NOOK CONSTRUCTIONS PVT. LTD.

STRATEGIC BUSINESS PLAN

We build dreams

SUBMITTED BY: ANAS ANDHI, CP0112 ARPANA ROY, CP1112, RUPAL SANKHLA, CP1312, VISHUL SAXENA, CP1412 VRUSHANK SHAH, CP2512

STRATEGIC BUSINESS PLAN

For

NOOK CONSTRUCTION PVT. LTD.

For the period of

January 2014 to December 2016

EXECUTIVE SUMMARY
Nook Construction (NC) is an Oregon-based real estate company that will offer benchmarked living units in Jamshedpur. NCs units will balance safety, cutting edge features, and a positive atmosphere for all customers. These units will be provided with unmatched levels of customer service and attention. Sales are projected to be substantial in year one growing moderately by year three. The Market NC will target two distinct customer segments. The largest segment that they will service is employees of Industrial area AIADA. The second market segment is ex-employees of TATA The two major functions of the Real Estate and Land Development Department consist of land management and land development. Land management entails acquiring, managing and disposing of the Citys real estate holdings in support of corporate and community objectives. These functions include: Ensuring the Citys land bank is properly managed until such time it is required for urban uses, Ensuring the Citys properties are utilized for their highest and best uses, and Ensuring all agreements relating to City lands are current and appropriately administered

Land development is a process which transforms raw land owned by the City into serviced, developable parcels. The activity related to this process includes planning, marketing and selling lands for a variety of uses, including, but not limited to residential, industrial, institutional, recreational and commercial. Objectives The following are the main objectives: To invest in undervalued residential real estate properties for the purpose of renovating or rehabilitation and then immediate resale, or to hold and rent properties, generating monthly income while obtaining market value appreciation over a longer period. To manage real estate investments from identifying potential properties, to evaluating, to acquisition, and to final sale or disposition. To manage the renovation or rehabilitation activities of newly acquired residential

properties. To manage the residential properties that are rented and held for the longer term. To manage the portfolio of real estate assets.

Keys to Success The keys to success will be: Acquisition of undervalued residential properties. The greater the discount that properties can be purchased, the greater the upside for short term or long term gains will be. Complete the renovation or rehabilitation work within the scheduled time and within the budgeted amount. Recognize buying opportunities on specific properties that would provide the option to immediately resell selected renovated or rehabilitated properties upon completion for short term gain.

Find rental occupants for the selected properties before renovations are completed, or at the first opportunity after completion. Generate cash flow from rental income sufficient to cover debt and expenses and provide funding for new property acquisitions. Maintain an average 92% occupancy rate each year on rental properties. Provide projected overall 5%-6% cash-on-cash return on the portfolio of assets.

SECTION ONE
STRATEGIC FOCUS
The Aim of the Plan Aim is to enter the real estate development business in Jamshedpur and grow geographically in the next 10 years. The purpose of this business plan is to raise 900,000 for the development of a real estate development firm that specializes in residential properties while showcasing the expected financials and operations over the next three years. The Nook Construction Pvt. Ltd. (the Company) is a Jamshedpur based corporation that will provide real estate development and rental services to customers in its targeted market. Our Vision To be the best, full service real estate Company in Eastern India and to enhance quality of life through active community involvement. Our Mission The mission of Nook Construction is to be the most successful real estate firm in Jamshedpur. It incorporates proven, professional state of the art techniques specializing in the construction, marketing, listing and selling of new and resale luxury homes, residential communities, home sites, undeveloped land and commercial and investment opportunities. Nook construction is a creative, innovative and people oriented organization providing individual opportunity, personal satisfaction and rewarding challenges to all members of the firm. To make the buying and selling of real estate as cost effective as possible while maintaining the highest level of service. To provide accurate and up to date information, skilled analysis and sound real estate advice. To continually explore ideas and technologies, to make the selling and buying of real estate faster, less costly and easier. Core Organisational Competencies Core organisational skills and competencies are vital to achieving our mission and are listed below: Advanced technology Human capital

Geographical Advantages. Legal Parameters Speculation Adequate Finance Strong Market Research and Analysis

Organisational Values Our company prides itself in having very strong organisational culture and values. Some of which is listed below: Help meet social, economic and financial community objectives through efforts in land management. Support to business industrial, commercial and residential, to develop and thrive in our community. Provide leadership and innovation in meeting land needs of our institutions, recreational users, social agencies and residents. Assist to protect natural environmental features through the land banking system and the land development process. Support internal Business Units to meet their land requirements. Respect the expertise and contribution of team members and recognize the value of collaborative effort. Provide timely, accurate information to customers.

Highest Priority Goals By 2014 to construct and commission a world-standard production and delivery firm capable of handling 3 to 4 projects costing below 10 crores at a time By 2015, to achieve a turnover of 100 crores. To establish a strong and sustainable internal structure. Hiring the right workers and defining their job description and to form a project development team that includes skilled members to successfully deliver the projects. To establish an extensive outlay of resources both in terms of materials, labour and finance. To promote a profitable and sustainable business activity that meets customer needs. To increase companys market share to gain the competitive edge

SPOT ANALYSIS
STRENGTHS: Internal and external relationships Council support Experienced and knowledgeable staff Customer service Land bank program Ability to influence Ability to think big Nontax supported revenue generator Document management Policies and procedures Attention to detail

PROBLEMS: Comprehensive marketing program Complexity of land transactions Complex and cumbersome multidepartmental road plan and closure process Complex and cumbersome multidepartmental shallow utility installation process Complex land inventory system; coordination of multiple databases: Tempest, GIS, and Excel Infrastructure service standards and specifications

OPPORTUNITIES: Create positive change in the fabric of the community Develop partnerships for economic and/or public benefit Create communities utilizing sustainability principles that include economic, environmental and social attributes Streamline processes while adhering to approval requirements

THREATS: Loss of corporate knowledge through staff turnover Downturn of the economy Geotechnical risks Changing regulatory requirements (storm water management) Rapid upturn in the economy (cost escalations, too busy, supply/demand)

SECTION TWO
CAPITAL INVESTORS

Name: Arpana Roy She is the director of the company and holds majority of the shares in the company. She is born and brought up in Jamshedpur and has done her graduation in architecture from BIT, Mesra, Ranchi.

Name: Rupal Sankhla She is the Marketing Head of the company and holds 12% shares in the company. She is born and brought up in Udaipur and has done her graduation in Civil Engineering Udaipur.

Name: Vishul Saxena He is the Design Head of the company and holds 12% shares in the company. He is born and brought up in Patiala, Punjab and has done his graduation in Architecture from NIT, Raipur.

Name: Anas Andhi He is the Administrative head of the company and holds 12% shares in the company. He is born and brought up in Gujarat and has done his graduation in Civil Engineering from SVIT, Gujarat.

Name: Vrushank Shah He is the Construction head of the company and holds 12% shares in the company. He is born and brought up in Gujarat and has done his graduation in Civil Engineering from Gujarat.

BUSINESS UNIT OVERVIEW

We are in the business to: Develop land to provide industrial, residential and commercial land opportunities Create revenue to be reinvested into other projects. Administer land holdings to create opportunities for the orderly assembly of land for effective community planning Demonstrate leadership through innovation in support of the Municipal Development Plan

The goals for our land development are: To achieve a reasonable return on investment measured through earnings and/or value to the community To provide a variety of choices such as density, price point, amenities and locations in the marketplace to consumers To develop communities that are attractive and sustainable (economically, socially and environmentally responsible) Business segment: Real estate developer in Jamshedpur, Jharkhand

Reason for selection Jamshedpur, the steel city is a small town in the newly found state of Jharkhand. A major part of the city is run by TATA STEEL itself. Jamshedpur has been selected as one of the cities for the global compact cities pilot programme by United Nations, the only one to be selected in India as well as South Asia.

