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Company Information

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DLF LTD.

25 November 2022 | 12:00

Industry >> Construction & Contracting

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ISIN No INE271C01023 BSE Code / NSE Code 532868 / DLF Book Value (Rs.) 146.90 Face Value 2.00
Bookclosure 03/08/2022 52Week High 430 EPS 6.06 P/E 65.41
Market Cap. 98170.86 Cr. 52Week Low 295 P/BV / Div Yield (%) 2.70 / 0.76 Market Lot 1.00
Security Type Other

NOTES TO ACCOUNTS

You can view the entire text of Notes to accounts of the company for the latest year
Year End :2022-03 

(i) Contractual obligations

Refer note 49(i) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(ii) Property plant and equipment pledged as security

Refer note 19 and 23 for information on property, plant and equipment pledged as security for borrowings by the Company.

(iii) Assets given under operation and management agreement

Out of total assets, assets amounting to ? 10,879.94 lakhs (31 March 2021: ? 12,958.92 lakhs) are given to DLF Golf Resorts Limited, a subsidiary company, under operation and management agreement [refer note 2.2®, 55 and 56].

(iv) Capitalised borrowing cost

No borrowing cost are capitalised during the current year and previous year.

(v) Transition to Ind AS

On transition to Ind AS (i.e. 1 April 2015), the Company has elected to continue with the carrying value of all property, plant and equipment measured as per previous GAAP and use that carrying value as the deemed cost of property, plant and equipment.

# There are no projects in progress under capital work-in-progress whose completion is overdue or has exceeded its cost compared to its original plan.

$ The Company undertakes several long-term duration projects at a time which range between 3 to 6 years. In some cases the projects may get temporarily suspended or their progress may be on slower side. On such occasions, where there is no active development on the projects, direct cost attributable to the project continues to be reflected in CWIP as at 31 March 2022 and 31 March 2021, respectively. Due to the above, the Company is not able to furnish the tentative project time or plan even though the Company is confident of resuming the project in future.

(ii) Contractual obligations

Refer note 49(i) for disclosure of contractual commitments for the acquisition of investment properties.

(iii) Capitalised borrowing cost

No borrowing costs are capitalised during the current year and previous year.

(iv) Investment property pledged as security

Refer note 19 and 23 for information on investment properties pledged as security by the Company.

(v)(b) Fair value hierarchy and valuation technique

1) The Company's investment properties consist of two class of assets i.e., commercial properties and retail mall, which has been determined based on the nature, characteristics and risks of each property. As at 31 March 2022 and 31 March 2021, the fair values of the properties are ? 447,313.29 lakhs and ? 424,448.29 lakhs, respectively. The fair value of investment property has been determined by external, independent registered property valuers as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued in conjunction with valuer assessment services undertaken by approved valuer, except (as stated in note 2) below.

The Company obtains independent valuation for its investment property at least annually and fair value measurements are categorized as level 3 (refer note 36) measurement in the fair value hierarchy. The valuation has been taken considering values arrived using the following methodologies:

(a) Discounted cash flow method, net present value is determined based on projected cash flows discounted at an appropriate rate; or

(b) Sales comparable method, which compares the price or price per unit area of similar properties being sold in the marketplace; or

(c) Average of the above.

Further, inputs used in the above valuation models are as under:

(i) Property details comprising of total leasable area, area actually leased, vacant area, parking slots etc.;

(ii) Revenue assumptions comprising of market rent, market parking rent, rent growth rate, parking income growth rate, market lease tenure, market escalations, common area maintenance income prevailing in the market etc.;

(iii) Cost assumptions comprising of brokerage cost, transaction cost on sale, cost escalations etc.;

(iv) Discounting assumptions comprising of terminal cap rate and discount rate; and

(v) Estimated cash flows from lease rentals, parking income, operation and maintenance income etc. for the future years.

2) In addition to 1) above, the Company ("Developer”) has a land parcels which is notified Special Economic Zone ("SEZ”) and classified under investment property. The Developer has partially developed the SEZ under the co-development agreement between the Company and DLF Assets Limited ("DAL' or "the Codeveloper”) and transferred completed bare shell buildings to DAL. Remaining portion of such land is under development. As per the co-developer agreement, the underneath the buildings has been given on long-term lease to DAL. The management has assessed that the fair value of such SEZ land classified under investment property, based on the prevailing circle rates, is higher than the book value. However, given the above arrangement and restriction on the sale of land in a SEZ as described under SEZ Rules 2006, the management considered carrying value aggregating to f 11,554.66 lakhs (31 March 2021: f 11,554.66 lakhs) to be a reasonable estimate of its fair value.

1 All the investment in equity shares of subsidiaries, associates and joint ventures are stated at cost as per Ind AS 27 'Separate Financial Statements'.

2 All equity shares of ? 10/- each and fully paid up, unless otherwise stated.

3 These investments are on account of or includes the investment booked on account of stock options issued to employees of those subsidiaries and joint venture.

4 The Company has subscribed to 0.01% unsecured Compulsorily Convertible Debentures (CCDs) of ? 10/-each. At the option of holder, these CCDs are convertible into fixed number of equity shares in one or more tranches within a period of 10 years from the date of allotment. The resulting shares upon conversion shall rank pari-passu in all respect with the existing equity shares.

5 All are redeemable instruments, are having a face value of ? 100/- each, unless otherwise stated and are measured at amortised cost. These preference shares are redeemable at the option of the holder i.e. the Company, on or before expiry of 2023 from the date of allotment. These instruments carry cumulative dividend @ 6% to 12% per annum.

6. During the previous year, the terms of 88,544,000 Nos. of 0.01% redeemable preference shares (RPS) of the face value of ? 100/- each subscribed by the Company has been changed and converted to Optionally Convertible Redeemable Preference Shares (OCRPS).

7 During the financial year 2018-2019, bonus shares were issued by DLF Cyber City Developers Limited (DCCDL) (Class-B equity shares) as per below terms and conditions:

- Class-B equity shares shall not carry any voting rights;

- Holder of Class-B equity shares shall not receive any proceeds of any winding-up or liquidation of the Company;

- Holder of Class-B equity shares shall have the right to receive dividend only to the extent specifically approved/ recommended by the Board in the relevant financial year; and

- These Class-B equity shares shall not stand pari-passu with the already existing equity shares issued by DCCDL. However these Class-B equity shares shall stand pari-passu to the Class-B equity shares to be issued, in future by DCCDL, if any, on account of conversion of existing 0.001% Class-B Compulsorily Convertible Preference Shares of ? 10/- each ("Class-B CCPS”) in terms of Class-B CCPS issued and allotted on 26 December 2017 by DCCDL.

8 During the year, the Hon'ble National Company Law Tribunal (NCLT), Chandigarh Bench vide its Order dated 2 February 2022, has approved the Scheme of Arrangement involving merger of wholly-owned subsidiary companies namely DLF Phase-IV Commercial Developers Limited, DLF Real Estate Builders Limited, DLF Residential Builders Limited (Transferor Companies) and demerger and Transfer/ Vesting of real estate undertaking of DLF Utilities Limited (Demerged Company) with DLF Limited (Transferee Company) with the appointed date as 1 April 2021. Refer note 58.

Pursuant to the above, the Company has received 4,966 shares of DLF Commercial Developers Limited, 372,913 shares of DLF Home Developers Limited and 10,000 shares of Ariadne Builders & Developers Private Limited, respectively. Accordingly, the investment in these subsidiary companies and figures for the corresponding year have been restated.

