The Project Appraisal Committee examines and makes recommendations to the Board on projects/capital investment .
The Terms of Reference of Project Appraisal Committee:
A) Statement of proposal: This Committee will appraise Schemes/ Projects proposals which have been recommended for sanction by the Board of Directors.
- The Committee will make recommendations on such schemes/ projects in consonance with standing guidelines for appraisal and approval.
- Reasons and justification for proposal indicating historical background, circumstances in which the need have arisen, whether other alternatives have been considered and what detailed studies have been made in regard to the proposal for establishing its need, its economics and other relevant aspects.
- The Committee shall go through the basis for the selection of location for any project.
- The Committee shall estimate the yield from the Project and its economic implications.
- In case of ongoing scheme/ project, present status and benefits already accrued to the beneficiaries may also be furnished.
B) Programme Schedule: The Committee shall go into the question of whether the project/ scheme been worked out and scrutinized in all its details.
- The Committee shall enquire into the schedule for construction, indicating the position separately relating to plant and machinery and civil works, raw material manpower etc., together with year-wise phasing.
- The Committee shall verify whether physical and financial targets match with each other.
The Committee shall infer the target date for completion and the expected benefits to commence.
C) Expenditure involved: The Committee shall calculate the estimated total expenditure (both non-recurring and recurring) and indicate the position year-wise and also whether any budget provision has been made.
- Details of the scheme of financing clearly bringing out the financial obligations undertaken by the Company. Note along with the requirement and availability of funds for the project under consideration.
D) Reliability of Cost Estimates and Other parameters: Has pre-project investigation been arrived at in detail and details of area where changes in project parameters could be anticipated will be done by the Committee.
E) Add statements showing:Expenditure on buildings and other works and its basis and expenditure on stores and equipment will be worked out by the Committee.
E) Viability:Information is to be given if benefits accruable from the projects/ schemes are quantifiable and can be translated in monetary terms.