Final Project Report

SUMMER TRAINING PROJECT

REPORT ON

A STUDY INTO FEASIBILITY OF SAHARA CITY HOMES

SUBMITTED TO U.P. TECHNICAL UNIVERSITY, LUCKNOW FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Session: 2008-2009

UNDER THE GUIDANCE OF: - SUBMITTED BY: -

Mr. Pradeep Singh Ashutosh Pandey

CFO (Housing and Infrastructure) Roll No: 0827870007

Sahara Prime City Limited M.B.A. IIIrd Sem.

ARYAN INSTITUTE OF MANAGEMENT & COMPUTER STUDIES, AGRA (U.P.)

CODE: 278

Acknowledgement

God has set limit to the depth of the sea and height of the mountain but he has failed to set the

limit to success or perfection. Hence I can’t claim perfection in presenting this project.

I, Ashutosh Pandey, am feeling great pleasure in presenting this project. I extremely express

my sincere gratitude to Mr. Pradeep Singh, CFO (Housing and Infrastructure) Sahara India

Pariwar, Lucknow for accepting me as a summer trainee in the Account and Finance

department of Housing and Infrastructure. I extend my thanks to my mentor Mr. Mudit

Saxena (Housing and Infrastructure) of Sahara India Pariwar and his staff members under the

personal guidance of whom I completed project work.

I would also like to thank Dr.R.C.Gupta Director of Aryan Institute of Management and

Computer Studies & Dr.Piyush Shailya my Faculty Guide who helped me in preparing

my summer training project report on time.

Date: Ashutosh

Pandey

Preface

This project was undertaken to find out the “Financial feasibility of Sahara’s new real

estate venture” at SAHARA CITY HOMES. It includes all the vital and financial details

based on certain assumptions provided by the competent authorities of the organization in

keeping with the actual financial data.

A questionnaire was circulated to find out the demand of Sahara City Homes. The sample

size was taken 100. For this purpose firstly the economic condition of the city was

analyzed .After analyzing the data, the interpretation were made. It was found to be positive.

The financial statements made under this study are:-

Total fund flow, Inflows, Outflows, Advances from customers, Work in Progress, Bank

Account, Profit & loss and Balance Sheet. Charts and Bar graphs are also drawn depicting the

same.

Based on the above financial statement Capital Budgeting techniques and Ratio were applied.

Finally the SWOT analysis of the organization was done and thereafter recommendations

were made.

Declaration

I, Ashutosh Pandey, hereby declare that I have carried out summer training project on the

topic. “A STUDY INTO FEASIBILITY OF SAHARA CITY HOMES” in Sahara Prime

City Limited, Lucknow.

I further declare this project work is my original work and no part of this report has been

published or submitted to anybody or university award of any other Degree or Diploma.

DATE:

PLACE: AGRA

ASHUTOSH PANDEY

Roll No.:0827870007

M.B.A. IIIrd Semester

CONTENTS

Page No.

CHAPTER 1-REAL ESTATES INDUSTRY:AN INTRODUCTION

CHAPTER 2-AN OVERVIEWOF:

SAHARA CITY HOMES

CHAPTER 3-FINANCIAL FEASIBILITY OF SAHARA’S NEW REAL ESTATE VENTURE

SIGNIFICANCE OF THE PROJECT

OBJECTIVES & HYPOTHESIS

RESEARCH METHODOLOGY

COLLECTION OF DATA

SAMPLE SIZE

ANALYTICAL TOOLS

CHAPTER 4- DATA INTERPRETATION

AND ANALYSIS

CHAPTER 5- FINDINGS AND SUGGESTIONS

CHAPTER 6- CONCLUSIONS

ANNEXURE-

QUESTIONNAIRE BIBLIOGRAPHY

INTRODUCTION

The global financial crisis and the resultant slowdown in the global economy during the year

2008-2009 have halted industrial and business expansion. The subsequent drying up of

liquidity has led to an overall slowdown in the real estate sector in India.

There has been sales slowdown across all real estate asset classes: Residential,

Commercial, SEZ/Industry Parks.

Demand in real estate has remained grim, primarily due to low consumer confidence. This

can be attributed to a weak economic scenario. High levels of inflation led to the government

increasing interest rates. This led to the drying up of liquidity available for businesses to

expand, leading to a slowdown in the commercial real estate demand. The increase in the

cost of finance also led to a drop in residential real estate demand.

According to a report released by UBS Investment Research in April 2009, unsold inventory

with developers in major residential real estate destinations in India is still high at around

18% of the properties being promised for delivery over the next 12 months.

The inventory situation is not limited to the residential space. Recent data from Jones Lang

Lasalle REIS on supply and vacancy for office space in Delhi and Mumbai indicates that

office vacancy rates are very high. However, analysts and industry experts believe that long

term prospects of the Indian real estate sector remain promising.

According to ASSOCHAM, the Indian domestic real estate market is estimated to be

approximately USD 15 billion, of which FDI contributions are expected to be less than USD

4 billion.

The share of FDI in real estate is expected to increase manifold in the coming years with

the gradual relaxation of ceiling in construction space permitted to foreign investors.

India’s growing young population, rapid urbanization, growth in industry and services and

rapid development of tourism are factors that will propel real estate demand in the long term.

A number of reforms introduced by the Government in recent years have contributed to the

scorching pace of development of the Indian Real Estate Industry in the past and will

facilitate future growth. These real estate reforms include:

Repealing the Urban Land (Ceiling and Regulation) Act, 1976 by a large number of

Indian States

Allowing FDI upto 51% in single brand retail outlets and 100% in cash and carry

In April 2008, the Securities and Exchange Board of India (SEBI) announced

amendments to the SEBI (Mutual Funds)

Regulations 1996 permitting the launch of Real Estate Mutual Funds (REMFs) in

India. REMFs are required to invest at least 35% of the net assets of the scheme

directly in real estate (in ready-to-use property that assures rental income and capital

appreciation) not stating the maximum investment limit

Real Estate Investment Trusts (REITs) have been allowed entry into India. REITs

cater to the capital requirement of the real estate sector as it enables the company easy

access to funds and preferable exit options

Real Estate

The real estate story in India is growing bigger by the day. Industry experts believe that

Indian real estate has huge demand potential in almost every sector -- especially commercial,

residential and retail.

Growth in commercial office space requirement is led by the burgeoning outsourcing and

information technology (IT) industry. By 2010, the IT sector alone is expected to require 150

million sq.ft. of space across major cities. It is estimated that in the residential sector there is

a housing shortage of 19.4 million units out of which 6.7 million are in urban India. The

increase in purchasing power and exposure to organised retail formats has redefined the

consumption pattern. As a result, retail projects have been mushrooming across even B-grade

cities. The retail market is expected to grow at around 35 per cent. Industry observers feel

that this growth is facilitated by favourable demographics, increasing purchasing power,

existence of customer-friendly banks and housing finance companies, professionalism in real

estate and reforms initiated by the Government to attract global investors.

Global Majors in Indian Real Estate

Policy changes introduced by the Government in February 2005 allowed 100 per cent foreign

investments in construction projects with fast-track approvals. But the real attraction for

foreign investors is potential investment returns of 25 per cent and more in Indian projects

that might be hard to come by in the US and in Western Europe today. A report by property

consultants Jones Lang LaSalle estimates that US$ 10 billion foreign investment will be

injected into the Indian real estate sector in the next 12-18 months. International companies

like Ayala of the Philippines, Signature from Dubai, Och-Ziff Capital, EurIndia and Old Lane

have indicated their interest in entering the Indian real estate market soon. On the cards is

sizeable FDI inflow from Malaysia, followed by the UK, US, Israel and Singapore.

Industry sources say over 90 foreign investors are already in the country tapping investment

avenues. Nearly two dozen US funds are raising US$ 3.5 billion for investments in Indian

realty. Those raising the funds include Wall Street powerhouses such as the Blackstone

Group (US$ 1 billion) Goldman Sachs (US$ 1 billion), Citigroup Property Investors (US$

125 million), Morgan Stanley (US$ 70 million) and GE Commercial Finance Real Estate

(US$ 63 million). Others raising funds are JP Morgan, Warburg Pincus, Merrill Lynch,

Lehman Brothers, Warren Buffett’s Berkshire Hathaway, Colony Capital and Starwood

Capital.

