DLF Directors Report

The Directors have pleasure in presenting their 52nd Report on the business and operations of the Company together with the audited results for the financial year ended 31 March 2017.

Consolidated Financial Results

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In FY’17, DLF reported consolidated income from operations of Rs.8,941 crore, a decrease of 15.63% from Rs.10,597 crore in FY’16. Net profit stood at Rs.708 crore, an increase of 132.13% from Rs.305 crore in the previous year. The EPS for FY’17 stood at Rs.3.89 as compared to Rs.1.86 for FY’16.

The cost of revenues including land, plots, development rights, constructed properties and others stood at Rs.3,466 crore as against Rs.4,558 crore in FY’16. Staff cost increased to Rs.328 crore versus Rs.315 crore. Depreciation, amortization and impairment charges were at Rs.572 crore against Rs.766 crore in FY’16. Finance cost increased to Rs.2,980 crore from Rs.2,680 crore in FY’16.

The exceptional items were higher mainly on account of sale of cinema business and investments in associate companies.

The Ministry of Corporate Affairs vide its notification dated 16 February 2015, notified the Indian Accounting Standards (Ind AS) applicable for certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of Companies (Accounts) Rules, 2014, as amended.

Accordingly, the standalone and consolidated financial statements for the year ended 31 March 2017 and 31 March 2016 including transition date balance sheet as at 1 April 2015 have been presented in accordance with Ind AS. The reconciliations and descriptions of the effect of the transition from previous GAAP to Ind AS have been set-out in Note 65 of the standalone financial statements and in Note 62 of consolidated financial statements.

Review of Operations

Your Company’s development business primarily focuses on the development and sale of residential real estate which include plotted developments, houses, villas and apartments of varying sizes and integrated townships, with a focus on the high-end, luxury residential developments. The development business also consists of certain commercial and shopping complexes, including those that are integral to the residential developments they are attached to.

Your Company has primarily categorized its development business into two broad categories viz. Gurgaon DevCo and National DevCo. Both these geographical segments are independently responsible and accountable for all activities across the product value chain from acquisition of land, obtaining approvals, project planning and execution, to launch, sales & marketing and final delivery of the developed property to the customers.

Residential Segment

The Company clocked gross sales booking of Rs.2,100 crore in FY’17. As of 31 March 2017, your Company has 203 msf of land resources allocated for residential development.

Lease Business

Your Company’s lease business involves leasing of its developed offices and retail properties. One of the key objectives of its lease business is to achieve returns from investments in its portfolio properties within a targeted timeframe. Another key objective is to achieve high occupancy rates for the leased portfolio properties. The utilities and facility management business supports and complements the lease business.

As of 31 March 2017, DLF lease business comprised completed offices and retail properties with leasable area of approx. 31.50 msf and annuity income (run-rate) of approx. Rs.2,900 crore. Gross leasing of 4.03 msf was achieved during the financial year at higher than targeted rentals. Net incremental leasing 0.88 msf was achieved post lease expiry and terminations of 3.15 msf.

As of 31 March, 2017, your Company has land bank of 43 msf allocated for development of leased assets.

Offices Segment

As of 31 March 2017, the occupancy rate for your Company’s leased offices portfolio was approx. 93%.

Retail Segment

As of 31 March 2017, the occupancy rate for your Company’s leased retail portfolio was approx. 94%. The fast growing retail market presents significant market potential for your Company to expand its retail portfolio.

Company’s Project Execution Status and Development Potential

Your Company completed approx. 14.5 msf of commercial and residential projects in FY’17. As a result, the total area under construction was approx. 19.30 msf as on 31 March 2017.

Standalone Financial Results

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Future Outlook

Your Board of Directors approved the signing of definitive agreements between your Company and an affiliate of GIC Real Estate, Singapore for a strategic partnership to develop a rental assets portfolio of DLF Cyber City Developers Limited (“DCCDL”), a subsidiary company. The partnership enables sustainable, long-term growth of DCCDL’s rental business and creates an optimum structure for its rental business to improve efficiency, with long-term capital for growth of the portfolio.

