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

SUBMITTED TO
Maharishi Markandesdhwar Institution of Management Mullana (Ambala) (M.M.I.M)

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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
Zirakpur for six

studying in BBA (5th Sem.). Roll no.1208006 has undergone summer/industrial training in Motia Developers,
"Various

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

Sources of finance for MOTIA DELOPERS PVT. of Business Administration (B.B.A.)


to

LTD. as assigned by the Company, for partial fulfillment of Degree


of Bachelor

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
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

59-69 70 71-72

73-77

Limitation Of the study Recommendations


Suggestions

Annexure
Bibliography Questionnaire

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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

Literature Review
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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 rightly said 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 difficulties are 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 difficulties on 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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RESEARCH DESIGN
There are many definitions of research design, but no definition imparts the full range of important aspects. Several examples from leading authors can be cited. Research design is like arrangement of conditions for collection and analysis of data that aims to combine relevance to the research purpose with economy in procedures. Research design is purely and simply the framework of plans for a study that guides the collections and analysis of data. Research design is the conceptual structure within which the research is conducted.

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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 research question. 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.

Exploratory Research design

Descriptive Research Design

Experimental Research Design

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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 the challenges 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 this part 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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Chairman Chairman

Directors Directors

Finance Finance Manager Manager Account Account & ss& finance finance Assistan Assistan tt

Marketing Marketing Manager Manager

Purchase Purchase Manager Manager Purchas Purchas e e Assistan Assistan tt

Chief Chief Engineer Engineer

StoreIn In Store charge charge

Marketin Marketin g g Assistan Assistan tt

Civil Civil Engineer Engineer

Store Store Assistan Assistan tt

Supervis Supervis or or

Supervis Supervis or or

Supervis Supervis or or

Motia Developers Profile

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Chairman Directors

Mr. Pawan Bansal Mr. Kewal Bansal, Mr. Labh chand Mittal, Mr. Ramesh Mittal, Mr. Gunjan Mittal Mr. Pawan Joshi Mr. Mukesh Mr. Kewal Krishan Rattan

Finance manager Chief Engineer Marketing

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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
Motia Plaza Shakti Vatika Shiv Shakti Vatika Motia Royal Estate Motia Heights Highway Apartments

Location
Baddi Samana

Status
Completed Completed

Barnala Township Completed Zirakpur Zirakpur Kalka Completed Completed Ongoing

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Competitors of Motia Developers Pvt. Ltd.

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Comparison Price of Apartments

Particulars Sqft)

3BR (1621 Sqft).

3BR (1381

Apartments Power backup Car parking

Rs.42,14,551/Rs.1,00,000/Rs.1, 00,000/-

Rs.35,90,551/Rs.1,00,000/Rs.1, 00,000/-

Particulars
Apartments

2BR(1237Sqft)
22, 05,000/-

3BR(1524Sqft)
27, 43,200/-

Particulars

3BR (1800Sqft).

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Apartments

48, 00,000/-

Particulars
Apartments Floor Ground Floor 1st Floor 2nd Floor 3rd Floor 4th Floor 5th Floor

3BR (1647 Sqft)

Rs. 3788000/Rs. 3721000/Rs. 3673000/Rs. 3629000/Rs. 3581000/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 Purchase Account Bricks Purchase A/c cement Purchase A/c electronic item purchase A/c elevator purchase a/c kitchen purchase a/c Marble pur. a/c Misc.item pur. a/c Sanj/bajri pur. a/c Sanitary items pur. a/c S.R agencies Steel Purchase a/c wood purchase a/c Direct Expenses Freight & cartage exp. A/c Misc. Building exp. Wages & labor A/c 1-Apr-2008 to 31-Mar-2009 45,715,575.00 2,117,278.00 6,455,575.00 3,507,854.00 5,520,500.00 343,800.00 4,853,630.00 3,859,027.00 1,973,212.00 3,179,474.00 8,537.00 10,590,616.0 0 3,323,146.00 16,436,597.00 5,845.00 240,057.00 16,190,695.0 0 Particulars Gross loss c/o 1-Apr-2008 to 31-Mar-2009 62,152,172.00

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62,152,172.00 Indirect incomes Interest received A/c

62,152,172.00

Gross loss b/f Indirect expenses Adv. Expenses a/c bank charges a/c comm. & brokerage a/c com. Maintance charges a/c consultancy fees a/c depreciation electric exp. a/c E.S.I.C A/c Fbt a/c Generator running exp. income tax A/c insurance a/c interest paid a/c misc. ofice exp. newspaper & peroidicals A/c postage & courier exp. printing & statinary a/c provident fund a/c salary a/c sales promotion taxes & fees a/c telephone exp.

62,152,172.00

37,557.35 37,557.35

9,202,042.00 1,171,856.00 230,841.00 1,575,640.00 15,300.00 108,500.00 584,532.00 439,528.00 17,181.00 85,320.00 276,002.00 12,212.00 48,303.00 3,551,667.00 56,378.00 1,244.00 6,231.00 16,525.00 28,185.00 589,550.00 7,440.00 20,900.00 Net loss 71,316,656.65

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203,734.00 vech. Running exp. welfare a/c 154,484.00 489.00

Particulars
SOURCES OF FUNDS Share Capital Reserves & surplus LOANS FUNDS Secured Loans Unsecured Loans Deferred Tax Liability

As on 31-3-2009
53,900,000.00 109,172.24 54,009,172.24 31,163,053.50 21,931,535.00 53,094,588.50

As on 31-3-2008
60,750,000.00 88,145.98 60,838,145.98 22,689,591.00 16,931,803.00 39,621,394.00 100,459,539.98

