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” 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
Maharishi Markandesdhwar Institution of Management Mullana (Ambala) (M.M.I.M)
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.
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.
"Various weeks and have submitted a project/industrial report on the title Sources of finance for MOTIA DELOPERS PVT.A.B.” as assigned by the Company. Roll no. for partial fulfillment of Degree of Bachelor MAHARISHI MARKANDESHWAR UNIVERSITY.) to LTD.). Signature of Student (Ankush Sharma) -5- . of Business Administration (B. 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.DECLARATION This is to certify that I Ankush Sharma the student of MAHARISHI MARKANDESHWAR UNIVERSITY Zirakpur for six studying in BBA (5th Sem.1208006 has undergone summer/industrial training in Motia Developers.
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.I. I am highly thankful to _____________________. I feel self-short of words to thanks my parents and friends who had directly or indirectly instrumental in the completion of the project. it is more a matter of feeling”.M. Pawan Joshi (Finance Manager) who has devoted his precious time in guiding me and helping me it with in time.” I give my regards and sincere thanks to Mr. (M.ACKNOWLEDGEMENT “Gratitude is not a thing of expression. of all.M) for allowing me to pursue my Summer Training Report on “Various sources of finance for the companies. (Ankush Sharma) -6- . I am indebted to the Company employees who supported me in handling my queries.
CONTENTS Page No. 2-3 4 5 6 9-10 11-12 13-22 23-38 39-40 41-57 58 -7- .
Ltd. Preface Certificate Acknowledgement Declaration Introduction • To Company Profile Literature Review RESEARCH METHODOLOGY • Research Design BUSINESS PROFILE • Competitors of Motia Developers Pvt. • Comparison Price of Apartments • Balance Sheet COMPANY PROFILE • SWOT Analysis PROFILE OF THE STUDY OBJECTIVE OF THE STUDY -8- .
Analysis & interpretation 59-69 70 71-72 73-77 Limitation Of the study Recommendations • Suggestions Annexure • Bibliography • Questionnaire -9- .
INTRODUCTION .10 - .
including the air above it and the ground below it. Or Real estate . and any buildings or structures on it.INTRODUCTION Real estate A piece of land.11 - .
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 . land.12 - . including buildings or improvements on it and its natural assets.
13 - ..
14 - .RESEARCH METHODOLOGY .
Definition “Research comprises of defining and redefining hypothesis or suggesting solution.Research is any organized inquiry carried out to provide information for solving problems.15 - . collecting. Business research is a systematic inquiry that provides information to take business decisions. By Clifford Woody . organizing and evaluating data making deductions and reaching conclusions”.
”. Ltd.16 - .The term Research Methodology here comprises of all research activities carried on in connection with the “Various Sources Of finance For Motia Developers Pvt. 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 ↓ .
Overt difficulties are those.17 - . It is rightly said that a problem well defined if half solved. . latent difficulties and unnoticed opportunities should be studied.Interpretation ↓ Recommendation PROBLEM STATEMENT The first step in research is formulating a research problem. A poorly defined problem will not yield any useful result. In order to identify the research problem three categories of symptomatic situation namely overt difficulties. 1. 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.
Unnoticed Opportunities indicate the potential for growth in a certain area of marketing. Moreover the targets given to them are also very high. . • Strict Rules and High Targets Rules and regulation for the employee of the organization were so much tight some time they feel very hectic. As such no problem was given to me while doing my summer training project but I found the following problems in the organization. Decline sales may in due course demoralize the sale staff. which are not so apparent and I which if not checked.18 - . would soon become evident for ex. Latent difficulties on the other hand are those. Such opportunities are not clearly seen and some effort is required to explore them.2. 3. • Complicated terms and Conditions The terms and conditions of every product were so much complicated that it is not easily understandable by the customers.