9 During the year, with effect from 23 July 2021 a partnership firm namely 'DLF Office Developers' is converted into a Private Limited Company i.e. 'DLF Office Developers Private Limited' and accordingly investment in partnership firm has been re-classified to investment in subsidiaries.

10 During the previous year, the Company had invested in Non-Convertible Debentures (NCDs) of face value ? 100,000/- each fully paid. The NCDs carry fixed interest of 7.50% per annum and are redeemable on or before 2 February 2024 at the option of investee company.

11 The Company has subscribed to optionally convertible redeemable preference shares (OCRPS) having a fixed non-cumulative dividend @ 5% p.a. At the option of the issuer, these OCRPS are convertible into 10 equity shares having face value of ? 10/- each for every preference share of ? 100/- at any time on or before 10 years from the date of allotment or can be redeemed at par at the end of 10 years. The resulting shares upon conversion shall rank pari-passu in all respect with the existing equity shares.

12 During the previous year, DLF Property Developers Limited got merged with DLF Luxury Homes Limited with effect from 5 March 2021. Accordingly, in accordance with the scheme of arrangement, the Company had received 37,318,000 shares in DLF Luxury Homes Limited. Further, the carrying value of investment in DLF Property Developers Limited has been added to the carrying value of Company's investment in DLF Luxury Homes Limited.

13 These are equity portion of compound financial instruments.

(i) Deferred tax asset is recognized on unabsorbed depreciation and carry forward losses to the extent it is probable that future taxable profits will be available against which the deductible temporary differences, unabsorbed depreciation and carried forward tax losses can be utilised. The Company has tax losses of ? 974,554.96 lakhs [(31 March 2021: ? 1,118,839.92 lakhs) comprising business loss of ? 784,198.98 lakhs (31 March 2021: ? 925,677.94 lakhs), capital losses of ? 147,535.98 lakhs (31 March 2021: ? 150,341.98 lakhs)] that are available for offsetting against future taxable profit for eight years and unabsorbed depreciation of ? 42,820.00 lakhs (31 March 2021: ? 42,820.00 lakhs) available for offseting against future taxable profits. Majority of these losses will expire between March 2022 to March 2029. Based upon margin from sale of existing projects, profit from launch of new projects in near future and planned reduction in interest cost and overheads in future, Company believes there is reasonable certainty that deferred tax asset will be recovered.

(ii) The Company has not recognised deferred tax asset in respect of losses (including capital losses) of ? 235,391.50 lakhs (31 March 2021: ? 238,443.58 lakhs) as there is no reasonable certainty supported by convincing evidences of their recoverability in the near future. If the Company was also to recognise all unrecognised deferred tax assets, the profit would increase by ? 57,402.08 lakhs (31 March 2021: ? 58,135.21 lakhs) [also refer note 50(1)(b)].

b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ? 2/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

For dividend related disclosure, refer note 39.

e) Aggregate number of shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting dateShares issued under Employee Stock Option Plan (ESOP) during the financial year 2017-18 to 2021-22

The Company has issued total 472,022 equity shares of ? 2/- each (during FY 2016-2017 to 2020-2021: 759,030 equity shares) during the period of five years immediately preceding 31 March 2022 on exercise of options granted under the Employee Stock Option Plan (ESOP).

NATURE AND PURPOSE OF RESERVES Capital reserve

Capital reserve was created under the previous GAAP (Indian GAAP) out of the profit earned from a specific transaction of capital nature. Capital reserve is not available for the distribution to the shareholders.

Capital reserve on account of merger

The excess of net assets taken over the respective investments carried in Transferor Companies/ Demerged Company is treated as capital reserve on account of meger, refer note 58. Capital reserve on account of merger is not available for the distribution to the shareholders.

Capital redemption reserve

The same has been created in accordance with provision of the Companies Act, 2013 with respect to buy back of equity shares from the market in earlier years.

Securities premium

Securities premium includes premium on issue of shares. It will be utilised in accordance with the provisions of the Companies Act, 2013.

General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Forfeiture of shares

This reserve was created on forfeiture of shares by the Company. The reserve is not available for distribution to the shareholders.

Debenture redemption reserve (DRR)

The Company had issued redeemable non-convertible debentures. In terms of the provisions of Section 76 read with Rule 18(7)(b)(iii)(B) of the Companies (Share Capital and Debentures) Rules, 2014, Debenture Redemption Reserve is not required for privately placed debentures by listed companies. Accordingly, for debentures issued post applicability of amended rules, no Debenture Redemption Reserve is being created. However, for debentures issued prior to the amendment, the Company, in the previous year created Debenture Redemption Reserve for an amount equal to 25% of the value of debentures due for redemption.

FVOCI equity investments

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity.

Retained Earnings

Represents surplus/ (deficit) in statement of Profit and Loss during the year, including retained earnings of Transferor Companies/ Demerged Company on account of merger (refer note 58).

Non-convertible debentures:

(a) Non-convertible debentures of ? 49,877.62 lakhs (31 March 2021: ? 49,816.01 lakhs) are secured by way of pari-passu charge on the immovable property situated at New Delhi, owned by a subsidiary company and corporate guarantee of the subsidiary company. The debentures carry a coupon rate of 7.00% and the outstanding amount (excluding current maturities) is due for redemption on 25 March 2024.

Rupee term loan:

(a) Term loans of ? 33,842.92 lakhs (31 March 2021: ? 35,235.56 lakhs) is secured by way of

(i) equitable mortgage of immovable properties situated at New Delhi, owned by the Company and

(ii) charge on receivables pertaining to the aforesaid immovable properties owned by the Company. The outstanding amount (excluding current maturities) are repayable in 77 monthly installments starting from April 2023.

(b) Term loan of ? 13,823.80 lakhs (31 March 2021: ? 15,580.06 lakhs) is secured by way of (i) equitable mortgage of immovable properties situated at Gurugram owned by the Company (refer note 58),

(ii) charge on receivables pertaining to the aforesaid immovable properties owned by the Company and

(iii) corporate guarantee provided by the subsidiary company for the said immovable properties,which has been subsequently released. The outstanding amount (excluding current maturities) is repayable in 40 monthly installments starting from April 2023.

(c) Term loan of ? 24,031.76 lakhs (31 March 2021: ? 25,730.49 lakhs) is secured by way of (i) equitable mortgage of immovable properties situated at Kolkata owned by the Company and (ii) charge on receivables pertaining to the aforesaid immovable properties owned by the Company. The outstanding amount (excluding current maturities) is repayable in 56 monthly installments starting from April 2023.

(d) Term loan of ? Nil (31 March 2021: ? 19,194.88 lakhs) is secured by way of (i) equitable mortgage of immovable properties situated at Gurugram owned by certain sudsidiary companies and (ii) charge on escrow/ current account opened with the lender. The said loan has been pre-paid during the year.

(e) Term loan of ? Nil (31 March 2021: ? 33,021.67 lakhs) is secured by way of (i) equitable mortgage of immovable properties situated at Gurugram owned by the Company (refer note 58), (ii) charge on escrow account pertaining to the properties situated at New Delhi owned by the Company/ subsidiary company and (iii) corporate guarantee provided by the subsidiary company owning the aforesaid immovable property. The said loan has been pre-paid during the year.

