Technical Due Diligence and Audit
BOV provide Technical Due diligence services to financial institutions wherein they are looking for investment in Existing / Ongoing / Proposed real estate projects.
BOV Value Creation:
- Reviewing the approval documents required for development of the project, and confirm or otherwise that construction of the project can be completed subject to clearances / approvals / no-objection certificates (NOCs) required for “occupancy” post-completion.
- Review of the situation for official permits required for the project
- Review and comment on approvals / NOC/ clearances that are pending, and/or requires re-validation / amendment due to change in project configuration from what is contained in the existing approval.
- Review pre-requisites (the dependencies) for any approval that is pending, and/or requires revalidation / amendment
- Review basic set of documents (Environmental, Pollution, Fire, etc.) for validating timelines / expiry dates.
- Examine building plans / other approvals are as per local authority building bylaws.
- Examine the differences in the approved plans with reference to physical ongoing construction at site.
- Building measurements
- Risk assessment
Project Monitoring / Lenders Engineering
Investing in projects which are under various stages of construction carries considerable risk and it can prove difficult for Financial Institutions to secure and keep a track on the funding. To reduce risk involved in the development of large projects employ the services of a project monitor.
Project monitoring is carried out on behalf of stakeholders like Developers, Financial Institutions, fund managers, to inform them of the regular observation and recording of activities taking place in a project and the risks associated with a project. Without an understanding of the risk and the overall risk/reward relationship attached to transactions, poor decisions may arise that can ultimately undermine the business performance.
BOV Value Creation:
Due Diligence / Cost Planning (Stage I)
- Prepare a cost plan based on the specifications provided by the developer.
- Cost incurred in the project and pending to be incurred for completion of the project.
- Comments on timelines for completion of the project.
Quarterly update (Stage II)
- Compliance of conditions mentioned in the building approvals
- Construction progress of the project (floor and area wise)
- Comments on the reasonableness of the following, based on cost plan prepared in Stage I / BOQ & project implementation schedule provided by the developer:
- Total project cost, project cost claimed to have been incurred (in a quarter as well as on cumulative basis) and balance project cost to be incurred.
- Project implementation schedule i.e. estimated time to be taken as compared to intended physical progress.
- Cost budget provided by the company i.e. construction costs to be incurred for a quarter and intended physical progress.
- Actual costs incurred in a quarter as compared to actual physical progress made during the quarter.
- Comments on time and cost over-runs, if any
- Any policy change or infrastructure announcements in the area and its impact on project.