• 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.19 - . Research design is the conceptual structure within which the research is conducted.RESEARCH DESIGN There are many definitions of research design. Several examples from leading authors can be cited. . but no definition imparts the full range of important aspects. • • Research design is purely and simply the framework of plans for a study that guides the collections and 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. Second. it is a framework for specifying the relationship amount the various variables.These definitions differ in detail.20 - . Third. . it is a blueprint that outlines each procedure from the hypothesis to the analysis of data. 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.
which are collected afresh & for the first time & this happen to be original in character. balance sheets and the response of the staff of the company are the major source of information . There are two types of data collection sources.SOURCE OF DATA COLLECTION To make the research complete it is very necessary to have useful and authentic data. PRIMARY SOURCE:Primary data are those. Company bills.21 - . Full freedom was provided to an individual to answer the questions. In my project simple well drafted questionnaire was circulated among all respondents.
• Convenience Sampling . Journals. Magazines. The judgment of the investigator plays an important role in the type of sampling. Ltd. which represents the characteristics of the problem under study.SECONDARY SOURCES:These are those which are collected by someone else & which have been passed through statistical process. • Judgment Sampling In this investigator selects only those items.22 - . and Various Articles lot many inputs for successful completion of project. Brouchers. Site of Motia Groups Pvt. Manual. 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.
The sample size depends upon the convenience of the investigator but the chances of inaccuracy and biasness are more.In this the investigator chooses the items according to his own convenience.23 - . Exploratory Research design Descriptive Research Design Experimental Research Design .
Business Profile .24 - .
The Company always chooses the best locations. . Years of dedication and perseverance has led to develop discrete strategies and improvise solutions that suit the challenges of the market.25 - . The group is executing a major project in ‘Baddi’ and the prime most location has already been acquired. we are accomplished in the line. Prime Location with close proximity to the city is an important aspect for every project at ‘Motia Group’.5 Acers of Land. reliability and service in the field of real estate.Motia Developers Two Projects Motia Heights ‘Motia’ is a name Synonymous with quality. having successfully executed several residential projects. As Motia developers. Also developing more than 3. The project in its full construction mode is set to create a landmark in Himachal Pradesh’s Industry hub ‘Baddi’.
An amalgamation of lifestyle and luxury is the Hallmark of these dwellings.26 - . With an extensive area of about 50. comfort and royal splendor along with all contemporary facilities. one of the prime opportunities in this part of the Country . They are a harmonious blend of convenience.000 square feet. What's more. the scenic park for kids inside the Estate ensures that their childhood is spent in the lap of nature at leisure. One gets all modern day amenities with in a Kilometer radius at ‘Motia Heights”. You find nature at its best. Discover your long cherished desire to call a space 'your own. the latest from Motia Group is Motia Heights . in its captivating beauty with lush green parks all around.' Motia Heights has homes that are elegantly fashioned and exquisitely designed. .Ensconced admits sprawling lush green surroundings. world-class amenities including shopping complex and schools make it a deal.
Discotheque and Health Club Facilities • Shopping Arcade in front of Complex • Well-Planned Individual Car Parking .27 - .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.
A small.Baddi road via Siswan will give another boost to the industry. And the construction of the Chandigarh.000 crore invested in Himachal Pradesh in the last two years. The road will reduce the distance between the two cities by almost 26 km. industrial town of 45 kms from Chandigarh . Hero Honda. including big names like TVS. and Cadbury already here. 300 others. Godrej.has attracted over 75 per cent of the Rs 10. to follow soon.• 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. Wipro.28 - .It is here where you will find .
ORGANISATION CHART .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.29 - .
30 - .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 .
31 - . Mr. Pawan Bansal Mr. Pawan Joshi Mr.Chairman Directors - Mr. Labh chand Mittal. Gunjan Mittal Mr. Kewal Krishan Rattan Finance manager Chief Engineer Marketing - . Kewal Bansal. Ramesh Mittal. Mukesh Mr. Mr. Mr.
Location Plan of Motia Developers .32 - .
33 - .Location Plan of Motia Developers .
