Dear Members,
The Board of Directors take pleasure in presenting their 59th Annual Report on the business and operations of the Company, together with the audited financial statements for the Financial Year (FY) ended 31 March 2024.
Financial and Operational Highlights
Financial Performance Review and Analysis
The Company delivered a strong financial performance during the period. Consolidated revenue (including other income) grew to 6,958 crore, delivering a 16% growth as compared to the previous year.
Total operating expenses (excluding finance costs, depreciation and amortisation expenses) were 4,303 crore. Consolidated EBITDA continued to improve and increased to 2,655 crore, reflecting a strong growth of 30% from the previous year. Total comprehensive income witnessed a robust Y-o-Y growth of 33% and stood at 2,730 crore during the year.
DLF Cyber City Developers Limited
DLF Cyber City Developers Limited (DCCDL) reported a consolidated total income of 5,897 crore, reflecting 9% growth over the previous period, primarily led by the rental growth in the office and retail portfolio. DCCDL's consolidated EBITDA stood at 4,478 crore in FY 2023-24 in comparison to 4,139 crore in FY 2022-23. Total comprehensive income stood at 1,690 crore, reflecting 18% growth over the last year.
Review of Business Development Business
The development business exhibited strong performance across all parameters. Sustained demand momentum along with a diversified pipeline of new products resulted in the residential business delivering persistent healthy performance for the period.
DLF's Luxury offering - DLF Privana South at Sector 76-77 in Gurugram, witnessed a strong response from the customers which resulted in complete sell out of the Project, ahead of its official launch, garnering new sales bookings of Rs 7,200 crore. The project stands as a continued testament of the strong demand for luxury residential projects from a credible brand, offering an aspirational lifestyle. Your Company continued to witness similar response to its other offerings across multiple markets and segments.
Rental Business
The rental business also delivered a strong performance during the period resulting in an improved portfolio occupancy at 93% at the end of the fiscal.
The retail business continued its growth trajectory by delivering 18% growth as compared to the previous year. All the retail malls continue to operate at high occupancy levels and deliver healthy growth. Outlook towards this segment remains positive and hence expansion plans in this segment remain on track.
Dividend
The Board has recommended a dividend of 5/- per equity share (250%) (previous year 4/- per equity share) of the face value of 2/- each for FY 2023-24, payable to those shareholders, whose names appear in the Register of Members/ list of Beneficial Owners, provided by the Depositories, on the record date. The total outgo on account of payment of dividend for FY 2023-24 would be 1,237.65 crore (previous year 990.12 crore).
The dividend payout is in accordance with the prevalent applicable laws and the Company's Dividend Distribution Policy, pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (‘SEBI Listing Regulations'). The said policy is available on the website of the Company at https://www.dlf.in/pdf/ DividendDistributionPolicy.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 2023-24.
Transfer to Reserves
During FY, the Company has not transferred any amount to the general reserve. The closing balance of the retained earnings of your Company for FY 2023-24, after all appropriations and adjustments, was 1,263.88 crore.
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:
Public Deposits
During the year under review, the Company has neither invited nor accepted/ renewed any deposits from the public within the meaning of Section 73 and 74 of the Companies Act, 2013 (the ‘Act') read with the Companies (Acceptance of Deposits) Rules, 2014.
Holding Company
Rajdhani Investments and 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 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, respectively and form part of this Report.
Subsidiaries, Joint Ventures, Associate Companies and Consolidated Financial Statements
As on 31 March 2024, the Company had 139 with Stable 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 form part of this Report.
Pursuant to the provisions of Section 129(3) of the Act and SEBI Listing Regulations, the Consolidated Financial Statements of the Company were prepared in accordance with the applicable Ind AS and form 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 form 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 2024, your Company has four material subsidiaries, namely DLF Cyber City Developers Limited (Debt Listed), DLF Home Developers Limited (Debt Listed), DLF Assets Limited and DLF Power & Services Limited.
Amalgamation/ Arrangement
A. Scheme of Amalgamation/ Arrangement sanctioned by the Hon'ble National Company Law Tribunal, Chandigarh Bench (NCLT, Chandigarh)
1. DLF Golf Resorts Limited and DLF Homes Services Private Limited (Transferor Companies) were merged with DLF Recreational Foundation Limited (Transferee Company), vide order dated 15 June 2023, w.e.f. the Appointed date of 1 April 2021.
