PROJECT FINANCE

Mukesh Ahuja MBA III Apeejay Institute of Management Jalandhar

INTRODUCTION 
With a view to harnessing advancements in

S&T to economic development, GoI laid emphasis on industrialisation through successive Five Year Plans. 
Rapid industrial development needed massive

investment. 
Prior

to independence, there were no institutional arrangements for term finance.

INTRODUCTION 
GoI,

therefore, established financial institutions:

the

following 

Indl. Finance Corporation of India (1948)  Indl. Credit & Inv. Corpn. of India (1955)  Indl. Development Bank of India (1964) &  Indl. Reconstruction Bank of India (1971)  Similarly, State Governments also established

SFCs in their respective states.

INTRODUCTION 
For long, commercial banks confined their

lendings to meet WC requirements only and they did not play any active role in extending term finance. 
However, with increasing proportion of Term

Deposits in their deposit portfolio and the paucity of resources in the country, it was felt that banks could enter the field of term finance, in a role complementary to that of Term Lending Institutions.

PROJECT BACKGROUND 
The purpose of term assistance is to meet a

part of the capital expenditure of a project. 
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·. 
A project may be in the nature of setting up a

new industrial unit, modernisation, expansion, diversification and promotion of R&D.

. etc. railway sidings. in addition to the Preliminary / Pre-Operative Expenses and margin on WC Limits. water supply. certain capital expenditure needs to be incurred in acquiring assets such as L&B. Term Loans are sanctioned to supplement the promoters· contribution. meet the entire capital expenditure out of their own resources.  Where promoters of a project are unable to .PROJECT BACKGROUND  To set up a project. P&M and other infrastructural facilities like roads.

around Joint Stock Company as promoter.  Our discussion of the subject would revolve . Co-operative Society & Joint Stock Company.PROJECT BACKGROUND  Promoters of an industrial project can constitute themselves into any of the following forms of business organisations to implement the project : Sole Proprietorship. Partnership. JHF.

Promotion in relation to a project will comprise broadly the following functions:  I] Identification of a project  II] Feasibility investigation  III] Assembling the proposition  IV] Financing the proposition .PROJECT BACKGROUND  The Promotion Stage is a crucial stage in the entire life cycle of a project.

then considers the feasibility of manufacturing and marketing the product at a remunerative price.I] Identification of a Project  The first step in the project promotion is the identification of a project. background and ability.  The promoter.  There should be an unsatisfied demand. . An industrial project originates as an idea in a promoter when he observes the existence of a potential market for a certain product. on the basis of his experience.

II] Feasibility Investigation  A detailed feasibility study is a costly exercise. A market study aims at assessing aggregate demand for a product.  There are agencies. the . It is. Promoters may take advantage of their services. specialising in market research. desirable that. before it is undertaken. marketability of the product to be manufactured is firmly established. therefore. which conduct such market studies.

II] Feasibility Investigation  The promoter will now undertake the detailed feasibility investigation proper. comprising two feasibility studies:  i) The Technical Feasibility Study  ii) The Economic Feasibility Study .

II] Feasibility Investigation .Technical Feasibility Feasibility Study covers following aspects:  Location of the project  Lay-out of the Plant  Size of the Plant  Factory construction  Manufacturing process / Technology  Process Design  Product Design  Scale of Operation  Infrastructural facilities  Technical the .

concerns itself with matching of economic resources with the physical requirements of a project and determining the viability of investment therein.II] Feasibility Investigation . .Economic Feasibility  The prime objective of setting up a project is to derive a fair return on the investment. therefore.  Economic Feasibility Study.

CoP & MoF  When a promoter is satisfied about the technical feasibility and economic viability of a project. the next task is to work out the Cost of the Project and the Means of financing it. Engg. (a) L&B (b) P&M (c) Misc.III] Assembling the Proposition . & Consultancy fees (e) Preliminary and Pre-operative expenses (f) Provision for contingencies (g) Margin on WC Limits  The Cost of the Project would broadly include: . Fixed Assets (d) Technical Know-how.

which when sold bring in cash. Fixed Assets have a relatively longer life and are generally not meant for resale.  C/A go through the operating cycle of RM. WIP and FG.IV] Financing the Proposition  Setting up of a project involves acquisition of Fixed Assets which facilitate the process of production. They are required to be retained over a period of time to exploit their productive potential. . This cycle is generally completed in a short period of less than one year.

investment in C/A is realised over a short term. the promoter should raise suitable long term funds to finance a project. Depreciation and other non-cash write-offs.  As it takes a long time for the Fixed Assets to pay for themselves.IV] Financing the Proposition  Thus. .  It is realised through surplus generated in the form of Net Profits. while investment in Fixed Assets is long term in nature.

