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DLF LTD.

22 May 2024 | 03:59

Industry >> Realty

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ISIN No INE271C01023 BSE Code / NSE Code 532868 / DLF Book Value (Rs.) 159.30 Face Value 2.00
Bookclosure 28/07/2023 52Week High 968 EPS 11.02 P/E 76.92
Market Cap. 209757.91 Cr. 52Week Low 462 P/BV / Div Yield (%) 5.32 / 0.59 Market Lot 1.00
Security Type Other

DIRECTOR'S REPORT

You can view full text of the latest Director's Report for the company.
Year End :2023-03 

The Board of Directors have pleasure in presenting their 58th Annual Report on the business and operations of the Company, together with the audited financial statements for the Financial Year (FY) ended 31 March 2023.

Financial and Operational Highlights

(' in crore)

Particulars

Consolidated

Standalone

2022-23

2021-22

2022-23

2021-22

Total income

6,012

6,138

5,173

4,657

Total expenses

4,510

4,749

2,434

2,747

Profit before exceptional items, tax, share of profit in associates and joint ventures

1,502

1,389

2,739

1,910

Exceptional items (net)

-

(224)

-

(235)

Profit before tax, share of profit in associates and joint ventures

1,502

1,165

2,739

1,675

Less: Tax expense (Current tax including earlier years and Deferred Tax)

401

321

428

340

Profit after tax before share of profit (net) in associates and joint ventures

1,101

844

2,311

1,335

Share of Profit in associates and joint ventures (net)

933

656

Net Profit for the Year

2,034

1,500

2,311

1,335

Other Comprehensive Income

17

13

6

0.13

Total Comprehensive Income

2,051

1,513

2,317

1,335


Financial Performance Review and Analysis

Consolidated revenue (including other income) stood at ' 6,012 crore, a 2% drop from the previous period. Total operating expenses (excluding finance costs, depreciation and amortisation expense) were ' 3,969 crore. Consolidated EBITDA stood at ' 2,043 crore, reflecting a drop of 6% from the previous year. The drop in the EBITDA was primarily on account of lower other income as compared to the previous period and higher expenses driven by business scale. Continued focus on debt reduction led to a significant drop in the finance costs during the period which were recorded at ' 392 crore, a reduction of 37% as compared to the previous year.

Your Company recorded a total comprehensive income of ' 2,051 crore during the year as compared to ' 1,513 crore in the previous year after accounting for share of profit in DLF Cyber City Developers Limited (DCCDL), a material subsidiary, and other jointly controlled entities/ associates. The 36% growth in the comprehensive income is attributable to high

profit growth of 43% in DCCDL along with a significant reduction in finance costs.

DLF Cyber City Developers Limited

DCCDL reported a consolidated total income of ' 5,410 crore, reflecting a 19% growth over the previous period primarily led by the rental growth in the office and retail portfolio. DCCDLs consolidated EBITDA stood at ' 4,139 crore in FY 2022-23 in comparison to ' 3,488 crore in FY 2021-22. Total comprehensive income stood at ' 1,429 crore, reflecting a 43% growth over last year.

Review of Business

Development Business

The development business exhibited record performance across all parameters. Sustained demand momentum along with quality offerings resulted in the residential business delivering record sales for the period. Cumulative new sales bookings for the fiscal were recorded at ' 15,058 crore, reflecting a 107% growth over previous period.

Our luxury offering - The Arbour at Sector 63, Gurugram, created a new benchmark in residential sales by setting a record of being entirely sold out during the pre-formal launch phase garnering new sales bookings in excess of ' 8,000 crore. The success of this project stands as a testament of the immense faith that our customers have reposed towards our brand and a strong endorsement towards an aspirational lifestyle.

Your Company continued to witness similar response to its other offerings across multiple markets and segments. A few noteworthy launches for this fiscal included The Grove at DLF5, Garden City Enclave at Sector 93 at Gurugram and The Valley Gardens at Panchkula.

The sustained demand momentum and increasing consumer interest enthuses us to diligently work on newer offerings and hence your Company has identified a strong potential of ~1.02 million square meters (msm) [11 million square feet (msf)] of new products with a sales potential of 19,700 crore. In addition to these new offerings, your Company also has a launched inventory worth 7,300 crore.

Annuity Business

The recovery across the office segment remains gradual on account of continued global macro headwinds. The occupancy of the existing portfolio improved to ~89% at the end of the fiscal. The office business exhibited ~13% growth over last year, primarily on account of rental escalations, mark to market rentals and rental commencement of new assets viz. DLF Downtown Block 2 & 3, Gurugram.

