Motia Developers

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A

SUMMER TRAINING REPORT

ON

VARIOUS SOURCES OF FINANCE FOR

MOTIA DEVELOPERS PVT. LTD.

CONDUCTED BY

In partial fulfillment of the degree of Bachelor of Business

Administration

(Session: 2008-2011)

Under the guidance of:Mr. Pawan Joshi (Finance Manager)Motia Developers Pvt. Ltd

SUBMITTED TO

Maharishi Markandesdhwar Institution of

Management Mullana (Ambala) (M.M.I.M)

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SUBMITTED BY:

Ankush Sharma

Roll No. 1208006BBA-5th Sem.Session: 2008-2011


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PREFACE

Theoretical knowledge without the practical exposure is of little

value. Theoretical study in classroom is not sufficient to understand

the functioning and nature of research. Therefore, it becomes

necessary to undergo project.

On the job training in business organization infuses among

student senses of critical analysis of the real managerial situations to

they are exposed. This gives them an opportunity to apply their

conceptual, theoretical and imaginative skills to real life situations and

evaluate the results thereof.

The concept of summer training, which is there in curriculum of

Business Management Schools, serves two important purposes.

Firstly, it gives the student the fair amount of insight of the problem

faced by them. Secondly, this type of projects helps business

management students to get a first hand experience of the actual

working conditions, which otherwise is possible only when students

the job. Joining any organization without practical experience would

be just like getting a driving license without actually a vehicle.

I undertook my training at Motia Developers Pvt. Ltd. During

my training, I gained a good experience and in-depth knowledge

about the working Construction companies and how to deal with

different situations.

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This report is account of what I learnt and experienced during

my training and I have tried to complete this report with as much

perfection as possible.

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CERTIFICATE

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DECLARATION

This is to certify that I Ankush Sharma the student of

MAHARISHI MARKANDESHWAR UNIVERSITY

studying in BBA (5th Sem.). Roll no.1208006 has undergone

summer/industrial training in Motia Developers, Zirakpur for six

weeks and have submitted a project/industrial report on the title

"Various Sources of finance forMOTIA DELOPERS PVT.LTD.as assigned by the Company, for partial fulfillment of Degree

of Bachelor of Business Administration (B.B.A.) to

MAHARISHI MARKANDESHWAR UNIVERSITY.

I solemnly declared that the work done by me is original and no copy

of it has been submitted to any other Universities for award of any

other degree/diploma/fellowship or on similar title and topic.

Signature of Student

(Ankush Sharma)

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ACKNOWLEDGEMENT

Gratitude is not a thing of expression; it is more a matter of

feeling.

There is always a sense of gratitude which one express for

others for their help and supervision in achieving the goals. I too

express my deep gratitude to each and every one who has been helpful

to me in completing the project report successfully.

First, of all, I am highly thankful to _____________________,

(M.M.I.M) for allowing me to pursue my Summer Training Report

on Various sources of finance for the companies.

I give my regards and sincere thanks to Mr. Pawan Joshi

(Finance Manager) who has devoted his precious time in guiding me

and helping me it with in time.

I am indebted to the Company employees who supported me in

handling my queries. I feel self-short of words to thanks my parents

and friends who had directly or indirectly instrumental in the

completion of the project.

(Ankush Sharma)

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CONTENTS

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Page No.

2-3

4

5

6

9-10

11-12

13-22

23-38

39-40

41-57

58


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Preface

Certificate

Acknowledgement

Declaration

Introduction

To Company Profile

Literature Review

RESEARCH METHODOLOGY

Research Design

BUSINESS PROFILE

Competitors of Motia Developers Pvt. Ltd.

Comparison Price of Apartments

Balance Sheet

COMPANY PROFILE

SWOT Analysis

PROFILE OF THE STUDY

OBJECTIVE OF THE STUDY

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Analysis & interpretation

Limitation Of the study

Recommendations

Suggestions

Annexure

Bibliography

Questionnaire

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59-69

70

71-72

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INTRODUCTION

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INTRODUCTION

Real estate

A piece of land, including the air above it and the ground

below it, and any buildings or structures on it.

Or

Real estate

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land, including buildings or improvements on it and its

natural assets, as water

the profession or work of an agent in the purchase and

sale of real estate

the buying and selling of real estate for investment or

speculation

LiteratureReview

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RESEARCH

METHODOLOGY

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Research is any organized inquiry carried out to provide

information for solving problems. Business research is a

systematic inquiry that provides information to take business

decisions.

Definition

Research comprises of defining and redefining

hypothesis or suggesting solution, collecting,

organizing and evaluating data making deductions

and reaching conclusions.

By Clifford Woody

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The term Research Methodology here comprises of all

research activities carried on in connection with the Various

Sources Of finance For Motia Developers Pvt. Ltd..

