Detailed Project Report

Detailed Project Report is the document that gives a 360-degree view of any project. It’s a vital document which is mandatory while applying for any project finance. The financing institute inspects the project report thoroughly to ascertain the various prospects of the project.

 

It has the vital data which has been used to appraise any project and fund it. It covers data & stats from every aspect of the Business. E.g. it contains financial, technical, economic, manufacturing or service-related aspects.

DETAILED PROJECT REPORT

As mentioned above, the experts of the financing organizations like banks and NBFCs take to study it thoroughly. To make their task easy and get quick loan approval, it’s essential that your project report should be precise, up to the mark & pitch-perfect.

 

An ideal report should have information related to the Plant location, Land to be used, Product that will be manufactured, the process of Manufacturing, the annual Manufacturing capacity, Pricing of the Machinery that will be used for the production, Raw material to be used, necessary electricity, Water, number of Work Force, Advertising and Marketing expenses, any other financial aspects and most importantly, the economic viability of the project.

Objectives of a Detailed Project Report

The core objective of DPR is to analyze the feasibility of any project. It helps the financers to get an in-depth insight into the project. It also helps them understand various aspects of the proposed project like Financial Aspect, Social Aspect, Economic Aspect, Technology & Design. Let’s understand each one of them, one step at a time.

Financial Aspect

 

The DPR helps analysts to get an in-depth understanding of how a business will perform in the future financially. DPR contains a projected Profit & Loss account, estimated sales account, production cost, estimated revenue, gross profit & net profit.

 

Apart from this, it explains the projected cash flow statements & fund flow statements in the upcoming period of 3 years. The income flow statement must have a detailed income and cash flow statement on a monthly basis for the first year & quarterly basis for the next two years. This aspect also covers the inventor management and accounting system that will be followed once the project starts.

Social aspect

 

Analyzing the relationship between the proposed project and the Society is critical. The project depends on the Society for its employments, infrastructure, consumption, profit, marketing and every other factor that can influence the Business.

 

So it’s vital to understand how the proposed project will impact on the Society and vice-versa. As a business that depends solely on Society, it’s important how it will be following its Social Responsibility.

 

The DPR must have a detailed dissection of how the project intends to give back to the Society once the production commences.

Economic Aspect

 

Every Business needs a continuous flow of capital for smooth operations. So it is essential to mention the primary source of funding for the proposed project in the DPR. Apart from funding from external sources, the information about the owner’s financial status and the details of borrowed funds should also be mentioned in the DPR.

 

It helps the lender to understand the economic aspects of the proposed project and how it will operate once they lend money. The estimated cost of the entire project must be broken down into the following parts.

 

  1. Expenses towards the purchasing or leasing of Land
  2. Construction of infrastructure
  3. Machinery & equipment
  4. Preliminary expenses
  5. Preoperative expenses
  6. Working Capital

 

This section also helps understand the analysts about expected financial sources along with the norms related to equity financing and debt financing.

Technology and Design aspects

 

This part of a DPR is significant. It helps the analysts understand whether the proposed Business will be able to cope with the rapidly changing technologies and consumer demands.

 

In the 21st century, technologies are changing at a rapid pace. Any business with outdated technology or even technology that is working fine right now but can’t withstand the onslaught of rapidly changing customer needs cannot survive for too long.

 

So the lender will be keen to know about the technology that the proposed Business will be utilizing to stay on the top in the future.

 

A DPR in such cases gives a detailed understanding of the technology and design of the proposed project.

Preparation of DPR

The process of preparing a DPR for any financial firm needs a lot of attention and precision. There is a no fixed format for the DPR, but all the financial institution accepts a generalized form.

Format of a DPR

Ideally, a DPR should contain the following information.

