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DLF Ltd.

BSE: 532868 Sector: Infrastructure
NSE: DLF ISIN Code: INE271C01023
BSE 00:00 | 23 Jul 333.95 3.50
(1.06%)
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330.95

HIGH

335.10

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325.05

NSE 00:00 | 23 Jul 334.15 3.65
(1.10%)
OPEN

331.95

HIGH

335.50

LOW

325.00

OPEN 330.95
PREVIOUS CLOSE 330.45
VOLUME 452705
52-Week high 338.70
52-Week low 134.60
P/E 74.38
Mkt Cap.(Rs cr) 82,663
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 330.95
CLOSE 330.45
VOLUME 452705
52-Week high 338.70
52-Week low 134.60
P/E 74.38
Mkt Cap.(Rs cr) 82,663
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DLF Ltd. (DLF) - Director Report

Company director report

Your Directors have pleasure in presenting their 55th Report on the businessand operations of the Company together with the audited results for the financial yearended 31 March 2020.

Financial and Operational Highlights

(Rs.in crore)

Consolidated Standalone
2019-20 2018-19 2019-20 2018-19
Total Income 6888 9029 4864 3709
Total expenses 6575 8511 2584 2943
Profit before exceptional items tax share of profit in associates and joint ventures 313 518 2280 766
Exceptional items (net) 340 127 1186 -
Profit before tax share of profit in associates and joint ventures 653 646 3466 766
(a) Tax expense for the year 217 277 57 78
(b) DTA reversal on account of adoption of new tax rate 1916 - 1145 -
Less: Tax expense (a) + (b) 2133 277 1202 78
Profit/ (Loss) after tax (1479) 368 2264 688
Share of Profit/ (Loss) in jointly controlled entities (net) 890 946 - -
Net Profit for the year (590) 1314 2264 688
Other Comprehensive Income (10) (3) (3) (1)
Total Comprehensive Income (600) 1311 2261 687

Financial Performance Review and Analysis

On a consolidated basis your Company recorded a revenue (including other income) ofRs.6888 crore which was lower by 24% as compared to the previous year. This was largelyon account of change in the product mix of the completed properties delivered by theCompany during the financial year. This led to profit before tax and exceptional items atRs.313 crore as compared to Rs.518 crore in the previous year. In view of COVID-19 aftera thorough analysis and following a prudent approach your Company undertook certainprovisions to reflect changes in carrying value of some of its assets and investments.This led to a one-time exceptional provision of Rs.331 crore in the last quarterof FY'20.

During the year we recorded exceptional gain on transfer of certain investments whichnetted off with exceptional provision made on certain assets resulted into netexceptional income of Rs.340 crore. Further the Company recorded a one-time reversal inDeferred Tax Assets (DTA) of Rs.1916 crore upon adoption of lower tax rate pursuant tothe Finance Act 2019. This led to your Company recording a net loss after taxes butbefore Minority Interest and share of Profit in jointly controlled entities of Rs.1479crore as against net profit of Rs.368 crore in the previous financial year.

After accounting for share of profit in DLF Cyber City Developers Limited and otherjointly controlled entities of Rs.890 crore your Company recorded a net loss of Rs.590crore during the year as against net profit of Rs.1314 crore in the previous financialyear. However Net Profit for the year excluding impact of DTA reversal on account ofadoption of new tax rate for FY'20 would have been Rs.1326 crore against Rs.1314 croreof FY'19. The Ministry of Corporate Affairs had notified Ind AS 116 ‘Leases' whichsupersedes Ind AS 17 ‘Leases'. Ind AS 116 is effective for an annual periodbeginning on or after 1 April 2019 and sets out principles for recognition measurementpresentation and disclosure of leases to account for all leases under a single on balancesheet model. The Company has adopted a modified retrospective approach in terms of Ind AS116. Under this approach the lessee records the lease liability at the present value ofthe remaining lease payments (over the non-cancellable term of the lease) discounted atthe incremental borrowing rate and the right to use assets. In case where the Company is alessor lease rentals are straight line over the non-cancellable period andaccordingly the period of security deposit is also aligned in accordance with the leaseterms determined as per Ind AS 116.

Consequently the right to use assets of Rs.344.67 crore with corresponding leaseliability of Rs.239.72 crore has been recognised in consolidated financial statements. Thenet impact of the same on the consolidated profit before tax for the year is due toadoption of Ind AS 116 the Profit before tax for the year ended is down by Rs.30.73 crorealong with corresponding gain of Rs.12.66 crore adjusted in retained earnings.

Change in Leadership Chairman

Dr. K.P. Singh Non-Executive Director/ Chairman of the Company who has been at thehelm of the affairs of the Company over five decades as part of the succession planningtendered resignation on 4 June 2020. The Board has elevated Mr. Rajiv Singh as‘Chairman' of the Company effective 4 June 2020.