IV] Financing the Proposition  Keeping the foregoing in view. the promoter will explore the financial feasibility of the project by examining  a) The possible long term sources of finance  b) The feasible financial leverage  c) The expected return on the investment .

IV] Financing the Proposition L N TR S UCS OG EMORE O NDCP A WE AITL B RO E CP A OR WD AITL hre ait a pa ea e a ins t in rn g eetre n s e on Ps P ic eoits r as ps it P rec ree ne .

comprising two components ² (a) Owned Capital and (b) Borrowed Capital.  The other sources of long term funds are: (a) Capital Subsidy applicable to projects coming up in certain notified backward areas.Long Term Sources  The aggregate amount of finance raised for financing a project is referred to as Capital. . and (b) Interest free sales tax loans offered by State Governments.IV] Financing the Proposition .

.Financial Leverage  After considering availability of long terms sources of finance.  Few projects can be financed entirely by equity or debt.IV] Financing the Proposition .  It will depend upon the financial leverage envisaged in the combination of sources of finance under the two categories. Owned Capital and Borrowed Capital. viz. the promoter will decide about a suitable financial structure for the Company..

Financial Leverage  The divergent interests of debt and equity are brought into alignment by the concept of Debt / Equity gearing which determines the level of debt that can be supported by a given quantum of equity. .  For this purpose.IV] Financing the Proposition .  No standard D/E Ratio can be prescribed. Debt means Funded Debt including all term liabilities and equity will include Share Capital and retained earnings. if available.

vis-à-vis alternative sources of investment.  In arriving at a financial plan for the project. a promoter will examine the attractiveness of the project. . over a period of time.  The process which assists the management in such a task is collectively known as ¶Capital Investment Evaluation·.IV] Financing the Proposition .Return on Investment  The amount invested in a project can be recouped through annual cash flows.

Return on Investment  The most important and widely used Capital Investment Evaluation techniques are:  Pay-back Method  Net Terminal Surplus Method  Excess Present Value Method  Internal Rate of Return Method .IV] Financing the Proposition .

 The cash flows (Net Profit + Depreciation + Other non-cash write-offs) are compared with the outlay on the project to determine the pay-back period. Years to pay back would be: Total Investment Cash Flow per annum .Return on Investment  The object of Pay-back Method is to find out the period of time required for recovering the entire amount of investment made in a project.IV] Financing the Proposition .

 Future Value = Principal x (1+i)L .Return on Investment  Net Terminal Surplus Method employs the concept of compounding which involves re-investing the simple interest earned each year along with the principal so that the principal grows each year by the amount of interest earned during the previous year and interest being calculated on the increased principal also grows.IV] Financing the Proposition .

we arrive at the Present value of a future sum to which the original amount (which we want to find out). invested at a particular compound rate of interest has grown.  In discounting.Return on Investment  Excess Present Value Method is based on the discounted cash flow technique and uses the concept of discounting which is just the opposite of compounding.IV] Financing the Proposition .  PV = Future sum (1+i)L .

between the two NPVs. IRR is the rate which makes the Present Value (PV) of benefits equal to the Present Value of costs or reduces the Net Present Value (NPV) to zero. In other words.  IRR = Lower Discount Rate + Diff.Return on Investment  Internal Rate of Return Method ² It is that rate at which the sum of the discounted cash flows is equal to the investment outlay. Between the two discount rates x NPV at lower discount rate Abs. .IV] Financing the Proposition . The object of this method is to find the rate of return which a project is likely to earn over its useful life. diff.