Projects by Motia Developers Pvt. 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 . Ltd.34 - .
Competitors of Motia Developers Pvt. . Ltd.35 - .
00.551/Rs.1.000/Rs.551/Rs. 3BR (1381 Apartments Power backup Car parking Rs.00.1.00.000/- Particulars Apartments 2BR(1237Sqft) 22.42.000/- 3BR(1524Sqft) 27.36 - .14. 43. .000/Rs.90.200/- Particulars 3BR (1800Sqft).Comparison Price of Apartments Particulars Sqft) 3BR (1621 Sqft).1.35. 00.000/- Rs.1. 05.
3581000/Rs.Apartments 48. 3673000/Rs. 3629000/Rs. 00. 3788000/Rs.37 - . 3721000/Rs. 3513000/- .000/- Particulars Apartments Floor Ground Floor 1st Floor 2nd Floor 3rd Floor 4th Floor 5th Floor 3BR (1647 Sqft) Rs.
a/c S.00 3.146.800.item pur.027.00 16.212.455.537. A/c Misc.853.00 2.507.R agencies Steel Purchase a/c wood purchase a/c Direct Expenses Freight & cartage exp.00 .575.590.278.436.172.00 1. Building exp.715.323. 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 Sanj/bajri pur.00 3.00 343.152.973.38 - .00 6.00 10.500.474.630.520.00 5. a/c Misc.00 240.597.00 16.575.616.P& L A/c of the year ending 2008-2009 MOTIA DEVELOPERS Pvt.695.190.117. Ltd.179.0 0 3.00 4.00 3.859.00 8. a/c Sanitary items pur.057.00 5.0 0 Particulars Gross loss c/o 1-Apr-2008 to 31-Mar-2009 62.854.845. Wages & labor A/c 1-Apr-2008 to 31-Mar-2009 45.
I.00 28.00 584.320.532.152.00 37. Maintance charges a/c consultancy fees a/c depreciation electric exp.00 56.00 85.152. Expenses a/c bank charges a/c comm.551.656.00 1.39 - .C A/c Fbt a/c Generator running exp.00 589.181. 62.00 1.00 1.002.00 276.212. a/c E.303.62.841.00 7.557. newspaper & peroidicals A/c postage & courier exp.856.575. ofice exp. printing & statinary a/c provident fund a/c salary a/c sales promotion taxes & fees a/c telephone exp.00 108.00 12.35 126.96.36.1990.00 3.557.528.231.440.00 6.00 15.00 439.378.500.00 16.00 230.00 20.185.525.244.00 Net loss 71.300.65 .152.042.172.00 Indirect incomes Interest received A/c 62. & brokerage a/c com.640.S.316.00 Gross loss b/f Indirect expenses Adv.667.00 17. income tax A/c insurance a/c interest paid a/c misc.00 48.550.202.35 37.171.
485.966.98 .LOANS&ADVANCES inventories Sundry debtors Cash & Bank balances Loans & advances Less: Current Liabilities & provision Liabilities Provisions Net Current Assets Misc.335.98 60.00 39.726. Running exp.027.50 As on 31-3-2008 60.528.374.24 54.00 4.172.989.170.785.459.207. Expenditure 107.000.336.902.444.00 109.423.00 96.74 107.00 88.242.98 22.459.24 31.00 448.394.689.74 164.734. welfare a/c 154.74 6.535.276.145.249.00 Particulars SOURCES OF FUNDS Share Capital Reserves & surplus LOANS FUNDS Secured Loans Unsecured Loans Deferred Tax Liability As on 31-3-2009 188.8.131.522. Dep Net Block CURRENT ASSETS.766.00 4.00 189.513.750.00 176.589.760.621.838.00 16.454.094.98 100.591.00 53.103.09 1.539.00 902.900.053.931.800.925.009.471.172.50 21.394.539.858.98 Total APPLICATION OF FUNDS Fixed Assets Gross Block Less.74 189.864.064.931.39 9.48 292.803.00 102.89 10.759.00 509.079.922.00 281.484.950.039.87 1.163.746.00 4.648.00 1.588.00 489.203.103.00 80.98 80.825.00 100.000.00 vech.760.456.478.40 - .
