GUIDELINES FOR STRATEGIC PARTNERSHIP

Transcription

1 ENERGY EFFICIENCY SERVICES LIMITED GUIDELINES FOR STRATEGIC PARTNERSHIP Page 1

2 CONTENTS Objectives 3 Scope 3 Application Process 3 Appraisal Process 4 Fees 5 Appraisal Parameters 5 General Instructions 7 Section-A Applicant Related General Information 10 Section-B Entity Appraisal Information 14 Annexure-A Details of borrowing arrangements from other banks 36 Annexure-B Letter of Authorization to Banker 38 Annexure-C Diligence Report 39 Section-C Project Appraisal Information 42 Declaration Form 44 Notes 46 Page 2

3 1. Objectives: EESL has been tasked with market development of energy efficiency in India which is estimated at over $ 20 b. It is also expected to support entities engaged in the energy efficiency market to implement energy efficiency projects. One of the key barriers to implementation of energy efficiency projects in India has been the risk attached to such projects, both technical as well as financial. EESL objectives are to mitigate the risk and to evolve methodologies that could disperse the risk to various stakeholders making the projects attractive from all perspectives. EESL, being a public sector entity, has a natural advantage of creating market access. However, the size of the market being large, it is not possible for EESL to make a significant impact unless it offers mechanisms that could be replicated. Also, it needs to build partnerships to support the nascent Energy Service Companies (ESCOs) to enhance their confidence amongst various stakeholders. EESL has decided to explore overseas operations to leverage the implementation experience, enhance revenues and profile of the organisation and add new verticals of business. 2. Scope: These guidelines are to promote partnerships of private or public entities for projects outside India, hereinafter referred to as 'Partner', with EESL. These guidelines will apply where the EESL and/ or the Partner is in the process of indentifying/ preparing to bid any energy efficiency project by any facility. For the purposes of these guidelines, energy efficiency project, hereinafter referred to as 'EE Project', would mean an investment that would result in energy savings and where the payments are linked to such savings. 2.1 EESL will assess the Partner as well as the EE Project based on the parameters indicated in these guidelines. Once the minimum benchmark is crossed, the qualified Partner and EESL will engage in detailed discussions on the arrangements for joint implementation of the EE Project. 2.2 The guidelines provide a framework to EESL to assess the Partner as well as the EE Project. It does not provide any guarantee that EESL will necessarily undertake joint implementation. Such a decision will be taken only after detailed discussions with the qualified Partner and agreements. 2.3 EESL does not provide any grant or loan to EE Projects, therefore, it will not consider such applicants who are desirous of grants/ loans. 3. Application Process: Any prospective Partner having being awarded a commercially viable EE Project can approach EESL. The following process is outlined: 3.1 The application has to be in the format prescribed and attached herein. 3.2 All the details asked for in the application format must be submitted. Supporting documents, wherever necessary, must also be attached. Page 3

4 3.3 EESL, on receipt of the application, may require the applicant to provide more information that is necessary for completing the appraisal. It may also require meetings/ discussions to clarify various parameters if necessary. 3.4 EESL will determine the eligibility of the applicant to be a Partner based on the appraisal parameters. 3.5 EESL will inform, in writing, to the designated person of the applicant the result of the appraisal in no more than 4 weeks of receipt of all the details necessary for appraisal. For applicants declared as Partners, discussions on the joint implementation methodology will be undertaken. 3.6 Applicants who fail to secure the minimum benchmark, can make a one- time representation to EESL. In such cases, EESL will make a review and inform the applicant within 2 weeks of the receipt of the review application. 4. Appraisal Process: On the receipt of such request, EESL will carry out a two level appraisal, namely Entity Appraisal and Project Appraisal based on Financial as well as Non- Financial parameters outlined. A minimum qualification criteria has also been set to determine the eligibility of the applicant to qualify as a Partner. 20 financial and non-financial parameters will be used to determine the eligibility of the applicant. Each parameter has a maximum weight of 5 and the appraisal process will be assign weight to each parameter. 4.1 Based on total weight, an Integrated Rating (IR) ranging from IR-1 to IR-6 will be assigned to each applicant as indicated below: IR IR-1 IR-2 IR-3 IR-4 IR-5 IR-6 Weight 80 above 71 to to to to 50 Below An applicant will be qualified as a Partner if the overall weight assessed is above the minimum band of IR EESL may use the services of expert agencies to carry out the appraisal. 5. Fee: EESL will charge a processing 0.1% of estimated investment in the EE Project presented by the applicant subject to minimum of Rs.5 lakh and maximum of Rs.30 lakhs. Page 4

