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Summary
Established in 1971 by a group of technocrats led by Mr. Ramesh Chandra, Unitech has
over the last three decades emerged as one of the leading business houses in India. Apart
from the flagship business of real estate development, the group has interests in varied
businesses such as Fund management, Infrastructure development and Transmission tower
manufacturing.
Unitech has long partnered with internationally acclaimed architects and design
consultants including SOM (USA), BDP (UK), Maunsell AECOM (HK), MEA Systra
(France), Callison Inc. (USA), RMJM (UK), FORREC (Canada), SWA, and HOK (USA)
for various projects. It s clientele for commercial projects includes global leaders such as
Fidelity, McKinsey, Bank of America, Ford Motors, Nike, Intercontinental Hotel Group,
EDS, Hewitt, Amdocs, Ernst & Young, United Health Group, Converges, Reebok
A ratio is a comparison of any two relevant values from balance sheet and profit & loss
a/c of an organization. J. Batty defines “accounting ratios” as a relationship expressed
between numbers reflected in profit and loss account, balance sheet or any other part of
accounts.
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PROJECT REPORT
Chapter
~1
Company
profile
2
PROJECT REPORT
The Group has recently ventured into mobile telecom business. The Group’s
flagship company Unitech Limited is a leading real estate developer in India with a market
capitalization of around USD 6 billion. Unitech has been at the forefront of the rapid
transformation of Indian real estate sector in the recent years.
From being a National Capital Region (NCR) focused real estate developer,
Unitech has fast established a pan Indian presence. It is already a market leader in NCR
and Kolkata and endeavors to attain leadership in every market that it operates in.
Unitech has the most diversified product mix comprising residential, commercial/
Information Technology (IT) parks, Retail, Amusement parks, Hotels and Special
Economic Zones. It is known for the quality of its product and is the first real estate
developer to have been certified ISO 9001:2000 certificate in North India.
Unitech has long partnered with internationally acclaimed architects and design
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PROJECT REPORT
consultants including SOM (USA), BDP (UK), Maunsell AECOM (HK), MEA Systra
(France), Callison Inc. (USA), RMJM (UK), FORREC (Canada), SWA, and HOK (USA)
for various projects. It s clientele for commercial projects includes global leaders such as
Fidelity, McKinsey, Bank of America, Ford Motors, Nike, Intercontinental Hotel Group,
EDS, Hewitt, Amdocs, Ernst & Young, United Health Group, Converges, Reebok.
Over the years, Unitech has been very efficient in utilizing capital and has grown
to become a USD 6 billion market cap company with a cumulative external equity capital
of under USD 10 million! It was the first real estate company to be part of the National
Stock Exchange s NIFTY 50 index.
Group has recently ventured into the fast growing mobile telecom business in
India. It has already secured the licenses for providing Mobile telecom services across the
country. Rollout is expected to happen by the end of this fiscal year.
BOARD OF DIRECTORS
4
PROJECT REPORT
REGISTERED OFFI CE
6, Community Centre, Saket, New Delhi 110017
Tel.: +91-11-26857331 (Shares), 26857330 (FD), 26965169/41664040 (Marketing).
Fax: +91-11-26857338
CORPORATE OFFI CE
D-3, District Centre, Saket Place, New Delhi 110017
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PROJECT REPORT
Tel.: +91-11-29562196
GURGAON OFFI CE
Unitech Signature Towers, Ground Floor, South City-1,
Gurgaon. Tel.: +91-124-4082020. Fax: +91-124-4083355
www.unitechgroup.com
CHAPTER ~ 2
BALANCE
SHEET
&
PROFIT AND
LOSS A/C
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PROJECT REPORT
2) LOANS FUNDS
a) Secured loans 23,904,079,627
b) Unsecured loans 7,675,028,057 31,579,107,684
3) DEFERRED LIABILITY
– AGAINST LAND 4,492,586,021
4) DEFERRED TAX
LIABILITY 21,232,241
TOTAL 47,702,935,914
APPLICATION OF FUNDS
1) FIXED ASSETS
Gross(at cost) 998,680,654
Less: Depreciation 302,425,840
Net block 696,254,814
Add: Capital work in
progress. 28,753,897 725,008,711
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PROJECT REPORT
2)INVESTMENTS 5,189,269,439
3)CURRENT ASSETS,
LOANS AND ADVANCES
a) Inventories 327,678,535
b) Projects in progress 44,057,110,255
c) Advances to subsidiary
co. 8,578,976,970
d) Sundry debtors 975,494,326
e) Cash and bank balance 7,958,175,118
f) Loans and advances 22,311,322,122
84,208,757,326
Less: CURRENT
LIABILITIES-PROVISIONS
a) Current liabilities 37,922,118,817
b) Provisions 4,497,980,745
