Project report is a written document which portrays overall picture of the proposed unit. It illustrates factors and findings on the basis of which the proposed project is found to be technically feasible and commercially viable. Project report provides information regarding installed capacity, land and building, plant and machinery, manufacturing process, raw-materials, utilities, manpower, product details, market potential, industry outlook and performance, financial projection and funding request etc. relating to the proposed project.
Contents of project report
Contents of the project report are as follows-
Executive Summary
It is a summary of the key aspects of the project proposal which gives an overview of the entire project proposal. It contains a description of the organisation, promoters, products or services, market potential, value proposition, competitive advantage, potential risks, key leaders, financial projections and funding request.
The Industry
Project report should contain a description of the industry relating to the proposed unit. The past performance, growth rate, current problems, future prospects of the industry should be stated in the project report. It should also specify the factors behind the growth of the industry, existing competition, consumer needs and expectation. It should state the demand and supply of the proposed product in local, national and international market.
The organisation
The organisational structure (sole proprietorship, partnership, LLP, company or any other form) of the proposed unit should be stated in the project report. In case of partnership firm, it should mention the name of the partners. In case of a company, it should mention the name of the directors and major shareholders.
The Promoters
A brief bio data of the promoters should be stated in the project report. It should contain the name, address, qualification, age, financial soundness, experience, skill and expertise of the promoters.
The Products
A brief description of the products or services along with their features, benefits and uses should be incorporated in the project report.
Locational analysis
Project report should contain information about the proposed location of the unit and why it is favourable for the unit. The project report should spell out the vulnerability of the area to natural calamities such as past records of earthquakes, floods, cyclones etc. It should also mention the availability of infrastructural facilities such as roads, power, water, skilled/unskilled labour, connectivity to airport, railway station, highways etc.
Infrastructural facilities and utilities
Project report should provide information about the availability of infrastructural facilities and other related factors. It should state whether the following facilities are already available at the site or can be developed at a minimum cost-
- Sources and ease of availability of raw-materials
- Technology
- Power and fuel
- Water
- Transportation and distribution facilities
- Manpower
- Pollution control measures
Market Potential
Project report should state whether there is sufficient demand for the proposed product/service and the organisation can provide it profitably. It should cover size of the market, estimate of the possible demand, expected competition, industry composition and marketability of the proposed product/service. It should spell out the assessment of existing and potential market i.e. demand and supply, both domestic and international, for the product/ service.
Sales and Marketing Plan
A project report must spell out the marketing strategy of the unit. It should mention market segmentation giving due attention to all the demand and supply side factors. It should specify the target market, type of customer and how the proposed unit is going to tape the market. It should also specify the distribution channels to be used by the unit.
Technical aspects
Project report should state the following-
- Technology selected for the project
- Manufacturing process
- Production schedule
- Material, input and inventory requirement
- Plant capacity
- Type, size and cost of machinery and equipment
- Input constraint, if any
- Production method
- Space requirement
- Requirement of technical personal
- Plant layout
- Structure and civil work
Socio –economic impact
Project report should indicate the direct and indirect impact of the proposed unit on society. It should also mention the measures to be taken by the unit to mitigate the adverse effect, if any.
Manpower Requirement and recruitment
Project report should mention the required number of skilled, semi-skilled and unskilled manpower and plan for recruitment and training. It should stat whether the necessary manpower is available near the site. It should contain a brief of the prominent members of the current management team.
Project implementation
Project report should mention the implementation schedule. Implementation schedule stats the time taken by different activities relating to the project till commercial operation.
Cost of project and means of finance
Project report should mention the total cost of the project and the sources of funds. Total project cost comprises of cost of land, site development, building & civil structure, plant & machinery, misc fixed assets, pre-operative expenses, contingencies, security deposits, margin for working capital etc. Sources of finance indicates promoters’ contribution and debt financing.
Financial aspects
Project report should contain financial statements to judge the profitability and financial soundness of the proposed unit. A project report should contain the following:-
- Balance sheet
- Profit and loss account
- Cash flow statement
- Fund flow statement
- Break event analysis
- Debt service coverage ratio
- Debt equity ratio
- Payback period
- Internal rate of return
- Return on capital employed
- Net Present Value
- Sensitivity analysis
- Schedule of repayment of loan
- Different accounting ratios