This is one of the largest private equity transactions in India in the real estate space. The transaction shall create one of the leading platform play for rental properties, with rent yielding assets of 26.9 msf. The portfolio, currently, has an under development pipeline of approx. 2.5 msf with further development potential of approx. 19 msf within the portfolio.

The transaction shall be subject to necessary corporate, shareholders and regulatory approvals.

The transaction implies an Enterprise Value of Rs.35,617 crore for DCCDL, translating into equity value of approx. Rs.30,200 crore.

As per arrangements, the gross proceeds to the promoter entities would be Rs.11,900 crore approx., which includes secondary sale of equity shares [post conversion of cumulative compulsorily convertible preference shares (CCPS)] to GIC affiliate for Rs.8,900 crore approx. and two buybacks of CCPS by DCCDL for Rs.3,000 crore. The expected post tax consideration in the hands of the promoter entities pursuant to the sale and two tranches of buyback is expected to be in excess of Rs.10,000 crore (approx.). A substantial portion of the said amounts will be invested in the Company.

The Development business will also benefit due to the structural reformation of its capital structure.

During the financial year, your Company, despite adverse macro headwinds, continued to deliver on its commitments. With the stated objective of focusing on faster execution of all projects, completion of approx. 14.5 msf was achieved.

The Rental business remains on a growth trajectory, and hence, DLF has commenced construction of the next phase of Chennai IT SEZ and remains on path of timely execution of the Cyber Park project in Gurugram.

The business strategy remains focused on the following key pillars:

(a) Efficient capital structure

Your Company continues to improve the quality of debt and has successfully reduced the average cost of borrowing for the Group. Post the transaction in the Rental business, DLF believe that the development business will attain a very healthy gearing ratio and the Rental business will continue to improve its quality debt by reducing the cost and phasing-out the principal payments, which essentially remain self liquidating.

(b) Timely execution of projects

The Company has in the past years demonstrated its focus of timely execution of the various projects and continues to embark on the strategy of creating finished inventory and reap benefits at the right inflexion point in the market. This strategy is incumbent in the current scenario, post the notification of the Real Estate (Regulation and Development) Act, 2016.

(c) Growth of rental business

Given the healthy traction and expected demand momentum, your Company has initiated new development in its rental portfolio. The Company strongly believes that this segment is embarking on a high tide and the time is ripe to reap benefits by deploying capital into this business and create a marquee portfolio.

Real Estate (Regulation and Development) Act, 2016

Real Estate (Regulation and Development) Act, 2016 [RERA] promulgated by the Central Government and Rules made thereunder by the respective State Governments will bring transparency, accountability and higher standard of governance. RERA will boost consumer confidence, pave the way for accelerated demand for housing products and also facilitate the flow of investments into the realty sector, from both global and Indian investors. It provides a unified legal regime for purchase of real estate and standardize the practice across the country. RERA will prove to be a game changer for all stakeholders in the real estate markets. It is expected that overall capital values will go up across most cities as there will be slowdown in supply, while demand will remain robust. Your Company has applied for registration of its project(s), wherever applicable.


The Directors are pleased to recommend a dividend of Rs.2/- per equity share (100%) (previous year interim dividend - Rs.2/- per equity share) for the FY’17 amounting to Rs.356.80 crore (previous year Rs.356.74 crore), subject to approval of the members.

The dividend payout is in accordance with the Company’s Dividend Distribution Policy. The said policy is available on the website of the Company http://www.dlf.in/images/ downloads/170601162837_0001.pdf


The Company proposes to transfer an amount of Rs.10,143 lakhs to debenture redemption reserve.