5 6. Appraisal Parameters: Appraisal Parameters: The following are the parameters for appraisal: Marks Assigned Financial Parameters- Project Appraisal Project IRR Above 19% to 18% to 17% to 16% to Below (%) 20% 20% 19% 18% 17% 16% Project Below 5 5 to 6 6 to 7 7 to 8 Years 8 to 10 Above 10 Period Years Years Years Years Years Payback Below 40% 40% to 50% to 60% to 70% to Above Period (% of Project Period) 50% 60% 70% 80% 80% DSCR Above to 1.60 to 1.40 to to Below (Average) Project Cost is Secured by way of any Mechanism Receivables Security % 90% to 100% Govt./ Guarantee mechanism ESCROW/ LCs % to 90% Any other mechanism 70% to 80% % to 70% NO 1.20 Below 70% or Unsecured Non-Financial Parameters- Project Appraisal Experience >15 years > 10 > 8 years > 5 years > 3 years NO of Project years Team in Energy Efficiency Patents with promoters Yes NO Stage of Letter of Letter of Project Bid -- NO project Award intent submission preparation submission Scalability Very high High Medium Low Financial Parameters- Entity Appraisal Net Worth Above to 1.00 to 0.75 to to Below (in multiples of Project Cost) Profitable in 5 Yrs 4 Yrs 3 Yrs 2 Yrs 1 Yrs 0 Yr Page 5

6 last 5 Years Average Above 18% to 16% to 14% to 12% to Below Return on 20% 20% 18% 16% 14% 12% Equity in last 3 Years Non-Financial Parameters- Entity Appraisal Experience Above 5 4 to 5 3 to 4 2 to 3 1 to 2 Upto 1 Yr (Yrs) Percentage Above 80% to 70% to 60% to 50% to Below of EE 80% 70% 60% 50% 40% 40% Projects Completed/ developed (%) International > 10 > 8 > 5 > 3 > 2 NO experience countries countries countries countries countries Promoters Credibility Country/ Region Assessment (15 marks) Risk assessment Very low Low Medium High Very High NO of country/ region Page 6

7 General Instructions: 1. The form is meant for financial assistance from EESL to Energy Efficiency Projects. 2. All pages of Financial Assistance application form and annexure thereof should be duly filled in, signed and stamped. If particular information is not applicable or is NIL, same should be properly indicated and should not be left blank. 3. The form is divided into three sections a. Section A- It is general information pertaining to Applicant. b. Section B- Entity Appraisal Information-This section deals with information pertaining to entities contributing equity to the project. All such entities are called promoters in EESL. c. Section C- Project Appraisal Information-This section deals with information pertaining to the project in detail. 4. Two complete sets may be submitted to EESL. Soft copy of duly filled in Financial Assistance application format along with relevant annexure and enclosures may also please be given along with hard copy of same in a CD. 5. Rating Methodology and Rationale: EESL rates each project primarily on two parameters a. Entity Appraisal: Creditworthiness of promoters and their ability to bring in requisite equity and also the management/promoters capability to effectively manage the project and to carry the project to completion is judged under Entity Appraisal. Entity Appraisal does not cover appraisal of the project per-se. For example, if a project is developed through an SPV say SPV Ltd. and if the promoters / shareholders of the said SPV Ltd. are XYZ Ltd. and LMN Ltd. proposing to contribute 50% of the equity each, the Entity Appraisal by EESL would cover appraisal of the promoters viz. XYZ Ltd. and LMN Ltd and not the project company namely SPV Ltd. Page 7

8 Who is considered an Applicant for Entity Appraisal? Guidelines for Strategic Partnership Generally all parties contributing 10% or more of the proposed aggregate promoters' contribution in the project company are considered individually as promoters of the project, and collectively as promoter consortium or entity. In case of projects promoted by corporate groups, group companies contributing equity to the project, individually or on collective basis, would be considered as promoters and subjected to evaluation; provided that the aggregate contribution of such group companies should be at least 10% of project equity. However, in cases where a company with existing operations is developing the project on its own balance sheet, such company may also be subjected to Entity Appraisal as a promoter. b. Project Appraisal: Technical and commercial viability of the project which is judged under Project Appraisal. Each project is appraised as per merits based on Integrated Rating Methodology approved by the Board of Directors. Grades obtained under Entity and Project Appraisal are integrated to arrive at a single rating called Integrated Rating (IR). There are six integrated grades ranging from IR 1 IR VI in which each project is categorized which mainly effects rate of interest, upfront fees, lead fees, upfront equity, debt equity ratio etc. IR-I is the best grade. IR-VI is the worst grade which is considered speculative and not considered for funding by EESL. The broad parameters presently taken into account in Entity and Project Appraisal are as follows: Part A -Entity Appraisal Parameters a. Business Risk Analysis: The business risk score is based on the prospects of the sectors the company operates in and the position of the company in its businesses on operating efficiency and market position in comparison to the sector average, or the major peers. b. Financial Risk Analysis: The financial risk score takes into account the recent three-year financial performance and also the projected financials of the Company/Promoters till Scheduled COD of the project, and is also adjusted for concerns related to accounting quality and defaults in payment of dues to lenders/banks/fis etc Page 8