In mid-2007, Morgan Stanley closed a deal worth about US$ 150 million with Oberoi

Constructions in Mumbai. The Nakheel Group in Dubai entered into a US$ 10 billion deal

with DLF for residential projects in Tier I and II cities. This was followed by three financial

institutions -- Khaleej Finance and Investment (KFI) from Bahrain, Kuwait Investment

Company (KIC) and Kuwait Finance House (KFH) -- from the Middle East promoting a US$

200 million fund for investing in India. Called the 'Indian Private Equity Fund', it targets

activities with controlled risks in growing sectors like real estate. Close on its heels,

California Public Employees’ Retirement System entered India, investing US$ 100 million in

a US$ 400-million real estate fund promoted by IL&FS. Ascendas, Asia’s leading business

space provider is launching the first property trust of Indian assets worth US$ 500 million in

Singapore in July 2007 with the renowned real estate developer Embassy Group.

Financial Institutions in Real Estate

Indian financial institutions are competing with each other to invest in this higher return

segment. Some of the prominent companies promoting real estate funds in India are HDFC

Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture

Capital Fund (a group venture of Pantaloon Retail India Ltd) and ICICI’s real estate fund,

India Advantage Fund. Regulated under SEBI’s (Securities and Exchange Board of India)

Venture Capital Funds, these are closed-ended schemes with an initial public offer (IPO)

contributing to a discount on NAVs (Net Asset Value).

The Tata group has joined hands with private equity firm, Xander, through its group company

Trent in April 2007 to raise US$ 1 billion for an institutional retail real estate fund. India's top

real-estate firm DLF has raised US$ 2.24 billion in the country's largest initial public offering

in June 2007. It has also entered into a joint venture agreement with Indian pharmaceutical

major Ranbaxy group company Fortis Healthcare to set up hospitals across the country with

investments of about US$ 1.5 billion. Meanwhile, an HDFC sponsored real estate fund has

been permitted to bring up to US$ 790 million of FDI into the country, while Indiabulls Real

Estate (IREL) is looking to raise up to US$ 1.2 billion.

Retailers and Malls

India has emerged as the most attractive destination for retailers in 2007. According to the

latest AT Kearney study, for the third year in a row, India leads the annual list of most

attractive emerging markets for retail investment followed by Russia and China.

Organised retail, which currently accounts for only 4.6 per cent of the US$ 270 billion Indian

retail sector, is expected to grow at 37 per cent in 2007 and 42 per cent in 2008, according to

India Retail Report 2007. The report adds that organised retail in India has the potential to

add over US$ 45 billion business by the year 2010.

This is expected to create a demand for around 220 million square feet of retail space by

2010. According to industry estimates, 27 million square feet of organised retail space is

currently available. Another 90 million square feet is expected to be added by 2008 from 263

mall projects. Of these, 18 million square feet is slated to come up in Delhi as well as in

Mumbai, 9.5 million square feet in Ludhiana, 6 million square feet in Chandigarh and 3.6

million square feet in Ahmedabad.

With the retail sector experiencing a boom, the country is witnessing a spurt in extremely

large retail spaces. Shopping malls with over 1 million sq ft of space have become the order

of the day. About 20 of these are now at various stages of construction across the country. In

the National Capital Region (NCR), Unitech's Great India Place has a million square feet (sq

ft) of retail space. In Mumbai, at least eight malls covering over 1 million sq ft each include

R-Mall at Ghatkopar, and two 1 million sq feet plus malls proposed for Thane. In Bangalore,

at least three malls with similar dimensions are under development. Ludhiana will soon have

a 1.6-million sq ft mall by Today Homes.

As the competition in the market intensifies, builders are going out of their way to be

different. Specialised malls, designer brands and multi-movie options are marking the

shopper's day out. Gurgaon, on the suburbs of New Delhi, has a jewellery mall and will soon

have an auto mall. Bangalore will get an exclusive furniture mall. Two malls, first of their

kind, targeting foreign tourists, will come up at tourist hotspots--Goa and Udaipur--with a

projected cost of around US$ 22 million each. A furnishings mall is coming up on Elgin road

in Kolkata. And India's largest theme amusement park, Noida Entertainment City (E-City),

will stand upon 150 acres approximately. Discount malls are also on the rise. Top realtors and

local retail chains are developing malls in regional boroughs, specifically to sell premium

branded goods at prices 30 to 40 per cent cheaper than the maximum retail price. At least 50

discount malls are expected to come up in the next two years across the country, positioned in

the middle-to-the-premium end of the market.

In what could perhaps become a trend in the booming retail business, Reliance Retail, Future

Group and Bharti-WalMart are among leading retail companies that are acquiring housing

societies and colonies in Ahmedabad to knock down and build mega-retail stores.

Big Deals in Realty

The biggest mall of the world--Mall of India--planned by DLF Universal along NH-8--will

have 32 acres spanning a huge entertainment area and large city town squares offering a total

retail experience.Chennai, on the radar of foreign real estate funds, recently witnessed two

big-ticket property deals. AIG Real Estate Fund and RMZ Corporation purchased an 11-acre

plot at Guindy for US$ 686.9 milion and Shyam Kothari, in another deal, bought IDBI's 2.5

acres Boat Club property in Chennai for US$ 40.3 million.

Residential Development

Majority of retailers are now planning to expand within the current city, and a similar

percentage is willing to open new stores in other cities within India. The most confident

among them are home and interior retailers and sports apparel/equipment retailers, followed

by department stores and jewellery and food retails.

While the last decade saw the transition of sleepy towns like Gurgaon, Noida and Faridabad

into enviable addresses, today these tier I towns, as they are called, are saturated and far

beyond the means of the middle class. Naturally, the opportunity in the residential

development in Tier-II and Tier-III cities--like Hyderabad, Cochin, Chennai, Coimbatore and

Pune--is equally enormous.

For instance, Pune, the engineering and automobile hub of western India--about 160-km

south-east of Mumbai--is emerging as a major IT centre. With sprawling software parks

coming up all over the city and its suburbs, the demand for high-value apartments is growing.

Beyond professionals and people looking to relocate from Mumbai or even overseas, are the

older people who have sold a bungalow and want to live in spacious, easy-to-manage

surroundings. Developers maintain that the bar for the super-premium luxury housing has

risen from US$ 231,964 to over US$ 463,929 per unit.

If the year 2006 was marked by some of the countries biggest land deals, the future of India is

set to usher in the gold rush of realty.

REAL ESTATE INDUSTRY OF INDIA

The real estate story in India is growing bigger by the day as it continues to receive an ever

increasing inflows of funds. While more than 35 big ticket foreign funds have already

checked in, the first half of the 2010 will see at least 20 more funds making an India entry.

Meaning US$ 12 billion of foreign direct investment (FDI) will be injected into the real estate

sector.

Merrill Lynch forecasts that the Indian real estate sector shall grow from US $12 billion to

US $ 90 billion in 2015.

Majority retailers are now planning to expand within a current city, and a similar percentage

is willing to open new stores in other cities. While the last decade saw the transaction of

sleepy towns like Gurgaon, Noida and Faridabad into enviable addresses. More and more

people are turning to big cities thereby increasing the demand for high-value apartments.

Developers maintain that the bar for the super premium luxury housing has risen from Rs. 1

crore to over Rs. 2 crore. If the year 2009 was marked by some of the country’s biggest land

deals, the future of India is set to usher in the gold rush of realty.

It is estimated that in the residential sector there is a housing shortage of 19.4 million units

out of which 6.7 million are in urban India. The increase in purchasing power and exposure to

organised retail formats has redefined the consumption pattern. As a result, retail projects

have been mushrooming across even B-grade cities. The retail market is expected grow at

around 35 per cent. Industry observers feel that this growth is facilitated by favorable

demographics, increasing purchasing power, existence of customer-friendly banks and

housing finance companies, professionalism in real estate an reforms initiated by the

Government to attract global investors.

Financial Institutions in real estate

Indian financial institutions are competing with each other to invest in this higher return

segment. Some of the prominent companies promoting real estate funds in India are HDFC

Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Reality Fund, Kshitij Venture

Capital Fund (a group venture of Pantaloon Retail under SEBI’s Venture Capital Funds, these

are closed- ended schemed with an Initial Public Offer (IPO) contributing to a discount on

NAVs(Net Assets Value).The Tata group has joined hands with private equity firm, Xander,

through its group company Trent in April

Retailers and Malls

Organised retail, which currently accounts for only 4.6 per cent of the US$ 270 billion Indian

retail sector, is expected to grow at 37 per cent in 2009 and 42 per cent in 2010, according to

Indian Retail Report 2007. The report adds that organised retail in India has the potential t

add over US $ 45 billion business by the year 2015.