Forex Loans)  II] Deferred Payment Guarantees  III] Bill Discounting Facilities  IV] Underwriting of Shares / Debentures .Types of Term Assistance  The types of term assistance extended by the Bank can be broadly classified into:  I] Term Loans (Incl.

they could be classified into (a) Short Term Loans (b) Medium Term Loans and (c) Long Term Loans. intended normally for financing fixed assets acquired / to be acquired. and scheduled for repayment in instalments. .Types of Term Assistance -Term Loan  A Term Loan is a loan granted for a fixed term of not less than one year. carrying interest at a specified rate.  Depending on the term for which the said terms loans are granted.

Term Loan and. in agreed instalments with stipulated interest on the respective due dates in case of default in payment thereof by the buyer. as far as the buyer of P&M is concerned. a substitute for a  Standards of appraisal are the same as TL. supplied by him on deferred terms.  A DPG is. .Types of Term Assistance -DPG  Deferred Payment Guarantee (DPG) is a contract to pay to the supplier the price of machinery. it serves the same purposes as a Term Loan. in many respects.

.Bills Discounting  Under a contract for sale of machinery on deferred payment basis. the balance remaining to be paid after the initial down ² payment represents the deferred receivables of the seller. the funds of the seller get blocked for unduly long periods and the seller requires finance against such deferred receivables to replenish his Working Capital.  Thus.Types of Term Assistance .

Bills Discounting  To facilitate availment of finance against the deferred receivables.  The usance bills drawn by the seller will be accepted by the buyer before they are discounted by the seller·s banker. the seller usually draws a series of usance bills with graded maturities to coincide with the due dates of payment of the relative instalments (including applicable interest).Types of Term Assistance . .

in the event of the public not subscribing for them.Types of Term Assistance .  Underwriting is a contract whereby a person agrees. to take up a specified number of shares or debentures or amount of debenture stock to be offered to the public.Underwriting of Shares  The necessity for underwriting arrangement arises only in the case of a Public Limited Company resorting to raise through the capital issue market. a part of the Share Capital for part-financing a project. in consideration. .

the business stemmed not so much from the point of view of earnings on the investment as from the consideration that no viable project enjoying national priority should suffer for want of underwriting support.Types of Term Assistance .  In view of this.  However. .Underwriting of Shares  Underwriting as a business will come under the scope of ¶Investment Banking· as distinct from ¶Commercial Banking·. a high degree of selectivity should continue to be exercised in undertaking underwriting business. therefore.

and design.Project Appraisal  The purpose of Project Appraisal is to ascertain whether the project will be sound ² technically. . economically. financially and managerially ² and ultimately viable as a commercial proposition. examination of:  The appraisal of a project will involve the  a) Technical Feasibility : To determine the suitability of the technology selected and the adequacy of the technical investigation.

of cost estimates. .  c) Financial Feasibility : To determine the accuracy  d) Commercial Viability : To ascertain the extent of profitability of the project and its sufficiency in relation to the repayment obligations pertaining to term finance. suitability of the envisaged pattern of financing and general soundness of the capital structure.Project Appraisal  b) Economic Feasibility : To determine the conduciveness of economic parameters to setting up the project and their impact on the scale of operations.

from the point of view of its value to the national economy in terms of socio-economic benefits like generation of employment opportunities. forex earnings. . wherever appropriate. etc. the quantum of import substitution.Project Appraisal  e) Managerial Competency : To ascertain that competent men are behind the project to ensure its successful implementation and efficient management after commencement of commercial production.  A project should also be examined.

utilities and other infrastructural facilities  Whether the project is in keeping with the priorities. . particularly in the proposed line of activity  The potential demand for the product  The availability of the required inputs.Project Appraisal  The first step in Project Appraisal is to find out whether the project is prima facie acceptable by examining salient features such as:  The background and experience of the applicants. laid down by the Government. if any.

In such cases. an ¶Application·. containing the following essential data / information.Project Appraisal  The original application may not contain all the basic data / information. it may be necessary to interview the applicants and elicit all the necessary data / information with a view to forming an overall idea about the general feasibility of the project. such as: .  After satisfying itself about the prima facie acceptability of the project. the Branch should call for from the promoters.

availability of construction / production facilities. .Project Appraisal  a) Particulars of the project along with a copy of the Project Report furnishing details of the technology. manufacturing process. inclusive of Preliminary / Pre-operative Expenses and WC margin requirements.  b) Estimates of cost of the project detailing the itemised assets acquired / to be acquired. etc.

