Module 4

Project Financing, Implementation & Review

PROJECT FINANCING

Project Finance can be characterised in a variety of ways and there is no universally adopted
definition but as a financing technique,

the definition is: “the raising of finance on a Limited Recourse basis, for the purposes of developing a
large capital intensive infrastructure project, where the borrower is a special purpose vehicle and
repayment of the financing by the borrower will be dependent on the internally generated cash flows
of the project”.

The terms ‘Project Finance’ and ‘Limited Recourse Finance’ are typically used interchangeably and
should be viewed as one in the same. Indeed, it is debatable the extent to which a financing where the
Lenders have significant collateral with (or other form of contractual remedy against) the project
shareholders of the borrower can be truly regarded as a project financing. The ‘limited’ recourse that
financiers have to a project’s shareholders in a true project financing is a major motivation for
corporates adopting this approach to infrastructure investment.

Pre-requisites to Project Finance

There are clear advantages to using Project Finance as a tool for financing large infrastructure
projects. Nevertheless, there are a number of practical pre-conditions to financing a project on a
Limited Recourse basis:

3. Accessible financing: From both Sponsor and (if applicable) Procurer perspectives, high leverage
and long-tenor financing is a de facto requirement to achieving attractive economics for large
infrastructure financings.

2. Identifiable risks: An unidentified and unmitigated risk could potentially jeopardise the stability of
a project.

1. Sustainable economics: Whilst comfort can be gained from (a) undertaking detailed financial due
diligence and modelling to stress-test the projected cashflows of the asset and (b) contractually
mitigating revenue risk, experienced investors and bankers will ultimately look for a clearly
identifiable demand for the project’s goods or services in order to ‘rationalise the credit’.

4. Political stability: Even if political ‘force majeure’ risk is contractually born by the government (as
is common practise in many PPP programs), the efficacy of that remedy to Lenders/investors would
be negated by a strategic sovereign default – expropriation/nationalisation of assets being one
potential example. Whilst such risks cannot be mitigated against in the insurance markets, varying
degrees of political risk insurance can be obtained through the use of financing products available
from multilateral and export credit agencies.
Sources of Finance Margin Money
Debt Financing

Debt funds are the outsider’s liability. The funding agencies evaluate the project and provide finance
for the same with predetermined terms of returns and repayments. The repayment schedule is
predetermined and so is the interest rate. The term, or time limit to pay a debt, is generally
commensurate with the value of an item or investment. Business and governmental bodies carry long-
term debt in the form of loans or bonds. Loans are taken from institutes or banks and are paid back
with an agreed interest rate. Bonds or debentures are similar to loans, but are usually purchased by
individuals or other businesses.

Types of Debts

There are two broad classifications of debts: loans and debentures

Loans are the most common source of financing. There are several development banks/institutions
and commercial banks providing finance with a predefined rate of interest. The repayment schedule is
also predefined. Repayments are generally made in installments (quarterly/semi annually/annually)
whereas interest payment is generally on quarterly basis in India. There are various banks/institutes
providing loans. Some of them are:

• Central financial Loans

al institutions/development banks: Financial intuitions like IFCI (Industrial Financial Corporations of

India), IRBI (Industrial Reconstruction Bank of India), and development banks like IDBI (Industrial
Development Bank of India), ICICI Bank, SIDBI, GIC, EXIM, etc.

• State Financial Corporations (SFCs): All major states have their own SFC for funding medium
sized projects. They all are refinanced by IDBI. For example, APSFC (Andhra Pradesh State
Financial Corporation) in Andhra Pradesh, UPFC (Uttar Pradesh Financial Corporation), etc.

• State Industrial Development Corporations (SIDCs): The role of SIDC is not restricted to financing
but theyare also responsible for zones for industrial developments and infrastructural facility.
Pithampur (near Indore) and Mandideep (near Bhopal) are developed by MPAKVN (Madhya Pradesh
Audhyogic Kendra Vikas Nigam), Similarly, MIDC (Maharashtra Industrial Development
Corporation) and GIDC (Gujarat Industrial Development Corporation) have developed a number of
industrial areas in their respective states and contributed towards its development.

