*INTRODUCTION OF DLF LIMITED:
DLF Limited
DLF Limited or DLF (Delhi Land and Finance) is the India's biggest real estate
developer based in New Delhi, India. The DLF Group was founded by Raghuvendra
Singh in 1946.[2] DLF developed residential colonies in Delhi such as Shivaji Park
( which was actually its first one), Rajouri Garden, Krishna Nagar, South Extension,
Greater Kailash, Kailash Colony and Hauz Khas. In 1957, with the passage of Delhi
Development Act, the local government assumed control of real estate development in
Delhi and banned private real estate developers.
As a result DLF began acquiring land at relatively low cost outside the area controlled
by the Delhi Development Authority, in the district of Gurgaon, in the adjacent state of
Haryana. In the mid-1970s, the company started developing DLF City project at
Gurgaon. Its upcoming plans include hotels, infrastructure and special economic
zones-related development projects.
The company is currently headed by Indian billionaire Kushal Pal Singh. Kushal Pal
Singh, according to the Forbes listing of richest billionaires in 2009, now stands as the
98th richest man in the world and the world's richest property developer. The
company's US$ 2 billion IPO in July, 2007 created India's biggest IPO in history. [4] In
July 2007, DLF announced its first quarter results ending 30 June 2007. The company
reported a turnover of Rs. 3,120.98 Crore and PAT at Rs. 1,515.48 Crore.
History
In the early 40s-50s Raghuvendra Singh was bankrolled by the Dabra & the Sahanpur
families to procure real estate around Delhi. That money was multiplied over the
decades through investments like Punjabi Bagh, Rajouri Garden, Krishna Nagar, South
Extension, Greater Kailash 1 & 2, Kailash Colony, Hauz Khas and Panchsheel. In the
1970s and 1980s DLF purchased 3,000 acres (1,214 ha) of land from farmers in
Gurgaon for $2000 per acre.
But at that time, the Haryana government did not allow private companies to develop
the land. Years later, when Rajiv became Prime Minister, he ensured that the Haryana
Government change the local law and allow private compaines to develop the land.
The haryana government relented and Gurgaon underwent a private real estate boom
which is continuing to this day.
In 1985, DLF started developing the 3000 acres it had acquired from farmers
In 1999, DLF developed its first A-grade office spaces for rent in Gurgaon.
The boom includes world-class office buildings, apartments, golf courses, shopping
malls, 5-star hotels and a private expressway linking Gurgaon to Delhi Airport.
PROFIT AND LOSS ACC OF DLF (in Rs. Cr.)
Mar '08 Mar '09
12 mths 12 mths
Income
Sales Turnover 5,496.96 2,827.90
Excise Duty 0 0
Net Sales 5,496.96 2,827.90
Other Income 560.9 1,004.57
Stock Adjustments -6.06 0
Total Income 6,051.80 3,832.47
Expenditure
Raw Materials 0 0
Power & Fuel Cost 0 0
Employee Cost 103.78 71.12
Other Manufacturing
Expenses 2,141.29 778.34
Selling and Admin Expenses 146.06 159.03
Miscellaneous Expenses 27.72 56.01
Preoperative Exp Capitalised 0 0
Total Expenses 2,418.85 1,064.50
Mar '08 Mar '09
12 mths 12 mths
Operating Profit 3,072.05 1,763.40
PBDIT 3,632.95 2,767.97
Interest 447.65 809.86
PBDT 3,185.30 1,958.11
Depreciation 25.68 114.08
Other Written Off 41.79 37.86
Profit Before Tax 3,117.83 1,806.17
Extra-ordinary items 0.36 33.05
PBT (Post Extra-ord Items) 3,118.19 1,839.22
Tax 543.52 261
Reported Net Profit 2,574.40 1,547.77
Total Value Addition 2,418.85 1,064.51
Preference Dividend 0 0
Equity Dividend 681.93 339.44
Corporate Dividend Tax 115.89 28.91
Per share data (annualised)
Shares in issue (lakhs) 17,048.33 17,048.33
Earning Per Share (Rs) 15.1 9.08
Equity Dividend (%) 200 100
Book Value (Rs) 66.1 72.59
-
------------------ in Rs. Cr. -------------------
Balance Sheet of DLF
Mar '08 Mar '09
12 mths 12 mths
Sources Of Funds
Total Share Capital 340.96 339.44
Equity Share Capital 340.96 339.44
Share Application Money 0.00 0.00
Preference Share Capital 0.00 0.00
Reserves 10,928.19 12,035.39
Revaluation Reserves 0.00 0.00
Networth 11,269.15 12,374.83
Secured Loans 4,945.91 7,979.97
Unsecured Loans 3,440.49 1,635.00
Total Debt 8,386.40 9,614.97
Total Liabilities 19,655.55 21,989.80
Mar '08 Mar '09
12 mths 12 mths
Application Of Funds
Gross Block 1,533.72 1,968.40
Less: Accum. Depreciation 59.34 152.87
Net Block 1,474.38 1,815.53