The basis purpose of Research Methodology is to describe

the research procedure. It helps the researchers to the way to

move on for carrying the study.

Process of Research design

Formulation of research problem

Extensive literature survey

Research Design

Collection of data

Analysis of Data

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Interpretation

Recommendation

PROBLEM STATEMENT

The first step in research is formulating a research problem. A

poorly defined problem will not yield any useful result. It is rightlysaid that a problem well defined if half solved.

In order to identify the research problem three categories of

symptomatic situation namely overt difficulties, latent difficulties and

unnoticed opportunities should be studied.

1. Overt difficultiesare those, which are quite apparent, and

which manifest themselves for example if a firm has been

witnessing a decline in sale for same time this could be called

on overt difficulty.

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2. Latent difficultieson the other hand are those, which are not

so apparent and I which if not checked, would soon become

evident for ex. Decline sales may in due course demoralize the

sale staff.

3. Unnoticed Opportunities indicate the potential for growth in a

certain area of marketing. Such opportunities are not clearly

seen and some effort is required to explore them.

As such no problem was given to me while doing my summer training

project but I found the following problems in the organization.

Complicated terms and Conditions

The terms and conditions of every product were so much

complicated that it is not easily understandable by the

customers.

Strict Rules and High Targets

Rules and regulation for the employee of the organization were

so much tight some time they feel very hectic. Moreover the

targets given to them are also very high.

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These definitions differ in detail, but together they give the

essentials of research design. First, the design is a plan for selecting

the sources and types of information used to answer the researchquestion. Second, it is a framework for specifying the relationship

amount the various variables. Third, it is a blueprint that outlines each

procedure from the hypothesis to the analysis of data.

The design provides answers for such questions as these:

Why the study is being made?

What techniques will be used together data?

What kind of sampling will be used?

How will time & cost constraints be dealt with?

How the data can be analyzed? In my study the organization

was Motia Developers and sample size was around 20 persons.

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SOURCE OF DATA COLLECTION

To make the research complete it is very necessary to have

useful and authentic data. There are two types of data collection

sources.

PRIMARY SOURCE:-

Primary data are those, which are collected afresh & for the first

time & this happen to be original in character. In my project simple

well drafted questionnaire was circulated among all respondents. Full

freedom was provided to an individual to answer the questions.

Company bills, balance sheets and the response of the staff

of the company are the major source of information

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SECONDARY SOURCES:-

These are those which are collected by someone else &

which have been passed through statistical process.

Brouchers, Manual, Journals, Magazines, Site of Motia

Groups Pvt. Ltd. and Various Articles lot many inputs for

successful completion of project.

SAMPLING DESIGN

The various sampling plans used in the study were as follows:

Random Sampling

In this sampling technique each and every unit of universe has the

same chance of being included in the sample and every unit is

selected randomly out of population.

Judgment Sampling

In this investigator selects only those items, which represents the

characteristics of the problem under study. The judgment of the

investigator plays an important role in the type of sampling.

Convenience Sampling

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In this the investigator chooses the items according to his own

convenience. The sample size depends upon the convenience of the

investigator but the chances of inaccuracy and biasness are more.

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ExploratoryResearch

design

DescriptiveResearch

Design

ExperimentalResearchDesign


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Business Profile

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Motia Developers Two Projects

Motia Heights

Motia is a name Synonymous with quality, reliability and service in

the field of real estate. Years of dedication and perseverance has led to

develop discrete strategies and improvise solutions that suit thechallenges of the market. The Company always chooses the best

locations. Prime Location with close proximity to the city is an

important aspect for every project at Motia Group.

As Motia developers, we are accomplished in the line, having

successfully executed several residential projects. Also developing

more than 3.5 Acers of Land. The group is executing a major project

in Baddi and the prime most location has already been acquired. The

project in its full construction mode is set to create a landmark in

Himachal Pradeshs Industry hub Baddi.

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Ensconced admits sprawling lush green surroundings, the latest from

Motia Group is Motia Heights , one of the prime opportunities in thispart of the Country . An amalgamation of lifestyle and luxury is the

Hallmark of these dwellings. One gets all modern day amenities with

in a Kilometer radius at Motia Heights. Discover your long

cherished desire to call a space 'your own.' Motia Heights has homes

that are elegantly fashioned and exquisitely designed. They are a

harmonious blend of convenience, comfort and royal splendor along

with all contemporary facilities. What's more, world-class amenities

including shopping complex and schools make it a deal. You find

nature at its best, in its captivating beauty with lush green parks all

around. With an extensive area of about 50,000 square feet, the scenic

park for kids inside the Estate ensures that their childhood is spent in

the lap of nature at leisure.