Debentures

Debentures are loans that are usually secured and are said to have either fixed or floating charges with
them. They are different from loans as loan is provided by a bank or an institution whereas debenture
is funded by public or group of people.

A secured debenture is one that is specifically tied to the financing of a particular asset such as a
building or a machine. Then, just like a mortgage for a private house, the debenture holder has a legal
interest in that asset and the
Commercial banks: All commercial banks finance long-term debt at a predefined rate of
interest, generally with collateral security. Both nationalized and private commercial banks
are playing a major role in financing agro industries and service projects.

• Private financing: Private companies and NBFC are also providing long term loans for
projects

• International financial institutions: These institutions provide funding to the projects of

great magnitude. World Bank, International Finance Corporation, Asian Development Bank,
Overseas Economic Co – operation Fund, etc.

Equity Financing

Although owners of equity instruments are the owners of a company, it is actually equity shareholders
who are the real owners of the company. There are various sources of equity financing

• Preference shares

• Equity shares

• Returned earnings

Preferential Shares

Preference shares offer their owners preferences over ordinary shareholders. There are two major
differences between ordinary and preference shares:

1. Preference shareholders are often entitled to a fixed dividend even when ordinary shareholders are
not.

2. Preference shareholders cannot normally vote at general meetings.

Equity Shares
Equity shareholders are the true owners of the company. They have the voting rights and right on all
the remainder profit after paying interest to debt and preferential dividends. Who owns Reliance
Industries? Mukesh Ambani? No, he is just holding majority stake of the company, and so he is
controlling the company. All shareholders of Reliance industries are the owners of the company. The
equity shares are generally not subjected to buy back and under no circumstances can an equity
shareholders be forced for the buy back. Companies may offer a buy back but can never force buy
back on shareholder. Returns to shareholders are in the form of dividends, right shares or bonus
shares. Generally, the return expected by shareholders is in the form of increased market prices.
Future aspects, profits, reserves and all the aspects of the company are depicted by its share prices.
The value of the company is determined by market price/share x No. of shares issued.

Retained Earnings

Retained earnings are the cheapest of equity source of capital. Companies do not declare dividends
equal to their earnings; they retain some portions of their earnings for various reasons. One of the
major reasons is future prospects. Such reserves are used as source of funding of a new project
(generally in the case of brown field projects).
Newer Sources of Finance
1. International financing: The International Finance Corporation (IFC), the Multilateral
Investment Guarantee Agency (MIGA), and International Project Financing Agency (IPFA)
give loans to promote private sector, corporate investment in developing countries, under the
theory that such investment will provide economic growth. Other major sources of
international financing include Euro Currency loans,

• Euro Bonds, Global Depositary Receipt and American Depository Receipts.

2. Leasing: Lease is an agreement between two parties, the lessee and the lessor. The lessor
purchases capital goods for the use of the lessee and the lessee uses it by payment of predefined
rentals. The lessee continues to be the owner of the asset. Leasing is generally used for financing
capital goods.

3. Hire purchase: It is a form of installment credit. Hire purchase is similar to leasing with the
exception that ownership of the goods passes to the hire purchase customer as soon as the final
installment is paid, whereas a lessee never becomes the owner of the goods.

4. Venture Capital Financing: Venture capital is the capital provided by outside inventors for
financing of new, innovative or struggling business. Venture capital investments generally are
high risk investments, but offer the chance for above average returns. A venture capitalist (also
called angel investor) is a person who makes such investments. A venture capital funds is a
pooled investment vehicle (often a partnership) that primarily invests the financial capital of third-
party investors in enterprises that are too risky for the standard capital markets or bank loans. A
venture capitalist is an expert not only in acquiring capital, but can also provide support and
direction to early startups.

Promoters Contribution:

• An entrepreneur who promotes the project will also participate in the scheme of finance of the
project. The extent of promoter’s participation is considered as sign of interest the promoters
show in the project. When the bank/financial

• institution is asked to participate in the scheme of finance, they would ask the promoters to
bring a certain portion, normally between 25 to 50% of the project cost into the equity share
capital of the company.