.  d) WC requirements at the peak level (i. . etc.e.Project Appraisal  c) Details of the proposed means of financing indicating the extent of promoters· contribution. the quantum of Share Capital to be raised by public issue. DPGs. the composition of the borrowed capital portion with particulars of Term Loans. when the level of Gross Current Assets is at the peak) during the first year of operations after the commencement of commercial production and the banking arrangements to be made for financing the WC requirements. Foreign Currency Loans.

marketing and finance after commencement of commercial production.Project Appraisal  e) Project Implementation Schedule. . experience and competence of (i) The key personnel to be in charge of implementation of the project during the construction period and (ii) The executives to be in charge of the functional areas of purchase. production.  f) Organisational set up along with a list of Board of Directors and indicating the qualifications.

. schedule.  j) . i.e.  h) Estimates of sales.Project Appraisal  g) Demand projection based on the overall market prospects together with a copy of the market survey report. CoP and profitability. Proposed amortisation repayment programme.  i) Projected P&L Account and B/S for the operating years during the currency of the Bank·s term assistance.

securities offered. the the  l) Details of the nature and value of the  m) Consents from the Government / other authorities and information. any other relevant .Project Appraisal  k) Projected Funds Flow Statement covering both the construction period and subsequent operating years during currency of the Term Loan.

.  The ¶Application· completed in all respects and duly signed by the authorised signatories of the Company will form the basis for the detailed appraisal of the project. its past performance. in addition to this information. . present financial position. should also be called for.Project Appraisal  In respect of existing concerns. etc. particulars regarding the history of the concern.

 Each project has to be examined in proper perspective having due regard to its nature. size and scope.Project Appraisal  An inspection of the project site (or factory in the case of existing units) is a must. .  Although the basic techniques employed for appraising the viability of various projects are more or less the same. there could be no standard or uniform approach for appraising all projects.

it is not so much the quantum of . the proposed term assistance as the prospects of its repayment that should weigh with the Branch while appraising a project.Project Appraisal  The ultimate objective of the appraisal exercise is to ascertain the viability of a project with a view to ensuring the repayment of the borrower·s obligations under the Bank·s term assistance.  Therefore.

nothing assumed or taken for granted. counter-checked through inter-firm and inter-industry comparisons.Project Appraisal  In project appraisal. wherever possible.  It should be borne in mind that ´Healthy scepticism is a cardinal virtue in project appraisal. should be  All the data / information should be checked and.µ .

PRESENT FINANCIAL POSITION Com pany's audited Balance Sheets &P/L Accounts for the past 3 years w analysis. experience and backgroun ith Line of activities. Qualifications / Adverse rem by auditors arks . Sales &profitability. etc. PRO SAL PO Nature of proposal. Liabilities. Overall structure of inter-corporate investm ents 3. operating profit and Net Profit for s the past 3 years. Capital expenditure program es im ented by the Com m plem pany during the past 3 years and howthey w financed. diversification or for any other approved purpose 2. Method of depreciation. Present organisational set up w BoD. Financial position. of Associate Concerns. Qualifications. MA &AA. PAST PERFORMANCE Sum ary of Com m pany's past perform ance in term of licensed / installed / operating capacities. Com ere pany's m anagem ent-labour relations 4. Com ith pany's Capital structure. Capacity utilisation.Project Appraisal Memorandum PROJECT APPRAISAL M ORAN EM DUM 1. Dividend policy. Position of Com ajor pany's tax assessm Contingent ent. expansion. sales.. Purpose : Newproject. Pending suits. BRIEF HISTORY Brief account of corporate history. Revaluation of F/A. Regd. address. m odernisation. Record of m defaults. Sum arise conclusions m of financial analysis.

