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DetailedProjectReportForsettingupSemiconductorWaferFABFacilityinIndia

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DetailedProjectReportTemplate

1©DepartmentofElectronicsandInformationTechnology|GovernmentofIndia

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TableofContentsDataSheet.........................................................................................................................................................3GeneralInstructions.....................................................................................................................................41. BackgroundandBroadProjectRationale....................................................................................52. InvestmentOutlay.................................................................................................................................62.1. CostofProjectandMeansofFinancing...........................................................................62.2. BillofMaterials/CapexDetails..........................................................................................62.3. TechnologyFeeDetails:.........................................................................................................73. ProjectExecutionStrategy................................................................................................................94. TechnologyDetails.............................................................................................................................105. ProjectFinancials................................................................................................................................116. ImplementationDetails....................................................................................................................127. RiskImpactAnalysis..........................................................................................................................138. BusinessCase........................................................................................................................................149. PlantInfrastructureDetails.............................................................................................................1510. EnvironmentalImpactAssessment.........................................................................................1611. DetailsofProjectSPVandPartnersintheSPV...................................................................17AppraisalParametersforDetailedProjectReport.........................................................................18



GeneralInstructions 1. ApowerofattorneyfromtheBoardofDirectorsoftheprojectSPVinfavourofthesigningauthority(whosignsalldocumentsrelatedtothedemonstrationofcommitment,includingthisDPR)shouldbefurnished.2. AllfinancialspresentedinthisDPRshouldbequotedinINRusingaconversionrateofINR62.17for1USD.Howeverallcosts/capexwhicharetobeincurredinUSD,shouldalsobespecifiedinUSD.3. AllpagesoftheDPRshouldbeinitialledbythesigningauthorityoftheapplicant.4. TheDepartmentofElectronicsandInformationTechnologyreservesallrightstochecktheveracityofthesupportingdocuments.Thisincludestherighttocallfororiginaldocumentsatanypointintheappraisalprocess.5. DeitY also reserves the right to ask for clarifications and/or additionaldocuments/informationprovidingofwhichwithinthespecifiedtimelineswouldbebindingontheapplicants.6. AlldatapointsusedintheDPRshouldbesupportedbyreliablesources(citedinfootnotesonsamepage)andcopiesoftherelevantsourcepagebeappendedtothedocument.7. All assumptions used in the document should be supported by detailedjustificationandsourcefordataasapplicable.8. As the submission is covered under the NDA signed between the applicantpartiesandDeitY, and therefore confidentialitymaynotbe citedas the reasonfor withholding any information required. If so felt required, confidentialinformationmaybeenclosedasaseparatedocumentandmarkedassuchwhichwouldbehandledwithadditionalcare(withproperreferencingtotherelevantsectionoftheDPR).



1. BackgroundandBroadProjectRationaleSuggestedPageLength:5pages1) Providedetailsoftheproject,including:a) Highlevelcapitaloutlayb) Technologyproposedc) Productlinesproposedd) Marketsegmentproposedtobeaddressed.2) WriteuponhowtheproposedprojectwillenhancetheelectronicsmanufacturingecosysteminIndia.3) StakeholderAnalysis(includingpartners, investors,GoI,strategicsectors forIndia,semiconductorecosystem,customers,suppliersandaffectedpopulation).4) PlanforCSR,reliefandrehabilitationofaffectedpopulation.5) Planforcompliancetogoodgovernanceandethicalcorporatepractices(thissection

hastobeaccompaniedwithanundertakingbytheauthorizedsignatoryoftheSPVto

complywiththementionedplanandothergoodgovernanceandethicalpractices in

theoperationsandexecutionoftheproposedproject).



2. InvestmentOutlaySuggestedPageLength:Asrequired

2.1CostofProjectandMeansofFinancing1) CapitalOutlay,ProposedMeansofFinancingandCapitalPhasing2) AssumptionsforFinancialModelling(withsummaryjustificationandbasis)3) Details of equity already injected in project SPV (Supporting document to befiling)includingbreakupbysource4) Details ofDebt structure proposed (Supporting documents in formof In-principleapprovallettersfromlenders)includingbreakupbysource5) GrowthCapexplanandphasing(withjustificationandbasis).For the purposes of this DPR the following definition of capex and growth capex shall

apply:

Capex: Any and all investment (which is allowed to be capitalized as per Indian

Accounting Standards) which has been incurred prior to declaration of Commercial

OperationDate(foreachphaseindividually).

