CFThe Jaypee Group is an conglomerate based in Noida, India. It was founded by Jaiprakash Gaur which is involved in well diversified infrastructure conglomerate with business interests in Engineering & Construction, Power, Cement, Real Estate, Hospitality, Expressways, IT, Sports & Education (not-for-profit).

Jaypee is India's third largest cement producer and the largest private sector hydropower company with 1,700 MW in operation. The Jaypee Group successfully completed projects in 18 states of India and Bhutan. Jaypee is the engineering and construction company for India's Yamuna Expressway, which opened 9 August 2012.

JIL, the group flagship, has an engineering and construction wing which mostly supports Jaypee projects. It also has the largest land bank in India's National Capital Region, i.e., New Delhi. Jaypee has four thermal power plants totalling 5,120 MW under construction, and these are slated to go on stream by December 2014.

SOURCES OF FUNDS

Meaning of Share Capital: Share capital denotes the amount of capital raised by the issue of shares, by a company. It is collected through the issue of shares and remains with the company till its liquidation.

Share capital is owned capital of the company, since it is the money of the shareholder and the

shareholder are the owners of the company. The total share capital is divided into small parts and each part is called a share. Share is the smallest part of the total capital of a company.

Features of Share Capital:

Owned capital: Share capital is owned capital of the company. It is actually the money of the shareholders and since the shareholders are the owner of the company, so share capital is the owned capital.

Remains with the company: It remains with the company till its liquidation.

Dependable sources: Share capital is the most dependable source of finance for the joint stock companies.

Raises creditworthiness: It raised the credit worthiness of the company.

Substantial funds: It provides substantial funds to the company.

Available for: Share capital is easily available for expansion and diversification of business activities.

Amendment: The amount of share capital can be raised by amending the capital clause of the Memorandum of Association.

No charge: Share capital does not create any charge on the assets of the company.

Opportunity to participate: Share capital give its shareholders an opportunity to participate in the company's management with normal rights of shareholders.

Benefit of bonus shares: It gives it shareholders the benefit of bonus shares.

Benefit of limited liability: Share capital also gives its shareholders the befit of limited liability as the liability of its shareholders is limited up to the face value of each share.

Meaningful participation: Share capital enables its shareholders to have a meaningful participation in the expansion of corporate sector.

Types of Share Capital:

Authorized capital: It is the maximum amount of capital which a company can collect or raise by selling it's shares to the general public. Authorized capital is known as nominal capital or registered capital. For example: A company wants to sell 100 shares of Rs. 10/- each, so the total amount collected by the company is Rs. 1000/- i.e. 100 shares x 10 each = 1000

The capital with which a company is registered is known as its authorized capital.

Issued capital: It is that part of the authorized capital which is actually issued to the general public. For example: A company has issued 80 shares of Rs. 10/- each so the issued capital is Rs. 800/-

Unissued capital: It is that part of the authorized capital which is not being issued to the general public.That is, company has not issued 20 shares of Rs. 10/- each, so the unissued capital is Rs. 200/-.

Subscribed capital: It is that part of the issued capital which is actually subscribed by the general public. That is company has issued 80 shares out of which 70 shares are being bought by the general public, so the subscribed capital is Rs. 700/-. That is 70 shares of Rs. 10/- each.

Unsubscribed capital: It is that part of the issued capital which is not subscribed by the general public. That is, if the the company has issued 80 shares out of which 70 are bought by the general public and 10 are not being bought by them, so the unsubscribed capital is 10 x Rs. 10 = Rs. 100. That is 10 shares of Rs. 10 each.

Called up capital: It is that part of the subscribed capital which is actually called up by the company. For instance, if a company has asked its shareholders to pay Rs. 5/- per share so on 70 shares, they have to pay 70 shares x Rs. 5 each = Rs. 350/-. This is the called up capital.

Uncalled up capital: It is that part of the subscribed capital which is not being called up by the company. It may be called up as and when the company need funds. That is out of Rs. 10/- per share, Rs. 5/- per share is being called up by the company and Rs. 2 is being uncalled up and Rs. 3 is kept as reserve, that is yet to be called.

Reserve capital: Reserve capital is that part of the uncalled capital which is reserved to be called up only at the time of winding up or liquidation of the company. It cannot be

called during the life time of a company. It is to be used only for meeting extra- ordinary situation such as liquidation of the company. The purpose of reserve capital is to meet the interests of the creditors at the time of winding up of the company.

Paid up capital: It is that part of the called up capital which is actually paid up by the shareholders. For example, out of 70 shares which were subscribed for 60 shareholders have paid up their call money, that is 60 x Rs. 5 = Rs. 300/- is called as the paid up capital of the company.

Unpaid up capital: It is that part of the called up capital which is not being paid by the shareholders. For example: out of 70 shareholders, 60 shareholders have paid up their call money and 10 shareholders have not paid their call money, so 10 x Rs. 5 = Rs. 50/- is called as unpaid up capital.