Mr. Rajiv Singh a Mechanical Engineering Graduate from the Massachusetts Institute ofTechnology U.S.A. was the Vice Chairman of the Company and has led the Company with greatsuccess in developing and sustaining its leadership in each segment of the real estatesector by development of world class residential IT parks and office complexes andbrought international organized retail experience in India. His vision has also helped todrive infrastructural project like 16 Lane Toll Free Road in Gurugram.

The Company under his able leadership will navigate sectoral challenges and shallemerge stronger.

Chairman Emeritus

Considering Dr. K.P. Singh's outstanding and selfless service for development growthand success of the Company and his path breaking and visionary contribution towardsbuilding a modern India as a real estate developer which has transformed the urbanlandscape of the country the Board has conferred upon Dr. Singh lifetime title of‘Chairman Emeritus' with effect from 5 June 2020. This would help the Company tocontinue reaping the benefits of the rich reservoir of his experience knowledge wisdomand insights.

Impact of COVID-19

The pandemic caused some temporary disruptions in the economy and on the real estateindustry as well. The pandemic has impacted the consumer sentiments and spending appetitein the short-term however the longer term impact still remains uncertain. Due to thesubsequent lockdown restrictions certain operations and construction activities wereimpacted as these had to be shut down. Construction activities are now gradually returningback to normalcy.

The residential segment was impacted as demand continued to remain muted in thisperiod. Some green shoots of consumer interest revival is visible especially in the lowto mid-income housing.

Offices business continued to demonstrate resilience in these challenging times withsustained collections and positive feedback from the tenant partners. Your Company ensuredseamless business continuity to all its partners. New concepts like work from homede-densification and wellness are emerging in this segment and are expected to complementthis business.

Retail business was severely impacted as all malls remained shut due to lockdownrestrictions. Retail malls are expected to resume operations soon albeit without cinemasand restricted Food and Beverage activities. Your Company anticipates that marqueeproperties at good locations shall bounce back while taking a longer tenure. Your Companymaintained extensive connect with all its retail partners and keeping in mind the pain andchallenges faced by the industry plans to offer a revised rental scheme on the concept of"shared pain" to all its partners across the malls. This shall help inreinstating confidence and growth in the business in the long run.

Rental collections in offices business has been resilient and your Company is confidentthat the business shall return back to its growth phase by end of the year.

DLF Cyber City Developers Limited (DCCDL)

DCCDL reported a consolidated income of Rs.5083 crore as compared to Rs.5088 crore inthe previous financial year. DCCDL consolidated EBIDTA is Rs.3720 crore in FY'20 incomparison to Rs.3794 crore in FY'19 and total comprehensive income stood at Rs.1317crore compared to Rs.1400 crore in FY'19. As on 31 March 2020 DCCDL and itssubsidiaries together had an operational portfolio of 2.81 million square meter (msm)[30.3 million square feet (msf)]. The Company owns 66.67% stake in DCCDL while thebalance is owned by GIC Singapore.

Review of Business Development Business

Residential Segment

This sector was already grappling with subdued demand due to oversupply liquiditycrunch and certain regulatory initiatives by various authorities. The COVID-19 has furtherpushed back this segment. The Company recorded Gross Sales booking of Rs.3450 croreduring the FY 2019-20 an increase of approximately 10% from previous year. Net salesbooking was at Rs.2485 crore. The Company is poised to liquidate its ready-to-builtinventory. In order to improve demand the Company is planning to introduce new productsin the coming months to address the vast unmet demand in mid-income housing and isproposing to launch projects to address this.

The Company has commenced construction of its Central Delhi Project which is a Jointventure with GIC Singapore. The construction which was halted during the lockdown periodhas recommenced. The total saleable potential of this entire project is in excess of 0.74msm (8 msf).

Annuity Business

The Annuity business is primarily undertaken through DCCDL. During the year underreview as part of the stated strategy of consolidating the rental platform the Companyalong with its wholly-owned subsidiaries have transferred their investments in certainrental assets to DCCDL. As on 31 March 2020 DCCDL and its subsidiaries together had anoperational portfolio of ~ 2.81 msm (30.3 msf) with further potential of more than2.79 msm (30 msf). The new addition in the office portfolio is Cyber Park Gurugram ~ 0.23msm (2.5 msf) which is approximately 95% plus pre-leased and is expected to start rentgeneration in fiscal 2021.

The rental revenue recorded a 15% growth during the year at Rs.3006 crore a mix ofboth organic and inorganic growth. Barring couple of assets all other assets were almostfully occupied taking the average occupancy level of the portfolio to 95%. The newleasing volumes witnessed an uptick during the year.