Housing scenario in Jamshedpur Employees of TATA STEEL are provided with houses. Areas owned by the TATA STEEL are governed by JUSCO.

Customer base Retired employees of Tata Steel and other small industry employees which directly employ approximately 30,000 people.

Real estate Development Locals and tribal are now waking up for the upcoming development in the nearby areas and are trying to improve their living conditions. To fill this gap, our company will provide the excellent and cost-effective housing solutions. Ministry of commerce and state government has given up approval for setting up a 90 acres SEZ in Adityapur industrial area. This will boost the investment and employment opportunities in the area giving rise to housing demand.

Nature of the business and it main activities Leveraging our EPC experience Strong EPC base will give cutting edge to rise above industry standard in terms of execution capabilities Synergies of operating diverse businesses

Focus on Green Buildings Try to make all our projects green and get certification from registered authority.

Unique Business model focused to lower land acquisition costs Real Estate development through Joint Ventures (JVs) and Joint Development Agreements (JDAs) Partnerships augurs well for local market dynamics Focus on Tier II and Tier III cities

Presence across the entire universe of projects Residential and Office Complexes, IT parks, Shopping malls, Multiplexes, Hospitality properties and other buildings

Competitive strengths

Qualified and Proven Project Team and Experienced Management Ability to accurately estimate costs Design, construct and deliver the project in cost effective and timely manner Diversity of experience gives flexibility to adapt to the needs of customers

Differentiated Real Estate Business Model Asset light model using joint development agreements and/or joint ventures Strong business model with mix of development and rental earnings

Synergy between Real Estate and Green Buildings Ability to develop turnkey Real Estate projects

Control on quality and execution timeline Ability to get certification for greeen buildings

Emphasis on Innovative Technology for making all type of projects Green Innovative developments to maximize the use of land and minimize use of power and other natural resources Innovative theme-based on Green buildings.

Backward Integration through GMP Acquisition To participate in complete solution engineering in modular clean room, office partitions, HVAC, electrical and building management systems Ability to bid for full service contracts

Growth Strategies

Expanding Geographical Presence Entry in new geographies with Real estate business RE development once gained significant know-how about the region

Expanding business verticals High growth potential in Education, Pharmaceuticals and Health-care segments with green aspects Making in-roads in Government projects

Mature as a General Contractor Acquiring more of General Contracts and Participate in bidding of full service contracts

Increased Mechanization To facilitate reduction in cost and To adhere to project timeline

Evaluation of Infrastructure Projects Exploring entry into infrastructure sector in India like bridges, small airports Focus on Real estate related EPC contracts

SECTION THREE
MARKET ANALYSIS
Economic Outlook The Real Estate Developer will be actively engaged in two primary business units that will seek to generate revenue in any real estate market. These strategies include developing residential properties and the rental of completed properties. Management is developing a very complex pricing method to ensure that the Company can continue to provide its units at profit despite possible drawbacks in the overall economic market. The Companys two prong approach to real estate will allow the business to grow successfully in the rapidly changing real estate market. More importantly, this strategy will allow the Company to offset the risks from each business unit so that there is a diversified balance in the Companys real estate portfolio. This is especially important as the business uses leverage to finance the acquisition of its properties. Industry Analysis The India Economic Census estimates that there are 21,300 companies that specialize in the construction of new residential units in India. On an annualized basis, these companies generate fees of 43.9 billion while concurrently providing jobs to more than 520,000 people. In each of the last five years, aggregate payrolls have exceeded 20 billion. However, the industry has recently come under some turmoil has the value of housing and commercial properties has plummeted over the last two years. Many real estate developers are holding onto substantial inventories of properties that have depreciated significant. While this is a prominent issue in the housing market, it presents an excellent opportunity for the Company to develop properties inexpensively so that they can be sold at the current market rate at profit. Recently, the number of real estate sales has increased significantly within the last year. This is one of the primary signals of an overvalued real estate market. As stated earlier, the Bureau of Economic Analysis estimates that homes on the market have increased more than 13% over last years figures. During the boom time for real estate over the last five years, many people overextended and over leveraged their properties with floating interest only loans. Customer Profile As the Company intends to operate among several different investment and operating units, it is hard to characterize any specific tenant that will occupy the Companys properties. However,

Management will enact strict tenant quality and credit review procedures to ensure the Companys revenues will not be interrupted by tenant default. Competitive Analysis Since real estate is effectually one of the most free market oriented businesses in the country, competition cannot be accurately categorized. The Company anticipates that there will be a sizable amount of competition from both single owner investment firms to large construction companies that are seeking to gain from the real estate prices throughout the target market.

Market Segmentation
1. Nook Constructions largest market segment in the Jamshedpur city will be industrial people of the local industries. These people will be the most likely to desire the more technological amenities that our company offers. We expect this to be the largest growing segment with a good growth rate of 7%. 2. Local Skilled and unskilled employees are another large segment. They will be attracted to the units because of the same technological needs, but will also be attracted to the comfortable, well maintained living environment with low prices in such industrial city. Nook offers units that provide a quality "hub" between industry and home ownership. We expect this segment to grow at a rate of about 4% with a more frequent turn over. 3. Local Employees (Administrative) and staff represent the third and smallest identifiable segment, but contain the second highest growth rate. Proximity and quality will entice this segment which we expect to grow at a rate of 5%.

Market Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Industrial People from Outside Local Skilled and Unskilled People Local Employees (Administrative) Other Total Growth 2008 2009 2010 2011 2012 CAGR 7.00% 4.00% 5.00% 3.00% 5.43% 7% 18,000 19,260 20,608 22,051 23,595 4% 12,000 12,480 12,979 13,498 14,038 5% 3% 6,000 4,000 6,300 4,120 6,615 4,244 6,946 4,371 7,293 4,502

5.43% 40,000 42,160 44,446 46,866 49,428

Target Market Segment

We believe that our unparalleled level of quality and technological amenities put Nook into a niche of its own. This will be the focal point of all our marketing and advertising efforts. These segments are also easily reached through local newspapers and publications, as well frequent open house displays.

It is essential for NOOK patrons to understand that their needs are our priority.

Market Trends
This industry is constantly evolving and leaving many inflexible companies stagnant. One of the major trends is the need to adapt to technological advancements as well as maintaining the overall appearance and condition of the complexes. Another important trend is adapting to higher density housing in smaller areas due to urban growth boundaries, etc. NOOK is dedicated to trends while maintaining the level of comfortable livability that sets us apart from our competitors.

Market Needs
Each of our targets need the quality, convenience, service, safety, comfort and technological amenities that can only be found at our living complexes. 1. The general employees segment needs a quiet safe atmosphere that fosters a quality learning environment. They also need the convenience of location and on-site amenities. 2. The Administrative professional segment needs a living environment that separates them from the noisy, dirty inconvenience of average apartment living. Most professionals are on their way to home ownership or movement to a larger city, so they need housing that will let them feel like they are getting the quality that they need. 3. The Higher Post Managers segment also has similar needs. They need to feel separation from the noise and unkept conditions of most near-campus housing. Along with the students, they also need a place to feel safe and one that fosters convenience.