This is expected to create a demand for around 220 million square feet of retail space by

2010. According to industry estimates, 27 million square feet of organised retail space is

currently available. Another 90 million square feet is expected to be added by 2009 from 263

mall projects. Of these, 18 million square feet is slated to come up in Delhi as well as

Mumbai, 9.5 million square feet in Ludhiana, 6 million square feet in Chandigarh and 3.6

million square feet in Ahmedabad.

In what could perhaps become a trend in the booming retail business, Retailer Retail, Future

Group and Bharti-WalMart are among leading retail companies that are acquiring housing

societies and colonies in Ahmedabad to knock down and build mega-retail stores. The biggest

mall of the world—Mall of India—planned by DLF Universal along NH-8 will have 32 acres

spanning a huge entertainment area and large city town square offering a total retail

experience.

Residential Development

Majority of retailers are now planning to expand within the current city, and a similar per

centage is willing to open new stores in other cities with India. The most confident among

them are home and interior retailers and sports apparel/equipment retailers, followed by

department stores and jewellery and food retails.

While the last decade saw the transaction of sleepy towns like Gurgaon, Noida and Faridabad

into enviable addresses, today these tier I towns, as they are called, are saturated and far

beyond the means of the middle class. Naturally, the opportunity in the residential

development in Tier-II and Tier-III cities—like Hyderabad, Cochin, Chennai, Coimbatore

and Pune—is equally enormous.

For instance, Pune, the engineering an automobile hub of western India-about 160-km south-

east of Mumbai—is emerging as a major IT centre. With sprawling software parks coming up

all over the city and its suburbs, the demand for high-value apartments is growing. Beyond

professionals and people looking to relocate from Mumbai or even overseas, are the older

people who have sold a bungalow and want to live in spacious, easy-to-manage surroundings.

Developers maintain that the bar for the super-premium luxury housing has risen from US $

231,964 to over US $ 453,929 per unit. If the year 2006 was marked by some the country’s

biggest land deals, the future of India is set to usher in the gold rush of realty.

CHALLENGES AND OPPORTUNITIES IN THE REAL ESTATE SECTOR

Opportunities

Firstly, it is the sustained high growth rate of GDP and increasing GDP per capita in the

country providing and impetus to the real state demand across segments. According to t he

recent FICCI report, the last three years have seen real GDP rise a cumulative 26 per cent,

with impressive increase of 8.5 per cent in 2007/08, 7.5 per cent in 2008/09 and 8.4 per cent

in 2009/10 on the back of the robust growth across industries. Thus, setting into motion the

demand for commercial / industrial as well as residential real estate.

Secondary, the huge demographic shift being witnessed in the country in the last decade is

cited as one more reason behind the sect ors exponential growth. The increasing rate of life

expectancy, declining infant mortality and a high but falling birth rate in the country have

created an additional demand for housing and infrastructure for the ever-increasing

burgeoning population.

Besides these, favourable reforms ensuring easy project financing, increased fiscal incentives

to developers and simplification of Government procedures are the few of the bottom factors

that have catapulted the growth in this sector.

Challenges

In pursuance of the expected growth that this sector will take, the future is full of challenges.

In the commercial office segment. In spite of the huge demand, the developers may have to

face heat from the ups and down of other sectors since this segment, in particular, is highly

depended on the performance of the Indian IT/ITES.

Secondly, with the introduction of the SEZ policy, it is believed that a significant amount of

the office space demand will be targeted in SEZs. While in the residential segment, if one

goes by the Planning Commission report there is a shortage of approximately 9 million units,

and this deficit, as per the Asian Development Bank, would escalate to around 22 million

units by 2009/10 and upto 10 million units by 2030. The most deterring challenge that would

come on the way would be the product differentiation and correct understanding of the

consumer needs. This challenge would be applicable to both the national or international

players as the consumers preference in India vary from one location to other and brand value

in a highly competitive market would be stiff without substantial product differentiating

factors.

Another segment that would gain momentum is the hospitality sector, According to the

Ministry of Tourism, Government of India, there are as estimated 1.2 million hotel rooms in

the country, of which star hotels account for a mere 7 per cent (approximately 80,000

rooms). The Ministry forecasts that there will be a total 2.9 million hotel rooms in the biggest

deterrent in the growth in this segment could be the delay in further relaxation for FDI in the

sector.

EFFECT OF RECESSION ON REAL ESTATE IN INDIA

The Development of real estate in India is attributed to the off-shoring and outsourcing

businesses, such as high-end technology consultation, call centres and programming houses.

The demand from the information technology sector certainly has changed the urban

landscape in India. Several multinational companies (MNCs) continue to move their

organizational operations to India to take advantage of lower manpower and other costs.

Providing human resources and home at their work place assumes great significance and

therefore, the requirement to create space for people to live and work that in turn causes the

development of other related infrastructure. It has been a predominant trend to set up the

world´s best business centres, often campus-style establishments, bearing a distinguishing

corporate stamp. Some of these locations are so distinctive that they are termed as the

´temples of new or modern India´. It is just an indication of the extent to which the

development of real estate has been taking place.

The real estate market in India remains unorganized, fairly fragmented, mostly characterized

by small players with a local presence. Traditionally, real estate developers were viewed with

an element of skepticism. Developers were often identified dealing with large amounts of

unaccounted money, lacking transparency and would use unscrupulous mean to acquire a

variety of regulatory approvals. The tremendous growth of the real estate sector is attributed

to various fundamental factors such as growing economy, growing business needs, etc. This

boom however is restricted to areas such as commercial office space, retail and housing

sectors. The impending concerns of this sector namely- skill shortage, non availability of

statistics, lack of low cost-affordable housing, lack of sustainability, high RE prices and last,

to meet a future that might have downturn due to oversupply.

The industry is presently facing a major resource crunch – an obvious lack of qualified

skilled people from construction firms, PMC firms, etc. Coupled with this manpower

shortage is the shortage of availability of relevant statistics which has created an ambiguity as

to how much construction activity is actually taking place and one can´t gauge the demand

and supply trends accurately. The opportunities and issues of affordable, low cost housing in

India are mainly related with tremendous shortfall of middle class housing as majority of the

developers are involved in developing high class housing, so there is a dearth of low cost

affordable units. The negative version of Indian real estate industry is “they have complete

disrespect for sustainability” and that the concept of green buildings, proper waste disposal

methods and the longevity of the product are often dismissed.

Presently, the impact of recession in US economy has impacted Indian Real Estate Market as

well as it is also witnessing the recession. Till now the real estate industry was a very

booming industry in India which were in pace with IT industry. Accordingly, the demand for

IT space and Commercial spaces has been grown. Also the high net worth of individual

investors has created a very fast pace of demand in Indian real estate sector which have gain a

very high impact image of investing in India.

As the money was coming in terms on investment in India from NRI as well as Private

Equity funds, the well known developers and real estate players have grown their portfolio as

well many small sized players have also created in Indian market. It has provided a very high

supply of real estate segments either in residential or in commercial or in office space. SEZ

has also creates a very good opportunities for investors as well as corporate to invest and get

benefited from Indian real estate market. So the booming market has created a niche as

modern living in India and created a very mass employment in Indian segment.

The recent changes which happened in American market such as Bankruptcy of Lehman

Brother an oldest financial firm of American market and sell process of PE Firm Merryl

lynch by the largest US bank Bank of America has created a very fast drops/recession in

financial industry and created a crisis in all over US economy. Both of these firms were

invested their more part of funds in to real estate sector without having the proper analyzing

or effect. They also have given the funds for mortgage industry of US which is currently

facing the hurdle of Sub prime lending and have impacted many players to bankrupt.

All of these changes in US economy have impacted in Indian economy as well as Real estate

segment as most of the Indian players have their liquidity funded by both of these firms. Also

the IT segment which was mainly funded by the PE firms or have their export to US markets

have noticed very sharp drop of net worth of their firms. This recession also impacted the

Sensex which has bullish very sharply and brings down the net worth of the leader of Indian

real estate player very low. The impact can be shown in share price of DLF, Unitech, GMR

group, Reliance group, Wipro, Satyam etc groups.

All of these sudden changes in Indian and US market created a point of thinking to investors

& individuals that where it will go and what will be best option in real estate investment. The

market rates in India are also dropped by 10 to 30% in most of prominent as well as

upcoming cities and the trend appears to be still continuing till it will not recover the effects

of this financial crisis.

Major Players in Real Estate

Ansal Properties.

DLF Group

Eros Group

Parsavanath Developers

Eldeco Group

Sahara

Omaxe

Plumeria

Snapshot of Real Estate

Growth in urban population 20-25%

25-48% rise in incomes

Income Profile

Residential Property Rates By 10-90%

By 10-30%

Commercial Property Rates

Industry Profile

Real Estate Pei 2008-09 $ 13 Billion

Real Estate Pei 2015 $ 50 Billion

Projected Demand of Residential Property 20 Million houses

In next five years.

