6.  Preparation of project report

. Preparation of project report Project reports needs to be prepared according to the format prescribed in the loan application form of term lending institutions. An entrepreneur can get the report prepared either by technical consultancy organisation or by auditors or by consultants or by development agencies. This report should cover aspects like sources of finance, technical know-how, sources of labour and raw materials, market potential 12th Commerce Unit - - . . AM and profitability. The project report should include the following • Technical Feasibility. It should mention the following ■■ Description of product specification ■■ Raw materials availability ■■ Manufacturing process ■■ Quality control measures ■■ Availability of water, power, transport and communication facilities • Economic Viability It essentially involves compilation of demand for domestic and export market, installed capacity of machines, market share, revenue expected, and suitable price structure. • Financial Viability It should cover the aspects like ■■ Non-recurring cost such as Land and Building, Plant and Machinery etc. ■■ Recurring expenses like wages, salaries, and overheads etc. ■■ Probable cost of production ■■ Profit on expected sales • Managerial Competency Entrepreneur has to include the mechanism for managing the venture in the project report. In the case of small sized ventures, the owner or partners may take care of managerial activities while a team of managerial personnel is to be brought in for manning various managerial positions across different levels of management in the case of corporate form of organisation. He has to provide details of the organisational structure contemplated in the project report for implementing the venture. • Provisional Registration Certificate Entrepreneur has to apply for Provisional Registration certificate. It will be issued to entrepreneur after the fulfilment of certain conditions for a period of one year subject to renewal of two periods of six months duration. If an entrepreneur is not able to commence production beyond the extension period, further extension will not be granted. • Permanent Registration Certificate Once the venture has commenced production or when it is ready to commence production, it is eligible to get permanent registration certificate. • Statutory Licence Entrepreneur has to obtain Municipal License from the authority concerned. Then the Entrepreneur has to register the unit with the Central and Sales Tax Department. If a unit comes within the provisions of Factories Act, he/she has to register it with Inspector of Factories or it has to register the unit under the Shops and Establishment Act. • Power Connection Entrepreneur has to make application to Assistant Divisional Engineer of State Electricity Board for power connection after paying Security Deposit and fulfilling the official formalities prescribed. • Arrangement of Finance Entrepreneur requires two types of finance namely long term and short term. While long-term requirements are needed for acquiring fixed assets, short-term requirement are meant for meeting working capital needs. Entrepreneur has to bring in promoters contribution (seed capital) prescribed by financing agencies. 12th Commerce Unit - - . . AM