• A part of the contribution can be arranged by the promoters from outside sources like arranging
investment in capital from friends and relatives. For eligibility of financing, the financial
institutions will stipulate minimum promoters contribution which is to be arranged by the
promoter. The financial institutions always press for the slightly higher participation in the
project.

• This is to ensure a long and continued involvement of the promoter in the project. Promoters
contribution indicates the extent of their involvement in the project in terms of their own financial
stake. The promoters contribution will be provided in the form of subscribing to
Angel Investor

An angel investor provides initial seed money for startup businesses, usually in exchange for
ownership equity in the company.

The angel investor may be involved in a series of projects on a purely professional basis or
may be found among an entrepreneur's family and friends. The investor's involvement may
be a one-time infusion of seed money or an ongoing injection of cash to get a product to
market.

Angel investors aren't usually in the loan business. They're putting money into an idea they
like, with the expectation of a reward only if and when the business takes off.

 Angel investing may be the primary source of funding for an entrepreneur who finds
it more appealing than other forms of financing like bank loans.
 This is risky business for the angel investor and usually represents no more than 10%
of an angel investor's portfolio.
 An angel investor may be hands-off or get deeply involved in the early stages.

Pradhan Mantri Mudra Yojana (PMMY)

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India. The
scheme facilitates micro credit/Loan up to Rs. 10 lakh to income generating micro enterprises
engaged in the non farm sector in manufacturing, processing, trading or service sector.
MUDRA supports Financial Intermediaries to extend loans to the non-corporate, non-farm
sector income generating activities of micro and small entities.

These Micro and small entities comprises of millions of proprietorship / partnership firms
running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable
vendors, truck operators, food-service units, repair shops, machine operators, small
industries, artisans, food processors and others, in rural and urban

The loans under MUDRA scheme can be availed only through banks and lending institutions
which include:

 Public Sector Banks

 Private Sector Banks
 State operated cooperative banks
 Rural banks from regional sector
 Institutions offering micro finance
 Financial companies other than banks
Interest rate
Interest rates are charged as per the policy decision of the bank. However, the interest rate
charged to ultimate borrowers shall be reasonable.

Upfront fee/Processing charges

Banks may consider charging of upfront fee as per their internal guidelines. The upfront
fee/processing charges for Shishu loans (Covering loans upto Rs. 50,000/-) are waived by
most banks.

Benefits
The benefits under the scheme has been classified under three categories as 'SHISHU',
'KISHOR' and 'TARUN' to signify the stage of growth / development and funding needs of the
beneficiary micro unit / entrepreneur.

 Shishu: Covering loans up to Rs. 50,000/-

 Kishor: Covering loans from Rs. 50,001 to Rs. 5,00,000/-
 Tarun: Covering loans from Rs. 5,00,001 to Rs. 10,00,000/-

Private equity

 Private equity describes investment partnerships that buy and manage companies
before selling them. Private equity firms operate these investment funds on behalf
of institutional and accredited investors.

 Private equity funds may acquire private companies or public ones in their entirety,
or invest in such buyouts as part of a consortium. They typically do not hold stakes in
companies that remain listed on a stock exchange.

 Private equity is often grouped with venture capital and hedge funds as an alternative
investment. Investors in this asset class are usually required to commit significant
capital for years, which is why access to such investments is limited to institutions
and individuals with high net worth

Understanding Private Equity

In contrast with venture capital, most private equity firms and funds invest in mature
companies rather than startups. They manage their portfolio companies to increase their
worth or to extract value before exiting the investment years later.

The private equity industry has grown rapidly amid increased allocations to alternative
investments and following private equity funds' relatively strong returns since 2000.1 In
2021, private equity buyouts totaled a record $1.1 trillion, doubling from 2020. 2 Private
equity investing tends to grow more lucrative and popular during periods when stock
markets are riding high and interest rates are low and less so when those cyclical factors turn
less favorable.345

Private equity firms raise client capital to launch private equity funds, and operate them as
general partners, managing fund investments in exchange for fees and a share of profits
above a preset minimum known as the hurdle rate.

PROJECT MANAGEMENT

Project in general refers to a new endeavour with specific objective and varies so widely that
it is very difficult to precisely define it. Project is a temporary endeavour undertaken to create
a unique product or service or result.

