Introduction
Quantum’s focus is to provide services throughout investment cycle. The major part of this cycle is asset management. Quantum is also helping the clients in managing the assets through 360˚ asset monitoring. We are currently monitoring more than 120 nos. of projects across India covering scopes of Technical, sales and financial monitoring.
Over the years, we have evolved various effective models for monitoring involving technology. It varies from monthly monitoring to quarterly monitoring through either dedicated staff at the site or through periodic visits. Our primary focus is to access specific risks to the project and the investment in order to suggest the relevant model for monitoring & control.
Scope of Services of Project Monitoring and Audit
Technical Monitoring
Monitoring Broad Overview
• Overview of the status of the project
• Indicating critical activities
• Progress photos
• Status of design
Schedule Monitoring
• Review of Master Schedule
• Summary of progress to date, Milestones, critical path
• Tracking of milestones (primarily slab casting) against the base schedule
• Delay analysis and suggestion on corrective measures for accelerating schedule
• Impact of delays on critical activities
• Flagging non-critical activities, which are on the verge of becoming critical
• Comments / suggestions on the schedule for the next quarter
• Review and Status of available resources (material, labour and machinery)
• Tracking of design changes
• Construction Costing / Budget Monitoring
• Reviewing processes and output of cost consultant and suggestion for the same
• Summary of construction cost incurred to date – Developer will share the details as per mutually agreed format
• Cost variance with respect to business plan
• Estimation of cost to completion
• Tracking of design changes – Developer will share tracker only in the event of changes
• Review of change order records (if available)
Contract and Payment Monitoring
• Review of supporting documents for payments related to construction activities
• Check receipt and Quality Acceptance of goods / Certification of work
• Comment on Authorization, Recovery of amounts, Settlement of advances
• Monitor of Bank guarantees / Performance guarantees
• Review of Compliance to PO / WO terms
RERA Compliance Monitoring
• Regulatory overview including impact of RERA on possible hindrances in timely completion of the construction of the property and the remedies available thereto
Valuation and Financial Monitoring
Monitoring Business Plan
• Review Business Plan of the Project SPV
• Review assumptions in the Business model
• Understand major financial highlights under Loan agreement/ Sanction letter etc.
• Obtain an understanding of and based on historical trends, comment on the assumptions used in the business model provided by you in respect of -
○ Debt treatment and end use of fund
○ Principal repayments obligations
○ Interest rates and resets
Sales Monitoring
• Review of Customer Agreements based on sampling method
• Assets Compliance to agreed threshold for Basic Sale Price ( BSP) and other charges like preferential Location Charges, Car parking charges, infrastructure charges etc.;
• Review of new sales, bookings & allotments, review of booking forms to asses compliance to agreed booking process
• Review of Sales performance, Comparison of actual sales vs. planned sales
• Assets final payments and receivables reconciliation (pre hand over compliances)
• Flagging non-critical activities, which are on the verge of becoming critical
• Specific review of scheme sales
• Review of transfers and cancellation, Sales commission/brokerage, Discounts and Collection
• Validation of sales in the MIS
Review of Receivables
• Review the Mapped Sales collection as per the construction schedule including progress payments, interest and charges for delayed payments, if applicable
• Ageing analysis of delayed receivables
• Reconciliation of receipts against customer ledgers
• Compare of payments demanded Vs. payments collected and comment on penalties raised to customers
• Review of deviation to waiver and exemption Policy, if any
Bank ESCROW Account reconciliation
• Obtain all Bank ESCROW account statements for project SPV and analyse the same with respect to inward and outward transaction of;
○ Sales collections
○ Amounts transfer for project/construction activities
○ Map and compare with actual expenses incurred for construction with payments made through ESCOR A/c
• Nature of other transfers
• Comment on major transfers (inward and outward) and its relationship with the project
• Reconciliation of amount received against sales and comments on accuracy of such booking
Financial Monitoring
• Review and comment on cash flow statement as per Business Plan Model and highlight key sources of funds used and comment on ‘headroom’ available based on total availability of funds
• Review and Reconciliation of Bank Account Statements and comment on major transfers (inward and outward) and its relationship with the project
• Review security cover, DSRA and Interest/Coupon Servicing Capability
Compliances
• Review of Statutory Compliances like TDS, GST etc. related to Sales
• Checking of Lender compliances to Covenants for approvals/NOC
Portfolio Valuation
• Periodic Monitoring of the investments in the Fund Portfolio
• Periodic Monitoring of the Securities in the Fund Portfolio
• Determining the following ratios periodically after valuation
○ DSR: Debt Service Ratio
○ SCR: Security Cover Ratio
• Special notes/remarks for factors that have direct impact on the market value of the subject property
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