SECTION FOUR
PRODUCTS & SERVICES
The primary revenue center for the business is acquiring land with the intent to develop new residential units with the intent to resell, or rent the properties to the general public. This is a strategy that is popular in any economic climate as profits come from the sale of the property after it is completed. Immediate wealth is created from the moment that the property is complete. The primary focus of the Companys marketing strategies will be the sale of properties, but the business may rent its completed units in the event that the property does not sell within 90 days of placing the property on the market. Below is a description of the real estate services offered by Nook Construction Pvt. Ltd. Developer of Residential Real Estate The Real Estate Developer will primarily engage the business of developing residential properties with the intent to sell or rent the property once the project is completed. If the real estate market does not provide a fair and reasonable market value for the property, then Management will aggressively rent the units until such time when the building can be divested at a fair market value. After the development process is complete, the Company can quickly divest these assets to a real estate investor for a significant profit. There are several considerations that the Company must deal with before purchasing land for development purposes. Once the property is competed the business will then seek to divest the property or rent the units in order to generate income to satisfy the debt obligations of the business. Rental of Completed Properties The direct finance and purchase of residential property is the secondary business of Real Estate Developer. Residential real estate will provide a continuous stream of rental income that the Management will use for reinvestment and profit stability for the Company. Management is developing a complex economic pricing strategy that will determine the fair market rate of a property based on its capitalization rate in conjunction with the market values of residential property. Residential real estate is the least risky form of real estate investing because the service offered is a necessity.

Products
1. Small size flats for unskilled employees from outside (Bedroom With Service room) 2. Small size flats for skilled employees from outside (Bedroom With Service room)
Such kind of flats are consists of 1 bedroom, verandah and service area with attached bathroom. No separate kitchen area will be provided. Single bed, Work Desk and Chair Built-in wardrobes, book cup-boards Hot water for inmates Phone facilities House-keeping services for the rooms well supplied with electricity by one 500 kVA and another 300 kVA transformers. 3 diesel generator sets with a total capacity of 437.5 kVA caters to the emergency electricity needs. The roads are lighted by 70 watts Metal Halide Lamps and 125/250 watts Mercury Vapour Lamps

3. Low Cost Housing for unskilled local employees (1/2 BHK) Provision of Rs.100 Crore for this scheme in the budget of 2013-14. Nearly 10,000 beneficiaries will be benefited under this scheme. Minimum carpet area and maximum carpet area of the houses for the people belonging to LIG will be of 31 sq.meter and 50 sq.meter respectively. Facilities like one bedroom, hall, kitchen, bathroom and toilet will be provided in the house. Families having annual income of Rs.1,00,000 to 2,50,000 will be able to get benefit of this scheme. Houses for LIG will be built on the lands available with Gujarat Housing Board while Municipal Corporations, Municipalities, Urban Development Authorities and Area Development Authorities will construct houses on the housing land available to them. The state government will provide an assistance of Rs.1,00,000 for each beneficiary under the housing scheme for LIG. FSI of up to 3.0 will be given on the land for such housing schemes.

We will give advertisement in the newspapers and finally select the beneficiaries in a transparent manner by conducting a computer draw of received applications. Beneficiaries will be given priority as per the governments current policy. Maximum price of the house will be Rs.7.50 lakh to Rs.11.00 lakh. We will provide basic facilities like drinking water, underground drainage and electricity to the beneficiaries. TPI (Third Party Inspection) will be carried out, if necessary and as per the rules, with a view to check housing quality.

4. Apartments for skilled local employees (1/2 BHK) 5. Luxurious apartments with amenities (2/3 BHK)

Clear Title. 345 flats spread over 6 acres of land 2 & 3 bedroom flats of 1,100 sft. & 1,665 sft. Choice of Semi-deluxe & Deluxe flats Housing loans available Pollution free environment Eco-friendly development - 60% open area Possession from February 2015 onwards. Design as per vaastu.

Amenities 8,000 sq. ft. Club House with

o o o o

Banquet hall cum TV Room Recreation Room with Pool and TT table Library Fully Equipped Gym

Swimming pool Children's park Landscaped gardens Tennis court Open-air Badminton courts Basketball court

8 passenger Automatic Lifts Backup generator for lifts & common lighting 1 KVA generator backup for each flat CC roads and street lighting 24 Hrs security with CC TV Intercom in all flats & security room

SECTION FIVE
MARKETING PLAN
Marketing in a highly competitive housing industry depends on the recognition of excellence, as well as a point of difference to display our units in an individualized light. Nook Construction will build a reputation upon these components. We will develop and provide a living environment of unmatched proportion. It starts with the commitment to customer satisfaction and fulfilling their demands. Our commitment to quality and comfort includes safety and 24-hour customer service. The aspect of our living developments that differentiate Nook Construction from all other real estate companies is our focus on maintaining the most advanced technological innovations on the market for our tenants. We intend to maintain an extensive marketing campaign that will ensure maximum visibility for the completed units in its targeted market. Below is an overview of the marketing strategies and objectives of our company. Marketing Objectives

Establish relationships with other real estate brokers and agents within the targeted market. Implement a local campaign with the Companys targeted market via the use of flyers, local newspaper advertisements, and word of mouth.

Develop an online presence by acquiring accounts for major online real estate portals.

Marketing Strategies Property and home buyer marketing will be the most difficult portion of the marketing strategy. This task will be accomplished through the businesss broad marketing campaign throughout its targeted market. The Company will also use an internet based strategy. This is very important as many people seeking real estate for purchase or rent use the Internet to conduct their preliminary searches. Mr. Doe will register the Real Estate Developer and its properties with these online portals so that potential buyers/renters can easily reach the Company. The Company will also develop its own online website. The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the homes and properties that the Company is selling.

Pricing Expected margins from sales will reach 60%. Rental income is to be determined based on market conditions. NCs pricing will be at the top of what the market will bear. Our prices will be competitive with the larger firms while maintaining the high level of quality and expert management. However, we must try to follow market pricing trends in order to maintain a competitive advantage. Distribution Strategy We will focus on providing high-quality living in convenient locations with a wide customer base. It is also important that we remain at the upper echelon in the quality range when compared to competitors. We can only do this by organizing and implementing a sound plan that will assume responsibility for the functionality and appearance of our properties. We will have an updated Web site for anyone interested in the properties. Marketing Programs Our most important marketing program is customer word of mouth. The only way to truly know the quality of our units is through experience; hence we must maintain the highest level of customer satisfaction. Rewards will be given to clients or customers that refer new clientele to the company. We confidently believe that the high level of quality that we will provide can attract a strong demand for our units. Another incentive that we will use is the early move-in bonus program. Anyone that signs their lease before June 15th will receive a free month as well as two parking spaces. This will encourage people to try and beat the rush of people who move in later. It will also give the appearance of increased demand. Positioning Statement For people who desire high-quality living with all the technological amenities available, only Nook construction real estate properties will be able to fulfill their needs and desires at an affordable price. Unlike most other property management companies, we are committed to guaranteeing customers full satisfaction, with 24-hour on-staff service, live answering service, and a website that handles all complaints instantly. Promotion Strategy Our most successful promotion will come in the form of word of mouth. Since we will own real estate, we will be highly visible to the public. Since our complexes will be in the upper echelon of quality and livability, word will spread through the community about our unique appeal.

