You are here » Home » Companies » Company Overview » DLF Ltd

DLF Ltd.

BSE: 532868 Sector: Infrastructure
NSE: DLF ISIN Code: INE271C01023
BSE 09:49 | 10 Jul 146.60 0.50
(0.34%)
OPEN

145.95

HIGH

146.95

LOW

144.40

NSE 09:44 | 10 Jul 146.40 0.40
(0.27%)
OPEN

145.50

HIGH

146.95

LOW

144.65

OPEN 145.95
PREVIOUS CLOSE 146.10
VOLUME 110430
52-Week high 266.65
52-Week low 114.50
P/E 24.35
Mkt Cap.(Rs cr) 36,288
Buy Price 146.50
Buy Qty 90.00
Sell Price 146.60
Sell Qty 573.00
OPEN 145.95
CLOSE 146.10
VOLUME 110430
52-Week high 266.65
52-Week low 114.50
P/E 24.35
Mkt Cap.(Rs cr) 36,288
Buy Price 146.50
Buy Qty 90.00
Sell Price 146.60
Sell Qty 573.00

DLF Ltd. (DLF) - Director Report

Company director report

Your Directors have pleasure in presenting their 54th Reporton the business and operations of the Company together with the audited results for thefinancial year ended 31 March 2019.

Financial and Operational Highlights

(` in crore)

Consolidated Standalone
2018-19 2017-18 2018-19 2017-18
Total Income from operations 9029 7664 3709 3804
Total expenses 8511 7814 2943 3138
Profit before exceptional items and tax 518 (150) 766 666
Exceptional items(net) 127 8765 - (121)
Profit before tax 645 8615 766 545
Less: Tax expense 277 4323 78 180
Profit after tax 368 4292 688 365
Share of Profit/ (Loss) in jointly controlled entities (net) 946 184 - -
Net Profit for the year 1314 4476 688 365
Other Comprehensive Income (3) 13 - 10
Total Comprehensive Income 1311 4489 688 375

Your Company recorded a consolidated revenue of र 9029 crore inFY'19 as compared to र 7664 crore in FY'18 an increase of 18%. Thefinancials for the current year are not comparable on account of the following reasons:(a) Revenue was recognized as per Ind AS 115 ‘Revenue from contracts withcustomers' during the year under review whereas it was recognized based on thepercentage of completion method (PoCM) in the preceding year; (b) DLF Cyber CityDevelopers Limited (DCCDL) Group was consolidated as a subsidiary till 25 December 2017and as a joint venture in accordance with Ind AS 28 ‘Investment in Associated andJoint Ventures' for the remaining period of FY'18 whereas the DCCDL Group wasconsolidated as a joint venture for FY'19; and (c) A one-time exceptional gain uponfair valuation of DCCDL was recorded in FY 2017-18.

Gross operating cash flow before interest and tax stood at ` 1605crore while operating cash flow stood at र 390 crore for FY'19.

The earnings per share (EPS) for the year under review was र 7.38.

Your Company's net worth as on 31 March 2019 stood at र33577 crore. The decrease was mainly attributed to the implementation of the newaccounting standard Ind AS 115 which resulted in opening reserves being adjusted by र 5383 crore (net of taxes) and subsequently enhanced by र 3173 crorefollowing the placement of equity shares to Qualified Institutional Buyers (QIBs). YourCompany's Balance Sheet was transformed following the infusion of ` 12173 crore ofequity र 9000 crore from the promoters and र 3173 crore from QIBs. Thisresulted in a significant reduction in debt resulting in a net debt-to-equity ratio of0.13. The infusion of र 2250 crore by the promoters following the exercise ofwarrants during FY 2019-20 would reduce the ratio further.

With the debt overhang behind it and following the completion of alllegacy projects your Company has enhanced its focus on generating free cash flows throughthe progressive monetization of its ready-to-occupy inventory. In a challenging year yourCompany achieved net sales of र 2435 crore as against net sales of ` 1000 crore inthe previous year. It completed 0.59 million square meter (msm) [6.3 million square feet(msf)] of projects during the year under review and issued possession letters to customersfor 3318 units aggregating 0.62 msm (6.64 msf) during FY'19.

DLF Cyber City Developers Limited (DCCDL)

DCCDL reported a consolidated revenue of र 5088 crore compared to र 4948 crore in the previous year. DCCDL Group's consolidated EBIDTA of र2664 crore in FY'19 in comparison to र 3541 crore in FY'18 and a profitafter tax stood of ` 1399 crore compared to ` 1418 crore in FY'18. Your Company hasa 66.67% equity stake in DCCDL.

