Annual Report - DLF - 2008-2009

DLF LIMITED

ANNUAL REPORT 2008-2009

DIRECTOR'S REPORT

To
The Members

Your Directors have pleasure in presenting their 44th Annual Report on the
business and operations of the Company together with the audited results
for the financial year ended 31st March, 2009.

Financial Results:

(Rs. in Crores)

Consolidated

2008-09 2007-08

Gross operating Profit 5,985.98 9,961.48
Less : Finance Charges 554.84 310.00
Less: Depreciation 238.96 90.06
Profit before Tax 5,192.18 9,561.42
Less: Provision for Tax 675.36 1,739.09
Profit before minority interest 4,516.83 7,822.34
Share of Profit/(loss) in associates (21.10) 26.41
Minority interest (27.54) (35.48)
Profit after tax and minority interest 4,468.19 7,813.27

The year under review was extremely challenging. The markets witnessed
unprecedented turbulence in the wake of the global financial meltdown. A
runaway inflation touching a high point of 12% early in the year, tight
monetary policies followed by the authorities for most of the year to
control inflation with the consequent high interest rates, precipitous 26%
fall in the value of the Rupee during the year and weak consumer demand,
all led to a difficult environment in which the Company had to operate.

The worst affected industry was Real Estate. The Company being the
forerunner had to face the brunt of the economic slow-down resulting into
decreased sales volumes and pressure on the profit margins and financing
costs.

The Company's total income on consolidated basis decreased from Rs. 14,684
Crores to Rs. 10,431 Crores, a decrease of 29% over the previous financial
year. Similarly, the gross operating profit on consolidated basis reduced
from Rs. 9,961 Crores to Rs. 5,986 Crores, resulting in a decrease of 40%
and the net profit after tax and minority interest for the year is Rs.
4,468 Crores as against Rs. 7,813 Crores for the previous year (2007-08),
representing a decrease of about 43%. This revenue and profit figures have
been arrived at after adjusting for losses contributed by non-core
businesses of Rs. 163 Crores.

DLF has taken aggressive steps to meet the challenges of the difficult
times through major initiatives in sustaining growth, cost-optimization,
process improvement and efficient management of working capital. The
commitment to meet these challenges resulted in an optimistic start to FY
2009-10.

(CLICK ON THE READ MORE LINK TO VIEW FULL REPORT)



Review of Operations:

Over the past few years, the real estate sector has transformed from a
nascent and unorganized sector to a professionally organised industry,
which has been contributing significantly to the nations' GDP. Being the
leader in the industry in terms of revenues, earnings and market
capitalisation, your Company has been able to capitalise the opportunities
in an efficient manner.

However, the challenging credit market conditions through out the calendar
year 2008, triggered off a slowdown in the second half of FY09, resulting
in a slowdown in sales and fresh bookings. While your Company saw
relatively subdued volumes of sales and leases through the last 2-3
quarters of FY09, things have now started looking up with a lot of steps
being taken by the Government as well as the players in the industry.

During the year under report, your Company delivered 7 m.s.f. of developed
area to its customers - 2 m.s.f. of homes and 5 m.s.f. of office space. As
on 31st March, 2009, your Company had a development potential of 425
m.s.f., with 37 m.s.f. of projects under construction.

Focussed on timely execution of delivery of presold/leased projects, your
Company slowed down few projects till conditions stabilize to improve
demand for fresh leasing. Accordingly, 27 m.s.f. of office and retail
developments have been deferred. Your Company has also exited from long
gestation projects like Bidadi and Dankuni townships, along with
development plan for hotels being shifted out for next 15-18 months.

Your Company has also been granted in principle approval by the Central
Government for de-notification of 5 of its SEZs.

Your Company introduced price re-sets and extended other benefits to its
customers in Feb-March, 2009. This was done in an endeavour to pass on the
benefits of reduced construction costs and offer best possible prices to
our customers, as well as build on the Company's brand equity as a
customer-friendly Company. Your Company foresees the results of these
measures in terms of increased customer support and recognition as the
preferred and fair' developer by the customers in the coming time.