(b R M rials-Imo d/In ig n u N e o m su p rs. O K G A IT L E U E E T A ssmn o to W re u mn atth p akle l (G A d rin th firstye o o e n afte c m e c mn o c m e ial p d c n sse e t f tal C q ire e ts e e ve C ) u g e ar f p ratio s r o mn e e t f o mrc ro u tio .P rno u itp e &flu tu n fg ro e asis f le tio stific n ) aw ate p rte d e o s.p c ss(d F an ial F asib c ve gC sto P je t&M an o F an e itab f c n lo y.Project Appraisal Memorandum P O C A P A LM M R N U R JE T P R ISA E O A D M 5PO C . x e n e d liab f o tsid a e c w op p re th P je tR p rt.fu l.(d O e gO an n-E p rie c an e p rtiseo M ag rial /T c n al p rso n l.o e staffre u d d isp sal f fflu n ) p ratin rg isatio x e n e d x e f an e e h ic e n e th r q ire 8 W R IN C P A R Q IR M N S .tran o railw sid gw c m e tso ad q ac o arran e e ts.S d g e p rie c an re ilityo e rip n f e ro c o e isatio .c m e c mn o c m e ia p d c nisre so a le&a c p b h d le r o stru tio . (c U s&E n S rvic s-R q ire e tso p w r.(c T c n a F a ilityc ve g u e g n y h re a d e ro c e o ) o b ra n rra g mn e h ic l r in n ia ) e h ic l e sib o rin su ilityo te h o g size&lo atio o p t. am s f ain p lie atte f n ric s c atio .P c ss-B o se c n&ju atio . ay in ith o mn n e u y f g mn atmn an d o o e e ts. re tio sta tio f & . an in f d n C q irmn ase f x g o p ie . rt-u l n o mn e e t f o mrc l ro u tio a n b c e ta le 7 P O U T NF C O S .M stag sinth p je timle e tatio an w e e th tim ith fe n e ar h r E T P h d e h f tu p mn n ain e e ro c p mn n d h th r e e sc e u fo c n c n e c n/in lla no P M sta p/tria ru .te h ic arran e e ts&m .w r. R JE T (a)D sc tio o th p je t (M d rn n e p sio . c n f lan c n al g mn fg ro e ) in c e ility o rin o f ro c e s f in c 6 P O C IM L M N A IO S H D L .d rsific no an wve tu ). sh go b sin ssamn mme b k fin c go ad itio al W re u e tsinc o e istin c m an s arin f u e o g e b r an s.(b C lla o tio A n e e t(T c n a o F a c l). R D C IO A T R (a)M .tre e t ) tilitie sse tial e e e u mn f o e e ate sp rt. x an n ive atio r e n re tan in . R JE T P E E T T N C E U E W re re c toB C arto P R /C MC artan inth lig to ac al imle e tatio .