Review of Operations

Your Company's ready-to-occupy inventory across the country stoodat ` 11650 crore which your Company is monetising through a focused sales engine. YourCompany demonstrated its execution capabilities and addressed all customer commitments.The Company is now gearing towards the next cycle of development planning to build out1.58 msm (17 msf) of residential and commercial space in the near future. TheCompany's land reserves are in strategic locations acquired at historical costs andit is attractively placed to capitalize on improving market conditions by launchingprojects with speed and without the need to acquire land.

Development Business

Your Company commenced the construction of a new residential project atMidtown Central Delhi in a joint venture with GIC Real Estate Singapore with adevelopment potential of 0.18 msm (1.9 msf); the Company is in the midst of designinganother project in that vicinity in a joint venture with GIC Real Estate Singapore with adevelopment potential of 0.56 msm (6 msf).

Your Company also commenced planning for 0.28 msm (3 msf) commercialbuilding in Gurugram in a joint venture with Hines USA. It commenced plans for a 0.23 msm(2.5 msf) residential project in DLF5 Gurugram.

Annuity Business

Your Company's commercial leasing business continued to reportgood growth. Gross leasing achieved during the year stood at 0.61 msm (6.56 msf) out ofwhich 0.52 msm (5.57 msf) was attributable to the DCCDL Group. Rental values continued togrow attractively. Over 0.17 msm (1.8 msf) of office space was re-leased following theexpiry of its nine-year cycle resetting rentals at the prevailing market rate. CyberPark a 0.23 msm (2.5 msf) commercial office property in Gurugram will begin to generaterentals from September 2019. Over 90% of the property has been pre-leased to marqueetenants. Another phase of IT SEZ Chennai is nearing completion and rentals shall commencefrom the current fiscal year.

DLF's strong portfolio of high-quality office and retailproperties caters to more than 1600 tenants including a number of Fortune 500 companies.Your Company's existing properties have set global benchmarks; the Company isendeavouring to graduate these benchmarks higher by setting new standards in its upcomingdevelopments. DLF embarked upon development of 0.28 msm (3 msf) of Commercial Office spaceto address emerging demand in Gurugram. The design for the project is underway. YourCompany also commenced planning for the development of 0.33 msm (3.5 msf) commercialoffice space in Hyderabad and 0.37 msm (4 msf) of office space in Chennai. DLF'srigorous safety standards are vetted by world-class independent third parties like BritishSafety Council. DLF has championed the cause of sustainable development adherence toglobal standards and created benchmarks in the Indian real estate sector through thecreation of the highest LEED Platinum space in the country (2.53 msm) [27.25 msf]certified by the U.S. Green Building Council the highest global sustainabilitycertification agency. DLF recently emerged as the first (and only) organization in theworld to win 11 Sword of Honour awards conferred by the British Safety Council in a singleyear. This is widely recognised as the pinnacle of safety achievement in the real estatesector the world over.

The Indian office leasing market is expected to grow steadily on theback of robust economy activity and a growing recognition of India as a favorableinvestment destination due to improving infrastructure and fewer policy hurdles etc. TheIndian retail industry is passing through a transformation comprising the employment ofnew technologies new store formats evolving business models and a greater provision forexperiential retail environments. Retailers are preparing for a future marked by anextension beyond conventional retail formats in line with changing consumer preferences.In this emerging environment lifestyle experience is expected to emerge as the keyinflection point influencing the success of malls; with food beverages and entertainmentfacilities will increase in importance. Besides customer preferences have shifted towardsbranded developments of superior quality. Innovative developers are introducing newentertainment options in malls. Retailers are seeking to merge online experiences withoffline ones to enhance the customer's interest and involvement.

Other Businesses - Hotels

Your Company continues to own two hotel properties viz. The Lodhi aniconic hotel property in New Delhi which it directly manages and Hilton Garden InnSaket which is managed by the global major Hilton.

Transfer of Mall of India Noida

In line with the Company's stated objective of streamlining andconsolidating the operations and holding structure of its rental assets the Companytransferred its property Mall of India Noida (MOIN) a retail mall located in Sector 18Noida with a leasable area of 0.19 msm (2 msf) (approximately) to Paliwal Real EstateLimited (Paliwal) a wholly-owned subsidiary. Subsequently the Board of Directorsapproved the transfer of entire shareholding of the Company in Paliwal to DCCDL.

