Project Report

[savio13]

What is a project report?

The project report is a document, which gives an account of the project proposal to ascertain the prospects of the proposed plan/activity. The project report contains detailed information about:
• Land & building required
• Manufacturing Capacity per annum
• Manufacturing Process
• Machinery & equipment along with their prices and specifications
• Requirements of raw materials
• Power & Water required.
• Manpower needs
• Marketing
• Cost of the project and production.
• Financial analyses & economic viability of the project.

How is a Project Report Prepared?

A project report is prepared with the help of prescribed guidelines available with MSMEDI's, DIC's & financial institutions. Information about prices of machinery & equipment, raw material and other various inputs required for setting up an enterprise need to be collected from the market.

Is there any standard model for preparing the project report?

A model proforma for preparing the project report is available with MSMEDI's, DIC's & financial institutions. Every institution has its own model proforma. However contents of all the proforma are almost similar.

Is a model project report available?

Yes, Model project profiles are available with the MSMEDIs(formerly Small Industries Service Institute's) & DIC's for the guidance of entrepreneurs.. However, these project profiles have to be recast in accordance with specific needs of the entrepreneurs and the current prices of inputs.

Which agency assists in preparation of Project Report?

MSMEDIs, NSIC and State Govt. agencies viz. DICs, SFCs can help you in preparing the Project Report. You can also prepare the Project Report yourself by collecting detailed information on various points.

What details are required for preparation of Project Report?

Information in detail is required about the technical process, requirements of plant and machinery, raw materials, manpower requirement, market information and statutory representations (like pollution control and public safety) etc. The details of power and water tariff, land/shed/building and selling prices etc. needs to be collected as prevalent in the market.

Which agencies can be approached for obtaining information for preparation of the Project Report?

Entrepreneur can approach MSMEDIs and state Govt. agencies viz. Directorate of Industries, SFCs, DICs and market channels for getting information.

Who can help in selecting production process, equipment etc?

Micro, Small & Medium Enterprises Development Institute’s (formerly Small Industries Service Institutes), Design and Development Centers like MSME Technology Development Center’s (formerly PPDC's) /Tool Room's, Research and Developmental agencies such as NRDC's and Regional Research Laboratories can help you in selecting the right production process, suitable equipment's etc

Training

What basic training is required for setting up an enterprise?
Basic training differs from product to product but will necessary involve sharpening of entrepreneurial skills. Need based technical training is provided by the Govt. & State Govt. technical Institutions.

What are the other types of training relevant for a new entrepreneur?
One can acquire entrepreneurial skills by under going Entrepreneurial Development Programme and Management Development programme.

What is the duration of such courses?
These are short-term courses of 2 week's to 4 week's duration.

Which are the agencies providing such training?
There are a number of Government organisations as well as NGOs who conduct EDPs and MDPs. These EDPs and MDPs and are conducted by MSME's, NIESBUD, NSIC, IIE, NISIET, Entrepreneurship Development Institutes and other state government developmental agencies.
Is different type of training available for different categories of entrepreneurs?
Need based training courses are available for different categories of entrepreneurs. For example, Central Footwear Training Institute's provide training for footwear. Tool Room and Tool Design Institutes provide training in Engineering Industry. Likewise other technical training is provided by various institutions of centre and state govt.

Are there any preferential criteria for imparting training?
An entrepreneur desirous of setting up of enterprises or his representative is preferred for attending these training programmes which are offered on a nominal fee. However, there is no fee charged for imparting training for the entrepreneurs of NE region. Moreover, preference is accorded to weaker sections such as SC/ST, Women, Ex-servicemen. and Physically handicapped persons.

 

[savio13]

Re: Project Report - contd...1

Projection :

Are there any short terms courses available?

Short term technical training courses are conducted by SISIs and other technical institutions, which vary from 3 to 6 months of duration depending on nature of training. In addition, short-term training programmes for managers & supervisors are also conducted by MSME's to upgrade their knowledge and skills.

Does any agency give on the spot training for installation and commissioning of equipment?

Normally the suppliers of machinery & equipment provide on the spot training as well as facilities on the spot for installation and commissioning of equipment. However, SISIs also assist the entrepreneurs for installation and commissioning of machinery equipment at their premises.

Is there any agency providing training for skill upgradation?

Skill development/upgradation courses are offered by SISIs, NSIC, PPDCs etc. in different disciplines to skilled workers engaged in the micro, small and medium enterprises with a view to equip them with better and improved technologies of production.