Project is a unique process, consist of a set of coordinated and controlled activities with start
and finish dates, undertaken to achieve an objective confirming to specific requirements,
including the constraints of time cost and resource. Examples of project include Developing a
watershed, creating irrigation facility, developing new variety of a crop, developing new
breed of an animal, developing agro-processing centre, construction of farm building, sting of
a concentrated feed plant etc. It may be noted that each of these projects differ in
composition, type, scope, size and time.
1.2 Characteristics and Importance of Project Management

1. Temporary: Projects are temporary in nature. Every project has a beginning and end. The
word ‘temporary’ here may refer to an hour, a day or a year. Operational work is an ongoing
effort which is executed to sustain the business. But projects are not ongoing efforts. A
project is considered to end when the project’s objectives have been achieved or the project is
completed or discontinued. Only projects are temporary in characteristic and not the project’s
outcomes. It will not generally be applied to the product, service or result created by the
project. Projects also may often have intended and unintended social, economic and
environmental impacts that long last.

2. Definite Beginning and Completion: Project is said to be complete when the project’s
objectives have been achieved. When it is clear that the project objectives will not or cannot
be met the need for the project no longer exists and the project is terminated. Thus, projects
are not ongoing efforts. Thus, every project has a definite beginning and end.

3. Definite Objective/Scope and Unique: All the projects have their own defined
scopes/objectives for which they are carried out. Every project is undertaken to create a
unique product, service, or result. E.g., Hundreds of house buildings may have been built by a
builder, but each individual building is unique in itself like they have different owner,
different design, different structure, different location, different sub-contractors, and so on.
Thus, each house building is to be considered as a Project and each Project produces unique
outcome.

4. Defined Time and Resources: As the projects have definite beginning and end, they are to
be carried out within the time and resources constraints. Each project will have defined time
and resources for its execution.

5. Multiple Talents: As projects involve many interrelated tasks done by many specialists, the
involvement of people from several departments is very much essential. Thus, the use of
multiple talents from various departments (sometimes from different organizations and across
multiple geographies) becomes the key for successful project management. For example, take
the construction of house building; the expertise of very many professionals and skills of
various people from various fields like architect, engineers, carpenters, painters, plumber,
electrician, interior decorator, etc, are being coordinated to complete the house project.

Project schedule
“Project scheduling is a process that allows you to create a schedule that you can use to keep
track of tasks and deadlines within a project. Typically, project schedules come in the form of
a calendar or a timeline. While scheduling a project, it's important that you estimate the start
and end dates for individual tasks and project phases to make sure the project advances at the
desired speed. You can do this by carefully considering different project milestones, activities
and deliverables, which may impact task duration, budget and resource allocation ”.

Scheduling is an inexact process in that it tries to predict the future. While it is not possible to
know with certainty how long a project will take, there are techniques that can increase your
likelihood of being close. If you are close in your planning and estimating, you can manage
the project to achieve the schedule by accelerating some efforts or modifying approaches to
meet required deadlines. One key ingredient in the scheduling process is experience in the
project area; another is experience with scheduling in general. In every industry area there
will be a body of knowledge that associates the accomplishment of known work efforts with
a time duration. In some industries, there are books recording industry standards for use by
cost and schedule estimators. Interviewing those who have had experience with similar
projects is the best way to determine how long things will really take. When preparing a
schedule estimate, consider that transition between activities often takes time. Organizations
or resources outside your direct control may not share your sense of schedule urgency, and
their work may take longer to complete. Beware of all external dependency relationships.
Uncertain resources of talent, equipment, or data will likely result in extending the project
schedule. Experience teaches that things usually take longer than we think they will, and that
giving away schedule margin in the planning phase is a sure way to ensure a highly stressed
project effort. People tend to be optimistic in estimating schedules and, on average, estimate
only 80% of the time actually required. Failure to meet schedule goals is most often due to
unrealistic deadlines, passive project execution, unforeseen problems, or things overlooked in
the plan.