The retail business continued its growth trajectory by delivering 59% growth as compared to the previous year.

All retail malls continue to operate at high occupancy levels and deliver healthy growth. Demand growth across retail malls remains sustained and hence expansion plans in this segment remain on track.

Dividend

The Board has recommended a dividend of ' 4/- per equity share (200%) (previous year ' 3/- per equity share) of the face value of ' 2/- each for FY 2022-23, payable to those shareholders, whose names appear in the Register of Members/ Beneficial ownership list provided by the depositories on the record date.

The total outgo on account of payment of dividend for FY 2022-23 would be ' 990.12 crore (previous year ' 742.59 crore).

The dividend payout is in accordance with the prevalent applicable laws and the Company's Dividend Distribution Policy. The said policy is available on the website of the Company at https://www.dlf.in/pdf/Dividend%20 Distribution%20Policy.pdf.

Capital Structure

The paid-up equity share capital of the Company is ' 495.06 crore comprising 2,47,53,11,706 equity shares of ' 2/- each fully paid-up. There is no change in the authorised, issued and paid-up share capital of the Company during FY 2022-23.

Redemption of Debentures

During FY, the Company exercised the option to prepay and has fully redeemed 5,000 Senior, Secured, Rated, Listed, Redeemable Rupee denominated Non-Convertible Debentures (NCDs) of face value of ' 10,00,000/- each, aggregating to ' 500 crore on 24 March 2023, one year before the due date of redemption, as per the Information Memorandum read with the Debenture Trust Deed.

Transfer to Reserves

During FY, the Company has not transferred any amount to the general reserve. In terms of the provisions of Section 71 of the Companies Act, 2013 (the 'Act') read with Rule 18(7)(b)(iii)(B) of the Companies (Share Capital and Debentures) Rules, 2014, Debenture Redemption Reserve is not required to be created for privately placed debentures issued by listed companies, hence no amount was transferred to Debenture Redemption Reserve. Moreover, the said debentures were redeemed by the Company on 24 March 2023.

Credit Rating

The Company's strong focus on financial capital coupled with financial discipline and prudence are reflected in the strong credit ratings ascribed by rating agencies, as under:

CRISIL

Instrument

Date of Rating

Rating

Remarks

Long-term bank facilities

16 September 2022

CRISIL AA-

Rating re-affirmed and outlook revised from 'Stable' to 'Positive'

Short-term

facilities

CRISIL A1

Re-affirmed

Long-term bank facilities

29 March 2023

CRISIL AA

Rating on long-term bank facilities was upgraded from AA-(Positive Outlook) to Aa (Stable Outlook)

Short-term

facilities

CRISIL A1

Re-affirmed

ICRA

Instrument

Date of Rating

Rating

Remarks

Non-Convertible

Debentures

(since

redeemed) and Long-term bank

facilities

23 August 2022

[ICRA] AA-

Rating re-affirmed and outlook revised from 'Stable' to 'Positive'

Short-term

facilities

[ICRA] A1

Re-affirmed

Non-Convertible

Debentures

(since

redeemed) and Long-term bank

facilities

5 April 2023

[ICRA] AA

Rating on long-term bank facilities was upgraded from AA-(Positive Outlook) to Aa (Stable Outlook)

Short-term

facilities

[ICRA] A1

Re-affirmed

Public Deposits

During the year under review, the Company has neither invited nor accepted/ renewed any deposits from the public within the meaning of Sections 73 and 74 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

Holding Company

Rajdhani Investments & Agencies Private Limited continued to be the holding company and holds 61.53% of paid-up equity share capital of the Company.

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

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended, is given at Annexure-A 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) and 5(3) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement listing names of the top 10 employees in terms of the remuneration drawn and other particulars of the employees drawing remuneration in excess of the limits set-out in the said Rules, are given at Annexure-E1 and E2 and forms part of this Report.

Subsidiaries, Joint Ventures, Associate Companies and Consolidated Financial Statements

As on 31 March 2023, the Company had 139 subsidiary companies in terms of the provisions of the Act. Further, details of changes in subsidiaries, joint ventures and associate companies during FY are given at Annexure-D and forms part of this Report.

Pursuant to the provisions of Section 129(3) of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('SEBI Listing Regulations'), the Consolidated Financial Statements of the Company were prepared in accordance with the applicable Ind AS and forms part of the Annual Report. A statement containing the salient features of the financial statements of the Subsidiaries, Joint Ventures and Associates of the Company in Form AOC-1, as required under the Companies (Accounts) Rules, 2014, as amended, also forms part of the Notes to the financial statements. The highlights of the performance of Subsidiaries, Joint Ventures and Associates and their contribution to the overall performance of the Company are included as part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act read with Regulation 46 of the SEBI Listing Regulations, Audited Financial Statements of the Company, including Consolidated Financial Statements, other documents required to be attached thereto and Audited Financial Statements of each of the subsidiaries, are available on the website of the Company and may be accessed at https://www.dlf. in/investor.