Along with word of mouth, our most consistent form of promotion will come from ads in local publications, specifically, The Time of India, The Telegraph and The Hindustan times, as well as smaller magazines and circulations. We will also be personally promoting our product within the community. Sales Strategy Sales in our business is based upon providing customers with a living concept fitting of their needs. We must be in touch with the needs and desires of our clientele in order to best attract a consistent flow of incoming residents.

Marketing
Marketing Vision Nook seeks to make first-time home buyers comfortable, happy, and worry-free both during the home buying process and even after their closings. By doing this, Nook hopes to build a reputation as the real estate company for first-time home buyers, effectively eliminating competition within their market. This marketing plan details the current and new marketing programs and practices of Nook which will lead to establishing and consolidating this reputation. Goals Nook will pursue the following specific goals:

Hire an additional agent before workload cuts into time necessary for marketing and company direction

20 invitations to area speaking engagements in 2014 in Industrial Projects

Strategic Goals

Be ranked in the top 1 real estate agencies for first-time home buyers in local area. Achieve 100% customer satisfaction

Purpose Nook seeks to make the process of buying a first home a relief for clients, offering them such great service that all of their fears associated with the process will disappear. Through this, Nook hopes to make home ownership, and the financial, emotional, and psychological value

that comes with it, happen for as many people as possible. Ideally, the ideas and process of how customers are treated at Nook will be shared with similarly-minded real estate agents in other towns and states so that the reach of the company's impact goes well beyond its locale.
Free brochures and different seminars (with free lunch) to industrial working people as per their requirements JUSCO Power Substation JOST India Auto Components Pvt. Ltd. Power Grid Crop. Of India TATA Rolls Ltd CAPARO Engg. India Pvt. Ltd. Dipali Enterprises Hindustan Petrolium Corp. Ltd. Indian Oil Corp Ltd. JMT Auto Ltd Large boarding near industrial area and roads as well as highways Adityapur Kandra Main Road Jamshedpur to Barbil Jamshedpur to Govindpur NH 32 Advertisement in Local News Papers and Internet

Dainik Jagran -Jameshedpur Dainik Bhaskar - Jamshedpur Prabhat Khabar - Adityapur The Telegraph Times of India
Nook will provide easy EMI and installations with availability of low interest home loans.

SECTION SIX
RESEARCH AND DEVELOPMENT
Our company mainly deals with real estate and construction business in which the process is very slow due to lot of paper work and clearance. Due to this the money is blocked in the project for long time so proper planning for financial part is crucial. Moreover Locals and tribal in Jamshedpur are now waking up for the upcoming development in the nearby areas and are trying to improve their living conditions. To fill this gap, our company will provide the excellent and cost-effective housing solutions. For this thorough market research is to be done on the development pattern of the city. For example Ministry of commerce and state government has given up approval for setting up 90 acres SEZ in Adityapur industrial area. So what more schemes of government or private companies are coming in the area where our companys capital is invested. For example town planning scheme and other such scheme which will affect our land possession, type of use i.e if the portion of land is purchased for building commercial building but in the new scheme that portion is declared residential or agricultural. So all this risk factors should be analysed and studied thoroughly Lack of Transparency in Real Estate Development is essentially an activity which consists of aggregating land and the respective project, mobilizing resources, getting the license and approvals for construction and marketing the project to the targeted client. Profitability of a real estate developer combines profitability of all its projects, at the corporate level cash flow of the development company is the net aggregate cash flow from all its projects as adjusted for the corporate expenses and interest payments. Total assets can comprise of all kind of land development agreements, receivables, even liability for subvention payments on certain home loans.. We cannot know whether a project is delayed, being implemented on time, profitable, unprofitable etc. The numbers do not tell us the impact of cost over runs, contingent liability on account of delays and defaults etc. It is very difficult in such circumstances to make a clear picture about the future growth of a real estate development company. Companies are also not required to disclose project wise cash flows and whether and to what extents fund have been diverted to other projects or activities like land acquisition. All this create difficulties for developer and in such a situation objective judgment becomes a casualty.

Research areas

Housing Markets & Finance: The dynamics of supply and demand that create the U.S. housing markets. Demographic trends, housing construction and costs, mortgage finance process, and secondary mortgage market.

Real Estate Finance/Securitization:Financial products used to finance real property. Strategies and structures of financial products.

Real Estate Development/Land Use Policy:Real estate development process and practical applications of design, construction, and finance in developing real estate.

Real Estate Investment Strategy: The variety of forms of value creation in global real estate; development, investment management, and strategy. Economic, financial, institutional dynamics that constrain actors and organizations in the real estate business.

Real Estate Public Development Finance & Urban Development Politics: The role of local actors in real estate development. The economics and role of government in financing real estate development.

Demographics: Exploring demographic trends and the impact of such trends on real estate markets. Issues such as demand for workforce housing and the expansion of midsized communities.

Social Enterprise and Policy: The economics of education. Determinants of property taxation and expenditure in local public school districts, the impact of teachers on student achievement, and measuring the effectiveness of educational policies such as charter schools and school accountability systems.

So an effective team is to be appointed for carrying out research on above topics and for formulating successful strategy for land acquisition, development etc. Considering all critical factors mentioned above

SECTION SEVEN
PRODUCTION AND DELIVERY
We are focusing on real estate so we can focus on business. Our Services capability integrates various real estate disciplines, such as Advisory Services, Portfolio Administration, Facilities Management, Transaction Management, and Project Management into tailored solutions meeting the exact needs of our clients. Delivered through a dedicated account team, we serve as a natural extension of customers, supporting and enabling the achievement of customers objectives. The professionals at our company serve as customers advocate, using our experience and proven methodologies to complement customers own strengths and capabilities. Our proven ability to reduce costs and mitigate risks enhances the value of real estate. Smart positioning and marketing to attract and retain tenants. Our qualified professionals take care of marketing our property and achieving the most competitive rates while maintaining occupancy. Working with our company gives investors the benefit of having a world-class, full-service partner that is committed to their long-term investment. Making most of the market opportunities. Good project managers can oversee a project through to completion, but producing superior results requires a firm grasp of business goals, priorities and speed to market. Our company oversees the management and tracking of the entire project from site selection to final closeout. We negotiate tenant work letters or owner contracts to ensure timeliness and clearly communicate your company standards to all parties. We create streamlined project schedules, saving the precious resources of time and money. Our project management experts offer unmatched strategic perspective and hands-on problem solving to add value and mitigate risk at each significant point of the process. Your assets, your way. Your real estate assets are more than addresses on a map, they are an integral part of your plans and priorities for the future. Thats why what is important for us that not just how well we know Property Management. Its how well we understand the full range of our investor and customer business requirements from your financial goals to their assets distinctive

characteristics, from reporting needs to decision-making processes. we measure the worth of our Property Management business not by the value of assets under our care, but by the value of our relationships with owners and investors like you. Financial Advisory We also have a financial advisory team which give advices to our investors and customers the present market and financial plan so that they can make their decision faster and feel safe about their investment. Execution For the execution part we have formed six separate department i.e project planning department, safety department, quality department, electrical department, billing and account department and execution team. They all will take care of their respective department and submit their DPR to project planner daily. We will also have a weekly meeting to resolve the problems if any. Delivery Delivery for the land purchase transaction will be according to the convenient and sale deed and that of the constructed project i.e residential or commercial time will be given of the project duration and release of fund from the clients or customer or investor will be according to the stages of construction, for example at plinth 15%, at 1st floor 15%, at 2nd floor 10% etc.