Dividend

The Directors are pleased to recommend a dividend of र 2/- perequity share (100%) on the face value of र 2/- each for FY'19 on the enhancedshare capital payable to those shareholders whose names appear in the Register ofMembers/ Beneficial ownership details provided by depositories on the record date. Thetotal outgo on account of dividend (exclusive of tax on distributed profit) would absorb र 441.44 crore against र 356.81 crore in the previous financial year. The totaloutgo would increase subsequent to the allotment of equity shares upon conversion ofCompulsorily Convertible Debentures (CCDs) and the exercise of Warrants by the promoters/promoters group entities as the case may be. The dividend payout is in accordance withthe Company's Dividend Distribution Policy. The policy was formulated by the Boardpursuant to Regulation 43A of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 [Listing Regulations]. The policy isavailable on the website of the Company http://www.dlf.in/images/downloads/170601162837_0001.pdf.

Reserves

The Company as per the provisions of the Companies (Share Capital andDebentures) Rules 2014 as amended has adequate Debenture Redemption Reserve (DRR). TheBoard of Directors of your Company decided not to transfer any amount to the Reserves forthe year under review.

Credit Rating

CRISIL reaffirmed Long-Term/ Non-convertible Debentures RatingA+/Stable and Short-Term/ Short-Term Debt Rating of CRISIL A1. ICRA reaffirmed itslong-term rating at [ICRA]A+ (Positive) and the short-term rating at [ICRA]A1.

Investor Relations

Your Company strives to excel in its engagement with international anddomestic investors and activated a feedback mechanism to measure its investor relationeffectiveness. Your Company interacts periodically with the investor/ analyst communitythrough structured conference calls and periodic investor/ analyst interactions includingone-on-one meetings participation in investor conferences and quarterly earnings calls.Your Company hosted an analyst meet during the year under review comprising a meeting ofanalysts and investors with its senior management.

Real Estate (Regulation and Development) Act 2016 (RERA)

Even as the Central Government had notified RERA in May 2016 certainStates are yet to have operational websites. The regulation created short-term adjustmentchallenges but is expected to be beneficial for the sector. RERA is expected to enhanceconfidence among customers increasing sectoral transparency and delivery discipline. YourCompany has applied for registration of the eligible projects under RERA with variousState Governments.

Goods and Services Tax (GST)

The Company smoothly implemented the new tax structure under GST sinceits implementation with effect from 1 July 2017 and is complying with all periodicregulatory requirements which are reviewed by an external expert independent agency.

Impact on the Development Business

With effect from 1 April 2019 a concessional GST rate of 5% (1% incase of affordable housing) was notified for the construction of Residential Real EstateProjects without input tax credit. Various conditions were stipulated for the revisedrate. For ‘ongoing projects' an option was provided to developers to opt forthe new rate or continue at the retrospective rate (12% of the basic sale price andparking but with input tax credit). It was clarified that where the Occupation Certificatewas received prior to 31 March 2019 the earlier rate would apply. For most of the ongoingprojects of the Company the Occupation Certificate was received before 31 March 2019 andhence the 12% rate continued to apply to the extent of bookings made prior to receivingthe Occupation Certificate. The Company made necessary compliances in view of this change.

Impact on the Rental Business

The GST rate on the Rental Business continued @ 18%. No input taxcredit was available on goods and services used for the construction of a leasablebuilding unless to the extent specifically allowed under GST Act. Benefit for SEZscontinued the zero tax rate in case supplies were made to SEZ units and relateddevelopers and co-developers subject to the fulfilment of prescribed conditions.

Fixed Deposits

During the year under review the Company has neither invited noraccepted/ renewed any deposits from the public.

Holding Company

Rajdhani Investments & Agencies Private Limited is the holdingcompany currently holds 55.56% shares of the Company.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings/ Outgo

The information on conservation of energy technology absorption andforeign exchange earnings & outgo as stipulated under Section 134(3)(m) of theCompanies Act 2013 (‘the Act') read with Rule 8(3) of the Companies (Accounts)Rules 2014 is 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 readwith Rule 5(2) & (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended (‘the Rules') in respect of employees of theCompany drawing remuneration in excess of the limits set-out in the said Rules is annexedto this Report. Pursuant to the provisions of Section 136(1) of the Act the FinancialStatements are being sent to entitled members and others excluding the information onemployees' particulars specified under Rule 5(2) & (3). The same are available onthe website of the Company viz. www.dlf.in and also for inspection by members atthe Registered Office/ Corporate Office of the Company up to the date of the ensuingAnnual General Meeting (AGM). Any member interested in obtaining such information maywrite to the Company Secretary.