42,420,099,562 41,788,657,764
NET CURRENT ASSETS
TOTAL 47,702,935,914
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH,2007
PARTICULARS RUPEES RUPEES
INCOME
Sales, receipts and incomes 25,996,461,272
Closing stock 327,678,535
26,324,139,807
EXPENDITURE
12,875,815,107
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PROJECT REPORT
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PROJECT REPORT
2)INVESTMENTS 13,979,895,154
3)CURRENT ASSETS,
LOANS AND ADVANCES
g) Inventories 136,587,503
h) Projects in progress 70,787,615,459
i) Advances to subsidiary
co. 21,516,110,009
j) Sundry debtors 7,397,448,313
k) Cash and bank balance 3,711,808,167
l) Loans and advances 54,706,215,641
158,255,785,092
Less: CURRENT
LIABILITIES-PROVISIONS
a) Current liabilities 63,105,381,624
b) Provisions 7,490,298,472
70,595,680,096 87,660,104,996
NET CURRENT ASSETS
TOTAL 102,647,289,079
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH,2008
PARTICULARS RUPEES RUPEES
INCOME
Sales, receipts and incomes 26,697,250,734
Closing stock 136,587,503
29,833,838,237
EXPENDITURE
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PROJECT REPORT
16,178,756,142
PROFIT BEFORE TAX 13,448,324,700
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PROJECT REPORT
Chapter ~
3
Ratio
analysis
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PROJECT REPORT
A ratio is a comparison of any two relevant values from balance sheet and profit & loss
a/c of an organization. J. Batty defines “accounting ratios” as a relationship expressed
between numbers reflected in profit and loss account, balance sheet or any other part of
accounts.
It is expressed in three ways:-
Classification
These ratios indicate profitability or otherwise for a company. This category includes:-
Gross profit ratio
Net profit ratio
Operating ratio
Return on capital employed
Return on shareholders’ funds
Earnings per share
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PROJECT REPORT
It is a ratio expressing relationship between gross profits earned to net sales. It is a useful
indication of the profitability of the business.
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PROJECT REPORT
= 61.83 %
= 60.23%
Gross ratio
62
61.5
Ratio of percentage
61
60.5 S eries1
60
59.5
59
2006-07 2007-08
Ye a r
Interpretation:-
Gross profit ratio for 07-08 is 61.83% which is good as compared to years 06-07.In 07-
08, the gross profit and sales is high than 06-07, 61.83% is beneficial for the company.
This ratio is useful for the purpose of ascertaining the overall profitability of the business
and shows the efficiency or otherwise of operating the business. This ratio shows
relationship between net profit and sales.
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PROJECT REPORT
= 36.78%
= 39.28%
39.5
Profit of percentage
39
38.5
38
37.5 Series1
37
36.5
36
35.5
2006-07 2007-08
Year
Interpretation:-
Net profit ratio in the year 07-08 is less as compared to 06-07. Net profit ratio is showing
a decreasing trend from 06-07 to 07-08.
3. Operating ratio:-
This ratio is very important for analyzing the profitability of the firm. One can the
operating efficiency with the help of this ratio.
Operating ratio
= cost of goods sold + operating expenses X 100
Sales
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PROJECT REPORT
= 22.309,322,558
28,022,751,557
= 79.61 %
= 19,207,217,421
25,039,718,678
= 76.70 %
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PROJECT REPORT
Operating ratio
80
79.5
Percentage of ratio
79
78.5
78
77.5 Series1
77
76.5
76
75.5
75
2006-07 2007-08
Year
Interpretation:
As it is an expense ratio, lower ratio will be beneficial for the firm. In the year 07-08 the
operating ratio is very high as 79.61% .The reason for high operating ratio is high cost of
goods sold in these years. As the ratio is much high the position of the firm is very bad as
due to high expenses, profits are going to be decreased.
In year 06-07 the ratio is not very good but it is better as compared to 07-08.
Calculation of EBIT
Particulars 07-08 06-07
profit after tax 10,306,765,627 9,835,576,616
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PROJECT REPORT
= 14.97 %
= 34.81 %
40
35
Percentage of ratio
30
25
20 Series1
15
10
5
0
2006-07 2007-08
Year
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PROJECT REPORT
Interpretation:
It is very important for all the external parties to the firm. In the year 07-08 the ratio is
18.51% which is very low. In year 06-07 the ratio is 34.92% which is comparatively
better than 07-08. There are many wide fluctuations in this ratio for the firm.
5. Return on shareholders’ funds:-
In order to judge the efficiency with which the proprietors’ funds are employed in
business, this ratio is ascertained.