Which are the organisations providing training to improve management of an enterprise?

SISIs, Management Development Institute's, NPC, NSIC etc. offer Management Development Programmes for acquiring knowledge about the different aspects of the management required for an operation of industry. Short-term courses of two to four weeks are available on Production Management, Marketing Management, Financial Management, Export Management, Export Procedure & Documentation, Packaging for Exports, Cost Reduction, Material Management etc.

Are there institutions providing consultancy for development or setting up of project?

SISIs, DICs and State industrial development corporations can provide consultancy for development or setting up of project. Suitable technologies are also offered by CSIR Laboratories, PPDC's, NRDCs, R&D institutions also offer consultancy at nominal charges.

What kind of consultancy is offered by these agencies?

The consultancy provided by these institutions includes identification of suitable product, market, technologies, Raw Materials, production method, regulatory requirement etc. In fact any problem can be addressed by these institutions for setting up or running of the enterprise.

Which agencies provide information on plant and machinery, raw materials and other equipments?

SISIs, DIC, CSIR Laboratories, PPDC's, NRDC, R&D institutions etc. provide information on plant and machinery, raw materials and other equipments.
How does one tackle pollution control needs of the project?
In case your product is covered under the list of the polluting industries as defined by the state government, it will be necessary to get specific clearance from the state Pollution Control Board/Committees. Pollution control equipments/measures will have to be installed by the enterprise as per need. Such polluting enterprises can only be set up in the designated industrial areas or locations and may have to link up with the common affluent treatment facility, if available in the area.

Which institutions provide details of pollution control requirements?

Pollution control board/ Committees and State Directorate of industries provide details of pollution control requirements. SISIs, and DICs also help in understanding of pollution needs.

Does any agency provide training in pollution control?

MSME's provide training in pollution control for different type of industries as per their local needs. Pollution Control Boards & Ministry of Environment also support training efforts.

Marketing

How does a new entrepreneur market the product?

This is an era of globalization and liberalization. The manufacturers have to offer goods and services of desired quality at optimum cost. Select the right market/consumers identified at the time of planning the unit. Establish Direct marketing channels or a network of dealers as per requirement of the product based upon initial survey. Highlight strengths of the product.

How does one popularise the new product?

You may create awareness among the buyers or consumers about your product's strong points in order to convince them of the utility of the product. Publicity in various available forms has to be arranged within the budgetary constraints. Sell your quality, to gain consumer's confidence. Review consumer feed back. Resort to live demonstration. MSME /NSIC help in popularising the product through domestic and international trade fairs/exhibitions.

Are there any specialized agencies which offer marketing assistance?

There are Governmental and non-governmental specialised agencies which provide marketing assistance. NSIC & KVIC are the devoted govt. agencies for providing marketing assistance to MSME units.

 

[savio13]

Re: Project Report....contd..2

How does one popularise the new product?

You may create awareness among the buyers or consumers about your product's strong points in order to convince them of the utility of the product. Publicity in various available forms has to be arranged within the budgetary constraints. Sell your quality, to gain consumer's confidence. Review consumer feed back. Resort to live demonstration. MSME /NSIC help in popularising the product through domestic and international trade fairs/exhibitions.

Are there any specialized agencies which offer marketing assistance?

Is there any other assistance offered by NSIC for marketing MSME Product?
Besides promotion of MSME products through exhibitions, NSIC directly market the MSME produce in the domestic and overseas market. NSIC also manages a single point registration scheme for manufacturers for Govt. purchase. Units registered under this scheme get the benefits of free tender documents and exemption from earnest money deposit and performance guarantee.

Does any agency help in exhibition of the product?

MSME & NSIC help the micro, small and medium enterprises for exhibiting products of MSME in the domestic and international exhibition.

Does any agency help in promoting exports?

ITPO, DGFT, FIEO & Chambers of commerce in different countries Ministry of Commerce provide assistance in promoting exports. Office of the Development Commissioner (MSME), Government of India provides financial assistance to micro, small and medium scale entrepreneurs to display their products in overseas fairs and also for sales-cum-study tours abroad.

Are there any special benefits for exports?

MSME units gets special benefits such as duty draw back, advance licensing for import of capital goods and raw materials, pre- shipment and post shipment credit against firm export orders and marketing development assistance. Income tax benefit is available on exports earning.

Promotional Schemes

What is the policy of Government for promoting a micro, small and medium enterprises ?

