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DLF Ltd.

BSE: 532868 Sector: Infrastructure
NSE: DLF ISIN Code: INE271C01023
BSE 00:00 | 18 Jan 180.30 -3.80






NSE 00:00 | 18 Jan 180.35 -3.85






OPEN 184.90
VOLUME 372229
52-Week high 265.50
52-Week low 141.20
P/E 54.31
Mkt Cap.(Rs cr) 32,175
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 184.90
CLOSE 184.10
VOLUME 372229
52-Week high 265.50
52-Week low 141.20
P/E 54.31
Mkt Cap.(Rs cr) 32,175
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 52nd Report on the business andoperations of the Company together with the audited results for the financial year ended31 March 2017.

Consolidated Financial Results

(Rs. in crore)

2016-17 2015-16
Total income from operations 8940.51 10597.04
Total expenses 8340.25 9374.11
Profit before exceptional items and tax 600.26 1222.93
Exceptional items (net) 429.26 (196.67)
Profit before tax 1029.52 1026.26
Less: Tax expense 229.26 564.24
Profit after tax 800.26 462.02
Share of (loss) in associates and jointly controlled entities (net) (92.26) (156.92)
Net Profit 708.00 305.10

In FY’17 DLF reported consolidated income from operations of Rs. 8941 crore adecrease of 15.63% from Rs. 10597 crore in FY’16. Net profit stood at Rs. 708 crorean increase of 132.13% from Rs. 305 crore in the previous year. The EPS for FY’17stood at Rs. 3.89 as compared to Rs. 1.86 for FY’16.

The cost of revenues including land plots development rights constructed propertiesand others stood at Rs. 3466 crore as against Rs. 4558 crore in FY’16. Staff costincreased to Rs. 328 crore versus Rs. 315 crore. Depreciation amortization and impairmentcharges were at Rs. 572 crore against Rs. 766 crore in FY’16. Finance cost increasedto Rs. 2980 crore from Rs. 2680 crore in FY’16.

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

The Ministry of Corporate Affairs vide its notification dated 16 February 2015notified the Indian Accounting Standards (Ind AS) applicable for certain classes ofcompanies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 ofthe 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 31March 2017 and 31 March 2016 including transition date balance sheet as at 1 April 2015have been presented in accordance with Ind AS. The reconciliations and descriptions of theeffect of the transition from previous GAAP to Ind AS have been set-out in Note 65 of thestandalone financial statements and in Note 62 of consolidated financial statements.

Review of Operations

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

Your Company has primarily categorized its development business into two broadcategories viz. Gurgaon DevCo and National DevCo. Both these geographical segments areindependently responsible and accountable for all activities across the product valuechain from acquisition of land obtaining approvals project planning and execution tolaunch sales & marketing and final delivery of the developed property to thecustomers.

Residential Segment

The Company clocked gross sales booking of Rs. 2100 crore in FY’17. As of 31March 2017 your Company has 203 msf of land resources allocated for residentialdevelopment.

Lease Business

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

As of 31 March 2017 DLF lease business comprised completed offices and retailproperties with leasable area of approx. 31.50 msf and annuity income (run-rate) ofapprox. Rs. 2900 crore. Gross leasing of 4.03 msf was achieved during the financial yearat higher than targeted rentals. Net incremental leasing 0.88 msf was achieved post leaseexpiry and terminations of 3.15 msf.

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

Offices Segment

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

Retail Segment

As of 31 March 2017 the occupancy rate for your Company’s leased retail portfoliowas approx. 94%. The fast growing retail market presents significant market potential foryour 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 inFY’17. As a result the total area under construction was approx. 19.30 msf as on 31March 2017.