During the year, DLF Pramerica Life Insurance Company Limited, your
Company's JV with Prudential International Inc. for life insurance services
in India, began its operations. DLF Pramerica Asset Managers Pvt. Ltd, a JV
between your Company and Prudential Financial Inc., also received in-
principle approval during the year for commencing its business operations
in India.

Your Company met all its stakeholder commitments in time during the year,
including its commitments to banks and financial institutions.


In order to weather the tough economic environment over the last year, your
Company affected a strategy which allowed it to be liquid, whilst it tested
the right market conditions where it could attract significantly larger
number of end customers. Value proposition being a key element of this
strategy, your Company launched various different projects across India in
the residential space and demonstrated leadership position within the
industry to bring back demand.

1,389 apartments were booked in a single day in the newly launched project
in the heart of Delhi during April, 2009. Even in Bangalore, around 700
apartments were booked in Q1 FY2010.

Though there were marginal cancellations in some of the existing pre-leased
space across the country, your Company's relationship with all the long
term strategic tenants continues to be strong and engaged. Your Company
believes that as business conditions in the global markets improve over the
next 6 months, the leasing activity will gain fresh traction.

On the whole, while fiscal 2009 was hit by the tight credit conditions,
subdued volumes and few onetime adjustments, your Company sees the coming
quarters gaining back the lost momentum and showing better performance. The
first quarter of FY10 has already started showing positive signs with 2.5
m.s.f. sold in homes segment in April, 2009. Seeing these positive trends,
your Company will continue to launch new residential and commercial
projects in various locations across the country, after adequate research
of market demand, at the best prices.

The performance of the Company on stand-alone basis for the year ended on
31st March, 2009 is as under:

(Rs. in Crores)

Stand Alone

2008-09 2007-08

Turnover 3,839.04 6,058.46

Gross operating Profit 2,734.80 3,591.25

Less : Finance Charges 809.86 447.65

Less : Depreciation 114.08 25.68

Profit before Tax 1,810.86 3,117.92

Less: Provision for Tax 261.00 543.52

Profit after Tax 1,549.86 2,574.40

Earlier Year Items:

Income Tax - 0.19

Prior-period expenses (net) 2.09 -

Net Profit 1,547.77 2,574.59

Balance as per last Balance Sheet 1,734.96 269.27

Balance Available for:

Appropriation 3,282.73 2,843.86

Appropriation:

Transfer to Debenture Redemption Reserve 113.17 -

Utilise for Bonus Issue - 0.07

Transfer to General Reserve 154.78 311.00

Dividend on Equity Shares:

Interim - 340.97

Final 339.44# 340.97

Tax on Dividend 28.91 115.89

Excess provision of previous year
written back (29.81) -

Surplus carried to Balance Sheet 2,676.24 1,734.96

3,282.73 2,843.86

# Proposed.

Future Outlook:

Given the prevalent sentiments, your Company had followed a cautious
approach to new launches. However, as economic conditions stabilize, your
Company plans to make selective new launches based on targeted market
research in different markets to catch the changing demand scenario.

Your Company will continue to focus on affordable housing with test
launches across newer locations, along with launching some strategic 'city-
center' housing projects. We endeavour to generate buyer interest by
providing excellent location and superior product specifications.

Focussing on the sales model, your Company will also make selective
launches of commercial complexes.

For offices, we intend to expedite execution and deliveries wherever
backlog exists and pump up the construction activity based on visibility of
pre-leasing. We continue to strengthen our relationships with our existing
customers.

Your Company is quite hopeful that the coming quarters will see better
sales/leases and the performance of the Company will be revived.

Dividend:

In view of the difficult economic climate in which the Company operated
during the year, a reduction is being made in the proposed Dividend as
compared to the Dividend of Rs.4 per Equity Share (200%) paid in the
previous year. Your Directors are pleased to recommend for approval of the
Members a Dividend of Rs.2 per Equity Share (100%) of Rs. 2 each for the FY
2008-09 amounting to Rs. 368.35 Crores (Rs. 339.44 Crores towards Dividend
and Rs. 28.91 Crores as Dividend tax).

