In India the real estate sector comes second in terms of employment generation, the first being agriculture industry and it contributes almost 5% of the country’s GDP. Majority of the real estate developed in India (almost 80%) is residential space with the rest being offices, malls, hotels and hospitals. India leads the pack of top real estate investment markets in Asia for 2010, according to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute. Foreign direct investment (FDI) into India in the real estate sector for the fiscal year 2008-09 has been US$ 12.62 billion approximately.
Unitech Ltd is one of the largest listed real estate companies in India. Unitech Limited is a leading Real Estate and Infrastructure developer with projects in India and abroad. Along with Real estate and infrastructure development, United Ltd is also in varied other fields like in commercial spaces, hotels, amusement parks, construction of thermal power plants, transmission lines, highways, flyovers, industrial facilities, steel plants, and overseas turnkey projects. It has projects in all four regions (NCR, Mumbai, Chennai and Kolkata)
-Their focus has shifted from ‘Land Banking’ to ‘Banking on Land’ -Over 7500 acres of geographically diversified, low cost land bank is being leveraged to launch projects across segments -Since more often than not, their presales meet project cost they has decided to have no capital constraints for launching new projects -Launching houses in the high volume affordable segment under “UniHomes”Brand -High volume standardized “manufacturing style” product are being implemented resulting in economies of scale and quick execution -Unitech Ltd is diversifying much more. It has recently launched a telecom service ‘Uninor’ in collaboration with Telenor a Norwegian telecommunication company.
Unitech Limited started out as a company dealing in Soil Mechanics in 1972 and diversified into construction in 1975. it was earlier know as United Technical Services. In 1978 they did their first international project in Iraq and Libya. From 1986 till now they have done projects in various cities in India for e.g Bangalore, Gurgaon, Kolkata, Mumbai etc.
SIGNIFICANT ACCOUNTING POLICIES
A. Financial statement rules followed
The accounts are maintained under the historical cost convention on accrual basis as a going concern
a. Real Estate Projects
For real Estate Projects undertaken on and after 1st April, 2004. Revenue from real estate projects is recognized on the “Percentage of Completion Method” of accounting.
b. Construction Contracts
In Construction Contracts income is recognized on percentage of completion method.
c. Revenue on account of contract variations, claims and incentives are recognized upon settlement.
The expenses incurred under natural heads of accounts for execution of works are charged to job and construction expenses.
The maintenance and other expenses which are obligatory and are incurred subsequently, after Completion of project(s), are booked as expenses under the head “Real Estate Completed Projects”.
I. Materials, stores & spares, tools and consumable are valued at cost or market value, which ever is lower on the basis of first in first out method reflecting the fairest possible approximation to the cost incurred in bringing the items of inventory to their present location and condition. II. Finished stock of completed real estate projects is valued at lower of cost or net realizable value on the basis of actual identified units. III. Work in Progress is valued at estimated cost.
Since the company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars research & development, as prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not...