Share Capital

Qualified Institutions Placement

Your Company allotted 173000000 equity shares of र 2/- each toeligible qualified institutional buyers pursuant to the Qualified Institutions Placement(QIP) at the issue price of ` 183.40 per equity share (including a share premium of `181.40 per equity share) aggregating र 3172.82 crore in a sluggish capital marketvalidating investor confidence in the Company's prospects. Conversion of CompulsorilyConvertible Debentures Your Company converted 249746836 Compulsorily ConvertibleDebentures (CCDs) on 29 March 2019 into an equal number of equity shares of र 2/-each at a price of र 217.25 per share (including a premium of र 215.25 pershare) to the promoter/ promoter group entities. Employee Stock Option Scheme Your Companyalso allotted 408084 equity shares of र 2/- each fully paid-up upon the exercise ofstock options by eligible employees under the Employee Stock Option Scheme 2006.Consequently the paid-up equity share capital of the Company increased to र 441.44crore equity shares comprising 2207221948 equity shares of र 2/- each fullypaid-up. The above allotted equity shares rank pari-passu in all respects with theexisting equity shares of the Company including dividend and/ or any corporate benefitsdeclared by the Company from time to time following allotment.

Employee Stock Option Scheme

Disclosures with respect to stock options as required under Regulation14 of the SEBI (Share Based Employee Benefits) Regulations 2014 are available on thewebsite of the Company viz. www.dlf.in. During the year under review there has notbeen any change in the Company's Employee Stock Option Scheme 2006.

A certificate from S.R. Batliboi & Co. LLP Chartered AccountantsStatutory Auditors of the Company as required under Regulation 13 of the saidRegulations with respect to the implementation of the Company's Employee StockOption Scheme 2006 is available for inspection at the Registered Office/ CorporateOffice of the Company and shall also be available at the ensuing AGM.

The relevant disclosures in terms of Ind AS relating to share basedpayment forms part of notes to the Standalone Financial Statement and ConsolidatedFinancial Statement of the Company.

Subsidiaries and Consolidated Financial Statements

As on 31 March 2019 the Company had 106 subsidiary companies in termsof the provisions of the Act. Further details of changes in subsidiaries and associatesduring the year are given at Annexure-D.

As required under the Listing Regulations and Section 129 of the Actthe consolidated financial statements of the Company were prepared by the Company inaccordance with the applicable Ind AS and form a part of the Annual Report. A statementcontaining the salient features of the Financial Statements of the subsidiaries jointventures and associates of the Company in Form AOC-1 as required under the Companies(Accounts) Rules 2014 form a part of the Notes to the financial statements. Thehighlights of the performance of subsidiaries associates and joint venture companies andtheir contribution to the overall performance of the Company are included as a separatesection and form a part of this Annual Report. Pursuant to the provisions of Section 136of the Act audited financial statements of the Company including consolidated financialstatements other documents required to be attached thereto and audited financialstatements of each of the subsidiaries are available on the website of the Company andmay be accessed at http://www.dlf.in/downloads.aspx. These documents would also beavailable for inspection at the Registered Office/ Corporate Office of the Company and itsrespective subsidiary companies between 2.00-4.00 P.M. on all working days.

In terms of the provisions of the Listing Regulations your Company hasa policy for determining ‘Material Subsidiary' and such policy is available onthe Company's website at the link http://www.dlf.in/images/downloads/Material-Subsidiary-Policy-Revised.pdf.

Material Unlisted Subsidiary

During the year under review your Company had four material unlistedsubsidiaries namely DLF Cyber City Developers Limited DLF Assets Private Limited CarafBuilders & Construction Private Limited (since merged with DCCDL) and DLF HomeDevelopers Limited. DLF Power & Services Limited became a material unlisted subsidiarywith effect from 1 April 2019. The Company appointed an Independent Director(s) on theBoard of the respective material subsidiary wherever applicable in compliance with theprovisions of the Listing Regulations.

Joint Venture

During the year under review your Company through its wholly-ownedsubsidiary DLF Home Developers Limited (DHDL) entered into a joint venture with GreenHorizon Trustee Limited (an affiliate of ‘HINES') for the development of ahigh-end commercial project in Gurugram. The project will be developed on 11.76 acresowned by the joint venture company. The land parcel is located across the existingbusiness district of DLF Cyber City Gurugram. DHDL holds 67% stake in the joint venturewhile 33% is held by joint-venture partner with the option to increase its stake to 49%.The joint venture partner invested approximately र 500 crore in the first tranche.

