Preparation of Project Report For

8/3/2019 Preparation of Project Report For

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Preparation of Project Report forPreparation of Project Report forBank FinanceBank Finance

Presented byPresented by

Er.RENJITHEr.RENJITH C OC O


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INTRODUCTIONINTRODUCTION

The project report is an essential buildingThe project report is an essential buildingblock for completion of a project.block for completion of a project.

The project report must be preparedThe project report must be preparedcarefully and with sufficient details tocarefully and with sufficient details toensure approval, appraisal and finallyensure approval, appraisal and finally

funding from the financial institution.funding from the financial institution. The project report must be accompaniedThe project report must be accompanied

by executive summary.by executive summary.


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POINTS TO BE KEPT IN MIND WHILEPOINTS TO BE KEPT IN MIND WHILE

PREPARINGPROJECT REPORTPREPARINGPROJECT REPORT What is Project Report?What is Project Report?

How to prepare a Project Report?How to prepare a Project Report?

What are all points to be covered in theWhat are all points to be covered in theProject Report?Project Report?

Whether any consultant or auditor has to beWhether any consultant or auditor has to becontracted to prepare the Project Report?contracted to prepare the Project Report?

How to express to the Bank Manager aboutHow to express to the Bank Manager aboutthe proposed project for which you requirethe proposed project for which you requirefinancial assistance?financial assistance?


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POINTS TO BE COVERED IN THEPOINTS TO BE COVERED IN THE

PROJECT RE

PORT

PROJECT RE

PORT

Techno Feasibility ReportTechno Feasibility Report

IntroductionIntroduction

Executive SummaryExecutive Summary

Complete details of all aspect ofComplete details of all aspect ofprojectproject

ConclusionConclusion


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TECHNO FEASIBILITY REPORTTECHNO FEASIBILITY REPORT

It is a summary of complete project,It is a summary of complete project,that provide information about thethat provide information about the

project in a glance.project in a glance.

It should cover all the major and vitalIt should cover all the major and vitalinformation of the project.information of the project.

It shouldnt cover more than 2 pages.It shouldnt cover more than 2 pages.


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INTRODUCTIONINTRODUCTION

The part of project constitutes of:The part of project constitutes of:

PreamblePreamble

Brief background of companyBrief background of company

Background of entrepreneursBackground of entrepreneurs

Location details of the projectLocation details of the project


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EXECUTIVE SUMMARYEXECUTIVE SUMMARY

Executive summary is a important andExecutive summary is a important andnecessary part of a project report. Itnecessary part of a project report. Itincludes all the details which will becomeincludes all the details which will become

part of a detailed project report but inpart of a detailed project report but insummary form. It covers:summary form. It covers:

LocationLocation

Proposed capacityProposed capacity

Product mixProduct mix

Technological arrangementTechnological arrangement

Layout of Factory / plantLayout of Factory / plant


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EXECUTIVE SUMMARYEXECUTIVE SUMMARY

Raw material requirement, storage andRaw material requirement, storage andhandlinghandling

Present and Future demand of end productPresent and Future demand of end product

Plant and MachineryPlant and Machinery

Pollution Control equipmentsPollution Control equipments

Power and water supplyPower and water supply

Capital CostingCapital Costing Other subsidiary requirements and ancillaryOther subsidiary requirements and ancillary

facilitiesfacilities


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ENTERPRENUER DETAILSENTERPRENUER DETAILS

QualificationQualification

Work experience in detailWork experience in detail


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PRODUCT MIXPRODUCT MIX

Complete details ofComplete details of

End productEnd product

Proposed productionProposed production

are to be given.are to be given.


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TECHNOLOGICAL CONSIDERATIONSTECHNOLOGICAL CONSIDERATIONS

Technology used in domestic andTechnology used in domestic andinternational market to produce the endinternational market to produce the end

productproduct Merits and demerits of variousMerits and demerits of various

technology usedtechnology used

Technology proposed to be used in ourTechnology proposed to be used in our

project and reason for the sameproject and reason for the same Details of complete process cycle withDetails of complete process cycle with

process chartprocess chart


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SITE DESCRIPTIONSITE DESCRIPTION

Site DetailsSite Details

LocationLocation

Metrological datasMetrological datas

Connectivity through road, train, air etc.Connectivity through road, train, air etc.

Proximity of raw material sources and otherProximity of raw material sources and other

vital facilitiesvital facilities Reason to chosen the site.Reason to chosen the site.


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PLANT LAYOUTPLANT LAYOUT

The part of the project report willThe part of the project report willinclude the complete layout, structureinclude the complete layout, structure

and various facilities to cater with theand various facilities to cater with theproduction.production.

The part must cover the layout map.The part must cover the layout map.


