FINANCIAL STATEMENT

ANALYSIS (2007-2008)
Parsvnath Developers Ltd.
COMPANY PROFILE

• Parsvnath Developers Limited is one of India’s leading real

estate developers.

• The Company was incorporated on July 24, 1990 under the

Companies Act, 1956 as Parsvnath Developers Limited.

• It has its presence in 51 cities and 18 states across the

country.

• The company is primarily engaged in the business of

promotion ,construction and development of integrated
townships ,residential and commercial complex ,multistoried
buildings, flats, houses, apartments, shopping malls, IT parks,
hotels, SEZs etc.
ACCOUNTING POLICIES
 Basis of Accounting
The Company maintains its accounts on accrual basis.
 Fixed Assets
1) Fixed assets are stated at cost of acquisition or
construction less accumulated depreciation.
2) Financing costs relating to borrowed funds attributable to
acquisition or construction of fixed assets.
 Depreciation
1) Depreciation on fixed assets is provided on written down
value method
2) Based on the managements estimates of the useful life of
the assets, whichever is higher. Accordingly, the
depreciation rates used
3) Cost of building on land held on license basis is
amortized over the period of license of project facility
 Revenue Recognition
1) Revenue from projects is recognized on the Percentage
of Completion Method of accounting.
2) Income from construction contracts is recognized by
reference to the stage of completion of the contract
activity at the reporting date of the financial statements.
 Cost of Construction/Development
1) Cost of Construction/Development incurred is charged to
the profit and loss account proportionate to project area
sold.
 Inventories
1) Completed unsold inventory is valued at lower of cost or
net realizable value.
2) Work-in-progress is valued at cost, which comprises cost
of land, materials, services and other overheads related
to projects under construction
 Investments
1) Investments Intended to be held for more than a year are
classified as long term investment.
2) All other investments are classified as current
Investments.
3) Long term Investments are stated at cost less provision
for diminution in value, if such diminution is other than
temporary.
MANAGEMENT DISCUSSION
AND ANALYSIS
 Urbanization - driving demand in residential sector
1) Sustained economic growth has increased the rate of
urbanization which, with favorable demographics and
rising income levels, holds the key to real estate
development.
 driving demand in commercial sector
1) IT/ITES, Hospitality & Retail sectors - driving demand in
commercial sector
2) Retail market is expected to grow from USD 330 billion in
2007 to USD 427 billion by 2010 and further to USD 637
billion by 2015.
 Development of Special Economic Zones (SEZs)
1) The SEZs have received priority of the Government,
resulting in a big boost and the trend is expected to
intensify in the coming years.
 Review of Operations
1) Developable area increased to 211 million square feet
from 153 million square feet of the last fiscal.
2) Number of Customers have increased by 5893 during the
year.
3) Launched 28 new Projects, which includes 11
Residential, 12 Commercial, 5 Integrated Townships.
ACCOUNTING RATIOS
 LIQUIDITY RATIOS= LIQUID ASSETS /CURRENT
LIABILITIES

1) CURRENT RATIO= CURRENT ASSETS / CURRENT

LIABILITIES

2) LIQUID RATIO = LIQUID ASSETS / CURRENT

LIABILITIES

RATIOS As on 31.03.2008
Current ratio 3.39
Liquid Ratio 1.53
ACTIVITY RATIOS
 WORKING CAPITAL TURN OVER RATIO = SALES
/ WORKING CAPITAL
 INVENTORY TURNOVER RATIO = COGS /
AVERAGE STOCK
 DEBTORS TURNOVER RATIO = TOTAL SALES /
ACCOUNTS RECEIVABLES

RATIOS As on 31.03.2008
WC TURNOVER RATIO 1.02
INVENTORY TURNOVER 0.93
RATIO
DEBTOR TURNOVER 2.22
RATIO
PROFITABILITY RATIOS
 GROSS PROFIT RATIO = GROSS PROFIT / NET
SALES

 OPERATING RATIO = COGS + OPERATING

EXPENSES / NET SALES

RATIOS As on 31.03.2008
GROSS PROFIT RATIO 34.41
OPERATING RATIO
End..