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Amenities

Freehold Land Approved by Punjab Government

Earthquake Resistant RCC Framed Structure

Optimum Utilization of Available Covered Space

Vaastu-friendly Layout and Design

Strategic location with Splendid Surroundings

Beautiful Landscaped Exterior

Walled Complex with 24 Hours Security

Modern Elevators with Gen-Set Back-Up

24 Hours Water Supply

Provision For Cable Connection

EPBAX And Broadband Facilities

Club with Indoor & Outdoor Games, Discotheque and

Health Club Facilities

Shopping Arcade in front of Complex

Well-Planned Individual Car Parking

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School Site within the Complex

Swimming Pool within the Complex

Price without Escalation Clause

MOTIA PLAZA

(Thinking differently about the future)

The new found love nest of Indian industry Baddi. A small,

industrial town of 45 kms from Chandigarh - has attracted over 75 per

cent of the Rs 10,000 crore invested in Himachal Pradesh in the last

two years. Wipro, Godrej, and Cadbury already here, 300 others,including big names like TVS, Hero Honda, to follow soon. And the

construction of the Chandigarh- Baddi road via Siswan will give

another boost to the industry. The road will reduce the distance

between the two cities by almost 26 km.It is here where you will find

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Motia Plaza, the Complex is the most strategic investment of a

lifetime for any one willing to enjoy the closeness of India's leading

Industrial Township and picturesque of lower Himalayas.

ORGANISATION CHART

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Motia Developers Profile

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ChairmanChairman

DirectorsDirectors

FinanceManagerFinanceManager

MarketingManager

MarketingManager

PurchaseManager

PurchaseManager

ChiefEngineerChief

Engineer

Accounts &financeAssistan

t

Accounts &

financeAssistan

t

Store Incharge

Store Incharge

StoreAssistan

t

StoreAssistan

t

Marketing

Assistant

Marketing

Assistant

Purchase

Assistant

Purchase

Assistant

CivilEngineer

CivilEngineer

Supervisor

Supervisor

Supervisor

Supervisor

Supervisor

Supervisor


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Chairman - Mr. Pawan Bansal

Directors - Mr. Kewal Bansal,

Mr. Labh chand

Mittal,

Mr. Ramesh Mittal,

Mr. Gunjan Mittal

Finance manager - Mr. Pawan Joshi

Chief Engineer - Mr. Mukesh

Marketing - Mr. Kewal Krishan

Rattan

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Location Plan of Motia Developers

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Location Plan of Motia

Developers

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Projects by Motia Developers Pvt. Ltd.

are listed in the table below.

Project Name Location Status

Motia Plaza Baddi Completed

Shakti Vatika Samana Completed

Shiv Shakti Vatika Barnala Township Completed

Motia Royal Estate Zirakpur Completed

Motia Heights Zirakpur Completed

Highway Apartments Kalka Ongoing

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Competitors of Motia Developers

Pvt. Ltd.

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Comparison Price of Apartments

Particulars 3BR (1621 Sqft). 3BR (1381

Sqft)

Apartments Rs.42,14,551/- Rs.35,90,551/-

Power backup Rs.1,00,000/- Rs.1,00,000/-

Car parking Rs.1, 00,000/- Rs.1, 00,000/-

Particulars 2BR(1237Sqft) 3BR (1524Sqft)

Apartments 22, 05,000/- 27, 43,200/-

Particulars 3BR (1800Sqft).

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Apartments 48, 00,000/-

Particulars 3BR (1647 Sqft)

Apartments

Floor Ground Floor Rs. 3788000/-

1st Floor Rs. 3721000/-

2nd Floor Rs. 3673000/-

3rd Floor Rs. 3629000/-

4th Floor Rs. 3581000/-

5th Floor Rs. 3513000/-

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P& L A/c of the year ending 2008-2009

MOTIA DEVELOPERS Pvt.

Ltd. P&L A/c

Particulars 1-Apr-2008 to 31-Mar-2009 Particulars 1-Apr-2008 to 31-Mar-2009

Purchase

Account

45,715,575.00 Gross loss c/o

62,152,172.00BricksPurchase A/c

2,117,278.00

cementPurchase A/c

6,455,575.00

electronic itempurchase A/c

3,507,854.00

elevatorpurchase a/c

5,520,500.00

kitchenpurchase a/c

343,800.00

Marble pur.a/c

4,853,630.00

Misc.item pur.

a/c

3,859,027.00Sanj/bajri pur.

a/c1,973,212.00

Sanitary itemspur. a/c

3,179,474.00

S.R agencies8,537.00

SteelPurchase a/c

10,590,616.00

woodpurchase a/c

3,323,146.00

Direct Expenses16,436,597.00

Freight &cartage exp. A/c

5,845.00

Misc. Buildingexp.