= 48.08 %
= 84.72 %
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PROJECT REPORT
90
80
Percentage of ratio
70
60
50
Series1
40
30
20
10
0
2006-07 2007-08
Year
Interpretation:
This ratio should be higher as it will suggest that how much dividend will be declared to
shareholders by the company. The ratio in year 06-07 is comparatively better than the
ratio in year 07-08 which is 48.08%.
Thus a fluctuating trend is observed in return on shareholders’ funds.
= 6.30
= 12.11
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PROJECT REPORT
14
12
Percentage of ratio
10
8
Series1
6
4
2
0
2006-07 2007-08
Year
Interpretation:
This ratio shows the profitability of the firm. By comparing the EPS of the current
year with those of past year, the trend of profitability can be ascertained. In year 07-08,
1. Current ratio:-
The current ratio of a firm measures its short term solvency that is ability to meet
the short term obligations of the firm. It is a measure of margin of safety to the creditors.
From this ratio, one can know the capability to pay current liabilities
Current ratio = Current assets
Current liabilities
= 2.24:1
= 1.99:1
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PROJECT REPORT
Interpretation:
The ideal ratio is 1.33:1 to 2:1. If this ratio is between anywhere in this range then it
is beneficial for the company. In year 07-08 and 06-07 it is 2.24:1 and 1.99:1 which
means the situation has been controlled.
2. Liquid ratio:-
It is a better indication of liquid position of the company. It shows the amount of cash
available to meet immediate payments. It is obtained by dividing the liquid assets by
liquid liabilities. It includes all the current assets except stock and all current liabilities
except bank overdraft. The standard liquid ratio is 1:1.
Liquid ratio = liquid assets
Liquid liabilities
= 2.24:1
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PROJECT REPORT
= 1.98:1
Interpretation:
As the ideal ratio is 1:1 then each of the two years the ratio is unexpected. In year 07-08 it
is 2.24:1 which means investment in assets of current use is more than needed. In year
06-07 also the ratio is high so investment is current assets should be decreased. We can
c) Leverage ratios
1. Proprietory ratio:-
This ratio shows the proportion of proprietors’ funds to the total assets employed in the
business. It is expressed in terms of percentage. Higher ratio is beneficial.
= 20.89 %
= 24.34 %
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PROJECT REPORT
Proprietory ratio
25
24
Percentage of ratio
23
22 Series1
21
20
19
2006-07 2007-08
Year
Interpretation:
Here the ratio seems to be unsatisfactory in the year 07-08 and 06-07.Ratio in 06-07 is
24.34% which is low but it is better than 07-08.Ratio in 07-08 is quit unsatisfactory.
The relationship between borrowed funds and owners capital is a popular measure of long
term financial solvency of a firm. This ratio reflects the relative claims of creditors and
shareholders against the assets of the firm.
= 214.72%
= 205.89%
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PROJECT REPORT
Interpretation:
In all the leading successful companies in India this ratio is between 40-60%. If this
ratio is very low then no advantage of trading on equity can be taken. If it is very high
then also it is very risky.
In year 07-08 and 06-07 the ratio is 214.72% and 205.89% which is very high than
needed. This means that in proportion to equity the debts are very high. It is very risky for
the firm.
Here the outside liabilities are related to the total capitalization of the firm and not only to
the shareholders’ equity.
= 1417.78%
= 1478.65%
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PROJECT REPORT
Interpretation:
When this ratio will be very low there will be no risk for the firm but no advantage of
trading on equity can be enjoyed by the firm. When it is high it will be much risky for the
firm and equity shareholders will not get any money.
In year 07-08 and 06-07 this ratio is unexpected which is 1417.78% and 1478.65%
which shows that all the equity capital is worth paying to some other party. It is very
danger situation for the life of the firm.
= 66.98
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PROJECT REPORT
= 48.98
80
70
Percentage of ratio
60
50
40 Series1
30
20
10
0
2006-07 2007-08
Year
Interpretation:
In 07-08 and 06-07, the fixed capital is more than the fixed assets therefore it is
beneficial. Even though the ratio in 06-07 is less than 07-07, it is beneficial.
This ratio indicates as to how many times the profit covers the payment of interest on
debentures and other long term loans.