2. Gavel Builders & Constructions Private Limited, 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) were merged with DLF Homes Panchkula Private Limited (Transferee Company), vide order dated 25 August 2023, w.e.f. 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) were merged with DLF Utilities Limited (Transferee Company), vide order dated 16 April 2024, w.e.f. the Appointed date of 1 January 2023.
B. Scheme of Amalgamation/ Arrangement filed/ pending before the Hon'ble National Company Law Tribunal, Chandigarh Bench (NCLT, Chandigarh)
1. 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.
2. 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.
3. 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).
Management Discussion and Analysis Report
The Management Discussion and Analysis Report, as required under Regulation 34 read with Schedule V of 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 Regulation 17 to 27 and Clause (b) to (i) and (t) of Regulation 46(2) and Paragraph C, D and E of Schedule V of the SEBI Listing Regulations, forms part of the 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 annexed to the Corporate Governance Report.
Directors and Key Managerial Personnel
During FY 2023-24, Mr. Rajiv Krishan Luthra, Independent Director and Mr. Gurvirendra Singh Talwar, Non-executive Director, ceased to be Directors of the Company, due to their sad and untimely demise on 10 May 2023 and 27 January 2024, respectively.
The Board of Directors expressed their deep condolences and took on record the valuable contribution made by them.
During FY 2023-24, the shareholders vide their respective resolution(s) had appointed Mr. Ashok Kumar Tyagi and Mr. Devinder Singh as Managing Directors, liable to retire by rotation, for a term co-terminus with their existing tenure as CEO and Whole-time Directors i.e. up to 30 November 2027.
Further, the shareholders vide their respective resolution(s) had also approved appointment of Dr. Umesh Kumar Chaudhary as an Independent Director, not liable to retire by rotation, for a term of 5 (five) consecutive years w.e.f. 4 August 2023 and re-appointment of Ms. Priya Paul as an Independent Woman Director, not liable to retire by rotation, for a second term of 5 (five) consecutive years w.e.f. 1 April 2024.
Mr. Ved Kumar Jain and Mr. Pramod Bhasin, upon completion of their second term, ceased to be Independent Directors of the Company w.e.f. the close of business hours on 31 March 2024.
The Board in its meeting held on 27 March 2024 had approved the appointment of Lt. Gen. Ajai Singh (Retd.) as an Independent Director, not liable to retire by rotation, for a term of 5 (five) consecutive years w.e.f. 1 April 2024 and re-appointment of Mr. Rajiv Singh as Whole-time Director designated as Chairman of the Company, not liable to retire by rotation, for a period of 5 (five) years w.e.f. 9 April 2024. The approval of shareholders has been proposed for the appointment of Lt. Gen. Ajai Singh (Retd.) and re-appointment of Mr. Rajiv Singh by way of Postal Ballot notice dated 27 March 2024.
Pursuant to the provisions of Section 152 of the Act read with the Articles of Association of the Company, Ms. Anushka Singh and Ms. Pia Singh, Non-executive Directors, are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, have offered themselves for re-appointment. The resolution(s) seeking members approval for their re-appointment form part of the AGM Notice. The Board of Directors of your Company has recommended their re-appointment.
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 Standard on General Meetings, is provided in the Corporate Governance Report and Notice convening the AGM.
Further, Mr. Vivek Anand has resigned as Group Chief Financial Officer of the Company w.e.f. the close of business hours on 29 February 2024.
Subsequent to FY, the Board of Directors in its meeting held on 13 May 2024 appointed Mr. Ashok Kumar Tyagi as Chief Financial Officer (CFO) of the Company in addition to his existing role and responsibilities as the Managing Director of the Company.
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, Managing Director and CFO, Mr. Devinder Singh, Managing Director and Mr. R.P. Punjani, Company Secretary and Compliance Officer.
Directors' Responsibility Statement
In terms of the provisions of Section 134(5) of the Act, your Directors confirm that for the year ended 31 March 2024:
(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 judgments 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 2024 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 fulfill conditions specified in Section 149(6) of the Act and Regulation 16(1)(b) and 25(8) of the SEBI Listing Regulations.
Further, the Board is of the opinion that the Independent Directors of the Company uphold the highest standards of integrity and possess the requisite expertise and experience required to fulfill their duties as Independent Directors.