DCCDL has also initiated two new projects for further growth:

(i) Downtown Gurugram total project size ~ 1.03 msm (11 msf) Phase-I admeasuring ~0.17 msm (1.83 msf) has been initiated. The development is being executed on steelbased construction to enable faster execution.

(ii) Downtown Chennai total project size ~ 0.64 msm (6.8 msf) Phase-Iadmeasuring ~ 0.19 msm (2.05 msf) has been initiated. The project has locational advantagebeing in Taramani "Gateway to the IT Corridor" in the region.

Having established a strong base your Company will continue to focus on increasing theoffice and retail rental portfolio and will continue to emphasize on the quality of theworkplace.

Dividend

Based on the Company's performance the Board of Directors have declared interimdividend @ Rs.1.20 per equity share of the face value of Rs.2/- each of the Company forthe FY 2019-20. The total outgo on account of payment of interim dividend wasRs.297.04 crore.

The Directors are also pleased to recommend a final dividend of Rs.0.80 per equityshare of the face value of Rs.2/- each for the FY 2019-20 payable to those shareholderswhose names appear in the Register of Members/ Beneficial ownership list provided by thedepositories on the record date.

The total outgo on account of payment of dividend (interim and final) for the FY2019-20 would be Rs.495.06 crore against Rs.441.44 crore in the previous financial year.The dividend payout is in accordance with the prevalent applicable laws and the Company'sDividend Distribution Policy. The said policy is available on the website of the Companyi.e. https://www.dlf.in/pdf/Dividend%20Distribution %20Policy.pdf.

Changes in Capital Structure

Your Company converted 130000000 Compulsorily Convertible Debentures (CCDs) intoequal number of equity shares of Rs.2/- each at a price of Rs.217.25 per share (includinga premium of Rs.215.25 per share) to the promoter/ promoter group entities.

Upon exercise of warrants and receipt of balance subscription of Rs.2249.90 croreyour Company also allotted

138089758 equity shares of Rs.2/- each fully paid-up at a price of Rs.217.25 pershare (including a premium of Rs.215.25 per share) to the promoter/ promoter groupentities.

Consequently the paid-up equity share capital of the Company increased to Rs.495.06crore comprising 2475311706 equity shares of Rs.2/- each fully paid-up.

Reserves

During the year under review the Company has not transferred any amount to the generalreserve. The Company has adequate Debenture Redemption Reserve (DRR) hence nottransferred any amount in terms of the Companies (Share Capital and Debentures) Rules2014 as amended.

Credit Rating

ICRA has reaffirmed Long Term Rating as A+ the outlook has been revised from positiveto stable. There has been no change in the short-term rating it has been reaffirmed asA1. The change in outlook follows the outbreak of COVID-19 pandemic with ongoingpan India lockdown and consequent economic uncertainties.

CRISIL has reaffirmed its ratings on the bank facilities and debt instruments of DLFLimited (DLF) at ‘CRISIL A+/ Stable/CRISIL A1'.

Fixed Deposits

During the year under review the Company has neither invited nor accepted/ renewed anydeposits from the public.

Holding Company

Rajdhani Investments & Agencies Private Limited continued to be the holding companyand holds 60.42% shares of the Company.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings/ Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings & outgo as stipulated under Section 134(3)(m) of the Companies Act 2013(‘the Act') read with Rule 8(3) of the Companies (Accounts) Rules 2014 as amendedis given at Annexure-A hereto and forms part of this Report.

Particulars of Employees

Pursuant to the provisions of Section 197(12) of the Act read with Rule 5(2) & 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names of the top 10 employees in terms of theremuneration drawn and names and other particulars of the employees drawing remunerationin excess of the limits set-out in the said Rules forms part of this report at Annexure-D2& D3.

Subsidiaries and Consolidated Financial Statements

As on 31 March 2020 the Company had 178 subsidiary companies in terms of theprovisions of the Act. Further details of changes in subsidiaries joint ventures andassociate companies during the year are given at

Annexure-D.

Pursuant to the provisions of Section 129(3) of the Act and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015[‘SEBI Listing Regulations'] the consolidated financial statements of the Companywere prepared by the Company in accordance with the applicable Ind AS and form apart of the Annual Report. A statement containing the salient features of the financialstatements of the subsidiaries joint ventures and associates of the Company in FormAOC-1 as required under the Companies (Accounts) Rules 2014 as amended forms part ofthe Notes to the financial statements. The highlights of the performance of subsidiariesjoint ventures and associates and their contribution to the overall performance of theCompany are included and form a part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act audited financial statements ofthe Company including consolidated financial statements other documents required to beattached thereto and audited financial statements of each of the subsidiaries areavailable on the website of the Company and may be accessed athttps://www.dlf.in/investor.php.