SECTION EIGHT
SUPPPLY CHAIN
Real estate plays a vital role in overall supply chain strategy, as nearly every warehousing or distribution center decision features a real estate component. When properly aligned with corporate objectives, a well-executed real estate strategy can make significant contributions toward achieving operational and financial budgets. Our companys real estate and logistics service is to offer a single-sourced comprehensive solution. Our aim is to be world's largest supply chain management company and experts in understanding the operational factors that influence real estate decisions. Customers benefit from reduced end-to-end supply chain costs, minimized risks, improved efficiency, and market-tested solutions. Leasing Our leasing group performs site searches, advises on facility selection, and negotiates lease terms. On average, our leasing team is expected to perform 50 site searches and executes nearly 30 leases each year. To present the best options to our customers, we have assembled a network of local brokers with extensive knowledge in each market. This network ensures customers acquire the facility that best meets location and financial requirements. Our real estate team also offers lease mitigation services for customers with existing leases. We work closely with landlords to develop creative solutions to reduce or eliminate lease exposure Lease Administration Once the lease has been executed, we manage the payment of rent, common area maintenance (CAM), taxes, and insurance. We also oversee and execute operating expense reconciliations, tax appeals, turn-back negotiations, and can represent the tenant in any landlord disputes. We perform about 65 CAM reconciliations and 60 tax appeals each year. Development & Construction For customers with unique needs, we offer build-to-suit development services. We want to build our experience in developing large area, coupled with our vested interest in delivering facilities on time, on budget and to user specifications, reduce real estate risks. Some of our employees are also experienced negotiating tax abatements and other local incentives to reduce occupancy costs.

We are also planning to invest in campus developments in key logistics markets, which allow customers to reduce start-up and operational risks by leveraging resources, talent, and knowledge within a campus environment. Capital Markets For customers who have a need to dispose of owned assets, we offer capital markets consulting to review the asset or portfolio, advise on monetization strategies, and manage the disposal process, all while acting as the customer's advocate. We maintain several institutional relationships allowing for both private and public market transactions. How our real estate assets and expertise are different from competitors Procuring integrated real estate and logistics solutions from one provider reduces the number of touch points and solution complexity It will help the company to be vested in the delivery of an on-time, optimal real estate solution because we understand the operational implications of delivery delays and other sub-optimal solutions Integrating real estate and logistics decisions reduces end-to-end supply chain cost and improves efficiency Handing off real estate execution to us allows customers to focus on strategic, rather than tactical, issues We use a market test to ensure that the optimal customer solution is presented each and every time

SECTION NINE
BUSINESS SYSTEMS AND PROCESSES
a) QUALITY MANAGEMENT

QUALITY POLICY (POLICY STATEMENT)

within the time schedules at the lowest cost to our Customers including providing safe work environments. ality of products and services including the development of employees at all levels.

PROJECT QUALITY MANAGEMENT SYSTEM (PQMS)

management objective. ng ensures that change is conducted in a controlled manner and that the Integrity of the Project Management System is maintained during this change.

QUALITY OBJECTIVES PMC has established Quality Objectives and levels of assurance that are measurable and consistent with Organization policy. Quality and safety objectives are defined within the respective policies and operations procedures forming part of this Project Quality Management System. Quality Objectives are as follows:

100% compliance with applicable safety and environmental standards. 100% conformance to customer specification and expectations. 0% re-work 100% delivery on time 100% completion within budget

QUALITY ASSURANCE PLAN

The objective of the QAP is to establish a procedure to plan, monitor and achieve Quality Management System planning in order to fulfill customer requirements, statutory requirements and organization objectives based on contractual requirement. Assurance Plans. 1. Field Quality Assurance Plans 2. Quality Assurance Plans for Incoming Materials There are two types of Quality

QUALITY MONITORING PROCEDURE Management Review (General) System is suitable and effective in satisfying the requirements of the PMC quality environmental and Safety objectives. ss is reviewed in MIS reports. Management Review At Site iew Inputs: Results of audits including safety, customer feedback , process performance and product conformance , status of preventive and corrective action includes Safety, follow-up actions from earlier management reviews, recommendations for improvement includes Safety, changes that could affect the Project Quality Management System

Improvement of Product Quality, Improving Customer satisfaction, Best practices for implementation.

quality Management system processes to achieve the planned results of the product & to verify that the requirements have been met as per contract.

b) RISK MANAGEMENT
Risk can be defined as a measure of the probability, severity and the exposure to all hazards for an activity. For an infrastructure project there is always a chance that things would not turn out exactly as planned. Thus project risk pertains to the probability of uncertainties of the technical, schedule and cost outcomes. Risk = f ( likelihood , impact )

Construction is a high risk industry. The uncertainties in the construction process increase exponentially with increasing complexity & competitions. Time, Cost & Quality achievement of advanced projects depends on how effectively risks are managed during its process. Risk and uncertainty are inherent in construction projects whether it is building, commercial; industrial or any specialized such as bridge, warehouse, water retaining structure etc. Risk Management can be defined as identification, measurement and economic control of risks that threaten the assets and earning of a construction business or any enterprise. It identifies the various risk factors and sources of risk and tries to control them before the failure or damage occurs. This is a management tool/technique which aims at identifying sources of risk and uncertainty, determining their impact and developing appropriate response.

Three Major Aspects of Project Risk Management 1. Risk Identification 2. Risk Assessment 3. Risk Response Planning and Mitigation Measures

Sources of Risk High risks in projects typically stem from Using an unusual approach Attempting to develop and use new technologies Training for new tasks Developing and testing of new equipments

Project Risks can be categorized into: 1. Internal Risks : originate from within the project 2. External Risks : external factors affecting the project

Internal Risks Technical, Design and Execution Risks Market Risks (risk of not fulfilling either market needs or requirements of particular customers) External Risks Government Regulations Interest Rates Competitors Action

Customer Needs and Behaviour Supplier Relations Adverse Weather Conditions Problems in Labour Availability (strikes, agitations) Market Conditions Scarcity of Resources Force Majeure Risks ( earthquake, flood, fire etc.)

COMMON PROJECT RISK SOURCES

i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv. xvi. xvii. Delay in Approval of Detailed Project Report (DPR) Land Acquisition risks Design Risks Technology Selection Risks Approval and Permit Risks Joint Venture Risks Financial and Investment Risks Political Risks Environment Related Risks Geo-technical Risks Major / Minor Accidents during Execution Unforeseen Heavy Rains Force Majeure Risks like Flood, Fire, Earthquake etc. Labor Agitation and Strikes Inflation Risk Delayed Payment from Client Delayed Payment to Subcontractor

RISK RESPONSE PLANNING AND MITIGATION MEASURES 1. Transfer of risk 2. Avoid risk 3. Reduce Risk 4. Risk Contingency Planning 5. Accept Risk 6. Insurance as Risk Mitigation Tool

c) PROJECT MANAGEMENT INFORMATION SYSTEM (PMIS)

PROGRESS REPORTS Daily Progress report This report, which will be made daily, has all minor progress details of the approach works, precast works, erection works & cast in situ works. This report will be made by the contractor & is send to the client the very next day for signing and for clients record. Weekly reports A weekly progress report will be send to the HO from the site office on every Monday. Majorly weekly progress report will contain details of planned works for that week. Contractor will also make a weekly report in more or less similar format and sends it to client for his records. Material procurement, consumption and issue reports Requirement of material as given by the Sr. Site engineer on different parts of the project. The Planning engineer will check the demand with the help of the previous consumption reports (pour card, bbs, etc.) and also with the target chart to deal with the quantities required for that particular stretch of time.

