Findings analysis & conclusion

CHAPTER 4

Analysis

&

Findings

54

The balance sheet of DLF for last 5 years has been presented below:-

Balance Sheet of DLF ------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 37.77 305.88 340.96 339.44 339.48

Equity Share Capital 37.77 305.88 340.96 339.44 339.48

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 607.16 346.92 10,928.19 12,035.39 12,490.53

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 644.93 652.80 11,269.15 12,374.83 12,830.01

Secured Loans 3,010.93 6,242.81 4,945.91 7,979.97 11,590.19

Unsecured Loans 2.99 526.48 3,440.49 1,635.00 1,047.67

Total Debt 3,013.92 6,769.29 8,386.40 9,614.97 12,637.86

Total Liabilities 3,658.85 7,422.09 19,655.55 21,989.80 25,467.87



Application Of Funds

Gross Block 108.91 365.58 1,533.72 1,968.40 2,002.85

Less: Accum. Depreciation 29.24 37.01 59.34 152.87 273.84

Net Block 79.67 328.57 1,474.38 1,815.53 1,729.01

Capital Work in Progress 456.73 665.03 1,781.79 1,657.73 1,718.51

Investments 1,397.28 769.17 1,839.83 2,956.32 6,558.88

Inventories 472.12 4,281.07 5,928.13 6,627.43 6,533.69

Sundry Debtors 26.55 173.79 930.18 212.89 607.96

Cash and Bank Balance 11.89 19.30 968.03 51.26 171.43

Total Current Assets 510.56 4,474.16 7,826.34 6,891.58 7,313.08

Loans and Advances 2,466.47 4,807.90 10,492.80 11,117.09 11,609.93

Fixed Deposits 115.08 160.19 26.79 709.94 0.00

Total CA, Loans & Advances 3,092.11 9,442.25 18,345.93 18,718.61 18,923.01

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 1,197.33 3,059.67 2,531.21 1,699.75 2,025.90

Provisions 169.61 723.25 1,255.16 1,458.64 1,435.66

Total CL & Provisions 1,366.94 3,782.92 3,786.37 3,158.39 3,461.56

Net Current Assets 1,725.17 5,659.33 14,559.56 15,560.22 15,461.45

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 3,658.85 7,422.10 19,655.56 21,989.80 25,467.85

Contingent Liabilities 1,643.36 3,818.81 3,047.92 4,875.99 7,423.38

Book Value (Rs) 170.76 4.27 66.10 72.91 75.59

55

Profit & Loss account of DLF

------------------- in Rs. Cr. -------------------



Income

Sales Turnover 953.46 1,101.66 5,496.96 2,827.90 2,729.42

Excise Duty 0.00 0.00 0.00 0.00 0.00

Net Sales 953.46 1,101.66 5,496.96 2,827.90 2,729.42

Other Income 191.32 327.48 560.90 1,004.57 491.01

Stock Adjustments -2.58 -8.72 -6.06 0.00 0.00

Total Income 1,142.20 1,420.42 6,051.80 3,832.47 3,220.43

Expenditure

Raw Materials 0.00 0.00 0.00 0.00 0.00

Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00

Employee Cost 16.76 44.82 103.78 71.12 130.57

Other Manufacturing Expenses 577.64 237.75 2,141.29 778.34 889.25

Selling and Admin Expenses 43.65 136.16 146.06 159.03 0.00

Miscellaneous Expenses 6.23 15.77 27.72 56.01 284.23

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses 644.28 434.50 2,418.85 1,064.50 1,304.05



Operating Profit 306.60 658.44 3,072.05 1,763.40 1,425.37

56

PBDIT 497.92 985.92 3,632.95 2,767.97 1,916.38

Interest 146.15 356.25 447.65 809.86 847.24

PBDT 351.77 629.67 3,185.30 1,958.11 1,069.14

Depreciation 3.90 9.44 25.68 114.08 126.05

Other Written Off 0.00 0.00 41.79 37.86 0.00

Profit Before Tax 347.87 620.23 3,117.83 1,806.17 943.09

Extra-ordinary items 1.11 1.24 0.36 33.05 -2.32

PBT (Post Extra-ord Items) 348.98 621.47 3,118.19 1,839.22 940.77

Tax 120.47 214.56 543.52 261.00 175.71

Reported Net Profit 227.44 405.77 2,574.40 1,547.77 765.06

Total Value Addition 644.27 434.50 2,418.85 1,064.51 1,304.06

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 1.55 340.97 681.93 339.44 339.48

Corporate Dividend Tax 0.22 57.95 115.89 28.91 11.38

Per share data (annualised)