Share Capital

During the year under review, the Company has allotted 2,87,008 equity shares of Rs.2 each fully paid-up on exercise of stock options by the eligible employees under the Employee Stock Option Scheme, 2006 thereby increasing the paid-up share capital by Rs.5.74 lakhs.

Credit Rating

CRISIL has reaffirmed the ratings at ‘CRISIL A/ CRISIL A2 ’ on the bank facilities and debt instruments.

ICRA has also reaffirmed the long-term rating of [ICRA]A assigned to Non-convertible Debentures (NCD) programme and bank facilities.

Fixed Deposits

The Company has not accepted/ renewed any public deposits during the year under review.

Subsidiary Companies and Consolidated Financial Statements

As on 31 March 2017, the Company has 109 subsidiary companies in terms of the provisions of the Act. Further, details of change in subsidiaries, associates and joint ventures during the year are given at Annexure-D.

The consolidated financial statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the provisions of Section 129(3) of the Act read with Ind AS 110 - ‘Consolidated Financial Statements’ read with Ind AS 28 - ‘Investment in Associates’ and Ind AS 31 - ‘Interest in Joint Ventures’, forms part of this Annual Report. Further, a statement containing salient features of the financial statements of subsidiaries, associates and joint ventures in the prescribed format AOC-1 is included as a separate section and forms part of this Annual Report. The statement also provides the details of performance and financial position of each of the subsidiaries.

Pursuant to the provisions of Section 136 of the Act, the audited financial statements of the Company including consolidated financial statements and audited accounts of each of the subsidiaries, are available on the website of the Company viz. www.dlf.in. These documents will also be available for inspection at the Registered Office of the Company and respective subsidiary companies.

In terms of the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), your Company has a policy for determining ‘material subsidiary’ and such policy is available on the Company’s website at the link http://www.dlf.in/images/downloads/Material-Subsidiary-Policy.pdf

The Company has four material subsidiaries viz. DLF Cyber City Developers Limited, Caraf Builders & Constructions Private Limited, DLF Assets Private Limited and DLF Home Developers Limited and has appointed Independent Director(s) in these subsidiaries in compliance with the provisions of Regulation 24 of Listing Regulations.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/ Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings & outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014 are given at Annexure-A hereto and forms part of this Report.

Particulars of Employees

The information required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘the Rules’) in respect of employees of the Company, is annexed to this Report.

Pursuant to the provisions of Section 136(1) of the Act, the financial statements are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars specified under Rule 5(2) & (3) of the Rules. The same are available on the website of the Company viz. www.dlf.in and for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy thereof may write to the Company Secretary.

Employee Stock Option Scheme (ESOS)

Disclosures with respect to stock options as required under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 are available in the Notes to the financial statements and also available on the website of the Company viz. http://www.dlf.in/downloads.aspx. During the year, there has not been any change in the Company’s Employee Stock Option Scheme, 2006.

The certificate from Statutory Auditors of the Company, Walker Chandiok & Co LLP, Chartered Accountants, as required under Regulation 13 of the said Regulations, with respect to the implementation of the Company’s Employee Stock Option Scheme, 2006, shall be placed at the forthcoming Annual General Meeting.

Listing at Stock Exchanges

The equity shares of your Company are listed on NSE and BSE (the stock exchanges). The Non-convertible Debentures issued by your Company are also listed on the Wholesale Debt Market (WDM) segment of NSE and BSE.

Management Discussion & Analysis Report

The Management Discussion and Analysis Report as required under Regulation 34 read with Schedule V to the Listing Regulations with the stock exchanges forms part of this Report.

Corporate Governance Report

The Corporate Governance Report, as stipulated under Regulation 17 to 27 & 46(2) and paragraphs C, D and E of Schedule V to the Listing Regulations, forms part of this Report.

The requisite certificate from the Statutory Auditors of the Company, Walker Chandiok & Co LLP, Chartered Accountants, confirming compliance with the conditions of corporate governance as stipulated under the Listing Regulations is attached to Corporate Governance Report.