Projected Demand of Residential Property 20 Million square feet.

In next five years.

INTRODUCTION

Sahara Infrastructure & Housing, originated to hasten the pace of progress of the

country, is the largest Infrastructure & Housing Company with an array of multi-

dimensional ventures like Mini & Mega townships, Shopping Malls & Commercial

Complexes across India

This project was undertaken to find out the feasibility of SAHARA CITY HOMES. It

includes all the vital and financial details based on certain assumptions provided by the

competent authorities of the organization in keeping with the actual financial data.

The financial statements made under this study are.

Total fund flow, Inflows, Outflows, Advances from customers, Work in Progress, Bank

Account, Profit & loss and Balance Sheet. Charts and Bar graphs are also drawn depicting the

same.

Based on the above financial Capital Budgeting techniques were applied. Finally the SWOT

analysis of the organization was done and thereafter recommendations were made.

Positively everyone is celebrating India's coming of age, whether it is cricket, movies,

tourism, software, culture. With the US.

As I shifted my offices from Mumbai to Lucknow, I noticed, amidst all these positive

developments the real estate scenario is also undergoing significant change. The real

estate market in India continues to ride high on a robust & booming economy. Business

circles, seminars and conferences are eclectic discussing the overdrive which has a lot to

do with 100 percent FDI, NURMA (National Urban Renewal Mission) , ULCRA and

tax efficient home loans. Industry bodies like NARDECO & ICRA are also contributing

to it by rating the developers & their projects.

Platitudes about affordable housing, vast floor plates, and newer building techniques

have been substantiated by the comfortable numbness of statistics and squatters.

While discussing these issues with my peers it came as a realisation to me that real estate

is a People's Business: people as sellers and people as buyers. While people as buyers or

customers are fast changing and becoming more demanding with increased incomes,

affordability and evolving real estate formats and offerings; people in business of

servicing customers have failed to keep pace even as overseas players have come in with

this rapid change. More surprising is the fact that acclaimed real estate renaissance is

seen as a phenomenon witnessed only in metros and big cities. Evidently, $1 billion

worth of real estate fund proposals filed with the SEBI as FDI is yet to transcend to

heartlands of India. Seemingly, the acclaimed real estate gurus are perpetrated about the

changing times. Growth and aspirations of real estate customers or consumers is an

entity acclaimed only in metros and big cities and smaller ones are discreetly

marginalized. Whether it is the case or it is dictated by the business equations may be a

debatable issue on ethical grounds.

As a group of concerned, responsible individuals at Sahara Infrastructure and Housing

we plan to propagate the real estate phenomenon across 217 cities in India. People as

buyers are rightly represented in our plans; as Sahara City Homes is firmly rooted into

almost every sector like security, health, beauty, home improvement, electricity, water,

transport, education and entertainment.

SAHARA INFRASTRUCTURE

Sahara Infrastructure & Housing is India's best & the largest realtor with leadership in

offering innovative products to the esteemed customer.

Our projects are planned to become living legends of class, comfort & elegance. The world

class quality along with adequate emphasis on security & health has given us an edge over

others.

•  There are various measures to ensure multi-level security to the residents of the townships

to create a safe & relaxing environment.

•  Health of the residents is another highlighting feature of the townships where complete

measure has been taken to ensure health & hygiene.

Qualification of Work Force

At Sahara Infrastructure & Housing, we value work force as our most valuable asset. It gives

us the confidence to move ahead and foray into unidentified paths of success. Our people

have time & again proved their mettle and given the company a scoop of success in existing

projects.

Our team is a judicial mix of highly talented brains from technical & non-technical

backgrounds with an average age of 33 years. The ladder to growth with us is made of hard

work, honesty & commitment towards one's duties. There is no stopping for the deserving to

grow & the work environment is coherent enough to aid them.

Business Ethics  

Sahara India Pariwar is an ethically bound company, rich in its values. All its forays are

committed to its ethos & on the whole it stands as an Emotionally Integrated Family.

Sahara Infrastructure & Housing, which is an integral part of Sahara India Pariwar has also

started emanating similar vibes.

At Sahara Infrastructure & Housing we aim at serving our internal & external customers well

& believe that a satisfied customer is the gateway towards a company's success. Keeping this

in mind we have come up with prestigious residential & commercial projects that plug the

unfulfilled needs of the customers. These projects are packed with an assurance of quality.

Each Government Norm is followed completely. All the projects are Earthquake Resistant &

Environment friendly. We have obtained quality certification like ISO 9001 for some

projects & seek to obtain it for the upcoming ones to ensure premium quality in construction,

designing & specifications. Our Environment friendly approach supports our belief in healthy

living. The ISO 14001 is not merely a certification we have added to our credentials, it is a

means to authenticate our opinion. We stress on vast green lands in our projects & render

around 55% of the total area to full greenery as a ritual. As a mark of our devotion towards

environment conservation we have planted 25000 saplings at our Gorakhpur Township & are

going to plant around 9000 trees in each of our prestigious project Sahara City Homes.

We have embraced societal progress as our underlying objective and our genuine concern for

the workers & employees would get strengthened by achievement of certifications like SA

8000 & OHSAS 18001.

As a tribute towards the victims of Gujarat Earthquake, two villages were specifically

adopted to rehabilitate the people. We were also actively involved in rehabilitating the

Tsunami victims.

Our moral & ethical objectives also reflect in the reservation for special categories in our

residential projects which is upto 10% of the total units. These categories can purchase the

units at a discount of 30% of the unit price. Where professionalism & pragmatism have now

become the talk of the town, we stand tall following our traditional values & catering to the

customers with best services at premium quality.

Certifications

We seek to achieve following certifications for all of our projects:

•  ISO-9001 { for Quality Management System }

•  ISO-14001 {for Environment Management System}

•  OHSAS- 18001 {for Occupational Health & Safety Assessment Series}

•  SA-8000 {for Social Accountability}

Earthquake Resistant Construction

•  The construction has been planned for maximum protection of life & property from

earthquake

•  Every construction is designed & executed 1 level higher than the seismic zone in which

the project is located (As per Bureau of Indian Standards specifications)

ABOUT SAHARA INFRASTRUCTURE

Sahara Infrastructure & Housing, originated to hasten the pace of progress of the country, is

the largest Infrastructure & Housing Company with an array of multi-dimensional ventures

like Mini & Mega townships, Shopping Malls & Commercial Complexes across India.

VENTURES

RESIDENTIAL PROJECTS

AAMBY VALLEY CITY

SAHARA CITY HOMES

SAHARA GRACE

SAHARA STATES

COMMERCIAL PROJECTS

Sahara India Commercial Corporation Ltd. has under its banner some of the finest

business addresses. Built on the latest architectural concepts, these projects bear

outright signatures of success.

SAHARA MALL - GURGAON

SAHARA GANJ - LUCKNOW

SAHARA HOSPITAL - LUCKNOW

SAHARA STAR - MUMBAI

OTHER COMMERCIAL PROJECTS

Having an impressive elevation designed on latest architectural concepts, these projects are -

Sahara Plaza, Sahara Trade Centre, Sahara Shopping Centre & Sahara Bazaar in Lucknow.

They incorporate finest ultramodern concepts so as to become a fine example of style,

standard & splendid workmanship.  

SAHARA SHOPPING CENTER, launched in April 1994 in Lucknow was among the first

commercial projects built by Sahara Infrastructure & Housing to start its endeavour in the

field of real estate. It is located in the commercially busy area of Indira Nagar, Lucknow,

Sahara Shopping Center has a mix of local Retail outlets, Cosmetic stores, Fitness zones,

Clinics & offices.

SAHARA TRADE CENTER, launched in April 1999 in Lucknow & is another

commercial outlet in the same vicinity as Sahara Shopping Center.

SAHARA PLAZA launched in Oct. 2001, is located at Gomti Nagar area in Lucknow.

Built with the concept of serving daily needs of the near-by residents it offers apparel shops,

jewellery shops, restaurants etc.

UPCOMING PROJECTS

Sahara Power Projects

The objective of Sahara Power Projects is to provide continuous, reliable and good quality

power at rates equivalent to or lower than prevailing market rates to the beneficiaries of

Sahara City Homes and for all on-going/ proposed Projects of Sahara Infrastructure &

Housing including Amby Valley City. The estimated load requirement for all the Sahara City

Homes and other Projects is more than 6000 MW. Sahara Group shall be the largest

consumer of power in the Private Sector in India.