Shares in issue (lakhs) 377.68 15,294.21 17,048.33 16,972.09 16,973.91

Earning Per Share (Rs) 60.22 2.65 15.10 9.12 4.51

Equity Dividend (%) 40.00 100.00 200.00 100.00 100.00

Book Value (Rs) 170.76 4.27 66.10 72.91 75.59

57

Cash Flow of DLF ------------------- in Rs. Cr. -------------------



Net Profit Before Tax 347.90 620.33 3117.92 1808.77 943.09

Net Cash From Operating Activities -64.36 -2626.83 -1505.81 1365.86 395.24

Net Cash (used in)/fromInvesting Activities

-2146.23 -628.34 -6482.00 -1151.17 -2420.00

Net Cash (used in)/from Financing Activities 2251.52 3233.37 8945.90 -437.54 1434.95

Net (decrease)/increase In Cash and Cash Equivalents

40.93 -21.80 958.09 -222.85 -589.80

Opening Cash & Cash Equivalents 5.11 46.05 24.16 982.25 759.40

Closing Cash & Cash Equivalents 46.05 24.25 982.25 759.40 169.60

58

Key Financial Ratios of DLF ------------------- in Rs. Cr. -------------------


Investment Valuation Ratios

Face Value 10.00 2.00 2.00 2.00 2.00

Dividend Per Share 4.00 2.00 4.00 2.00 2.00

Operating Profit Per Share (Rs) 81.18 4.31 18.02 10.39 8.40

Net Operating Profit Per Share (Rs) 252.45 7.20 32.24 16.66 16.08

Free Reserves Per Share (Rs) 159.66 2.25 63.84 69.75 --

Bonus in Equity Capital -- 87.50 78.51 78.87 --

Profitability Ratios

Operating Profit Margin(%) 32.15 59.76 55.88 62.33 45.29

Profit Before Interest And Tax Margin(%) 26.43 45.40 50.28 42.99 28.68

Gross Profit Margin(%) 31.63 47.79 55.41 58.30 39.82

Cash Profit Margin(%) 20.20 29.04 43.60 44.29 28.67

Adjusted Cash Margin(%) 20.22 29.05 43.60 44.29 27.74

Net Profit Margin(%) 19.86 28.38 42.49 40.36 --

Adjusted Net Profit Margin(%) 19.88 28.39 42.49 40.36 23.87

Return On Capital Employed(%) 13.50 13.15 18.13 11.90 6.96

Return On Net Worth(%) 35.27 62.16 22.84 12.50 5.96

Adjusted Return on Net Worth(%) 35.29 62.17 22.84 12.49 5.98

Return on Assets Excluding Revaluations 4.53 4.27 66.10 72.91 75.59

Return on Assets Including Revaluations 4.53 4.27 66.10 72.91 75.59

Return on Long Term Funds(%) 14.90 15.35 22.40 13.36 7.02

Liquidity And Solvency Ratios

Current Ratio 1.51 1.75 2.34 2.96 5.47

Quick Ratio 1.91 1.36 3.28 3.83 3.58

Debt Equity Ratio 4.67 10.37 0.74 0.78 0.99

Long Term Debt Equity Ratio 4.14 8.74 0.41 0.58 0.97

Debt Coverage Ratios

Interest Cover 3.63 3.22 8.38 3.52 2.45

Total Debt to Owners Fund 4.67 10.37 0.74 0.78 0.99

Financial Charges Coverage Ratio 3.41 2.77 8.12 3.42 2.26

Financial Charges Coverage Ratio Post Tax 2.58 2.17 6.90 3.10 2.05

Management Efficiency Ratios

Inventory Turnover Ratio 2.43 0.33 -- -- --

Debtors Turnover Ratio 62.46 11.00 9.96 4.95 5.62

Investments Turnover Ratio 2.43 0.33 -- -- 0.42

Fixed Assets Turnover Ratio 1.88 1.44 -- -- --

Total Assets Turnover Ratio 0.26 0.15 0.28 -- 0.11

Asset Turnover Ratio 8.75 3.01 3.60 1.46 1.36

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- --

59

Number of Days In Working Capital 651.37 1,849.36 953.52 1,980.86 2,039.31

Profit & Loss Account Ratios

Material Cost Composition -- -- -- -- --

Imported Composition of Raw Materials Consumed

-- -- -- -- --

Selling Distribution Cost Composition 2.80 5.75 0.83 2.09 --

Expenses as Composition of Total Sales 11.72 18.06 2.18 3.51 4.48

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 0.77 98.30 30.99 23.79 45.86

Dividend Payout Ratio Cash Profit 0.76 96.07 30.19 21.67 39.37

Earning Retention Ratio 99.23 1.72 69.01 76.19 54.28

Cash Earning Retention Ratio 99.24 3.95 69.80 78.32 60.73

AdjustedCash Flow Times 13.02 16.30 3.17 5.66 14.15


Earnings Per Share 60.22 2.65 15.10 9.12 4.51

Book Value 170.76 4.27 66.10 72.91 75.59

60

Competition

Last Price Market Cap.(Rs. cr.)