240,057.00

Wages & laborA/c

16,190,695.00

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62,152,172.00 62,152,172.00

Gross loss b/f 62,152,172.00 Indirectincomes 37,557.35Interest

received A/c37,557.35

Indirectexpenses

9,202,042.00

Adv. Expensesa/c

1,171,856.00 Net loss

71,316,656.65

bank chargesa/c

230,841.00

comm. &brokerage a/c

1,575,640.00

com.Maintancecharges a/c

15,300.00

consultancyfees a/c

108,500.00

depreciation584,532.00

electric exp. a/c439,528.00

E.S.I.C A/c17,181.00

Fbt a/c85,320.00

Generatorrunning exp.

276,002.00

income tax A/c12,212.00

insurance a/c48,303.00

interest paida/c

3,551,667.00

misc. ofice exp.56,378.00

newspaper &peroidicals A/c

1,244.00

postage &courier exp.

6,231.00

printing &

statinary a/c

16,525.00provident fund

a/c28,185.00

salary a/c589,550.00

salespromotion

7,440.00

taxes & feesa/c

20,900.00

telephone exp.

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203,734.00vech. Running

exp.154,484.00

welfare a/c489.00

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Particulars As on 31-3-2009 As on 31-3-2008

SOURCES OF FUNDS

Share Capital 53,900,000.00 60,750,000.00

Reserves & surplus 109,172.24 88,145.98

54,009,172.24 60,838,145.98

LOANS FUNDS

Secured Loans 31,163,053.50 22,689,591.00

Unsecured Loans 21,931,535.00 16,931,803.00

53,094,588.50 39,621,394.00

Deferred Tax Liability

Total 107,103,760.74 100,459,539.98

APPLICATION OF FUNDS

Fixed Assets

Gross Block 6,513,276.00 4,966,989.00

Less; Dep 1,864,374.00 902,039.00

Net Block 4,648,902.00 4,064,950.00

CURRENTASSETS,LOANS&ADVANCES

inventories 281,485,766.39 164,785,825.89

Sundry debtors

Cash & Bank balances 9,249,335.87 10,800,478.09

Loans & advances 1,471,925.48 1,336,456.00

292,207,027.74 176,922,759.98

Less: Current Liabilities & provision

Liabilities 189,242,423.00 80,079,444.00

Provisions 509,746.00 448,726.00

189,752,169.00 80,528,170.00

Net Current Assets 102,454,858.74 96,394,589.98

Misc. Expenditure107,103,760.74 100,459,539.98


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Particulars As on 31-3-2009 As on 31-3-2008

SOURCES OF FUNDS

Share Capital 53,900,000.00 60,750,000.00

Reserves & surplus 109,172.24 88,145.98

54,009,172.24 60,838,145.98

LOANS FUNDS

Secured Loans 31,163,053.50 22,689,591.00

Unsecured Loans 21,931,535.00 16,931,803.00

53,094,588.50 39,621,394.00

Deferred Tax Liability

Total 107,103,760.74 100,459,539.98

APPLICATION OF FUNDS

Fixed Assets

Gross Block 6,513,276.00 4,966,989.00

Less; Dep 1,864,374.00 902,039.00

Net Block 4,648,902.00 4,064,950.00

CURRENTASSETS,LOANS&ADVANCES

inventories 281,485,766.39 164,785,825.89

Sundry debtors

Cash & Bank balances 9,249,335.87 10,800,478.09

Loans & advances 1,471,925.48 1,336,456.00

292,207,027.74 176,922,759.98

Less: Current Liabilities & provision

Liabilities 189,242,423.00 80,079,444.00

Provisions 509,746.00 448,726.00

189,752,169.00 80,528,170.00

Net Current Assets 102,454,858.74 96,394,589.98

Misc. Expenditure107,103,760.74 100,459,539.98


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COMPANY

PROFILE

SWOT

S - StrengthW - Weakness

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O - OpportunityT - Threats

PROFILE OF THE STUDY

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Strengths:-

Good Financial Sources

Good Projection

Situated On main Road

Finance options to customers

Market reputation of the company

Good market relations with the

Companys. directors

Weakness:-

Delay in Projection

Lack of highly Qualified Staff

No control Of architecture on project

Opportunities:-

High Market share

High market growth

Availability of land

Threats:-

No. of options available for the

customers

Others flats are selling at lower cost

No Unified System

Price leadership


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Various Sources ofFinance Available

For the Company

One can learn more about a road by traveling it,

Than by consulting all the maps in the world.