Scheme of Amalgamation/ Arrangement

a) The Board of Directors of your Company approved the scheme ofarrangement comprising merger/ demerger of wholly-owned subsidiary companies - DLFPhase-IV Commercial Developers Limited DLF Real Estate Builders Limited DLF ResidentialBuilders Limited (Transferor Companies) and demerger of the real estate undertaking of DLFUtilities Limited with DLF Limited (Transferee Company) pursuant to Section 232-234 andother relevant provisions of the Act read with rules made thereunder. The scheme ofarrangement/ merger is pending before the Hon'ble National Company Law TribunalChandigarh Bench.

b) The Hon'ble National Company Law Tribunal Principal Bench NewDelhi vide its order dated 4 January 2019 has sanctioned the scheme of arrangementinvolving de-merger of SEZ undertaking of DLF Home Developers Limited (DHDL) awholly-owned subsidiary of the Company into DLF Info City Chennai Limited (DICCL) awholly-owned subsidiary of DHDL.

c) The Hon'ble National Company Law Tribunal Principal Bench NewDelhi vide its order dated 8 April 2019 sanctioned the scheme of amalgamation/arrangement involving the merger of DLF South Point Limited (DSPL) with DLF CommercialDevelopers Limited (DCDL) and demerger of the Hyderabad SEZ undertaking of DLF CommercialDevelopers Limited into DLF Info City Hyderabad Limited (DICHL).

d) The Hon'ble National Company Law Tribunal Chandigarh Benchvide its order dated 27 September 2018 sanctioned the scheme of amalgamation involvingthe merger of Caraf Builders & Constructions Private Limited with DLF Cyber CityDevelopers Limited.

Listing at Stock Exchanges

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

Management Discussion and Analysis Report

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

Corporate Governance Report

The Corporate Governance Report as stipulated under Regulations 17 to27 & 46(2) and paragraphs C D and E of Schedule V to the Listing Regulations formspart of this Report.

The requisite certificate from S.R. Batliboi & Co. LLP CharteredAccountants Statutory Auditors of the Company confirming compliance with the conditionsof corporate governance as stipulated under the Listing Regulations is attached to theCorporate Governance Report.

Directors' Responsibility Statement

In terms of provisions of Section 134(5) of the Act your Directorsconfirm that: (i) in the preparation of the annual accounts the applicable accountingstandards had been 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 2019 and the profit and loss ofthe Company for that period; (iii) they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (iv) they have prepared the annual accounts on a going concernbasis; (v) they have laid down internal financial controls to be followed by the Companyand 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 allapplicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors

The Independent Directors of your Company submitted declarations oftheir Independence as required under Section 149(7) of the Act and the ListingRegulations confirming that they meet the criteria of independence as provided in Section149(6) of the Act and Rules framed thereunder and Regulation 16(1)(b) of the ListingRegulations. There was no change in the circumstances effecting their status asIndependent Directors of the Company. The Board reviewed the certificates and noted thatall Independent Directors are independent of the Company's management.

Board and its Committees

The Board of Directors met seven times during the FY 2018-19. Thedetails on the composition of the Board committees meetings held and related attendanceare provided in the Corporate Governance Report and form a part of this Report.

Auditors & Auditor's Report

S.R. Batliboi & Co. LLP Chartered Accountants (FRN 301003E/E300005) were appointed as Statutory Auditors of the Company for a term of fiveconsecutive years from the conclusion of 52nd AGM till the conclusion of 57thAGM subject to ratification of their appointment at every subsequent AGM. The Ministry ofCorporate Affairs vide notification dated 7 May 2018 obliterated the requirement ofseeking members' ratification at every AGM on appointment of statutory auditorsduring their tenure of five years. The Notes on financial statements (including theConsolidated Financial Statements) referred to in the Auditor's Report areself-explanatory and do not call for any further comments. The Auditor's Report doesnot contain any qualification reservation adverse remarks or disclaimer.

Cost Auditors

During the year M/s R. J. Goel & Co. Cost Accountants (FRN000026) were appointed as Cost Auditors of the Company for the FY 2018-19 for conductingthe audit of cost records of the Company pertaining to real estate development activities.Your Company is maintaining the requisite cost records and the Cost Audit Report for theFY 2018-19 shall be filed with the Ministry of Corporate Affairs in due course.

A certificate from the Cost Auditor certifying their independence andarm's length relationship has been received by the Company. As per provisions of theAct the remuneration payable to cost auditors is required to be placed before the membersin a general meeting for their ratification. Accordingly a resolution seekingmembers' ratification for the remuneration payable to M/s R.J. Goel & Co. CostAccountants is included in the notice convening the AGM.

Secretarial Auditor

Dr. K.R. Chandratre Company Secretary in practice was appointed asSecretarial Auditor to conduct Secretarial Audit for the FY 2018-19. In terms of theRegulation 24A of the Listing Regulations the Secretarial Compliance Report andSecretarial Audit Report of the Company together with material unlisted subsidiariesnamely DLF Cyber City Developers Limited DLF Home Developers Limited and DLF AssetsPrivate Limited for the financial year ended 31 March 2019 are at Annexure-B. Thesaid reports are self-explanatory and do not contain any qualification reservation andadverse remarks or disclaimer.