Total
APPLICATION OF FUNDS Fixed Assets Gross Block Less; Dep Net Block CURRENT ASSETS,LOANS&ADVANCES inventories Sundry debtors Cash & Bank balances Loans & advances Less: Current Liabilities & provision Liabilities Provisions Net Current Assets Misc. Expenditure

107,103,760.74

6,513,276.00 1,864,374.00 4,648,902.00

4,966,989.00 902,039.00 4,064,950.00

281,485,766.39 9,249,335.87 1,471,925.48 292,207,027.74 189,242,423.00 509,746.00 189,752,169.00 102,454,858.74 107,103,760.74

164,785,825.89 10,800,478.09 1,336,456.00 176,922,759.98 80,079,444.00 448,726.00 80,528,170.00 96,394,589.98 100,459,539.98

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Particulars
SOURCES OF FUNDS Share Capital Reserves & surplus LOANS FUNDS Secured Loans Unsecured Loans Deferred Tax Liability

As on 31-3-2009
53,900,000.00 109,172.24 54,009,172.24 31,163,053.50 21,931,535.00 53,094,588.50

As on 31-3-2008
60,750,000.00 88,145.98 60,838,145.98 22,689,591.00 16,931,803.00 39,621,394.00 100,459,539.98

Total
APPLICATION OF FUNDS Fixed Assets Gross Block Less; Dep Net Block CURRENT ASSETS,LOANS&ADVANCES inventories Sundry debtors Cash & Bank balances Loans & advances Less: Current Liabilities & provision Liabilities Provisions Net Current Assets Misc. Expenditure

107,103,760.74

6,513,276.00 1,864,374.00 4,648,902.00

4,966,989.00 902,039.00 4,064,950.00

281,485,766.39 9,249,335.87 1,471,925.48 292,207,027.74 189,242,423.00 509,746.00 189,752,169.00 102,454,858.74 107,103,760.74

164,785,825.89 10,800,478.09 1,336,456.00 176,922,759.98 80,079,444.00 448,726.00 80,528,170.00 96,394,589.98 100,459,539.98

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COMPANY PROFILE

SWOT
S W - Strength - Weakness

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O T

- Opportunity - Threats Weakness: Delay in Projection Lack of highly Qualified Staff No control Of architecture on project

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

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

PROFILE OF THE STUDY

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Various Sources of Finance 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 must forewarn 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 their own 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 be secured. Security may take the form of either a fixed charge or a floating 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 a prior 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 retained earnings 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 mediumterm 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 a floating 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. R How 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 as providing 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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A venture capital organization will not want to retain its investment in a business indefinitely, and when it considers putting money into a business venture, it will also consider its "exit", that is, how it will be able to pull out of the business eventually (after five to seven years, say) and realize its profits. Examples of venture capital organizations are: Merchant Bank of Central Africa Ltd and Anglo American Corporation Services Ltd. When a company's directors look for help from a venture capital institution, they must recognize that: The institution will want an equity stake in the company it will need convincing that the company can be successful it may want to have a representative appointed to the company's board, to look after its interests. The directors of the company must then contact venture capital organizations, to try and find one or more which would be willing to offer finance. A venture capital organization will only give funds to a company that it believes can succeed, and before it will make any definite offer, it will want from the company management: a) A business plan b) Details of how much finance is needed and how it will be used C) the most recent trading figures of the company, a balance sheet, a cash flow forecast and a profit forecast

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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-aCar, 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 Current Ratio

= =

292, 207, 027.74 189,752,169. 00

1.53:1

Interpretations:According to accounting principles, the current ratio 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

=
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Liquid Assets

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 =


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Total Assets

Debt Total Assets to debt Ratio = Total Assets to debt Ratio =


296,855,929.74 53,094,588.50 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 Propitiatory Ratio = = 54,009,172.24 296855929.74 .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 Current Ratio

= =

176,922,759.98 80,528,170.00

2.19:1

Interpretations:According to accounting principles, the current ratio 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

=
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Shareholders Fund

Total Assets Propitiatory Ratio Propitiatory Ratio = =


60,838,145.98 180,987,709.98

.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
Current Ratio

2009 1.53 0.056 0.98 5.59 18.1%

2008 2.19 0.063 0.65 4.56 33.61%

Quick Ratio

Debt-equity ratio Total Assets to debt equity Ratio Proprietary Ratio

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 views about the company position. Activity ratios and profitability ratios cant be calculated because the balance sheet contains the WORK IN PROGRESS DATA. So sales of the apartments and the profit cant be calculated.

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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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Name Age Sex Occupation

: ____________________________________ : ____________________________________ : ____________________________________ : ____________________________________

1. Please state where you first heard about MOTIA HEIGHTS? Friends Internet Advertisement others (fm, T.V)

2. What factor plays an important role while dealing with the company? Friends Convincing power of executives Advertisement Special offers

3. Are you satisfied with dealing with the company? Yes Average 4. What about the cost spent by you? Minimum Average Over feited Excessive No cant say

5. How you rate the general ambience, design& feel of the apartments? 1 Excellent 2 Good 3 Fair 4 Average 5 Disappointed

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6. How was employees behavior during the dealing? As usual Indifferent Hostile Friendly

7. Was their any communication gap between you and the co. executive? Yes Partially No cant say

8. Have you understand all the guide lines and the policies of the company? Yes Limited No Partially

9. Did you find any difference between service provided & services delivered? Yes 10. Whether there is a time delay in possession? Yes No 11. From how many years are you associated with the company? 1-3 years 5 or more 3-5 years not further At some Occasions No

12. Are you looking forward to continue maintained relationship with the company? Yes Deciding No

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13. Would you like to suggest to others about the company? Yes No

Complaints:-

Suggestions:-

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