336.785.87 1.00 281.800.98 22.459.145.335.621.528.064.902.760.48 292.242.00 448.079.170.00 102.74 189.09 1.98 100.00 100.74 164.103.513.Particulars SOURCES OF FUNDS Share Capital Reserves & surplus LOANS FUNDS Secured Loans Unsecured Loans Deferred Tax Liability As on 31-3-2009 53.485.00 16.922.74 107.276.74 6.394.766.539.825.456.589.454.423.053.444.98 .LOANS&ADVANCES inventories Sundry debtors Cash & Bank balances Loans & advances Less: Current Liabilities & provision Liabilities Provisions Net Current Assets Misc.989.535.478.838.00 4.925.00 80.009.24 31.648.00 109.172.931.726.374.000.858.459. Expenditure 107.591.900.00 1.027.746.931.689.98 80.000.950.803.00 184.108.40.2069.145.094.98 60.750. Dep Net Block CURRENT ASSETS.50 As on 31-3-2008 60.207.471.00 4.172.00 4.00 509.41 - .394.039.39 9.00 53.89 10.760.169.24 54.00 96.864.00 189.98 Total APPLICATION OF FUNDS Fixed Assets Gross Block Less.163.00 902.759.00 176.50 21.00 88.752.966.588.
42 - .Weakness .Strength .COMPANY PROFILE SWOT S W .
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 Company’s. directors Opportunities: High Market share High market growth Availability of land Threats: No.O T . of options available for the customers Others flats are selling at lower cost No Unified System Price leadership PROFILE OF THE STUDY .Opportunity .43 - .
“Than by consulting all the maps in the world.44 - .” .Various Sources of Finance Available For the Company One can learn more about a road by traveling it.
Sources of funds A company might raise new funds from the following sources: . record. analyze and understand the business activities and practical aspects of business by applying his theoretical knowledge and concepts.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. venture capital and franchising. government assistance. However. whilst these may be "traditional" ways of raising funds. All have their own advantages and disadvantages and degrees of risk attached. they are by no means the only ones. These alternatives include bank borrowing.45 - . It is a student attempt to watch. 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. There are many more sources available to companies who do not wish to become "public" by means of share issues. Even then I dare to say that I made the best possible attempt to accomplish this work.
Ordinary (equity) shares Ordinary shares are issued to the owners of a company. typically of $1 or 50 cents.The capital markets: New share issues. by companies acquiring a stock market listing for the first time • • • • • • • Rights issues Loan stock Retained earnings Bank borrowing Government sources Venture capital Franchising. for example. They have a nominal or 'face' value.46 - . except that when ordinary shares are issued for cash. The market value of a quoted company's shares bears no relationship to their nominal value. Deferred ordinary shares . the issue price must be equal to or be more than the nominal value of the shares.
in order to take it over.47 - . if the firm is seeking to grow. 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.Are a form of ordinary shares. A new issue of shares might be made in a variety of different circumstances: a) The company might want to raise more cash. although this method may not provide enough funds. If it issues ordinary shares for cash. simple low-cost source of finance. offers an important. for example. instead of paying them out in the form of dividends. c) The company might issue new shares to the shareholders of another company. which are entitled to a dividend only after a certain date or if profits rise above a certain amount. Simply retaining profits. b) The company might want to issue shares partly to raise cash. New shares issues . but more importantly to float' its shares on a stick exchange.
