Financial and Strategic Management

What is the Format of the Project Report?

There is no prescribed format for the preparation of a project report – but a project report should contain mainly the following set of information in general:

1. Information about the industry and its status in the economy, present production, and demand, indicating Licensed, installed capacity, Government policies, and export potential. Generally speaking, broad guidelines in this respect may be had from the plan documents of the Government.

2. Broad market trend of the product within and outside the states for 5 years.

3. Raw material survey, giving specifications and quality of raw materials required and their availability.

4. Process – broad description of different processes and their relative economics.

5. Availability of technical know-how.

6. Location of Plant, its advantages.

7. Water – a requirement of water for process, boiler feed, cooling, etc., sources of water available and making it useable for the factory and to townships.

8. Power – total power requirement for the factory specification of power and choice between purchasing power and generated power. If the power to be generated – the total cost of investment, choice of fuel, and the cost for fuel available to the factory.

9. Fuel – its requirement for steam raising or processing source and price at which it will be available for factory including taxes and surcharge.

10. Effluents – type and quality of effluents, their treatment and disposal, investment in the effluent treatment and disposal. The government of India has since decided that any project proposal has to have a clearance of the Environmental Authority set up by the government.

11. Implementation program: implementation and construction program in form of CPM/PERT.

12. Cost of Project – (Specify foreign exchange cost if any):

  1. Land, inclusive of development expenditure incurred on the land;
  2. Buildings to be erected for housing the plant and machinery, the administrative office, stores, services, etc. requirements estimates to be included in the project cost;
  3. Plant and machinery; including other equipment and their estimated cost;
  4. Offsite facilities: utilities and auxiliary facilities;
  5. Preliminary expenses (share issue, stamp duty, cost of raising equity, etc.);
  6. Contingencies;
  7. Cost of spares, repairs, and maintenance during a trial run and commissioning period;
  8. Pre-commissioning and commissioning expenses;
  9. Working capital margin-details of estimation be given.

13. Margin of financing-broad pattern to be indicated.

14. Cost of production – project broad pattern five years of vis-a-vis design capacity. Breakeven point of production cost should be given, the effect of variation of cost of raw materials, utilities, selling price, etc. be indicated and elaborated. Price trends of raw material and finished goods be discussed.

15. Profitability for five years after the commission of the project should be worked out in the prescribed format.

16. Cash flow statement and pay period should be worked out for the project.

17. Technical feasibility be discussed in detail with financial viability.

18. Organisation and management – description of corporate management, promoters experience, and background organizational chart, key personnel and delegation of power and responsibility structure be fully described.

About the author

Shreya Kushwaha

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