D C &R P Y E TP O R M E 1 O M R IA IA IL Y S R E A M N R G A M (a D C (G ss)a d(N t)['C reT st' R tio M ino sa tya de te to riskc ve g . ) ax n ) ro ility M ata d s) ) te op n 1 . C M E C LV B IT . tc ) ro se ts r x o x o b a n (d M e gO an n. arg f fe n x n f o ra e ) re k ve n ly o ll e r f ro u tio n th ye o m im mc ac u e ar f ax u ap ity tilisatio .. to su p p sitio . ) tilitie W F ) ag s alarie (d F to O rh ad (e D p c n.. D u rs/ S llin A e ts.S M/ W V C n n y.F rth ye w o e gp fitn are toth ave eo e gp fit n o e ar ith p ratin ro e st e rag p ratin ro d te in 'S ano R silie c o th p je t. C n e s. C M E C LV B IT .(a) M c n md (b U s(P & ). ) e re iatio L D .. (c P p c fo e p rts-E p rto lig tio s. (d V e (B C P. re in re p ra E p (k T atio (C P fitab (C AD an ratio (D In r-firmc mariso x .ta e a dd e d a fu p vid dfo C shg n ra nwu b a e u tetom c a r e re se C . (c W e &S n ) alu ) o atls. o ld d ate o g e u lu r e it o mn /A C ad g in re seo d c a inWG E n l e p n itu o F .(a) V lu e (b N . o w rk gd (c C ac u ) ale o m alu o m.. e an ro c n n e asis f ast o su p n tal p ly o n e e o d n f d stry (b S llin P e-T n tose w e e sta le G vt. o ric o tro u ta ste s. o n w o . ) in c x .Project Appraisal Memorandum P O E TA P A A M M R N U R J C P R IS L E O A D M 9 M R E IN .C P&P O IT B IT 0 O M R IA IA IL Y o R F A IL Y (A S sV lu e/ V e. (c C st-V lu e ric (C P o S n n ) o o m-P e V ) r e stivityA alysis.S h n go p fits ) ark tin rg isatio d q ac istrib to e g g n e s f g mn m n ratio . re u e n c me n e A .o siste c e g x .A e u y. E p (i) R yalty&K o -h w (j) P lim ary/ P -o e ) ac ry ve e s. a e e tio o ld e d q a e all c m itmn d rin th e tirere aymn p rio .q o sy m e . ) d n x . (f) S llin E p (g F an ial E p (h A m . g n ral c n itio o in u ale ro e ts d n e g mtio s. ) e g ric re d e h th r b . (d R p e tP g m b do th ab vefac rsan in mrato m(start-u ) p rio e rm e p f e n y' f e ro c ) e aymn ro ram e ase n e o to d itial o riu p e d 1 .. sse tia x e d re n /A p y e t b a n x s n ivid n s re lly ro e r. sso o c rn ip o in f ro 1 . ) o f o in ays.D w u in ic L n T rmS rp so D fic / M ve e tsinC &O Lle in u d lo s e ivid d to o g e u d lo s d h rt e u d lo s if.(b B a -E nA a sis-F rfirstfu y a o p d c na d ) S R ro n e o e a ].re a mn o lig tio s.p ec n ls. o m e ts u g e n p et e d . F N SF O A A Y IS 2 UD L W NLS F n sF w tob d e in L n T rmF n sF w an S o T rmF n sF w . AKT G (a) S sp sp c an u d rlyin assu p n d m dp je tio so th b o p c n mtio . o su e . o p te c . T rm o arran e e t. ) ap ity tilisatio .

) n e ritin -u . ) a ita a e n s. ) o . ) a e sp n e ro o d u lic e ) o k p f n s.S E IA T R S&C N IT N 5 P C L E M O D IO S (a R h o e a in tio o b rro e b o s. o .md re listic llya da c ra ly ) ro c d /S e ru ise n ly a ith fe n e ll th r la d sse tia a n re a ll e ro c n a e a a n c u te . ) h th r c rity ffe d a dth mrg a a b a a e u tea dsa c ry(e C d R tin tob d n a din re ra (P in )tob inlin w th ra g u le mrk tfo e d mn n e a in v ila le re d q a n tisfa to ) re it a g e o e n te st te ric g e e ith is tin . h v b e wv nin wll c -o in te fin n ia sta mn a e e n o e to e o rd a d a c l te e ts.Project Appraisal Memorandum P O E TA P A A M M R N U R J C P R IS L E O A D M 1 .S C R Y&M R INA DR T O IN E E T 4 E U IT A G N A E F T R S (a C mle d ta o se u tob o re fo th T rmL a .C p l G in a rT x (f)C ma no to l e rn g th sa e a w to l e rn g th t ) o p ra e a in s n ly n e ritin o m n iv e d a ita a s fte a . (e C ma tiv E rn g A a sis-U d rw gC m issio . o p riso f ta a in s u rriv d t ith ta a in s a wu a c etoth B n ifth a o n (V lu o sh re d v lv g isle tb wyo T rmL a sfo th sa ep rio o ld c ru e a k e mu t a e f a s e o in ) n y a f e o n r e m e d .F n sF wp je tio sa dp je te B a a in r-re te ) ro c d /S o e g e n e d f p y e t e ru ise . ro b stimte u d lo ro c n n ro c d /S re ll te la d (c P je te B tob sc tin da a tic llyw re re c toa o e re te e n l d tatoe su th ta th p je tio s. 1 .P OE T DB L N ES E T 3 R J C E A A C HE S (a P je te B c v rin th e tirep rio o re a mn tob sc tin d (b C P M F P fita ilitye a s. 1 . n ss a e rc s e a d o e ise th rw 1 .(b R stric nw re a toc a g inC p l S c re (c R stric nw re a to(i)R p y e to d p sitsfro F R ) ig t f x m a n f o wr's o k ) e tio ith g rd h n e a ita tru tu .(c S c rityMrg C v ra eR tio (d We e se u o re ) o p te e ils f c rity e ffe d r e e o n ) e ile p io e o n u ra to ) e u a in o e g a .(d R stric nw re a to ith u e e issio f e a k a f te st a a le n c e o e wr a e te f te st h rg d y e a k ) e tio ith g rd tra sfe o c n llin in re inth C .(d L c -u o fu d a f o p site ro o l.D id n s.(b D ta dO in nR p rto g a n rs.E O O IC O U D R R IN 6 C N M S F N E WIT G Inc seo c mo p p sa (a U d rw gtie p (b C p l Mrk ttre d (c Mrk tre o setoth p p se p b issu . ) th r n a & . ) e tio ith g rd e a mn f e o m& w o tth p rm no th B n (ii)R teo in re p y b o su hd p sitstob lo e th nth ra o in re c a e b th B n .o d sticc a g inth C ma y mn g mn se pw o tB n 'sp rp rm n (e O e sta d rdT C n r f o tro g te st e o r ra h n e e o p n 's a a e e t t-u ith u a k rio e issio .