Material Unlisted Subsidiary

In terms of the provisions of the SEBI Listing Regulations your Company has a policyfor determining ‘Material Subsidiary' and the said policy is available on theCompany's website at the link https://www.dlf.in/pdf/ Material-Subsidiary-Policy.pdf.

Your Company has four material unlisted subsidiaries namely DLF Cyber City DevelopersLimited DLF Assets Limited (formerly DLF Assets Private Limited) DLF Power &Services Limited and DLF Home Developers Limited.

Scheme of Amalgamation/ Arrangement

1. The Scheme of Arrangement comprising amalgamation of wholly-owned subsidiarycompanies namely DLF Phase-IV Commercial Developers Limited DLF Real Estate BuildersLimited DLF Residential Builders Limited (Transferor Companies) and demerger of the realestate undertaking of DLF Utilities Limited with the Company (Transferee Company) pursuantto Section 232-234 and other relevant provisions of the Act read with rules madethereunder was filed before the Hon'ble National Company Law Tribunal (‘NCLT')Chandigarh Bench. NCLT vide its Order dated 21 November 2019 has disposed of the FirstMotion and directed sending of notices to those creditors having outstanding debt of 5% ormore and shareholders having 5% and more share capital. Accordingly the Company had sentnotices and filed compliance affidavits with NCLT. Thereupon second motion was filed inMarch 2020 to enable the NCLT to seek consent/ NOC of Regional Director MCA and otherregulators such as Income Tax etc. before approving the scheme of amalgamation/arrangement. However due to nationwide lockdown on account of COVID-19 pandemic thecourts/ tribunals are not fixing regular hearings therefore no further development hastaken place in the matter.

2. A Scheme of amalgamation/ arrangement has been filed before the NCLT ChandigarhBench for merger of DLF Property Developers Limited Genisys Property Builders &Developers Private Limited and Ghaliya Builders & Developers Private Limited(Transferor Companies) with DLF Luxury Homes Limited (Transferree Company) pursuant toSection 232-234 and other relevant provisions of the Act read with rules made thereunder.The next date of hearing is 7 September 2020.

3. Another Scheme of Arrangement comprising amalgamation of Richmond Park PropertyManagement Services Limited (Transfeor Company) with DLF Emporio Limited (TransfereeCompany) pursuant to Section 230-232 and other relevant provisions of the Act read withrules made thereunder was filed online before the NCLT Chandigarh Bench on 4 May2020.The petition is likely to be heard upon opening of the NCLT.

Listing at Stock Exchanges

The equity shares of your Company are listed on National Stock Exchange of IndiaLimited (NSE) and BSE Limited (BSE). The Non-convertible Debentures issued by your Companyare also listed on the Wholesale Debt Market (WDM) segment of BSE.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report as required under Regulation 34 read withSchedule V to the SEBI Listing Regulations forms part of this Report.

Corporate Governance Report

The Company is committed to sound corporate governance practices as well as compliancewith all applicable laws and regulations. The Board believes that combining the highestlevel of ethical principles with our unmatched brand experience and expertise willensure that we continue to be the leading company in our sector. The Corporate GovernanceReport as stipulated under Regulations 17 to 27 & 46(2) and paragraphs C D and E ofSchedule V to the SEBI Listing Regulations forms part of this Report.

The requisite certificate from S.R. Batliboi & Co. LLP Chartered AccountantsStatutory Auditors of the Company confirming compliance with the conditions of corporategovernance as stipulated under the SEBI Listing Regulations is attached to the CorporateGovernance Report.

Directors' Responsibility Statement

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

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

(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31 March 2020 and the profit and loss ofthe Company for that period;\

(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 andthat such internal financial controls are adequate and were operating effectively; and

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

Declaration by Independent Directors

The Independent Directors in their disclosures have confirmed that they are not awareof any circumstances or situation which exists or may be reasonably anticipated that couldimpair or impact their ability to discharge their duties. Based on the disclosuresreceived from Independent Directors the Board of Directors has confirmed that theyfulfilled conditions specified in Section 149(6) of the Act and Regulation 16(1)(b) of theSEBI Listing Regulations and were independent of the management.

Confirmation by Directors regarding directorship/ committee positions

Based on the disclosures received none of the Directors on the Board holdsdirectorships in more than ten public companies and none of the Independent Directorsserves as an Independent Director on more than seven listed entities as on 31 March 2020.Further no Whole-time Director serves as an Independent Director in any other listedcompany. Necessary disclosures regarding Committee positions in other public companies ason 31 March 2020 have been made by the Directors and have been reported in the CorporateGovernance Report and form a part of this Report.

Certification from Company Secretary in Practice

A certificate has been received from AS & Associates Company Secretaries inpractice that none of the Directors on the Board of the Company had been debarred ordisqualified from being appointed or continuing as Directors of companies by theSecurities and Exchange Board of India Ministry of Corporate Affairs or any such otherstatutory/ regulatory authority.