Business Plan

A business plan is a document that details a company's goals and how it intends to achieve
them. Business plans can be of benefit to both startups and well-established companies. For
start-ups, a business plan can be essential for winning over potential lenders and investors.
Established businesses can find one useful for staying on track and not losing sight of their
goals. This article explains what an effective business plan needs to include and how to write
one.

Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic
categories: traditional and lean startup. According to the U.S. Small Business Administration
(SBA), the traditional business plan is the more common of the two.2

 Traditional business plans: These plans tend to be much longer than lean startup
plans and contain considerably more detail. As a result they require more work on
the part of the business, but they can also be more persuasive (and reassuring) to
potential investors.
 Lean startup business plans: These use an abbreviated structure that highlights key
elements. These business plans are short—as short as one page—and provide only
 the most basic detail. If a company wants to use this kind of plan, it should be
prepared to provide more detail if an investor or a lender requests it.

Components

1. Executive summary – Also known as the elevator pitch, the business plan executive
summary is the most important element of any business plan, best fitted in a page or two. A
business should draw its plan from the mission and vision, which are the founding principles
of any business. Next, it provides an idea and an overview of the company. It also introduces
the product or service the company aims to offer. Finally, it is a summary of the plan.
2. Business description – This is an elaboration of the company goals and objectives. It
includes the market or industry the business belongs to, its target audience, etc. It can also
provide information on the company structure and how it operates.
3. Market research and analysis – Market research is the concrete floor on which the
business plan stands. It should include facts and figures and give the readers an understanding
of the market, its preferences, classifications, and the number and size of competitors.
Analyzing the market lets businesses identify a gap and fill it. The plan should also inform
the market’s acceptance of the product or service.
4. Competitive analysis – Competitors can make or break any business. Therefore, before
entering the market, the businesses must evaluate how the competitors operate, their profits
and costs, their offerings, etc. This will give the enterprise an idea of what it can do
differently from the competitors to have the edge over them. This should be effectively
communicated to the investors, as it might convince them of the venture’s success.
5. Marketing and sales plan – The whole point of any business is to make sales. For this, they
need marketing campaigns and strategies targeting the right audience with minimal cost but
maximum returns. For example, a firm selling study tools and materials will target students,
especially through social media. Like this, businesses should plan their campaigns and decide
their advertising channels.
6. Operating plan – As the term implies, it talks about how the business is operated. The
manufacturing and supply patterns, strategies like agile or lean, inventory approach, etc.,
decided by the management come under this. In addition, the expected quantity to be
produced and supplied in a given period and the reverse logistics plan are good additions to
the operating plan.
7. Organization description – This gives information on the total employees, departments,
management qualifications, job description, and total skill set of the organization’s human
 resources. The decided salary and wages, HR policies, etc., are also part of an organization’s
description.
8. SWOT analysis – SWOT analysis helps the business identify its strengths, weaknesses,
opportunities, and threats, which will help them choose the critical approach. The business
should take advantage of its strengths and opportunities while simultaneously working on the
weaknesses and finding the best strategy to deal with the threats. This will balance the
company and its internal and external environment.
9. Financials – These refer to the financial projections, including the budget, estimated costs,
payments, expected break-even point, payback period, etc. Forecasts on
expected revenue and costs for at least one year or until the business breaks will be
necessary. Also, the net capital requirements with proper accounting calculations must be part
of the plan.
10. Appendices – This can include other important or relevant documents to prepare the plan.
For example, financial documents, proof of people’s acceptance of products, resumes of the
management, study on competition, etc.

Business plan steps

Step 1: Establish your mission

In essence, your mission statement explains why your business exists. When you encounter a
problem or a key decision, the answer will be informed by your mission. Think about why
you started the business, and imagine where you want it to be in the future. These two
elements will provide your mission statement.

Step 2: Analyse your SWOT

With your mission statement in mind, analyse your
business's strengths, weaknesses, opportunities and threats. List each category in full and be
honest. Done correctly, this 'SWOT' analysis will help you to take an objective, critical,
unemotional look at your business in its entirety.

