Birla Sun Life, housing projects and transparency...

I read with interest the news that Birla Sun Life is raising a Rs 1,200-crore realty fund focussed on residential real estate projects (Business Line, July 3, 2010).

The paper quotes Sri Shashi Kumar, Head, Real Estate Investment Advisory, Birla Sun Life Asset Management Company as saying that the intention was not to be a “one more realty fund,” but to bring about as much transparency as possible in the projects. That's a great news.  To this end, Birla Sun Life plans to identify two developers in each of the cities of Mumbai, Hyderabad, Chennai and Bangalore and participate in the development process, right from land purchase.

While this is a good news, what is troubling is the answer to the question as to how the fund house would overcome the unaccounted component of the land deal, since land deals, in general, are known to carry a financial consideration that does not reflect in the accounts, he said the developer would have to take care of that.

Starting a fund, announcing that their intention was not to be a “one more realty fund,” but that the intention is to bring about transparency in the projects, keeping that in view and participating in the development process, right from land purchase, etc but ultimately saying that the developer would have to take care of the "unaccounted component" of the land deal... this is disappointing.

Our Balance Sheet tells only half the story..!

This advertisement by ONGC in Mint(*) caught my attention.

(*) I forgot to jot down the date of issue

With C & AG auditing the Government Companies, I am sure the accounts/Balance Sheet will be credible and reliable.

In a lighter vein, it takes real courage to proudly say that the Balance Sheet tells only half the story!  That too in today's world, where lack of transparency in accounting is being blamed for the financial/economic problems in western world. 

I guess the person who made the advertisement might have thought about Tata Steel's famous decade old advertisement - "We also make steel".  Maybe he/she or ONGC thought that they can tap the same theme by implying that they do much more than what their Balance Sheet reveals. 

But, in today's context, when financial institutions/banks are being blamed for off-balance sheet items, lack of transparency in accounting issues etc, putting a politician on the advertisement, and saying "Our Balance Sheet tells only half the story", has potential of being misunderstood.