Board and its Committees

The Board of Directors met seven times during the FY2019-20. The details on thecomposition of the Board Committees meetings held and related attendance are providedin the Corporate Governance Report and form a part of this Report.

Auditors & Audit Reports

S.R. Batliboi & Co. LLP Chartered Accountants (FRN 301003E/ E300005) wereappointed as Statutory

Auditors of the Company for a term of five consecutive years from the conclusion of 52ndAnnual General Meeting (AGM) till the conclusion of 57th AGM subject toratification of their appointment at every subsequent AGM. The Ministry of CorporateAffairs vide notification dated

7 May 2018 obliterated the requirement of seeking members' ratification at every AGM onappointment of statutory auditors during their tenure of five years.

The Notes on financial statements (including the consolidated financial statements)referred to in the Auditors Report are self-explanatory and do not call for any furthercomments. The Auditors Report does not contain any qualification reservation adverseremarks or disclaimer.

Cost Auditors

During the year M/s R.J. Goel & Co. Cost Accountants (FRN 000026) were appointedas Cost Auditors of the Company for the FY 2019-20 for conducting the audit of costrecords of the Company pertaining to real estate development activities. Your Company ismaintaining the requisite cost records and the Cost Audit Report for the FY 2019-20 shallbe filed with the Ministry of Corporate Affairs in due course.

A certificate from the Cost Auditors certifying their independence and arm's lengthrelationship has been received by the Company.

As per provisions of the Act the remuneration payable to Cost Auditors is required tobe approved by the members in a general meeting for their ratification. Accordingly aresolution seeking members' ratification for the remuneration payable to M/s R.J. Goel& Co. Cost Accountants is included in the notice convening the AGM.

Secretarial Auditor

Dr. K.R. Chandratre Company Secretary in practice was appointed as Secretarial Auditorof the Company to conduct Secretarial Audit for the FY 2019-20. The Secretarial AuditReport and Secretarial Compliance Report for the financial year ended 31 March 2020 isannexed herewith at Annexure-B. The Secretarial Audit Report does not contain anyqualification reservation or adverse remarks. The Secretarial Compliance Report shall befiled with the stock exchanges in due course.

DLF Cyber City Developers Limited DLF Assets Limited (formerly DLF Assets PrivateLimited) DLF Powers & Services Limited and DLF Home Developers Limited materialsubsidiaries of the Company have also undergone Secretarial Audit under Section 204 of theAct and Regulation 24A of the SEBI Listing Regulations.

Accordingly the Secretarial Audit Report of the material unlisted subsidiaries namelyDLF Cyber City Developers Limited DLF Assets Limited (formerly DLF Assets PrivateLimited) and DLF Power & Services Limited for the financial year ended 31 March 2020issued by Dr. K.R. Chandratre and the Secretarial Audit Report of DLF HomeDevelopers Limited issued by M/s Sanjay Grover & Associates Practicing CompanySecretaries are at Annexure-B. The said reports are self-explanatory and do notcontain any qualifications reservations and adverse remarks or disclaimers.

Reporting of frauds by Auditors

During the year under review the Statutory Auditors and Secretarial Auditor have notreported any instances of frauds committed by the Company its officers or employees underSection 143(12) of the Act.

Secretarial Standards

The Secretarial Standards i.e. SS-1 & SS-2 relating to meetings of the Board ofDirectors and General

Meetings respectively have been duly followed by the Company.

Directors and Key Managerial Personnel

Mr. Amarjit Singh Minocha (DIN 00010490) was re-appointed as an Independent Director ofthe Company by the shareholders vide their special resolution passed through postalballot for a further period of five years effective from 20 May 2020.

Pursuant to the provisions of Section 152 of the Act read with Articles of Associationof the Company Mr. Ashok Kumar Tyagi (DIN 00254161) and Mr. Devinder Singh (DIN02569464) Whole-time Directors are liable to retire by rotation at the ensuing AnnualGeneral Meeting (AGM) and being eligible have offered themselves for re-appointment. Theresolutions seeking members' approval for their re-appointment form part of the notice.

A brief resume of the Directors seeking re-appointment along with other details asstipulated under Regulation 36(3) of the SEBI Listing Regulations read with theSecretarial Standards on General Meetings are provided in the Corporate Governance Reportand Notice for convening the AGM.