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In my SUMMER TRAINING REPORT, I made a research on

Various sources of funds available for the organization I mustforewarn the readers that this project is no a work of excellence by a

scholar. It is a student attempt to watch, record, analyze and

understand the business activities and practical aspects of business by

applying his theoretical knowledge and concepts. Even then I dare to

say that I made the best possible attempt to accomplish this work.

This final chapter starts by looking at the various forms of "shares" as

a means to raise new capital and retained earnings as another source.

However, whilst these may be "traditional" ways of raising funds,

they are by no means the only ones. There are many more sources

available to companies who do not wish to become "public" by means

of share issues. These alternatives include bank borrowing,

government assistance, venture capital and franchising. All have theirown advantages and disadvantages and degrees of risk attached.

Sources of funds

A company might raise new funds from the following sources:

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The capital markets:

New share issues, for example, by companies acquiring a stock market listing for

the first time

Rights issues

Loan stock

Retained earnings

Bank borrowing

Government sources

Venture capital

Franchising.

Ordinary (equity) shares

Ordinary shares are issued to the owners of a company. They have a

nominal or 'face' value, typically of $1 or 50 cents. The market value

of a quoted company's shares bears no relationship to their nominal

value, except that when ordinary shares are issued for cash, the issue

price must be equal to or be more than the nominal value of the

shares.

Deferred ordinary shares

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Are a form of ordinary shares, which are entitled to a dividend only

after a certain date or if profits rise above a certain amount. Voting

rights might also differ from those attached to other ordinary shares.

Ordinary shareholders put funds into their company:

a) By paying for a new issue of shares

b) through retained profits.

Simply retaining profits, instead of paying them out in the form of

dividends, offers an important, simple low-cost source of finance,

although this method may not provide enough funds, for example, if

the firm is seeking to grow.

A new issue of shares might be made in a variety of different

circumstances:

a) The company might want to raise more cash. If it issues ordinary

shares for cash.

b) The company might want to issue shares partly to raise cash, but

more importantly to float' its shares on a stick exchange.

c) The company might issue new shares to the shareholders of another

company, in order to take it over.

New shares issues

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A company seeking to obtain additional equity funds may be:

a) An unquoted company wishing to obtain a Stock Exchange

quotation

b) A company which is already listed on the Stock Exchange wishing

to issue additional new shares.

The methods by which an unquoted company can obtain a quotation

on the stock market are:

An offer for sale

A prospectus issue

A placing

An introduction.

Rights issues

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A rights issue provides a way of raising new share capital by means of

an offer to existing shareholders, inviting them to subscribe cash for

new shares in proportion to their existing holdings.

For example, a rights issue on a one-for-four basis at 280c per share

would mean that a company is inviting its existing shareholders to

subscribe for one new share for every four shares they hold, at a price

of 280c per new share.A company making a rights issue must set a

price which is low enough to secure the acceptance of shareholders,

who are being asked to provide extra funds, but not too low, so as to

avoid excessive dilution of the earnings per share.

Loan stock

Loan stock is long-term debt capital raised by a company for which

interest is paid, usually half yearly and at a fixed rate. Holders of loan

stock are therefore long-term creditors of the company.

Loan stock has a nominal value, which is the debt owed by the

company, and interest is paid at a stated "coupon yield" on this

amount. For example, if a company issues 10% loan stock the coupon

yield will be 10% of the nominal value of the stock, so that $100 of

stock will receive $10 interest each year. The rate quoted is the gross

rate, before tax.

Debentures are a form of loan stock, legally defined as the written

acknowledgement of a debt incurred by a company, normally

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containing provisions about the payment of interest and the eventual

repayment of capital.

Debentures with a floating rate of interest

These are debentures for which the coupon rate of interest can be

changed by the issuer, in accordance with changes in market rates of

interest. They may be attractive to both lenders and borrowers when

interest rates are volatile.

Security

Loan stock and debentures will often besecured. Security may take

the form of eitherafixed chargeor afloating charge.

a)Fixed charge; Security would be related to a specific asset or

group of assets, typically land and buildings. The company would be

unable to dispose of the asset without providing a substitute asset for

security, or without the lender's consent.

b)Floating charge; With a floating charge on certain assets of the

company (for example, stocks and debtors), the lender's security in the

event of a default payment is whatever assets of the appropriate class

the company then owns (provided that another lender does not have aprior charge on the assets). The company would be able, however, to

dispose of its assets as it chose until a default took place. In the event

of a default, the lender would probably appoint a receiver to run the

company rather than lay claim to a particular asset.

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Retained earnings

For any company, the amount of earnings retained within the business

has a direct impact on the amount of dividends. Profit re-invested as

retained earnings is profit that could have been paid as a dividend.