Rights issues .48 - .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: ℵ An offer for sale ℵ A prospectus issue ℵ A placing ℵ An introduction.
inviting them to subscribe cash for new shares in proportion to their existing holdings.A rights issue provides a way of raising new share capital by means of an offer to existing shareholders. before tax. 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. and interest is paid at a stated "coupon yield" on this amount. so as to avoid excessive dilution of the earnings per share. normally . The rate quoted is the gross rate. if a company issues 10% loan stock the coupon yield will be 10% of the nominal value of the stock. which is the debt owed by the company. For example.49 - . usually half yearly and at a fixed rate. but not too low. Loan stock has a nominal value.A company making a rights issue must set a price which is low enough to secure the acceptance of shareholders. at a price of 280c per new share. who are being asked to provide extra funds. Debentures are a form of loan stock. Holders of loan stock are therefore long-term creditors of the company. Loan stock Loan stock is long-term debt capital raised by a company for which interest is paid. legally defined as the written acknowledgement of a debt incurred by a company. For example. so that $100 of stock will receive $10 interest each year.
in accordance with changes in market rates of interest. Security would be related to a specific asset or group of assets. They may be attractive to both lenders and borrowers when interest rates are volatile. stocks and debtors). Debentures with a floating rate of interest These are debentures for which the coupon rate of interest can be changed by the issuer. The company would be unable to dispose of the asset without providing a substitute asset for security. The company would be able. the lender would probably appoint a receiver to run the company rather than lay claim to a particular asset. In the event of a default. Security Loan stock and debentures will often be secured. With a floating charge on certain assets of the company (for example. Security may take the form of either a fixed charge or a floating charge. typically land and buildings. . or without the lender's consent. 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). to dispose of its assets as it chose until a default took place.50 - . a) Fixed charge.containing provisions about the payment of interest and the eventual repayment of capital. b) Floating charge. however.
However. although this is not true. d) The use of retained earnings avoids the possibility of a change in control resulting from an issue of new shares.51 - . Another factor that may be of importance is the financial and taxation position of the company's shareholders.Retained earnings For any company. are as follows: a) The management of many companies believes that retained earnings are funds which do not cost anything. The major reasons for using retained earnings to finance new investments. c) The use of retained earnings as opposed to new shares or debentures avoids issue costs. From their standpoint. the amount of earnings retained within the business has a direct impact on the amount of dividends. because of taxation considerations. it is true that the use of retained earnings as a source of funds does not lead to a payment of cash. If. rather than to pay higher dividends and then raise new equity for the new investments. retained earnings are an attractive source of finance because investment projects can be undertaken without involving either the shareholders or any outsiders. Profit re-invested as retained earnings is profit that could have been paid as a dividend. for example. b) The dividend policy of the company is in practice determined by the directors. they would rather make a capital profit .
(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.
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.
- 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?
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".
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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 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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paying only a small percentage (perhaps 10%) to the lessor. with the exception that ownership of the goods passes to the hire purchase customer on payment of the final credit installment. 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. Hire purchase Hire purchase is a form of installment credit. 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.be able to lease the asset to someone else. The lessor must. whereas a lessee never becomes the owner of the goods. .56 - . ii) The supplier delivers the goods to the customer who will eventually purchase them. therefore. Hire purchase is similar to leasing. as the asset would be worn out. Hire purchase agreements usually involve a finance house. Alternatively. iii) The hire purchase arrangement exists between the finance house and the customer. i) The supplier sells the goods to the finance house. in return for a very low nominal rent. 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.
A venture capitalist will require a high expected rate of return on investments. . the term 'venture capital' is more specifically associated with putting money.Government assistance The government provides finance to companies in cash grants and other forms of direct assistance. For example. into a new business. but he will probably need extra funding from a source other than his own pocket. the Indigenous Business Development Corporation of Zimbabwe (IBDC) was set up by the government to assist small indigenous businesses in that country. and it might take a long time before any profits and returns materialize. usually in return for an equity stake. as part of its policy of helping to develop the national economy. especially in high technology industries and in areas of high unemployment.57 - . There is a serious risk of losing the entire investment. However. a management buy-out or a major expansion scheme. A businessman starting up a new business will invest venture capital of his own. But there is also the prospect of very high profits and a substantial return on the investment. The institution that puts in the money recognizes the gamble inherent in the funding. Venture capital Venture capital is money put into an enterprise which may all be lost if the enterprise fails. to compensate for the high risk.