Buy-Back of Equity Shares:

The Board of your Company in its meeting held on 10th July, 2008 approved
buy-back of not exceeding 2.20 Crores fully paid-up Equity Shares of Rs.2
each, at a price not exceeding Rs.600 per Equity Share, by utilizing an
amount of not exceeding Rs.1,100 Crores, i.e., within the limits of 9.80%
of the aggregate of the Company's total paid-up Equity Capital and Free
Reserves as on 31st March, 2008, from open market through NSE and BSE using
their nation-wide electronic trading facilities in compliance with the
provisions of the Companies Act, 1956 read with Securities and Exchange
Board of India (Buy-Back of Securities) Regulations, 1998. Accordingly,
Public Announcement (PA) and Corrigendum to PA dated 30th September and
15th October, 2008 respectively, were issued by the Company.

The Buy-back Offer was open from 17th October, 2008 to 6th May, 2009.
During the period the Company bought-back 76,38,567 Equity Shares, for a
total consideration (including transaction cost) of Rs.141.02 Crores, i.e.
at an average price of Rs.184.62 per share by utilising free reserves
and/or share premium account of the Company. The paid-up capital of the
Company after extinguishment of shares bought back under the Scheme stood
at Rs.339.43 Crores.

Fixed Deposits:

The Company has not accepted/renewed any public deposits during the year
under review. An unclaimed public deposit of Rs.0.27 lacs was transferred
to Investors Education and Protection Fund (IEPF) on 19th June, 2008.

Subsidiary Companies and Consolidated Financial Statements:

The consolidated financial statements of the Company and its subsidiaries,
prepared in accordance with Accounting Standards AS-21, 23 and 27, issued
by the Institute of Chartered Accountants of India, form part of the Annual
Report. The Company has made an application to the Central Government
seeking exemption under Section 212(8) of the Companies Act, 1956 from
attaching the Balance Sheet, Profit & Loss account and other documents of
the subsidiaries to the Balance Sheet of the Company. The documents/details
will be made available upon request to any member of the Company and are
also available for inspection by any Member of the Company/its subsidiaries
at the Registered Office of the Company/its subsidiaries and at the Head
Office of the Company during working hours up to the date of Annual General
Meeting.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
/ Outgo, etc.:

The particulars required to be disclosed under Section 217(1)(e) of the
Companies Act, 1956 read with Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are given at Annexure-A annexed
hereto and form part of this Report.

Particulars of Employees:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975, the names
and other particulars of the employees are set out in the annexure to the
Directors' Report. However, as per the provisions of Section 219(1) (b)(iv)
of the said Act, the Directors' Report and the Accounts are being sent to
all the Members of the Company and others entitled thereto excluding the
statement of particulars of employees. Any member interested in obtaining
such particulars may write to the Company Secretary at the Registered
Office of the Company.

Employee Stock Option Scheme (ESOS):

Information in terms of Clause 12 of the SEBI (Employees' Stock Option
Scheme and Employees' Stock Purchase Scheme) Guidelines, 1999 is at
Annexure-B.

Debentures:

During the year under review, the Company has issued Non-convertible
Debentures (NCDs) of Rs.10 lacs each on private placement basis aggregating
to Rs.1,320 Crores, as per details below:

i) 14% NCDs aggregating to Rs.100 Crores to Standard Chartered Bank;

ii) 13.7% NCDs aggregating to Rs.500 Crores to Life Insurance Corporation
of India;

iii) 14% NCDs aggregating to Rs.720 Crores to Life Insurance Corporation of
India.

Listing at Stock Exchanges:

The Equity Shares of your Company continue to be listed on BSE and the NSE.
During the year under review, the Equity Shares form part of S&P CNX Nifty
& BSE - 30 indices. The Non-convertible Debentures issued by your Company
are also listed in the Wholesale Debt Market (WDM) segment of National
Stock Exchange. The listing and custody fees for the year 2009-10 have been
paid to the Stock Exchanges, NSDL and CDSL, respectively.

Pursuant to Clause 5A of the Listing Agreement, the Company has initiated
appropriate steps to deal with unclaimed Equity Shares allotted in the IPO
in 2007. As on 31st March, 2009, 14,750 Equity Shares are unclaimed by the
rightful owners.

Forfeiture of Partly-paid Shares:

The Board of Directors of the Company in its meeting held on 30th July,
2009 has forfeited 43,680 partly-paid Equity Shares (allotted on 28th June,
2007) for non-payment of balance outstanding amount/allotment money due and
payable thereon.