GrowthCapex:Anyandallinvestment,includingmaintenancecapex(whichisallowedto

becapitalizedasperIndianAccountingStandards)whichhasbeenincurredsubsequentto

declarationofCommercialOperationDate(foreachphaseindividually).

Additionally for the purposes of this DPR appraisal, Total Project Cost (TPC) shall be

definedasCapex+GrowthCapex(forlifeofproject,i.e.25yearsfromCoDofphaseI).

2.2BillofMaterials/CapexDetailsDetailsofCapex (asadmissibleunderM-SIPS) shouldbeprovided (with justification)underthefollowingheads(sub-heads,asapplicabletoalsobeprovided):a) Landandbuilding(civilconstructionandlanddevelopmentcosts) requiredfortheprojectb) Plant,machineryandequipment,includingcostof:i) Erectionandcommissioning



ii) Tools,dies,moulds,jigs,fixtures,andpartsiii) Accessoriesiv) Componentsv) Sparesc) Expenditureonleasingorhireandpurchaseofplant,machineryandequipmentd) Expenditureonin-houseandcaptiveResearchandDevelopmentincluding:i) Softwarecostsandsoftwarelicensefeesii) Purchaseoftechnology,IPRs,patents,copyrightsetc.e) Utilitymachinesf) Expenditureoncaptivepowerplant(ifset-upexclusivelytosupporttheFAB)ForthepurposesofBoM/Capexdetails,equipment/itemwisecostingshouldbeprovided

under the above broad heads and the following supporting document guidelines shall

apply:a) Forallitem/equipmentwithunitcostoverUSD10,000ortotalcostofover1%ofTPC(asdefinedabove),quotationtobeprovided.b) Forall item/equipmentwithunitcostoverUSD1Millionortotalcostover5%ofTPC,atleast3quotationstobeprovided.If the requisitenumberofquotations forany item (asdefinedabove) isnotavailable, a

detaileditem-wisejustificationshouldbeprovided.

For intangible goods (suchas IntellectualProperty),ValuationReports canbe provided

insteadofQuotations.

2.3.TechnologyFeeDetails:The technology fee proposed (including any other payments, such as Royalty.Engineering Services Fees etc. to be made to other members of the consortia, asrepresented in various communications to GoI so far) should be accompanied withdocumentaryevidence to justify the same(E.g.Agreementofprevious transaction fortransfer of similar/comparable technology to FABs in the recent past). This shouldadditionallybeaccompaniedwiththefollowing:a) ValuationreportsofIntellectualPropertyproposedtobetransferred



b) Note on cost of manpower required for technology transfer (in sync withtechnologytransferplan)c) Justificationofanyothercostheadswhicharepayabletoeitherpartners



3. ProjectExecutionStrategySuggestedPageLength:5pages

1) Institutional Framework (including details of vendors/contractors/partnersidentifiedformajoractivities)forprojectdesign,developmentandconstruction2) Infrastructuredetailsandstrategyforsecuring/implementingthesame:a) Landb) Powerc) Waterd) Sewagedisposale) EffluentTreatmentPlant3) Packaging,procurementandcontractingstrategyandframework4) Projectmanagementframeworkandphilosophy5) Cost&Timeoverruncontingencymeasuresandstrategy



4. TechnologyDetailsSuggestedPageLength:5pages

1) DetailsofIPOwnership:ListofIntellectualPropertyproposedtobetransferredtothe project SPV (from each technology partner) and documentary evidence ofcurrentownershipofthesame.2) DetailsofTechnologyProvider/s3) IPStatusofTechnologyBeingProposed4) ValuationofTechnologyandIP(AlongwithValuationReports)5) Technology Transfer Agreement (Final, non-conditional agreement, includingperformanceguaranteeclausesasdeemedappropriate)a) IPtransferb) KnowledgeTransfermechanism(detailednote)c) Capacitydevelopmentmechanismd) Details of process and product technology proposed (with detailed notes oneach)6) SourcesofProductDesignproposed7) R&DPlanandDetails(withnoteonIPproposedtobegenerated)8) DetailedTechnologyTransferPlan(Supportedbytechnologytransferagreementasabove), includingpersonnelexchange/deputation, facilitiesandequipmentsharingetc.Technological Details should be supported by documents where necessary (Example:

DocumentaryevidenceofIPownership,TechnologyTransferCompleteness,documentary

evidence of similar transactions in the past etc.). A provision to assess the technology