9 c. Financial Flexibility: This covers the assessment of Equity funding potential of the promoters d. Qualitative Assessment of Promoter Management: This covers the assessment of the past experience of promoters and their managerial competence. Part B- Project Appraisal Analysis Parameters a. Project Rationale and Strategy. b. Project Area and Target Group. c. Objectives. d. Implementation structure and Arrangements. e. Barriers in implementation and strategy to overcome. f. Project Financials. Page 9

10 Section-A Applicant Related General Information Page 10

11 1) Name of the Applicant Key Applicant Details 2) Date of Incorporation (Attach relevant certificate) 3) Date of Commencement of business (Attach relevant certificate) Guidelines for Strategic Partnership 4) Clause in MOA authorizing implementation of Energy Efficiency Projects 5) Registered Office address 6) Address for communication 7) Details of the directors (of Applicant Company) a) Full Name, D.O.B, Age, Address, qualification, PAN number b) Experience in Energy Efficiency and other sectors c) Nature-Promoter/Independent/Professional/family member etc. d) Shareholding in the Company e) Name of other Companies in which acting as Director and whether those companies are part of Promoter Group 8) Project Name 9) Location 10) Project Cost Details ($) (Price level considered in DPR to be mentioned) 11) Means of Finance ($) Equity Contributors Instrument Voting% Amount Remarks Debt Contributors N.A. Total Page 11

12 Note: Copy of shareholding agreements, if any, is to be provided. Guidelines for Strategic Partnership 12) Details of Expenditure incurred so far duly certified by Statutory Auditors along with means of finance 13) Copy of Board Resolution for implementing the project with EESL 14) Key Project Financials a) Important Dates: Investment Period and Project Period b) Project IRR post tax c) Project IRR Pre tax d) Average DSCR over loan period e) Minimum DSCR over loan period f) Estimated Annual Energy Saved Page 12

13 Section-B Entity Appraisal Information Page 13

14 PART I General Notes: a) Any Company/Entity contributing equity into the proposed Energy Efficiency project is known as promoter in EESL. b) Group Companies: The key criterions for a company to be considered as a group company of other are: i) A company which, directly or indirectly, holds 10% (ten percent) or more of the share capital of the other company or ii) A company in which the company, directly or indirectly, has the power to direct or cause to be directed the management and policies of such company whether through the ownership of securities or agreement or any other arrangement or otherwise c) Following information has to be given for each Company/Entity contributing equity into the proposed Energy Efficiency project. In case the company contributing equity is a shell company or not putting in funds directly out of its own sources, information is also to be given for company actually bringing in/providing the equity funds. d) However if any company/entity is contributing 100% upfront equity, information is required only for points 1 to 24. Information in Part II will still be required in case the said entity is Core Promoter as per criteria specified therein. e) Please use separate form/sheet for each promoter bringing equity into the project. Page 14

15 Information Requirement: 1) Name of the Promoter 2) Date of Incorporation (Attach relevant certificate) 3) Date of Commencement of business (Attach relevant certificate) 4) Committed Equity amount in the proposed Energy Efficiency project 5) Copy of Board Resolution for investment of committed equity (as per 10 above) 6) Instrument by which equity will be infused. Terms of instrument if it is not in the form of equity shares. 7) Clause in MOA authorizing investment in the SPV/Project Company along with copy of MOA 8) Details of the directors of the Promoter Company a. Full Name, D.O.B, Age, Address, qualification, PAN, DIN b. Experience in Energy Efficiency and other sectors c. Nature-Promoter/Independent/Professional/family member etc d. Shareholding in the Company e. Name of other Companies in which acting as Director and whether those companies are part of Promoter Group 9) Authorized person/s for Contact-their , phone, fax and address for correspondence along with authority letter. 10) Details of Promoter Group to whom this company belongs duly certified by Company Secretary. a) All Companies comprising of Promoter Group as intimated to other Bank/FIs/Govt Agencies etc b) Flowchart of above group companies clearly establishing interse relationship and holdings along with a) voting and b) economic interest. Page 15