Management Discussion and Analysis Report:

The Management Discussion and Analysis Report as required under Clause 49
of the Listing Agreement with the Stock Exchanges forms part of this
Report.

Corporate Governance Report:

The Company is committed to maintain the highest standards of Corporate
Governance. The Directors adhere to the requirements set out by the
Securities and Exchange Board of India's Corporate Governance practices and
have implemented all the stipulations prescribed. The Company has
implemented several best Corporate Governance practices as prevalent
globally. The Report on Corporate Governance as stipulated under Clause 49
of the Listing Agreement forms part of this Report.

Your Company was conferred Golden Peacock Award' for Excellence in
Corporate Governance in September, 2008 at London.

The requisite Certificate from the Statutory Auditors of the Company, M/s.
Walker, Chandiok & Co, Chartered Accountants, confirming compliance with
the conditions of Corporate Governance as stipulated under the aforesaid
Clause 49, is attached to this Report.

Directors' Responsibility Statement:

As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm having:

a) followed in the preparation of the Annual Accounts, the applicable
accounting standards with proper explanation relating to material
departures, if any;

b) 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 your Company at the end of
the financial year and of the profit of your Company for that period;

c) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities; and

d) prepared the Annual Accounts on a going concern basis.

Auditors:

The Auditors, M/s. Walker, Chandiok & Co, Chartered Accountants, hold
office until the conclusion of the forthcoming Annual General Meeting and
are recommended for re-appointment.

Certificate from the Auditors has been received to the effect that their
re-appointment, if made, would be within the limits prescribed under
Section 224(1B) of the Companies Act, 1956.

Auditors' Report:

There is no qualification or adverse remarks on the stand-alone financials
of the Company. Further, the observation given in Point No. 4 of the
Auditors' Report on consolidated financials read with Note No. 19 of
Schedule 24 to the consolidated financials, are self-explanatory and your
Directors have nothing more to add.

Directors:

Pursuant to Section 256 of the Companies Act, 1956 read with the Clause 102
of Articles of Association of the Company, Dr. D.V. Kapur, Mr. M.M.
Sabharwal and Mr. K. Swarup, Directors retire by rotation at the ensuing
Annual General Meeting and being eligible have offered themselves for re-
appointment.

Brief resume of the Directors proposed to be reappointed, nature of their
experience in specific functional areas, names of the companies in which
they hold directorship and membership/chairmanship of Board Committees,
shareholding and relationship between Directors inter-se, as stipulated
under Clause 49 of the Listing Agreement with the Stock Exchanges, are
provided in the Notice for convening the Annual General Meeting.

Corporate Social Responsibility:

The Company has made significant investments in community welfare
initiatives including to underprivileged through education, training,
health, environment, capacity building and rural-centric interventions as
detailed at Annexure - C. The employees of the Company also participated in
many of such initiatives.

Promotion of Sports:

DLF-Indian Premier League (IPL), in its second season held at South Africa,
saw a strong reaffirmation of the Company's commitment towards sporting
events, while it also strengthened DLF's national as well as international
brand equity. Your Company bagged the title sponsorship rights for IPL in
2008 for a total of five years.

DLF Golf & Country Club retained its crown as the Best Golf Course in
India' for a second year in succession, presented at the Asian Golf Monthly
Awards Ceremony held in Shenzhen, China.

Awards and Accreditations:

During the period under review, your Company has excelled in various
spheres of Corporate achievements and is recognised through public
evaluation. The details of awards and recognitions to your Company are as
under:

* Dr K.P. Singh, Chairman has been invited on the Board of Governors on the
Future of Real Estate at the World Economic Forum and participated as a
Discussion Leader at the Annual Meet of the Forum held at Davos on 28th
January, 2009.

* Public Relations Society of India (PSRI) presented the PSRI Golden
Jubilee Award to DLF for Best Private Sector Organisation'

* The Reader's Digest Most Trusted Brand 2009' Award was picked up by DLF
for the second year in a row.

* Augtics Systems (International Real Estate Data Bank) Award of
Excellence' bestowed three individual awards to DLF Aralias, The Belaire
and The Magnolias.