Capital Work in Progress 1,781.79 1,657.73
Investments 1,839.83 2,956.32
Inventories 5,928.13 6,627.43
Sundry Debtors 930.18 212.89
Cash and Bank Balance 968.03 51.26
Total Current Assets 7,826.34 6,891.58
Loans and Advances 10,492.80 11,117.09
Fixed Deposits 26.79 709.94
Total CA, Loans & Advances 18,345.93 18,718.61
Deffered Credit 0.00 0.00
Current Liabilities 2,531.21 1,699.75
Provisions 1,255.16 1,458.64
Total CL & Provisions 3,786.37 3,158.39
Net Current Assets 14,559.56 15,560.22
Miscellaneous Expenses 0.00 0.00
Total Assets 19,655.56 21,989.80
Contingent Liabilities 3,047.92 4,875.99
Book Value (Rs) 66.10 72.59
RATIO ANALYSIS:
Ratio analysis is the calculation and comparison of ratios which are derived from
the information in a company's financial statements. The level and historical trends of
these ratios can be used to make inferences about a company's financial condition, its
operations and attractiveness as an investment.
Financial ratios are calculated from one or more pieces of information from a
company's financial statements. For example, the "gross margin" is the gross profit
from operations divided by the total sales or revenues of a company, expressed in
percentage terms. In isolation, a financial ratio is a useless piece of information. In
context, however, a financial ratio can give a financial analyst an excellent picture of a
company's situation and the trends that are developing.
A ratio gains utility by comparison to other data and standards. Taking our
example, a gross profit margin for a company of 25% is meaningless by itself. If we
know that this company's competitors have profit margins of 10%, we know that it is
more profitable than their industry peer which is quite favourable. If we also know
that the historical trend is upwards, for example has been increasing steadily for the
last few years, this would also be a favourable sign that management is implementing
effective business policies and strategies.
Financial ratio analysis groups the ratios into categories which tell us about
different facets of a company's finances and operations. An overview of some of the
categories of ratios is given below.
Leverage Ratios which show the extent that debt is used in a company's capital
structure.
Liquidity Ratios which give a picture of a company's short term financial
situation or solvency.
Operational Ratios which use turnover measures to show how efficient a
company is in its operations and use of assets.
Profitability Ratios which use margin analysis and show the return on sales and
capital employed.
Solvency Ratios which give a picture of a company's ability to generate cash flow
and pay it financial obligations.
Although financial ratio analysis is well-developed and the actual ratios are well-
known, practicing financial analysts often develop their own measures for particular
industries and even individual companies. Analysts will often differ drastically in their
conclusions from the same ratio analysis.
*RATIOS ANALYSIS *
1)LIQUIDITY RATIOS
I) CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITES
2009 = 15560.22 = 4.92
3158.39
2008= 14559.56 =3.84
3786.37
II) QUICK RATIO= CURRENT ASSETS – INVENTORIES
CURRENT LIBILITIES
2009= 15560.22-17744.52 =0.69
3158.39
2008= 14559.56-16420.99 =0.49
3786.37
III) ABSLOUTE RATIO = CASH +MARKETSEQURITY
CL
2009 = 51.26+2956.32 =0.95
3158.39
2008 = 968.03+1839.83 =0.74
3786.37
INTERPRETATION OF LIQUDITY RATIOS:
A) The ideal current ratio is 2:1.
B) In 2009 it was 4.92:1 which good.
C) In 2008 CR is 3.84 which is very good.
D) According to this ratio the financial position of DLF is well enough.
E) Current assets should be double of current liabilities.
F) Quik ratio is good(0.69) in 2009. The ideal QR is 1:1.
G) In 2008 QR is 0.49 which is half of the ideal ratio which is not good.
H) The main reason for this situation is raising more current liabilities.
2) SOLVENCY RATIO
I) DEPT EQUITY RATIO = DEBT
EQUITY
2009 = 9614.97 = 0.77
12374.83
2008 = 8386.40 = 0.62
13314.91
II) EQUITY RATIO = SHAREHOLDER FUND
TOTAL ASSETS
2009 =339.44 =0.015
21989.80
2008 = 340.96 =0.017
19655.56
III) FIXED ASSETS NETWORTH RATIO = FIXED ASSETS
SHARE HOLDER FUND
2009 = 1815.53+2956.32 = 14.04
339.44
2008 = 1474.38+1839.83 = 9.87
340.96
INTERPRETATION OF SOLVENCY RATIOS:
A) The ideal DEBT EQUITY RATIO is 2:1. It means co. should arrange funds from debt
twice than equity.
