DLF AR 2015 for Web.Indd

Contents Company Information ……………………………………………………………………… 3 Message from the Chairman ……………………………………………………………… 4 Board of Directors ………………………………………………………………………… 6 Directors’ Report …………………………………………………………………………… 7 Management Discussion & Analysis Report …………………………………………… 38 Corporate Governance Report …………………………………………………………… 46 Financial Statements ……………………………………………………………………… 74 Auditors’ Report …………………………………………………………………………… 75 Balance Sheet ……………………………………………………………………………… 82 Statement of Pro¿ t & Loss ………………………………………………………………… 83 Cash Flow Statement ……………………………………………………………………… 84 Notes ………………………………………………………………………………………… 86 Consolidated Financial Statements ……………………………………………………… 140 Details of Subsidiary Companies ………………………………………………………… 210 Notice ………………………………………………………………………………………… 219 Company Information Board of Directors Reference Information Executive Directors Registered Of¿ ce Dr. K.P. Singh Shopping Mall, 3rd Floor, Arjun Marg Chairman Phase-I, DLF City, Gurgaon-122 002 Mr. Rajiv Singh Vice Chairman (Haryana) Mr. T.C. Goyal Managing Director (upto 31.03.2015) Corporate Of¿ ce Ms. Pia Singh DLF Centre, Sansad Marg Whole-time Director (upto 20.05.2015)* New Delhi-110 001 Mr. Mohit Gujral Whole-time Director Statutory Auditors Mr. Rajeev Talwar Whole-time Director Walker Chandiok & Co LLP Non-Executive Directors Registrar & Share Transfer Agent Mr. K.N. Memani Lead Independent Director Karvy Computershare Private Limited Mr. G.S. Talwar Dr. D.V. Kapur Listed at Mr. B. Bhushan Mr. Pramod Bhasin Bombay Stock Exchange Mr. Rajiv Krishan Luthra National Stock Exchange Mr. Ved Kumar Jain Lt. Gen. Aditya Singh (Retd.) (w.e.f. 29.08.2014) Company Secretary Mr. A.S. Minocha (w.e.f. 20.05.2015) Mr. Subhash Setia * Non-executive Director (w.e.f. 21.05.2015) 3 Message from the Chairman Dr. K.P. Singh, Chairman Dear Shareholders, Propelled by the new Government’s growth-oriented strategy the economy as a whole is beginning to show distinct signs of revival. Largely due to the deft handling of macro-economic issues and several positive sector-speci¿ c policy initiatives, the industrial outlook has improved overall. As far as the real estate and urban housing sector is concerned, great expectations have been aroused of a robust revival through the Prime Minister’s announcement of visionary initiatives like ‘Smart Cities’ and ‘Housing for All’. Unfortunately, such expectations have not yet been realised and the sector continues to face a plethora of challenges, including rising input costs, high interest rates and sluggish demand. We need to ponder about why this vital sector, which is universally acknowledged as a powerful engine of growth that contributes more than 7 per cent to the country’s GDP, is not reÀ ecting the overall uptrend being experienced by other sectors of the economy. The truth is that housing and real estate development is a unique industry unlike any other sector like manufacturing or services. It needs policies speci¿ cally framed to cater to its special characteristics. In my view, a major reorientation is called for in monetary policies aimed at encouraging home ownership by providing home loans/mortgages at affordable rates. This will not only revive demand and help achieve the target of ‘Housing for All’, but will also give a boost to building activity. Secondly, the real estate development industry is beset by antiquated laws and a host of regulations that are a major impediment to growth. 4 It needs to be remembered that with linkages with more than 250 ancillary industries, this sector has a major multiplier effect on the entire economy, creating jobs across the spectrum. In order to realise the vision of ‘Smart Cities’ and ‘Housing for All’, bold decisions and upfront reformations are needed in our urbanisation policy, monetary policy in the form of low costs ¿ nance for home buyers, availability of mortgage/reverse mortgage market and above all in the regulatory framework for real estate sector. We need to create an environment where people are encouraged to own a house at the beginning of their career, but not at the retirement age. Turning to your Company’s performance during the year under review, consolidated revenues were 8,168 crore, a decrease of 17% from 9,790 crore in FY’14. Net pro¿ t after tax, minority interest and prior period items was at 540 crore, a decline of 16% from 646 crore. The EPS for FY’15 stood at 3.03 as compared to 3.65 for FY’14. Finance cost decreased to 2,304 crore from 2,463 crore in FY’14. Your Company’s Balance Sheet as on 31st March, 2015 reÀ ected a healthy position with a net worth of 29,168 crore. During the year, the credit rating of your Company improved, with outlook changed from ‘negative’ to ‘stable’. Your Company’s development business primarily focuses on the development and sale of residential real estate which include plotted developments, houses, villas and apartments of varying sizes and integrated townships, with a focus on the high end, luxury residential developments. As of 31st March, 