dlf info city developers

8/6/2019 DLF Info City Developers

1/13

Project Appraisal and FinancingSubmitted by,

Banumathi.R

Anusha.MJagannath.G

Niveathetha.V

Prabu. M

Manoj pon spurgeon.S


2/13

ABOUT DLF

DLF- referred as the Delhi Land and Finance

The DLF group- founded by Raghuvendra Singh in 1946

First development- shivaji park in Delhi

In mid 1970- started developingDLF city project at Gurgaon.

Upcoming plans include hotels, infrastructure and special

economic zones-related development projects


3/13

ABOUT DLF

Headed by Kushal Singh.

The company is having a gross operating profit of Rs. 5985.98

Crores in March 2010.

Profit After Tax & Monitory interest is Rs.4468.19 Crores

Recent developments include residential, office and retail

properties.


4/13

Capital structure ofDLF Info City Developers

(chandigarh) ltd

DLF has a debt equity ratio of 10.6%

The major factors included inDL

F ltd are

Cost

Nature of asset

Business risk

Control consideration

Market conditions


5/13

Pros and Consof public and private sources:

The DLF info city developers (Chandigarh) ltd, have obtaineda secure loan of Rs. 238.26 crores it consists of both short

term & long term borrowings.

The DLF has obtained secured term loan borrowing from the

following banks

1. IL&FS Trust Company Limited

2. GE Capital Services India

3. Infrastructure Development Finance Company

limited

4. Axis BankLimited - Trust Series

5. Axis BankLimited - DAS Trust Series

6. Housing Development Finance Corporation

Limited


6/13

Year Mar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

Current ratio 0.148 0.142 0.085 1.074 2.303 3.077

DLF has taken a term loan the current ratio which is about 3.077 by theend of March 2009. This shows their ability to pay the term loan.

The negative working capital shows that the project is facing serious

financial trouble or they generate cash so quickly and so they actually

have a negative working capital.

Year Mar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

Working capital -6 -6 -12 -6 -3 -0.7

Working capital

Current ratio


7/13

Inte

rnal acc

rual

su

sed

Nearly 40 crores is charged as depreciation from 2006- 2009.

This is an internal source of fund for the organization. There

was no depreciation charged in the year 2005.

Year 2006 2007 2008 2009

Amount in Crores 4 6 27 2

Break-up of the Depreciation charged

Year 2005 2006 2007 2008 2009

Amount in

Crores-0.12 -24 -29 -22 1

Retained Earnings:The company shows negative balance for years 2005 to 2008. It shows a positive

balance for the year 2009.


8/13

Cont..

Internal Accruals = Depreciation + Retained Profit. So, by

adding up we get

The company made positive Internal Accruals only in 2008

and 2009. All the other years there were negative internal

accruals. This shows that the company does not use internal

accruals effectively to source its financing activities.

Year 2005 2006 2007 2008 2009

Internal

Accruals-0.12 -20 -23 5 3


9/13

Financial Instruments Used

Financial instruments can be categorized into two types:

1.Cash instruments.

2.Derivative instruments.

DLF has used borrowings from corporate bodies, group and

associated bodies, debentures and bonds and fresh capital to raise

their funds.


10/13

Financial Instruments Used

The fresh capital was Rs.33.11 crore during march 2005.

Borrowings were Rs.30.55 crore when the project was started

in March 2005 and increased to Rs.116.26 crore in march

2009.

Rs. 30.55 crore was borrowed from corporate bodies, group/

associated bodies during march 2005.

Borrowings from corporate bodies, group/ associated bodiesduring the year 2009 was -122.

The firm increased its external sources of fund to Rs.121.03

during the year 2009.


11/13

Firms dependence on domestic capital as

againstInte

rnalizati

on

Some of the domestic capitals used by DLF are,

1. Secured loans

2. Unsecured loans

3. Zero deferred credit Here, the unsecured loans are very less compared to the

secured loans.

DLF doesnt depend on any international capital.


12/13

Benefitsof the internationalization of capital

markets

Diversification of risk.

Individual investors, major corporations, and individual

countries all usually try to diversify the risks of their financialportfolios. The reason is that people are generally risk-averse.

The trend in the late 1990s was for corporations to issue

securities that attracted investors from all over the world.

Even though they has several advantages as mentioned above,

International capital markets are not focused by DLF.

One factor that is to be considered primarily is the forex rates

or the foreign exchange rates and rates keep on fluctuating.

If the firm buys the loan from an international capital market,

there may be an uncertainty in the value to be repaid.


13/13

THANK YOU

dlf info city developers

Documents