PREPARED BY:Patel Kaushal A.

[ 15ENV015 ]
Ajay Andodariya [ 15ENV017 ]

A Project Report is a written document pertaining to any

investment proposal. It contains relevant data, on the basis

of which the project has been appraised and found
relevant to the entrepreneur.
A project Report is prepared by the expert after detailed

study & analysis of the various aspects of a project.

 It is basically a business plan.

It outlines the desired goals.
It describes all the necessary inputs to the enterprises.
It explains the mode of utilization of the resources.
It details the strategies for the execution of the project.

 To identify the requirement of the resources (technical,

financial, commercial, managerial and operational)

To find out the critical components of the project idea.
To obtain the opinions of experts from various fields.
To facilitates financial appraisal of the project by
financial institutions, banks, insurance companies, etc.

Need for project formulation

Selection of appropriate technology
Influence of External Economics
Dearth of Technically Qualified Personnel
Resource mobilisation
Knowledge about Government Regulations

 Description of the entrepreneur

Description of the enterprise & brief summary of the

project.
Inputs for the proposed project
Financial Aspects
Economic Viability
Total income, operative net profit, etc.
Profitability analysis.
Information regarding technical feasibility, marketing
,present demand, etc.

 General Information
Preliminary analysis of alternatives
Project Description
Marketing Plan
Capital Requirement & Costs
Operating Requirement & Costs
Financial Analysis
Economic Analysis

Significance of a project formulation

Project formulation is the best passport for obtaining the

required assistance from financial institutions.

It will also be of great assistance for obtaining necessary
Government clearances and in meeting the hurdles of
procedure formalities.
It will pinpoint the matters for which government
sanctions have to be obtained.
It will provide an independent assessment of the
feasibility of obtaining the sanctions based on the existing
government policies.

Elements of Project Formulation

Feasibility analysis
Techno-economic analysis
Project design and network analysis
Input analysis
Financial analysis
Social cost benefit analysis
Project appraisal

Project selection
Economic size
Status of industry or scope
Raw material availability
Cost of production
Capital cost
Utility requirements
Infrastructure facilities needed
Profitability
government policy

Preparation of Project Formulation

1.Preliminary study
2.Group discussion
3.Prepare project report
4.Obtain government clearance
5.Submit the application to financial institutions
6.Implement
7.review

3. Prepare project report

Phase 1

Technical
Estimate Cost

of assets
Estimate cost

of inputs
Prepare flow

chart

Prepare primary data

Marketing
Demand forecast
Estimate of

product price
Estimate product

mix

Personnel

Project Net Work

Identify

Identify activities
Prepare time

promoters
Decide
organization
Plan man
power
requirement

Estimates
Draw network
diagram

Phase 2

Financial projections

Cost of project
Means of finance

Estimate of working results

Balance sheet and cash flow

Phase 3

Compute

payback period
Internal rate of

return

Economic analysis
Compute break

even analysis

Sensitivity

Debt service

analysis

Coverage ratio

4.Obtain government clearance

Industrial license

Controller of
capital issues

Foreign collaboration
approval

S.G. clearance

Capital goods

MRTP clearance

5.Submit the Application to Financial

Institutions

Obtain funds
Comply with terms and
conditions

Create security
Procure sanction

The information contained in the project report is very

useful for: Entrepreneur
Financial Institutions
Government