The major reasons for using retained earnings to finance new

investments, rather than to pay higher dividends and then raise new

equity for the new investments, are as follows:

a) The management of many companies believes that retainedearnings are funds which do not cost anything, although this is not

true. However, it is true that the use of retained earnings as a source of

funds does not lead to a payment of cash.

b) The dividend policy of the company is in practice determined by

the directors. From their standpoint, retained earnings are an attractive

source of finance because investment projects can be undertaken

without involving either the shareholders or any outsiders.

c) The use of retained earnings as opposed to new shares or

debentures avoids issue costs.

d) The use of retained earnings avoids the possibility of a change in

control resulting from an issue of new shares.

Another factor that may be of importance is the financial and taxation

position of the company's shareholders. If, for example, because of

taxation considerations, they would rather make a capital profit

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(which will only be taxed when shares are sold) than receive current

income, and then finance through retained earnings would be

preferred to other methods.

A company must restrict its self-financing through retained profits

because shareholders should be paid a reasonable dividend, in line

with realistic expectations, even if the directors would rather keep the

funds for re-investing. At the same time, a company that is looking for

extra funds will not be expected by investors (such as banks) to pay

generous dividends, nor over-generous salaries to owner-directors.

Bank lending

Borrowings from banks are an important source of finance to

companies. Bank lending is still mainly short term, although medium-

term lending is quite common these days.

Short term lending may be in the form of:

a) An overdraft, which a company should keep within a limit set by

the bank. Interest is charged (at a variable rate) on the amount by

which the company is overdrawn from day to day;

b) A short-term loan, for up to three years.

Medium-term loans are loans for a period of from three to ten years.

The rate of interest charged on medium-term bank lending to large

companies will be a set margin, with the size of the margin depending

on the credit standing and riskiness of the borrower. A loan may have

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a fixed rate of interest or a variable interest rate, so that the rate of

interest charged will be adjusted every three, six, nine or twelve

months in line with recent movements in the Base Lending Rate.

Lending to smaller companies will be at a margin above the bank's

base rate and at either a variable or fixed rate of interest. Lending on

overdraft is always at a variable rate. A loan at a variable rate of

interest is sometimes referred to as afloating rate loan. Longer-term

bank loans will sometimes be available, usually for the purchase of

property, where the loan takes the form of a mortgage. When a banker

is asked by a business customer for a loan or overdraft facility, he will

consider several factors, known commonly by the economic.

PARTS

- Purpose

- Amount

- Repayment

- Term

- Security

P The purpose of the loan A loan request will be refused if the purpose

of the loan is not acceptable to the bank.

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A The amount of the loan. The customer must state exactly how much

he wants to borrow. The banker must verify, as far as he is able to

do so, that the amount required to make the proposed investment has

been estimated correctly.

RHow will the loan be repaid? Will the customer be able to obtain

sufficient income to make the necessary repayments?

T What would be the duration of the loan? Traditionally, banks have

offered short-term loans and overdrafts, although medium-term

loans are now quite common.

S Does the loan require security? If so, is the proposed security

adequate?

Leasing

A lease is an agreement between two parties, the "lessor" and the

"lessee". The lessor owns a capital asset, but allows the lessee to use

it. The lessee makes payments under the terms of the lease to the

lessor, for a specified period of time.

Leasing is, therefore, a form of rental. Leased assets have usually been

plant and machinery, cars and commercial vehicles, but might also be

computers and office equipment. There are two basic forms of lease:

"operating leases" and "finance leases".

Operating leases

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Operating leases are rental agreements between the lessor and the

lessee whereby:

a) The lessor supplies the equipment to the lessee

b) The lessor is responsible for servicing and maintaining the leased

equipment

c) The period of the lease is fairly short, less than the economic life of

the asset, so that at the end of the lease agreement, the lessor can

either

i) Lease the equipment to someone else, and obtain a good rent for it,

or

ii) sell the equipment secondhand.

Finance leases

Finance leases are lease agreements between the user of the leased

asset (the lessee) and a provider of finance (the lessor) for most, or all,

of the assets expected useful life.

Other important characteristics of a finance lease:

a) The lessee is responsible for the upkeep, servicing and maintenance

of the asset. The lessor is not involved in this at all.

b) The lease has a primary period, which covers all or most of the

economic life of the asset. At the end of the lease, the lessor would not

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be able to lease the asset to someone else, as the asset would be worn

out. The lessor must, therefore, ensure that the lease payments during

the primary period pay for the full cost of the asset as well asproviding the lessor with a suitable return on his investment.

c) It is usual at the end of the primary lease period to allow the lessee

to continue to lease the asset for an indefinite secondary period, in

return for a very low nominal rent. Alternatively, the lessee might be

allowed to sell the asset on the lessor's behalf (since the lessor is the

owner) and to keep most of the sale proceeds, paying only a small

percentage (perhaps 10%) to the lessor.

