Module - ED 06

6 Classes Intensive Coaching Programme

Meaning of Project Report
A Project Report is a document which provides details on the overall picture of the proposed
business. The project report gives an account of the project proposal to ascertain the prospects of the
proposed plan/activity.
An assessment that takes place during a project or process, that conveys details such as what sub-
goals have been accomplished, what resources have been expended, what problems have been
encountered, and whether the project or process is expected to be completed on time and within
budget. Progress reports are used by management to determine whether changes are necessary to an
ongoing effort.

Project Report is a written document relating to any investment. It contains data on the basis of
which the project has been appraised and found feasible. It consists of information on economic,
technical, financial, managerial and production aspects. It enables the entrepreneur to know the
inputs and helps him to obtain loans from banks or financial Institutions.
The project report contains detailed information about Land and buildings required, Manufacturing
Capacity per annum, Manufacturing Process, Machinery & equipment along with their prices and
specifications, Requirements of raw materials, Requirements of Power & Water, Manpower needs,
Marketing Cost of the project, production, financial analyses and economic viability of the project.
Contents of a Project Report
Following are the contents of a project report.
1. General Information
A project report must provide information about the details of the industry to which the project
belongs to. It must give information about the past experience, present status, problems and future
prospects of the industry. It must give information about the product to be manufactured and the
reasons for selecting the product if the proposed business is a manufacturing unit. It must spell out
the demand for the product in the local, national and the global market. It should clearly identify the
alternatives of business and should clarify the reasons for starting the business.
2. Executive Summary
A project report must state the objectives of the business and the methods through which the business
can attain success. The overall picture of the business with regard to capital, operations, methods of
functioning and execution of the business must be stated in the project report. It must mention the
assumptions and the risks generally involved in the business.
3. Organization Summary
The project report should indicate the organization structure and pattern proposed for the unit. It
must state whether the ownership is based on sole proprietorship, partnership or joint stock company.
It must provide information about the bio data of the promoters including financial soundness. The
name, address, age qualification and experience of the proprietors or promoters of the proposed
business must be stated in the project report.
4. Project Description
A brief description of the project must be stated and must give details about the following:

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Location of the site,

Raw material requirements,

Target of production,

Area required for the work shed,

Power requirements,

Fuel requirements,

Water requirements,

Employment requirements of skilled and unskilled labour,

Technology selected for the project,

Production process,

Projected production volumes, unit prices,

Pollution treatment plants required.
If the business is service oriented, then it must state the type of services rendered to customers. It
should state the method of providing service to customers in detail.
5. Marketing Plan
The project report must clearly state the total expected demand for the product. It must state the price
at which the product can be sold in the market. It must also mention the strategies to be employed to
capture the market. If any, after sale service is provided that must also be stated in the project. It
must describe the mode of distribution of the product from the production unit to the market. Project
report must state the following:

Type of customers,

Target markets,

Nature of market,

Market segmentation,

Future prospects of the market,

Sales objectives,

Marketing Cost of the project,

Market share of proposed venture,

Demand for the product in the local, national and the global market,

It must indicate potential users of products and distribution channels to be used for distributing the
product.
6. Capital Structure and operating cost
The project report must describe the total capital requirements of the project. It must state the source
of finance; it must also indicate the extent of owner’s funds and borrowed funds. Working capital
requirements must be stated and the source of supply should also be indicated in the project. Estimate
of total project cost, must be broken down into land, construction of buildings and civil works, plant
and machinery, miscellaneous fixed assets, preliminary and preoperative expenses and working
capital.
Proposed financial structure of venture must indicate the expected sources and terms of equity
and debt financing. This section must also spell out the operating cost
7. Management Plan
The project report should state the following.
a. Business experience of the promoters of the business,
b. Details about the management team,
c. Duties and responsibilities of team members,
d. Current personnel needs of the organization,