) d a e R r e ro c n o mn n c ma nw th IR sfo sim rp jetsinth sa ein u .(e We e a d p rtmn a wll se e b p fe n ls n e v l f a a e l x e u p ith e ro p ) h th r ll e a e ts re e rv d y ro ssio a 2 .M N G R LC M E E C 9 A A E IA O P T N Y (a C ma y mn g mn se p (b C mo no th B D (c C Oinc a eo d y -d ya irso th C ma y (d Q a o th C ma y mn g mn ) o p n 's a a e e t t-u . e ro o l ir a k g .(b V rifyE G 'sS e ificA p v lL (c In ic teth IR fo th p je ta dc m e tso ) e B ist f e u rs ilfu e u rs u ile c o n ) e C C p c p ro a ist.(b C ma y lia ilityin ) rie su e f ro p o p n s d a g e x n h h e re e e d n n e a n o p n th r o p n s e ro p ) o p n 's b re e to p rtlyp idsh re insu sid ryc ma ie sp c f a a a s b ia o p n s 1 . . tc ) re n o n 1 . ) o se t m o tro r f a ita e (f)V rio sa p v ls/N O je tio C rtific te fro C /S /L c lA th ritie e .(d In ic teth imo n eo th p jetinte so n tio a p ritya dima tth re n (e D ta th o p riso ith e R r ila ro c e m d stry ) d a e p rta c f e ro c rm f a n l rio n p c e o .(c C a n efo imo o P M h se ill la . ) E h rg f a -to a ffa f e o p n .(f)We e a c n e d th p p sa isafa b n in risk (g R c m e d tio sfo sa c no T rm o n a e f e o p n ro p o n c n e a k h th r.Project Appraisal Memorandum P OE TA P A A MM R N U R J C P R IS L E O A D M 1 . (d A p v lfo mk gp y e tsfo imo dP Mo d fe dte sa dsp c c a n efo ta e e p no in re (e C n n fro C n lle o C p lIssu s ) p ro a r a in a mn r p rte & n e rre rm n eific le ra c r x x mtio n te st.(g P se tp sitio a u p ro a o b c n e a s m G G o a u o s. te lia ) d stria ic n e ) p ro a r o b ra n g e e t n c n a n w o rra g mn ) le ra c r p rt f & .to(a In u lL e c .(b A p v lfo c lla o tio a re mn a dte h ic lk o -h wa n e e t.C NE T F O G V R M N A DO HR 7 O S NS R M OE N E T N T E S T e w re te in ra . ) e il e v lu o th C ma y/G u 'sc n e tio stoth B n . ) e o mn a n r n tio f e L a . ) u lity f e o p n 's a a e e t a dth le e o mn g ria e p rtiseb ilt-u w inth G u . ll o sid re . ) o p sitio f e o .O H R A DR C M E D T N 0 T E S N E O M N A IO S (a V rifyR I'sL o D fa lte /W lD fa lte /S itF dAc u ts.G O PC M A IE 8 R U O PN S (a B fre m o G u C ma ie in ic tin th e te ttowic th ya d p n e to th p re tc ma y/o e c ma ie inth G u .

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