Hire purchase

Hire purchase 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 on payment of the final credit installment,

whereas a lessee never becomes the owner of the goods.

Hire purchase agreements usually involve a finance house.

i) The supplier sells the goods to the finance house.

ii) The supplier delivers the goods to the customer who will

eventually purchase them.

iii) The hire purchase arrangement exists between the finance house

and the customer.

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Government assistance

The government provides finance to companies in cash grants and

other forms of direct assistance, as part of its policy of helping to

develop the national economy, especially in high technology

industries and in areas of high unemployment. For example, the

Indigenous Business Development Corporation of Zimbabwe (IBDC)

was set up by the government to assist small indigenous businesses in

that country.

Venture capital

Venture capital is money put into an enterprise which may all be lost

if the enterprise fails. A businessman starting up a new business will

invest venture capital of his own, but he will probably need extra

funding from a source other than his own pocket. However, the term

'venture capital' is more specifically associated with putting money,

usually in return for an equity stake, into a new business, a

management buy-out or a major expansion scheme.

The institution that puts in the money recognizes the gamble inherent

in the funding. There is a serious risk of losing the entire investment,

and it might take a long time before any profits and returns

materialize. But there is also the prospect of very high profits and a

substantial return on the investment. A venture capitalist will require a

high expected rate of return on investments, to compensate for the

high risk.

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d) Details of the management team, with evidence of a wide range of

management skills

e) Details of major shareholders

f) Details of the company's current banking arrangements and any

other sources of finance

g) Any sales literature or publicity material that the company has

issued.

A high percentage of requests for venture capital are rejected on an initial

screening, and only a small percentage of all requests survive both this screening

and further investigation and result in actual investments.

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Franchising

Franchising is a method of expanding business on less capital than

would otherwise be needed. For suitable businesses, it is an alternative

to raising extra capital for growth. Franchisors include Budget Rent-a-

Car, Wimpy, Nando's Chicken and Chicken Inn.

Under a franchising arrangement, a franchisee pays a franchisor for

the right to operate a local business, under the franchisor's trade name.

The franchisor must bear certain costs (possibly for architect's work,establishment costs, legal costs, marketing costs and the cost of other

support services) and will charge the franchisee an initial franchise fee

to cover set-up costs, relying on the subsequent regular payments by

the franchisee for an operating profit. These regular payments will

usually be a percentage of the franchisee's turnover.

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Objectives of the study

I have taken my internship in the real estate sector due to my

personal interest

The main objectives of my internship are:-

To get all the basics knowledge that how to run

business in corporate world.

To get the knowledge about the financial position

of the business. E.g. calculating ratios of the year

2008 & 2009

To get the knowledge about the tax and the

payments of the deals.

To know about the various sources of finance

available for the company

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Findings & Data Analysis

Calculation of ratios for the year 2009

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITES

Current Ratio = 292, 207, 027.74189,752,169. 00

Current Ratio = 1.53:1

Interpretations:-

According to accounting principles, the currentratio of 2:1 is supposed to be an ideal ratio. Now here

the current ratio is 1:53:1 which is low then the, this all

indicates that the company has the lack of liquidity and

shortage of working capital. The reason for low current

ratio is that with the increase in our assets our liabilities

are also increasing

QUICK RATIO = Liquid Assets

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Current Liabilities

QUICK RATIO = 10,721,261.35

189,752,169. 00

QUICK RATIO = 0.056:1

Interpretations:-

Here the liquid ratio is 0.056:1 which

is more then the ideal ratio i.e. 1:1. It is not beneficial for the

growth of the organization. It means companies have not the

proper current assets to pay its liabilities. The reason is that

when our current liabilities are increasing on the other hand

our liquid assets are decreasing.

Debt Equity Ratio = Long-term loans

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Shareholders Funds

Debt equity ratio = 53,094,588.50

54,009,172.24

Debt Equity Ratio = 0.98: 1

Interpretations:-

Here the debt equity ratio is .98:1

which is less then the ideal ratio. This tells that long

term financial position of the company is sound. It

provides the sufficient protection to long term lenders.

Total Assets to debt Ratio = Total Assets

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Debt

Total Assets to debt Ratio = 296,855,929.74

53,094,588.50

Total Assets to debt Ratio = 5.59: 1

Interpretations:-

Here the Total Assets to debt Ratio = 5.59: 1.

It all shows that the use of debts is less then the total assets

and shows a lager safety for the lenders.

Propitiatory Ratio = Shareholders Fund

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Total Assets

Propitiatory Ratio = 54,009,172.24

296855929.74

Propitiatory Ratio = .18 or 18.1%

Interpretations:-

Shareholders funds of the company are 18.1% in comparison

to total assets. It all shows the long term financial position of

the company is very good.