2015, your Company had 46 msf of development projects under construction. Your Company’s lease business involves leasing of its developed commercial and retail properties. One of the key objectives of its lease business is to achieve returns from investments in its portfolio properties within a targeted timeframe. Another key objective is to achieve high occupancy rates for the leased portfolio properties. The utilities and facility management business supports and complements the lease business. As of 31st March, 2015, your Company’s lease business with leasable area of approximately 29.4 msf, yielded annuity income of approximately 2,200 crore. Your Company has always created quality assets with highest safety norms. Your Company’s commitment to contribute back to the communities has created momentum towards ‘inclusion’ and signi¿ cantly touched the lives of marginalised people. Numerous programme initiatives have been able to directly reach out to over 100,000 persons during the year. Such programmes - Village Cluster Development Programme, Swachh Haryana Campaign, the Nurturing Talent Programme, Skill-a-Million Programme, have contributed signi¿ cantly to the society. Further, your Company contributed whole-heartedly and was amongst the ¿ rst to reach to the victims of the À ood that struck Jammu & Kashmir in 2014. I trust that the implementation of various path-breaking policies of the new Government under the stewardship of Hon’ble Prime Minister and the success of innovative initiatives such as ‘Make in India’, ‘Digital India’, ‘100 Smart Cities’ and ‘REITs’ would yield the desired results and lead to rapid growth of the economy in the year ahead. With best wishes, Sincerely, (Dr. K.P. Singh) 27th July, 2015 Chairman 5 Board of Directors Dr. K. P. Singh Mr. Rajiv Singh Ms. Pia Singh Mr. Mohit Gujral Mr. Rajeev Talwar Mr. K. N. Memani Mr. G. S. Talwar Dr. D. V. Kapur Mr. Rajiv Krishan Mr. B. Bhushan Mr. Pramod Bhasin Mr. Ved Kumar Jain Luthra Lt. Gen. Aditya Mr. A.S. Minocha Singh (Retd.) Directors’ Report Your Directors have pleasure in presenting their Review of Operations 50th Report on the business and operations of the Your Company’s Balance Sheet as at 31st March, Company together with the audited results for the 2015 reÀ ected a healthy position with a net worth of ¿ nancial year ended 31st March, 2015. 29,168 crore. Consolidated Financial Results Net debt was 20,965 crore as on 31st March, 2015. in crore) The net debt to equity ratio was at 0.72. 2014-15 2013-14 Consolidated revenue/turnover 8,168.16 9,789.59 Your Company’s development business primarily focuses on the development and sale of residential Gross Operating Pro¿ t (EBIDTA) 3,543.17 3976.79 real estate which include plotted developments, Less: Finance Costs 2,303.86 2,463.25 houses, villas and apartments of varying sizes and integrated townships, with a focus on the high end, Less: Depreciation 544.79 662.93 luxury residential developments. The development Pro¿ t before exceptional items 694.52 850.61 business also consists of certain of¿ ces, SEZ and and tax shopping complexes, including those that are Exceptional items (67.87) (329.86) integral to the residential developments they are attached to. Less: Provision for Tax 157.57 (83.63) Pro¿ t before minority interest 469.08 604.38 Your Company has now primarily categorized its development business into two broad categories Share of Pro¿ t/(loss) in associates (3.43) 7.08 viz. Gurgaon DevCo and National DevCo. Both Minority interest 33.30 56.54 these geographical segments are independently Pro t after Tax, minority interest responsible and accountable for all activities ¿ 498.95 668.00 and before prior period items across the product value chain from acquisition of Prior period items (net) (41.28) 21.79 land, obtaining approvals, project planning, execution, to launch, sales & marketing and ¿ nal delivery of the Net Pro¿ t 540.23 646.21 developed property to the customers. st In FY’15, your Company reported consolidated As at 31 March, 2015, your Company had 46 msf revenues of 8,168 crore, a decrease of 17% from of development projects under construction. 9,790 crore in FY’14. EBIDTA stood at 3,543 Your Company’s lease business involves leasing crore, a decrease of 11% from 3,977 crore in the of its developed of¿ ces, SEZ and retail properties. previous year. Net pro¿ t after tax, minority interest One of the key objectives of its lease business is and prior period items was at 540 crore, a decline to achieve returns from investments in its portfolio of 16% from 646 crore. The EPS for FY’15 stood properties within a targeted timeframe. Another key at 3.03 as compared to 3.65 for FY’14. objective is to achieve high occupancy rates for the The cost of revenues including cost of land, leased portfolio properties. The utilities and facility plots, development rights, constructed properties management business supports and complements and others stood at 3,285 crore as against the lease business.

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