Material Unlisted Subsidiary(ies)

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

As on 31 March 2023, your Company has four material unlisted subsidiaries namely, DLF Cyber City Developers Limited (Debt Listed Entity), DLF Assets Limited, DLF Power & Services Limited and DLF Home Developers Limited.


Amalgamation/ Arrangement

A. Scheme of Amalgamation/ Arrangement sanctioned by the Hon'ble National Company Law Tribunal, Chandigarh Bench (NCLT, Chandigarh)

1. Abhigyan Builders & Developers Private Limited, Abhiraj Real Estate Private Limited, Benedict Estates Developers Private Limited, Chakradharee Estates Developers Private Limited, DLF Gayatri Home Developers Private Limited, Lizebeth Builders & Developers Private Limited, Vkarma Capital Investment Management Company Private Limited and Vkarma Capital Trustee Company Private Limited (Transferor Companies) with DLF Residential Partners Limited (Transferee Company) vide order dated 27 May 2022 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 October 2019.

2. Adeline Builders & Developers Private Limited, Armand Builders & Constructions Private Limited, Americus Real Estate Private Limited, DLF Commercial Developers Limited, Elvira Builders & Constructions Private Limited, Eastern India Powertech Limited, Lada Estates Private Limited, Lear Builders & Developers Private Limited, Melosa Builders & Developers Private Limited, Mens Buildcon Private Limited, Narooma Builders & Developers Private Limited, Nudhar Builders & Developers Private Limited, Rachelle Builders & Constructions Private Limited, Royalton Builders & Developers Private Limited and Saket Holidays Resorts Private Limited (Transferor Companies) with DLF Home Developers Limited (Transferee Company) vide order dated 30 June 2022 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 October 2019.

3. Bellanca Builders & Developers Private Limited, Garv Promoters Private Limited and Lempo Buildwell Private Limited (Transferor Companies) with Naja Estates Developers Private Limited (Transferee Company) vide order dated 21 October 2022 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

4. Dome Builders & Developers Private Limited and Qabil Builders & Constructions Private Limited (Transferor Companies) with Skyrise Home Developers Private Limited (Transferee Company) vide Order dated 20 January 2023 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

5. Faye Builders & Constructions Private Limited and Garv Realtors Private Limited (Transferor Companies) with Garv Developers Private Limited (Transferee Company) vide order dated 23 January 2023 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

6. Pariksha Builders & Developers Private Limited (Transferor Company) with Unicorn Real Estate Developers Private Limited (Transferee Company) vide order dated 30 January 2023 and the Transferor Company stands merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

7. Ariadne Builders & Developers Private Limited, Dae Real Estates Private Limited, Liber Buildwell Private Limited, Mariabella Builders & Developers Private Limited, Phoena Builders & Developers Private Limited and Vibodh Developers Private Limited (Transferor Companies) with Raeks Estates Developers Private Limited (Transferee Company) vide order dated 3 February 2023 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

8. Pyrite Builders & Constructions Private Limited and Webcity Builders & Developers Private Limited (Transferor Companies) with Nadish Real Estate Private Limited (Transferee Company) vide order dated 6 March 2023 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

9. Adsila Builders & Developers Private Limited, Alana Builders & Developers Private Limited, Beyla Builders & Developers Private Limited, Hansel Builders & Developers Private Limited and Seamless Constructions Private Limited (Transferor Companies) with Milda Buildwell Private Limited (Transferee Company) vide order dated 9 March 2023 and the Transferor Companies stand merged with the T ransferee Company w.e.f. the Appointed date of 1 April 2021.

10. DLF Golf Resorts Limited and DLF Homes Services Private Limited (Transferor Companies) with DLF Recreational Foundation Limited (Transferee Company) vide order dated 15 June 2023 and the Transferor Companies stand merged with the Transferee Company w.e.f. the Appointed date of 1 April 2021.

B. Merger(s) filed/ pending before the Hon'ble

National Company Law Tribunal, Chandigarh

Bench (NCLT, Chandigarh).