16 c) Any change in above promoter group by way of deletion/addition of company by any reason whatsoever. d) Name change of any company comprising of Promoter group along with details. e) Details of any Financial Assistance applied by any of the group company to EESL. f) Details of Financial Assistance sanctioned to any of the group company by EESL. 18) Whether the equity shares are listed on stock exchange? If yes, market capitalization based on 200 day moving average with 52 week high and low 11) Details of shares pledged, if any, of the promoters of the promoting company. 12) Detailed Shareholding Pattern (% and amount wise) along with changes in last 4 financial years. Same should clearly state promoter and non-promoter shareholding 13) Default Status/Cash loss: Please give Statutory Auditor Certificate for a) the status of default or delay in repayment of loans and interest to Banks/FIs/NBFCs/Other loans since the date of last audited balance sheet and also the details of each default in the last four audited financial years. 14) Details of a) EE Projects already commissioned b) Under Implementation c) Under Planning along with equity and debt break up for each project and the manner and source of funding. This information is to be preferably given for all the projects taken up during the last 10 years. 15) Commitments made by company by way of undertakings/guarantees or otherwise towards investment of equity or any other investment in any entity both disclosed and not disclosed in Annual Report. Page 16

17 16) Source of Equity: Please attach a detailed note on source of equity. Guidelines for Strategic Partnership Equity commitment for the project Means: Raising of additional Debt Raising of Equity Promoters IPO/FPO Others institutions Marketable Securities Internal Accruals Any other source(with details) T (Latest Audited yr) T+1 Tn (SCOD Yr) a) If cash surplus/internal accruals are proposed to be used, please give details of such cash surplus along with details of assumptions behind such cash surplus/internal accruals. b) Whether the issue of equity shares of the promoter company will take place for raising equity? Please give details along with copy of Board resolution. c) Are you planning to raise debt on your books of accounts for bringing in equity? If yes please give details along with Debt/Equity ratio and DSCR ratio both before/after raising such debt d) Are marketable securities going to be used for funding equity requirement? If yes please give details thereof e) Any other source of raising funds for equity investment in the project. Note: Commitment of equity for other projects where the company proposes to invest any equity are to be invariably included for calculating cash surplus available f) Statement of Calculation of Cash flow for investment into proposed Energy Efficiency project: A Cash flows from operating activities 1 Net profit before taxation, and extraordinary item 2 Adjustments for non-cash items (Specify 3 itemwise) Adjustment for Interest income 4 Adjustment for Interest expense 5 Adjustment for dividend 6 Operating profit before working capital changes T (Latest Audited yr) T+1 Tn (SCOD Yr) Page 17

18 7 Working Capital changes (specify item wise) 8 Cash generated from operations 9 Income Taxed Paid 10 Cash flow before extraordinary item 11 Extra-ordinary item (To be specified) 12 Any other item (to be specified) Net cash from operating activities B Cash flows from investing activities 1 Purchase of fixed assets 2 Proceeds from sale of equipment 3 Interest received 4 Dividends received 5 Other item to be specified Net cash from investing activities C Cash flows from financing activities 1 Proceeds from issuance of share capital 2 Proceeds from long-term borrowings 3 Proceeds from other borrowings 3 Repayment of long-term borrowings 4 Repayment of other borrowings 5 Interest paid 6 Dividends paid 7 Any other item (to be specified) Net cash used in financing activities D Net increase in cash and cash equivalents E Cash and cash equivalents at beginning of period Gross Surplus cash available F Committed Investments in other projects(if not G included Net Surplus in above) cash available for investment into current project) g) Bifurcation of Projected Gross Operating Revenues as per point 35(b)(1) A Operating Income as per point 35(b)(1) B Breakup of the above operating income into: 1 Projects Already Commissioned Operating Revenues from projects already commissioned 2 Projects To be Commissioned T+1 T+2 Tn Page 18

19 A B C Revenues from projects for which financial closure achieved and getting completed within next one year Revenues from projects which more than 75% completed as on Revenue date of from application other projects to EESL Total Please attach corroborative evidence of status of project completion for 2a and 2b above 17) Business Profile a) Please attach a detailed note on business and financial policy of your company b) Major business segments (BS) along with following details Name of each major Business Segment Turnover in each business segment % to total turnover Industry Leader in each business segment Turnover of Industry leader in each of business segment BS 1 BS 2 BS -n c) What are critical factors affecting each business segment of your business d) Management view for key developments, risks, challenges, opportunities in each business segment e) For each business segment please provide details on major products for the latest Audited financial year as follows- Product Qty Produced Qty Sold Amount of Sales Per unit Sale price Per unit cost of major cost components 1) Is your business exposed to foreign exchange fluctuations? 2) If yes, do you have a written policy approved by your BOD on hedging or dealing with such foreign exchange currency risk. Please provide copy of company policy on this 3) Details of foreign currency exposure during past 4 years and amount of profit and loss on account of such exposure along with details of Page 19