5. ProjectFinancialsSuggestedPageLength:5pages1) FinancialStructuringa) DebtEquityRatio(includingdetailsofvarioussourcesofequity,sourcesofdebtandotherfundsandsequencingofthesame)b) Treatmentofincentivesapprovedc) Drawdownrequirementsincludingsplitbysourced) LoanscheduleandDSCRanalysis2) LoanAgeing3) Financial Indicators (NPV,EIRR,PIRR,DSCR,PAT,PBT,BreakevenperiodbyCashandEBITDA)4) FinancialStructuringincludingtheIncentivesasapprovedbyGoI5) Major Investments and Fund Raisings Planned (With supporting documents forfundsrequiredtobeshownfordemonstrationofcommitment)6) ProjectCashflowanalysis7) Taxationschedule(inlinewithapplicablelawsandstandards)

The applicants are required to include a soft copy (editable excel file) of the financial

modelalongwith theDPRandanundertaking thatthe same is correctand in linewith

accountingstandards,companylawandtaxationlawsinIndia.



6. ImplementationDetailsSuggestedPageLength:5pages

1) Project Phasing (Quarterly activity plan supported by detailed Gantt Charts)includingmajormilestones2) ProjectO&MPlanning(includinggrowthcapexplansandassumptions)3) KeyActivitiesbyquarter4) Organization Structure proposed (with details of management team and role ofpartners) upto three levels (starting with CEO). Also append the profiles of thepersonnelproposedaswellastherolesandresponsibilitiesofeach.5) ProcurementDetails(includingphasing, timingandsequencing,apart fromoverallprocurementstrategy)6) Services and Service Levels proposed with implementation partners andcontractors/vendors7) OutsourcingandContractordetailsandscopeofworkenvisaged8) Detailsofpermissions,clearancesandfulfilmentofotherstatutoryrequirementsfortheprojects,accompaniedbyadetailednoteonplansforfulfilmentofeach



7. RiskImpactAnalysisSuggestedPageLength:5pages

1) ProjectFinancialViabilityandGoingConcernviabilityanalysisanddetails2) BusinessSustainabilityPlan3) RiskAnalysis(financialandbusiness),alongwithfinancialimpactestimationfortop10riskfactors(upsideanddownside)4) RiskMitigationPlanincludingcostsassociatedwiththeindividualplans5) Detailedestimationofriskduetocostortimeoverrunsandmitigationplansforthesame6) MitigationplanforForexexposurerisk7) Technologyobsolescenceriskassessmentandmitigationplan



8. BusinessCaseSuggestedPageLength:5pages

1) ProductionPlan(withjustification)2) MarketingPlan(TieupsandStrategies)3) ProductStrategy(technologyanddemandanalysis)4) Market Feasibility Analysis (especially Strategic Sectors), includingmarketingmixproposed (split by domestic and export) and assessment of India market(governmentandprivateprocurement)5) Analysiswithrespecttostrategicsectorrequirementa) Aerospacei) Productlinesandapplicationsproposedwhichmaybeusefulinthesectorii) RelevantR&Dproposediii) Processtechnologyproposedwhichmayberelevanttothesectorb) Defence(includingweaponsystems)i) Productlinesandapplicationsproposedwhichmaybeusefulinthesectorii) RelevantR&Dproposediii) Processtechnologyproposedwhichmayberelevanttothesectorc) AtomicEnergyi) Productlinesandapplicationsproposedwhichmaybeusefulinthesectorii) RelevantR&Dproposediii) Processtechnologyproposedwhichmayberelevanttothesector d) i) Proposedmechanismfordevelopmentofa ii) Proposedplanfordevelopmentofanend-to-endecosystem6) PlantodevelopandpartnerwithupstreamanddownstreamindustriesinIndia7) ProjectBenefitsAssessment:a) Social Benefits (Appropriate Calculations including employment direct andindirect,GDPMultiplieretc.)b) CostBenefitAssessment



9. PlantInfrastructureDetailsSuggestedPageLength:5pages

1) Analysisincludingavailability,requirement,gapanalysisandmitigationplanforthefollowing:a) WaterSupplyb) PowerSupplyc) Seweraged) SolidWasteManagemente) EffluentTreatmentPlantf) PlantSafetyManagement,speciallyprecautionsagainstleakageofnoxiousgasesg) Drainagesystemsh) Roads/UrbanTransportationi) SocialInfrastructurej) Logistics(Warehouseetc.)k) AssemblyLineWorkflow



