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Ref: HO:TAD:2013-14:279
HEAD OFFICE
Technical ppraisal Dept
tar
House.G5
G
bck
Ba nd raX uk Complex.
Bandra East),
Mumbai
400 051
Phone 6684632FAX ffi6846W
30
headoff [email protected]
Date
:
21.01.2014
MIS Webcon Consulting (India) Ltd.
Chatte ee International Centre,
4 h Floor, 33-A J L Nehru Road,
Kolkata-700071, WB.
Dear Sir,
Renewal of vour empanelment on our Bank s approved panel
of Consultants for Techno Economic Appraisal.
We refer to your application received on 20.01.2014 through our Kolkata Zonal
)
Office, requesting for renewal of empanelment on our Bank s approved panel of TEV
Study consultants.
2. We have considered your request favourably and are pleased to inform you that
we have renewed your name on our Bank s approved panel for the following:
Industry
Tvpe of service Proiect Size
ManufacturingIService Technoeconomic viability study
All
3. The format in which study report is to be submitted and the minimum coverage
expected in the report shall be advised to you by our Zonal Office at the time of
assigning the job and the same will have to be meticulously followed by you while
executing assignment for our Bank.
4. Please note that services of consultants are availed only and only in case of
exigencies when bank s in-house services are not available. Hence being on the panel
of consultants of Bank of India, does not guarantee assignments during the period of
empanelment.
5.
This empanelment is valid for a period of one year from the date of issue of this
letter and needs to be renewed thereafter annually as prescribed.
6
Please note that Bank shall be within its right to initiate suitable action against you
in the event of any professional misconduct/ negligence etc. while handling the matter
entrusted to you, including by filing complaint with Institute of Chartered Accountants1
lnstitute of Engineers etc.
7. Please acknowledge receipt of this letter.
Yours truly,
-14
Kapila)
General Manager
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.
PPR IS L FEE FOR EXTER N L GENCY
Wherever appraisal work
is
to:be referredto an external agl?ncy consultant, the
charges
/
terms of paymentetc of the agency / consultant will have to be negotiated by
the Bank before. hand and the concurrence of the proponent / borrower for bearing
such expenditure will have to be obtained in writing ( preferably the concerned amount
be got.deposited by the proponent in his deposit amunt with Bank's. lien marked on it .
Only thereafter an am'gnment shall be entrusted to an external agency
/
consultant.
negotiated with thereof will be as per the terms of approval by the appropriate
authoiii. Allowing the propqnents / borrowers to negotiate the fees with the agencies/
consultants should bedlscouraged. The scope of asslgnment for the external agency/
consultant should be advised by the Bank In writing. Report shoulj be obtained diredly
(not through the customer) and payment to the consultant should be made by ~ani c.
T V STUDY COVER GE SCCOPE OF WORK
TEVS report should normally cover the following aspects specifically, depending
upon the availability of inputs:
i
Promoters their background
-
only objective assessment of promowrs
and their background based on their experience, existing operations and
professional qualifications etc to be given. Relevance of these to the
proposedventure n case of new units to be brought out.
ii
Project cost Means of finance
.
Financial analysis In case of exijtlng units with a view to ascertaining
-.
~nvesbble urplus, expected cash. accruals during the implementation of
the proposed new expansion diienification project. Other aspects to be
studied include inventory and receivable leve s maintained- vis-a-vis
normative requlremenk and/or industry standards.
iv)
Plant and Machlnery : coyments on condition, t~alancingjadequacyof
existlng/proposed machinery,
technological
level, suppliers of machinery
etc should be given. In case of second hand machinery, availability of
chartered engineer's certificate on age of nla;:hinery, condition of
machinery, reasonabiilty.of cost, residual life and availability of spares etc
shoul'd also be seen and commented upon.
v)
Infrastructure : availability of the required infrast'ucture, arrangements
made/proposed andadequacy thereof
vi) .
Raw materials
:
equired rawmateriais, quantitative requirements based
on yield data, sources of supply, cost of raw materiz~ls nd their availability
position etc
vii)
Products: main p'roduct(s) to be.,manufactured, bye-products and wastes
etc. Quantitative projectlons (where avaiiable/possible) proposed selling
prices vis-a-vis current mar,ket'pricesetc
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viii) Market Marketing Arrangements
:
Demand supply data/position. Other
competitors in the industry, imported substitutes, targeted consumer
segment
ix)
.Assessment of Working capital requirements
x)
A sw sm en t of Term Loan requlrement
xi)
SWOT analysis includin g risk factors and risk m itigants
xi i) Concluding comments on technical feasibility and economic' viability
including BEP analysis, DSCR calculations, I R calculations and sensitivity
analysis on
sl s
and major inputs. Debt sewicing capacity of the project
at diffe ren t DSCR levels may be work.& ou t where the pro jec t DSCR is
lower than the benchmark flgure for the limits sought by the
proponentlbonower.
The above list is indicative only, the officer concerned would decide oncase to
case basis and based on the nature o f the p roject, availability o f inputs an d purpose of
repor t (new finance or review or restructuring), as to w hich are the p oints to
be
covered no t covered.