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. S.T.A.R.T Project - Identification, Selection & Financing Module ED 06. Page 3
e. Methods of managing the business,
f. Plans for hiring and training personnel,
g. Programmes and policies of the management.
8. Financial Aspects
In order to judge the profitability of the business a projected profit and loss account and balance
sheet must be presented in the project report. It must show the estimated sales revenue, cost of
production, gross profit and net profit likely to be earned by the proposed unit. In addition to the
above, a projected balance sheet, cash flow statement and funds flow statement must be prepared
every year and at least for a period of 3 to 5 years.
The income statement and cash flow projections should include a three-year summary, detail by
month for the first year, and detail by quarter for the second and third years. Break even point and
rate of return on investment must be stated in the project report. The accounting system and the
inventory control system will be used is generally addressed in this section of the project report. The
project report must state whether the business is financially and economically viable.
9. Technical Aspects
Project report provides information about the technology and technical aspects of a project. It covers
information on Technology selected for the project, Production process, capacity of machinery,
pollution control plants etc.
10. Project Implementation
Every proposed business unit must draw a time table for the project. It must indicate the time within
the activities involved in establishing the enterprise can be completed. Implementation schemes show
the timetable envisaged for project preparation and completion.
11. Social responsibility
The proposed units draw inputs from the society. Hence its contribution to the society in the form of
employment, income, exports and infrastructure. The output of the business must be indicated in the
project report.
Meaning of Project Report:
A project report is a document wherein all the details obtained from technical analysis, financial
analysis; profitability analysis, economic analysis etc. are put together. A project report may be
defined as a document with respect to any investment proposal based on certain information &
factual data for the purpose of appraising the project.
Signif icance / Importance of Project Report:
Project report is an important cornerstone for setting up an enterprise. It is a business plan to convert
a business idea into a productive venture. It is like a blue print for any construction activity without
which one would land in confusion or chaos at a later stage. The significance of a project report is as
follows;
Serves as a Master Plan-
For successful management, effective planning is absolutely essential. A project report serves as a
business plan indicating the objectives or goals of the enterprise & states in detail how these
objectives are going to be achieved at various stages of the enterprise.
Describes Direction / Road Map-
A project report is like a road map. It describes the direction in which the enterprise should go &
how to reach the goal. Without well defined goals & operational methods, as stated in the report,
most enterprises land in troubled waters & flounder on the rocks of hard times.
Shows Feasibility-
A project report also shows the feasibility of the proposed project & the probability of achieving
profit. Whether a project is feasible from different angles- economic, financial, commercial, social
etc. can be ascertained while preparing a project report.
Foresees requirements-

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A project report enables an entrepreneur to realize what he needs for implementing the project well
in advance. It also gives a general idea of his various resource requirements like raw materials,
manpower, finance, infrastructure facilities etc. and also the means of procuring them. Thus, it
enables an entrepreneur to foresee his requirements in advance & helps him to take suitable decisions
accordingly.
Indicates Profitability-
It gives an indication of likely & benefits which a prospective entrepreneur can get from his venture.
This profitability indication will help an entrepreneur to take an important investment decision. Thus,
the financial rewards can be visualized in advance.
Helps in Decision Making-
Crucial decisions have to be made at various stages of production. How much to produce to achieve
Break-Even-Level? How to fix the repayment schedule? Such important decisions can be taken with
the help of a project report prepared well in advance. It also anticipates problems in advance so that
suitable decisions can be taken then & there to solve those problems. Thus, it helps to visualize
action tasks also.
Paves way for Financial Assistance-
The preparation of a project report is absolutely essential for those enterprises which apply for
financial assistance from different financial institutions & banks. It is on the basis of project report,
that the financial institutions could be given or not. In most cases, the quality of the firms project
report weighs heavily in taking lending decisions. Thus, it paves the way for financial assistance
which is the life blood of an enterprise.
Ensures Survival-
The survival of any business depends upon the marketability of its products. The project report
projects the demand & supply position, competitor’s position in the market, expected price etc. and
thus ensures the survival of the business unit.
To Plan Expected Performance-
A project report is prepared to plan in advance about the fulfillment of expected performance in
various areas like technology, marketing, finance, personnel, production, customer satisfaction &
social endowment.
Assess Profitability-
Project report assesses the demand potential of the proposed product, works out the cost of capital
invested & operational costs & side by side expected profitability of the proposed project.
To know expected Inputs & Outputs-
A project report enables an entrepreneur to know how much money, manpower & material would be
required to set up the project, type of machine & technology required & the economic gains from the
project.
To Evaluate Organisational Goals-
A project report helps to evaluate the organization objectives, to what extent they are achievable. For
this purpose, an entrepreneur is expected to consider the input data, analyse the data, predict
outcome, choose best alternatives, take action, measure results with predictions.
To Quantify Objectives-
Project report helps to quantify the objectives. It makes them to be measurable, tangible, verifiable &
attainable.
To gain Financial Support-
Project report ensures to avail financial support from the financial institutions. This report helps to
evaluate the desirability of financing the project.
Guides the Course of Action-
Successful implementation of a project is governed by the course of action as given in project report.