During the year under review the Board has appointed Mr. Vivek Anand as Group ChiefFinancial Officer w.e.f. 8 November 2019. Mr. Anand is a member of the Instituteof Chartered Accountants of India and has a work experience of around 25 years to hiscredit in various capacities. Pursuant to the provisions of Section 203 of the Act theKey Managerial Personnel of the Company as on 31 March 2020 were Mr. Rajiv SinghChairman/ Whole-time Director Mr. Mohit Gujral Mr. Rajeev Talwar Chief ExecutiveOfficers & Whole-time Directors Mr. Ashok Kumar Tyagi Mr. Devinder SinghWhole-time Directors Mr. Vivek Anand Group Chief Financial Officer and Mr.Subhash Setia Company Secretary & Compliance Officer of the Company.

Corporate Social Responsibility (CSR)

Your Company accords a similar priority to ‘Building Lives' as it does to‘Building India.' To attain the objectives CSR Programmes of the Company areprimarily undertaken through DLF Foundation which aims to create socially relevantprojects around a measurable and sustainable impact.

In line with the objective of focused contributions your Company addresses underservedstakeholders residing in and around DLF projects equally partnering in DLF's growthstory.

During the unprecedented COVID-19 pandemic DLF Group (through DLF Foundation) was inforefront to help the poorest of the poor and distributed dry ration packets equivalent to27.0 lakh meals and approximately 13.50 lakh cooked meals amongst slum dwellers migrantlabourers daily wage earners in and around Gurugram and other parts of NCR. DLFFoundation has continued to serve 65000 cooked meals daily through ISKCON in Gurugram andAkshay Patra the channel partners in Delhi and Noida among the poor migrant workers anddaily wagers. DLF also donated multiple diagnostic machines hospitals beds oxygencylinders gloves face masks sanitizers PPE suits and other medical equipments. Theabove created a positive and lasting impact on the lives of underprivileged.

DLF Foundation has worked closely with Districts Administration Municipal authoritiesPolice and other authorities which helped to identify the needy and DLF through itspartners ensured that food medical supplies and safety equipments must reached the needy.The efforts of DLF has been recognized and commended by the District Authorities.

DLF has spent Rs.20.0 crore (approx.) including contribution to Haryana Covid FundTamil Nadu State Relief Fund Chennai Kanchipuram District Relief Fund and CyberabadSecurity Council in Hyderabad.

Your Company has been investing in building capacities and creating resources for themarginalized. Your Company addresses Social Development Projects with an integratedholistic approach to ensure that its programmes impact critical aspects of the lives ofthe underserved comprising Education Healthcare Environment Preservation WomenEmpowerment and Social Infrastructure.

The Board based on the recommendations of the CSR Committee approved the CSR Policyof the Company in accordance with Section 135 of the Act and Rules made thereunder. A copyof the CSR policy is available on the Company's website viz. https://www.dlf.in/pdf/Corporate%20Social%20Responsibility%20Policy.pdf.

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

Environment & Sustainability

At DLF we embrace our unique position as industry pioneers to re-write the Indian realestate narrative. We take pride in enacting exemplifying and exceeding the highestenvironmental standards which address the most pressing challenges faced by our nation.

DLF adopted the 3R approach (Reduce Reuse and Recycle) in waste management. The threefocus areas of DLF's environment strategy are: (a) Carbon footprint reductions: Energyefficiency buildings and use of renewable energy; (b) Water Management: Efficient use ofwater recycling and rainwater harvesting in all buildings; and (c) Waste Management:Reduction Reuse and Recycling of wastes in all buildings.

DLF has invested in driving sustainability across every vertical - from the pioneeringwaste water treatment systems in DLF Golf and Country Club to recycling of ourconstruction materials. It has reduced waste generation and pollution. DLF endeavours toeducate and empower all stakeholders with respect to shared environmental obligations. DLFoperates with the intention of placing Indian industry at the global forefront of greeninnovation. DLF has maintained rigorous safety standards vetted by world class independentorganizations like British Safety Council. A reflection of this we are the only groupglobally to conferred 13 ‘Sword of Honor' awards in a year from the British SafetyCouncil a pinnacle of safety standards across the world.

DLF Buildings have also been conferred with ‘Five Star Rating in OccupationalHealth and Safety' by British Safety Council. DLF Cyber City Developers Limited therental arm had been certified as a ‘Great Place to Work' by Great Place to WorkInstitute.

The Company is deeply committed to the health wellbeing and prosperity of itscustomers partners employees and all other stakeholders. We have determined tocontinuously innovate to create safer workplaces green and intelligent buildings energyefficient smarter cities for sustainable communities across India to achieve long-termstakeholders' value.

The Company was amongst the earliest in the Indian Realty sector to adopt theEnvironment Social and Governance (ESG) framework. Our Environment Social and GovernanceReport shall be available at https://www.dlf.in/pdf/ESG-Report-2020.pdf.

Extract of Annual Return

The extract of Annual Return in form MGT-9 as provided under Section 92(3) of the Actread with Companies (Management and Administration) Rules 2014 as amended is at Annexure-D.