1. GavelBuilders&ConstructionsPrivateLimited, Jesen Builders & Developers Private Limited,

Jingle Builders & Developers Private Limited, Keyna Builders & Constructions Private Limited, Morgan Builders & Developers Private Limited, Morina Builders & Developers Private Limited and Morven Builders & Developers Private Limited (Transferor Companies) with DLF Homes Panchkula Private Limited (Transferee Company) with the Appointed date of 1 April 2021.

2. Amon Estates Private Limited, Calista Real Estates Private Limited, Chevalier Builders & Constructions Private Limited, Erasma Builders & Developers Private Limited, Hestia Realtors Private Limited, Laraine Builders & Constructions Private Limited and Snigdha Builders & Constructions Private Limited (Transferor Companies) with DLF Southern Towns Private Limited (Transferee Company) with the Appointed date of 1 April 2021.

3. Alankrit Estates Limited, DLF Estate Developers Limited, Kirtimaan Builders Limited, Tiberias Developers Limited and Ujagar Estates Limited (Transferor Companies) with DLF Utilities Limited (Transferee Company) with the Appointed date of 1 January 2023.

4. DLF City Centre Limited, DLF Lands India Private Limited, DLF Info City Developers (Kolkata) Limited, DLF Emporio Limited (Transferor Companies) and DLF Assets Limited (Demerged Company) with DLF Cyber City Developers Limited (Transferee Company) with the Appointed date of 1 April 2022.

5. Chamundeswari Builders Private Limited, DLF Garden City Indore Private Limited, DLF IT Offices Chennai Private Limited, DLF Residential Developers Limited, Latona Builders & Constructions Private Limited and Livana Builders & Developers Private Limited (Transferor Companies) with DLF Home Developers Limited (Transferee Company) with the Appointed date of 1 April 2022.

Listing at Stock Exchanges

The equity shares of your Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Non-Convertible Debentures, which were redeemed during FY, were 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 with Schedule V to the SEBI Listing Regulations, forms part of the Annual Report.

Corporate Governance Report

The Company is committed to sound corporate governance practices as well as compliance with all

applicable laws and regulations. The Board believes that adopting the highest level of ethical principles would ensure that DLF continues to be the leading Company in the real estate sector. The Corporate Governance Report, as stipulated under Regulations 17 to 27 and Clauses (b) to (i) and (t) of Regulation 46(2) Paragraphs C, D and E of Schedule V to the SEBI Listing Regulations, forms part of this Annual Report.

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

Directors and Key Managerial Personnel

Mr. Rajiv Krishan Luthra, Independent Director demised on 10 May 2023. The Board of Directors at their meeting held on 12 May 2023 expressed their deep condolences and took on record the invaluable contribution made by Late Rajiv Krishan Luthra as an Independent Director of the Company.

During FY 2022-23, Shareholders vide their respective resolution(s) had re-appointed Mr. Ashok Kumar Tyagi and Mr. Devinder Singh as Chief Executive Officer (CEO) and Whole-time Directors, liable to retire by rotation, for a period of 5 (five) consecutive years with effect from 1 December 2022.

Further, Shareholders also approved, re-appointment of Mr. Vivek Mehra as Independent Director, not liable to retire by rotation, for a second term of 5 (five) consecutive years w.e.f. 13 February 2023, continuation of Lt. Gen. Aditya Singh (Retd.) as Independent Director, not liable to retire by rotation who had attained the age of 75 (Seventy Five) years on 20 September 2022 and continuation of Mr. Gurvirendra Singh Talwar, Non-executive Director, liable to retire by rotation who had also attained the age of 75 (Seventy Five) years on 22 March 2023.

Pursuant to the provisions of Section 152 of the Act read with Articles of Association of the Company, Mr. Ashok Kumar Tyagi, CEO and Whole-time Director and Ms. Savitri Devi Singh, Non-executive Director, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, have offered themselves for re-appointment. The resolution seeking members approval for their reappointment forms part of the AGM Notice. The Board of Directors of your Company has recommended their re-appointment.

A brief resume of the Director(s) seeking re-appointment, along with other details as stipulated under Regulation 36(3) of the SEBI Listing Regulations read with the Secretarial Standards on General Meetings, is provided in the Corporate Governance Report and Notice convening the AGM.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Mr. Rajiv Singh, Chairman (Whole-time Director), Mr. Ashok Kumar Tyagi, Mr. Devinder Singh, CEO and Whole-time Directors, Mr. Vivek Anand, Group Chief Financial Officer and Mr. R.P Punjani, Company Secretary and Compliance Officer. During the year under review, there were no changes in the Key Managerial Personnel of the Company.