= 3.91
= 9.47
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PROJECT REPORT
10
9
Percentage of ratio
8
7
6
5 Series1
4
3
2
1
0
2006-07 2007-08
Year
Interpretation:
Higher the ratio, the more sound is the financial strength of the company, as it indicates
greater ability of the firm to handle fixed charge liabilities. If the ratio is very high, it
shows the firm is not making proper use of outside debt. But a very low ratio indicates
that the firm is using excessive debt. Here, in 07-08 the ratio is low while in 06-07, it is
high
= 27.81 times
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PROJECT REPORT
725,008,711
= 34.53 times
40
35
Percentage of ratio
30
25
20 Series1
15
10
5
0
2006-07 2007-08
Year
Interpretation:-
This ratio is very good when it is above 4 times and very adverse situation when it is
below 2 times. So the ratio is satisfactory as we can see all ratios for the years are more
than 4 times.
A decreasing trend is followed by this ratio from 06-07 to 07-08. But in all the years
sales are high so fixed assets will be rotating speedily.
= 0.27 times
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PROJECT REPORT
47,702,935,914
= 0.52 times
0.6
0.5
Percentage of ratio
0.4
0.3 Series1
0.2
0.1
0
2006-07 2007-08
Year
Interpretation:-
Here high ratio is considered to be a good situation. In year 06-07 and 07-08 the ratio is
less than 2 times. So it is a very dangerous situation. The average situation is 2<4 times.
So it is a very bad situation.
= 95 days
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PROJECT REPORT
25,039,718,678
= 14 days
Debtors’ turnover ratio = 360
Debtors’ ratio
= 4 times
= 26 times
30
25
Percentage of profit
20
15 Series1
10
0
2006-07 2007-08
Year
Interpretation:-
Here in year 06-07 the debtors’ ratio is 26 days which is average for the business. It
means that money outstanding from debtors will be recovered within 26 days. Ratio for
year 07-08 is 4 days. As the collection period is small it is beneficial for the firm.
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PROJECT REPORT
It shows how frequently the creditors are to be paid. It is to test the urgency of the
creditors of the firm.
= 126 days
= 185 days
= 2.8 times
= 1.9 times
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PROJECT REPORT
Percentage of ratio
3
2
Series1
1
0
2006-07 2007-08
Year
Interpretation:-
This ratio will be considered satisfactory when the duration will be higher. In year 06-07
this ratio is 1.9 times a year which means that creditors are to be paid off 1.9 times in one
year. In year 07-08 this ratio is 2.8 times a year which means that creditors are to be paid
off 2.8 times in one year.
5. Stock turnover
The number of times the average stock is turned over during the year is known as stock
turnover.
Stock turnover = cost of goods sold
Average stock
= 232,133,019
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PROJECT REPORT
= 319,836,717
= 46.08
= 31.13
Stock turnover
60
Percentage of
40
ratio
Series1
20
0
2006-07 2007-08
Ye a r
Interpretation:-
This ratio signifies that the average stock is turned over 46 times in 07-08 and 31 times in
06-07. Higher the turnover ratio, the profitable the business would be.
35
PROJECT REPORT
Chapter ~
4
36
PROJECT REPORT
Financial
results
37
PROJECT REPORT
16,265.12 10,416.94
38
PROJECT REPORT
The net profit ratio of the firm is showing a decreasing trend from 06-07 to 07-08
The ratio in year 06-07 is beneficial for the firm as compared to 07-08.
The ratio of return on capital employed is very important for all the parties which
are related to the firm whether directly or indirectly. Many wide fluctuations are seen in
return on capital employed of the firm for these years. . In the year 07-08 the ratio is
18.51% which is very low. In year 06-07 the ratio is 34.92% which is comparatively
better than 07-08. This means that the firm is obtaining a firm amount of return on capital
employed in the firm.
Any firm’s current availability of assets to repay the current and immediate
liabilities can be known from the current ratio. The ideal current ratio is 1.33:1 and it
should not be very high as compared to the liabilities to be paid off. In year 07-08 and 06-
07 it is 2.24:1 and 1.99:1 which means the situation has been controlled.
This ratio should be higher as it will suggest that how much dividend will be declared to
shareholders by the company. The ratio in year 06-07 is comparatively better than the
ratio in year 07-08 which is 48.08%.
Thus a fluctuating trend is observed in return on shareholders’ funds.
High ratio of total assets turnover is considered to be a good situation for the firm. In year
06-07 and 07-08 the ratio is less than 2 times. So it is a very dangerous situation. The
average situation is 2<4 times. So it is a very bad situation.
This ratio is very good when it is above 4 times and very adverse situation when it is
below 2 times. So the ratio is satisfactory as we can see all ratios for the years are more
than 4 times.
A decreasing trend is followed by this ratio from 06-07 to 07-08. But in all the years sales
are high so fixed assets will be rotating speedily.
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PROJECT REPORT
BIBLIOGRAPHY
I have referred to company’s annual report for two consecutive years of “UNITECH
GROUP”.
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PROJECT REPORT
41