Management Appraisal

Management Appraisal
Assessment of competency of
management to implement project
Profitably run the project
Ability to raise funds for project- including
own contribution
Creditworthiness of promoters
More critical in case of new promoters
Promoters
Qualifications, background
Experience, Motivation, execution capacity
Earlier projects their performance
Track record of loans
Market reputation
Managerial resourcefulness
Financial resourcefulness

Creditworthiness
List of bankers, lenders
Track record, reference check
CIBIL check
List of willful defaulters of RBI
Ability to meet shortfalls
Check with collaborators
Check with major suppliers

Board of Directors
Composition of Board- representatives
from technical, financial, legal, commercial
Independent Directors no, expertise,
other Directorships
Full time/ Part time Directors
Allocation of duties among Directors
Expertise level in the Board
Board Committees- audit, project implemn
Board basing of Board


Senior Management
CEO- full time, qualifications and
experience
Functional executives
Organisation during implementation and
operation
Proper organisation structure
Delegation of Powers

General aspects
Corporate plans
Projects under implementation
Reference from bankers/other lenders
Reference to bankers/embassy for
overseas promoters
Past assistance from Banks/Fis
Rating of any instrument
Past prospectus
Financial results of group
companies
Balance sheet and P &L analysis
Notes to Balance Sheet
Important financial ratios
Cash Flow statement
Directors Report
Audit Report
Utilisation of IPO proceeds


For new promoters
Family background, qualifications
Industrial experience
Sources of income
Study of income tax, wealth tax returns
Bankers reference
Status of other projects, if any
Associate companies and their performance
Memorandum and Articles
Object clause
Promoters powers
Capital details, Capital Structure
Borrowing powers
Board of Directors, Nominee Directors
Managerial personnel
Shareholders Agreement
Capital Structure
Promoters inter se contribution
Representation on Board
Broad basing of Board
Terms of appointment of MD,WTD,
Directors
Sharing of responsibilities
Procedure for divestment
Organisation
Project Implementation Committee of
Directors
Project Implementation Committee of
Executives
Project Audit Committee
Summing up


Overall strengths and weaknesses of
management structure to be assessed