(f) Term loan of ? 5,911.86 lakhs (31 March 2021: ? 24,809.76 lakhs) is secured by way of (i) equitable mortgage of immovable properties situated at Gurugram and Mullanpur owned by a subsidiary/ fellow subsidiary company, (ii) charge on receivables pertaining to the aforesaid immovable properties owned by the subsidiary company and (iii) corporate guarantee provided by the subsidiary/ fellow subsidiary company owning the aforesaid immovable properties. The outstanding amount (excluding current maturities) is repayable in 3 quarterly installments starting from July 2024.

(g) Term loan of ? 49,407.07 lakhs (31 March 2021: ? Nil) are secured by way of pari-passu (i) equitable mortgage of immovable properties situated at New Delhi and Gurugram and owned by the Company/ subsidiary companies, (ii) charge on escrow account pertaining to the properties situated at New Delhi owned by the Company/ subsidiary companies and (iii) Corporate guarantee provided by the subsidiary companies. The outstanding amount (excluding current maturities) is repayable in 125 monthly installments starting from April 2023.

(h) Term loan of ? 13,176.33 lakhs (31 March 2021: ? Nil) are secured by way of pari-passu (i) equitable mortgage of immovable properties situated at New Delhi and Gurugram owned by the Company/ subsidiary companies, (ii) charge on escrow account pertaining to the properties situated at New Delhi owned by the Company/ subsidiary companies and (iii) corporate guarantee provided by the subsidiary companies. The outstanding amount (excluding current maturities) is repayable in 28 monthly installments starting from May 2023.

Rupee term loan from others:

(a) Term loan of ? 6,133.45 lakhs (31 March 2021: ? 6,370.14 lakhs ) is secured by way of (i) equitable mortgage of immovable properties situated at Gurugram, owned by the Company (refer note 58),

(ii) charge on receivables pertaining to the aforesaid immovable properties owned by the Company and

(iii) corporate guarantee provided by the subsidiary company for the said immovable properties, which is in the process of release. The outstanding amount (excluding current maturities) is repayable in 102 monthly installments starting from April 2023.

Rate of interest:

The Company's total borrowings from banks and others have an effective weighted-average contractual rate of 7.01% (31 March 2021: 7.95%) per annum calculated using the interest rate effective as on 31 March 2022.

Loan Covenants:

Borrowings (other than loans from related parties) contain certain debt covenants relating to security cover, net debt to tangible net worth ratio, debt-equity ratio, minimum tangible net worth and asset coverage ratio. The Company has satisfied all debt covenants prescribed in the terms of term loan.

The Company has not defaulted on any loans payable.

Rupee term loans from banks:

(a) Term loan of ? 31,384.70 lakhs (31 March 2021: ? 31,389.86 lakhs) is secured by way of (i) equitable mortgage of properties situated at Gurugram owned by the Company (refer note 58) and (ii) corporate guarantee provided by the subsidiary company for the said immovable properties, which is in the process of release.

(b) Term loan of ? 91,415.59 lakhs (31 March 2021: ? 116,314.92 lakhs) is secured by way of (i) equitable mortgage of properties situated at Gurugram, Indore, Panchkula and New Delhi owned by the Company and subsidary companies (refer note 58), (ii) corporate guarantee provided by the subsidiary companies owning the aforesaid immovable properties. Further, corporate guarantee provided by one of the subsidiary company for the said immovable properties, which is in the process of release and (iii) charge on receivables pertaining to the aforesaid immovable properties owned by the Company and subsidary companies.

(c) Term loan of ? 600.00 lakhs (31 March 2021: ? 7,500.00 lakhs) is secured by way of (i) equitable mortgage of properties situated at Gurugram owned by the Company (refer note 58) and (ii) corporate guarantee provided by the subsidiary company for the said immovable properties is in the process of release.

(d) Term loan of ? 14,000.00 lakhs (31 March 2021: ? 29,200.00 lakhs) is secured by way of pari-passu on equitable mortgage of immovable property situated at New Delhi owned by a subsidiary company.

(e) Term loan of ? Nil (31 March 2021: ? 12,158.75 lakhs) is secured by way of (i) equitable mortgage of properties situated at New Delhi owned by a subsidiary company, (ii) corporate guarantee provided by certain subsidiary companies owning the aforesaid immovable properties and (iii) charge on receivables pertaining to the aforesaid immovable properties owned by the subsidiary company. The said loan has been pre-paid during the year.

(f) Term loan of ? 25,000.00 lakhs (31 March 2021: ? 25,000.00 lakhs) is secured by way of equitable mortgage of properties situated at Gurugram owned by the Company (refer note 58) and (ii) corporate guarantee provided by the subsidiary company for the said immovable properties, which is in the process of release.

Loans from related parties:

Unsecured loan of ? 3,352.77 lakhs (31 March 2021: ? 14,150.23 lakhs) repayable as demanded by the lender.

Loan covenants:

Borrowings (other than loans from related parties) contain certain debt covenants relating to security cover, net debt to tangible net worth ratio, debt-equity ratio, minimum tangible net worth and asset coverage ratio. The Company has satisfied all debt covenants prescribed in the terms of term loan.

The Company has not defaulted on any loans payable.

Performance obligation

Information about the Company's performance obligations for material contracts are summarised below:

The performance obligation of the Company in case of sale of residential plots and apartments and commercial office space is satisfied once the project is completed and control is transferred to the customers.

The customer makes the payment for contracted price as per the installment stipulated in the respective Buyer's Agreement.

Revenue from co-development projects

Co-development projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the co-developer agreements. Under such contracts, assets created do not have an alternative use and Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project.

The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognised immediately.

The transaction price of the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March 2022 is ? 562,194.85 lakhs (31 March 2021: ? 683,325.03 lakhs). The same is expected to be recognised within 1 to 3 years.

a) During the year, one of the investee company had defaulted in meeting its debt obligation mainly due to project execution delays arising out of disruption caused by Covid-19 pandemic. Subsequent to the year end, the lender has issued notice for e-auction of the project. Also, very recently, the lender has served notices to initiate legal proceedings for alleged contravention related to loan agreement against the investee company, its directors and shareholders. The Company is in the process of evaluating and has replied/ replying to the notices, however, based on initial understanding with the legal counsels, the management believes that there will not be any further financial implications due to this.

The management as an abundant caution had considered an impairment provision of ? 23,518.87 lakhs on a best estimate basis and is confident that no further provision is required at this stage.

With regard to above, management used the available information, expert advice, consequential delays expected and expectation of possible resolution of the matter to arrive at the impact on the carrying value of its investments.

b) During the previous year, in view of Covid-19 situation, the Company had experienced adverse trends in recovering interest on delayed payments from customers. The Company had reassessed such receivables from the customers and recognized a provision during the year ending 31 March 2021: ? 4,535.87 lakhs against those receivables.

Investments in equity shares of subsidiaries, associates and joint ventures are measured at cost as per Ind AS 27, "Separate

Financial Statements” and are not required to be disclosed here.

* including non-convertible redeemable debentures issued by the Company. Since there is no comparable instrument having the similar terms and conditions with related security being pledged, the carrying value of the debentures represents the best estimate of fair value.

37. FINANCIAL RISK MANAGEMENT

The Company's principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, derivative assets and cash and cash equivalents that derive directly from its operations.

i) Risk management objectives and policies

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The Company's senior management is supported by a Finance Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance Committee provides assurance to the Company's senior management that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

A) Credit risk

Credit risk is the risk that a counter party fails to discharge its obligation to the Company under a financial instrument or customer contract leading to a financial loss. The Company's exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables including contract assets and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortized cost includes loans to employees, security deposits and other credit risk related to other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk

B: Moderate credit risk

C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written-off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written-off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

Expected credit loss for trade receivables under simplified approach

The Company's trade receivables in respect of projects does not have any expected credit loss as registry of properties sold is generally carried out once the Company receives the entire payment. During the periods presented, the Company made ? Nil (31 March 2021: ? 2,340.60 lakhs) provision towards interest receivable from customers. In respect of other trade receivables, the Company considers provision for lifetime expected credit loss. Given the nature of business operations, the Company's trade receivables has low credit risk as the Company holds security deposits equivalents ranging from three to six months rentals. Further, historical trends indicate any shortfall between such deposits held by the Company and amounts due from customers have been negligible.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Maturities of financial liabilities

The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities.