Standalone Financial Results

(Rs. in crore)

2016-17 2015-16
Total income from operations 4405.31 4809.06
Total expenses 3482.61 3572.27
Profit before exceptional items and tax 922.70 1236.79
Exceptional items (net) (42.25) 513.49
Profit before tax 880.45 1750.28
Less: Tax expense 283.89 253.66
Net Profit 596.56 1496.62

Future Outlook

Your Board of Directors approved the signing of definitive agreements between yourCompany and an affiliate of GIC Real Estate Singapore for a strategic partnership todevelop a rental assets portfolio of DLF Cyber City Developers Limited("DCCDL") a subsidiary company. The partnership enables sustainable long-termgrowth of DCCDL’s rental business and creates an optimum structure for its rentalbusiness to improve efficiency with long-term capital for growth of the portfolio. Thisis one of the largest private equity transactions in India in the real estate space. Thetransaction shall create one of the leading platform play for rental properties with rentyielding assets of 26.9 msf. The portfolio currently has an under development pipelineof approx. 2.5 msf with further development potential of approx. 19 msf within theportfolio. The transaction shall be subject to necessary corporate shareholders andregulatory approvals.

The transaction implies an Enterprise Value of Rs. 35617 crore for DCCDL translatinginto equity value of approx. Rs. 30200 crore.

As per arrangements the gross proceeds to the promoter entities would be Rs. 11900crore approx. which includes secondary sale of equity shares [post conversion ofcumulative compulsorily convertible preference shares (CCPS)] to GIC affiliate for Rs.8900 crore approx. and two buybacks of CCPS by DCCDL for Rs. 3000 crore. The expectedpost tax consideration in the hands of the promoter entities pursuant to the sale and twotranches of buyback is expected to be in excess of Rs. 10000 crore (approx.). Asubstantial portion of the said amounts will be invested in the Company. The Developmentbusiness will also benefit due to the structural reformation of its capital structure.

During the financial year your Company despite adverse macro headwinds continued todeliver on its commitments. With the stated objective of focusing on faster execution ofall projects completion of approx. 14.5 msf was achieved. The Rental business remains ona growth trajectory and hence DLF has commenced construction of the next phase ofChennai IT SEZ and remains on path of timely execution of the Cyber Park project inGurugram.

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 theaverage cost of borrowing for the Group. Post the transaction in the Rental business DLFbelieve that the development business will attain a very healthy gearing ratio and theRental business will continue to improve its quality debt by reducing the cost andphasing-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 thevarious projects and continues to embark on the strategy of creating finished inventoryand reap benefits at the right inflexion point in the market. This strategy is incumbentin the current scenario post the notification of the Real Estate (Regulation andDevelopment) Act 2016.

(c) Growth of rental business

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

Real Estate (Regulation and Development) Act 2016

Real Estate (Regulation and Development) Act 2016 [RERA] promulgated by the CentralGovernment and Rules made thereunder by the respective State Governments will bringtransparency accountability and higher standard of governance. RERA will boost consumerconfidence pave the way for accelerated demand for housing products and also facilitatethe flow of investments into the realty sector from both global and Indian investors. Itprovides a unified legal regime for purchase of real estate and standardize the practiceacross the country. RERA will prove to be a game changer for all stakeholders in the realestate markets. It is expected that overall capital values will go up across most citiesas there will be slowdown in supply while demand will remain robust. Your Company hasapplied 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 amountingto 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 DistributionPolicy. The said policy is available on the website of the Company


The Company proposes to transfer an amount of Rs. 10143 lakhs to debenture redemptionreserve.

Share Capital

During the year under review the Company has allotted 287008 equity shares of Rs. 2each fully paid-up on exercise of stock options by the eligible employees under theEmployee 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 bankfacilities and debt instruments.

