• Neelkanth School and Neelkanth residency is a twin project. In this the Neelkanth School will manage and operate a CBSE school, while Neelkanth Residency will offer sale of plots near the school. This twin project can be of a great benefit to the investor. The following section will discuss and describes the benefit to the single investors of different types and investing in residential plots with different angle. The single investor may be investing from different point of view. Say he might be investing for the purpose of return, building of future house, sale of existing house and shifting in long run to new house, etc.

    • The investor under this is motivated by welfare activity to its member or his association. Under this the organizer or owner may buy plots on behalf of his members. This type of welfare activity is undertaken to perform with conducting Corporate Social Responsibility (CSR) activity in mind. The initial investment will be done by the owner initially as a soft loan and the balance amount will be returned back by the beneficiary.

Corporate Investor

  • A corporate or a social organization or an NRI groups can also be the investor in the Neelkanth Residency project. Such association can encourage their members to invest in the buying of the plots in Neelkanth Residency in following different ways:

    • Introduction Plan: Under this the corporate introduces the Neelkanth Residency scheme to its members. The members will decide about investing in Neelkanth Residency individually.
    • CSR Plan: Under this the corporate will actually pay for the plots to its members and letter on members will pay back to their corporate in agreed installments per month without interest.
      • Introduction Plan:
      • Introduction plan is in which the corporate introduces the entire project to all its members in a formal lecture or by providing a point of place where members may come and ask for the details about the project, people of Neelkanth Residency will actually explain the project in detail to the interested persons. In this option the corporate will get benefit of a corporate membership for the functioning of Neelkanth School. This membership will be free-of-cost and will be initially for the period of 10 years. Further to this the corporate can utilize the lecture hall and other infrastructure facility of the Neelkanth School at a nominal cost. The financial implication for such investment will be same as that is in the case of single investors and discussed previously. Note that in this plan the corporate will not have any additional financial liability.

      • CSR Plan:
      • Corporate Social Responsibility (CSR) is a recent management concept. Under this organization invest in wellbeing or for the welfare of the employee (member) and in return ensures happy and long term employer-employee (association-member) relationship. However, high costs of CSR deter the organizations to venture into this field. Neelkanth Residency and Neelkanth School offer you an economic way of opting for CSR for welfare of your employee. CSR plan is in which the company will actually offer to pay for its members the purchase of plots in Neelkanth Residency and the members will be asked to pay from their salary the fixed sum as an installment against such payment. The payment will be considered as interest free advance to the employee by the corporate.

  • Corporate Plan
  • IAs shown in above flow diagram. First the organization will accept the CSP plan proposed by Neelkanth Residency (Developer in this case). Once that is done developer and organization will search for the interested employee. Once it is done organization will pay on behalf of employee ‘n’ number of monthly contributions to the developers. Employee at the same time employee will pay registration charges (from his pocket – non-refundable) and amount of deposit to the developer (from his pocket - refundable). Once that is done the developer will allot a plot to the employee and goes in to final agreement by way of registering the agreement (at this point of time developer is getting his full amount). The original registered agreement will be kept as a mortgage with the organization, until employee successfully pays from his salary ‘n’ monthly installments. Once ‘n’ installments are paid the organization releases the original registered agreement to the employee and also return the deposit employee paid initially.

  • Let us consider following sets of assumptions for a corporate opting for CSR plan for its members:

    • The net cost of a 200 yards plot in year 2017 is Rs. 10 lacks, including everything.
    • Interest rate charged by company will be 0%. The duration of loan will be less than 10 years.
    • Inflation considered during this period of the analysis is 7.5%.
    • Monthly payment from the member to the corporate is Rs. 0.20 lacks or Rs. 20,000/-.
    • Rate of income tax payable by company during this period is 25%.
    • Fully refundable deposit collected by company from the employee is Rs. 1 lack from every member.

  • The net cost of the purchase of plot will be 10 lacks. Deducting 25% due to saving in the payment of income tax, the net payable amount will be 7.5 lacks only. Fully refundable security deposit of 1 lack, if paid towards purchase of plot, the net financial liability for purchase of plot will be reduced to 6.5 lacks only. This is the net payable by the corporate towards the purchase of plot for its member. Against this a member will make the payment of Rs. 0.20Lacks (or Rs. 20,000) every month, which makes Rs. 2.4 lacks in a year as his contribution, for every year until loan is paid up. This contribution will be charges as an income for the corporate and the corporate will have to pay income tax on this at a rate of 25% until the loan is paid-up. This will leave with the corporate an effective contribution of Rs. 1.80 lacks for every year until loan is paid. Once the loan is paid the corporate will pay Rs. 1 lack back to the employee (again he saves 25% income tax liability from this) and his net payable will be Rs. 0.75 lacks only. The present worth of all the contributions and security deposit against the payment of loan will be Rs. 0.09 lack. This means the present worth for corporate for this loan will be Rs. 9,000 only. Figure shows the detailed calculations.

  • Corporate Plan
  • The additional benefits to the corporate under CSR plan is as under:

    • The residents (employee) will be likely to stay in the organization for the period for which the loan is not paid.
    • The happy and cheerful performance of members for the duration of period.
    • The participation in the management of Neelkanth School.
    • Opportunity to utilize the facility of Neelkanth School for other social events of the organization.

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