Reporting of frauds by Auditors

During the year under review the Statutory Auditors and SecretarialAuditor have not reported any instances of frauds committed by the Company its officersor employees under Section 143(12) of the Act.

Secretarial Standards

The Secretarial Standards i.e. SS-1 & SS-2 relating to meetings ofthe Board of Directors and General Meetings respectively have been duly followed by theCompany.

Directors and Key Managerial Personnel

The members of your Company have passed Special Resolutions withrequisite majority through postal ballot process on 29 March 2019 approving there-appointments of Dr. Kashi Nath Memani (DIN 00020696) and Dr. Dharam Vir Kapur (DIN00001982) as Independent Director(s) for a second term of two consecutive years witheffect from 1 April 2019. Further the members approved re-appointments of Mr. PramodBhasin (DIN 01197009) Mr. Rajiv Krishan Luthra (DIN 00022285) and Mr. Ved Kumar Jain (DIN00485623) as Independent Director(s) for a second term of five consecutive years witheffect from 1 April 2019. The members also approved the continuation of Mr. Amarjit SinghMinocha (DIN 00010490) pursuant to Regulation 17(1) of Listing Regulations who hasattained the age of 75 years as an Independent Director for the remaining period of hisexisting term of Directorship i.e. up to 19 May 2020. The Board of Directors consideredthat in view of their illustrious profile enriched experience expertise and deepbusiness acumen vis-a-vis. their extensive involvement in the deliberations of themeetings of the Committees of Directors and Board of the Company their continuedassociation as Independent Directors would be of benefit to the Company and stakeholders.The Board of Directors of your Company at its meetings held on 25 September 2018 and 5February 2019 based on the recommendations of Nomination and Remuneration Committee hasapproved subject to approval of the members re-appointment of Dr. K.P. Singh (DIN00003191) Whole-time Director designated as Chairman for a further period of five yearswith effect from 1 October 2018 Mr. Mohit Gujral (DIN 00051538) Chief Executive Officer& Whole-time Director and Mr. Rajeev Talwar (DIN 01440785) Chief Executive Officer& Whole-time Director for a further period of five years with effect from 14 February2019 and Mr. Rajiv Singh (DIN 00003264) Whole-time Director designated as Vice Chairmanfor a further period of five years with effect from 9 April 2019.

The Board of Directors of your Company based on the recommendation ofthe Nomination and Remuneration Committee has co-opted Ms. Priya Paul (DIN 00051215) as anadditional director of the Company in capacity of independent woman director with effectfrom 1 April 2019 pursuant to the Regulation 17(1) of the Listing Regulations subject tothe approval of the members statutory and regulatory authorities.

Nomination and Remuneration Committee on the basis of performanceevaluation and contribution made by Lt. Gen. Aditya Singh (Retd.) (DIN 06949999) duringhis tenure has recommended to the Board his continued association for a second term offive consecutive years with effect from 29 August 2019 as an Independent Director of theCompany not liable to retire by rotation would be in the interest of the Company. TheBoard recommends to the shareholders for re-appointment of Lt. Gen. Aditya Singh (Retd.).The Company has received the requisite notices from the members in writing proposing thenames of Ms. Priya Paul and Lt. Gen. Aditya Singh (Retd.) for their appointment/re-appointment as Independent Directors.

Pursuant to the provisions of Section 152 of the Act read with Articlesof Association of the Company Ms. Pia Singh (DIN 00067233) and Mr. G.S. Talwar (DIN00559460) are liable to retire by rotation at the ensuing AGM and being eligible haveoffered themselves for re-appointment. The resolutions seeking members' approval fortheir re-appointment form part of the notice.

Mr. B. Bhushan expressed his inability to continue on the Board as anIndependent Director upon the completion of his term i.e. 31 March 2019 due to hisadvanced age and ill health and ceased to be an Independent Director.

A brief resume of the Directors seeking appointment/ re-appointmentalong with other details as stipulated under Regulation 36(3) of the Listing Regulationsand the Act are provided in the Corporate Governance Report and Notice for convening theAGM.

Mr. Saurabh Chawla Group CFO was separated from the Company witheffect from 1 February 2019 and Mr. Ashok Kumar Tyagi Whole-time Director was given theadditional responsibility as Group CFO. Mr. Subhash Setia is the Company Secretary andCompliance Officer of the Company.