B) In 2009 DER is 0.77 & in 2008 this is 0.62. Which is more than desirable level.
C) The DEBT TO TOTAL FUNDS RATIO should be under 50%.
D) If it is more than 50% it would be not risky for any organization because in that
condition it will depends on inside liabilities. Which leads to lower interest?
3) PROFITABILITY RATIO
I) SELLING AND ADMIN EXPENSES RATIO =SELLING & ADMIN EXPS*100
NET SALES
2009) = 159.03*100 = 5.623%
2827.90
2008) = 146.06 * 100 = 2.65%
5496.96
II) NET PROFIT RATIO = NET PROFIT (PAT)
NET SALES
2009) = 1547.77*100 = 54.73%
2827.90
2008) = 2574.40*100 = 46.84%
5496.96
III) OPRATING RATIO = OPERATING PROFIT
NET SALES
2009) = 1763.40*100 = 62.34%
2827.90
2008) = 2574.40*100 = 46.84%
5496.96
IV) RETURN ON INVESTMENT = NET PROFIT AFTER INTEREST TAX
SHARE HOLDER FUND
2009) = 1547.77 = 4.55
339.44
*RETURN ON INVESTMENT OF
2008) = 2574.40 =7.55
340.96
v) RETURN ON EQITY = NET AFTER INTEREST TAX - PREFERENCE DIV
EQUITY SHARE CAPITAL
2009) = 154.77-0 =4.55
339.44
2008)= 2574.40-0/340.96 =7.55
INTERPRETATION OF PROFITABILITY RATIO :
a) Total net sale the selling admin exps is 5.623 in 2009 and 2.65 in 2008.
b) Net profit ratio is just more than the half of net sale which is quite good for the
company which 2008 in 46.84 which is also good because it just approximate half of
the net sale.
c) The operating profit of 2009 in 62.34 of the net sale which is very good to meet
opening expenses & 2008 is 46.84 which is just half of net sale that easily handle the
operating expenses.
d) Return on investment the total net profit is 2009 in 4.5% of total share holder fund
invested by this company 2008 of 7.55% of what the share holder fund is invested by
the company.
e) Net profit is 4.55 and 7.55 from which the equity share is invested.
FUND FLOW STATEMENT:
Fund Flow Statements summarize a firm’s inflow and outflow of funds. Simply
put, it tells investors where funds have come from and where funds have gone. The
statements are often used to determine whether companies efficiently source and
utilize funds available to them.
This statement shows the flow of funds, flow of funds means movement of
working capital over a period of time. In other words , increase or decrease in the
working capital reflects the flow of funds. When a transaction increases the working
capital, it is known as a source of fund and when it decreases the working capital, it is
termed as use of funds. When a business transaction does affect the working capital,
no flow of funds take place.
So we can say that a statement which depicts the various sources and uses of
fund is known as fund flow statement.
FUND FLOW
1. STATEMENT OF CHANGES IN WORKING CAPITAL
PARTICULARS 2008 2009 INCREASE DECREASE
CURRENT ASSET (A)
INVENTORIES 5928.13 6627.43 699.3
SUNDRY DEBTOR 930.18 212.89 717.29
CASH ND BANK BALANCE 968.03 51.26 916.83
TOTAL 7826.34 6891.92
LIABILITIES (B)
CURRENT LIABILITY 2531.21 1699.75 831.46
PROVISION 1255.16 1458.64 203.48
TOTAL(B) 3786.37 3158.39
(A-B) 4039.97 3733.53
NET DECREASE IN WORKING 306.44
306.44
CAPITAL
TOTAL 4039.97 4039.97 1837.6 1837.6
ADJUSTED PROFIT ND LOSS ACCOUNT
PARTICULARS AMOUNT PARTICULARS AMOUNT
BY BALANCE B/D 1547.77
TO TRANSFER TO GENERAL
RESERVE
1107.20
TO BALANCE C/D
BY FUND FROM 2133.83
OPERATION
2574.40
TOTAL 3681.6 3681.6
FUND FLOW STATEMENT
SOURCE AMOUNT APPLICATION AMOUNT
BY FUND 2133.83 LOAN PAID 1228.57
FROMOPERATION
PURCHASE OF NET 341.15
BLOCK
1116.49
306.44
Increase in
Net decrease in investment
working capital
TOTAL 2686.21 2686.21
