The .prj file, which was originally designed to hold the coordinate system information (i.e., projection) for a Shapefile (.shp format vector map file), can be associated to any vector or image map layer. In such case, the layer is rendered to the coordinate system provided by the associated .prj file.
The proper .prj file naming convention must be followed. The name of the associated .prj file must be as filename.ext.prj. Some examples:
||.prj file name
A layer must be georeferenced to work properly with the .prj file. For more information, refer to KB10389.