Project Report preparation

Meaning of Project Report

A Project Report is a document which provides details on the overall picture of the proposed
business. The project report gives an account of the project proposal to ascertain the prospects
of the proposed plan/activity.
Project Report is a written document relating to any investment. It contains data on the basis
of which the project has been appraised and found feasible. It consists of information on
economic, technical, financial, managerial and production aspects. It enables the entrepreneur
to know the inputs and helps him to obtain loans from banks or financial Institutions.
The project report contains detailed information about Land and buildings required,
Manufacturing Capacity per annum, Manufacturing Process, Machinery & equipment along
with their prices and specifications, Requirements of raw materials, Requirements of Power &
Water, Manpower needs, Marketing Cost of the project, production, financial analyses and
economic viability of the project.
 Contents of a Project Report
Following are the contents of a project report:

  1. General Information
    A project report must provide information about the details of the industry to which the project
    belongs to. It must give information about the past experience, present status, problems and
    future prospects of the industry. It must give information about the product to be manufactured
    and the reasons for selecting the product if the proposed business is a manufacturing unit. It
    must spell out the demand for the product in the local, national and the global market. It should
    clearly identify the alternatives of business and should clarify the reasons for starting the
  2. Executive Summary
    A project report must state the objectives of the business and the methods through which the
    business can attain success. The overall picture of the business with regard to capital,
    operations, methods of functioning and execution of the business must be stated in the project
    report. It must mention the assumptions and the risks generally involved in the business.
  3. Organization Summary
    The project report should indicate the organization structure and pattern proposed for the unit.
    It must state whether the ownership is based on sole proprietorship, partnership or joint stock
    company. It must provide information about the bio data of the promoters including financial
    soundness. The name, address, age qualification and experience of the proprietors or promoters
    of the proposed business must be stated in the project report.
  4. Project Description
    A brief description of the project must be stated and must give details about the following:
     Location of the site,
     Raw material requirements,
     Target of production,
     Area required for the work shed,
     Power requirements,
     Fuel requirements,
     Water requirements,
     Employment requirements of skilled and unskilled labour,
     Technology selected for the project,
     Production process,
     Projected production volumes, unit prices,
     Pollution treatment plants required.
    If the business is service oriented, then it must state the type of services rendered to customers.
    It should state the method of providing service to customers in detail.
  5. Marketing Plan
    The project report must clearly state the total expected demand for the product. It must state
    the price at which the product can be sold in the market. It must also mention the strategies to
    be employed to capture the market. If any, after sale service is provided that must also be stated
    in the project. It must describe the mode of distribution of the product from the production unit
    to the market. Project report must state the following:
     Type of customers,
     Target markets,
     Nature of market,
     Market segmentation,
     Future prospects of the market,
     Sales objectives,
     Marketing Cost of the project,
     Market share of proposed venture,
     Demand for the product in the local, national and the global market,
     It must indicate potential users of products and distribution channels to be used for
    distributing the product.
  6. Capital Structure and operating cost
    The project report must describe the total capital requirements of the project. It must state the
    source of finance, it must also indicate the extent of owner’s funds and borrowed
    funds. Working capital requirements must be stated and the source of supply should also be
    indicated in the project. Estimate of total project cost, must be broken down into land,
    construction of buildings and civil works, plant and machinery, miscellaneous fixed assets,
    preliminary and preoperative expenses and working capital. Proposed financial structure of
    venture must indicate the expected sources and terms of equity and debt financing. This section
    must also spell out the operating cost.
  7. Management Plan
    The project report should state the following.
    a. Business experience of the promoters of the business,
    b. Details about the management team,
    c. Duties and responsibilities of team members,
    d. Current personnel needs of the organization,
    e. Methods of managing the business,
    f. Plans for hiring and training personnel,
    g. Programmes and policies of the management.
  8. Financial Aspects
    In order to judge the profitability of the business a projected profit and loss account and balance
    sheet must be presented in the project report. It must show the estimated sales revenue, cost of
    production, gross profit and net profit likely to be earned by the proposed unit. In addition to
    the above, a projected balance sheet, cash flow statement and funds flow statement must be
    prepared every year and at least for a period of 3 to 5 years. The income statement and cash
    flow projections should include a three-year summary, detail by month for the first year, and
    detail by quarter for the second and third years. Break-even point and rate of return on
    investment must be stated in the project report. The accounting system and the inventory
    control system will be used is generally addressed in this section of the project report. The
    project report must state whether the business is financially and economically viable.
  9. Technical Aspects
    Project report provides information about the technology and technical aspects of a project. It
    covers information on Technology selected for the project, Production process, capacity of
    machinery, pollution control plants etc.
  10. Project Implementation
    Every proposed business unit must draw a time table for the project. It must indicate the time
    within the activities involved in establishing the enterprise can be completed. Implementation
    schemes show the timetable envisaged for project preparation and completion.
  11. Social responsibility
    The proposed units draws inputs from the society. Hence its contribution to the society in the
    form of employment, income, exports and infrastructure. The output of the business must be
    indicated in the project report.
     What is a detailed project report and how does it differs from feasibility
    study report?
    Feasibility study report is prepared to support the investment proposal. Feasibilities for the
    various aspects related to technical, commercial and financial are examined in detail by the
    experts and consultants brought in feasibility study report. Feasibility study report is termed as
    a techno economic feasibility study. It is the primary report for the formulation of the
    investment proposal.
    Detailed project report is a complete document for investment decision-making, approval,
    planning whereas feasibility study report is a base document for investment decision-making.
    A Detailed project report is a base document for planning the project and implementing the

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