Term Paper Financial Management

8/8/2019 Term Paper Financial Management

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Term paper of

FINANCIALMANAGEMENT

NAMEOFCOMPANY-DLF

SUBMITTED TO : SUBMITTED BY:

MISS ANUSHITAL SINHA SANJEEV

ROLLNO:A12

ACKNOWLEDGEMENT


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I take this opportunity to present my votes of thanks to all those guidepost who

really acted as lightening pillars to enlighten our way throughout this project that

has led to successful and satisfactory completion of this study.

We are really grateful to our teacher for providing us with an opportunity to

undertake this project in the university and providing us with all the facilities. We

are highly thankful to Miss. Anushital sinha for his active support, valuable time

and advice, whole hearted guidance, sincere co-operation and pains taking

involvement of preparing the given project within the time stipulated

Table of contents

Introduction

History

Background


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Management

Objectives of the study

Company s position

Share price of company

Capital structure

Liquidity position

Financial credibility

IPO issues

Report and news

Conclusion

References

1. INTRODUCTION:Delhi Land Finance Limited, or DLF, is India's largest real estate developer. It is

based in New Delhi. The DLF Group was founded by Chaudhary Raghuvendra

Singh in 1946. The company is currently headed by Indian billionaire Kushal Pal

Singh, who inherited the company from Mr. Chaudhary.


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The group is capitalizing on emerging market opportunities to deliver high-end

facilities and projects to its wide base of customers by constantly upgrading its

internal skills and resource capabilities. A roster of world-reputed businesses

chooses DLF to jointly venture with, to seek growth in India. All the intensified

growth underlines DLF's commitment to quality, trust and customer sensitivityand, delivering on its promise with agility and financial prudence. This, in turn, has

earned DLF the coveted 'Super brand' ranking. DLF is the only company in India

in the Consumer validated category from the real estate sector to have been

awarded this distinction.

2. HISTORY:

DLF developed some of the first residential colonies in Delhi such as Krishna

Nagar, South Extension, Greater Kailash, Kailash Colony and Hauz Khas. In 1957,

with the passage of Delhi Development Act, the government assumed the control

of real estate development activities in Delhi and the role of private real estate

developers was restricted. As a result DLF began acquiring land at relatively low

cost outside the area controlled by the Delhi Development Authority, particularly

in the district of Gurgaon in the adjacent state of Haryana. In the mid-1970s, the

company started developing its ambitious DLF City project which helped

transform Gurgaon from a farming village to a commercial and real estate hub.

DLF has been instrumental in putting Gurgaon on the urban landscape of India.

Until the mid-1990s, most of DLF's operations were in Gurgaon and Delhi

metropolitan area. However, with increased assets, DLF has been trying to ramp up

its operations all over India.


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management DLF

3.BACKGROUND

Name Designation

K P Singh Chairman / Chair PersonT C Goyal Managing Director

Kameshwar Swarup Senior Executive Director

D V Kapur Non Executive Director

M M Sabharwal Non Executive Director

B Bhushan Non Executive Director

Name Designation

Rajiv Singh Vice Chairman

Pia Singh Whole Time Director

G S Talwar Non Executive Director

K N Memani Non Executive Director

Ravinder Narain Non Executive Director

N P Singh Non Executive Director


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DLF Limited is the flagship company of the DLF group founded in 1946. Overtheyears, DLF has evolved as one of the leading real estate developers in India withanextensive track record of developing real estate properties across various spheres ofreal estate The group ventured into real estate development with the launch of aresidential

project in Krishna Nagar, Delhi, which was completed in 1949. Later, the companyhas developed some of the first residential colonies of Delhi including SouthExtension, Greater Kailash, Kailash Colony and Hauz Khas. Historically DLF haslargely been a NCR-based developer, however in the last few years; it hasexpanded its footprints across30 cities in India. As on March 31, 2009, thecompany's majority of the land bankresources are in NCR, Mumbai, Kolkata, Bangalore and Chennai

DLF POSITION IN INDUSTRY

DLF Limited is India's largest real estate company in terms of revenues, earnings,market capitalization and developable area. It has a 60-year track record ofsustained growth, customer satisfaction, and innovation. The group has over 224million sq. ft. of completed development as on 31st March, 2007 and 738 million

sq. ft. of planned projects, and has pan India presence across 32 cities.