10. EnvironmentalImpactAssessmentSuggestedPageLength:5pages

1) LegalFrameworkandStandardsa) StatementofNeedb) ProjectLocationandScalec) ProjectandActivityDescriptionsd) ProjectStatusandSchedule2) Environment,Impacts,Mitigation,Monitoring,andRiskAssessmenta) EnvironmentalComponentsi) DescriptionoftheEnvironmentii) EnvironmentalImpactPredictionandEvaluationiii) MitigationMeasuresiv) MonitoringProgramb) Impacts,Mitigation,andMonitoringSummaryi) MitigatedImpactsii) ResidualImpactsc) RiskAssessmentsi) HazardsandEffectsRegisterii) ControlofMajorAccidentHazardsReportd) EnvironmentalManagementFrameworki) EnvironmentalManagementProgramObjectivesii) RolesandResponsibilitiesiii) TrainingandCompetenceiv) Communicationv) MonitoringandReportingvi) AuditandInspection3) ProjectAlternatives4) StatementofCommitments



11. DetailsofProjectSPVandPartnersintheSPVSuggestedPageLength:asrequired1) Thefollowingdetails(supportedbyrelevant documents)shouldbe furnishedwithrespecttotheSpecialPurposeVehicle(SPV)toexecutetheprojecta) RegistrationdetailswithRoC,detailsofregisteredofficeandcorporateofficeetc.b) Registrationwithvarioustaxauthorities(ServiceTax,PAN,SalesTaxetc.)c) MemorandumofAssociationd) ArticlesofAssociatione) ConstitutionoftheBoardofDirectors(includingbriefbiosofeachdirector,theroles envisaged for each of them, sitting fee proposed for each and letter ofacceptancefromeachdirector)anddetailsofrelatedpartydirectors(executivedirectors,andfamilymembers/relatives/nomineesofthepromotergroup)f) Details of authorized capital and paid up capital (supported with auditorcertificates)g) Detailsofbankaccountsmaintainedforthecompanyh) Remunerationdetailsfortopmanagement2) Thefollowingdetails(supportedbyrelevantdocuments)shouldbefurnishedforallpartners holding equity stake in the SPV (including members of consortiumproposedthusfarinallcommunicationtoGoI)a) Registrationdetailswithrelevantauthorityincountryofregistration,detailsofregisteredofficeandcorporateofficesb) DetailsofrelatedpartyfirmsinbusinessinIndia3) Detailed notes on the proposed role of each partner in the project (supported bylegal, binding agreements including performance guarantee clauses and feearrangements)4) Technologyfeearrangementstobesupportedwithdetailedjustificationa) ValuationreportforIPb) Effortestimationbasismanpowercommitmentc) Documents demonstrating fee for similar projects in the past (justifying feelevels)



THISPAGEDOESNOTFORMPARTOFTHEDPRTEMPLATEAppraisalParametersforDetailedProjectReport1) ReviewoftheoverallcontentsoftheDPRandmapcompletenesswithregardtotheDPRtemplate/formatcirculated.2) Detailedreviewofalltechnical,financialandinfrastructuraldetailsfurnishedintheDPR,includingbutnotlimitedto:a) Comparison of costs against global benchmarks for similar projects/components/equipmentandtools.b) DefiningofapplicablecapexforM-SIPS.c) Verificationofcredentialsofthevendors/contractors/partnersproposed.d) Reviewofprojectplansforsuitabilityandcompleteness.e) Suitabilityoflocationproposedincludingseismiczoneconsideration.3) Assessmentofappropriatenessofprocurement,contractingandexecutionstrategyproposed,withaspecialreferencetocosteffectiveness.4) DuediligenceoftheIPproposedtobesourcedfromconsortiapartnersandothers.5) Due diligence of the proposed Capex eligible for incentives as approved for theproject.6) ProjectviabilityintermsofNPVandEIRR.7) Reviewoftheappropriatenessoffundingstructureandsourcesoffunding.8) Planforenvironmentalcompliances.9) DetailedlegalandtaxreviewofvariousaspectsoftheDPR.10)Review of business plan (including marketing tie ups/plans) and comparison11)CapabilityoftheprojecttomeetstrategicobjectivesoftheGoI.12)Frameworkforpenaltiesfornon-compliancewithrespecttomilestones.(basedonindustrynorms)