Directors' Responsibility Statement

In terms of the provisions of Section 134(5) of the Act, your Directors confirm that for the year ended 31March 2023:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and the profit of the Company for that period;

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

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

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

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

Declaration by Independent Directors

The Independent Directors in their respective disclosures have confirmed that they are independent of the Management and not aware of any circumstances or situation, which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based on the disclosures received from Independent Directors, the Board of Directors has confirmed that they fulfilled conditions specified in Section 149(6) of the Act and Regulation 16(1 )(b) of the SEBI Listing Regulations.

Further, the Board is of the opinion that the Independent Directors of the Company uphold

highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.

Confirmation by Directors regarding Directorship/ Committee Positions

Based on the disclosures received, none of the Directors on the Board held directorships in more than ten public companies and none of the Independent Directors served as an Independent Director in more than seven listed entities as on 31 March 2023. Further, none of the Whole-time Directors of the Company served as an Independent Director in any other listed company. Necessary disclosures regarding Committee positions in other public companies as on 31 March 2023 have been made by the Directors and reported in the Corporate Governance Report which forms part of the Annual Report.

Certification from Company Secretary in Practice

A certificate has been received from AS & Associates, Company Secretaries in practice pursuant to Regulation 34(3) and Schedule V, Para C, Clause 10(i) of the SEBI Listing Regulations, certifying that none of the Directors on the Board of the Company had been debarred or disqualified from being appointed or continuing as Directors of companies by SEBI, Ministry of Corporate Affairs or any such Statutory authority.

Board and its Committees

The Board of Directors met six times during FY 2022-23. Details of the composition of the Board, its Committees, terms of references, meetings held and related attendance are provided in the Corporate Governance Report forming part of the Annual Report.

Auditors and Audit Reports

S.R. Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E/ E300005) were re-appointed as Statutory Auditors of the Company for a second term of five consecutive years from the conclusion of 57th AGM till the conclusion of 62nd AGM.

The Auditors' Report does not contain any qualification, reservation, adverse remarks or disclaimer of opinion. The Notes to the Financial Statements (including the Consolidated Financial Statements) referred to in the Auditors Report are self-explanatory and do not call for any further comments.

Cost Auditors

R.J. Goel & Co., Cost Accountants (FRN: 000026) were appointed as Cost Auditors of the Company for FY 2022-23 to conduct the 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 FY 2022-23 which shall be filed with the Ministry of Corporate Affairs in due course.

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

As per the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to Cost Auditors is required to be ratified and confirmed by the members in a General Meeting. Accordingly, a resolution seeking members' ratification for the remuneration payable to 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 Auditor of the Company to conduct Secretarial Audit for FY 2022-23. The Secretarial Audit Report and Secretarial Compliance Report for FY ended 31 March 2023 are annexed herewith at Annexure-B. The Secretarial Audit Report does not contain any qualification, reservation, adverse remarks or disclaimers. Further, as per the applicable provisions of the SEBI Listing Regulations, the Secretarial Compliance Report was filed with the stock exchanges, within the stipulated timeline.

DLF Cyber City Developers Limited, DLF Assets Limited, DLF Power & Services Limited and DLF Home Developers Limited, material subsidiaries of the Company, have also undergone Secretarial Audit as per Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations.

Accordingly, the Secretarial Audit Reports for FY ended 31 March 2023 of DLF Cyber City Developers Limited, DLF Assets Limited, DLF Power & Services Limited and DLF Home Developers Limited, issued by Dr. K.R. Chandratre, Practicing Company Secretary are at Annexure-B. The said reports are self-explanatory and do not contain any qualifications, reservations, adverse remarks or disclaimers.

Reporting of Fraud by Auditors

During the year under review, the Statutory Auditors, Secretarial Auditor and Cost Auditors have not reported any instance of fraud in respect of the Company by its officers or employees under Section 143(12) of the Act.

Secretarial Standards

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

Corporate Social Responsibility (CSR)

The DLF Group implements its CSR initiatives primarily through DLF Foundation, which plays a pivotal role along with the Government, civil society and communities to resolve critical development challenges faced by the communities. Its programmes are aligned with the immediate ongoing priorities of the Government on CSR.

DLF believes that it needs to empower communities across various domains through an integrated and holistic approach so that they are able to realise their full potential as well as make a difference to society. The Company believes in creating value for the stakeholders, including the underprivileged sections of society and that everyone should be able to lead a life with dignity.

The Company has been contributing towards building sustainable capacities and creating resources for the marginalised in the vicinity of its operational areas.