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. S.T.A.R.T Project - Identification, Selection & Financing Module ED 06. Page 5
Government Authorities-
A project report is of importance to government authorities to provide subsidies, tax exemptions,
deductions, incentives, concessions, government clearance from Pollution Control Boards.
Useful to Entrepreneur-
A project report highlights the practicability of a project in terms of different factors like economy,
finance, technology & social desirability. It is needed by the entrepreneur for carrying out expansion
or starting a new production line & for getting loans from banks & financial institutions. It enables
the entrepreneur to understand, at the initial stage, whether the project is sound on technical,
commercial, financial & economic parameters. It helps the entrepreneurs in establishing techno-
economic viability of the project.
Banks & Financial Institutions-
Commercial banks & financial institutions are the interested parties in project report which is
prepared for direct submission to banks & financial institutions for getting loans. Financial
institutions & banks require project report for granting financial assistance. It will help the bankers in
appraising the project report & offer financial assistance.
o It seems like the same and people get confused in these words. Both are related to finance but the
target market for both is different.
o Micro finance is specially framed for the need of an individual, a small industry or any type of small
business unit.
o Macro finance is designed for the large section of the economy like big business corporations or a
whole economy.
Micro finance
o A micro finance is a narrow concept which includes the various services like micro credit, micro
savings, micro insurance and many more schemes.
o The purpose of micro finance is to help the small section of a society like low-income level people or
a below poverty line who are not able to serve their needs just because of unavailability fund.
o Those who are not able to take a financial help by the conventional way of putting a security as a
guarantee.
o A micro finance helps people to start their own business by proving finance with a low rate of
interest and help to make them independent.

Macro finance
o Macro finance is a broad concept and works on a large scale and its advantages are widespread.
o Macro finance is an initiative which deals with the large section of an economy and covers all the
financial need and how to provide it to the needed one.
o A macro finance includes the drafting policy, subsidies, multi-year expansion plans.
o The main aim of macro finance is to help an economy to grow and to generate employment and
expand an economy.
o A government provides macro finance in any form to the business like tax benefits or a subsidy
because it will benefit the economy in future.
Difference between Micro finance and Macro finance
Basis Micro finance Macro finance

Meaning Micro finance is an individual based concept to Macro finance is a whole economy based
furnish financial services to low-income concept, which is not framed for any
individuals who have no access to finance in a particular group, to grow the economy at a
conventional way. national level.

Concept A micro finance is a narrow concept and focuses A macro finance is a broad concept and

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Page 6 Module ED 06 Statistics • Taxation • Accounting • Research • Tutorials S.T.A.R.T
on the need of an individual. focuses the whole nation.

By whom A micro finance is provided by micro finance A macro finance involves a large entity like
companies, self-help groups, and non- governments, big corporation, banks, and
government organizations. some big private lenders.

Money In micro finance, the money involved is in a The amount of money involved is in a large
involved small amount. portion.

Time A micro finance is an endless activity which A macro finance is for a specific time
period goes on and on. period like 2 years or a 3 year. It means it
has a predefined tenure.

