Detailed Project Report
Detailed Project Report (DPR) is a detailed chronicle focusing on the objectives of a Project, the modus operandi for its execution and for the achievement of the desired results. The basic idea behind a Detailed Project Report is that it should reflect the Vision and the approach of the Management in the area of Capital Budgeting and Project Management and understanding its implication in the working of the organization.
As per the norms the company seeking Financial Assistance for Implementation of its Business idea is required to prepare a Detailed Project Report. ARK provides its valuable guidance and support and helps its client in preparing such a Report taking into consideration all important aspects of the Project which are listed below-
• Promoters background/experience
• 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.
• Investor Guidance Inputs.
ARK also does a complete Management Evaluation for the same which includes the study of the following-
• Memorandum and Articles of Association : Object, Authorised and Paid-up Share Capital, Promoter's contribution, Borrowing powers, list of Directors on the Board, terms of appointment of Directors
• The company as the Promoter : Corporate plan of the Company, Projects promoted/implemented/under implementation, Bankers' report on dealings and Repayment of past loan assistance, details of Group companies its Operations, Balance sheet and Profit & loss account
• New Promoters: Educational background, Previous Industrial experience, Family background, Sources of income, details of Personal Properties, Banker's reference, Income tax/ Wealth tax returns
• Management and Organisation set up : Broad composition of the Board, details of full time Directors and their responsibilities, details of Chief executive and Functional Executives including their qualification, experience, organisation set-up for existing company and during project implementation for new company.
ARK also undertakes a detailed study in order to upraise itself in the following areas-
• 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 advantages, 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 equipments.
• 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.
• Study of all above factors and their effect on financials and commercial aspect of the project.
• 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 already obtained ,
• Covering these aspects clearly so that financials are not affected due to absence of these studies.
• 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.
• Detailed note on Scalability
• Sensitivity of the Trade
• Cost of the Project: This includes the cost of the Land & Site development, Building, Plant & Machinery, Technical know-how & Engineering fees, miscellaneous Fixed assets, Preliminary & Preoperative expenses, contingencies, Margin money for Working Capital.
• 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
• Profitability Projections:Past records of financial performance of the company, 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, Interest Service Coverage Ratio, Earning per share, Dividend payable etc. would be worked out to ascertain financial soundness of the Project.
• Study of real value of input as against the value accounted in Financial analysis for the purpose of Economic evaluation of the project.
• Study of Social Cost Benefit analysis as a measure of the costs and benefits of the project to Society and the Economy.
• Economic analysis therefore helps to understand the inherent strength of the Project so that it withstands the International competition on its own.
For Project Financing through Debt (specifically loan from Banks and FI's), a DPR is a basic and the most important document that must be attached to a loan application. From the point of view of a lender, a Project Report is a very decisive document as it forms the basis for him to decide whether he shall engage his funds in that particular project or not. This is where ARK plays an extremely important role in guiding and assisting its client in the most appropriate and professional manner in order to achieve assured success in acquiring the required funds thru Design and Making of a Project Report covering technical as well as financial aspects of the project.
SUBSIDY ASSISSTANCE REPORTS AND FILINGS
To augment Industrial Production activity and also to increase the presence of Commercial Units various Governmental programs are initiated by Central as well as State Governments. Apart from relaxation in Direct/Indirect Taxes, Tax Holidays the Government invites entrepreneurs to set up industry at specific locations and/or specific type of industries with Capital Subsidy Schemes as well as Other Subsidy Schemes. The prospective as well as existing Entrepreneurs always like to take benefit of these schemes and implement their projects by encashing the opportunities available under these Subsidy schemes.
Here ARK plays an extremely important role in guiding and assisting its client in the most appropriate and professional manner in order to achieve assured success in filing requisite reports and forms with the Nodal Agencies for taking the benefit of Centre/State sponsored Subsidy Schemes. It involves Designing and Making of a Project Report covering regulatory, technical as well as financial aspects of the projects which make an essential elements of these schemes.