C) Market Risk

a) Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates. The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company's functional currency.

The Company manages its foreign currency risk by hedging transactions. The Company has taken forward contract to hedge its cash flows related to foreign currency transactions covering the entire duration of the foreign currency loan. During the year and previous year, the Company hedged 100% of its foreign currency borrowings.

The Company's exposure to foreign currency changes for unhedged transactions are not material, therefore not disclosed.

b) Interest rate riski) Liabilities

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings keeping in view of current market scenario.

Interest rate risk exposure

ii) Assets

The Company's fixed deposits, interest bearing security deposits and loans are carried at fixed rate. Therefore, the said assets are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

c) Price risk

The company's exposure to price risk arises from investments held and classified as FVTPL and FVOCI. To manage the price risk arising from investments in mutual funds, the Company diversifies its portfolio of assets.

Sensitivity analysis

d) Legal, taxation and accounting risk

The Company is presently involved into various judicial, administrative, regulatory and litigation proceedings concerning matters arising in the ordinary course of business operations including but not limited to personal injury claims, landlord-tenant disputes, commercials disputes, tax disputes, employment disputes and other contractual disputes. Many of these proceedings seek an indeterminate amount of damages. In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, the Company records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings is assessed and the estimates are revised, if necessary.

To mitigate these risks, the Company employs in-house counsel and uses third party tax & legal experts to assist in structuring significant transactions and contracts. The Company also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

Change to any of the above laws, rules, regulations related to the Company business could have a material impact on its financial results. Compliance with any proposed changes could also result in significant cost for the Company. Failure to fully comply with various laws, rules and regulations may expose the Company to proceedings which may materially affect its performance.

38. CAPITAL MANAGEMENT

The purpose of the Company's capital management is:

- Maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the carrying amount of equity and net debt (adjusted for cash and cash equivalents) as presented on the face of balance sheet.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders or issue new shares.

During the year, the Company has paid final dividend for the year ended 31 March 2021 amounting to ? 49,506.23 lakhs (proposed in the previous year ? Nil) @ ? 2/- per equity share to its shareholders. The Company has received dividend of ? 33,355.94 lakhs from one of its joint venture company during the year. With effect from 1 April 2020, the Dividend Distribution Tax ('DDT') payable by the Company under Section 115O of Income-tax Act, 1961 was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

During the previous year, the Company had paid final dividend for the year ended 31 March 2020 amounting to ? 19,802.49 lakhs (proposed in the previous year ? 19,802.49 lakhs) @ ? 0.80 per equity share to its shareholders. The Company has received dividend of ? 19,620.82 lakhs from one of its joint venture company during the previous year. With effect from 1 April 2020, the Dividend Distribution Tax ('DDT') payable by the Company under Section 115O of Income-tax Act, 1961 was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

41. OTHER STATUTORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2022 AND 31 MARCH 2021:

(i) The Company do not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(ii) The Company does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013.

(iii) The Company does not have any charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company do not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961).

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or Government or any Government authority or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(ix) The Company has complied with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 from the date of their implementation.

42. The Company has entered into business development agreements with certain entities for acquisition of sole irrevocable development rights in identified land which are acquired/or in the advanced stages of being acquired by these entities.

In terms of accounting policy stated in Note 2.2(h), the amount paid to these entities pursuant to the above agreements for acquiring development rights are classified under inventory as development rights.

43. EMPLOYEE BENEFIT OBLIGATIONSa) Provident fund

The Company offers its employees, benefits under defined benefit plans in the form of provident fund scheme which cover all its group employees. The provident fund trust set-up by the Company is treated as a defined benefit plan since the Company has to meet the interest shortfalls, if any. Both the employees and the Company pay predetermined contributions in the trust. Contribution made by the Company to the provident fund trust during the year is ? 650.51 lakhs (31 March 2021: ? 548.02 lakhs). In this regard, actuarial valuation as on 31 March 2022 and 31 March 2021 was carried out to measure the obligation using projected unit credit method arising due to interest rate guarantee by the Company towards provident fund. In terms of said valuation the Company has no liability towards interest rate guarantee as on 31 March 2022.

b) Gratuity plan (non-funded)

The Company has a defined benefit gratuity plan, which is unfunded. The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employee's last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The weighted-average duration of the defined benefit obligation is 10.70 years (31 March 2021: 11.07 years).

Risks associated with plan provisions

The Company is exposed to number of risks in the defined benefit plans. Most significant risks pertaining to defined benefit plans and management's estimation of the impact of these risks are as follows:

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Interest rate risk

A decrease in interest rate in future years will increase the plan liability.

Life expectancy risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Withdrawals Risk

Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact the plan liability.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss:

a) During the year, two of the wholly-owned subsidiary companies have acquired 100% equity stake in 35 Indian companies at a consideration of ? 3,487.40 lakhs. Consequently, these companies have become wholly-owned subsidiaries of the Company w.e.f. 11 June 2021.

b) During the year, one of the partnership firm has disposed-off its stake in Daffodil Hotels Private Limited.

c) During the year, w.e.f. 23 July 2021, partnership firm 'DLF Office Developers' is converted into a Private Limited Company i.e. DLF Office Developers Private Limited'.

d) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 14 September 2021 the said entities have been merged with Akina Builders & Developers Private Limited.

e) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 27 September 2021 the said entities have been merged with Atherol Builders & Developers Private Limited.

f) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 27 September 2021 the said entities have been merged with Hoshi Builders & Developers Private Limited.

g) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 27 September 2021 the said entity has been merged with Arlie Builders & Developers Private Limited.

h) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 22 September 2021 the said entities have been merged with Ananti Builders & Construction Private Limited.

i) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 7 September 2021 the said entities have been merged with Qabil Builders & Developers Private Limited.

j) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 7 September 2021 the said entity has been merged with Sagardutt Builders & Developers Private Limited.

k) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 8 September 2021 the said entities have been merged with Vamil Builders & Developers Private Limited.

l) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 9 September 2021 the said entity has been merged with Uncial Builders & Constructions Private Limited.

m) During the year, pursuant to the order passed by the Hon'ble Regional Director, Northern Region, New Delhi vide order dated 7 September 2021 the said entity has been merged with Verano Builders & Developers Private Limited.

n) During the year, pursuant to the order passed by the Hon'ble National Company Law Tribunal (NCLT), Chandigarh vide order dated 2 February 2022 the said entities have been merged with DLF Limited and is effective from 1 April 2021. Refer note 58.

o) During the previous year, one of the subsidiary company had disposed-off its subsidiary Hemadri Real Estate Developers Private Limited, for an aggregate consideration of ? 400.00 lakhs at fair value.

p) DLF Home Developers Limited, one of the wholly-owned subsidiary company of the Company holds Compulsorily Convertible Preference Shares (CCPS) in Arizona Globalservices Private Limited (Arizona). These are convertible at the option of the investor. If these are converted (also considering the terms and conditions of the agreement), it will assure significant influence over Arizona by the wholly-owned subsidiary company. Hence, Arizona has been classified as an associate company.

