India's largest realty firm DLF today reported a nearly 42-fold rise in its consolidated net profit at Rs 4,091.27 crore for the December 2017 quarter, driven by deemed gain from stake sale in rental arm to GIC.
Its net profit stood at Rs 98.14 crore in the year-ago period, DLF said in a regulatory filing.
Total income, however, fell to Rs 1,855.21 crore in the third quarter of 2017-18 fiscal from Rs 2,177.90 crore in the corresponding period of the previous year.
As per the notes of account, DLF has made an exceptional gain of Rs 8,569.34 crore, mainly on the back of promoters' stake sale in rental arm DLF Cyber City Developers Ltd.
In December 2017, promoters concluded the sale of entire 40 per cent stake in DCCDL for Rs 11,900 crore. This deal included sale of 33.34 per cent stake in DCCDL to GIC for Rs 8,900 crore and buyback of remaining shares worth Rs 3,000 crore by DCCDL.
In a statement, DLF explained that profit has gone up due to one-time exceptional gain on account of restatement of the DLF's investment in DCCDL at fair market value based on Indian accounting standards (IndAS 110), as DCCDL is now being accounted as a joint venture instead of a subsidiary.
In notes of account, DLF group said, "It has fair valued its remaining equity stake (66.66 per cent) in DCCDL Group and recorded a gain of about Rs 9,927.13 crore arising due to deemed disposal on account of loss of control of DCCDL Group."
Consequently, deferred tax liability amounting to about Rs 4,060 crore has been created at the consolidated level in respect of investment in DCCDL as a joint venture.
DLF promoters have infused Rs 9,000 crore in the company and the same has been utilised to primarily prepay a substantial portion of its outstanding debt.
"The company has already repaid debt of Rs 7,100 crore (approx.) till date. DLF remains confident to become net debt zero by end- FY19," the company said in a statement.
The board has also appointed Vivek Mehra as an independent director.
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