DLF's primary business is development of residential, commercial and retail properties. As of date, more than 50% of value emanates from commercialbusiness and 25% from super luxury/luxury housing segments. DLF has a uniquebusiness model with earnings arising from development and rentals. Its exposureacross businesses, segments and geographies mitigates any down-cycles in themarket. DLF has recently forayed into infrastructure, SEZ and hotel businesses


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Objectives of study

To know the liquidity and financial position of the company in past and inpresent also

To know the market share of the company in that industry

To know the overall capital structure of the company

Analyze the balance sheet and profit and loss of company for making some

conclusions

To know the market price of the share and determine the fluctuations inprice of share

Factors affecting capital structure and share price of the company

To know the ranking and rating of the company given by different agencies

To know the future prospective of the company like future plans ,investment

plans joint venture etc


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DATA COLLECTION: The collection of data is mainly done throughsecondary sources

SECONDARY SOURCES:secondary sources of data collection are thosesources from which we collect second hand data which is already being published

or used by some one in past . secondary data is easily available and it is less time

consuming as compare to primary data Secondary data is data collected by

someone other than the user. Common sources of secondary data for social science

include censuses, surveys, organizational records and data collected through

qualitative methodologies

For conducting this study mainly data is collected from secondary sources and data

is interpreted by me. All the data used conducting this study is form of published

data

SHARE PRICES OF COMPANY OVER LAST YEAR:

In current the share price DLF in national stock exchange (NSE) is Rs 334 and in

Bombay stock exchange (BSE) is Rs 334.70


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BSE : Apr 13,

Open Price 339.80 Volume 997992

High Price 339.80 52 Wk High 490.80

Low Price 331.10 52 Wk Low 236.90Prev. Close 333.75

NSE : Apr 13, 15:15

Open Price 333.40 Volume 4548658

High Price 337.25 52 Wk High 519.90

Low Price 331.00 52 Wk Low 190.55

Prev. Close 333.65

The share price of DLF keep on changing in current price of share is 334 . Due to

the recession in all over world every company face slow down . but after one year

prices of the shares are rising .DLF is also main sponsor of IPL 2010 this also

affects the overall performance of the company. Initially the companys

operations are restricted only in NCR region but after sponsoring IPL company is

also spreading its operations in south India

Capital structure for last three year:

Capital structure in (crore)


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From

Year

To

Year

Class Of

Share

Authorized

Capital

Issued

Capital

Paid Up

Shares (Nos)

Paid Up

Face

Value

Paid Up

Capital

2008 2009 EquityShare 499.50 340.97 1704832680 2 340.97

2007 2008EquityShare 499.50 340.97 1704832680 2 340.97

2006 2007EquityShare 499.50 305.88 1529421080 2 305.88

Capital structure:

Year from 2006-2007 company is having 499.50 of authorized share capital with

paid up shares of 152941080 and paid up capital of rs 305.88

But in the year 2007 -2008 there is no change in the equity shares and authorized

capital and this situation is continue in the year 2008-2009 also but paid up capitalis increase from 305.88 to 340.97.

Liquidity position of the company:


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Liquidity ratios09 08 07 06 05

Current ratio 5.93 4.85 2.50 2.26 1.27

Current ratio (inc. st loans) 2.96 2.34 1.75 1.51 1.21

Quick ratio 3.83 3.28 1.36 1.91 0.73

Improved liquidity portfolio adjustments to play as strengthsIn FY09, DLFs net sales declined by 30.4% owing to the demand slump and

property price correction. EBITDA margin nosedived 12.6 percentage pointswhile net profit fell by 40.7%. With a revised target price of Rs. 365 per share, weupgrade our rating to Buy

liquidity position of the company can be interpreted by following rations

INTERPRETATION

current ratio:

current ratio of the company is 5.93 which is shows that the liquidity position of

the company is good and it is improving year by year because in 2005 it is 4.85

and in 2007 it is 2.85 and so on

quick ratio:

quick ratio of the company is increasing which is good as it is operating at low

liquidity and there is no need to sell its short term debt obligations

Financial credibility:


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Profit loss account


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Mar ' 09 Mar ' 08 Mar '

Income

Operating income 2,827.90 5,496.96 1,101.