Step 3: Develop a plan

Try this exercise: from each SWOT category, choose three to five important items. Then set
goals to maximise your strengths, correct your weaknesses, make the most of your
opportunities and nullify your threats. For example, you could decide to focus more strongly
on a particularly successful product or service (a strength), and abandon a side-project which
is costing time and money for little return (a weakness). Remember that you can't do
everything yourself. Think about how you will delegate tasks and involve all the staff. Avoid
dwelling on the negatives - set yourself realistic strategies for improving the business.

Step 4: Create a budget

All missions and strategies need money to succeed. A smart budget will help you to regularly
review your expenses and make financially beneficial decisions. You may need to take a
wide variety of factors into account when setting your budget. This is where we can help you
- why not give us a call?
Step 5: Put it in writing
Make sure you write down your finished plan. Include the mission statement, SWOT
analysis, goals and plans, budget and forecasts, and make it clear who is responsible for doing
what. Share it with your key staff and shareholders, and encourage their input.

Step 6: Make it a living document

This is vital! Make your business plan a living document that you and
your staff can frequently update and improve. Consider reviewing it
monthly to track your progress and readjust your strategy as necessary.
Hold yourself and your staff accountable for meeting the plan's goals,
and think about introducing an incentive programme to keep everyone
motivated.

Project report
A project report is a document that consists of crucial information about a project. It includes
information that can be used to evaluate the progress of a project, understand its objective,
trace its journey, provide direction to team members, mitigate risks, and communicate a
project’s success or failure to stakeholders and other business entities.

OR

The project report is a document that contains all information regarding the proposed project.
It is served as a blueprint of all operations to be undertaken for attaining the desired results.
The project report is basically the business plan of action and clearly describes its goals and
objectives. It is one that helps in converting the business idea into a productive venture
without any chaos or confusion as it defines strategies for project execution.

Project report steps

Step 1:

Identify your objective

Identifying your objective at the beginning helps keep your project on track and provides
metrics to measure success and progress.
Sit down and list out reasons for preparing a project report. In simpler words, find an answer
to “Why should I prepare a project report?” It will help in understanding the objective behind
developing a report.

Step 2:

Understand the audience

Understanding your target audience’s likes, dislikes, and preferences helps prepare a project
report that your audience can easily understand.
Step 3:

Choose the suitable template

Whether choosing from the existing template or creating a new project report temple, select a
template that conveys your message effectively and convincingly.

Remember that your template must answer these questions:

 Who is my audience?
 What is the purpose behind making the report?
 What are the budgets, time, and deliverables of the project?

Step 4 :

Data Collection
The chances of you having a solid project report increase when you have data to back your
claims. Therefore, including data from case studies, surveys, and interviews helps support
your claims and develop a successful project report.

Step 5 :

Project structure

Every report has a structure that arranges and organises all data and information in a user-
friendly manner. Here’s a close look at the project report’s structure:

 Summary: It is written once the report is completed. It helps in presenting the main
objective of the information. This critical section of the document compels the reader
to proceed with the report.
 Introduction: It introduces the report’s contents to the readers. The scope, essential
parameters, objectives, targets, and deadlines are mentioned in this part of the project
report.
 Body: It presents the background details, data, analysis, discussion, recommendation,
etc.
 Conclusion: In this part of the project report, project managers present a clear and
concise end to the document.

Pro-tip: Spending some time on the final project report before forwarding it to key
stakeholders will help fix typos, grammatical errors, structural challenges, and others.

Contents of a Project Report

Following are the contents of a project report.

1. Title
The title page of the report denotes the title of a project and the author’s name. It mentions
the name and detail of industry for which the project is undertaken. This page must clearly
define the area and scope of project.
 2. Abstract
Abstract is a brief summary giving details about the contents of a project report. It provides
an idea to reader regarding what is project report about. Anyone who does not know anything
about report simply by reading its abstract can make out whether it is of their interest or not.
Abstract is generally half a page long.

3. Acknowledgements
This section of report denotes the individuals who assisted you during your project work. It is
meant for thanking the people who provided you technical or any other type of assistance
such as your supervisor.

4. Contents Page
Content page tells about the main chapter and sub sections included in the report. Chapters
with proper titles are mentioned along with the page numbers telling where the particular
chapter/section begins and ends. It should be ensured that only sufficient levels of
subheadings are provided under each chapter.