SalesTurnover

Net Profit Total Assets

DLF 361.30 61,328.21 2,419.21 765.06 25,467.85DB Realty 431.30 10,491.75 - - 3,416.11HDIL 254.00 10,414.10 1,491.99 596.65 11,169.45Oberoi Realty 275.80 9,052.67 - - -Indiabulls Real 200.05 8,037.82 33.99 22.45 5,296.28Prestige Estate 216.00 7,086.39 - - -Godrej Proper 713.80 4,985.89 - - 1,270.33Sunteck Realty 682.75 4,299.02 16.38 7.24 394.10Anant Raj Ind 133.75 3,946.91 286.81 237.17 3,592.33Sobha Developer 366.85 3,597.47 1,114.00 136.70 3,162.51

61

Balance Sheet ------------------- in Rs. Cr. -------------------

DLF DB Realty HDIL Indiabulls Real

Mar '10 Mar '10 Mar '10 Mar '09

Sources Of FundsTotal Share Capital 339.48 243.26 358.84 189.04Equity Share Capital 339.48 243.26 358.84 51.50Share Application Money 0.00 0.00 78.00 232.20Preference Share Capital 0.00 0.00 0.00 137.54Reserves 12,490.53 2,853.75 6,680.90 3,505.84Revaluation Reserves 0.00 0.00 0.00 0.00Networth 12,830.01 3,097.01 7,117.74 3,927.08Secured Loans 11,590.19 2.39 4,051.72 1.84Unsecured Loans 1,047.67 316.69 0.00 1,367.35Total Debt 12,637.86 319.08 4,051.72 1,369.19Total Liabilities 25,467.87 3,416.09 11,169.46 5,296.27


Mar '10 Mar '10 Mar '10 Mar '09

Application Of FundsGross Block 2,002.85 24.24 190.53 24.64Less: Accum. Depreciation 273.84 8.42 9.83 5.35Net Block 1,729.01 15.82 180.70 19.29Capital Work in Progress 1,718.51 0.73 1,389.09 0.00Investments 6,558.88 1,773.48 596.48 2,507.18Inventories 6,533.69 97.37 8,033.66 0.00Sundry Debtors 607.96 0.00 200.72 10.73Cash and Bank Balance 171.43 43.18 297.33 9.28Total Current Assets 7,313.08 140.55 8,531.71 20.01Loans and Advances 11,609.93 1,571.84 1,211.52 2,775.15Fixed Deposits 0.00 0.00 490.05 0.00Total CA, Loans & Advances 18,923.01 1,712.39 10,233.28 2,795.16Deffered Credit 0.00 0.00 0.00 0.00Current Liabilities 2,025.90 84.76 808.41 18.79Provisions 1,435.66 1.55 421.69 6.56Total CL & Provisions 3,461.56 86.31 1,230.10 25.35Net Current Assets 15,461.45 1,626.08 9,003.18 2,769.81Miscellaneous Expenses 0.00 0.00 0.00 0.00Total Assets 25,467.85 3,416.11 11,169.45 5,296.28

Contingent Liabilities 7,423.38 2,023.60 436.45 919.94Book Value (Rs) 75.59 127.31 196.18 138.14

62

Profit & Loss account ------------------- in Rs. Cr. -------------------


Mar '10 Mar '10 Mar '10 Mar '09

Income

Sales Turnover 2,729.42 0.00 1,491.99 45.03

Excise Duty 0.00 0.00 0.00 0.00

Net Sales 2,729.42 0.00 1,491.99 45.03

Other Income 491.01 284.80 106.36 94.73

Stock Adjustments 0.00 32.82 1,591.97 0.00

Total Income 3,220.43 317.62 3,190.32 139.76

Expenditure

Raw Materials 0.00 0.00 0.00 0.00

Power & Fuel Cost 0.00 0.00 0.00 0.00

Employee Cost 130.57 2.47 45.15 18.96

Other Manufacturing Expenses 889.25 31.98 1,914.77 0.30

Selling and Admin Expenses 0.00 0.00 31.86 12.03

Miscellaneous Expenses 284.23 14.06 11.68 2.68

Preoperative Exp Capitalised 0.00 0.00 -69.07 0.00

Total Expenses 1,304.05 48.51 1,934.39 33.97


Mar '10 Mar '10 Mar '10 Mar '09

Operating Profit 1,425.37 -15.69 1,149.57 11.06

PBDIT 1,916.38 269.11 1,255.93 105.79

Interest 847.24 35.65 515.55 79.83

PBDT 1,069.14 233.46 740.38 25.96

Depreciation 126.05 5.42 5.10 2.55

Other Written Off 0.00 0.00 0.00 0.00

Profit Before Tax 943.09 228.04 735.28 23.41

Extra-ordinary items -2.32 0.00 -5.64 0.00

PBT (Post Extra-ord Items) 940.77 228.04 729.64 23.41

Tax 175.71 0.65 132.99 6.85

Reported Net Profit 765.06 227.39 602.30 16.56

Total Value Addition 1,304.06 48.51 1,934.38 33.97

Preference Dividend 0.00 0.00 0.00 13.75

Equity Dividend 339.48 0.00 0.00 0.00

Corporate Dividend Tax 11.38 0.00 0.00 2.34

Per share data (annualised)