Confirmation by Directors regarding Directorship(s)/ Committee Position(s)
Based on the disclosures received, number of Directorship(s), Committee Membership(s), Chairmanship(s) of all the Directors are within respective limits prescribed under the Act and SEBI Listing Regulations. Further, none andconfirmedbythe of the Executive Directors of the Company served as an Independent Director in any other listed company.for the Necessary disclosures regarding Committee positions in other public companies as on 31 March 2024 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 Clause 10(i) of Para C of Schedule V 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 7 (seven) times during FY 2023-24. Details of the composition of the Board, its Committees, terms of reference, meetings held and attendance thereat 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 5 (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 remark 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
Sanjay Gupta & Associates, Cost Accountants (FRN: 000212) were appointed as Cost Auditors of the Company for FY 2023-24 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 2023-24, 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 members to ratified in General Meeting. Accordingly, resolution seeking members' ratification payable to Sanjay Gupta & Associates, 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 for FY 2023-24. The Secretarial Audit and Secretarial Compliance Report(s) for FY ended 31 March 2024 are annexed at Annexure-B. The Secretarial Audit and Compliance Report(s) does not contain any qualification, reservation, adverse remark or disclaimer. Further, as per the applicable provisions of the SEBI Listing Regulations, the Secretarial Compliance Report was filed with the stock exchanges, within the stipulated timeframe.
DLF Cyber City Developers Limited (Debt Listed), DLF Home Developers Limited (Debt Listed), DLF Assets Limited and DLF Power & Services 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 2023-24 of DLF Cyber City Developers Limited (Debt Listed), DLF Home Developers Limited (Debt Listed), DLF Assets Limited and DLF Power & Services 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 qualification, reservation, adverse remark or disclaimer.
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 and SS-2 relating to the meetings of the Board of Directors and General Meetings, respectively issued by the Institute of Company Secretaries of India, have been duly followed by the Company.
Corporate Social Responsibility (CSR)
At DLF, the commitment to CSR remains steadfast with the belief that businesses thrive in educated, healthy and resilient communities. The Company has been contributing towards fostering sustainable ecosystems and enabling access to resources for the transformation of communities. The Company implements its CSR initiatives, through DLF Foundation and other Public Charitable
Trusts, which continue to spearhead initiatives that not only address immediate challenges but also foster sustainability, inclusion and well-being for all. The programmes are aligned with the immediate ongoing priorities of the Government on CSR and contribute to the UN Sustainable Development Goals.
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. Adopting a comprehensive approach alongside strategic partnerships with the Government, civil society and partner organisations, the Company aspires to create an inclusive and sustainable ecosystem for all stakeholders within the communities. The social endeavours undertaken by DLF Foundation during the year have been multifaceted, focusing on critical areas of education, environment, healthcare, animal welfare, social sustainability and sports promotion. The Company had appointed Price Waterhouse Chartered Accountants LLP, an independent agency to conduct the Impact Assessment of CSR projects/ programmes, namely
(i) COVID-19;
(ii) DLF CARES; and
(iii) Golf Excellence, which were completed during FY 2021-22, the report
(s) of which are available on the Company's website at https://www. dlf.in/annual_docket/Impact-Assessment.pdf.
Impact Assessment of the projects/ programmes, namely
(i) Environment Sustainability;
(ii) Saving Lives Through Safer Roads; and
(iii) Animal Welfare, which were completed during FY 2022-23, would be undertaken during FY 2024-25.
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 endeavours to excel in three pillars of sustainability namely, Environmental, Social and Governance, collectively referred to as ESG parameters. The Company has integrated sustainability into its core business operations, across its residential and commercial portfolio, ensuring a safe and sustainable ecosystem for all its stakeholders. Our entire existing Offices and Retail portfolio holds LEED Platinumcertification, our commitment to sustainability. We continuously strive to develop new products on similar sustainable principles.
DLF's rental portfolio has been granted Green Star Rating in both Development and Standing Investment category in the latest ESG Scores announced by the Global Real Estate Sustainability Benchmark (GRESB). Further, U.S. Green Building Council (USGBC) recognizes DLF's rental business as global partner in leading the transformation and regeneration of the built environment across India and throughout the world.
