1. PROJECT APPRAISAL

2. A project can be defined as a scheme of
things to be done during a specified period
in future for deriving expected benefits
under certain assumed conditions.
Project Appraisal basically means
validation of various assumptions outlined
in the project.
What is a project ...

3. The purpose of project appraisal is to ascertain
whether a project is sound -
•Technically
•Economically
•Financially
•Commercially, &
•Managerially.
Project Appraisal

4. PROJECT APPRAISAL
ENTREPRENEUR
/ PROMOTERS
ENTREPRENEUR
/ PROMOTERS
PRODUCT(S) & USE
OF THE PRODUCTS
PRODUCT(S) & USE
OF THE PRODUCTS
MARKETING
MANGEMENT
MARKETING
MANGEMENT
PRODUCTION
MANAGEMENT
PRODUCTION
MANAGEMENT
FINANCIAL
MANAGEMENT
FINANCIAL
MANAGEMENT
1 2
4 5
3
ORGANISATION
AND SYSTEMS
ORGANISATION
AND SYSTEMS
6

5. ENTREPRENEUR
/ PROMOTERS
ENTREPRENEUR
/ PROMOTERS
PRODUCTION
MANAGEMENT
FINANCIAL
MANAGEMENT
PROMOTERS & THEIR BACKGROUND – QUALIFICATIONS, EXPERIENCE,
SOCIAL STATUS, INTEGRITY, REFERENCE TO DEFAULTERS LISTS
PROMOTERS & THEIR BACKGROUND – QUALIFICATIONS, EXPERIENCE,
SOCIAL STATUS, INTEGRITY, REFERENCE TO DEFAULTERS LISTS
SOURCES OF PROMOTERS CONTRIBUTION TO THE PROJECT – TIMING FOR
INTRODUCTION OF FUND – WHY NOT UPFRONT? INTERNAL CASH ACCRUALS?
SOURCES OF PROMOTERS CONTRIBUTION TO THE PROJECT – TIMING FOR
INTRODUCTION OF FUND – WHY NOT UPFRONT? INTERNAL CASH ACCRUALS?
MANAGEMENT TEAM & KEY MANAGEMENT PERSONSMANAGEMENT TEAM & KEY MANAGEMENT PERSONS
PROJECT APPRAISAL

6. PROJECT APPRAISAL
PRODUCT(S) & USE
OF THE PRODUCTS
PRODUCT(S) & USE
OF THE PRODUCTS
TECHNICAL SPECS
PRODUCT RANGE
TECHNICAL SPECS
PRODUCT RANGE
TYPE OF
PRODUCTS
TYPE OF
PRODUCTS
INDUSTRIAL
PRODUCTS
INDUSTRIAL
PRODUCTS
CONSUMER
PRODUCTS
CONSUMER
PRODUCTS SERVICESSERVICES
USE OF THE
PRODUCTS
USE OF THE
PRODUCTS

7. PROJECT APPRAISAL
MARKETING
MANGEMENT
MARKETING
MANGEMENT
PRICINGPRICING
DEMAND IN THE
MARKET SEGMENT
DEMAND IN THE
MARKET SEGMENT
POTENTIAL
MARKET
POTENTIAL
MARKET
MARKET
SEGMENTS
MARKET
SEGMENTS

8. PROJECT APPRAISAL
PRODUCTION
MANAGEMENT
PRODUCTION
MANAGEMENT
Technical Know-how
Manufacturing Process
Plant & Machinery
Utilities
Land, Building
Installed Capacity
Raw material, Yield
Consumables
Power & Fuel
Manpower
Pollution Control
Regulatory factors

9. PROJECT APPRAISAL
FINANCIAL
MANAGEMENT
FINANCIAL
MANAGEMENT
COST OF PROJECT
MEANS OF FINANCE
D/E, ROI, DSCR, IRR
COST OF PROJECT
MEANS OF FINANCE
D/E, ROI, DSCR, IRR
INTEREST RATE
MORATORIUM
REPAYMENT
INTEREST RATE
MORATORIUM
REPAYMENT
PROFITABILITY
ESTIMATE

10. COST OF PROJECT
•Land & Land Development.
•Building & other civil works.
•Plants & Machinery.
•Utilities - Water, Steam, Power, etc.
•Furniture's & Fixtures
•Contingencies
•Margin for Working Capital

11. MEANS OF FINANCE
•Equity Share Capital
•Bank Term Loans
•Lease / Hire Purchase
•Debentures
•Unsecured Loans

12. PROJECT APPRAISAL
ORGANISATION
& SYSTEMS
ORGANISATION
& SYSTEMS
SYSTEMSSYSTEMS
ORGANISATIONORGANISATION
INVENTORY CONTROL
PRODUCTION PLANNING
& CONTROL
BUDGETARY CONTROL
INVENTORY CONTROL
PRODUCTION PLANNING
& CONTROL
BUDGETARY CONTROL
CONSTITUTION
PROPRIETORSHIP
PARTNERSHIP
PRIVATE LIMITED
LTD. COMPANY
SOCIETY
TRUST
CONSTITUTION
PROPRIETORSHIP
PARTNERSHIP
PRIVATE LIMITED
LTD. COMPANY
SOCIETY
TRUST
MANPOWER
HIERARCHY
AUTHORITY
RESPONSIBILITY
MANPOWER
HIERARCHY
AUTHORITY
RESPONSIBILITY

13. Assessment of :
•Requirement of credit
•Fund Based
•Non-Fund Based
•Credit Risk Assessment
(Management, Industry and Financial risks)
•Risk Assessment / Mitigation / sharing
•Pricing of Loan
Security – Primary / Collateral
Sanction of Loan
Related Non-Fund Based Facilities
Follow-up of implementation of the project
Project Appraisal

14. THANK YOU