* GIREM conferred DLF with the Company of the Year' Award and DLF Emporio
with the Iconic Project 2008' Award at the Urban Planning and Real Estate
Leadership Summit, 2008.

* Realty Plus Excellence Award 2009 for the category Luxury Project of the
Year' was presented to DLF Aralias.

* Realty Plus Lifetime Achiever's Excellence Award 2009' was bestowed upon
Dr. K.P. Singh, DLF Chairman, for his outstanding contribution to the
Indian Real Estate Sector.

* Conferred Golden Peacock Award for Excellence in Corporate Governance'
for the year 2008 at London.

Credit Rating:

During the year under review, ICRA Limited, an associate of Moody's
Investor Service and a leading credit rating agency, assigned A2+' for
Company's short term Debt programme of Rs.3,000 Crores. Further, CRISIL, a
unit of Standard & Poor's, assigned A+ ' / Rating 'watch with developing
implications' to the Company's Rs. 92.90 billion Term Loans and Overdraft
Facility and 'P1' / Rating 'watch with developing implications' to the
Company's Rs.15.99 billion Short Term Loan, Bank Guarantee and Letter of
Credit.

Wind Power Business:

In order to concentrate and consolidate on its core business, your Company,
on 1st July, 2009, transferred its Wind Power business to its wholly owned
subsidiary, DLF Wind Power Private Limited, on slump sale basis pursuant to
the approval granted by the Shareholders through postal ballot.

Acknowledgements:

Your Directors wish to place on record their sincere appreciation to the
employees at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the Company
to remain at the forefront of the industry despite slow-down in the Real-
Estate Industry.

Your Company continues to occupy a place of respect amongst stakeholders,
most of all our valuable customers. Your Directors would like to express
their sincere appreciation for assistance and co-operation received from
the vendors and stakeholders including Financial Institutions, Banks,
Central & State Government authorities, other business associates, who have
extended their valuable sustained support and encouragement during the year
under review. It will be the Company's endeavour to build and nurture
strong links with industry based on mutual respect and consistent co-
operation aligned with customer interests.

for and on behalf of the Board of Directors

(Dr. K.P. Singh)
Chairman

Place : New Delhi
Date : 30th July, 2009

ANNEXURE - A:

Disclosure of particulars under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of particulars in the Report of
Board of Directors) Rules, 1988, are given as under:

A. Conservation of Energy:

a) Energy conservation measures taken:

i) Use of wind energy for power generation 228 MW of capacity has been
installed.

ii) Energy conservation done by installing co-generation plants using gas
based power generators and Vapour Absorption Machines (VAMs) in four
projects which have already been commissioned.

For another seven projects procurement/installation of generators & VAMs is
in progress.

iii) Energy saved by using exhaust gas and water in VAMs approx. 11 lakh
units per month in four plants.

b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:

Additional investment is being planned to install further co-generation
plants. Use of solar energy for common area lighting is being practised.

c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:

Electrical energy to the tune of approx. 11 lakh units per month is being
saved.

d) Total energy consumption and energy per unit of production:

NA

B. Technology Absorption:

e) Efforts made in technology absorption: NA

C. Foreign Exchange Earnings and Outgo:

f) i) Activities relating to exports:

The Company is engaged in developing/constructing residential and
commercial properties in India and selling the immovable properties to
customers in India and abroad.

ii) Initiatives taken to increase exports:

The Company does not have any export activities.

iii) Development of new export markets for products and services:

The Company receives remittances of sale consideration for immovable
properties located in India, purchased by the customers' abroad.

iv) Export Plans:

The Company has taken many initiatives to increase the sale of immovable
properties to the customers abroad by designing premium apartments in
accordance with the requirements and lifestyle of NRIs, by holding meetings
with customers at different locations abroad, attending exhibitions, fairs
etc. through its senior executives and Directors with a view to have
personal contact with customers, by giving advertisement in India and
abroad, by having continuous touch with enquiries from customers abroad
through the Company's liaison office in London.

g) Total Foreign Exchange earned and used:

(Rs. In Crores)

2008-09 2007-08

a) Foreign Exchange earned 99.28 70.70
b) Foreign Exchange used 62.90 120.30

FORM - A:

Form for Disclosure of Particulars with respect to Conservation of Energy:

A. Power and Fuel Consumption:

1. Electricity:

a) Purchased Current Year Previous Year

Unit 37,421,772 48,166,505

Total Amount (in Rs.) 178,127,635 219,157,596

Rate per Unit 4.76 4.55

b) Own Generation:

i) Through diesel generation:

Unit 109,431,014 59,596,491

Unit per litre of diesel oil 3.82 3.82

Cost/Unit (in Rs.) 9.81 9.16

ii) Through gas turbine/generator:

Unit 40,503,954 30,231,250

Unit per litre of fuel oil/gas 3.70 3.70

Cost/Unit (in Rs.) 3.51 3.40

2. Coal (Specify quantity and
where used):

Quantity (tonnes) NA NA

Total Cost (in Rs.) NA NA

Average Rate NA NA

3. Furnace Oil:

Quantity (K. Litres) NA NA

Total Amount (in Rs.) NA NA

Average Rate NA NA

4. Others/internal generation
through wind energy:

Quantity (Units) 364,785,013 28,563,397

Total Cost (in Rs.) 113,083,354 8,854,653

Rate/Unit (in Rs.) 0.31 0.31

B. Consumption per unit of Production:

Standards, Current Year Previous Year
(if any)

Products (with details)
unit - NA NA

Electricity - NA NA

Furnace Oil - NA NA

Coal (Specify quality) - NA NA

Others (specify) - NA NA

FORM - B:

Form for disclosure of Particulars with respect to Absorption:

Research and Development (R&D):

1. Specific areas in which R & D carried out by the Company:

Company has initiated first of its kind building cogeneration activities.
The waste heat of the flue gases is used in absorption chillers. Efforts
are being made with the help of USAID and TERI for building energy
simulation.

2. Benefits derived as a result of the above R & D:

6.7 Million Units of energy saved through waste heat based absorption
chillers used for building air-conditioning.

3. Future plan of action:

Exploring the possibility of use of the building integrated Solar PV power
in future commercial & retail projects.

4. Expenditure on R&D } : Nil
} :
a. Capital } :
b. Recurring } :
c. Total } :

5. Total R&D expenditure as a percentage of total turnover: Nil

Technology Absorption, Adaptation and Innovation:

1. Efforts in brief, made towards technology absorption, adaptation and
innovation:

Efforts are made for adopting the building cogeneration technology in a
combination of residential and commercial projects.

2. Benefits derived as a result of the above efforts:

Approx. 60% water saving on account of air conditioning by using adiabatic
cooler and approx.23% electrical energy saving by using VAMs and Solar
cells.

3. In case of imported technology (imported during the last 5 years
reckoned from the beginning of the financial year) following information
may be furnished:

NA

a) Technology imported: NA

b) Year of import : NA

c) Has technology been fully absorbed : NA

d) If not fully absorbed, areas where this has not taken place, reasons
therefore and future plan of action: NA

ANNEXURE - B:

Statement pursuant to Clause 12 Disclosure in the Directors' Report of
SEBI (Employees' Stock Option Scheme and Employees' Stock Purchase Scheme)
Guidelines, 1999.

2007 2008 Total Future
Grants Grants
made till 2009
31.03.09

(a) (i) Options granted 4042134 1805579 5847713 Min -
3,81,559

Max -
16,46,959

(b) Pricing formula Intrinsic Value

(c) Options vested Nil

(d) Options exercised Nil

(e) Total number of
equity shares arising
as a result of exercise
of options 58,47,713

(f) Options forfeited
/lapsed 6,99,937

(g) Variation of terms
of options Nil

(h) Money realized by
exercise of options Nil

(i) Total number of
options in force at the
end of the year 51,47,776

(j) Employee wise
detail of options
granted during the
financial year 2008-09:

(i) Senior Managerial Mr. T.C. Goyal, Managing Director
Personnel (Directors' on Total Options Granted till
Board) 31.03.2009 = 4,05,700

(ii) Any other employee Nil
receiving grant in any
one year of option
amounting to 5% or more of
the options granted during
the year

(iii) Identified employees Nil
who are granted options,
during any one year, equal
to or exceeding 1% of the
total issued capital
(excluding outstanding
warrants and conversions)
of the Company at the time
of grant.