45. DISCLOSURES UNDER IND AS 24 - RELATED PARTY TRANSACTIONS

a) Holding company

Rajdhani Investments & Agencies Private Limited

b) Fellow subsidiary/ partnership firms

DLF Urva Real Estate Developers & Services Private Limited (fellow subsidiary company)#

Lion Brand Poultries (partnership firm)

# As per the Hon'ble NCLT order dated 8 October 2021, this Company has been merged with the holding Company i.e. Rajdhani Investments & Agencies Private Limited.

Terms and conditions of transactions with related parties:

1. The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured, interest free and settlement occurs by cheque/ RTGS.

2. The Company has given loan to related parties which are repayable on demand. These loans are provided at interest rates of 7.50% (31 March 2021: 7.50%) p.a. to subsidiary companies and at interest as per agreement to joint ventures. The loans have been utilized by the related parties for business purposes.

3. The Company has given corporate guarantee to the bank's in respect of loan taken by the subsidiaries/ associate companies and joint ventures from that bank's and financial institution's and vice-versa.

4. The Company provides business and financial support to certain subsidiaries/ associate companies, which are in losses and are dependent on the Company for meeting out their cash requirements.

• There are no transactions of loans and advances to subsidiaries/ associates/ firms/ others in which Directors are interested other than as disclosed above.

• There are no loans and advances in the nature of loans where there is no repayment schedule or repayment beyond seven years or no interest or interest under Section 186 of the Companies Act, 2013.

• Does not include investment in non-convertible debentures of ? 20,000 lakhs (refer note 6A).

b) i) Security provided in favour of Axis Trustee Services Limited, for the benefit of Standard Chartered Bank Limited and its assignees by way of mortgage of its immovable property situated at Gurugram in respect of the term loan facilities of ? Nil (31 March 2021: ? 160,575.76 lakhs) availed by DLF Cyber City Developers Limited, a joint venture company.

ii) Security provided in favour of Housing Development Finance Corporation Limited by way of (i) mortgage of its immovable property situated at Gurugarm, (ii) charge on receivables pertaining to the aforesaid immovable property in respect of the term loan facilities of ? 22,867.95 lakhs (31 March 2021: ? 134,519.59 lakhs) availed by DLF Home Developers Limited, a subsidiary company.

iii) Security provided in favour of Vistra ITCL (India) Limited, for the benefits of NCD holder, Axis Bank Limited and Standard Chartered Bank and their assignees by way of mortgage of its immovable property situated at Gurugram in respect of the non-convertible debentures and term loan facilities of ? 117,022.06 lakhs (31 March 2021: ? 123,907.06 lakhs) availed by DLF Cyber City Developers Limited, a joint venture company.

iv) Security provided in favour of Axis Trustee Services Limited, for the benefit of Housing Development Finance Corporation Limited and Standard Chartered Bank and its assignees by way of mortgage of its immovable property situated at Gurugram in respect of the term loan facilities of ? 167,952.28 lakhs (31 March 2021: ? Nil) availed by DLF Cyber City Developers Limited, a joint venture company.

v) The Company had executed a Share Pledge Agreement dated 26 December 2017, for providing security by way of creating pledge on 37,500 Equity Shares (equivalent to 37.50%) of ? 100/- each held by the Company in Joyous Housing Limited ("Joyous”), a joint venture company, in favour of PNB Housing Finance Limited ("PNBHFL') to secure the credit facility up to ? 80,000.00 lakhs ["Credit Facility”] availed by Joyous.

48. COMPANY AS A LESSEE

i) The Company's leased assets primarily consists of lease for office space, building and equipment for running Golf course operations and SEZ land parcels having lease terms of 3 to 30 years.

The Company recorded the lease liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date of transition and has measured right-of-use asset at an amount equal to lease liability adjusted for previously recognised prepaid or accrued lease payments.

Further, lease arrangements where the Company is lessor, lease rentals are recognized on straight-line basis over the non-cancellable period.

ii) Set-out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

iv) The Company had total cash outflows for leases during the year is ? 3,431.33 lakhs (31 March 2021: ? 3,262.00 lakhs).

v) The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing and aligning with the Company's business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. The right-of-use has been recognized on complete lease terms [see note 2.2(t)].

vi) The maturity analysis of lease liabilities are disclosed in note 37B.

vii) The effective interest rate for lease liabilities is 10% per annum (31 March 2021: 10% per annum) with maturity between 2023-2047 (31 March 2021: 2022-2047).

Company as a lessor

The Company has leased out office and mall premises under non-cancellable operating leases. These leases have terms of between 3-30 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total lease rentals recognised as income during the year is ? 16,611.24 lakhs (31 March 2021: ? 18,958.65 lakhs).

49. COMMITMENTS

i) Estimated amount of contracts remaining to be executed on capital account and not provided for: at 31 March 2022, the Company had commitments of ? 974.61 lakhs (31 March 2021: ? 250.14 lakhs) relating to completion of various projects.

ii) The Company is committed to provide business and financial support to certain subsidiary companies, which are in losses and is dependent on parent company for meeting out their cash requirements. Further, the Company has given letter of support in favour of certain joint ventures/ associate companies for their bank borrowings.

iii) The Company has commitment regarding payments under development agreements with certain partnership firms amounting to ? 138,776.69 lakhs (31 March 2021: ? 139,314.06 lakhs), where the Company or its subsidiaries are partner and certain third-party entities with whom development agreements are in place.

1) a) The Income Tax Authorities had made disallowances of SEZ profits u/s 80IAB of the Income-tax Act,

1961 during tax assessment of the Company raising demands amounting to ? 109.00 lakhs for the assessment year 2015-16; ? 1,056.00 lakhs for the assessment year 2014-15; ? 6,834.00 lakhs for the assessment year 2013-14; ? 7,308.99 lakhs for the assessment year 2011-12; ? 7,284.99 lakhs for the assessment year 2010-11; ? 35,523.71 lakhs for the assessment year 2009-10 and ? 48,723.00 lakhs for assessment year 2008-09 respectively.

The Company had filed appeals before the appropriate appellate authorities against these demands for the said assessment years and have got full relief of ? 106,840.60 lakhs i.e ? 98,841.30 lakhs from the Hon'ble Income Tax Appellate Tribunal against which, the department appeal(s) are pending before the Hon'ble Delhi High Court and ? 7,999.30 lakhs from CIT (Appeals), against which, the department appeal(s) are pending before the Hon'ble Income Tax Appellate Tribunal.

Based on the advice from independent tax experts and the development on the appeals, the management is confident that additional tax so demanded will not be sustained on completion of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been made in these standalone financial statements.

b) During the year, the assessments of the Company for AY 2017-18 to 2019-20 were completed under faceless assessment scheme. In AY 2017-18 and AY 2019-20, the assessing officer disallowed one time losses claimed by the Company on account of mandatory adoption of erstwhile Ind AS 18 "Revenue” read with Guidance Note on Accounting for Real Estate Transactions issued by Institute of Chartered Accountants of India (ICAI) and on account of mandatory adoption of Ind AS 115 "Revenue from contract with customers” respectively. The one time losses were adjusted in the retained earnings of the respective financial years in accordance with the relevant accounting standards. However, the assessing office has allowed alternate claim as per erstwhile AS 7 "Construction Contracts”, read with "Guidance Note on Recognition of revenue by Real Estate Transactions” issued by ICAI, followed by the Company till the year ended 31 March 2016.