ICRA has also reaffirmed the long-term rating of [ICRA]A assigned to Non-convertibleDebentures (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 theprovisions of the Act. Further details of change in subsidiaries associates and jointventures during the year are given at Annexure-D. The consolidated financialstatements of the Company its subsidiaries associates and joint ventures prepared inaccordance with the provisions of Section 129(3) of the Act read with Ind AS 110 -‘Consolidated Financial Statements’ read with Ind AS 28 - ‘Investment inAssociates’ and Ind AS 31 - ‘Interest in Joint Ventures’ forms part ofthis Annual Report. Further a statement containing salient features of the financialstatements of subsidiaries associates and joint ventures in the prescribed format AOC-1is included as a separate section and forms part of this Annual Report. The statement alsoprovides 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 statementsof the Company including consolidated financial statements and audited accounts of each ofthe subsidiaries are available on the website of the Company viz. documents will also be available for inspection at the Registered Office of theCompany 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 fordetermining ‘material subsidiary’ and such policy is available on theCompany’s website at the link

The Company has four material subsidiaries viz. DLF Cyber City Developers LimitedCaraf Builders & Constructions Private Limited DLF Assets Private Limited and DLFHome Developers Limited and has appointed Independent Director(s) in these subsidiaries incompliance 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 exchangeearnings & 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 partof this Report.

Particulars of Employees

The information required pursuant to Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (‘theRules’) 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 arebeing sent to the Members and others entitled thereto excluding the information onemployees’ particulars specified under Rule 5(2) & (3) of the Rules. The same areavailable on the website of the Company viz. and for inspection by theMembers at the Registered Office of the Company during business hours on working days ofthe Company up to the date of the ensuing Annual General Meeting. Any Member interested inobtaining 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 thefinancial statements and also available on the website of the Company viz. the year there has not been any change in the Company’s Employee Stock OptionScheme 2006. The certificate from Statutory Auditors of the Company Walker Chandiok& Co LLP Chartered Accountants as required under Regulation 13 of the saidRegulations with respect to the implementation of the Company’s Employee StockOption 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). TheNon-convertible Debentures issued by your Company are also listed on the Wholesale DebtMarket (WDM) segment of NSE and BSE.

Management Discussion & Analysis Report

The Management Discussion and Analysis Report as required under Regulation 34 read withSchedule 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 thisReport. The requisite certificate from the Statutory Auditors of the Company WalkerChandiok & Co LLP Chartered Accountants confirming compliance with the conditions ofcorporate governance as stipulated under the Listing Regulations is attached to CorporateGovernance 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 beenfollowed along with proper explanation relating to material departures; (ii) they haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31 March 2017 and the profit and loss of the Company forthat period; (iii) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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 laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; and (vi) they have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.

Board and its Committees

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

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


In terms of the provisions of the Act read with Rules made thereunder the term ofWalker Chandiok & Co LLP Chartered Accountants Statutory Auditors expires at theconclusion of the 52nd Annual General Meeting (AGM) of the Company. The Board hasrecommended the appointment of S.R. Batliboi & Co. LLP [FRN 301003E/E300005]Chartered Accountants as the Statutory Auditors of the Company for a term of fiveconsecutive years from the conclusion of 52nd AGM till the conclusion of 57th AGM forapproval of the shareholders based on the recommendation of the Audit Committee. S.R.Batliboi & Co. LLP have confirmed their eligibility and qualification to act asStatutory Auditors of the Company.

Auditors’ Report

(i) Emphasis of Matter given in point no. 9 of the Auditor’s Report on standalonefinancial statements read with Note 46 of the standalone financial statements areself-explanatory and do not call for any further comments. (ii) Emphasis of Matter givenin point no. 9 of the Auditor’s Report on consolidated financial statements read withNote 50 of the consolidated financial statements are self-explanatory and do not call forany further comments.

Cost Audit

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

Secretarial Audit

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


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

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

All Independent Directors have submitted declarations that they meet the criteria ofindependence 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 initiativesincluding to the underprivileged through education training health environmentcapacity building and rural-centric interventions through ‘DLF Foundation’ andother agencies. The employees of the Company also participated in many of suchinitiatives.

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 Actand Rules made thereunder. A copy of the CSR policy is available on the Company’swebsite viz.

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


Environment Policy

The Company has over the years gone beyond the requirements of law in improving theenvironment in the ecosystem that it operates in and it has formalized and adopted aCorporate Environment Policy which is also available on the website of the Company viz.