Shares in issue (lakhs) 16,973.91 2,432.59 3,588.43 2,575.21

Earning Per Share (Rs) 4.51 9.35 16.78 0.11

63

Equity Dividend (%) 100.00 0.00 0.00 0.00

Book Value (Rs) 75.59 127.31 196.18 138.14

Disinvestment Plans of Non-core assets / businesses

Progress on divestment plan on track

Targeting potential divestment proceeds in excess of Rs 2500 Crores in 15-18 months

Rs. 294 Crs recovered during the quarter

DLF Retail Brands - Wholly owned subsidiary, having paid up equity capital of Rs. 8 Crs, engaged in

the business of retailing various life style / luxury brands. For FY10, the business had revenue’s of

approx.Rs 33 Crs, with losses of approx. Rs 25 Crs (cumulative

losses of approx. Rs.45 Crs)

Preferential allotment to a promoter company at par resulting in

Infusion of Rs 92 crores by the promoter company to take 92% stake at par via new share allotment

Dilution of DLF stake from 100% to 8% post promoter infusion

Rationale - identified as non-core business, recovers shareholder loans

Aman Resorts

Operating performance continues to improve as global economic environment stabilizes

Explore possibilities for strategic partnerships to further strengthen the business model

64

65

66

Going Forward Further strengthening of cash flows / profitability via -

Right pricing strategy

Budgetary controls

Value engineering

Timely execution / deliveries

Material Inflation could impact EBIDTA margins going forward

Continue to focus on the Balance Sheet through debt reduction and improving the quality of the debt

portfolio

Focus on execution and sale of stock in existing projects, with selective launches in ensuing quarters

Sale of commercial office towers to provide impetus to profitability

Focus on non-core asset divestment to continue, leading to rationalization of our core real estate portfolio

Given stable cash flows, Company is comfortable with a debt equity of 0.75x. On a longer term sustainable

basis\this ratio is expected to be lower for FY11 targeting between 0.4x -0.5x

Well positioned to capture increased momentum in leasing demand provided clarity on the Govt. policy front;

improve leasing seen in Q1

67

CHAPTER 5

Conclusion

68

Conclusion

The net profit has decreased from 1547 crores to 766 crores in FY10 as compared to

FY09.

The company uses generally accepted principles in India.

The company has initiated strategic and comprehensive portfolio adjustments

concentrating both on real estate assets and non-real estate business,with a view to

exit non-core businesses.

EBIDTA margins 51% versus 54%.

The sales has decreased from 2827 crores to 2729 crores in FY10.

Continue to focus on the Balance Sheet through debt reduction and improving the

quality of the debt portfolio

Well positioned to capture increased momentum in leasing demand provided clarity

on govt. policy front , improved leasing seen.

69

CHAPTER 6

Suggestions

Or

Recommendations

70

SUGGESTIONS

DLF should exit from non core business and concentrate on real and non real

estate business.

DLF should have parallel products in order to support economy during recession.

DLF should expand their projects to other areas in India so as to compete with

upcoming players such as Ansals and Unitech.

DLF should enforce expert policies so as to curb serious competition and maintain

its market standing.

71

CHAPTER 7

Limitations

of

the Study

72

Limitations Of The Study

Time constraint was one of the reason that hindered the study.

As project is based only on secondary data many factors were excluded from the

study.

Inadequate information on the topic also limits the study and analysis.

Only a generalized view is given in the research so as to make simpler for common

man to understand.

73

Bibliography

SITES REFFEREDwww.Wikipedia.com

www.Ask.com

www.Google.com

Dlf official site

www.moneycontrol.com

LITERATURE REFFEREDEconomic timesVarious catalogues

74

http://www.moneycontrol.com/

DEPARTMENT OF MANAGEMENTMAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

Attendance Sheet

Name of the Student :University Enrollment No. :Name of the Supervisor from the Industry :

S.No. Date Time Progress Report

Signature of the student

Signature of Supervisor (Institute)

1

2

3

4

5

6

7

8

9

10

*Minimum (8out of 10) 80% attendance compulsory.

75

Business

Findings analysis & conclusion