The management has filed an appeal against the orders passed by the assessing officer. In AY 2018-19, the alternate claim filed by the Company during assessment proceedings, consequential to disallowance of one-time losses in AY 2017-18, was also not allowed, against which also the Company has preferred an appeal. Further, the management has evaluated the impact of the matter and believes that there will be no tax outflow arising out of this, considering alternative claims are allowed by the assessing officer, however there may be an impact of ? 20,000.00 lakhs approximately on the carrying value of deferred tax asset due to non-adjustment of certain capital losses. Based on legal opinion obtained from tax experts, management is confident that it has a strong likelihood of succeeding in the matter and therefore, no adjustments are required in the standalone financial statements of the Company.

2) Other than matter mentioned at point no. 1 above, the Income Tax Authorities have raised demands on account of various disallowances pertaining to different assessment years. The Company is contesting these demands, which are pending at various appellate levels.

Based on the advice from independent tax experts and the development on the appeals, the management is confident that additional tax so demanded as mentioned in point 1) and 2) above will not be sustained on completion of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been made in these standalone financial statements.

3) There are various disputes pending with the authorities of excise, customs, service tax, GST, sales tax, VAT, property tax etc. The Company is contesting these demands raised by authorities and are pending at various appellate authorities.

Based on the grounds of the appeals and advice of the independent legal counsels, the management believes that there is a reasonably strong likelihood of succeeding before the various authorities. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

4) There are various litigations going on against the Company primarily by Competition Commission of India and in Consumer Redressal Forum, which have been contested by the Company.

Based on the grounds of the appeals and advice of the independent legal counsels, the management believes that there is a reasonably strong likelihood of succeeding before the various authorities. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

5) Interest and claims by customers/ suppliers may be payable as and when the outcome of the related matters are finally determined and hence not been included above.

Management based on legal advice and historical trends, believes that no material liability will devolve on the Company in respect of these matters.

6) Indemnification of DCCDL

a) As per the terms of the SPSHA, the Company has undertaken to indemnify, defend and hold harmless the Investor against all losses incurred or suffered by DCCDL arising out of following matters up to or prior to 25 December 2017 (i.e. Closing Date):

i) Income tax demands related to various matters and assessments year up to the closing date of ? 124,582.76 lakhs (31 March 2021: ? 87,999.67 lakhs);

ii) Indirect tax demands including service tax and entry tax related to various matters and financial years up to the closing date of ? 23,977.29 lakhs (31 March 2021: ? 23,947.93 lakhs);

iii) During the previous years, DLF Utilities Limited ("DUL') (Real estate undertaking of DUL, now merged with DLF Limited (refer note 58)) had received a notice from the Dakshin Haryana Bijli Vitran Nigam ("DHBVN”) wherein it had claimed cross subsidy surcharge of ? 3,328.00 lakhs on electricity being supplied by DUL to other companies for the period from 1 April 2011 to 30 September 2012 and had questioned the legality of such electricity supply. DUL filed an appeal to Haryana Electricity Regulatory Commission ("HERC”), wherein HERC vide order dated 11 August 2011 held that the supply of electricity by DUL was legal, however, DUL was liable to pay cross subsidy surcharge. Aggrieved by the said order, DUL filed an appeal before Appellate Tribunal of Electricity ("APTEL') against the levy of cross subsidy surcharge. APTEL held that the supply of electricity for commercial establishments from the main receiving panel was not in accordance with law and must be discontinued.

Further, APTEL also held that the DUL was liable to pay the cross subsidy surcharge and accordingly, a demand of ? 3,328.00 lakhs was received by DUL from DHBVN against the same. Aggrieved by the order of APTEL, DUL filed an appeal before the Hon'ble Supreme Court of India who has stayed the execution of the said order and asked DUL to deposit an amount of ? 284.36 lakhs to DHBVN which has been duly deposited.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

iv) The land parcel admeasuring 19.5 acres was acquired by the Company from Government of Haryana ('GoH') in August 2006 for development of Cyber City Project, which was earlier acquired by GoH from Gram Panchayat, Nathupur on February 2004 through proceedings of compulsory acquisition. DCCDL had constructed certain portions of its two IT/ IT SEZ buildings of the Cyber City Project as well as entered into third party rights vide lease/ sale of office space in the said buildings. Subsequently, the Hon'ble High Court of Punjab and Haryana, pursuant to a public interest litigation, vide order dated 1 October 2010, quashed the land acquisition proceedings and conveyance deed by GoH and directed the GoH to refund the amount, which was earlier paid by the Company and also directed the Company to remove any construction on the said land. Against the said order, the Company filed a Special Leave Petition in November 2010 before the Hon'ble Supreme Court of India, who vide order dated 3 January 2012, stayed the order of the Hon'ble High Court and the matter is pending disposal before the Hon'ble Supreme Court of India.

During the year, 7 residents of Village Nathupur filed applications for impleadment, which were dismissed vide Order dated 15 March 2022. Further, impleadment application filed by 5 residents of Village Nathupur are pending and to be listed in due course.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India.

v) The Company along with its subsidiaries had acquired a land parcel admeasuring approximately 30 acres and 7 acres respectively from EIH Limited ('EIH') for development of IT/ ITES project at Silokhera, Gurugram, which EIH acquired from GoH. The Company constructed 2 IT/ ITES SEZ Buildings on the said land, which was sold to one of the subsidiary companies of the DCCDL. The Company is constructing another block of buildings on the DCCDLs behalf. The net block and capital work-in-progress against Silokhera project appearing in DCCDLs books as at 31 March 2022 amounts to ? 152,101.71 lakhs (31 March 2021: ? 155,637.12 lakhs) and ? 89,111.05 lakhs (31 March 2021: ? 89,111.05 lakhs) respectively.

Subsequently, the Hon'ble High Court of Punjab and Haryana, pursuant to a public interest litigation and vide its order dated 3 February 2011 directed the GoH to carry out the acquisition proceedings again from the notification stage under the Land Acquisition Act, 1894 and directed the Company and its subsidiary to remove all constructions made on the said land. The Company filed a Special Leave Petition before the Hon'ble Supreme Court of India and the Hon'ble Supreme Court of India vide order dated 20 September 2011 stayed the order of the Hon'ble High Court and the matter is currently pending before the Hon'ble Supreme Court of India and the next date of hearing is yet to be notified by the registry.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

7) Certain other matters pending in litigation with Courts/ Appellate Authorities

a) The Competition Commission of India (CCI) on a complaint filed by the Belaire/ Park Place owners association had passed orders dated 12 August, 2011 and 29 August, 2011 wherein the CCI had imposed a penalty of ? 63,000.00 lakhs on DLF Limited ("DLF” or "the Company”) or, restraining DLF from formulating and imposing allegedly unfair conditions with buyers in Gurugram and further ordered to suitably modify the alleged unfair conditions on its buyers.

The said orders of CCI were challenged by DLF on several grounds by filing appeals before the Competition Appellate Tribunal (COMPAT). The COMPAT, pending hearing and till final orders had granted stay on demand of penalty of ? 63,000.00 lakhs imposed by CCI.

COMPAT vide its order dated 19 May 2014 accepted the arguments of DLF that since the agreements were entered into prior to coming into force of Section 4 of the Competition Act, 2002, the clauses of the agreements entered in 2006-07 could not be looked into for establishing contravention of Section 4 of the Competition Act, 2002, however COMPAT held that the Company is a dominant player in Gurugram being the relevant market and has abused its dominant position in relation to certain actions which is violative of Section 4 of the Competition Act, 2002 and has accordingly upheld the penalty imposed by CCI.