and before it will make any definite offer. A venture capital organization will only give funds to a company that it believes can succeed. 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. it will also consider its "exit". The directors of the company must then contact venture capital organizations. 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.58 - . and when it considers putting money into a business venture. a balance sheet. to try and find one or more which would be willing to offer finance. how it will be able to pull out of the business eventually (after five to seven years. When a company's directors look for help from a venture capital institution. to look after its interests. Examples of venture capital organizations are: Merchant Bank of Central Africa Ltd and Anglo American Corporation Services Ltd. that is. say) and realize its profits. a cash flow forecast and a profit forecast .A venture capital organization will not want to retain its investment in a business indefinitely.
.59 - .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.
Franchisors include Budget Rent-aCar. establishment costs.Franchising Franchising is a method of expanding business on less capital than would otherwise be needed. These regular payments will usually be a percentage of the franchisee's turnover. . a franchisee pays a franchisor for the right to operate a local business. under the franchisor's trade name.60 - . it is an alternative to raising extra capital for growth. Under a franchising arrangement. 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. For suitable businesses. Wimpy. Nando's Chicken and Chicken Inn. The franchisor must bear certain costs (possibly for architect's work. legal costs.
61 - . E. ℵ To get the knowledge about the financial position of the business. calculating ratios of the year 2008 & 2009 ℵ To get the knowledge about the tax and the payments of the deals.g. ℵ To know about the various sources of finance available for the company .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:- ℵ To get all the basics knowledge that how to run business in corporate world.
74 189. this all indicates that the company has the lack of liquidity and shortage of working capital.752.169. Now here the current ratio is 1:53:1 which is low then the.53:1 Interpretations:According to accounting principles. 027. 00 1. the current ratio of 2:1 is supposed to be an ideal ratio. 207.62 - Liquid Assets . The reason for low current ratio is that with the increase in our assets our liabilities are also increasing • QUICK RATIO = .Findings & Data Analysis Calculation of ratios for the year 2009 • CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITES Current Ratio Current Ratio = = 292.
169. It is not beneficial for the growth of the organization.35 189. 00 QUICK RATIO = 0.721.261. It means companies have not the proper current assets to pay its liabilities.Current Liabilities QUICK RATIO = 10.056:1 which is more then the ideal ratio i.752. • Debt Equity Ratio = Long-term loans . 1:1.e. The reason is that when our current liabilities are increasing on the other hand our liquid assets are decreasing.056:1 Interpretations:Here the liquid ratio is 0.63 - .
64 - Total Assets .588. This tells that long term financial position of the company is sound.24 Debt Equity Ratio = 0.094. • Total Assets to debt Ratio = .98:1 which is less then the ideal ratio.172.009.98: 1 Interpretations:Here the debt equity ratio is .50 54.Shareholders Funds Debt equity ratio = 53. It provides the sufficient protection to long term lenders.
50 5. • Propitiatory Ratio = Shareholders Fund .74 53.65 - . It all shows that the use of debts is less then the total assets and shows a lager safety for the lenders.59: 1.588.094.929.855.Debt Total Assets to debt Ratio = Total Assets to debt Ratio = 296.59: 1 Interpretations:Here the Total Assets to debt Ratio = 5.
Total Assets Propitiatory Ratio Propitiatory Ratio = = 54. Calculation of ratios for the year 2008 .74 .24 296855929.1% in comparison to total assets. It all shows the long term financial position of the company is very good.009.18 or 18.172.1% Interpretations:Shareholders funds of the company are 18.66 - .
