AGECON 211 Practical 05: Preparation of a Detailed Project Report (DPR)

B.Sc. (Hons.) Agriculture | Semester 3 | AGECON 211 | Practical 05

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Learning objectives

Prepare a project report that links market evidence, physical capacity, costs, funding and risk. Distinguish a working estimate from a confirmed quotation or commitment.

Required information

Collect a product specification, customer interviews, supplier quotations, site details, process flow, staffing assumptions and funding terms. Record sources and dates. A DPR is an evidence-supported decision document, not a guarantee of bank approval or profitability.

Report template

1. Executive summary and promoter profile.
2. Customer problem, product, target market and competition.
3. Market survey method, findings, demand assumptions and sales plan.
4. Site, process, equipment, practical capacity, utilities and quality controls.
5. Ownership, staffing, roles and applicable requirements to verify.
6. Project cost and means of finance.
7. Monthly working-capital and cash-flow forecast.
8. Projected profit statement and balance sheet.
9. Break-even, discounted appraisal and sensitivity analysis.
10. Implementation schedule, risk register and annexures.

Worked mini-DPR: nursery

Assume infrastructure and equipment ₹2,00,000, preliminary cash expenditure ₹20,000, opening working capital ₹80,000 and contingency provision ₹20,000. Total proposed funding requirement is ₹3,20,000. Owner contribution of ₹1,20,000 plus debt of ₹2,00,000 balances the funding plan. This is a planning schedule; accounting treatment of preliminary expenditure and contingency depends on what is actually incurred.

Assume annual sales of 40,000 saleable seedlings at ₹8 each: revenue is ₹3,20,000. Variable cost of ₹4 per saleable seedling totals ₹1,60,000; contribution is ₹1,60,000. With annual fixed operating costs of ₹1,00,000, operating surplus before any unlisted depreciation, finance or tax costs is ₹60,000. Break-even sales are 1,00,000/(8−4) = 25,000 seedlings.

If sales fall 20% to 32,000 seedlings, contribution is ₹1,28,000 and the corresponding surplus falls to ₹28,000. This exposes sensitivity even before additional expenses. Do not describe the ₹60,000 as net profit unless all relevant costs are included.

Cash-flow and consistency checks

Translate annual demand into planting-season sales. Separate customer collections from invoiced sales. Include cash needed before production, replacement inputs, losses, owner remuneration assumptions, debt servicing and minimum balances. Debt interest and principal must be modelled from the actual proposed terms, not invented.

Check that projected saleable output does not exceed feasible production; investment and funding totals agree; closing cash reconciles; and assets equal liabilities plus equity in the projected balance sheet. Avoid double counting working capital as both an initial investment and repeated operating expenditure without modelling its movement.

Submission and review

Submit the DPR with an assumptions register, quotations, survey summary and sensitivity table. Label this case as hypothetical. A reviewer should be able to trace each major number to evidence or a clearly stated assumption and identify what remains to be verified.

Revision and assessment

1. Compute the example funding requirement.
2. Compute break-even seedlings.
3. Why is operating surplus not necessarily net profit?

Answer guide

1. ₹2,00,000+₹20,000+₹80,000+₹20,000 = ₹3,20,000.
2. ₹1,00,000÷₹4 = 25,000 seedlings.
3. Depreciation, interest, taxes or other relevant costs may still be excluded.

Independent English study notes for the topics listed in the AGECON 211 course index. Consult your prescribed university syllabus for official course wording and assessment requirements. Numerical cases are hypothetical learning examples.