The Company had filed an appeal in the Hon'ble Supreme Court of India against the order dated 19 May 2014 passed by the COMPAT. The Hon'ble Supreme Court of India vide order dated 27 August 2014 admitted the Appeal and directed the Company to deposit penalty of ? 63,000.00 lakhs in the Court. In compliance of the order, the Company had deposited ? 63,000.00 lakhs with the Hon'ble Supreme Court of India and is continued to be shown as recoverable.

Company filed an application seeking refund of ? 63,000.00 lakhs with interest accrued thereon and the Hon'ble Supreme Court of India has issued notice vide order dated 16 April 2021 on the said application. The matter is to be listed in due course.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

b) During the year ended 31 March 2011, the Company, one of its subsidiaries and a joint venture company received judgements from the Hon'ble High Court of Punjab and Haryana cancelling the sale deeds of land/removal of construction relating to two IT SEZ/ IT Park Projects in Gurugram admeasuring 49.05 acres. The Company and the subsidiary companies filed Special Leave Petitions (SLPs) challenging the orders in the Hon'ble Supreme Court of India.

The Hon'ble Supreme Court of India had admitted the matters and stayed the operation of the impugned judgements till further orders in both the cases.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

c) i) The Securities and Exchange Board of India ('SEBI') had issued a Show Cause Notice (SCN)

dated 25 June 2013 under Sections 11(1), 11(4), 11A and 11B of the SEBI Act, 1992 ('the SEBI Act') read with Clause 17.1 of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 ('DIP Guidelines') and Regulation 111 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ('ICDR Regulations') inter alia alleging that the Company, some of its directors and its erstwhile Chief Financial Officer (CFO) while issuing its Red Herring Prospectus and Prospectus in 2007, had failed to ensure that the Offer Documents contained all material information which is true and correct, to enable the investors to make an informed investment decision in the Issue and actively and knowingly suppressed several material information and facts in the Offer Documents, leading to misstatements in the Offer Documents so as to mislead and defraud the investors in securities market in connection with the issuance of securities.

The Company filed its Reply to the aforesaid SCN denying the allegations contained therein. The Company participated in the personal hearings before the Hon'ble Whole Time Member of SEBI and thereafter filed written submissions in support of its case.

The Hon'ble Whole Time Member of SEBI however did not find favour with the position espoused by the Company and vide order dated 10 October 2014 restrained the Company, certain directors and its erstwhile CFO from accessing the securities market and prohibited them from buying, selling or otherwise dealing in securities, directly or indirectly, in any manner, whatsoever, for a period of three years.

The Company and other persons aggrieved by the order dated 10 October 2014 filed appeals before the Hon'ble Securities Appellate Tribunal ('Hon'ble SAT'), which vide majority order dated 13 March 2015 allowed all the appeals and the order dated 10 October 2014 passed by SEBI was quashed and set aside.

Assailing the Hon'ble SAT's order dated 13 March 2015, SEBI filed a statutory appeal under Section 15Z of the SEBI Act against the Company before the Hon'ble Supreme Court of India. On 24 April 2015, the Hon'ble Supreme Court of India admitted the appeals filed by SEBI against the Company and issued notice on interim application. No stay has been granted by the Hon'ble Supreme Court of India in favour of SEBI.

In October 2015, SEBI filed applications before the Hon'ble Supreme Court in some of the pending civil appeals seeking, inter-alia, restraint on the Company, its promoters and/ or directors from proceeding with the sale of 15,96,99,999 Cumulative Compulsorily Convertible Preference Shares of DLF Cyber City Developers Limited held by the promoter group companies to third party institutional investors ('the Transaction'). The matter is to be listed in due course.

The Petitioner "Kimsuk Krishna Sinha” had filed applications to withdraw various appeals filed against the Company and its subsidiaries. The withdrawal applications were allowed by the Hon'ble Supreme Court vide Orders dated 30 July 2020 and 25 August 2020.

ii) SEBI issued a SCN dated 28 August 2013 under Sections 15HA and 15HB of the SEBI Act and under Rule 4 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules,1995 ('Adjudication Rules') making allegations similar to the SCN dated 25 June 2013. The Company filed its Reply to the same opposing the allegations made against it. Similar SCNs were also issued to three subsidiaries, their directors and certain other entities.

By way of order dated 26 February 2015, the Adjudicating Officer, SEBI imposed monetary penalties upon Company, some of its Directors, its erstwhile CFO, its three subsidiaries and their Directors under Section 15HA and under Section 15HB of the SEBI Act.

The Company and other parties aggrieved by the aforesaid order filed appeals before the Hon'ble SAT against the aforesaid order dated 26 February 2015. When these appeals were listed before Hon'ble SAT on 15 April 2015, SEBI's counsel under instructions stated that during the pendency of the said appeals, the Order dated 26 February 2015 would not be enforced. The Hon'ble SAT vide its order passed on 25 April 2018 held that in view of Hon'ble SAT's majority decision dated 13 March 2015, the SEBI Order dated 26 February 2015 cannot be sustained.

Accordingly, the Hon'ble SAT disposed off the appeals with a direction that these appeals, shall stand automatically revived once the Hon'ble Supreme Court disposes of the civil appeals filed by SEBI against the Hon'ble SAT's judgement dated 13 March 2015.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

d) The petitions were filed before the Hon'ble Punjab and Haryana High Court challenging the action of the Haryana Government to acquire the land belonging to Gram Panchayat of village Wazirabad, District Gurugram for public purpose and thereafter selling the same to the Company, seeking directions from the court for quashing of the acquisition proceedings under Sections 4 and 6 dated 8 August 2003 and 20 January 2004.

The petitioners therein also sought quashing of the award dated 19 January 2006 and the regular letter of allotment (RLA) dated 9 February 2010 issued in favour of the Company for 350.715 acres of land. The Company has paid ? 99,969.26 lakhs to government towards purchase of this land out of total consideration of ? 182,437.49 lakhs.

The Hon'ble Punjab and Haryana High Court, vide its final order dated 3 September 2014, while upholding the acquisition of land has however disapproved the allotment in favour of the Company. The Hon'ble High Court passed an order to keep the RLA dated 9 February 2010 issued in favour of the Company in abeyance and further directed the Haryana State Industrial and Infrastructure Development Corporation ('HSIIDC') to initiate fresh allotment process for higher returns in respect of the land in question with an option to State to revive the RLA in case no better bid is quoted by the public at large.

The Company has filed a Special Leave Petition before the Hon'ble Supreme Court of India challenging the judgement dated 3 September 2014 passed by the Hon'ble Punjab and Haryana High Court. The Hon'ble Supreme Court of India issued notice to the respondents and directed status quo to be maintained by the parties.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements..

e) The Company has filed a Special Leave Petition (SLP) against the order dated 2 December 2016 passed by the Hon'ble Punjab and Haryana High Court in Writ Petition No.12210 of 2013 challenging the findings and directions passed by the Hon'ble High Court requiring DLF to allocate additional land measuring 10.6 Acres for DLF Park Place complex. DLF has taken the ground that after having rejected the contentions of the association on the claim of extra land based on FAR and PPA norms, the Hon'ble High Court could not have passed the order for allocation of additional land based on the representations made in the Brochure. The Company has further raised the ground that Hon'ble High Court has given a complete go by to the terms and conditions of the binding agreement where it was specifically provided the area of Park Place as 12.67 acres granted leave in the Special Leave Petition.