Awards and Accolades

Your Company continues to lead its sector and received a number of awards. The detailsof the major awards and accolades received during the year are given at

Annexure-F.

Business Responsibility Report (BRR)

The BRR describes the initiatives taken by the Company from social environmental andgovernance perspectives. Details are at Annexure-G.

Particulars of Loans Guarantees and Investments

Particulars of loans guarantees and investments have been disclosed in the notes tothe standalone financial statements.

Transactions with related parties

The Company has robust processes and procedures for the identification and monitoringof related party(ies) and related party transactions. None of the transactions withrelated parties falls under the scope of Section 188(1) of the Act.

The Company's policy for related party transactions regulate the transactions betweenthe Company and its related parties. The said policy is available on the Company's websiteviz. https://www.dlf.in/pdf/ Related%20Party%20Transaction%20Policy.pdf.

The policy intends to ensure that proper reporting approval and disclosure processesare in place for all transactions between the Company and its related parties.

During the year the Company has entered into arrangements/ transactions with relatedparties which are material in accordance with the Company's Policy on Related PartyTransactions read with the SEBI Listing Regulations. Further details of the transactionswith related parties pursuant to Section 134(3)(h) and 136(1) of the Act read with Rule8(2) of the Companies (Accounts) Rules 2014 as amended are provided at Annexure-Ein the prescribed Form AOC-2.

For details on related party transactions members may refer to the notes of thestandalone financial statements.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy was devised in accordance with Section 178 ofthe Companies Act 2013 and the SEBI Listing Regulations. The Nomination and RemunerationPolicy of the Company is aimed at inculcating a performance-driven culture. Through itscomprehensive compensation programme the Company endeavors to attract retain developand motivate a high-performance workforce. The said policy is available on the Company'swebsite viz. https://www.dlf.in/pdf/Nomination%20and% 20Remuneration20Policy.pdf.

The Company pays remuneration to its Chief Executive Officers Whole-time Directors byway of salary benefits perquisites and allowances (fixed component) and commission(variable component). Annual increments are approved by the Board of Directors based onthe recommendations of the Nomination and Remuneration Committee.

Based on the recommendation of the Nomination and Remuneration Committee the Board ofDirectors decides the commission payable to the Chief Executive Officers and Whole-timeDirectors out of the profits for the financial year within the ceilings prescribed underthe Act. The

Board of Directors also decides the commission payable to Non-executiveDirectors.

Annual Evaluation of the Board its Committees & Individual Directors

The Nomination and Remuneration Committee formulated criteria for Board evaluation itsCommittees' functioning and individual Director including Independent Directors and alsospecified that such evaluation will be done by the Nomination and Remuneration Committeeand the Board pursuant to the Act and the Rules made thereunder read with the SEBIListing Regulations. DLF believes that it is the collective effectiveness of the Boardthat impacts Company's performanceasawhole.TheBoardperformanceisassessed against the roleand responsibilities of the Board as provided in the Act and the SEBI Listing Regulations.The parameters for Board performance evaluation have been derived from the Board's corerole of trusteeship to protect and enhance shareholders' value as well as to fulfilexpectations of other stakeholders through strategic supervision of the Company.Evaluation of functioning of Board Committees is based on discussions amongst Committeemembers and shared by the respective Committee Chairman with the Board. IndividualDirectors are evaluated in the context of the role played by each Director as a member ofthe Board at its meetings in assisting the Board in realising its role of strategicsupervision of the functioning of the Company in pursuit of its purpose and goals. Whilethe Board evaluated its performance against the parameters laid down by the Nomination andRemuneration Committee the evaluation of individual Directors was carried out against thelaid down parameters anonymously in order to ensure objectivity. The IndependentDirectors of the Board also reviewed the performance of the non-Independent Directors andthe Board pursuant to Schedule IV to the Act and Regulation 25 of the SEBI ListingRegulations.

Internal Financial Control

Your Company has a robust and well embedded system of internal controls. This ensuresthat all assets are safeguarded and protected against loss from unauthorised use ordisposition and all transactions are authorised recorded and reported correctly. Anextensive risk based programme of internal audits and management reviews provide assuranceon the effectiveness of internal financial controls which are continuously monitoredthrough management reviews self-assessment functional experts as well as by theStatutory/ Internal Auditors during the course of their audits.

The internal audit was entrusted to Grant Thornton India LLP. The main thrust ofinternal audit was to test and review controls appraisal of risks and business processesbesides benchmarking controls with the best industry practices. The internal controlsystem ensures compliance with all applicable laws and regulations and facilitates optimumutilization of available resources and protects the interests of all stakeholders. TheCompany has clearly defined Policies Standard Operating Procedures (SOP) Financial &Operational Delegation of Authority (DOA) and Organizational structure for its businessfunctions to ensure a smooth conduct of its business. The ERP system supports in processesstandardization and automation.