Risk level In a micro finance, there is a risk of default that There is no risk at all because the main aim
an individual may not pay. is to give benefit to the economy.

Effect A micro finance has a direct effect on an A macro finance has a direct effect on the
individual. whole economy which indirectly affects the
whole population.

If ever there was a good time to get into the tourism industry, this is it. With greater connectivity
online, India has become a go-to destination all across the world, on account of relatively cheap rates
and the fact that English is widely spoken. For this reason, the tourism industry is expected to add
$440 billion to India’s GDP. Of course, tourism is a far wider term than travel agency, but for
tourists, a travel agent is where it all begins. And with the ability to attract tourists online, your
market has increased substantially. So let’s find out how to start a travel agency business in India:

Do you need to be a Government- Approved Travel Agent?

No, you do not need government approval to be a travel agency in India. This means that you can
charge a commission to tourists even though you’re not registered officially as a travel agent. That
said, tourists, particularly foreign ones, are interested in credentials and, therefore, it would be a good
idea to get a government license if you’re operating online and need to establish trust. Local agents,
however, tend to operate without any license. It would also make sense to get an International Air
Travel Association license, as this body has tie-ups with over 240 airlines worldwide.
Do You Need to Start a Company?
No, again. There is no need to start a private limited company right away. However, if you wish to
get government approval, you would need to have some entity or the other. This could be a
partnership firm, limited liability partnership or private limited company. At Vakilsearch, we can
show you exactly how to register a travel agency as a private limited company at a reasonable price.
Do You Need to Register a Trademark?
It is recommended. In the travel agency business, particularly online, your brand is everything. This
means that you need to ensure that you have exclusive rights over the brand. And the only way to do
this is through a trademark registration, which you can get in three days’ time.
Do You Need a Service Tax Registration?
Yes, once your annual revenues cross Rs. 9 lakh. At this time, you need to get a service tax
registration, but you need only collect service tax once you cross Rs. 10 lakh in revenues. Once you
do cross this amount in revenue, you would also need to make GST payments.

What really steers a great idea to become real is its legal viability, there are regulations and permits
to be acquired to even start operations.
See it's not a big deal. Its very simple and easy as well.

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. S.T.A.R.T Project - Identification, Selection & Financing Module ED 06. Page 7
You can register your company as pvt limited or LLP (If you have partners in business). A local CA
can help you to get it done.
If you are too small then you can start by just having a Gumasta from your city's municipal
corporation. Start it like a small travel agency.
IATA license is not really needed at begining and any other such accreditations from reputed
organizations.
You just need a computer on a table and a internet connection. Create an account on a B2B portal
and start booking flights, Hotels, tours, trains, activities, sightseeing etc on behalf of your customers.
That's it. Your business started.
1. Register your Business: Ensuring that you have registered your business with any of the RoCs
will let you operate as a credible and legit business in India
2. Apply for recognition to Ministry of tourism,
• Recognition is offered for 5 years
• Procedure: Meet the eligibility criteria; Documents gathering; Application filing; Attaching
relevant documents with the application; Pay Fees; An inspection carried out by department
officials within 60 working days of application submission.
• The TA is entitled to incentives and concessions as may be granted by the Government from
time to time.
• Approved TA to prominently display the Certificate of approval of recognition given by MOT
in the office by pasting it on a board or in a picture frame so that it is visible to a potential
tourist.
3. Privacy Policy: The data that you acquire from your customers are vulnerable to the danger of data
theft and as a company, it is very important that you have a proper privacy policy contract in place.
4. Billing guideline: Example, the tickets that you provide must be dated and stamped.
5. Abide by Frontier regulations: Must see to it that the customer compiles with frontier regulations,
such as personal documents, passport, visas, customs declarations etc.
6. Refund Policy: Recognize the traveler’s right to terminate the contract provided he pays the agency
for all the expenses incurred and waive the deposits made in advance.
7. Vendor Agreement: Managing the third party could be a huge task for businesses in this sector,
contract bounding the parties involved by rules and duties will enable your company work glitch-
free.
8. Bookkeeping: Recording your day to day transactions, categorizing them in their heads and
reconciliation of banks with your accounts. There are three methods you can use:
• Do It Yourself (DIY) You can do it yourself by using Excel spreadsheet or Tally
• Outsource the Accounts You have the option of using an outsourced or part-time accountant
• Hire an in-house Accountant If your business is big enough, you can opt for an in-house
accountant for your company who can do all your work under your roof.
9. Keep A Track Of Your Taxes: You need to keep a track of any penalties or any government
compliances you need to do. There are taxes that you need to take care of at certain point in your
business such as service tax, Sales Tax, and so on. If not taken care of, you may end up paying high
penalties and bear punishment from the government.
10. Tax Filings: It is mandatory that any registered businesses should file annual returns with MCA
every financial year. No problem if you got no returns made, you will have to just file ‘Nil Returns in
such situation.
11. Funding Compliance: Raising investment is a major milestone for startups, and for investor apart
from investing in a good idea, securing the invested money via Funding compliance is more than a
priority. This compliance can be done only in the presence of a qualified Lawyer in the party.
12. ESOP: ESOPs refer to plans that give employees the right to purchase a certain number of the
company’s shares instead of salary. This provides the employee with a virtual stake and helps to
reduce the risk of the founder. This blog will help you understand the procedure to issue ESOP