Monthly reports

The report will be submitted to the HO in the very first week of the month. Following will be the contents of this report:

d) ENVIRONMENTAL ASSESSMENT METHODS: BREEAM AND LEED

BREEAM - Building Research Establishment Environmental Assessment Method

BREEAM is the worlds longest established and most widely used environmental assessment method for buildings. It sets the standards for best practice in sustainable development and provides a recognised level of achievement. BREEAM is an assessment tool developed in the UK that rates the performance of buildings based on their environmental impact or measures taken to avoid such impacts. A building is rated on management, energy use, health and well-being, pollution (air and water), transport, land use, ecology, water consumption and efficiency, and materials.

LEED - Leadership in Energy and Environmental Design

The LEED green building rating system was originally developed by the US Green Building Council (USGBC). Largely based on BREEAM, it provides a recognised standard for the construction industry to assess the environmental sustainability of building designs.

LEED promotes integrated whole-building design, with the overall aim of reducing a building's environmental impact. LEED provides a framework for assessing building performance and meeting sustainability goals and like BREEAM, it produces a point-based rating system.

The USGBC has attracted over 6,500 paying members bringing in over $24 million a year. Despite this, since it was formed in 1995, just over 1,000 buildings have obtained LEED accreditation with about 9,000 projects registered for assessment.

LEED has been used to certify buildings in USA, Canada, India, China, Brazil, UAE, Mexico, Argentina, Italy and Spain.

The two most commonly-used assessment tools at the design stage are BREEAM (Building Research Establishment Environmental Assessment Method) and LEED (Leadership in Energy and Environmental Design).

Both headings actually cover a range of schemes for assessing environmental impact, with specific variations applying either to different building types or to different stages in the construction and occupation of a building.

e) PERFORMANCE IMPROVEMENT ACROSS THE BUSINESS, TO INCLUDE PERFORMANCE INDICATORS AND TARGETS

Firm performance measures used in this study are composite scores of several metrics of performance: schedule performance, cost performance, customer satisfaction, EMR, and profit. This builds on and enhances prior research that investigates IT use in the industry, as well as makes a case for generalizing the IT research for specific technologies that suggest IT use is positively correlated with cost and schedule performance on projects.

SECTION TEN
STAKEHOLDER RELATIONSHIPS AND ALLIANCES
A Stakeholder in an organisation is any group or individual who can affect or is affected by the achievement of the organisations objectives. Organisations are dependent on their Stakeholders for their success and their failure. A stake by definition may be:

In an organizational crisis, typically multiple stakeholder groups are affected and involved to a varying extent. Stakeholders needs and demands have to be balanced and prioritized wherever applicable. Professional crisis management and crisis communication may help creating support for and trust in companies by the complete range of its stakeholders.

According to the current situation key stakeholders that currently contribute to business performance are:
i. ii. iii. iv. v. vi. vii. viii. Investors/shareholders Employees Contractors Financial institutions Customers Buyers and suppliers

government departments community client executives end users alliances/partners competitors regulators local communities/pressure groups the media

ix. x. xi. xii. xiii. xiv. xv.

Common causes of project failure: Insufficient senior management/political/end user support Too much focus on outputs, not enough on outcomes Bad communication between relevant parties Difficulty overcoming resistance to change Unclear and lack of consensus on objectives

Key insights

1. Need to adopt a broader view of project success criteria - a new model 2. Prioritisation gaps between Stakeholders and Project Managers must be understood and managed 3. Managing the different/ opposing Stakeholder views on the same project is complex 4. The PM must be aware of what makes the difference to stakeholder confidence 5. Supporting PMs in focusing on customer understanding and empathy is vital 6. PMs need to be challenged and supported to understand and work with stakeholders perspectives 7. PMs are challenged to lead, not just manage

Project success Criteria

1 Quality of Deliverables & Service 2 Delivery Performance 3 Benefit Realisation 4 Attitude and Behaviour of People 5 Competence of People 6 Responsiveness 7 Ease of Doing Business 8 Innovation and Creativity

Overall Picture of Improvement Priorities:

SECTION 11
ORGANISATION AND MANAGEMENT

MARKETING (RUPAL SANKHALA) FINANCE (SANDEEP BHATACHARAYA)

IDEAL ORGANIZATION CHART FOR NOOK CONSTRUCTIONS

MD
ARCHITECT/DESIGN VISHUL SAXENA PLANNING SUMIT AGRAWAL

DIRECTOR /CEO/COO ARPANA ROY

PURCHASE

PROJECT

BILLING SURVEYOR

MEP

CONSTRUCTION HEAD VRUSHANK SHAH AND ANAS FUTURE PROJECTS SECURITY

Organisation
SAFETY

structure
AUDIT SYSTEM

QUALITY

Q.S/BILLING

BILLING

MANAGEMENT

The initial management team depends on the founders themselves, with back-up assistance from the property management department. As we continue to grow, we will establish satellite offices in all of our living developments. It will also be necessary to take on additional help in the marketing and R & D sectors as growth continues. Management Team NC is completely departmentalized. The main departments are finance, marketing, management, and research and development. The company will make all decisions in accordance with the company mission. Employees are delegated tasks based upon their specialty. Every six months, the two top partners will assess the results of these tasks, and the personality of the employee involved, to determine promotion and/or salary issues. Management Team Gaps The present team requires business development and administrative support. Most of the partners have been working in business environments where this kind of support was provided to them as part of a larger organization. NC will turn to Dynamic Public Relations to help create business development programs, such as speaking opportunities and magazine article insertions, as well as forums and seminars that are important to our ongoing development. Regarding administration, we need a strong finance manager to guard cash flow. Our partners are not accustomed to the worries of cash flow, but they have the sense to listen to reason and deal with constraints if the finance manager provides the proper information.

SECTION 12
ENVIRONMENTAL AND SOCIAL IMPACT
ENVIRONMENTAL SCAN MARKET TRENDS: Change in interest rates Cost of development Variety of housing options market demand Variety of land options Corporate land requirements

POLITICAL FACTORS: Change in Political party every 5 years Government supports the provision of industrial land Municipal Development Plan Public scrutiny of land transactions

ECONOMIC CLIMATE: City continues to have stable growth Interest rates, Oil prices

CUSTOMER NEEDS:

Information Fair and equitable timely opportunities

SECTION 13
RISK FACTORS AND REGULATORY COMPLIANCE

Risk Identification and management

The various risks associated with this business plan can be grouped into three categories: Business Risk, Property Investment Risk, and Market Risks. Business Risk could be viewed as the issues associated with the assumptions made for Nook Construction Pvt. Ltd. These may include the following: The principals do not have sufficient equity to fund property purchases for NC. Estimated start-up costs are greater than what is projected. The necessary time frame to acquire properties is greater than estimated and cannot be performed as a part time job. The necessary time frame to manage the rental properties is greater than anticipated and cannot be performed as a part time job. NC does not properly manage the portfolio of properties and, as such does not meet its projected returns and or obligations. Property Investment Risk could be viewed as the issues related to the acquisition assumptions and projected returns. These risks may include the following: Property acquisitions cannot be made as projected. Rental rates are less than projected. Operating expenses are greater than projected. Renovations/improvements costs are greater than projected. Vacancy periods are greater than projected. Lease transactions are greater than projected. Tenant vacates property early. Late rental payments. Unexpected capital improvements.

