Meaning of project report, Generally, the documents and statements in which complete information about the operation of the manufacturing industry of the product and marketing these are shown, in advance before the establishment of the industry are known as the ‘Project Report‘.
However, it can also be understood in the following two meanings:
In a narrow sense, the project report is a written statement about the different activities and feasibilities of the project to be started by any entrepreneur or company.
However, in the broader sense, it is a document regarding any project, prepared after determination of investment opportunities, evaluation, and planning, incorporating information about objectives of the project, financial structure, plant and machinery, raw material, technical labor, various physical resources, managerial arrangements, profitability, cash flow, distribution system, export costs, etc.
Characteristics of Project Report
Following are the characteristics of the project report:
- This is the Abstract and mirror of various information and analyses regarding the project to be started.
- For this report, various aspects of the projects are tested with the help of the experts, as the element of risk happens to be quite high in big projects.
- The economic viability of the proposed project is correctly evaluated through potentiality reports.
- This is a written document of various activities of the project and its feasibility.
- The project report is suggestive, because it gives clear suggestions for the selection of the project, by incorporating all essential facts of feasibility reports prepared by the experts.
- It is prepared after collecting complete information.
- This is the basis of calculation of profits because it includes the possible quantum production in the coming years and expenses to be incurred on the operation of the industry.
- Complete information about the production of the product, the operation of the industry and marketing is shown in the project report, before the actual establishment of the industry.
- It acts as a guide for the entrepreneur.
- This is a systematic approach for investment decisions, because the entrepreneur may make future improvements in his project, on its basis.
Related: 31 Contents & Subject Matter of Project Report.
Need and Objectives of the Project Report
Preparation of project report by the entrepreneur is a very essential and useful function, reason being that advantages of registration of the industry, land allotment, loan sanction, subsidy sanction, allotment of the quota of raw material, infrastructural facilities and other facilities may be availed, based on the project report.
Also, information about setting up the industry and its profitability to the entrepreneur may be very well known from it, as full details of various stages for setting up the industry and methods thereof are included in the project report.
In short, need and objectives of project report are as follows:
1. Selection of Best Investment Proposal
Project formulation is an important decision from the view of the investment proposal.
Hence, the project report is required to take the decision regarding the best investment and also to know, which investment is not good.
As a result, the expected profits may be gained.
Related: 6 Different Stages or Phases for Preparation of New Projects.
2. Registration and Approval of Project
The need for preparation of the project report is also to facilitate easy registration and approval of the project.
For that, the project reports are essentially required to be sent to the Directorate of industries, other government departments, and the district industries center. also, get Project Report Examples & Samples.
3. Financial Assistance
The enterprise gets financial assistance based on its project report.
For availing financial assistance, the project report is required to be sent to various specific Financial Institutions, banks and investment corporations.
Otherwise, they will neither be able to study the profitability and feasibility of the investment proposal, nor they will get satisfied with it.
Hence, the preparation of the project report is necessary to satisfy them for getting financial assistance.
Related: Elon Musk’s Top 12 Tips for Every Entrepreneur & Student (@elonmusk).
4. Solving of Various Doubts and Inquests
We know that the project report is a brief description, account, and mirror of the project to be started.
It presents solutions to various doubts and inquests relating to the project.
Hence, it is necessary to prepare the project report.
5. Appropriate Basis
The project report is an appropriate basis for getting infrastructure facilities, incentives, and concessions in various taxes from Government and other Institutions.
Hence, its preparation is in the interest of the enterprise.
6. Testing of Business Profitability and Soundness
The objective of the preparation of the project report is also to test the business profitability and soundness of the project.
The comparative review of estimated costs and possible income is possible by the project report.
7. Different Privileges/Exemptions
Preparation of project report is necessary also, because:
- Permanent and Temporary registration at District Industries Centre is possible, only on submitting copies of the project report with the registration form.
- Allotment of developed land and sheds also requires project report.
- The raw material may be procured from industrial Corporations.
- The loan may be obtained from different business Institutions, banks or commercial banks.
- The future financial position of the concern may be assessed, with the help of the project report.
Thus, now you know the characteristics and objectives of project report.
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