Sahara Hi-Tech City aims to develop a lifestyle that is an impeccable mix of advance

technology & environmentally rich surroundings.

It has been visualized as a qualitative living space for the common man assimilating the

advanced sciences of architecture, designing & construction. It shall be a next generation

cyber community that rejuvenates the living environment & makes it a treat to celebrate.

This township shall be located in Lucknow as well as in Kanpur covering more than 6500

acre land in total.

SAHARA CITY HOMES

Sahara City Homes exemplifies a truly aspirational way of life and is strongly rooted in

Indian socio-cultural ethos. Sahara City Homes is a chain of well planned, self sufficient,

high quality townships across 217 Indian cities. The Residential units are complimented by

complete support Sahara Hospital, School, Shopping malls & multiplex, Hotel & Club, Wave

pool, Exclusive Club and Central park.

Meticulous and aesthetic planning & designing, consideration varied requirement is the

essence of the product mix, which consists of high-rise, mid-rise apartments and independent

houses.

Sahara City Homes at Lucknow is being developed on approximately 200 acre (80.94

hectare) of land out of which 55-65% area has been exclusively earmarked for open space,

roads & landscaped greenery. An ideal model of modern urban development, Sahara City

Homes Township is a destination providing comprehensive peace, comfort and security.

Total no. of cities 217

Total Land area 10977.5 hectares

Total Commercial built up area 3.03 million sq.kms

Total length of road network 2243.75kms

Nationwide Chain Of Sahara City Homes

State  No. of Cities State No. of Cities

Andhra Pradesh  10 Kerala  01

Assam  04 Madhya Pradesh  16

Bihar  19 Maharashtra  17

Chandigarh  01 Orissa  04

Chhattisgarh  04 Pondicherry  01

Goa  01 Punjab  09

Gujarat  11 Rajasthan  13

Haryana  14 Tamil Nadu  10

Himachal Pradesh  01 Uttaranchal  06

Jammu & Kashmir  01 Uttar Pradesh  50

Jharkhand  06 West Bengal  06

Karnataka  12    

Total: 217

Type

COMPANY PROFILE

Private

Founded 1978 in Gorakhpur, India

Founder(s) Subrato Roy

Headquarters Lucknow, India

Key people Subrato Roy Sahara, Founder, Chairman and Managing Worker

Industry Finance, Real Estate, Media & Entertainment, Tourism & Hospitality, and

Services & Trading

Website www.saharaindiapariwar.org

SAHARA INDIA PARIWAR

Sahara India Pariwar is not just a business organization, but also and emotionally integrated

family. Quality is the essence of the Pariwar and it has always stressed on the qualitative

aspect. Consequently in this run for quality, quantity has always pursued the organization.

Sahara India Pariwar’s success story began in 1978. Starting on a modest scale of Rs.

2000(US $ 43), the company has traversed a long way to become a frontrunner in Indian

entrepreneurship. Today Sahara India Pariwar is a major entity on the corporate (US $ 10.87

billion) and a diversified business that include.

Public Deposit Mobilization, Infrastructure and Housing, Media and Entertainment,

Consumer products, Information Technology, Sundarvans Project, Sahara Hospitals etc.

Vision

An organization is exemplified by the values it practices. At Sahara India Pariwar, we believe

in religiously chasing quality, honouring rules and regulations and fulfilling all commitments.

These principles are aimed towards a peaceful, prosperous and progressive coexistence of

mankind, anywhere and everywhere. This is the essence of Collective Materialism - Our

Corporate Philosophy which means to progress and prosper together for collective sharing

and caring and not individually or for a select group. Like every other division of Sahara

India Pariwar, Sahara Infrastructure and Housing is also inspired by our mantra of "Karma,

Quality, Kartavya” i.e. practicing superior work ethics, emphasizing on "quality" in all

products and services and remaining true to our commitments.

It is a matter of pride that we are able to contribute through this division in accelerating the

momentum of India's wheel of progress. Sahara Infrastructure and Housing has also taken up

such social responsibility projects as Kargil Martyrs and Bhuj housing projects. We are

committed to make India a developed country from its present status of a developing country.

(Subrata Roy Sahara)

Managing Worker & Chairman

Sahara India Pariwar

Mission

Sahara Infrastructure and Housing aims at developing infrastructure, townships and such

other developmental projects by strict adherence to premium quality in each of its sphere.

Thereby initiating the genesis of an ideal living environment by the best of planning,

construction, designing and implementation; abiding by the laws of the country and by

keeping customer satisfaction as its first priority.

PAST HISTORY 1978

Started from Gorakhpur, with 3 workers.

15 dependent livelihood serving 42 esteemed workers.

Assets worth Rs. 2000 only.

1 establishment.

No trade union.

No Owner.

PRESENT PROFILE 2009

All India presence with over 9.12 lakh workers.

Over 47.50 lakh dependent

Serving over 8.10 crore esteemed depositors (1 out of every 24 Indian).

Assets over Rs. 50,500 crore.

No trade union.

No Owner.

FUTURE PLANS

Company is engaged in developing mega township in 217 cities all over the country. In the

mega township company is developing multiplexes, school, hospitals and Shopping Malls

etc.

Profit Sharing Ratio

35% towards companies net owned funds.

25% towards social development activities.

40% towards welfare of workers.

BOARD OF MANAGEMENT

Mr. Subrato Roy Sahara Chairperson

Ms. Swapana Roy Dy. Managing Worker (personnel and welfare)

Mr. O.P Srivastava Dy. Managing Worker (Controlling and Analysis)

Mr. J.B Roy Dy. Managing Worker (Commercial)

CHAIRPERSON

Quality

Quality is our essence and we, at Sahara India Pariwar, have always stressed on the

Qualitative aspect. Consequently in this run for quality, quantity has always pursued us. We

look forward to reaching the zenith and reaffirm our commitment to the process of sound

nation-building.

COMMITMENT

WE CHASE QUALITY, QUANTITY CHASES US

C o r e C o m m i t m e n t s - O u r S t r e n g t h

Emotion

Emotion is in Performance of genuine duties towards the loved ones primarily in their

benefit, from their point of view. EMOTION is THE KEY that generates the required

Dy. Managing Worker (P&W)

Dy. Managing Worker (C&A)

Dy. Managing Worker (Comm.)

energy and en thus iasm for des i red qua l i ty per formance .

Discipline

The enthusiastic obedience of laws and orders, which are given by the rightful authority.

Duty

The enthusiastic obedience of laws and orders, which are given by our CONSCIENCE.

No-Discrimination

Never should we discriminate in any of our actions, reactions, attitudes, decisions,

conclusions, in any of our expressions while caring for the six health of other human beings,

namely physical, material, mental, emotional, social and professional health.

Quality

Results from honoring Rules, Regulations, Commitments, Values, Fairness, Performance of

Duties by honestly balancing one's own and others' reasonable point of view in the

mat ters of Mater ia l & Emotional aspect s.

Give-Respect

To definitely make others feel important and respected by giving sincere regard to others'

feelings, reasonable wishes & thoughts with an open and receptive mind and warmth.

Self-Respect

To develop a sense of respect for oneself in others' mind, i.e. to generate genuine & warm

fee l ings for onese l f among o thers on a cont inuous bas i s .

Truth

Means total transparency in action, reaction, attitude and all other expressions and t h e

c o n v i c t i o n t o f o l l o w t h e r i g h t c o u r s e.

Collective-Materialism

Means to progress and prosper together for collective sharing and caring and not

i n d i v i d u a l l y o r f o r a s e l e c t g r o u p .

Religion

There is a religion higher than religion itself - it is NATIONALITY. We may practise our

religions in the confines of our homes, but outside, we should be Indians and only Indians.

'Bharatiyata' or Nationalism thus becomes our supreme religion. 

Absolute-Honesty

People generally manipulate and deceive for achieving their unreasonable desires and greed if

others do not or can not see, hear or understand. But we firmly believe that our mind inside

knows the truth and we should be absolutely honest to our mind inside and accordingly our

actions, reactions, directions, decisions and all our expressions should be present in all human

dealings.

HERITAGE

PHILOSOPHY

SAHARA INDIA PARIWAR'S PHILOSOPHY  - "Col lec t ive Mater ia l i sm "

In any human relationship, it becomes imperative to take into consideration the materialistic

aspect of life - we do so but by giving it second priority.

The first priority is given to emotional aspect and with perfect blending of materialism with

emotionalism, results in continuous collective growth for collective sharing and caring, that

gives an impetus to our philosophy - "COLLECTIVE MATERIALISM ".