Extract of Annual Return

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

Business Responsibility Report (BRR)

The BRR describes the initiatives taken by the Company from social environmental andgovernance perspectives is attached at Annexure-F and forms part of the AnnualReport.

Particulars of Loans Guarantees and Investments

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

Transactions with Related Parties

The Company has adequate procedures for the purpose of identification and monitoring ofrelated party(ies) and related party transactions. None of the transactions with relatedparties falls under the scope of Section 188(1) of the Act. Information on 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 available on the website ofthe Company viz. The Company’s policy for related partytransactions regulates the transactions between the Company and its related parties. Thesaid policy is available on the Company’s website viz.

The policy intends to ensure that proper reporting approval and disclosure processesare in place for all transactions between the Company and related parties. For details onrelated party transactions members may refer to the notes to the standalone financialstatements.

Nomination and Remuneration Policy

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

Board Evaluation

Pursuant to the provisions of the Act Regulation 17 & 25 of the ListingRegulations and Guidance Note on Board Evaluation issued by the Securities and ExchangeBoard of India vide its circular dated 5 January 2017 the Nomination and RemunerationCommittee has devised criteria for evaluation of the performance of Directors includingIndependent Directors. The Board has carried out the annual performance evaluation of itsown performance its Committees and Directors. The exercise was led by Lead IndependentDirector. The evaluation process focused on various aspects of the Board and Committeesfunctioning such as composition of the Board and Committees experience and competenciesperformance of specific duties and obligations corporate governance & compliancemanagement etc. Separate exercise was carried out to evaluate the performance ofNon-executive Directors on parameters such as experience attendance acquaintance withthe business effective participation vision and strategy contribution and independentjudgement.

Internal Financial Control

Internal financial controls are integral part of the risk management process addressingamongst others financial and non-financial risks. The internal financial controls havebeen documented and augmented in the day to day business processes. Assurance on theeffectiveness of internal financial controls is obtained through management reviews selfassessment continuous monitoring by functional experts as well as testing by theStatutory/ Internal Auditor during the course of their audits. Significant auditobservations and follow up actions thereon are reported to the Audit Committee.

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

Risk Management

Pursuant to the requirement of Regulation 21 of the Listing Regulations RiskManagement Committee is responsible to frame implement monitor risk management plan andensure its robust effectiveness. The details of the Committee and its terms of referenceare set-out in the Corporate Governance Report forming part of this Annual Report. TheCompany has established risk management framework that enables regular and activemonitoring business activities for identification assessment and mitigation of potentialinternal or external risks. The respective Function/ Business Unit Head(s) are entrustedwith the responsibility of identifying mitigating and monitoring of risk management. RiskManagement forms an integral part of the management policy and is an ongoing processintegrated with operations. The processes and guidelines of the risk management policy/plan provide a strong overview and monitoring system at Board and senior managementlevels. The Risk Management Committee and Audit Committee also seek independent assuranceon 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 wouldimpact the going concern status of the Company and its future operations. However some ofthe 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 withListing Regulations to deal with instances of unethical and/ or improper conduct andactioning suitable steps to investigate and correct the same. The details of the WhistleBlower Policy are explained in the Corporate Governance Report and also posted on thewebsite of the Company.

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

Your Company continue to follow robust Policy on "Prohibition Prevention &Redressal of Sexual Harassment of Women at Workplace". During the financial yearunder review no cases were reported. The Company continue to promote the cause of ourwomen colleagues through "Jagruti"- an all women’s forum for experiencesharing creating awareness on women safety & related issues and celebrating importantdays 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 providedin Annexure-E.


Your Directors wish to place on record their sincere appreciation to all the employeesfor their dedication and commitment. The hard work and unstinting efforts of the employeeshave 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 ourvaluable customers. Your Directors would like to express their sincere appreciation forassistance and co-operation received from the vendors and stakeholders including financialinstitutions banks Central and State Government authorities customers and otherbusiness associates who have extended their valuable and sustained support andencouragement during the year under review. It will be the Company’s endeavour tobuild 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)