67 - .00 2.19:1 Interpretations:According to accounting principles.528. the current ratio of 2:1 is supposed to be an ideal ratio.922. Now here the current ratio is 2. • QUICK RATIO = Liquid Assets .• CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITES Current Ratio Current Ratio = = 176.170. this all indicates that the company has the good financial position and they have the ability to pay their current liabilities.19:1 which is higher then the.759.98 80.
169.752. It is not beneficial for the growth of the organization. It means companies have not the proper current assets to pay its liabilities.934. The reason is that when our current liabilities are increasing on the other hand our liquid assets are decreasing.68 - . 1:1. 00 QUICK RATIO = 0.063:1 which is more then the ideal ratio i. • Debt Equity Ratio = Long-term loans .063:1 Interpretations:Here the liquid ratio is 0.09 189.e.Current Liabilities QUICK RATIO = 12.136.
838.65:1 which is much more then the ideal ratio.145.00 60.98 Debt Equity Ratio = 0.394.Shareholders Funds Debt equity ratio = 39.69 - . • Total Assets to debt Ratio = Total Assets . It provides the sufficient protection to long term lenders.621. This tells that long term financial position of the company is sound.65: 1 Interpretations:Here the debt equity ratio is .
394.Debt Total Assets to debt Ratio = 180.987.709.98 39.621.56: 1 Interpretations:Here the Total Assets to debt Ratio = 4. • Propitiatory Ratio = .00 Total Assets to debt Ratio = 4.70 - Shareholders Fund .56: 1. It all shows that the use of debts is less then the total assets and shows a lager safety for the lenders.
709.98 180.3361 or 33.838.98 .61% Interpretations:Shareholders funds of the company are 33.Total Assets Propitiatory Ratio Propitiatory Ratio = = 60.987.71 - . Ratios Comparison .61% in comparison to total assets. It all shows the long term financial position of the company is very good.145.
1% 2008 2.056 0.59 18.063 0.Year Current Ratio 2009 1.72 - . .19 0.98 5.53 0.56 33.65 4.61% 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.
Activity ratios and profitability ratios can’t be calculated because the balance sheet contains the WORK IN PROGRESS DATA. Managers some times not be ready to give their data and views about the company position. E. So sales of the apartments and the profit can’t be calculated. .g. As a part of summer training Some of the respondents are unwilling to give information. The research was carried out in a shortest spam of last 1 week.73 - .
74 - .Recommendations Suggestions .
• It is suggested that manufacturer should make all efforts to control cost.Recommendation refers to the outcome of the research work done and the suggestions for implementation. • New technology should be applied according to the requirement of the customer. • Competitor’s prices of the apartments should also be checked at different intervals. . • Payment should be improved by the Management.75 - .
Annexure Bibliography .76 - .
Ltd.www. Brouchers of Motia Developers Pvt.com www.realestate. Ltd News papers QUESTIONNAIRE .motiaheights.com Annual reports of Motia Developers Pvt.77 - .motiagroup.com www.
T. How you rate the general ambience. design& feel of the apartments? 1 Excellent 2 Good 3 Fair 4 Average 5 Disappointed .V) 2.78 - . What about the cost spent by you? Minimum Average Over feited Excessive No can’t say 5. Please state where you first heard about “MOTIA HEIGHTS”? Friends Internet Advertisement others (fm. Are you satisfied with dealing with the company? Yes Average 4. What factor plays an important role while dealing with the company? Friends Convincing power of executives Advertisement Special offers 3.Name Age Sex Occupation : ____________________________________ : ____________________________________ : ____________________________________ : ____________________________________ 1.
How was employee’s behavior during the dealing? As usual Indifferent Hostile Friendly 7. executive? Yes Partially No can’t say 8.6. Have you understand all the guide lines and the policies of the company? Yes Limited No Partially 9.79 - . Are you looking forward to continue maintained relationship with the company? Yes Deciding No . Did you find any difference between service provided & services delivered? Yes 10. Was their any communication gap between you and the co. 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.
13. Would you like to suggest to others about the company? Yes No Complaints:- Suggestions:- .80 - .