BHARTIYATA

There is a religion higher than religion itself - it is the INDIAN NATIONALITY. The swirl

of the Tricolour never fails to move a Sahara Worker. For we believe, it is the great feeling

that transcends all castes, creed and sects. Bharat Parva is Celebrated on every 26th of

January and 15th of August with a spirit and gaiety rarely seen.It comes from our heart.

www.saharabharatparva.in

KARTAVYA COUNCIL

WHAT

A commitment of Sahara India Pariwar to the genuine needs and rights of anybody &

everybody - Be it to a depositor, newspaper reader, consumer .... all business associates and

Sahara India Family Members.

NEED

India needs effective consumer protectio and protection of worker's genuine rights. There are

various agencies, promising protection & action. But no external body can provide justice

unless the company becomes 'QUALITY CONSCIOUS' WITH STRICTLY NO

DISCRIMINATION POLICY AND JUSTICE CONSCIOUSNESS as its very dominating natur e.

MOTTO

We not only believe but pratise NO DISCRIMINATION, JUSTICE & HIGH QUALITY -

means enthusiastic, productive performance of duty "KARTAVYA' towards the consumer',

workers' genuine satisfaction.

AIM

To provide justice - Be it a matter of tiniest imperfection or injustice in our COMMITMENT

- products or services. direct or indirect, short term or long term.

WHERE

Kindly rush your grievances/suggestions or any queries releated to Sahara India Pariwar to

the nearest Shara establishment and/or to:

'SAHARA INDIA PARIWAR KARTAVYA COUNCIL'

Sahara Shaher, Gomti Nagar,

Lucknow-226010

Website: www.saharaindiapariwar.org

e-mail: [email protected]

[email protected]

Fax No. : +91-522-2301895

Toll Free No. : 1800-230-1893

POSTAGE AND OTHER GENUINE EXPENSES WILL BE REIMBURSED BY THE

COMPANY

Response Will Never Be Delayed And Justice Will Never Be Denied

CORE DIVISIONS OF SAHARA INDIA

Financial Products.

Sahara Infrastructure and Housing.

Media and Entertainment.

FINACIAL PRODUCTS

Para banking (Public Deposit Mobilization)

Mutual Fund.

Capital Market Service Division.

MEDIA AND ENTERTAINMENT

Sahara India Mass Communication Limited(SIMCL)

Sahara One- Entertaining Millions

Film City( being developed)

New Channel- Regional and National.

INFRASTRUCTURE AND HOUSING

Sahara Estate, Lucknow.

Sahara Ganj Mall, Lucknow.

Sahara City Homes,Lucknow.

Aamby Valley, Mumbai.

Sahara Grace, Gurgaon.

ORAGANIZATIONAL CHART

SUSHANTO ROY

HEAD OF INFRASTRUTURE AND HOUSING

GENENRAL MANAGER WORKER

CHIEF MANAGER WORKER

SENIOR MANAGER WORKER

Dy. CHIEF GENENRAL MANAGER WORKER

DEPTY GENENRAL MANAGER WORKER

ASSISTANT MANAGER WORKER

EXECUTIVE WORKER

Jr. EXECUTIVE WORKER

SAHARA CITY HOMES

ASSUMPTIONS FOR SAHARA CITY HOMES

Project Duration = 5Years.

Total Land Area = 125.16 Acres [1 acre = 43,560 square feet].

Total Residential Floor Space Index (FSI) = 46.96 Lac square feet.

Built Area (Commercial)

Mall & Multiplex = 1.88 Lac per square feet.

Hotel = 1.11 Lac per square feet.

Hospital = 0.48 Lac per square feet.

School = 1.33 Lac per square feet.

Total Construction Rate (Residential) = Rs. 1354.65 per square feet.

Construction Rate (Commercial)

1. Mall & Multiplex @Rs. 2523.00 per square feet.

2. Hotel @Rs. 3117.64 per square feet.

3. Hospital @ Rs.5845.47 per square feet.

4. School @ Rs. 2142.00 per square feet.

Escalation Clause—escalation is taken 5% yearly on compounding basis for development

and amenities and construction cost of residential and commercial.

Conditions:

1. 1st possession date is 2.5 year from the start date of construction.

2. Approx 70% of development work will be completed before first possession date.

3. Interest Rate on bank loan is 12%per annum.

4. Total amount are distributed among the year in the ratio of 20,30,20,20 & 10 percent

respectively.

5. Administration and Site Running cost is taken as 4% of cost of construction of

and Development and Amenities

6. Miscellaneous and Contigencies has taken 3% of cost of construction of

Residential , Commercial Cost and Development and Amenities

7. Advertisement Cost is taken as 1% of sales of Residential only.

8. Commission Cost is taken as 3% of sales of Residential only.

9. Promoter’s fund is taken as Rs.7500 lakh(Non Refundable).

10. Bank Loan are taken Rs. 22,500 lakh payable in equal instalment.

Selling Price (Residential) = Rs. 2303.00 per square feet.

Price Escalation Clause— Price escalation starts from the second year of the

commencement of project @9% per annum.

Selling Price (Commercial)

Mall & Multiplex @ Rs. 8500 per square feet.

Hotel @ Rs. 5150 per square feet.

Hospital @ Rs.5000 per square feet.

School @ Rs. 4150 per square feet.

Payment Plan-

Residential

10% of unit price as booking amount.

5% of unit price as allotment within sixty days.

85% in 36 months equal monthly Installments.

Commercial

10% of unit price as booking amount.

5% of unit price as allotment within sixty days.

Remaining 85% in 22 months equal monthly Installments

DISTRIBUTION OF COST OF (Cost Sheet)

S.NO. DETAILS COST Rs / SQFT

1 Land Cost 52.55

2 Govt. Approval & Consultancy 14.15

3 Construction Cost 872.16

4 Computer & A.C 51.86

5 Administration & Site Running Expenses 62.04

6 Development & Amenities 229.7

7 Service Tax 41.25

8 Miscellaneous 30.94

  TOTAL COST 1354.65

OBJECTIVES OF THE STUDY

To know demand of Sahara City Homes among the people.

To know overall performance of the business.

To focus on the proper mix of short term a long term financing for current assets.

To find out the profitability of the company in this project.

To know the firm liquidity position i.e., the ability or capacity of the firm to meet its short

term obligations out of current assets.

To study the need for analyzing the changes in a firm’s funds and cash flow position.

Significances Of The Study

Increased product knowledge

Availability of products at reduced price

Increase in consumers buying confidence

Minimize Exploitation

Increase the sales

Demand for products and services

RESEARCH METHODOLOGY

Research

Research is an art of scientific investigation. Research comprises defining and redefining problems,

formulating hypothesis or suggested solution, collecting, organizing and evaluating data, making

deductions a reaching conclusions and at least carefully testing the conclusions, to determining

whether they fit the formulating hypothesis. Research Methodology is a way to systematically solve

the research is done scientifically. In it we study the various steps that are generally adopted by a

research in studying his research for the researcher to know not only the research methods/techniques

but also the methodology.

The study will be based on:-

1. Primary Data- Collected by circulating a questionnaire.

2. Secondary Data- By various resources.

Data Collection

Since research is combination of secondary data collection through desk research and primary data

through the author of this study collected the information from the personal interviews of the member

of financial department of the firm and the general public.

Primary Data - Questionnaire and Personal observation.

Secondary Data- Provided by various competent authorities of the department.

Primary + Secondary Data - City’s economic analysis.

Collection of Data:-

PRIMARY DATA- The data which is collected for the first time and is the original data.

SECONDARY DATA- This is the data which is collected from any other source and is the

duplicate data.

PRIMARY DATA

Personal interaction

Questionnaire

SECONDARY DATA

Books

Journals

Internet

Company documents

SAMPLE SIZE- 100 Respondents

AREA OF OPERATION- LUCKNOW

STATISTICAL TOOLS-

Bar diagram

Pie Charts &

All relevant sampling tools will be used.

Data Interpretation and Analysis

The data collected from secondary sources was assembled, screened, sorted, evaluated in line with the

objectives of the study and has been incorporated in this project. The data collected from the Balance

Sheet, Profit and Loss Account, and Cash Flow Statement and through Questionnaire was interpreted

and found to be positive.

All the above statements are helpful to know the financial feasibility of the Project and the demand

for Sahara City Homes.