Directors’ Responsibility Statement

In terms of provisions of Section 134(5) of the Act, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2017 and the profit and loss of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Board and its Committees

During the financial year 2016-17, the Board of Directors met four times. Details on the composition of the Board, Committees, meetings held, attendance thereat is provided in the Corporate Governance Report and forms part of this Report.

Mr. Ashok Kumar Tyagi is the Group Chief Financial Officer and Mr. Subhash Setia is the Company Secretary of the Company.


In terms of the provisions of the Act read with Rules made thereunder, the term of Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors, expires at the conclusion of the 52nd Annual General Meeting (AGM) of the Company.

The Board has recommended the appointment of S.R. Batliboi & Co. LLP [FRN 301003E/E300005], Chartered Accountants as the Statutory Auditors of the Company for a term of five consecutive years from the conclusion of 52nd AGM till the conclusion of 57th AGM for approval of the shareholders, based on the recommendation of the Audit Committee.

S.R. Batliboi & Co. LLP have confirmed their eligibility and qualification to act as Statutory Auditors of the Company.

Auditors’ Report

(i) Emphasis of Matter given in point no. 9 of the Auditor’s Report on standalone financial statements read with Note 46 of the standalone financial statements, are self-explanatory and do not call for any further comments.

(ii) Emphasis of Matter given in point no. 9 of the Auditor’s Report on consolidated financial statements read with Note 50 of the consolidated financial statements, are self-explanatory and do not call for any further comments.

Cost Audit

The Board has appointed M/s R.J. Goel & Co., Cost Accountants (FRN 000026), to audit cost records of the Company pertaining to real estate development activities for the FY 2016-17. The Cost Audit Report for the FY 2016-17 shall be filed with the Ministry of Corporate Affairs.

Secretarial Audit

The Board has appointed Dr. K.R. Chandratre, Practicing Company Secretary, to conduct Secretarial Audit for the FY 2016-17. The Secretarial Audit Report for the financial year ended 31 March 2017 is at Annexure-B. The said report do not contain any qualification, reservation and adverse remarks.


Pursuant to the provisions of Section 152 of the Act read with Articles of Association of the Company, Mr. G.S. Talwar, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

Brief resume of Mr. Talwar seeking re-appointment along with other details as stipulated under Regulation 36 of the Listing Regulations and the Act, are provided in the Corporate Governance Report and Notice for convening the Annual General Meeting.

All Independent Directors have submitted declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and the Listing Regulations.

Corporate Social Responsibility

The Company has made significant contribution in community welfare initiatives including to the underprivileged through education, training, health, environment, capacity building and rural-centric interventions through ‘DLF Foundation’ and other agencies. The employees of the Company also participated in many of such initiatives.

The Board, based on the recommendations of the Corporate Social Responsibility (CSR) Committee, approved CSR Policy of the Company in accordance with Section 135 of the Act and Rules made thereunder. A copy of the CSR policy is available on the Company’s website viz. http://www.dlf.in/downloads.aspx

The Annual Report on CSR activities as per prescribed format under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed at Annexure-C.

Environment Policy

The Company has over the years, gone beyond the requirements of law in improving the environment in the ecosystem that it operates in and it has formalized and adopted a Corporate Environment Policy which is also available on the website of the Company viz. www.dlf.in

Extract of Annual Return

The extract of the Annual Return in form MGT-9 as provided under Section 92(3) of the Act is at Annexure-D.

Business Responsibility Report (BRR)

The BRR describes the initiatives taken by the Company from social, environmental and governance perspectives, is attached at Annexure-F and forms part of the Annual Report.

Particulars of Loans, Guarantees and Investments

Particulars of loans, guarantees and investments have been disclosed in the notes to the financial statements.