20 hedged/un hedged exposure f) Details of Sundry Debtors and Sundry Creditors constituting more than 10% of the total debtors and total creditors of last audited year 18) Financial Information a) Annual Report for past 4 years. b) Audited information of last four financial years and projections are to be given up to the year in which project is scheduled to achieve CoD (minimum 2 future financial years) as follows along with detailed Projected Balance sheet and P&L A/c with assumptions and their basis Profit and Loss Items 1 Operating Income % increase over previous year 2 Other Income 3 Operating Expenditure % increase over previous year 4 Non - operating Income 5 Non-operating expenditure 6 Extra ordinary income 7 Extra ordinary expenditure 8 Interest on long term loans 9 Interest on working capital loans 10 Interest on other short term loans 11 Finance Charges 12 Lease/Hire purchase charges-interest Component 13 Any other item in nature of interest (please 14 specify) Depreciation 15 Other Non-Cash Expenses 16 Provision for Deferred Tax T-3 T-2 T-1 T-3 T-2 T-1 Latest Audited (T) e.g T+1 T+2 Tn Latest Audited (T) T+1 T+2 Tn Page 20

21 17 Provision for Tax (Other than FBT) 18 PAT % increase over previous year Balance Sheet Items 1 Equity Share Capital 2 Preference Share Capital not redeemable within construction period 3 Preference Share Capital redeemable within construction period 4 Share Appl. money with withdrawal restrictions 5 Share Appl. money without withdrawal restrictions 6 Debentures 7 Reserves and surplus (excluding revaluation 8 Revaluation Reserves 9 Intangible assets 10 Loss Brought Forward/Accumulated losses 11 Deferred Tax Asset 12 Deferred Tax Liability 13 Long term loans 14 WC loans from Banks 15 Other short term loans 16 Capital Work in Progress 17 Cash and Bank Balances 18 Current Assets excluding cash and bank balances 19 Current liabilities and provisions 20 Fixed Assets 21 Investments Other Items 1 Bills discounted/ deferred credit likely to devolve 2 Contingent liabilities likely to get devolve 3 Court cases likely to get devolve 4 Repayment due to long term loans 5 Marketable securities used for equity infusion 6 Marketable securities not used for equity infusion 7 Lease/Hire purchase charges-debt Component T-3 T-2 T-1 Latest Audited (T) T+1 T+2 Tn e.g Page 21

22 8 Present value of future rentals of lease/hire purchase payments 9 Cash Loss 10 Warrants attached to Equity instruments 11 Warrants attached to debt instruments 12 Fixed return in PE subscription agreement if any 13 Interest accrued and due 14 Proposed dividend 15 Long term unfunded liability for leave encashment, Gratuity and pension Key Financial Indicators A B C D E F G H I J K L Return on Capital Employed DSCR Total Debt/Tangible Equity Cash flow from operations to Total Debt PAT/Operating Income EBIDTA margin Return on Net worth Interest Coverage Ratio Current Ratio Debtor Days Creditor Days DSCR c) A detailed note on reasons for material changes in each of above items may please enclosed d) Excel based Financial Model for projections has to be enclosed detailing out assumptions and norms used for projecting each item of P&L Account and Balance Sheet e) Complete details of each item of contingent liability in excess of 1% of new worth giving the background, current status and management comments on the likelihood of devolvement of contingent liability with full justification. f) Has there been change in position of any contingent liabilities since the last balance sheet date or their effect on any accounting item. If yes please give details g) Any significant changes affecting position of accounts contained in latest Annual Report h) Please give details of fresh litigations that might have begun after latest annual report Page 22

23 along with accounting impact and impact on business i) Updates on litigations as contained in latest Annual report along with accounting effect if any. j) Please give a note on off balance sheet items such as guarantees, receivables that have been factored, pension liabilities, derivatives etc and there accounting impact and significance k) Reasons for interest accrued and due, if any. 19) Details of existing borrowing arrangements in form as per Annexure A. Further please give Amortization Schedule of Each existing Loan duly certified by practicing chartered accountant preferably Statutory Auditor in following format: Each loan wise T-2 T-1 T (latest Audited Yr T1 T2 Tn (Upto SCOD Yr A Long Term Loans Repayment of loan Payment of Interest Sub total Working Capital Loans Repayment of loan Payment of Interest Sub total Other Short Term Loans Repayment of loan Payment of Interest Sub total Gross Total B c 20) Name and address of the main Bankers having business dealings along with the copy of letter addressed to the Bankers as per Annexure B for making inquiries. Page 23

24 PART II CORE PROMOTER MANAGEMENT EVALUATION Information under this section is required in respect of each Core Promoter responsible for execution of Project. Core Promoter mean promoter: (i) Having project management experience, and/or (ii) Having management control, and/or (iii)having significant percentage (at least 26%) of equity amount. Please also support the above with records and evidence as may be available to enable EESL to form a considered opinion. Please indicate the names of Core Promoters based on the above criteria. Please provide information on separate sheet for each Core Promoter on the following points:- Managerial Competence 1) Can the Core Promoters management be considered to be broad-based? To assess the above, the following information may be provided in respect of Directors: a. Name, Age, Address, Qualification, PAN & DIN b. Total Experience in Energy Efficiency sector c. Total Experience in other sectors d. Nature-Promoter/Independent/Professional/family member etc 2) Do the Core Promoters employ qualified, experienced and professional management personnel? Please provide a brief write up covering the following information in respect of the Senior Management: a. Relevant Qualification of the senior management relevant to the portfolio / work Page 24