Government accords the highest preference to development of MSME by framing and implementing suitable policies and promotional schemes. Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate infrastructure, special schemes have been designed for specific purposes like quality upgradation, common facilities, entrepreneurship development and consultancy services at nominal charges.

What is the incentive provided for quality upgradation ?

Government of India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO 9000 certification to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in each case. ISO 9000 is a mechanism to facilitate adoption of consistent management practices and production technique as decided by the entrepreneur himself. This facilitates achievement of desired level of quality while keeping check on production process and management of the enterprise.

Is there any concession on Excise Duty payable by small units ?

MSME units with a turnover of Rs. 1 crore or less per year have been exempted from payment of Excise Duty. Moreover there is a general scheme of excise exemption for MSME brought out by the Ministry of Finance which covers most of the items. Under this, units having turnover of less than Rs. 3 crores are eligible for concessional rate of Excise Duty. Moreover, there is an exemption from Excise Duty for MSME units producing branded goods in rural areas.

Is priority there any on providing credit to MSME ?

Credit to micro, small and medium scale sector has been covered under priority sector lending by banks. Small Industries Development Bank of India (SIDBI) has been established as the apex institution for financing the MSME. Specific schemes have been designed for implementation through SIDBI, SFCs, Scheduled Banks, SIDCs and NSIC etc. Loans upto Rs. 5 lakhs are made available by the banks without insisting on collaterals. Further Credit Guarantee Fund for micro, small and medium enterprises has been set up to provide guarantee for loans to MSME up to Rs. 25 lakhs extended by Commercial Banks and some Regional Rural Bank.

What are the policies and schemes for promotion of MSME being implemented by State Governments ?

All the State Governments provide technical and other support services to small units through their Directorates of Industries, and District Industries Centres. Although the details of the scheme vary from state to state, the following are the common areas of support.
a. Development and management of industrial estates
b. Suspension/deferment of Sales Tax
c. Power subsidies
d. Capital investment subsidies for new units set up in a particular district
e. Seed Capital/Margin Money Assistance Scheme
f. Priority in allotment of power connection, water connection.
g. Consultancy and technical support

 

[savio13]

Re: Project Report...contd...4

Composition of short term financing

The appropriate mix, or weighting, of alternative sources depends on considerations of cost, availability, timing, flexibility, and the degree to which the assets of the firm are encumbered (burdened with legal claims). Central to any meaningful analysis of alternative sources of funds is a comparison of their costs and the problem of timing. Cost differentials among the various short term financing alternatives are not necessarily constant over time. Indeed, they fluctuate in keeping with changing market conditions. Thus, timing bears heavily on the question of the most appropriate mix of short term financing.

Naturally, the availability of financing is important. If a firm cannot borrow through commercial paper or through a bank loan because of its low credit standing, it must turn to alternative sources. The lower the credit standing of the firm fewer are the sources of short term financing available to it. Flexibility with respect to short term financing pertains to the firm’s ability to pay off a loan as well as to its ability to renew or even increase it. With short term loans, the firm can pay off the debt it has surplus funds and thereby reduce its overall interest costs. With factoring, advances can be taken only when needed, and interest costs incurred only as necessary. For commercial paper, the firm must wait until maturity before paying off the loan.

Flexibility also relates to how easily the firm can increase its borrowing on short notice. With a line of credit or revolving credit at a bank, it is an easy matter to increase borrowings, assuming the maximum limit has not been reached. With other forms of short term financing, the firm is less flexible.

Finally, the degree to which assets are encumbered impacts the decision. With secured loans, lenders obtain a lien on the various assets of the firm. This secured position puts constraints on the firm’s future financing possibilities. When receivables are actually sold under a factoring arrangement, the principle remains the same. In this case, the firm is selling one of its most liquid assets, thus reducing its creditworthiness, in the minds of many creditors.

All of these factors influence the firm in deciding on the appropriate mix of short term financing. Because cost is perhaps the key factor, differences in other factors should be compared with differences in cost. The cheapest source of financing from the standpoint of explicit costs may not be the cheapest source when flexibility, timing, and the degree to which assets are encumbered are considered. Although it would be desirable to express sources of short term financing in terms of both explicit and implicit costs, the latter are hard to quantify. A more practical approach is to rank sources according to their explicit costs and then consider the other factors to see if they change the rankings as they relate to total desirability. Because the financing needs of the firm change over time, multiple sources of short term financing should be explored on a continuous basis.