Blog

Meaning of Project Report

A project report is a proposal for the creation of productive capacities for manufacturing goods or providing services. The project report is a written statement of what an entrepreneur proposes to take up.

Preparation of the project report clarifies to the entrepreneurs various processes that are necessary for setting up and managing a new business venture.

This report helps entrepreneurs to have disciplined thinking and advance planning. It is not merely a document covering precise details with respect to financial and economic viability rather it is a projection of performance based on certain assumptions.

A project report contains information starting from very general issues to a detailed examination of specific issues/relating to the entrepreneur’s qualification, particulars of his unit, market demand and sources of supply of raw material, capacity of the plant, means of financing, marketing, and selling arrangements cost and profitability of the project.

Stages of Project Report

Project reports of small-scale enterprises are not as sophisticated as in the case of project reports of large-scale units. The information provided in the project report of one small-scale unit may be on different lines compared with the project report of another small-scale undertaking.

These are the stages of project report given below:

1. General Information
2. Project Description
3. Market Potential
4. Capital Costs and Sources of Finance
5. Assessment of Working Capital
6. Other-Financial Aspects
7. Economic and Social Valuables
8. No Objection Certificate

General Information

1. Biodata of promoter i.e. name, address, qualifications, experience, and other capabilities of the entrepreneur/entrepreneurs,
   
   
2. Industry profile i.e. the industry to which the project belongs, past performance, present status, its problems, etc.
   
   
3. Constitution and Organisation covering organizational structure and constitution i.e. registration etc.
   
   
4. Product details, Product utility, range, design, and relative advantages.

Project Description

Covering details w.r.t the site i.e. location of enterprise, physical infrastructure i.e. availability of raw material, skilled labor, power fuel, water, pollution control, communication network, transport facilities, production process, machinery and equipment, the capacity of the plant, selected technology, research, and development, etc.

Market Potential

Covering details like demand and supply position, expected price, marketing strategy, after-sale service, transportation, etc.

Capital Costs and Sources of Finance

Estimate containing various components of capital like land & building, plant, and machinery, installation cost preliminary expenses, the margin for working capital, etc. The various sources of finance should be stated mentioning clearly the owner’s contribution and funds raised from financial institutions.

Assessment of Working Capital

The requirement for working capital its sources of supply, and the length of the working capital cycle should be estimated and mentioned.

Other-Financial Aspects

For judging the profitability of the project a projected Profit & Loss Account indicating sales revenue, cost of production, allied cost and profit should be prepared. A projected balance sheet and cash-flow statement should be prepared. Break-even analysis should also be shown in the project report.

Economic and Social Valuables

Various socio-economic benefits expected from the project should be included in the project report. Various benefits can be employment generation, import substitution, exports, local resource utilization, development of the area, etc. Arrangements made for treating the effluents and emissions should be stated in the report.

No Objection Certificate

To obtain a ‘No Objection Certificate’ an entrepreneur has to apply to the Directorate of Industries or the office of DIC. The following documents are to be furnished for obtaining a ‘No Objection Certificate’ (NOC).

1. Duly filled up the prescribed application form
   
2. Legal documents of the location of the unit.
   
3. Certificate showing the industrial unit in the conforming zone.
   
4. In case the industrial unit is located in an industrial estate, a proof or certiftrutt indicating that the industrial estate is approved by the government.
   
   
5. Detailed scheme of the proposed product and the production processes.
   
   
6. Detailed list of machinery and equipment
   
7. List of raw materials.
   
8. Documents of the constitution of the unit.
   
9. Electricity license documents.
   
   
10. Ownership deed of the premises of the unit and the area of the unit.
    
11. Justification for ‘No Objection Certificate’.
    
12. Reserve Bank of India Challan of the required amount.

FAQs About the Stages of Project Report