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.

The information contained in the project report is very useful for: ENTREPRENEUR FINANCIAL INSTITUTIONS

GOVERNMENT

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 Miscellaneous 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

Prepare primary data

Technical Estimate Cost of assets Estimate cost of inputs Prepare flow chart

Marketing
Demand

forecast
Estimate of

product price
Estimate

product mix

Personnel Identify promoters Decide organization Plan man power requirement

Project Net Work Identify activities Prepare time Estimates Draw network diagram

Phase 2

Financial projections
Estimate of working

Cost of project Means of finance

results Balance sheet and cash flow

Phase 3

Economic analysis
Compute

Compute

payback period Internal rate of return

break oven analysis

Sensitivity analysis

4.Obtain government clearance

Industrial license

Controller of capital issues

S.G. clearance

Capital goods

Foreign collaboration approval

MRTP clearance

5.Submit the application to financial institutions

Obtain funds Create security Comply with terms and conditions

Procure sanction

Planning commission guidelines

General information Preliminary analysis of alternatives Project description Marketing plan Capital requirements and costs

Operating requirements and costs

Financial analysis Economic analysis