PROJECT REPORTS

A project report has become a pre-requisite for undertaking any major project on account of its following advantages:-

(i)

It lays down objectives in various spheres of business.

(ii) It evaluates the objectives in the right perspective. (iii) It identifies constraints on resources viz. manpower, equipment, financial and technological, etc., well in advance to take remedial measures in due course of time. (iv) It paves the way for management to seek financial accommodation from financial Institutions and banks. Banks and financial Institutions require a detailed project report to evaluate the desirability of financing the project. Besides, other financial intermediaries like merchant bankers and underwriters also require project report to evaluate project viability for raising funds from Capital market. (v) Apart from this, the successful implementation of a project depends upon the line of action as suggested in the project report. Besides, comparison of results will depend upon the projected profitability and cash flows, production schedule and targets as laid down in the project report.

Draft of a General Project Report

1. Introduction 2. Executive Summary/Overview of the entire project 3. Promoters: Promoters and their background, about their professional qualifications, experience, etc. 4. Existing Status of the Unit: What is the existing activity, product line, area of market, etc. 5. Manpower: About the Directors, Managers, professional manpower their professional background and expertise, arrangements for Human Resource Development, etc. 6. Infrastructure facilities: About the Equipment, Plant & Machinery, premises. 7. Product line proposed: Area of computer software development/IT enabled services 8. Clientele: About the clientele, present and prospective clients Countries to which exports are planned Market potential, market arrangements, plans for promoting exports, etc. 9. Domestic Operations, if any: where it is proposed to operate both as a domestic unit as well as an STP unit in distinctly separate accounts are to be maintained. 10. Financial/Technical, etc., tie ups

BALANCE SHEET 1ST Year A. Sources of funds Equity share capital Reserves & surplus Profit & loss 2ND Year 3RD Year

(Rs .lakhs) 4TH Year 5TH Year

Total shareholders funds Others (specify item wise)

Total
B. Use of funds: Gross fixed assets Additions Less: depreciation Net fixed assets Others (specify item wise) Cash & bank balances Net current assets

Total

Profit and loss statement 1 year Revenue:

st

(Rs .lakhs) 2
nd

year

3 year

rd

4 year

th

5 year

th

Total

Exports - Onsite services - Offshore Total Operational expenditure (specify itemwise) Op. Profit Depreciation Profit Dividend Transfer to reserves

Cash flow statement 1st year Inflow 2nd year 3rd year 4th year

(Rs .lakhs) 5th year Total

Equity Loans Others (specify itemwise) Profit Depreciation

Total inflow

Outflow
Fixed assets (specify details)

Others (specify itemwise) Dividend

Total outflow

Cash & bank balances Opening balance Net inflow Closing balance

IMPORTANT RATIOS 1st year Debt/equity Op. Profit/income Pat/income Return on total assets Dividend payout ratio Debt service converage (pat before interest/ interest) Eps (rs.) Compounded annual growth rate 2nd year 3rd year 4th year

(Rs .lakhs) 5th year Total

Questions : 1).What are the advantages of a Project report?

Compiled by Greeshma V P vpgreeshma@gmail.com 09895162998