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RAW MATERIALRAW MATERIAL

Name and chemical configuration, if anyName and chemical configuration, if any

Physical RequirementsPhysical Requirements

Chemical RequirementsChemical Requirements

Availability in the marketAvailability in the market


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RECEIPT, STORAGE & HANDLING OFRECEIPT, STORAGE & HANDLING OF

RAW MATERIALRAW MATERIAL

Handling systemHandling system

Feed systemFeed system

Storage arrangementsStorage arrangements

At godownsAt godowns

At plantAt plant

Transportation arrangmentsTransportation arrangments


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APPLICATION OF ENDPRODUCTAPPLICATION OF ENDPRODUCT

Whether will be used in own plantWhether will be used in own plant

Target marketTarget market

DomesticDomestic

ExportExport

Industry details, where it is usedIndustry details, where it is used


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ENVIRONMENTALASPECTSENVIRONMENTALASPECTS

Whether all environmental clearanceWhether all environmental clearancecertificates required for the specificcertificates required for the specific

industry has been taken and details ofindustry has been taken and details ofthe same.the same.

Arrangements to avoid pollution from theArrangements to avoid pollution from thegovernment specified limits.government specified limits.


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WATER, POWER ANDAUXILLARYWATER, POWER ANDAUXILLARY

SERVICESSERVICES

RequirementRequirement

Arrangement through government orArrangement through government orprivate sourcesprivate sources

Alternative arrangementsAlternative arrangements


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QUALITY CONTROLQUALITY CONTROL

SamplingSampling

Laboratory setupLaboratory setup


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SUPPLEMENTARY FACILITIESSUPPLEMENTARY FACILITIES

Repairs and Maintenance facilitiesRepairs and Maintenance facilities

Ventilation and air conditioning systemVentilation and air conditioning system

Instrumentation & telecommunicationInstrumentation & telecommunication

Automation and Computer ControlAutomation and Computer Control

Safety and fire protection arrangementSafety and fire protection arrangement

Hydrant SystemHydrant System


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MARKETARRANGEMNTSMARKETARRANGEMNTS

This part of project report covers completeThis part of project report covers completemarket analysis of your end product.market analysis of your end product.

in presentin present

in futurein future

It also covers the marketing strategyIt also covers the marketing strategy

customer is going to adopt in future, to sellcustomer is going to adopt in future, to sellits products.its products.


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POLLUTION CONTROLPOLLUTION CONTROL

Arrangements to avoidArrangements to avoid

Air PollutionAir Pollution

Water PollutionWater Pollution

Noise PollutionNoise Pollution

Arrangements for effluent disposalArrangements for effluent disposal


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MANPOWER PALNNINGMANPOWER PALNNING

Category wise break up needs to beCategory wise break up needs to begiven:given:

Senior ManagementSenior Management Technical staffTechnical staff

Marketing StaffMarketing Staff

Maintenance StaffMaintenance Staff Production staffProduction staff

Quality Control StaffQuality Control Staff


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MANPOWER PALNNINGMANPOWER PALNNING

Estimated requirementEstimated requirement

Cost InvolvedCost Involved

Training arrangementTraining arrangement

Employee welfare arrangementsEmployee welfare arrangements


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CONSTRUCTIONPLANNINGCONSTRUCTIONPLANNING

Month wise target is to be given forMonth wise target is to be given for

Each construction phaseEach construction phase

Erection of plant and machineryErection of plant and machinery

Commencement of commercial productionCommencement of commercial production


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CAPITAL COST CAPITAL COST

Estimated cost is to be given for each capitalEstimated cost is to be given for each capitalexpenditure planned up.expenditure planned up. LandLand

Cost of landCost of land Cost of site developmentCost of site development

BuildingBuilding construction costconstruction cost

Internal designing costInternal designing cost Plant and MachineryPlant and Machinery

Cost of purchaseCost of purchase Erection and Commissioning chargesErection and Commissioning charges


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CAPITAL COSTCAPITAL COST

Other costOther cost

Furniture and FixturesFurniture and Fixtures

Office EquipmentsOffice EquipmentsVehicles and Mobile equipmentsVehicles and Mobile equipments

Technical Know howTechnical Know how

Preoperative expenditurePreoperative expenditure Interest during constructionInterest during construction

Margin for contingencies, etc.Margin for contingencies, etc.