The purpose of T N Study is to aid the sanctioning authcrity to arrive at an
informed udgm ent
as
regards acc@ ptabillty f the project for lending or investment,
purposes and to enable thls, the echnical Officer should, as clearly as possible, gi ve a
conclusive v iew on th e techn ica l commerc ia l f inanc ia l aspec ts o f th e
project stu die d. Where the flaws noticed in the projec t are correctable, effort should
be made t o suggest ways and means In the TW S Report to make th e projec t bankable.
Projects lnvolving technological hks will nave to be norma lly dealt w l h in the
venturedpital f inance route.
I n
exceptional cases where such a project is. belng
contemplated by an erlstin g bor rower o f our Bank having adequate cash accruals, the
project (with technological risk) may be made banh ble to the extent ofsurpius debt
sew iang ca pauty ava ilable from existing operations even though the v iabliity aspect of
the projec t on stand alone basis would still remaln unestablished conclusively.
On the part of the recipient / user of the T N S Report,
it
is expected- that a
thorough study of the report be made before arriving at a conclusior~on the viability of
the project instead of asingle point reference only
to
the final paragraph of the T N S
Report. While the concluding paragmph will ce rtainly give an broad idea about. the
viability of the project, many subjective observations assumptions leading to such
conciusion in the final paragraph ar e normally spread over, th e report and may no t
necessalily be summ arlzed in the last paragraph to avoid re petitlon as also to keep the
concluding remark sufficiently brief.
T N S report shoul 'd not cover aspects like the need for collateral security etc.
and other ben efits t o the bank, and the professional opinion expressed by the office r?
should. be purely on the projec t aspects, leaving other aspects 'to the credit o*cers
/
sanctioning autho rity to take administrative decision.
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Annexure t o Branch Circular
No
9 9 / 1 0
dt
20.04.2005
ANNEXURE A
INFO RM AT ION TO BE SENT FOR TEVS
1. Project Feasibility Report submitted by the proponents, in case of
new/expansion/di.versification
projects. The report should include th e following:
vi)
Write-up Industrial License
/
SSI Registration/ FDA Approval and/or
any other licente/ permission required for manufacture of the proposed
products.
vii) Memo randum Artides of Aaoclation, Certificate o f Incorpora tion and
Certificate of Commencement o f Business where applicable
viii) .Bio data of ,promo ters including their background, qualifications,
exoerience, oresent occuoatlon. detalis of technical/Manaaerial ~ers on ne l.
ix)
x
xi)
xii)
xiii
f
xiv)
xvi)
xvii)
requirem en~a vallabll ity f ldlled labour.
Cost of project Means o f inance
Copies o f registrationJapprovals/clearances (eg. Power sanction,
Mun icipal corp ora tion clearances for factory/buildin j construc tion, NA
Permislon,
pollution
control au thorities approval, etc.)
Details o f land (location, area, price, site p lan etc.)/ buildi,ng.
plan/architect's estimate4 availability of infrastructure like roads,'
powe rlwater, effluen t disposal arrangements, etc. at the location. Total
pow erlw ater requirem ent and sources.
Details of plant and
machinery
(names of suppliers, cost, capacity,
powe r/fuel requirements, w hether pe rformance guarantee/back up
maintenance arrangements available>plant lay ou t
Project implementation schedule; ,Arrangements for
supervision/consultants, subcontracting i f any
Details o f the process rejebions /saap/bye products; arrange men ts for
process know how, techhical wllaboration/assistance; Buy back,
arrangements if any
Assumptions considered in profitabiiity projections, their basis and
supporting
documents where available. Quantitative requirements of raw
material wit h Its sources, and prices. Opening/closing stocks o f raw
materials/WIP/Finished Goods; production and sales both i n terms o f
quan tity and value. Installed Qpacity, utiiisation envisaged, projected
financial statements including cost o f production ant1 profitability, costing
'o f each product, DSCR calculations. Projected Balance Sheets and Funds
Flow statement
Detalled calc ulatio ns~ for xcise duty, depreciation, interest and taxes.
Market survey Report where available for the product .W stlng
/
projected demand and supply position. Compe titors, their locations,
instatled capaaties, selling prices, market share, etc. Product
specifications, uses, standards applicable, marke t segm ents targeted, etc.
List of proposed customers/whether tie ups madf/terrns of payment,
pending orders on hand.
2
Application in relevant forma ts wit h CMA data wherever a pplicable.
3. I n .case of existing borrowers where no new/expansion/diversification project is
being considered, a copy of last sanctioned proposal may be pravided.
4. Profitability
/
balance sheet /cash flow projections submitted by the existing
borrowers along with working notes (working notes to indude assumptions
considered in profitability projections, their basis and supporting documentswhere
available; quantitative requirements of raw material with its sources and prices; i
open ing/ciosing stocks of raw materials/WIP/Finished Good:, bo th in term s of
quan tity and value; production and sales both in' te rm s of quantity and value.
Installed capacity, utilisation envisaged, projected financial stalzments including cost
of production and profitability, costing o f each product, DSCR calculations)
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