5. Introduction
It is the most crucial element of the project report. The introduction tells about the nature and
scope of the report to the reader. This part summarizes what the author set out to attain, gives
a clear description regarding the background of the project, main contributions, and
relevance. The introduction shall summarize the key things in the report and provide the
sections containing the technical material.

6. Background
Background component sets the project report into context and describes the layout for
attaining project goals. For meeting out the proposed goals different approaches should be
evaluated for choosing the efficient one. However, this part of report can be included as a part
of introduction also but it is ideal to present it as a separate chapter in case if project involve
extensive amount of research and ground work. All pieces of work which are listed should be
provided with proper sources from where they are referred.

7. Body Of Report
This is the central part of project report which contains three to four chapters which describes
all technical work undertaken for the completion of project. The chapter’s structure
dependent upon project which reflects the development of project in chronological order. It
should be justified why a particular approach is chosen above other alternatives mentioned in
background component. Every interesting features and problems during the implementation
should be properly documented. All contents relating to testing and integration should be
thoroughly discussed with the supervisor.

8. Conclusions And Future Work

It denotes the achievements made as a result of completing the project. This part of report
concludes the success and failures of a project. It also provides suggestions for future work of
project for taking it further. No project is completely perfect and each of it come with certain
limitations.
 9. Bibliography
Bibliography tells about the books, articles, journals, manuals etc. which are used while
doing the project or referred in the report. Full and accurate information regarding sources
used such as title, author name, issue and page number should be mentioned for readers.
Providing the source of information helps readers in validating the facts of report.

10. Appendix
This part comprises of information that is peripheral to main body of report. Things included
here are such as program listings, graphs, proofs, tables or any other thing that would break
up the theme of text if it appeared in situ. All material should be bind in a single volume and
compressed as much as possible.

11. User Guide

This section consists of proper instructions for better understandability of users. Suppose a
project that had led to the development of new software, it should provide a complete guide
on how to use it. It displays all essential features of project using diagrams for illustrating
them properly. User guide component of report should be kept simple and concise.

Extra notes

Objectives of project report

1. Selecting Best Investment Proposal: Project report is an efficient tool for analyzing
the status of any investment proposal. It shows the expected profitability and risk
associated with the project and this way helps in choosing the best option.
2. Approval of Project: It is essential for registration or approval purposes of the
proposed project. Different authorities like District industries center, Directorate of
industries, government departments, etc. require project reports for giving approval.
3. Tracking: The Project report assists in tracking the current activities of the project. It
helps team members and other stakeholders to check the project progress from time to
time and helps in finding out any deviations against the original plan.
4. Visibility: Another important advantage of having the project report is that it gives
full insight into the project. It gives a clear description of activities to be undertaken
and avoids any confusion or disorder.
5. Risk Identification: Identification of risk is a significant step for the completion of
every project. The project report enables in spotting the risk early and taking all
corrective actions timely.
6. Cost Management: Project report helps in managing the expenses through regular
reporting of all activities. It sets the standard cost of every operation in advance and
helps in finding out any deviation in these costs through tracking of the project.
7. Financial Assistance: It is an important tool for availing financial assistance from
financial institutions or fund providers. The project report enables financial
institutions in judging the profitability of the proposed project and then takes the
decision accordingly for approving the funds.
8. Test Business Soundness: Project report helps in testing the profitability and
soundness of the proposed project. It tells the total estimated costs, possible income
and risk associated with any proposal.
Characteristics of Project Report

1. Scope: The project report gives a clear picture of what is to be done or to be achieved.
It describes the goals of the proposed project and activities to be undertaken for
achieving these goals.
2. Resource: It shows the means or resources required to meet the desired scope. Project
report serves as the roadmap which tells the direction in which business should go for
attaining its goals.
3. Time: The project report denotes the standard time required for the completion of
each and every task of the proposed project.
4. Quality: The project report explains the desired standards to be achieved by the
completion of all tasks. Limit of deviations that can be accepted from these defined
standards are also contained in this report.
5. Risk: Risk is an unavoidable factor associated with every business and needs to
monitored properly. The project report considers all risk factors that may arrive at the
completion of the proposed project and also tells the ways for recovering from these
factors.