25 being handled b. Total experience of the senior management. c. Relevant experience of the senior management relevant to the current portfolio / work being handled 3) Do the Core Promoters have generally efficient systems and procedures? Please provide a brief write up covering the following information in respect of the following: a. Timely closing and finalization of books of accounts - Date of signing of Balance Sheet for the past 3 years. b. Repute of the statutory & internal audit firms Partners and total number of qualified CAs, major audits of other companies, companies in Promoter group being audited by Statutory Auditor/Internal Auditor. c. Independent process/quality certifications Presence of in house or independent Internal Audit Team/Division, Constitution of Audit Committee in consonance of Section 292 A of Companies Act 1956, details of quality certifications (i.e. ISO etc.) assigned to the company by Independent agencies, if any. 4) Have the Core Promoters demonstrated their ability to satisfactorily complete infrastructure, industrial or other projects in the past? Details of infrastructure, industrial or other projects handled in the past Name of the project Sector Project Capacity (if any) Original Project Cost Original targeted date of completion Actual Project cost Actual date of completio n Reasons for cost & time overrun (if Similar above details in respect of projects executed by Group companies may also please be provided separately. Relationship with Core Promoter Company needs to be provided along with Percentage equity holding of core promoter in the said group company. Please provide documentary evidence preferably in the form of a Certificate from Page 25

26 the Statutory Auditor of your company. Business and financial policy 5) Is the size of the Core Promoters existing operations comparable to their expansion plans? Please provide a brief write up covering the following information: Existing Aggregate Existing + New Aggregate Turnover Turnover Net worth Net worth Production Capacity Production Capacity Project Cost Project Cost Total debt Total debt 6) Do the Core Promoters deploy conservative debt gearing levels to pursue their business plans? Please provide your existing debt equity ratio in respect of the existing operations and the debt equity ratio after the proposed expansion plans. Also please indicate average Debt/Equity ratio of Industry in which core promoters are working and the Debt/Equity ratio of top players of the industry in which core promoters are operating. 7) Are the expansion plans of the Core Promoter reasonable and stable in nature? Please provide the details of expansion plans project wise Name of Project Cost Capacity Debt Equity Net wort h Proposed Equity/Investme n t committed Already tied up Amount invested Debt Equity Debt so far Equity a. The complexity and stability of the sector in which the expansion is planned This Page 26

27 might be taken from the sector reports (Industry outlook) released by various reputed credit rating agencies and other firms, b. The similarity of the expansion with the current operations and c. The ability of the management of the company to take up such related / unrelated expansions in the past. 8) Do the Core Promoters have the policy of hedging foreign currency exposure? Please provide the following details: a) Is your business exposed to foreign exchange fluctuations? Details of foreign currency exposure during past 4 years and amount of profit and loss on account of such exposure along with details of hedged/un hedged exposure. b) Does the company have a written policy approved by your BOD on hedging or dealing with such foreign exchange currency risk. Please provide copy of company policy. c) Whether the foreign exchange transactions are treated as per the approved policy guidelines. Project Experience in Energy Efficiency Sector 9) Do the Core Promoters have any experience in the Energy Efficiency sector? Please provide a write up in respect of the experience of the Core Promoters in respect of managing/completing Energy Efficiency Projects. The total experience in Energy Efficiency sector may be indicated. S. No Type of Project Capacity Period of completio n Role/Position held by the Core Promoter during Any other informatio n (The above details needs to be provided in respect of all the Energy Efficiency sector projects mentioned by yourselves in Question No. 4 above) 10) Have the Core Promoters developed / operated any Energy Efficiency project comparable to the proposed project? Page 27

28 Please provide the following details: S. No Type of Project Capacity Technolog y Project cost (Rs. Crores) Any other information (The above information needs to be provided in respect of the Energy Efficiency sector projects mentioned by yourselves in Question No. 4 above). 11) Do the Core Promoters have the experience in developing, operating, providing EPC services or manufacturing equipment for Energy Efficiency projects? The experience of core promoter in manufacturing equipment, developing, operating and providing EPC services for the Energy Efficiency projects may be given for each project in a Tabular Form. 12) Do the Core Promoters have power operating capacities comparable to the top domestic players in the relevant space? If yes, please provide the comparative details in a Tabular Form. Experience in setting up like size projects 13) Have the Core Promoters developed any project of similar nature in the past? Please provide information of total cost of projects completed (both core sector and Noncore sector projects) of similar nature completed in the past. 14) Have the Core Promoters developed or operated any infrastructure project of similar size? Please provide information of projects developed or operated in infrastructure sector in the past. Page 28