Expenses

Material consumed - 6.06 8.

Manufacturing expenses 778.34 2,141.29 237.

Personnel expenses 71.12 103.78 44.

Selling expenses 59.28 45.70 63.

Adminstrative expenses 156.39 128.16 88.

Expenses capitalised - -

Cost of sales 1,065.14 2,424.98 443.

Operating profit 1,762.76 3,071.98 658.

Other recurring income 1,006.72 560.74 327.

Adjusted PBDIT 2,769.48 3,632.72 986.

Financial expenses 809.86 447.65 356.

Depreciation 114.08 25.68 9.

Other write offs 37.86 41.79

Adjusted PBT 1,807.69 3,117.59 620.

Tax charges 261.00 5

Adjusted PAT 1,546.68 2,574.07 405.

Non recurring items -2.15 0.16 -0.

Other non cash adjustments 33.05 0.36 1.

Reported net profit 1,577.58 2,574.59 406.

Earnigs before appropriation 3,312.54 2,843.86 930.


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INTERPRETATION :

NET PROFIT:

Net profit of the company in year 2007 is 406 but in year 2008 it raises to 2574.59

which is good for company , but due to recession in 2009 it declines to 1577.08 ,

this shows the affect of recession on the company.

Operating profit:

Operating profit of the company in year 2009 is 1726.76 , which is very low as

comparison to 2008 i.e. is 3071.90 this decline in the operating profit of the

company is due to the recession in the world economy , but in 2007 it is 658.49,which shows that company is doing good business , with proper utilization of the

funds

Retained earnings:

Retained earnings of the company is increasing which shows a good sign for the

company it means company is having enough funds for more investments and

there is wealth maximization of share holders . in year 2009 it is 2944.19 in 2008 it

is 20466.63

Expenses:

Manufacturing expenses of the company in year 2007 are 778.43 which increases

to 2141.29, but in year 2009 it declines to 237.35 it is due to recession business of

the company goes down


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balance sheet

Mar ' 09 Mar ' 08Mar ' 07Mar ' 06 Mar ' 05

Sources of funds

Owner's fund

Equity share capital 339.44 340.96 305.88 37.77 3.51

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 12,035.39 10,928.19 346.92 607.16 380.42

Loan funds

Secured loans 7,979.97 4,945.91 6,242.81 3,010.93 630.15

Unsecured loans 1,635.00 3,440.49 526.48 2.99 2.95

Total21,989.7

919,655.5

57,422.1

03,658.8

51,017.0

3

Uses of funds

Fixed assets


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Mar ' 09 Mar ' 08Mar ' 07Mar ' 06 Mar ' 05

Gross block 1,968.40 1,533.72 365.58 108.91 98.80

Less : revaluation reserve - - - - -

Less : accumulateddepreciation 152.87 59.34 37.01 29.24 26.79

Net block 1,815.52 1,474.37 328.57 79.67 72.00

Capital work-in-progress 1,657.73 1,781.79 665.03 456.73 406.63

Investments 2,956.32 1,839.83 769.17 1,397.28 173.82

Net current assets

Current assets, loans &advances 18,718.62 18,345.94 9,442.25 3,092.12 1,710.39

Less : current liabilities &provisions 3,158.40 3,786.38 3,782.93 1,366.95 1,345.82

Total net current assets 15,560.22 14,559.56 5,659.32 1,725.17 364.57

Miscellaneous expenses notwritten - - - - -

Total

21,989.7

9

19,655.5

5

7,422.1

0

3,658.8

5

1,017.0

3


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INTERPRETATION:

Equity share capital:

Equity share capital of the company in year 2007 is 305.88 and in year 2008 it is

340.96 , which is good for business it company is having is having enough funds in

the form of share capital but in the year 2009 there is slight change in share capital

, it also indicates that there is stability in the company

Loans and funds :

Loans and funds of the company are increasing which is good for the further

investment in the business which is 21989.79 in year 2009 and 19655.55 in year2008, but at the same time debt of the company is also increasing which may be

worrying factor for the company

Total assets:

Total assets of the company are increasing year by year as it is given in the table

that in 2007 it is 7422.10 then it increases to 19655.55 in year 2008 and again it

increases to 21989.77 in year 2009 there is slight increase in the year 2009 it is due

to the effect of economy slow down . it also means that cash generating capacity ofthe company is increasing

Current Liabilities:

Current liability of the company is increased in the 2009 which is 3158.40 to

3786.38 in the year 2008 but there is only slight change in the 2007 and 2008


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Credit rating of the company:

CREDIT RATING DETAILS

AgencyInstrument

Rating

CRISIL

Crisil Credit Rating

A+, P1

CARE

Short-Term Debt

PR1+

CRISIL has removed its ratings on the debt instruments and bank facilities of DLFLtd (DLF) from Rating Watch with Developing Implications, and has reaffirmedthe ratings at A+/P1. The rating outlook is Negative. The ratings had been

placed on watch in March 2009 after DLF announced its consolidation initiatives,including a possible merger of DLF Assets Ltd (DAL) with itself.During the quarter ended June 30, 2009, DLF reduced its receivables from DAL toabout Rs.23 billion from overRs.49 billion. It also undertook a series of measuresto increase its liquidity. These measures include replacement of short-term debt ofabout Rs.40 billion with debt of tenure of up to five years, and sale of assets ofRs.5 billion

.The company held cash and bank balances of Rs.7.2 billion, as on June 30, 2009.Further more, DLF proposes to generate additional Rs.30 billion through the sale

of non-core assets, and reduce its debt by about 50 per cent, bythe end of 2009-10(refers to financial year, April 1 to March 31). CRISIL believes that, given thesemeasures, the consolidation, even if executed, will not have a material impact onDLFs credit risk profile. CRISIL, therefore, has reaffirmed its ratings on DLFsinstruments and bank facilities. The ratings continue to reflect DLFs healthy

business risk profile, conservative financial policy, and significant financialflexibility. DLFs business risk profile is marked by its strong market position,


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low-cost land bank, and economies of scale. Its financial risk profile is marked bya large net worth and moderate debt protection measures. These rating strengthsare partially offset by the risks and cyclicality inherent in the real estate sector ,andthe continued pressure on its operating cash flows because of slowdown in itssales.

IPO issues made by the company:

In this we will discuss about DLF IPO. It is now India's largest IPO. DLF is a realestate company which is based in the capital of India, New Delhi. DLF also made

profit from the oversees investors.

In 2007, DLF Ltd., a real estate developer based in New Delhi, launched its first IPO to collect at most Rs 9,625 crores from public issue. The average share

price ranged between Rs 500 to 550.

DLF offered 175 million shares to the public at a cost of Rs.2 each. DLF's aim was to enter into the list of top ten companies in India.

DLF wanted to spend 3500 crores out of that estimated gain, mentioned above, to purchase land. The rest might be used to pay the construction cost and repay thedebt.

Experts think that DLF IPO was able to encourage the other realestates companies too

DLF's public issue is now the biggest IPO in India. Moreover, it is the

8th most valuable company in the country.

DLF's IPO road show covered Singapore, Hong Kong and UK. Thecompany also staged road shows in some places beside US and somecountries in the Europe.


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DLF received bids for almost 50.9 million shares from the small traders.

According to the National Stock Exchanges' data, the company got bids fortotal 607 million shares.

Almost 90% of the demands for DLF IPO had come from the globalinvestors.

DLF eyes second shot at IPO

INDIAN real-estate billionaire Kushal Pal Singhs DLF

Ltd plans to revive its initial public offering in the first

quarter of 2007 after resolving a dispute with some

shareholders, people involved in the sale said.

DLF may raise between US$2 billion and US$2.5

billion, the three bankers said, asking not to be

identified because details are confidential, Bloomberg

News reported.

The New Delhi-based developer in August shelved a

December IPO after regulatory documents lapsed for a share sale to raise capital

for the construction of more offices, shops and homes in India as the economy

expands at more than eight percent a year.

You can leverage to an extent,? said Jayesh Shroff, who helps manage US$3.3

billion of assets at SBI Asset Management inMumbai. The size of the

opportunity is pretty huge. The plans on paper are big and you require to have a

large net-worth base.?