Unpaid up capital is also known as Calls in Arrears.

Reserves – What are reserves? Definition: Reserves are any part of stockholders' equity, except for basic share capital. Reserves are amounts that are retained in the business and not distributed to the owners.

Stockholders' equity, except for basic share capital, is referred to as reserves. Reserves are retained in the business - they are not distributed to company owners.

These can be profits made by the business sometimes referred to as retained earnings and capital reserves which represent a perceived increase the value of some fixed assets such as land or buildings.

Use of the term 'reserves' in accounting Appropriation of retained earnings for a designated purpose, such as plant expansion. The

purpose of the reserve is to tell stockholders and creditors that part of retained earnings is unavailable for dividends.

Accrued liability, such as reserve for taxes. Contra account to the gross cost of an asset to arrive at the net amount, such as reserve

for depreciation or reserve for bad debts. In this use, the term reserve is outdated; accumulated depreciation and allowance for bad debts are used instead.

SECURED LOANS

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally loaned to the borrower, for example, foreclosure of a home. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount. The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may only satisfy the debt against the borrower rather than the borrower's collateral and the borrower. Generally speaking, secured debt may attract lower interest rates than unsecured debt due to the added security for the lender; however, credit history, ability to repay, and expected returns for the lender are also factors affecting rates.[

PurposeThere are two purposes for a loan secured by debt. In the first purpose, by extending the loan through securing the debt, the creditor is relieved of most of the financial risks involved because it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, this permits the second purpose where the debtors may receive loans on more favorable terms than that available for unsecured debt, or to be extended credit under circumstances when credit under terms of unsecured debt would not be extended at all. The creditor may offer a loan with attractive interest rates and repayment periods for the secured debt.

Types A mortgage loan is a secured loan in which the collateral is property, such as a home. A nonrecourse loan is a secured loan where the collateral is the only security or claim the

creditor has against the borrower, and the creditor has no further recourse against the borrower for any deficiency remaining after foreclosure against the property.

A foreclosure is a legal process in which mortgaged property is sold to pay the debt of the defaulting borrower.

A repossession is a process in which property, such as a car, is taken back by the creditor when the borrower does not make payments due on the property. Depending on the jurisdiction, it may or may not require a court order.

UNSECURED LOANS

Definition: Unsecured loans are not attached to any collateral. They're 'unsecured' loans because the bank has nothing to go after if you default. They can't sell your house like they could with a mortgage

Allowing access to both homeowners as well as tenants, unsecured loans provide short-term financial solution. It is a ready alternative to secured type of loans. Tenants find it especially favourable, as they are unable to offer collateral for taking a loan against it. Homeowners who have no intention to use their home as security take respite from financial constraints by taking out this type of loan. Mentioned below are a few highly handy benefits of unsecured loans.

Risk free option of raising fund

Offering a property as security to take out a loan becomes risky. You are left with the threat of losing it, in case you fail to pay off the loan. No such kind of risk is involved in unsecured loans, as they are not taken against any property. So, this type of loan is a risk-free option of raising necessary funds.

Quick processing and less documentation

Unsecured loans are preferred by many borrowers because they are processed quickly. There is no necessity to assess the property of the borrower, as he does not offer it as collateral. This absence of collateral makes some of the paperwork irrelevant. So, the processing of the loan gets over quickly.

Favourable for urgent cash release

As mentioned above, the non-attachment of collateral speeds up the process of unsecured loan. Since the processing is done rapidly, the borrower gets the money in his hand quickly. Thus, this loan caters to the need of urgent cash release.

Debt obligation gets over quickly

Unsecured loans are basically short-term loans. This implies that the borrower is offered the loan for a shorter time-span. So, he gets the chance of coming out of his debt obligation quickly if he doesn't miss any repayment instalments.

Available to borrowers with poor credit record

All those borrowers who have bad credit records can also take this loan. However, credit-challenged borrowers may be charged higher interest rate than those who have a great credit history. This type of borrower is advised to compare loans before accepting any package.

EXPECTED RATE OF RETURN

STEPS

1. I could find data only for two years so done for only two years.2. Open CapitaLine of your company and then go to share prices3. Go to share price data4. Take out the share prices of your company from CAPITALINE from 1 Jan 2012

to 1 Jan 2014 in monthly figures (change it from daily to monthly)5. Download Excel6. Substitute avg share price of your company in column B7. Also find Beta of your company from Beta Analysis heading under share price in

CAPITALINE8. Change the dates in beta analysis from Jan 2012 to Jan 20149. Then put it in the formula below10. And if you still don’t understand then call ITIKA AGGARWAL (221056) and

don’t bloody disturb me.

Beta = 2.2556 (from Capital Line)

Expected Return = Risk Free Return + Beta (stock) (Return(market) – Risk Free Return)*

= {0.086188 + 2.2556 [0.011293]}*100

= 0.111660437*100

= 11.166

*from excel sheet