Against the same order, DLF Park Place Residents Welfare Association has also filed an SLP before the Supreme Court on the grounds that the High Court has misinterpreted the statutory provisions of

the applicable law to hold that GH Park Place is not a separate and independent Company Housing Complex but is part of DLF Phase-V constructed over 476.42 Acres having 15 Company Housing Complexes. In accordance with the FAR ratio of 1:1.75, the association was entitled to additional land of 46.20 Acres on the total constructed area which has not been considered by the Hon'ble High Court.

The Court after hearing, granted leave in the SLPs. The appeals will be listed for arguments before Hon'ble Supreme Court of India in due course.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that there is a strong likelihood of succeeding before the Hon'ble Supreme Court of India. Pending the final decisions on the above matter, no adjustment has been made in these standalone financial statements.

f) During the year, Company has initiated the arbitration proceedings against Haryana Urban Development Authority (HUDA) in respect to outstanding amount of ? 6,002.90 lakhs recoverable under a joint development agreement entered with HUDA for construction of certain roads and underpass in Gurugram, Haryana on 50:50 cost sharing basis.

Based on the advice of the independent legal counsels and grounds of appeal, the management has assessed that claims by the Company are as per terms of agreement entered with HUDA and based on merits of the case, there is a strong likelihood of a favorable outcome for the Company in aforesaid case.

52. SEGMENT REPORTING

The Company's business activities which are primarily real estate development and related activities falls within a single reportable segment as the management of the Company views the entire business activities as real estate development. Accordingly, there are no additional disclosures to be furnished in accordance with the requirement of Ind AS 108 - Operating Segments with respect to single reportable segment. Further, the operations of the Company is domiciled in India and therefore there are no reportable geographical segment.

54. The investments made in related parties are long-term and strategic in nature. Further, loans, guarantees and securities given are for meeting business and working capital requirements.

55. The Company had entered into an operation and management agreement with DLF Golf Resorts Limited ("DGRL”), a wholly-owned subsidiary of the Company. As per the agreement, DGRL transfers 97% revenue generated and expenses incurred during the year to the Company and the remaining 3% is retained by DGRL for operation and management services provided to the Company. Accordingly, revenues of ? 8,501.49 lakhs (31 March 2021: ? 6,870.15 lakhs) and expenses of ? 6,309.02 lakhs (31 March 2021: ? 5,274.52 lakhs) [including ? 5,494.27 lakhs (31 March 2021: ? 4,662.54 lakhs) transferred from DGRL] pertaining to golf course operations, further depreciation of ? 1,185.02 lakhs (31 March 2021: ? 1,185.02 lakhs) in respect of assets taken on lease for golf operations has been recognized in these standalone financial statements.

57. Consequent to the uncertainties/ disruptions caused due to continuation of pandemic, the Company has made assessment of impact of this pandemic on its business operations and has made assessment of its liquidity position for the next one year and believes that there is no significant impact of Covid-19 on the Company's business operations. The Company has assessed the recoverability and carrying value of its assets comprising property, plant and equipment, investment properties, intangible assets, right of use assets, investments, inventory, advances, trade receivables, deferred taxes, other financial and non-financial assets etc. as at year end using various internal and external information up to the date of approval of these standalone financial statements. Based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets. Changing situation of pandemic is giving rise to inherent uncertainty around the extent and timing of the potential future impact of the COVID-19 pandemic which may be different from that estimated as at the date of approval of these standalone financial statements and the Company will continue to closely observe the evolving scenario and take into account any future developments arising out of the same.

58. SCHEME OF ARRANGEMENT (THE "SCHEME")

During the year, the Hon'ble National Company Law Tribunal ("NCLT”), Chandigarh Bench vide its Order dated 2 February 2022, has approved the Scheme of Arrangement involving merger/ demerger of wholly-owned subsidiary companies, namely DLF Phase-IV Commercial Developers Limited, DLF Real Estate Builders Limited, DLF Residential Builders Limited ("Transferor Companies”) and demerger and Transfer/ Vesting

of real estate undertaking of DLF Utilities Limited ("Demerged Company”) with DLF Limited ("Transferee Company”) pursuant to Section 230-232 and other relevant provisions of the Companies Act, 2013 read with the Rules made thereunder with the appointed date as 1 April 2021. The Company has applied principles of Appendix C to Ind AS 103 - 'Business Combinations' on 'Business Combinations of entities under Common Control' w.e.f. 1 April 2020 and accordingly previous year numbers including disclosures have been restated to give the effect to the scheme as if the common control business combination had occurred from the beginning of the earliest period presented irrespective of actual date of the combination.

The Transferor Companies and the Demerged Company are wholly-owned subsidiaries of the Company who are engaged in the business which inter-alia includes real estate activities and carrying on business activities in terms of their respective Memorandum of Association.

Pursuant to the Scheme:

• All the assets, rights, power, liabilities and duties of the Transferor Companies and Demerged Company vested/ transferred in the Transferee Company as going concern from the appointed date and the Transferor Companies were dissolved without the process of winding up;

• The identity of reserves of the Transferor Companies and Demerged Company is incorporated in the books of the Transferee Company in the same form as they appeared in the financial statements prior to the Scheme coming into effect;

• The carrying value of investment held by the Transferee Company in equity and preference shares of the Transferor Companies/ Demerged Company is cancelled and the amount of investment is reduced by the book value of net assets of the Transferor Companies/ Demerged Company as reduced by reserves accounted for in accordance with the Scheme has been debited to Capital Reserve. Since the Transferor Companies/ Demerged Company were wholly-owned subsidiaries of Transferee Company, no shares have been issued as a consideration of the amalgamation; and

• The inter-company balances between the Transferee Company and the Transferor Companies/ Demerged Company, appearing in the books of the Transferee Company have been eliminated.

Accordingly, all the debts, liabilities, duties and obligations present and future pertaining (including guarantees/ securities by whatever name called) to the Transferor Companies/ Demerged Company including the contingent liabilities will transferred and vested in the Transferee Company.

The Scheme will benefit both, the Transferor Companies/ Demerged Company and Transferee Company. The rationale and reasons for the Scheme, inter-alia are summarized below:

• To enable the Demerged Company to focus more specifically on the business of Facility Management Services as an exclusive entity and to concentrate on developing and achieving expertise towards facility management business strategies and decision making as the nature of risks, considerations, factors and commercial parameters applicable to the business being divergent in nature;

• Better, efficient and economical management, cost savings, pooling of resources, reduction of corporate tiers, creating better synergy across the group, optimum utilization of resources, rationalization of administrative expenses/ services, control and running of businesses and further development and growth of the business;

• Enable pooling of financial, commercial and other resources and considerable synergy of operations would be achieved from business and administrative point of view and conserve administrative resources and cost overheads; and

• To achieve better financial and business prospects.

59. During the previous year (a) Rates and taxes includes adjustment of input tax credit (ITC) of Goods and Services Tax (GST) amounting to ? 7,012.22 lakhs pursuant to change in methodology of allocation of common ITC of GST and other adjustments based on advise from tax experts; (b) Tax Expenses includes settlement of tax demand of ? 214.11 lakhs in accordance with Direct Tax Vivad se Vishwas Act, 2020.

60. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Based on the preliminary assessment the entity believes the impact of the change will not be significant

61. The figures for the corresponding previous year have been regrouped/ reclassified, wherever considered necessary including requirements of the amended Schedule III to the Companies Act, 2013, to make them comparable with current year classification.