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MEANS OF FINANCEMEANS OF FINANCE

Equity ContributionEquity Contribution

ExistingExisting

ProposedProposed

Borrowed FundsBorrowed Funds

ExistingExisting

ProposedProposed


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FINANCIAL APPRAISALFINANCIAL APPRAISAL

Need to provide 8 yearsNeed to provide 8 years

Capacity UtilisationCapacity Utilisation

Balance SheetBalance Sheet Profit and Loss AccountProfit and Loss Account

Cash Flow StatementCash Flow Statement

Break Even Point (BEP that means noBreak Even Point (BEP that means noprofit no loss)profit no loss)


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FINANCIAL APPRAISALFINANCIAL APPRAISAL

Calculation of Internal Rate of ReturnCalculation of Internal Rate of Return(IRR) on the basis of projected(IRR) on the basis of projectedprofitabilityprofitability

Calculation of Debt Service CoverageCalculation of Debt Service CoverageRatio (DSCR)Ratio (DSCR)

Details of assumptions made to prepareDetails of assumptions made to prepare

projected financialsprojected financials Sensitivity AnalysisSensitivity Analysis It is done to checkIt is done to check

the profitability if any projected targetsthe profitability if any projected targetsnot achieved.not achieved.


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LIST OF DOCUMENTS NEED TO BELIST OF DOCUMENTS NEED TO BE

SUBMITTED WITHPROJECT REPORTSUBMITTED WITHPROJECT REPORT Prescribe application form in DuplicatePrescribe application form in Duplicate Project Report in DuplicateProject Report in Duplicate List of total movable and immovable Assets of theList of total movable and immovable Assets of the

promoters.promoters. Income Tax and Wealth Tax details of last three years,Income Tax and Wealth Tax details of last three years,

with copies of Assessment / Return if applicable.with copies of Assessment / Return if applicable. Provisional Registration Certificate from the concernedProvisional Registration Certificate from the concerned

District Industries Centre.District Industries Centre.

Memorandum of Articles of Association and CertificateMemorandum of Articles of Association and Certificateof in corporation (in case of Company).of in corporation (in case of Company).

Certified copy of Registration Certificate issued by theCertified copy of Registration Certificate issued by theRegistrar of firms ( if partnership concern) if forms 'A'Registrar of firms ( if partnership concern) if forms 'A'and 'C'.and 'C'.


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SUBMITTED WITHPROJECT REPORTSUBMITTED WITHPROJECT REPORT Registration with the Tourism Department, and theRegistration with the Tourism Department, and the

licence for eating house in case of Hotel Industry.licence for eating house in case of Hotel Industry. Permission/licence from Competent Authority (in case ofPermission/licence from Competent Authority (in case of

Textile, Drugs, Foods etc.).Textile, Drugs, Foods etc.). Certified copy of sale deed in respect of land. (The landCertified copy of sale deed in respect of land. (The land

should be in the name of sole proprietor / partner /should be in the name of sole proprietor / partner /company whichever applicablecompany whichever applicable

OROR

Rent agreement in case of rented premises.Rent agreement in case of rented premises. Three quotation in respect of each item of plant andThree quotation in respect of each item of plant and

machinery and raw material, proposed to be purchased.machinery and raw material, proposed to be purchased.


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SUBMITTED WITHPROJECT REPORTSUBMITTED WITHPROJECT REPORT Details of power requirement and tieDetails of power requirement and tie--up with Stateup with State

Electricity Board.Electricity Board.

Copy of instructions to your Bankers to give fullCopy of instructions to your Bankers to give fullinformation about the concern on request to Stateinformation about the concern on request to StateFinancial Corporation.Financial Corporation.

Permission from Water Pollution Control Board.Permission from Water Pollution Control Board.

Approved Building plan from Competent Authority withApproved Building plan from Competent Authority withcost estimatescost estimates


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SOME IMPORTANT FORMULASSOME IMPORTANT FORMULAS

Working CapitalWorking Capital

= Current assets= Current assets Current LiabilitiesCurrent Liabilities

Current Assets are Accounts Receivables,Current Assets are Accounts Receivables,inventory and cash bank balancesinventory and cash bank balances

Current Liabilities are Account payablesCurrent Liabilities are Account payables


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Internal Rate of Return (IRR)Internal Rate of Return (IRR)

It is an annualised rate of return that can beIt is an annualised rate of return that can be

earned on invested capital.earned on invested capital.

IRR is calculated on the basis ofIRR is calculated on the basis of

Discounted Cash Flow MethodDiscounted Cash Flow Method


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Debt Service Coverage Ratio (DSCR)Debt Service Coverage Ratio (DSCR)

= (Profit before Tax + Interest)/ (Principal= (Profit before Tax + Interest)/ (Principal

repayment + interest)repayment + interest)

As a standard it should be two.As a standard it should be two.


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Debt Equity RatioDebt Equity Ratio

= Debt / Equity= Debt / Equity

As a standard it should be between 1 to 2.As a standard it should be between 1 to 2.

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Preparation of Project Report For