The Company had appointed Price Waterhouse Chartered Accountants LLP, an independent agency to conduct the Impact Assessment of its CSR expenditure on its Project COVID-19 undertaken during FY 2020-21, the report of which is available on the Company's website at https://www.dlf.in/investor. Impact Assessment of the projects, namely (i) COVID-19; (ii) DLF Cares Programme; and (iii) Golf Excellence Programme, which were completed during FY 2021-22 would be undertaken during FY 2023-24.

DLF Foundation addresses Social Development Projects with an integrated holistic approach to ensure that its programmes impact critical aspects of the lives of the downtrodden in the areas of Education, Healthcare, Sports, Culture and at the same time addresses environmental concerns by undertaking environmental projects.

A copy of the CSR policy is available on the Company's website at https://www.dlf.in/pdf/Corporate-Social-Responsibility-Policy.pdf and CSR Annual Action Plan is at https://www.dlf.in/pdf/CSR-Annual-Action-Plan.pdf.

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

Environment and Sustainability

DLF recognises its unique position as industry pioneer to re-write the Indian Real Estate narrative. It thus takes pride to enact, exemplify and exceed the highest standards in sustainable development.

The Company endeavors to excel in three pillars of sustainability namely Environmental, Social and Governance, collectively referred as ESG parameters. The Business Responsibility and Sustainability Policy is available at https://www.dlf.in/pdf/DLF-Business-Responsibility-Policy.pdf.

As per the provisions of Regulation 34 of the SEBI Listing Regulations, the top 1,000 listed entities by market capitalisation are required to prepare the Business Responsibility and Sustainability Report (BRSR) as part of their Annual Report. The BRSR revolves around the 9 (nine) reporting principles of 'National Guidelines on Responsible Business Conduct' covering aspects

of Environmental, Social and Governance (ESG) parameters. The BRSR for FY 2022-23 is annexed at Annexure-G of this Report.

Through our reporting, the Company reiterates its strong and longstanding commitment towards the overwhelming objective of sustainable growth through community development and allied measures by leveraging our capabilities to provide quality products to our esteemed customers while being a responsible corporate entity.

Care for the environment is a core focus area as the Company continues to contribute to shaping a better future, which is safe, inclusive and sustainable. Furthermore, the Company has designed business processes that incorporate social well-being in everything that it does. It is adopting innovative means to promote resource efficiency, emission reduction, water conservation, waste minimisation and biodiversity protection. It also positively engages with communities surrounding its operations, helping to enrich their lives through CSR programmes and employment opportunities.

The Company is deeply committed to the health, well-being and prosperity of its customers, partners, employees and all other stakeholders. It is continuously innovating to create safer workplaces and intelligent energy-efficient infrastructure. This is necessary to promote smarter cities and sustainable communities across India as also, achieve long-term value for all its stakeholders.

While the Company focuses on expanding its footprint and increasing its revenue, it also continues to assess and monitor the risks and opportunities. This includes assessing the emerging trends and addressing environmental and social issues as it moves forward. Therefore, the approach to sustainability includes monitoring growth in alignment with its targets and commitments towards ESG.

The Company's efforts towards the environment and society are backed by robust governance that supports its values of integrity, accountability and transparency. DLF takes pride in the fact that it has striven to exceed legal compliance requirements and ensured that policies and procedures supporting responsible business practices are implemented in their true spirit.

The Company has maintained rigorous safety standards vetted by world-class independent organisations like British Safety Council. Testimony of this is that it is the only Group globally, which has been conferred 18 'Sword of Honour' Awards by them, a pinnacle of safety standards across the world. DLF Buildings have also been conferred with 'Five Star Certifications for Occupational Health and Safety' by British Safety Council.

As a recognition of your Company's policies on Governance, Social and Environmental initiatives, your Company once again has been recognised as Index

component in the Dow Jones Sustainability Indices in the emerging markets category for the third consecutive year. DLF is the only real estate Company from India to be included in this index.

Annual Return

The Annual Return for FY 2022-23 as required under Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, is available at https://www.dlf.in/annual_docket/annual-Return-2022-23.pdf.

Awards and Accolades

Your Company continues to lead the real estate sector and has received several awards. The details of the major awards and accolades received during the year are at Annexure-F.

Particulars of Loans, Guarantees, Securities and Investments

Particulars of loans, guarantees, securities and investments have been disclosed in the notes to the Standalone Financial Statements.

Transactions with Related Parties

The Company has robust processes and procedures for identification and monitoring related party(ies) and related party transactions.

The Company's Policy on Related Party Transactions is in accordance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations, as amended, which regulates the transactions between the Company and its related party(ies). The said policy is available on the Company's website at https://www. dlf.in/pdf/Related-Party-Transaction-Policy.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all related party transactions.