Corporate Social Responsibility (CSR)

In line with your Company's motto of ‘Building India'it is equally concerned of its responsibility of ‘Building Lives' of underservedcommunities and stakeholders residing in and around DLF projects - equal partners in theDLF growth story. Your Company has continuously endeavoured to contribute towards buildingcapacities and creating resources better the lives of the marginalized. For all socialdevelopment projects DLF follows an integrated holistic approach to ensure that itsprogrammes enhance lives of the underserved in the area of education skilling livelihoodculture healthcare and social infrastructure. The CSR programmes of DLF were implementedthrough its CSR arm i.e. DLF Foundation. The projects undertaken during the year underreview focused on the creation of a positive and lasting impact on the lives of theunderprivileged.

The Board based on the recommendations of the CSR Committee approvedthe CSR Policy of the Company in accordance with Section 135 of the Act and Rules madethereunder. A copy of the CSR policy is available on the Company'swebsiteviz.http://www.dlf.in/images/downloads/Corporate-Social-Responsibility-Policy-Revised.pdf. DLF also made a significantcontribution in community welfare initiatives through education training healthenvironment capacity building skill development and rural-centric interventions throughDLF Foundation and other agencies. The employees of DLF participated in a number of suchinitiatives. The Annual Report on CSR activities as per the prescribed format under theCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended is annexed at Annexure-C.

Environment & Sustainability

In line with the ‘Go Green' philosophy your Companycontinued to invest in new techniques to eliminate or minimize the environmental impact.Your Company undertook projects aimed at climate change mitigation comprising the use ofLED lighting and solar PV-based roof to reduce energy consumption and related carbonfootprint. Your Company invested in energy-efficient motors rain water harvesting treeplantations waste water and solid waste management and the launch of certified GreenBuilding projects with Platinum and Gold rating. DLF achieved a 13% reduction in carbonemissions during the year under review. It replaced conventional lights with LED saving40 lakhs electricity units. It installed STPs for the zero discharge of water coupled withan investment in rain water harvesting across its facilities. Your Company periodicallymonitored toxic emissions and implemented corresponding waste management systems. Over theyears your Company extended beyond statutory requirements in improving the quality ofenvironment within its operating ecosystem. It formalized and adopted a CorporateEnvironment Policy which is available on the website of the Company - http://www.dlf.in/environmental-policy.aspx.

Extract of Annual Return

The extract of Annual Return in form MGT-9 as provided under Section92(3) of the Act read with Companies (Management and Administration) Rules 2014 isannexed at Annexure-D.

Awards and Accolades

Your Company continues to lead its sector and received number ofawards. The details of the major awards and accolades received during the year are givenat Annexure-E.

Business Responsibility Report (BRR)

The BRR describes the initiatives taken by the Company from socialenvironmental and governance perspectives and annexed at Annexure-E.

Particulars of Loans Guarantees and Investments

Particulars of loans guarantees and investments have been disclosed inthe notes to the standalone financial statements.

Transactions with related parties

The Company possesses adequate procedures for the identification andmonitoring of related party(ies) and related party transactions. None of the transactionswith related parties falls under the scope of Section 188(1) of the Act. Information ontransactions with related parties pursuant to Section 134(3)(h) and 136(1) of the Act readwith Rule 8(2) of the Companies (Accounts) Rules 2014 as amended are available on thewebsite of the Company viz. http://www.dlf.in/downloads.aspx.

The Company's policy for related party transactions regulate thetransactions between the Company and its related parties. The said policy is available onthe Company's website viz. http://www.dlf.in/images/downloads/Related-Party-Transactions-Policy.pdf. The policy intends to ensure thatproper reporting approval and disclosure processes are in place for all transactionsbetween the Company and its related parties. For details on related party transactionsmembers may refer to the notes to the standalone financial statements.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy containing guiding principlesfor payment of remuneration to Directors Senior Management Key Managerial Personnel andother employees including Non-executive Directors are provided in the Corporate GovernanceReport. The said policy is available on the Company's website viz. http://www.dlf.in/images/downloads/Nomination-and-Remuneration-Policy-Revised.pdf.

Board Evaluation

Pursuant to the provisions of the Act Regulation 17 & 25 of theListing Regulations and Guidance Note on Board Evaluation issued by the SEBI Nominationand Remuneration Committee has devised criteria for evaluation of the performance ofDirectors including Independent Directors. The Board has carried out the annualperformance evaluation of its own performance its Committees and Directors. The exercisewas led by the Lead Independent Director. The evaluation process focused on variousaspects of the Board and Committees functioning such as composition of the Board and

Committees experience and competencies performance of specific dutiesand obligations corporate governance & compliance management etc. Separate exercisewas carried out to evaluate the performance of Non-executive Directors on parameters suchas experience attendance acquaintance with the business effective participation visionand strategy contribution and independent judgement.