  • Introduction pageIT should contain the potential of the Business, its needs, finance, & fund required.
  • Scope of the proposed ProjectThis section should contain detailed information on the activities that you will be performing once the Business commence.
  • Details of products and servicesThis section must have all the necessary information about your Product or services.
  • Location of Proposed projectDetailed information about the exact location where the Business will be conducted.
  • Raw MaterialIn this section, you must mention the details about the raw material that you will be necessary for your project.
  • Equipment and Machinery description:In this section, the details of all the machinery and equipment that you will be using for your project must be mentioned.
  • Details of PromotersIn this section, the qualification and experience details about your promoters along with their financial status should be mentioned.
  • Details of employeesIn this section, you will have to mention the education details and their experience in the relevant industry.
  • Market Potential of your Product or servicesIn this section, you will have to mention how well your Product or service can perform in the market and what is the future potential for the same.
  • Marketing tacticsIn this section, you will have to mention what marketing routes you will be taking to advertise your Product or services.
  • Estimated Project CostIn this section, you will have to disclose what the whole project will cost you.
  • Utilization of fundsIn this section, you will explain how will you utilize the fund allotted to you by the financial institutions.
  • Source of financingIn this section, you will mention your all financial sources
  • Balance SheetIn this section, you will have to give a detailed insight into your previous Balance Sheet.
  • Profit and Loss statementIn this section, you will have to provide Profit and Loss Statements for the previous three years
  • Cash flow statement
  • General ratio
  • Breakeven point evaluation
  • Conclusion

Detailed Project report Content

Details about Company profile

 

Your DPR should include a specific detail about your company. This consists of the business structure, how long the company has been in the relevant industry and other information.

 

It should also have details about the promoters of your company, their experience and qualification. The information about the Product or the services that you will be providing is also needed.

Details of the Area of expertise & Affiliation

 

You need to present your area of expertise into the Business you are planning to venture. Financial firms like to invest in businesses that are already in the field for a long time.

 

Apart from this, any affiliation with other business groups has to be mentioned in the DPR.

Brief on the Proposed Project

 

A brief description of the project must be stated in this section. Following are the project details that should be mentioned here.

 

    1. Location of the project
    2. Product description
    3. Raw material required
    4. Annual Target production
    5. Fuel and electricity requirements
    6. Water requirements
    7. Workforce requirements
    8. Technology and design description
    9. Production procedure
    10. Pollution control measures

Market Analysis and Justification of the Project

 

The DPR must contain the Market analysis that you have performed before deciding to move ahead with the project. It should include brief information on the following factors:

 

    1. Target Customer Base
    2. Potential growth
    3. Nature of Marketd
    4. Objectives of sales
    5. Marketing expenses
    6. Proposed Market share of your project
    7. The demand for your Product or services at multiple levels
    8. Distribution channels

Details of Proposed investment and means of finance

 

The DPR must have complete detail on the total capital requirement of the project. It must have detailed information on the sources of finance too.

 

Apart from this, the information about the owner’s fund and the funds that have been borrowed must also be included in the DPR.

Proposed Employment for the project

 

The DPR should have a brief on how the proposed project will generate Employment in the locality. It must also include information related to the necessary skilled and unskilled labour.

Marketing plan Of the proposed project

 

The DPR must show how you are planning to market and advertise about the Product or services related to the proposed project. It must have details about how you are planning to carve a niche for yourself in the market and any after-sales services that you will be providing.

The proposed timeline for various phases of the proposed project

 

The DPR should have precise information about when each phase of the project will start functioning. The timetable of various proposed activities should be prepared systematically.

 

This helps analysts and financial institutes to understand at what stage and what interval would you need financing.

SWOT analysis of the proposed project

 

The SWOT analysis or Strength, Weakness, Opportunities and Threat analysis for the proposed project is vital for a DPR. It helps the financial institutes to understand how can your Business grow in a highly competitive market

 

It also shows how in-depth market research you have performed while planning the proposed project. Including a well-planned SWOT analysis in your DPR can prompt the financial institutes to lend you the necessary funds quickly.

Financial analysis and feasibility of the proposed project

 

No financial institution is interested in investing money in the project. So it’s essential to have a detailed feasibility report in your DPR. This report helps the investor understand how feasible your project is and what is its strength.

Benefits of a Detailed Project Report (DPR)

  • Helps in Cost Benefit Analysis
  • Helps in Identifying the Risk
  • Helps in Identifying the ROI
  • Assure Performance for reliable quality
  • Assess Business Weakness and Strength
  • Helps in getting funding/Investment
  • Mergers & Acquisitions
  • Helps in Restructuring Decisions
  • Determines the Payback Period of the Project
  • Compares Budgeted Vs Actual figures