Calculation of ratios for the year 2008

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CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITES

Current Ratio = 176,922,759.9880,528,170.00

Current Ratio = 2.19:1

Interpretations:-

According to accounting principles, the currentratio of 2:1 is supposed to be an ideal ratio. Now here

the current ratio is 2.19:1 which is higher then the, this

all indicates that the company has the good financial

position and they have the ability to pay their current

liabilities.

QUICK RATIO = Liquid Assets

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Current Liabilities

QUICK RATIO = 12,136,934.09

189,752,169. 00

QUICK RATIO = 0.063:1

Interpretations:-

Here the liquid ratio is 0.063:1 which

is more then the ideal ratio i.e. 1:1. It is not beneficial for the

growth of the organization. It means companies have not the

proper current assets to pay its liabilities. The reason is that

when our current liabilities are increasing on the other hand

our liquid assets are decreasing.

Debt Equity Ratio = Long-term loans

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Shareholders Funds

Debt equity ratio = 39,621,394.00

60,838,145.98

Debt Equity Ratio = 0.65: 1

Interpretations:-

Here the debt equity ratio is .65:1

which is much more then the ideal ratio. This tells that

long term financial position of the company is sound.

It provides the sufficient protection to long term

lenders.

Total Assets to debt Ratio = Total Assets

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Debt

Total Assets to debt Ratio = 180,987,709.98

39,621,394.00

Total Assets to debt Ratio = 4.56: 1

Interpretations:-

Here the Total Assets to debt Ratio = 4.56: 1.

It all shows that the use of debts is less then the total assets

and shows a lager safety for the lenders.

Propitiatory Ratio = Shareholders Fund

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Total Assets

Propitiatory Ratio = 60,838,145.98

180,987,709.98

Propitiatory Ratio = .3361 or 33.61%

Interpretations:-

Shareholders funds of the company are 33.61% in

comparison to total assets. It all shows the long term financial

position of the company is very good.

Ratios Comparison

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Year 2009 2008

Current Ratio 1.53 2.19

Quick Ratio0.056 0.063

Debt-equity ratio0.98 0.65

Total Assets to debt

equity Ratio5.59 4.56

Proprietary Ratio 18.1% 33.61%

Limitations of the study

Small sample size: Area covers under report were very small.

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The research was carried out in a shortest spam of last 1 week.As a part of summer training

Some of the respondents are unwilling to give information. E.g.Managers some times not be ready to give their data and viewsabout the company position.

Activity ratios and profitability ratios cant be calculatedbecause the balance sheet contains the WORK IN PROGRESSDATA. So sales of the apartments and the profit cant becalculated.

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Recommendations

Suggestions

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Recommendation refers to the outcome of the research

work done and the suggestions for implementation.

It is suggested that manufacturer should make all efforts to

control cost.

New technology should be applied according to the requirement

of the customer.

Competitors prices of the apartments should also be checked at

different intervals.

Payment should be improved by the Management.

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Annexure

Bibliography

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www.motiaheights.com

www.realestate.com

www.motiagroup.com

Annual reports of Motia Developers Pvt. Ltd.

Brouchers of Motia Developers Pvt. Ltd

News papers

QUESTIONNAIRE

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http://www.motiaheights.com/http://www.realestate.com/http://www.motiagroup.com/http://www.motiaheights.com/http://www.realestate.com/http://www.motiagroup.com/


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Name : ____________________________________

Age : ____________________________________

Sex : ____________________________________

Occupation : ____________________________________

1. Please state where you first heard about MOTIA HEIGHTS?

Friends Advertisement

Internet others (fm, T.V)

2. What factor plays an important role while dealing with the company?

Friends Advertisement

Convincing power of executives Special offers

3. Are you satisfied with dealing with the company?

Yes No

Average cant say

4. What about the cost spent by you?

Minimum Over feited

Average Excessive

5. How you rate the general ambience, design& feel of the apartments?

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1 2 3 4 5

Excellent Good Fair Average Disappointed


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6. How was employees behavior during the dealing?

As usual Hostile

Indifferent Friendly

7. Was their any communication gap between you and the co. executive?

Yes No

Partially cant say

8. Have you understand all the guide lines and the policies of the

company?

Yes No

Limited Partially

9. Did you find any difference between service provided & services

delivered?

Yes No

10. Whether there is a time delay in possession?

Yes At some

Occasions

No

11. From how many years are you associated with the company?

1-3 years 3-5 years

5 or more not further

12. Are you looking forward to continue maintained relationship with the

company?

Yes No

Deciding

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13. Would you like to suggest to others about the company?

Yes No

Complaints:-

Suggestions:-

Documents

Motia Developers