During the year, all the related party transactions were entered on an arm's length basis and in ordinary course of business. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2022-23 and hence, does not form part of this report.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy was devised in accordance with Section 178 of the Act read with SEBI Listing Regulations, as amended.

During FY, the Board of Directors of the Company revised the Nomination and Remuneration Policy of the Company. The said Policy includes matters related to Director's appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a Director and other related matters. The Nomination and Remuneration Policy of the Company is aimed at inculcating a performance-driven culture. Through its comprehensive compensation

program, the Company endeavours to attract, retain, develop and motivate a high-performance workforce. The said policy is available on the Company's website at https://www.dlf.in/pdf/Nomination%20 and%20Remuneration%20Policy.pdf.

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

Based on the recommendations of NRC, the Board of Directors decides the commission payable to the Chief Executive Officers, Whole-time Directors and Non-executive Directors, out of the profits for the FY within the ceiling as prescribed under the Act.

Succession Planning

The Board Members and the Senior Management are vital for creating a robust future for the Company. The Company's succession planning framework is well structured and lays down guiding principle for forwardthinking and a future-ready Board. The NRC plays an important role in ensuring that the Company has a strong and diversified Board. To ensure orderly succession planning, NRC also considers tenure of Directors and Senior Management personnel, skill matrix, diversity and statutory requirements etc.

Annual Evaluation of the Board, its Committees and Individual Directors

The NRC has formulated criteria for Board evaluation, its Committees' functioning and individual Directors including Independent Directors and also specified that such evaluation will be done by the NRC and the Board, pursuant to the Act and the Rules made thereunder read with the SEBI Listing Regulations, as amended.

DLF believes that it is the collective effectiveness of the Board that impacts Company's performance, as a whole. The Board's performance is assessed against the role and responsibilities as provided in the Act and SEBI Listing Regulations. The parameters for the Board's performance evaluation have been derived from the Board's core role of trusteeship to protect and enhance shareholders' value as well as to fulfil expectations of other stakeholders through strategic supervision of the Company.

Evaluation of functioning of Board Committees is based on discussions amongst Committee members and shared by the respective Committee Chairperson with the Board.

Individual Directors are evaluated in the context of the role played by each Director as a member of the Board at its meetings, in assisting the Board in realising its role of strategic supervision of the functioning of the Company in pursuit of its purpose and goals. While the Board evaluated its performance as per

the parameters laid down by the NRC, the evaluation of Individual Directors was carried out as per the laid down parameters, anonymously in order to ensure objectivity. The Independent Directors of the Board also reviewed the performance of the Non-Independent Directors and the Board, pursuant to Schedule IV to the Act and Regulation 25 of the SEBI Listing Regulations.

Internal Financial Control

The Company has a robust and well embedded system of internal financial controls. This ensures that all assets are safeguarded and protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported correctly. An extensive risk based programme of internal audit and management reviews provides assurance on the effectiveness of internal financial controls, which are continuously monitored through management reviews, self-assessment, functional experts as well as by the Statutory/ Internal Auditors during the course of their audits.

The internal audit of development business was entrusted to Grant Thornton Bharat LLP and of rental business to KPMG Assurance and Consulting Services LLP The main thrust of internal audit was to test and review controls, appraisal of risks and business processes, as also benchmarking controls with the best industry practices.

The internal control system ensures compliance with all applicable laws and regulations and facilitates optimum utilisation of available resources and protects the interests of all stakeholders. The Company has clearly defined Policies, Standard Operating Procedures (SOPs), Financial and Operational Delegation of Authority (DoA) and Organisational Structure for its business functions to ensure smooth conduct of its business. The Enterprise Resource Planning (ERP) system supports standardisation of processes and automation. The Compliance initiatives taken by the Company have been reported in the Corporate Governance Report, which forms part of this Report.

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

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

Insider Trading Code

The 'DLF Code of Conduct to Regulate, Monitor and Report trading by Designated Persons and

their Immediate Relatives' (DLF Code) is in compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended ('the PIT Regulations'). During FY, the Board of Directors of the Company has revised the DLF Code which is available on the Company's website at https://www.dlf.in/ corporategovernancepolicies/Code_for_Prevetion_ of_Insider_Trading_21_december_2020(1).pdf.

The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information including a Policy for determination of legitimate purposes is also in line with the PIT Regulations. Further, the Company has put in place an adequate and effective system of internal controls including maintenance of a structured digital database and standard operating procedures to ensure compliance with the requirements of the PIT Regulations to prevent insider trading.

Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the Risk Management Plan for the Company. The Committee is responsible for monitoring and reviewing the Risk Management Plan and ensuring its effectiveness. The major business and process risks are identified from time to time by the businesses and functional heads. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Risk management forms an integral part of the management policies and is an ongoing process integrated deeply into everyday operations.

During the period under review, the Board of Directors of the Company has revised roles and responsibilities of the Committee which is in line with the SEBI Listing Regulations and to ensure that the whole process of risk management is well coordinated and carried out as per mitigation plan.

The development and implementation of Risk Management Policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

Significant and Material Orders passed by Regulators or Courts or Tribunals

During the year under review, no significant and material order was passed by the regulators/ courts/ tribunals which would impact the going concern status of the Company and its future operations. However, some significant orders passed previously, forms part of Note 50 to the Standalone Financial Statements.

Detail pertaining to proceeding pending under the Insolvency and Bankruptcy Code, 2016 ('IBC') during

the year along with the status as at the end of FY is as under:

A petition under Section 9 of the IBC was filed by IL&FS Engineering Construction Company Limited ('IL&FS') praying that the Corporate Debtor is liable to pay approximately ' 46.34 crore in connection with a road project contract at Sector 56, Gurugram. The Company has filed its reply, inter-alia that the said amount is not payable and hence, the petition is liable to be dismissed. The Company without prejudice to its rights, submitted its claims of ' 381.49 crore against IL&FS as on 15 October 2018 (cut-off date) to Claims Management Advisor ('CMA') i.e. Grant Thornton Bharat LLP, out of total claim of 607.04 crore.

With respect to claims after 15 October 2018, the Company has also filed an application under Section 11 of the IBC before the Hon'ble Delhi High Court praying to appoint a sole arbitrator to adjudicate the disputes between the parties. The same was dismissed by the Hon'ble High Court vide order dated 21 December 2022 and observed that CMA, shall consider the claims already submitted by the petitioner, in accordance with law.

The Company has filed Special Leave Petition before the Hon'ble Supreme Court of India challenging the order dated 21 December 2022. The Petition is yet to be listed.

Vigil Mechanism

During FY, the Board of Directors of the Company re-visited the Whistle Blower Policy and the amended Policy is available on the Company's website at https://www.dlf.in/pdf/DLFWBP.pdf. The Company has established the necessary vigil mechanism for Directors and employees in compliance with Section 177(9) of the Act read with Regulation 22 of SEBI Listing Regulations, to report their genuine concerns or grievances regarding any unethical behaviour at the workplace.

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

The Company continues to follow a robust anti-sexual harassment policy for 'Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace' in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (POSH) and Rules made thereunder. The Company has set up an Internal Complaints Committee (ICC) for redressal of complaints relating to sexual harassment. The Committee includes an external member, who is an expert on issues relating to sexual harassment. The Committee constituted in compliance with POSH ensures a free and fair enquiry process with clear timelines for resolution.

The Company has been conducting programmes on regular basis. The Company continues to promote the cause of women colleagues, through 'Jagruti',

all-women's forum for experience sharing, creating awareness on women's safety/ related issues, celebrating important days dedicated to women and organising workshops on gender sensitivity.

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

During FY, no case was reported. However, during the previous FY, one case was reported which has undergone and completed the due process as per the framework prescribed under POSH. In this regard, the ICC post investigating the alleged complaint, adjudicated withholding of a part of the pay component of the concerned employee and accordingly the complaint stands closed.

Other Information

During FY, no disclosure or reporting is required in respect of the following matters:

• Material changes and commitments, if any, affecting the financial position of the company;

• Issue of equity shares with differential rights as to dividend, voting or otherwise;

• I ssue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees' Stock Options Scheme referred to in this Report;

• There has been no change in the nature of business of the Company;

• There was no instance of one-time settlement with any Bank or Financial Institution; and

• The Equity Shares of the Company have not been suspended from trading by the SEBI and/or Stock Exchanges.

Acknowledgements

The Board of Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. Their hard work and unstinted efforts enabled the Company to sustain its performance and its sectoral leadership.

The Board of Directors would also like to express their sincere appreciation for assistance and co-operation received from vendors and stakeholders, including financial institutions, banks, Central and State Government authorities, customers and other business associates, who continued to extend their valuable support during the year under review and to the esteemed investors for showing their confidence and faith in the management of the Company. It will be the Company's endeavour to nurture these relationships in strengthening business sustainability.

For and on behalf of the Board of Directors

(Ashok Kumar Tyagi) (Devinder Singh)

CEO and Whole-time CEO and Whole-time 30 June 2023 Director Director

New Delhi (DIN: 00254161) (DIN: 02569464)