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Page 8 Module ED 06 Statistics • Taxation • Accounting • Research • Tutorials S.T.A.R.T
Documents required for TA recognition:
1. Application form duly filled in.
2. Two attested photographs.
3. Documentary proof (preferably registration certificates from Government) in support of
beginning of operations of your firm.
4. A signed copy of the Pledge of Commitment towards “Safe & Honourable Tourism”. The
pledge is attached to English & Hindi as Annexure I & II, respectively.
5. A copy of complete Audited Balance Sheet with the Director’s Report for the latest financial
year.
6. Income Tax Acknowledgement for the latest assessment year.
7. Service Tax Registration number from the concerned authority.
8. Certificate of Statutory Auditor of the firm stating Paid-up Capital not less than Rs. 3.00 Lakh.
For Travel Agents from the North – Eastern region, remote and rural areas, the minimum Paid-
up Capital (or Capital employed) should be at least Rs. 50,000/- duly supported by the Statutory
Chartered Accountant’s certificate.
9. A copy of IATA approval letter indicating Numerical Code Number and a copy of IATA
Accreditation Certificate for the Current year.
10. Reference letter from Bank on its original letterhead regarding firm’s bank account and address
with telephone numbers.
11. The details of staff employed giving names, designation, educational qualification & experience
in tourism field and length of service in the organization (copies of certificates to be enclosed):
a) There should be a minimum of four qualified staff out of which at least one should have
Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or
an institution approved by AICTE. The owner of the firm would be included as one of the
qualified employees. b) The academic qualifications may be relaxed in case of the other two
staff members who are exceptionally experienced personnel in Airlines, Shipping, Transport
and PR agencies, Hotel and other Corporate Bodies and those who have worked for three years
with IATA / UFTA agencies and also those who have two years experience with Ministry of
Tourism approved Travel Agencies. c) For the agencies located in the North – Eastern region,
remote and rural areas, there should be a minimum of two staff out of which one should be a
qualified employee with a Diploma / Degree in Tourism & Travel Management from a
recognized University, IITTM or an institution approved by AICTE. The owner of the firm
would be included as one of the qualified employees. d) Names of focal points. List of
Directors / Partners or name of the Proprietor. Details of office premises, whether located in a
commercial or residential area, office space in sq. ft. (the minimum office space should be at
least 150 sq. ft for rest of India and 100 sq. ft for hilly areas which are above 1000 meters from
sea level) and accessibility to toilet and reception area.
12. A Demand Draft for Rs. 3,000/-Please confirm towards processing fees payable to Pay and Accounts
Officer, Ministry of Tourism, Government of India.
13. Documents duly stamped & attested by the Managing Director / Managing Partner/ Proprietor
of the firm.

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