The internal audit plan is also aligned to the business objectives of the Company whichis reviewed and approved by the Audit Committee. Further the Audit Committee monitors theadequacy and effectiveness of your Company's internal control framework. Significant auditobservations are followed-up and the actions taken were reported to the Audit Committee.

The Company's internal control system is commensurate with the nature size andcomplexities of operations.

Insider Trading Code

In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 as amended (‘the PIT Regulations') on prevention ofinsider trading your Company has revised ‘DLF Code of Conduct to Regulate Monitorand Report by Designated Persons and Immediate Relatives' in line with the recentamendments brought by SEBI in the PIT Regulations. The said Code lays down guidelineswhich advise Designated Persons on the procedures to be followed and disclosures to bemade in dealing with the shares of the Company and cautions them on consequences ofnon-compliances. Your Company has also updated its Code of practices and procedures offair disclosures of unpublished price sensitive information including a policy fordetermination of legitimate purposes. Further your Company has put in place an adequate& effective system of internal controls including maintenance of structural databasestandard processes to ensure compliance with the requirements of the PIT Regulations toprevent insider trading.

Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan and ensure its effectiveness. The AuditCommittee has additional oversight in the areas of financial risks and control.

The major business and process risks are identified from time to time by the businessesand functional heads. These identified risks are systematically addressed through internalcontrol mechanisms as well as appropriate actions on a continuous basis. The Companyestablished a risk management framework enabling risks to be identified assessed andmitigated appropriately with respect to internal and external risks. Risk management formsan integral part of the management policies and is an ongoing process integrated deeplyinto every-day operations.

Regulation 21 of the SEBI Listing Regulations provides that the Risk ManagementCommittee is responsible to frame implement monitor risk management plans includingcyber security and to ensure its robust effectiveness. The details of the Committee andits terms of reference are set-out in the Corporate Governance Report and form part ofthis Report.

The processes and guidelines of the risk management policy/ plan provide a strongoverview and monitoring system at the Board and senior management levels.

The Risk Management Committee and Audit Committee also seek an independent assurance onspecific risks from the internal audit or other assurance reviews.

Significant and material orders passed by Regulators or Courts

During the year under review no significant material order was passed by theregulators/ courts which would impact the going concern status of the Company and itsfuture operations. However some significant orders passed previously form a part of Note50 to the standalone financial statements.

Vigil Mechanism

The Company has a Whistle Blower Policy and established the necessary vigil mechanismin line with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulationsto enable the Directors employees and all stakeholders of the Company to report genuineconcerns to provide for adequate safeguards against victimisation of persons who use suchmechanism and make provision for direct access through an email or through a letter to theChairman of the Audit Committee.

The Whistle Blower Policy is posted on your Company's website athttps://www.dlf.in/corporate-governance-policies/DLFWBP.pdf.

Policy for Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace

Your Company continues to follow a robust anti-sexual policy on ‘PreventionProhibition and Redressal of Sexual Harassment of Women at Workplace' in accordance withThe Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013 ("POSH") and Rules made thereunder. Internal Complaints Committee has beenset-up to redress complaints received regarding sexual harassment at various workplaces inaccordance with POSH. The Committee constituted in compliance with POSH ensures a free andfair enquiry process with clear timelines for resolution. To build awareness in this areathe Company has been conducting programmes on regular basis.

All employees including of subsidiaries (permanent contractual temporary trainees)are covered under this Policy. The Policy is gender neutral.

During the financial year under review no case was reported. The Company continues topromote the cause of women colleagues through ‘Jagruti' all-women's forum forexperience sharing creating awareness on women's safety/ related issues celebratingimportant days dedicated to women and organizing workshops on gender sensitivity.

Acknowledgements

Your Directors wish to place on record their sincere appreciation to all the employeesfor their dedication and commitment. Their hard work and unstinting efforts enabled theCompany to sustain its performance and consolidate its sectoral leadership. Your Companycontinues to be respected by stakeholders including valuable customers. Your Directorswould like to express their sincere appreciation for assistance and co-operation receivedfrom vendors and stakeholders including financial institutions banks Central and StateGovernment authorities customers and other business associates who extended theirvaluable support during the year under review. It will be the Company's endeavour tonurture these relationships in strengthening business sustainability.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic. The Directors appreciate and value the contribution made by every member of DLFfamily who remain dedicated to the Company during this difficult time.

For and on behalf of the Board of Directors

(Mohit Gujral) (Rajeev Talwar)
CEO & Whole-time CEO & Whole-time
Director Director
(DIN 00051538) (DIN 01440785)
4 June 2020 New Delhi

.