29 15) Have the Core Promoters set up or managed any like size industrial project? Please provide information of the industrial projects set up or managed in the past. 16) Do the Core Promoter have the experience in developing, operating or providing EPC services for infrastructure or industrial projects of the like size projects? Please provide the information pertaining to the experience of Core Promoters in developing, operating or providing EPC services for infrastructure or industrial projects of similar size in the past. International Experience 17) Do the Core Promoters have any experience of managing businesses in locations where the project is being set up? Please provide the information covering the Core Promoters experience, total number of successful years, type of experience in developing / managing businesses in India or other developing economies. 18) Do the Core Promoter have prior experience of dealing with the Government and other regulatory authorities in India? Please provide the information pertaining to experience of the Core Promoters in dealing with the Government and regulatory authorities in India. 19) Do the Core Promoters have experience of acquiring land and/or obtaining environmental clearances in India? Please provide the information pertaining to the experience of Core Promoters in acquiring land and/or obtaining environmental clearances in India in respect of any project in the past. 20) Have the Core Promoters successfully developed/ managed any similar projects in India or other developing economies? Page 29

30 Please provide the information about the number of similar projects which have been successfully developed or managed by the Core Promoters in the past in India or other developing economies. Page 30

31 To, Energy Efficiency Services Limited New Delhi Part-I Diligence Report Annexure-C I/ We have examined the registers, records, books and papers of Limited (The Company) as required to be maintained under the Companies Act, 1956 (the Act) and the rules made thereunder, the provisions of various statutes, wherever applicable, the provisions contained in the Memorandum and Articles of Association of the Company as well as the provisions contained in the Listing Agreement/s, if any, entered into by the Company with the recognized stock exchange/s, as may be applicable for the half year ended on. In my / our opinion and to the best of my / our information and according to the examination carried out by me / us and explanations furnished to me / us by the Company, its officers and agents. I / We report that in respect of the aforesaid period: 1. (a) The management of the Company is carried out by the Board of Directors comprising the following persons: (b) During the period under review the following changes took place : 2. (a) The shareholding pattern of the company is as under : (b) During the period under review the following changes took place: 3. The company has altered the following provisions of (i) the Memorandum of Association during the period under review and has complied with the provisions of the Act. (ii) the following Articles of Association during the period under review and has complied with the provisions of the Act. 4. The company has during the period under review, entered into the following transactions with business entities in which directors are interested. 5. The company has during the period under review, advanced loans, given guarantees and provided securities amounting to Rs.. to its directors and / or persons or Page 31

32 firms or companies in which directors are interested. 6. The Company has during the period under review, made loans and investments; or given guarantees or provided securities to other business entities as under: 7. The amount borrowed by the Company from directors, members, public, financial institutions, banks and others during the period under review is / are within the borrowing limits of the Company. The break-up of the company's borrowings is as under: 8. The Company has during the period under review, not defaulted in the repayment of any public deposits or unsecured loans and the Company or its Directors are not under the Defaulter's list of Reserve Bank of India or in the Specific Approval List of ECGC. 9. The Company has during the period under review, created, modified or satisfied charges on the assets of the company as under : 10. The Forex Exposure and Overseas Borrowings of the company are as under' 11. The Company has issued, offered and allotted all the securities to the persons entitled thereto and has also issued letters, coupons, warrants and certificates thereof to the concerned persons and also redeemed its preference shares / debentures and bought back its shares (wherever applicable) in compliance with the specified procedures and within the stipulated time. 12. The Company has insured all its assets including the secured assets. 13. The Company has complied with the terms and conditions, set forth by the lending institution at the time of availing the facility and also during the currency of the loan and has utilized the funds for the purposes for which these were borrowed. 14. The Company has declared and paid dividends to its shareholders as per the provisions of the Companies Act, The Company has paid all its statutory dues and that there are no arrears. 16. The Company has complied with the provisions stipulated in Section 372 A of the Companies Act in respect of its Inter Corporate loans and Investments. 17. The Company has complied with the applicable and mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Page 32

33 18. The Company has credited and paid to the Investor Education and Protection Fund all the unpaid dividends and other amounts required to be so credited. 19. A list of prosecutions initiated against or show cause notices received by the Company for alleged offences under the Act and also the fines and penalties or any other punishment imposed on the Company in such cases is attached. 20. The Company has complied with the various clauses of the Listing Agreement, if applicable. 21. The Company has deposited both Employees' and Employer's contribution to Provident Fund with the prescribed authorities. (Note : The qualification, reservation or adverse remarks, if any, may be stated at the relevant place(s).) Place: Date: Signature Name of CA/CS/Firm: C.P. No. Page 33