Transactions with Related Parties

The Company has adequate procedures for the purpose of identification and monitoring of related party(ies) and related party transactions. None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) and 136(1) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended are available on the website of the Company viz. www.dlf.in

The Company’s policy for related party transactions regulates the transactions between the Company and its related parties. The said policy is available on the Company’s website viz. http://www.dlf.in/images/downloads/RPT-Policy.pdf. The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. For details on related party transactions, members may refer to the notes to the standalone financial statements.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy containing guiding principles for payment of remuneration to Directors, Senior Management, Key Managerial Personnel and other employees including Non-executive Directors are provided in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Act, Regulation 17 & 25 of the Listing Regulations and Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India vide its circular dated 5 January 2017, the Nomination and Remuneration Committee has devised criteria for evaluation of the performance of Directors including Independent Directors.

The Board has carried out the annual performance evaluation of its own performance, its Committees and Directors. The exercise was led by Lead Independent Director. The evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, corporate governance & compliance management etc. Separate exercise was carried out to evaluate the performance of Non-executive Directors on parameters such as experience, attendance, acquaintance with the business, effective participation, vision and strategy, contribution and independent judgement.

Internal Financial Control

Internal financial controls are integral part of the risk management process addressing amongst others financial and non-financial risks. The internal financial controls have been documented and augmented in the day to day business processes. Assurance on the effectiveness of internal financial controls is obtained through management reviews, self assessment, continuous monitoring by functional experts as well as testing by the Statutory/ Internal Auditor during the course of their audits. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The Company’s internal control system is commensurate with the nature, size and complexities of operations.

Risk Management

Pursuant to the requirement of Regulation 21 of the Listing Regulations, Risk Management Committee is responsible to frame, implement, monitor risk management plan and ensure its robust effectiveness. The details of the Committee and its terms of reference are set-out in the Corporate Governance Report forming part of this Annual Report.

The Company has established risk management framework that enables regular and active monitoring business activities for identification, assessment and mitigation of potential internal or external risks. The respective Function/ Business Unit Head(s) are entrusted with the responsibility of identifying, mitigating and monitoring of risk management. Risk Management forms an integral part of the management policy and is an ongoing process integrated with operations. The processes and guidelines of the risk management policy/ plan provide a strong overview and monitoring system at Board and senior management levels.

The Risk Management Committee and Audit Committee also seek independent assurance on specific risks from internal audit or other assurance reviews.

Significant and Material Orders passed by Regulators or Courts

There are no significant material orders passed by the regulators/ courts which would impact the going concern status of the Company and its future operations. However, some of the significant orders are forming part of Note 57 to the standalone financial statements.

Vigil Mechanism

The Company has a vigil mechanism in the form of Whistle Blower Policy in line with Listing Regulations to deal with instances of unethical and/ or improper conduct and actioning suitable steps to investigate and correct the same. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

Policy for Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

Your Company continue to follow robust Policy on “Prohibition, Prevention & Redressal of Sexual Harassment of Women at Workplace”. During the financial year under review, no cases were reported. The Company continue to promote the cause of our women colleagues, through “Jagruti”- an all women’s forum for experience sharing, creating awareness on women safety & related issues and celebrating important days dedicated to women and also organizing ongoing workshops on gender sensitivity [approx. 300 employees (male & female) were covered under this].


The details of Recognitions, Awards and Accolades received during the year are provided in Annexure-E.


Your Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. The hard work and unstinting efforts of the employees have enabled the Company to sustain and further consolidate its position in the industry.

Your Company continues to occupy a place of respect among stakeholders, most of all our valuable customers. Your Directors would like to express their sincere appreciation for assistance and co-operation received from the vendors and stakeholders including financial institutions, banks, Central and State Government authorities, customers and other business associates, who have extended their valuable and sustained support and encouragement during the year under review. It will be the Company’s endeavour to build and nurture these strong links with its stakeholders.

For and on behalf of the Board of Directors

(Dr. K.P. Singh)

New Delhi Chairman

25 August 2017 (DIN 00003191)

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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