Pursuant to the provisions of Regulation 34 of the SEBI Listing Regulations, your Company has prepared its Business Responsibility and Sustainability Report (BRSR), as part of its Annual Report incorporating the 9 (nine) reportable principles of ‘National Guidelines on Responsible Business Conduct'. Your Company had engaged KPMG Assurance and Consulting Services LLP for preparation of the BRSR for FY 2023-24.
Further, pursuant to the SEBI circular dated 12 July 2023 on ‘BRSR Core – Framework for assurance and ESG disclosures for value chain', your Company had appointed SGS India Private Limited as an independent assurance provider to provide reasonable assurance for the BRSR Core indicators consisting of Key Performance Indicators under the ESG attributes. The Company's Business Responsibility and Sustainability Policy is available at https://www.dlf.in/pdf/DLF-Business-Responsibility-Policy.pdf and the BRSR for FY 2023-24 including the reasonable assurance report is annexed at Annexure-G of this Report.
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 resourceefficiency,emission reduction, water conservation, waste minimisation and biodiversity protection. It also positively engages with the 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, U.K. The testimony to this is that DLF is the only Group globally, which has been conferred with 20 ‘Sword of Honour' Awards by them, a pinnacle of safety standards across the world. DLF has achieved the highest number of Sword of Honour Awards, consecutively for the last six years, maintaining its global leadership position in the field of Occupational Health and Safety.
The DLF Group is at the top of the global leaderboard, which has been conferred with 45 LEED Zero Water Certifications from the USGBC.
Annual Return
The Annual Return for FY 2023-24 as required under Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available at https://www.dlf.in/annual_docket/annual-Return.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 annexed 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 Act and SEBI Listing Regulations, 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/RelatedPartyTransactionPolicy.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 the 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 2023-24 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. The Nomination and Remuneration 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/NominationandRemuneration Policy.pdf.
The Company pays remuneration to its Executive 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 Executive Directors and Non-executive Directors, out of the profits of the Company for 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 principles for forward-thinking 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, the 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 evaluation of Board, its Committees' functioning and individual Directors including Independent Directors and also specified that such evaluation will be undertaken by the NRC and the Board, pursuant to the Act and the Rules made thereunder read with the SEBI Listing Regulations.
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 roles 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 shareholders' interest and enhance their value as well as to fulfil expectations of other stakeholders through strategic supervisionauditobservations of the Company.
Evaluation of functioning of Board Committees is based on the 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 of the Act and Regulation 25 of the SEBI Listing Regulations.
Internal Financial Controls
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 also by the Statutory/ Internal Auditors during the course of their audits.
The internal audit was entrusted to PricewaterhouseCoopers Services LLP. The main thrust of internal audit was to test and review controls, carry out 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 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 are followed-up and the actions taken are reported to the Audit Committee. The internal control system is commensurate with the nature, size and complexities of operations of your Company.
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 Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (the ‘PIT Regulations'). DLF Code is available on the Company's website at https://www.dlf.in/ corporate governance policies/Code_for_Prevention_ of_Insider_Trading.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 SOPs 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 business 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.
The development and implementation of the Risk Management Policy has been covered in the Management Discussion and Analysis Report, which forms part of the Annual Report.
Significant and Material Orders passed by Regulators or Courts or Tribunals
During the year under significantand review, no 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.
Details 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 and 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 stating 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 claims of Rs 607.04 crore.
With respect to claims after 15 October 2018, the Company has also filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 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 Delhi 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 Hon'ble Supreme Court of India vide order dated 8 December 2023 issued Notice to IL&FS. The matter is to be listed in due course.
Vigil Mechanism/ Whistle Blower Policy
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. The Company's Whistle Blower Policy is available on the website of the Company at https://www.dlf.in/pdf/DLF-LIMITED-WHISTLE-BLOWER-POLICY.pdf.
Policy for Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace
The Company continues to follow a robust anti-sexual harassment policy on ‘Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace' (‘POSH') in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 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 senior officials from the Company, an independent member from an NGO and a legal representative as external member. 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 2023-24, neither any complaint was reported nor any complaint was pending for disposal.
Other Information
During the year under review:
• There has been no material changes and commitments, affecting the financial position, which have occurred between the end of FY to which the financial statements relate and the date of the report;
• There has been no issue of equity shares with differential rights as to dividend, voting or otherwise;
• There has been no issue of shares (including sweat equity shares) to employees of the Company under any scheme;
• 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.