CASH OUTFLOW

(Amounts in lakh )

PARTICULARS TOTAL 2009 2010 2011 2012 2013

LAND COST 2865.02 2865.02        

GOVT. APPROVAL 771.45 771.45        

CONSTRUCTION COST

(RES) 42873.94 8191.32 12696.55 8826.15 8632.63 4527.29

SERVICE TAX 1937.1 387.42 581.13 387.42 387.42 193.71

COMPUTER & A.C 2435.8 487.16 730.74 487.16 487.16 243.58

CONSTRUCTION COST

(COM)            

MALL 4965.24 948.64 1470.4 1022.16 999.74 524.3

HOTEL 3775.51 755.11 1132.62 755.11 755.11 377.56

HOSPITAL 2755.688 526.508 816.08 567.34 554.86 290.9

SCHOOL 2982.063 569.77 883.013 613.92 600.46 314.9

TOTAL 14478.501 2800.028 4302.113 2958.53 2910.17 1507.66

DEVELOPMENT COST 11291.62 2157.32 3343.87 2324.53 2273.56 1192.34

ADMINISTRATION COST 2166.59 413.94 641.61 446.02 436.24 228.78

MISC EXP. 2059.3 394.46 610.27 423.27 414.49 216.81

ADVERTISEMENT EXP. 1259.7003 251.94 377.91 251.94 251.95 125.97

COMMISSION EXP. 3779.1009 755.82 1133.73 755.82 755.83 377.9

PAYMENT OF LOAN 22500   5625 5625 5625 5625

TAX PAYMENT 18802.557 0 0 3152.978 5780.595 9868.984

INTREST PAY 9450 2700 2700 2025 1350 675

GRAND TOTAL(A) 136670.69 22175.88 32742.92 27663.82 29305.05 24783.02

CASH OUTLOW

CASH INFLOW

(Amount in lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

INFLOW (RES) 125969.89 9372.89 21453.12 27284.35 33407.56 34451.97

IN FLOW (COM) 24716.01     3707.41 10504.3 10504.3

BANK LOAN 22500 22500        

PROMOTOR'S FUND 7500 7500        

GRAND TOTAL ( B) 180685.9 39372.89 21453.12 30991.76 43911.86 44956.27

NET INFLOW (A-B) 44015.212 17197.01 -11289.8 3327.942 14606.81 20173.25

CUMULATIVE NET

FLOW   17197.01 5907.209 9235.151 23841.97 44015.21

TOTAL INFLOW

P & L ACCOUNT

(Amount in Lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

BY SALES            

RESIDENTIAL 125970.03     21629.77 35364.68 68975.58

COMMERCIAL 24716.01     3707.41 10504.3 10504.3

TOTAL SALES 150686.04     25337.18 45868.98 79479.88

BY CLOSING WIP RESIDENTIAL 142307.4476 19375.85 42191.66 44229.762 36510.1752 0

BY CLOSING WIP COMMERCIAL 22436.76031 2800.028 7102.141 7888.8909 4645.70044 0

TOTAL 164744.2079 22175.88 49293.801 52118.653 41155.8756 0

GRAND TOTAL( Cr.) 315430.2479 22175.88 49293.801 77455.833 87024.8556 79479.88

BY OPENING WIP            

RESIDENTIAL 142307.4476   19375.85 42191.66 44229.7624 36510.1752

COMMERCIAL 22436.76031   2800.028 7102.141 7888.89087 4645.70044

TO LAND 2865.02 2865.02        

TO SERVICE TAX 1937.1 387.42 581.13 387.42 387.42 193.71

TO COMPUTER & AC 2435.8 487.16 730.74 487.16 487.16 243.58

TO GOV. APPROVAL 771.45 771.45        

TO DEVELOPMENT COST 11291.62 2157.32 3343.87 2324.53 2273.56 1192.34

TO ADMINISTRATION COST 2166.59 413.94 641.61 446.02 436.24 228.78

TO MICS EXPENCES 2059.3 394.46 610.27 423.27 414.49 216.81

TO ADVERTISEMENT EXP. 1259.7003 251.94 377.91 251.94 251.95 125.97

TO COMMISSION EXP. 3779.1009 755.82 1133.73 755.82 755.83 377.9

TO INTREST PAID 9450 2700 2700 2025 1350 675

TO CONTRUCTION COST (RES) 42873.94 8191.32 12696.55 8826.15 8632.63 4527.29

TO CONTRUCTION COST (COM) 14478.501 2800.028 4302.113 2958.53 2910.17 1507.66

GRAND TOTAL ( Dr) 260112.3301 22175.88 49293.801 68179.641 70018.1032 50444.9156

PROFIT BEFORE TAX 55317.9178 0 0 9276.1922 17006.7524 29034.9644

CUMULATIVE PBT   0 0 9276.1922 26282.9446 55317.909

PROVISION FOR TAX @ 33.99% 18802.55727 0 0 3152.9777 5780.59514 9868.98438

CUMULATIVE PROVISION FOR

TAX   0 0 3152.9777 8933.57288 18802.5573

PROFIT AFTER TAX 36515.35173 0 0 6123.2145 11226.1573 19165.98

CUMULATIVE PROFIT AFTER

TAX   0 0 6123.2145 17349.3718 36515.3517

CALCULATION OF WIP FOR RESIDENTIAL PROJECT

(Amount in lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

LAND COST 2865.02 2865.02        

GOVT.APPROVAL 771.45 771.45        

SERVICE TAX 1937.1 387.42 581.13 387.42 387.42 193.71

COMPUTER & AC. 2435.8 487.16 730.74 487.16 487.16 243.58

CONTRUCTION COST

( RES) 42873.94 8191.32 12696.55 8826.15 8632.63 4527.29

DEVELOPMENT COST 11291.62 2157.32 3343.87 2324.53 2273.56 1192.34

ADMINSTRATION COST 2166.59 413.94 641.61 446.02 436.24 228.78

MISC EXPENCES 2059.3 394.46 610.27 423.27 414.49 216.81

ADVERTISEMENT EXP. 1259.7003 251.94 377.91 251.94 251.95 125.97

COMMIOSSION EXP. 3779.1009 755.82 1133.73 755.82 755.83 377.9

INTREST PAID 9450 2700 2700 2025 1350 675

TOTAL 80889.6212 19375.85 22815.81 15927.31 14989.28 7781.38

SALE RELIASATION 125970.03          

% OF COST OF SALES 64.213          

OPENING STOCK 142307.448   19375.85 42191.66 44229.76 36510.18

ADD:-EXP. DURING YEAR 80889.63 19375.85 22815.81 15927.31 14989.28 7781.38

TOTAL 223197.078 19375.85 42191.66 58118.97 59219.03 44291.56

LESS:- COST OF

SALSE(RES) 80889.6212     13889.21 22708.86 44291.56

CLOSING STOCK 142307.448 19375.85 42191.66 44229.76 36510.18 0

CALCULATION OF WIP FOR COMMERCIAL PROJECT

(Amount in Lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

OPENING STOCK 22436.7603   2800.028 7102.141 7888.891 4645.7

ADD:-CONTRUCTION COST

(COM.) 14478.501 2800.028 4302.113 2958.53 2910.17 1507.66

LESS:-COST OF SALES(COMM.) 14478.501     2171.78 6153.36 6153.36

CLOSING STOCK 22436.7603 2800.028 7102.141 7888.891 4645.7 0

COST 14478.501          

SALE RELIASATION 24716.01          

%OF COST OF SALES 58.579          

ADVANCE FROM CUSTOMER

PARTICULARS 2009 2010 2011 2012 2013

OPENING BALANCE 9372.89 30826 36480.7 34523.5

ADD:- DURING THE YEAR 9372.89 21453.1 30991.8 43911.9 44956.3

TOTAL 9372.89 30826 61817.8 80392.6 79479.7

LESS:- SALES 0 0 25337.1 45869.1 79479.9

CLOSING BALANCE 9372.89 30826 36480.7 34523.5 -0.14

CALCULATION OF CASH AT BANK

(Amount in lakh)

PARTICULARS 2009 2010 2011 2012 2013

OPENING BALANCE 17197 5907.21 9235.15 23841.97

PROMOTERS FUND 7500

BANK LOAN 22500

INFLOW 9372.89 21453.1 30991.8 43911.9 44956.27

TOTAL 39372.9 38650.1 36899 53147 68798.24

LESS:-OUTFLOW 22175.9 32742.9 27663.8 29305 24783.02

CLOSING BALANCE 17197 5907.21 9235.15 23842 44015.21

BALANCE SHEET

(Amount in lakh)

PARTICULARS 2009 2010 2011 2012 2013

LIABILITIES

Promoters Capital 7500 7500 7500 7500 7500

Bank Loan 22500 16875 11250 5625 0

P/L Account 0 0 6123.214498 17349.37176 36515.35173

Advance from customers 9372.89 30826.01 36480.69 34523.47 -0.14

TOTAL 39372.89 55201.01 61353.804 64997.84 44015.21

ASSETS

Closing W-I-P

Residential 19375.85 42191.66 44229.76237 36510.17521 0

Commercial 2800.028 7102.141 7888.890871 4645.700435 0

Cash in bank 17197.012 5907.209 9235.151258 23841.96612 44015.21173

TOTAL 39372.89 55201.01 61353.804 64997.84 44015.21

NET PRESENT VALUE

(Amount in lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

Cost of capital 12%

Cash Inflow 111051.16 9372.89 17107.75 24714.32 31276.25 28579.95

Cash Outflow 97193.3 22175.87 29234.74 19546.12 16755.3 9481.27

NPV 13857.9

ACCEPTANCE RULE

When ,

NPV is Positive project is accepted

NPV is Negative project is rejected

NPV is Zero Indifference your choice

RESULT:-

The value of NET PRESENT VALUE is greater than zero, so the project of SAHARA CITY HOMES may be

accepted by the organisation.