Market Risk could be viewed as issues related to housing market in general or specific to the Frederick region. These risks may include:

Interest rates increase, thereby making financing cost greater than projected and either reducing cash flow or making deals unobtainable. Supply of rental housing increases, which could lead to lower rents. Government policy initiatives that enhances opportunity for homeownership and lure away would-be renters.

The risks identified could affect NCs performance or ability to meet its financial obligations or targeted return; however, that the long-term benefits of real estate investment combined with the principals expertise reduce these risks and will produce the projected returns and meet the obligations of Nook Construction Demographics According to the Indian census Adityapur has Population of 225,628. Males constitute 54% Females 46%. Adityapur has an average literacy rate of 68%, higher than the national average of 59.5%, with 60% of the males and 40% of females literate. Fourteen percent of the population is under 6 years of age.

Geographic Kharkai River surrounds Adityapur on three sides (except the west), and is connected with the well-known city of Jamshedpur (famous for Tata Steel) via a toll bridge through Kadma and Kharkai Bridge through Bistupur over the river. Transportation Services Adityapur has its own railway station and a four-lane highway (Adityapur-Kandra Main Road) that connects Jamshedpur to Barbil via Seraikela, Chaibasa. There is also a bridge between Kadma and Adityapur that provides a shortcut to NH 33 via Marine Drive. Housing Demand 6000 Medium and Small House Units are needed in coming 3 years. As per the AIADA Report in March 2013. Competitors: Akruti Developers are the only developers in Adityapur. Land Availability Company owned 3 Acres of area in Proper Adityapur. Uncertainty

In which, 1 Acre of Area has required to get Non Agricultural Construction Permission. Company has not been approved by JUSCO and AIADA yet (In Process) Political Risk

Regulatory Details
AIADA Control Area Held land area for the purpose of establishing industries and allied objectives Total developed land 33,970 53 sq. mile, 83 gm. 3186.90 acres acres

(including 345.87 acre basic infrastructural land) Number of total developed plots

2955.76 acres Plots 1365; Sheds 142 7 1 Industrial Industrial phases Estate

Total developed work area

1 medium near Industrial Estate medium-scale large-scale area. area

a) Micro Shed b) Mini Shed c) Large Shed Total allotted land Available Land for allotment a) Number of total allotted plots b) Number of Total allotted sheds Total Industrial units to whom plots/sheds are allotted Units under Production a) Large scale b) Medium scale c) Small scale d) Tiny scale Units under Construction

19 in VIth phase 48 in IIIrd phase 75 in IIIrd phase and Industrial Estate 2609.79 acre 35 acre 1365 142 1102 893 12 71 567 243 129

a) Large scale b) Medium scale c) Small scale d) Tiny scale No. of Sick/Closed Units Direct Employment Includes Tribals & local people Total investment on infrastructural facilities (Year 200304 to 2007-08) Approximate capital expenditure on units in production Average Annual Production

1 12 52 64 80 27,900 (approx.) 11,550 (approx.) Rs. 36.42 crores Rs. 3,050 crores Rs.3,550 crores

SECTION 14
Financial Plan
We want to finance growth mainly through cash flow. We recognize that this means we will have to grow more slowly than we might like. The most important factor in our case is Payment days. We can't push our clients hard on payment days. Therefore, we need to develop a permanent system of receivables financing, using one of the established financial companies in that business.

7.2 Important Assumptions

Plan depends on the assumptions that are made in the following table. These are annual and monthly assumptions that show the consistent growth of the company. Since we operate on a monthly basis, we are assuming that the majority of the collections will be timely and in full. Some of the underlying assumptions are: 1. We assume a healthy growth trend in the local real estate market, along with a continued strong local economy. 2. We assume that we stay in line with the continuing advances in technology and housing.

7.3 Key Financial Indicators

The following chart indicates our key financial indicators for the first three years. Growth in both unit payments as well as increasing the percentage of growth margin. Companys cash flow depends on the monthly collection from the client. We allow for a 25day grace period, after which unpaid accounts will inhibit our cash flow. However, since we collect on a monthly basis, cash flow should maintain at a steady level. TEAM DH/DPH PROJECT MANAGER SR. ENGINEER (STRUCTURE) SR. ENGINEER (FINISHING) JR. ENGINEER FOREMEN SUPERVISOR CIVIL WORK PROJECT HEAD PLANNING ENGINEER ARCHITECT 0 20 100000 20 40000 20 35000 20 35000 20 25000 20 20000 20 20000 0 20 120000 20 40000 20 40000 0 2000000 800000 700000 700000 500000 400000 400000 0 2400000 800000 800000

PROJECT MANAGER SENIOR ENGINEER (STRUCTURE) SENIOR ENGINEER (FINISHING) FOREMEN SURVEYOR ASSTT SURVEYOR BILLING DGM SENIOR ENGINEER MEP DGM / AGM SENIOR ENGINEER ELECTRICAL SENIOR ENGINEER PLUMBING SENIOR ENGINEER BILLING FOREMEN SAFETY SAFETY OFFICER SAFETY SUPERVISOR SECURITY OFFICER GUARD ADMIN MANAGER ADMIN ASSISTANT STORE MANAGER STORE ASSTT. DATA ENTERY SOFTWARE AUTOCAD ADOBE PROFFESIONAL MICROSOFT OFFICE TALLY INFRASTRUCTURE IT TELECOM

20 20 20 20 20 20 0 20 20 0 20 20 20 20 20 0 20 20 20 20 20 20 20 20 20

45000 35000 35000 20000 20000 15000 80000 40000 80000 35000 35000 35000 20000 35000 35000 25000 10000 40000 35000 30000 25000 15000

900000 700000 700000 400000 400000 300000 0 1600000 800000 0 1600000 700000 700000 700000 400000 0 700000 700000 500000 200000 800000 700000 600000 500000 300000 24400000

250000 250000 500000 500000 10000000 10000000 3000000 24500000

7.4 Break-even Analysis

The following table and chart summarize our break-even analysis. With per month fixed costs and a variable per-unit cost, the number of units we will need to rent out to cover our monthly costs is shown below.. According to the calculations, we will break-even within our first year

of operation. The break-even assumes that all units will be occupied and that all payment will be paid in a timely manner. This assumption is probably unrealistic; therefore our initial break-even per unit will most likely be higher.
Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 41 27,63,200 68,000.22 3,57,000.71 13,10,100

7.5 Projected Profit and Loss

The projected profit and loss for company is shown on the following table. Sales are increasing in 2014 and continue steadily after the third year. We show a net profit in 2016. We are projecting a healthy gross margin for the first year. This is an aggressive projection that will help our efforts to keep total cost of sales low while increasing gross margin. We will also have very low marketing costs, due to the public exposure to the units, and good word of mouth around the university area. The planned projections are included in the attached Profit and Loss Table.
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Utilities Insurance Maintenance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales Year 1 4,37,38,000 2,30,00,900 0 2,30,00,900 2,07,37,100 47.41% 90,60,000 13,80,000 12,22,100 2,40,000 7,20,000 14,40,000 0 3,00,000 13,59,000 0 157,21,100 50,16,000 62,38,100 64,85,300 0 (14,69,300) -3.36% Year 2 5,38,49,800 2,55,74,000 0 2,55,74,000 2,82,75,800 52.51% 105,00,000 14,00,000 13,00,000 2,60,000 8,20,000 15,50,000 12,000 4,00,000 15,75,000 0 190,05,000 92,70,800 105,70,800 79,59,100 0 13,11,700 2.44% Year 3 6,12,75,600 2,73,13,600 0 2,73,13,6 00 3,39,62,000 55.42% 1,28,00,000 17,70,000 19,33,300 2,80,000 8,50,000 16,00,000 15,000 5,00,000 19,20,000 0 231,53,300 108,08,700 127,42,000 93,55,200 0 14,53,500 2.37%

7.6 Projected Cash Flow

The following cash flow projections are a key part of company early success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly balance. The annual cash flow figures are included here and the more

important detailed monthly numbers are included in the appendix.

Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 4,37,38,000 4,37,38,000 0 8,40,000 1,80,200 4,50,000 0 0 5,86,200 457,94,400 Year 1 90,60,000 318,09,400 408,69,400 0 2,75,000 65,000 23,12,100 0 1,080,00,000 0 1,515,21,500 (1,057,27,100) 54,05,900 Year 2 5,38,49,800 5,38,49,800 0 15,00,000 2,50,000 513,00,000 0 0 6,00,000 1,074,99,800 Year 2 105,00,000 408,94,600 513,94,600 0 5,00,000 1,00,000 24,46,900 0 570,00,000 0 1,114,41,500 (39,41,700) 14,64,300 Year 3 6,12,75,600 6,12,75,600 0 12,00,000 2,00,000 2,50,000 0 0 4,00,000 633,25,600 Year 3 128,00,000 447,31,200 575,31,200 0 10,00,000 1,00,000 41,64,500 0 0 0 627,95,7 00 5,29,900 19,94,100

7.7 Projected Balance Sheet

The balance sheet in the following table shows varying but managed net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix and are a good indicator of annual value.

Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities 54,05,900 12,00,000 66,05,900 1,200,00,000 12,22,100 1,187,77,900 1,253,83,800 Year 1 35,04,800 10,65,000 1,15,200 46,85,000 1,061,37,900 1,108,22,900 Year 2 14,64,300 12,00,000 26,64,300 1,770,00,000 25,22,100 1,744,77,900 1,771,42,200 Year 2 33,48,300 20,65,000 2,65,200 56,78,500 1,549,91,000 1,606,69,500 Year 3 19,94,100 12,00,000 31,94,100 1,770,00,000 44,55,400 1,725,44,600 1,757,38,700 Year 3 37,05,900 22,65,000 3,65,2 00 63,36,100 1,510,76,500 1,574,12,600

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

251,86,200 (91,56,000) (14,69,300) 145,60,900 1,253,83,800 145,60,900

257,86,200 (106,25,300) 13,11,700 164,72,600 1,771,42,200 164,72,600

261,86,200 (93,13,600) 14,53,500 183,26,100 1,757,38,700 183,26100

7.8 Business Ratios

The business ratios for the years of this plan are shown below. They point out liquidity, debt, performance and some other important aspects. We expect to generate acceptable ratios for our profitability and return

Ratio Analysis Year 1 Sales Growth Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.00% 0.96% 5.27% 94.73% 100.00% 3.74% 84.65% 88.39% 11.61% 100.00% 47.41% 50.77% 2.79% 11.47% 1.41 1.41 88.39% -10.09% -1.17% Year 1 -3.36% -10.09% 9.96 27 0.35 7.61 0.04 19,209 0.77 2.87 4% 1.41 3.00 0.00 Year 2 23.12% 0.68% 1.50% 98.50% 100.00% 3.21% 87.50% 90.70% 9.30% 100.00% 52.51% 50.07% 2.41% 17.22% 0.47 0.47 90.70% 7.96% 0.74% Year 2 2.44% 7.96% 12.17 31 0.30 9.75 0.04 (30,143) 1.16 3.29 3% 0.47 3.27 0.00 Year 3 13.79% 0.68% 1.82% 98.18% 100.00% 3.61% 85.97% 89.57% 10.43% 100.00% 55.42% 53.05% 3.16% 17.64% 0.50 0.50 89.57% 7.93% 0.83% Year 3 2.37% 7.93% 12.17 29 0.35 8.59 0.04 (31,420) 1.16 2.87 4% 0.50 3.34 0.00 Industry Profile 4.77% 40.83% 46.21% 53.79% 100.00% 12.55% 35.36% 47.91% 52.09% 100.00% 100.00% 59.39% 0.88% 2.37% 1.90 1.28 59.42% 0.30% 0.73% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a

SECTION 15
PLAN IMPROVEMENT Performance Measurement
Performance measurement is an important factor for a business as it moves into the future. Business performance measurement tools provide a window into how every element of your business is working, and if you are on track to meet objectives. Typically, performance measurements fall into financial or non-financial categories, and are considered lagging or leading. Lagging measurements give feedback to past performance and leading look to the future. There are several business performance measurement tools you can use to analyze all aspects of your business.

Performance measurement tools : Financial Statements When calculating business performance, one of the first places many people will look is at the company's financial statements. Profit and loss, cash on hand, balance sheets and inventory are all valuable indicators of the health of a business. Customer Surveys Every business relies on the customers who purchase their product or service to survive, and if yours are not satisfied, it is an indicator of poor performance is some area. Asking your regular customers and clients to complete anonymous customer satisfaction surveys can help point you in the direction of what they really need to be happy. Employee Turnover A large part of how your business performs as a whole is how your employees are treated and managed. High employee turnover indicates a general dissatisfaction among your employees. Poor work conditions or low wages or lack of advancement potential could be reasons for a change. Sales Monitoring the sales totals that are coming into the business is a good tool to measure performance. Sales are a separate entity from the balance sheets and financial documents.

They show how your products are being perceived, whether they are fairly priced, and how your sales team presents them to customers. Quality Audits Auditing your production and management processes on a regular basis will help you keep everything running smoothly and efficiently. It will also let you know if there are any particular areas that are being more wasteful or inefficient than others, and if the quality procedures are consistently being met.

Plan Review and Up Date

To ensure the plan continues to provide a sharp focus and remain responsive to change it should be formally reviewed and updated every six months, at the achievement of a Strategic Goal and at any other time deemed necessary. Implementation of this plan is to be a fixed agenda item at meetings of the Board of Directors.

Performance management (PM) includes activities which ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product of service, as well as many other areas. PM is also known as a process by which organizations align their resources, systems and employees to strategic objectives and priorities.

Performance indicators: Sales Service quality Organisational measures Market share Cash flow Regulatory approval ROI, ROE Cycle time

f) Employee performance and morale Verbal/written counseling.

For attendance issue you may want to consider engaging in a discussion with the employee, if there are any specific circumstances that preclude the employee from meeting the attendance policy.

Documented performance improvement plan. Termination the unit appointing authority should consult with OHR Employee Relations prior to involuntarily terminating an unclassified staff.

A performance improvement plan and conversation include: Description of the performance that needs to be corrected and why it needs to be corrected. A statement describing how the unit is negatively impacted by the lack of performance. A discussion with the employee to understand the reasons why performance is not at the desired level.

Based on this dialogue proceed with the development of a performance improvement plan. Identify the expectation, University Rule, or policy that has been violated. Describe the desired performance; any qualitative or quantitative measurement, if applicable; and the time frame within which the desired performance must occur. Identify action steps that can be taken to reach the desired performance. Inform the employee as to how staff performance will be monitored/ reviewed. Establish a date and time to discuss progress (successes and challenges) in changing the performance. Identify and select any additional resources that the unit may provide to help the staff member improve the performance. Insert signature and date lines for the staff member and supervisor to note that the plan has been discussed.