L&M is dedicated to the creation of models that reflect, as faithfully as possible, the technical, operational and economic characteristics of the venture, exploiting as much as possible the knowledge available about the project, the business environment, and its specific characteristics. We guarantee the creation of information that is significant for the analysis process and the decision to invest, with the flexibility needed to simulate relevant variables that will affect economic performance, revealing the risk profiles of the business and the root causes of such risks.
We work in partnership with engineering companies, with which we interact throughout the preparation of these studies, with the aim of mapping and understanding the operational and logistic activities of the project and its fundamental characteristics of performance and cost, which is then correlated with projected and simulated cash flow. Together with the team from the owning company, we will seek to understand the corporate processes, economic premises and alignment with the interests of the investors.
Economic modeling incorporates in detail the tax incidences that apply throughout the productive structure of the project during both its implementation and operation, ensuring the most effective use of tax breaks and benefits, the simulation of scenarios for the creation of tax incentive projects and the preparation of information and subsidies for negotiation with government entities.
The projected financial demonstrations comply with generally accepted accounting principles, Brazilian legislation and international standards.
With a comprehensive knowledge of tax legislation in the sector and from mapping the implementation and operational processes of the project, including the logistics of purchasing of supplies and raw materials and the selling and marketing of the final product, L&M identifies in detail the taxation incidence of the fixed assets and operating demands of the project imposed by the federal, state and local government.
Forecasted incentives, whether aimed at the sector, specific supplies or resources, or for new investment, to which the eligibility of the project is guaranteed by law, will be identified, and their benefits reflected in the cash flow. Reimbursement and other established forms of recovery of tax credits will be treated in the same way.
The seamless integration of the tax structure with the economic modeling enables the mapping of the tax burden of the project and analysis and simulation of potential tax scenarios, from studies of the substitution of supplies to the analysis of alternative logistic and market policies.
More importantly, L&M is concerned with the effects of the investment on the regional micro-economy and its direct and indirect benefits, in terms of the real contribution of the project to the collection of taxes at the three levels of government. The potential analyses are crucial in orienting the relationship between the business and the state and in establishing the foundation for the planning and negotiation of specific tax incentives for the project.
Risk Assessment and Management is a set of quantitative tools developed by L&M to assist in the identification, assessment and understanding of the behavior of risk factors that threaten the aims of a project, in terms of execution of schedules, cost, and operational performance, together with the management of such risk factors, with the aim of reducing or eliminating the same.
There are a number of benefits to using AGR. The identification and the assessment of risks and their potential impact upon each activity of the project, creates a growing understanding of the project as a whole, and contributes to the formation of more realistic planning, with more accurate estimates of costs and deadlines. It allows the creation of measures of mitigation or elimination of the identified risks, allowing the implementation of a governance model for the project. Additionally, the information produced by this assessment can be used to create a framework for the definition and creation of protection strategies (hedge) for investment items that are more sensitive to the dynamics of uncertainty, as well as the assessment and establishing of contingencies that reflect the residual risks that remain in the process.
For the creation of these studies dedicated software has been developed, based on concepts such as network structure, costing activities, statistical tools, and the Monte Claro Method simulation. Given the dynamic nature of the decision making process and the capacity of engineering to adopt alternative solutions for the problems of a project, AGR should be a systematic and interactive process throughout the life of the project.
Dynamic simulation models for productive processes. The model allows the introduction of random variables to simulate the performance of individual activities that turn this set of variables into a stochastic process. Analysis of the output of a model is extremely useful as it can help identify bottlenecks and improve process efficiency.
This modelling can be adapted perfectly to other applications such as the optimization of complex supply and distribution chains.
We provide solutions for problems of site selection involving a large number of logistic, economic and tax variables.