Internal Financial Control

Internal financial controls represent an integral part of the riskmanagement process. These controls address among others financial and non-financialrisks. The internal financial controls were documented and augmented in day-to-daybusiness processes. Assurance on the effectiveness of internal financial controls wasobtained through management reviews self-assessment continuous monitoring by functionalexperts as well as testing by the Statutory/ Internal Auditors during the course of theiraudits. The internal audit was entrusted to Grant Thornton India LLP and KPMG. The mainthrust of internal audit was to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with the best industry practices. The Boardadopted policies and procedures to ensure the orderly and efficient conduct of itsbusiness including adherence to the Company's policy safeguarding of its assetsprevention and detection of fraud error reporting mechanism accuracy and completeness ofthe accounting records and timely preparation of reliable financial disclosures.

Significant audit observations and follow-up actions were reported tothe Audit Committee.

The Company's internal control system is commensurate with thenature size and complexities of operations.

Risk Management

Pursuant to the requirement of Regulation 21 of the ListingRegulations Risk Management Committee is responsible to frame implement monitor riskmanagement plan including cyber security and to ensure its robust effectiveness. Thedetails of the Committee and its terms of reference are set-out in the CorporateGovernance Report which is a separate section of this Annual Report. The Companyestablished a risk management framework enabling risks to be identified assessed andmitigated appropriately with respect to internal and external risks. The respectiveFunctional/ Business Unit Head(s) were entrusted with the responsibility of identifyingmitigating and monitoring risk management. Risk management forms an integral part of themanagement's policy and is an ongoing process integrated deeply into every-dayoperations.

The processes and guidelines of the risk management policy/ planprovide a strong overview 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 passedby the regulators/ courts which would impact the going concern status of the Company andits future operations. However some significant orders passed previously form a part ofNote 50 to the standalone financial statements.

Vigil Mechanism

The Company's vigil mechanism comprises a Whistle Blower Policy inline with the Listing Regulations to deal with instances of unethical and/ or improperconduct and actioning suitable steps to investigate and correct them. The details of theWhistle Blower Policy are explained in the Corporate Governance Report and posted on yourCompany's website.

Policy for Prevention Prohibition and Redressal of Sexual Harassmentof Women at Workplace

Your Company continues to follow a robust policy on ‘PreventionProhibition and Redressal of Sexual Harassment of Women at Workplace'. The InternalCommittee was constituted as per the requirements of The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. During the financial yearunder review no case was reported. The Company continues to promote the cause of womencolleagues through ‘Jagruti' all-women's forum for experience sharingcreating awareness on women's safety/ related issues celebrating important daysdedicated to women and organizing workshops on gender sensitivity.

Acknowledgements

Your Directors wish to place on record their sincere appreciation toall the employees for their dedication and commitment. Their hard work and unstintingefforts enabled the Company to sustain its performance and consolidate its sectoralleadership.

Your Company continues to be respected by stakeholders includingvaluable customers. Your Directors would like to express their sincere appreciation forassistance and co-operation received from vendors and stakeholders including financialinstitutions banks Central and State Government authorities customers and otherbusiness associates who extended their valuable support during the year under review. Itwill be the Company's endeavour to nurture these relationships in strengtheningbusiness sustainability.

For and on behalf of the Board of Directors
(Dr. K.P. Singh)

Chairman

21 May 2019 (DIN 00003191)

ANNEXURE – ‘A'

Conservation of energy technology absorption foreign exchangeearnings and outgo under Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014

A. CONSERVATION OF ENERGY
i) The steps taken or impact on conservation of energy In FY 2018-19 the Company has utilized 205789 KWH of electrical units generated by Solar PV based roof top electrical systems installed at DLF IT Park-II Kolkata; Mall of India Noida; and Two Horizon Center Gurugram.
ii) The steps taken by the Company for utilising alternative sources of energy Solar PV based roof top electrical systems of capacity 113.4 KW 40.32 KW & 15 KW have been installed on the building roof tops of DLF IT Park-II Kolkata; Mall of India Noida and Two Horizon Center Gurugram respectively.
iii) The capital investment on energy conservation equipment Nil
B. TECHNOLOGY ABSORPTION
i) Efforts made towards technology absorption NA
ii) Benefits derived like product improvement cost reduction product development or import substitution NA
iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): NA
a. Details of technology imported;
b. Year of import;
c. Whether the technology been fully absorbed;
d. If not fully absorbed areas where absorption has not taken place and the reasons thereof.
iv) the expenditure incurred on Research and Development. NA

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(` in crore)

2018-19 2017-18
a) Foreign Exchange earnings 0.92 1.74
b) Foreign Exchange outgo 456.77 342.93