PAY BACK PERIOD

(Amount in lakh)

PARTICULARS TOTAL 2009 2010 2011 2012 2013

Outflow 97193.3 22175.87 29234.74 19546.12 16755.3 9481.27

Inflow 111051.16 9372.89 17107.75 24714.32 31276.25 28579.95

Commulative

Inflow 9372.89 26480.64 51194.96 82471.21 111051.2

PERIOD = 4+ 14722.09/ 28579.95 *12

PAY BACK PERIOD = 4yrs 8month

ACCEPTANCE RULE

If Calculated Pay Back Period is greater than the Projected Pay Back Period. The project is rejected otherwise accepted.

RESULT:- The Projected period of the project is 5 year and our calculated pay back period is 4 year 8 month so

project is accepted

RATIO ANALYSIS

Gross Profit Ratio = Gross Profit/ Net Sales *100

SALES 150686

COST OF SALES 95368.1

GROSS PROFIT 55317.9

GROSS PROFIT RATIO 36.7107

RESULT:- The Gross Profit Ratio of this project based on assumption is 36.71%.

NET PROFIT RATIO Net Profit /Net sales *100

SALES 150686

NET PROFIT 36515.4

NET PROFIT RATIO 24.2327

RESULT:- The Gross Profit Ratio of this project based on assumption is 24.23%.

GROSS CAPITAL EMPLOYED = Net Profit(Before interest & tax) * 100

(RETURN ON TOTAL ASSETS) TOTAL ASSETS

PBT 18802.6

295830TOTAL ASSETS

RETURN ON ASSETS = 6.35587

RESULT:- Company earn a revenue of 6.35% of total assets.

NET CAPITAL EMPLOYED = Net profit(Before interest & tax) * 100

( RETURN ON NETASSETS)

NET ASSETS

NET ASSETS = TOTAL ASSETS - CUURENT

LIABILITIES

PBT 18802.6

NET ASSETS 153738

RETURN ON NET ASSETS 0.1223

TOTAL ASSETS TURNOVER RATIO = SALES/TOTAL ASSETS

SALES 150686

TOTAL ASSETS 295829.9

ASSETS TURNOVER RATIO 0.509

LIQUIDITY RATIO

CURRENT RATIO

CURRENT RATIO = CURRENT ASSETS /CURRENT LIABILITY

CURRENT ASSETS 264940.8

CURRENT LIABILITY 111202.9

CURRENT RATIO = 2.382498

RESULT:- The current ratio for this project is 2.38 times, which shows a good working condition

Of the organisation.

LIQUID RATIO

LIQUID RATIO = LIQUID ASSETS /CURRENT LIABILITY

LIQUID ASSETS 131085.7

CURRENT LIABILITY 111202.9

LIQUID RATIO = 1.178797

RESULT:- Organisation has a sufficient amount of asset to meet its liquid obligation.

NET WORKING CAPITAL RATIO

NET WORKING CAPITAL RATIO = NET WORKING CAPITAL / NET ASSETS

NET WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITY

CURRENT ASSETS 264940.8

CURRENT LIABILITY 111202.9

NET ASSETS 153737.8

NET WORKING CAPITAL = 153737.8

NET WORKING CAPITAL RATIO = 1

RESULT:- Organisation has a sufficient working capital to meet its day to day obligation.

RETURN ON INVESTMENT (ROI)

ROI BEFORE TAX = PBT/ NET ASSETS

PROFIT BEFORE TAX(PBT) 18802.56

NET ASSETS 153737.8

ROI BEFORE TAX = 0.122303

ROI AFTER TAX =PBT(1 - TAX RATE ) / NET ASSETS

TAX RATE 33.99%

ROI AFTER TAX 0.081955

Number of person having their own house:-

I circulated the questionnaire to public and got the information that 44% people do not have their

own home. Which is positive response for the Sahara City Homes.

Facilities people looking for:-

I circulated the questionnaire to public and got the information that 50% people looking for the

facilities as Township with Residetial Accommodation, 40% people looking for the facilities as

Township with Residential and 10% people looking for the facilities as Residential facilities only. So,

50% people looking for the facilities as Township with Residetial Accommodation, which positive for

the Project. Which is positive response for the Sahara City Homes.

People awareness about SAHARA CITY HOMES:-

I circulated the questionnaire to public and got the information that 85% people are aware about

this project.

Which is positive response for the Sahara City Homes.

Experience of those people who visited SAHARA PROJECT:-

I circulated the questionnaire to public and got the information that 74% people are visited and

experience was excellent about this project. Which is positive response for the Sahara City Homes.

People who wish to buy home in SAHARA CITY HOMES:-

I circulated the questionnaire to public and got the information that 78% people want to buy the

Sahara City Homes. Which is positive response for the Sahara City Homes.

Purpose to buy a residential unit:-

I circulated the questionnaire to public and got the information that 72% people want to buy the

Sahara City Homes as a Final Product. Which is positive response for the Sahara City Homes.

Salary of people

I circulated the questionnaire to public and got the information that 61% peoples’ salary is above

than 6,00,000 per annum. Which is positive response for the Sahara City Homes.

CITY PROFILE – LUCKNOW

1) STATE- UTTAR PRADESH 3) City Type:- Capital

2) Population : 40 Lakh approx. 4) Category :- A

5) All India Ranking : 13 6) State Ranking :- 2

7) Area in SQ. Km : 2528 sq. km.

8) The land is available/ not available : Available

9) City main source of income is : Service Class & Business Class

10) Tourist Place : Bulbulalia, Imaam Bara, Bara dari etc.

11) Sewarage System : Satisfactory.

12) No of cinema : 12

13) No of multiplex : 4

14)No. of Prominent Park : 10

15)Car Showroom : All Brands

16) Two wheelers showroom : All Brands

17) Commercial Area : Hazratganj, Aminabad, Chowk, Kapurthala, Alambag, Bhootnath market and

Nishat ganj.

18)Bank in the City :

No. Nationalized Banks :

No of rural Banks :

No. of non-commercial Nationalized Bank -

19) Bank with the ATM facility : All Nationalized and Private Banks

20)Clubs in the City : MB Club, Surya Club, Geniuses Club, Gymkhana Club and Golf Club, Scorpio

Club.

21) No. of English Medium Schools : 30

22) N0. Of Degree Colleges : 23

23) No. of Govt. Engineering Colleges :1

24) No. of Medical Colleges : 3

25) No. of Polytechnics : 2

26) No. of Private Nursing Homes : 150

27) Law and order position : Good

27) Economy Condition : Good

28) Culture : Mixed

29) Power available in hours : 18-20 Hrs.

30) Water Supply : 8-10 Hrs.

31) No. of Real Estate Builders : 5

32) New Residential Constructiion : Prominent & Builders

33) Flood Affected : No

34) City is on which National High-way : 56

35) Railway Station : Charbagh

36) Name & Location of airport : Amausi Airport, Kanpur Road.

37) Raod Connectivity to other cities : Kanpur, Sultanpur, Faizabad, Raibarely and Sitapur.

38) City Road Condition : Good

39) Mode of Transport inside the city is : city bus, auto, rickshaw.

40) Population by Income Group

HIG MIG LIG

NORTH HIGH HIGH

EAST HIGH HIGH

WEST HIGH HIGH

SOUTH HIGH

CENTRAL HIGH HIGH

41) Salary Class % : 30%

Self-employed % : 70%

Break up of self=employed :

Professionals % 15%

Business Class % 40%

Petty Business Class % 5%

Daily Wage Earner % 10%

Professionals included: Doctors, Advocates, CA, Engineers and Tutors.

42) Prominent Industry : 4-5

43) City’s Apartment culture : 30%

44) City’s independent House Culture : 70%