinery: List   of   machinery   &   equipment,   details   of   suppliers,   competitive quotations, technical & commercial evaluation of major equipment
  • Raw  material,  Utilities  and  Manpower: Details  of  raw  materials  and  suppliers,  electricity  and
  • water  supply,  basis  of  manpower  estimates,  details  of  manpower  eg.  managerial,  supervisory, skilled/unskilled, training needs
  • Contracts :Agreement  with  contractors  detailing  on  know-how,  engineering,  procurement,
  • construction, financial soundness and experience of contractors
  • Project  monitoring  and  implementation:  Mode  of  implementation,  details  of  monitoring  team, detailed schedule of implementation.

Environmental  Aspects: Air, Water and Soil Pollution, list of pollutants / Hazardous substances, their   safety,   handling   and   disposal   arrangements,   compliance   with   national   and   International Standards, Clearances and No objection certificates required and obtained etc.

Commercial Viability

  • Existing and potential market demand and supply for the proposed product in respect of volume and pattern
  • Share of the proposed product of the company in the total market through marketing strategy
  • Selling price of the product and export potential, if any.
  • Buy-back arrangements, if any.

Financial Appraisal

  • Cost  of  the  Project:   This  includes  the  cost  of  land  &  site  development,  building,  plant  & machinery,  technical  know-how  &  engineering  fees,  miscellaneous  fixed  assets,  preliminary  & preoperative  expenses,  contingencies,  margin  money  for  working  capital.  Your  company  is expected  to  submit realistic  estimates  and  reasonableness  of  the  cost  of  the  project  will  be examined  with  reference  to  various  factors  such  as  implementation  period,  inflation,  various agreements, quotations etc.
  • Means of Financing:  Means of financing shall have to conform to proper mix of share capital and debt. This includes share capital, unsecured loans from Promoters/associates, internal accruals, term loans, Government subsidy/grant. Reasonableness of Promoters’ contribution in the form of equity  and  interest-free  unsecured  loans,  if  any,  is  ascertained  in  view  of  commitment  to  the Project.
  • Profitability   Projections:    Past   records   of   financial   performance   of   Your   company   will   be examined. Your company needs to submit profitability estimates, cash flow and projected balance sheet for the project and for the Company as a whole. Based on the projections, various financial ratios such as Debt -Equity ratio, Current ratio, Fixed asset coverage ratio, Gross profit, Operating profit, Net profit ratios, Internal rate of return(over the economic life of the project), Debt Service Coverage  ratio Earning  per  share,  Dividend  payable  etc.  would  be  worked  out  to  ascertain financial soundness of your Project.

Economic Viability

  • Real  value  of  input  as  against  the  value  accounted  in  financial analysis for the purpose of economic evaluation of the project.
  • our company should carry out social cost benefit analysis as a measure of the costs and benefits of the project to Society and the Economy.
  • Economic   analysis   is   therefore   aimed   at   inherent   strength   of   the   Project   to   withstand international competition on its own.

 

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