Regulatory delays, following a complaint by shareholders, and investor concerns

about DLFs valuation hindered plans to complete this year what the company

hoped would be Indias biggest share sale, the bankers said. DLF is betting a rally
http://propertybytes.indiaproperty.com/index.php/newsbytes/dlf-eyes-second-shot-at-ipohttp://www.indiaproperty.com/index.php?option=search&page=results&transaction=sell&property=any&city=567http://www.indiaproperty.com/index.php?option=search&page=results&transaction=sell&property=any&city=2278http://propertybytes.indiaproperty.com/index.php/newsbytes/dlf-eyes-second-shot-at-ipohttp://www.indiaproperty.com/index.php?option=search&page=results&transaction=sell&property=any&city=567http://www.indiaproperty.com/index.php?option=search&page=results&transaction=sell&property=any&city=2278


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in Indias benchmark stock index to a record and more optimistic outlook for

projects will lure investors.

DLF said in May it plans to spend about 650 billion rupees (US$14.5 billion)

buying land, another 310 billion rupees to construct buildings and repay as much

as 400 billion rupees of loans.

News and report about company:

Sponsorship:

DLF is currently sponsoring Indian Premier League (IPL), a Twenty20 format cricket league inIndia. DLF Group has paid US $40 million to be the title sponsor of the tournament for 5 years.

Joint Ventures:

Laing O'Rourke- UK based construction company credited with construction of DubaiInternational Airport, London's Millennium Tower, etc, will construct all DLF's landmarkprojects. Together DLF-Laing O' Rourke shall build the expressways, ports and other megastructures of India's new economy.

Nakheel of Dubai are partnering with DLF for developing townships in India.

WSP Group Plc is also partnering DLF, providing Management and consultancy to the built andnatural environment.

Feedback ventures, is providing consultancy for faster project execution to DLF.

DLF has also tied up with Hilton Hotels to jointly develop hotels in India.

DLF stock rebounded 15% at share buyback news

Shares of realty major DLF on Wednesday soared over 15 per cent as the company announced itwould consider buying back some shares to protect shareholders interest.
http://en.wikipedia.org/wiki/Indian_Premier_Leaguehttp://en.wikipedia.org/wiki/DLF_Grouphttp://en.wikipedia.org/wiki/Nakheelhttp://en.wikipedia.org/wiki/WSP_Grouphttp://en.wikipedia.org/wiki/Hilton_Hotelshttp://en.wikipedia.org/wiki/Indian_Premier_Leaguehttp://en.wikipedia.org/wiki/DLF_Grouphttp://en.wikipedia.org/wiki/Nakheelhttp://en.wikipedia.org/wiki/WSP_Grouphttp://en.wikipedia.org/wiki/Hilton_Hotels


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In a regulatory filing in Mumbai, the New Delhi-based real estate major said its board wouldmeet on July 10 to consider and approve buyback of equity shares of the company.

The buyback proposal follows a sharp erosion in the companys market value over the recentpast, which saw its share price plunging to below the issue price of Rs 525, at which the

company had sold shares to public about a year ago.

Conclusion :

From the above study we can conclude that DLF is one of the fastest growingcompanies of our country . it is the only real estate company which is growing withthis pace but due to rescission DLF also faces some decline stage in the last year,this economy slow down affects almost all the companies of the world but at thesame time with the help of effective planning and management dlf is able to regainits position in this industry. All these factors affect the share price of company ,current price of DLF is 306 .56 which is very low as compare 525 , when there isno rescission in the market

DLF is also sponsoring the cricket event IPL for 5 years , this sponsoring of IPLgives huge advantage to increase their business and share price in the marketIt is also coming with some joint ventures with U.K base construction company toenhance its operations.

In the end I want to conclude this real estate company is going to perform verywell in the near future in the other parts of the country


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References :

www.businessline .com

www.dlf.com

wwww.indiatimes.com

www.moneycontrol.com

www.proquest.com
http://www.businessline/http://www.dlf.com/http://www.moneycontrol.com/http://www.proquest.com/http://www.businessline/http://www.dlf.com/http://www.moneycontrol.com/http://www.proquest.com/

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