34 Section-C Project Appraisal Information Page 34

35 1. List of Documents to be submitted i. Project Allotment Letter/ MOU signed with State/Central Government, if applicable ii. iii. iv. Detailed Project Report (DPR) 3 Copies Feasibility Report, Cost Estimates and any other studies conducted Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) v. PERT/CPM charts showing the detailed schedule of the project vi. List of all the Consultants with name, experience, contact persons details DPR Project Management Detailed Engineering Owner s Engineers Procurement vii Monthly/quarterly phasing schedule preferably in following format: Can be given in percent or actual value Particulars No. of Months/Quarters n Cost of Land & Site Development Plant & Equipment Initial spares Civil Works Overheads Construction & Pre-Commissioning Expenses Contingency Financing Charges Margin Money for WC Total Project Cost Page 35

36 DECLARATION FORM I/we confirm/affirm and undertake as below: - 1) That no insolvency proceedings initiated against me/us nor have I/we ever been adjudicated insolvent. Further, that no litigation is pending against the securities proposed to be offered in shape of movable or immovable, in any court in India or outside India 2) That neither I have been defaulter of any bank or financial institution nor any accounts has been written off by any bank/financial institution and that my name doesn t appear in RBI caution list/defaulter list etc 3) I am /we are not closely related to any of the Directors of EESL 4) That I /we have read the application form and am/are aware of all the term and conditions of availing finance from EESL. I also authorize EESL to exchange, share, part with all the information relating to me/our loan details and repayment history information to other bank/financial institution/credit bureaus/agencies as may be required and shall not hold the REC for use of this information. 5) I/we shall furnish any information required by EESL to process my application for Financial Assistance and also to be bound by the rules or by the revised additional terms and conditions which may at any time hereafter be made while the Financial Assistance obtained by me is still outstanding 6) And the information given in the application is correct, complete and up to date in all respects and I/we have not withheld any information. 7) We undertake that any photocopied document submitted along with Financial Assistance application format or during the appraisal process or any time thereafter is exact copy of original document. 8) Any material discrepancy/deviation subsequently found in any particulars herein furnished would entitle EESL to treat the Financial Assistance application as defunct, in which case the processing fees already paid would be forfeited and a fresh application would be required to be filed to seek financial assistance from EESL 9) All information pertaining to Applicant and all promoters including information contained in Loan application form including Information memorandum prepared by Lead Bank/FI or syndicator or company or any annexure thereto are true, correct, updated, accurate and is neither misleading nor qualified. We undertake that all information pertaining to promoters has been obtained from authorized representatives of promoters 10) We understand that information furnished to EESL towards project, Applicant or promoters forms the basis of appraisal. We undertake to inform EESL of any up-dations on all/any information furnished to EESL for appraisal and undertake to notify EESL in writing and in a prompt manner of any of the fact, matter or circumstance (whether existing on or before the submission of Financial Assistance application form or arising afterwards) Page 36

37 which would could reasonably be expected to cause any of the information given to become, in any manner untrue, inaccurate, in complete or misleading. 11) We undertake that any change in promoter group structure will be immediately communicated to EESL 12) The information given herein before and the Statements and other papers enclosed are to the best of our knowledge and belief, true and correct in all particulars. 13) No borrowing arrangements except as indicated above are made. 14) No legal action is being taken against me/us. 15) I/We shall furnish all other information that may be required by you in connection with the application. 16) EESL or its nominees or any other agency authorized by EESL may at any time inspect/ verify our assets, books of accounts, etc., in my / our factory & business premises. 17) We acknowledge and accept that mere submission of above documents alone will not entitle an applicant for registration and sanction of loan. 18) We accept that EESL is having its right to reject any loan application at any stage Place: Date: (Full name and Signature of the Applicant or person authorized to sign the application with official rubber stamp) CFO/Company Secretary/MD /Director Page 37

38 Notes: 1) Processing Fees in EESL Non-refundable processing 0.1% of Investment sanction amount subject to minimum of Rs.5 lakh and maximum of Rs.30 lakhs. Private Sector Applicant shall be required to pay 50% of the processing fee at the time of submission of loan application and the balance amount of processing fee shall be paid within 30 days from the date of intimation by EESL for issue of sanction letter. This amount is exclusive of service tax/applicable taxes. 2) Application form has been designed to capture maximum information required for doing appraisal at EESL so as to minimize the time required for appraisal process Still in few specific cases if borrower feels that some information may is not relevant/difficult to get, in such case the borrower is advised to contact concerned General Manager/AGM for clarification, if any regarding submission/relevance of information required as per loan application forms including rating methodology. Page 38