(k) Diluted Earning Per Rs. 9.09
Share (EPS) pursuant to
issue of shares on
exercise of option
calculated in accordance
with Accounting Standard
(AS - 20- Earnings Per
Share)

(l) Where the Company has Difference in employee compensation cost:
the employee compensation
cost using the intrinsic Reduction Rs. 428.68 lac.
value of the stock
options, the difference Impact on Profit:
between the employee
compensation cost Increase by Rs. 282.97 lac (net of Income Tax)
calculated using intrinsic
value of stock options and Impact on EPS:
the employee compensation
cost recognized if the Basic = + 0.03; Diluted = + 0.01
fair value of the options
had been used and the
impact of this difference
on profits and EPS of the
Company.

(m) Weighted average Rs.2
exercise price and
weighted average fair Weighted average fair value for options
value of options whose granted on 1st July, 2008:
exercise price equals or
exceeds or is less than Rs.380.83
market price of the
stock.
Weighted average fair value for options
granted on 10th October, 2008:
Rs.293.26

(n) Description of method Weighted average information for options
and significant granted on 1st July 2008:
assumptions used during
the year to estimate fair (i) Risk free interest rate : 9.46%
value of options.
(ii) Expected life (in years) : 6.5

(iii) Expected volatility : 52.12%

(iv) Expected dividend yield : 0.57%

(v) Price of the underlying share in the
market at the time of option grant: Rs.396.40

Weighted average information for options
granted on 10th October, 2008:

(i) Risk free interest rate : 8.17%

(ii) Expected life (in years) : 6.5

(iii) Expected volatility : 59.60%

(iv) Expected dividend yield : 0.73%

(v) Price of the underlying share in the
market at the time of option grant: Rs.308.85

ANNEXURE - C:

Corporate Social Responsibility:

DLF Foundation - An initiative:

This year, your Company embarked on an ambitious mission towards fulfilling
its social commitments by establishing DLF Foundation. Under the direct
patronage of Dr. K.P. Singh, Chairman, DLF Limited, the DLF Foundation has
been formed with the mission of empowering communities by creating
opportunities for the underprivileged and providing platforms for promoting
inclusive growth which is environmentally friendly, sustainable and
socially uplifting. The overall aim is to foster significant improvements
in areas of education, training, health and environment.

Education:

* DLF Rural Learning Excellence Centres:

The DLF-Pratham Learning Enhancement Programme covering 25 government
schools in over 22 villages of Gurgaon continues to enable underprivileged
children from the rural community to enhance quality of learning in
English, Mathematics and Hindi. The Programme has been extended to cover
Advanced English learning and establishment of rural libraries. The English
learning module which started with 40 teachers in November,2008 aims at
improving English conversation and reading skills of the Government Primary
school students. These students coming from marginalised backgrounds are
now learning to communicate in English and the programme has been extremely
well received by the beneficiaries.

* Swapan Sarthak School:

DLF is running a non formal school for over 200 underprivileged children
with no access to formal education wherein all facilities including fees,
uniforms, books and mid day meals are being provided. Out of these, 30
students are being mainstreamed in formal schools under a scholarship
scheme where all their education expenses will be borne by the Foundation.
Seeing the success of this programme, plans are afoot to open a number of
additional schools in the current financial year.

* SBM Senior Secondary School:

Your Company is running a CBSE affiliated SBM Senior Secondary School in
Delhi. The school has on its rolls 780 students coming from low income
group families and a number of academic and administrative reforms have
been undertaken to improve the functioning of the school. This year
performance of students in the Board exams of standard 10th and 12th has
been very encouraging wherein a large number of students have achieved
distinctions. DLF is also constructing a state-of-the-art and modern school
premises with a completely new look at its own cost.

* DLF Summerfields School:

DLF is running a CBSE affiliated 10+2 Summerfields School, Gurgaon for the
urban and rural communities. There are 1800 students studying in this
school.

Health:

* Rural Primary Health Centres:

DLF has established a rural health care programme under which the Company
has set up a number of Rural Primary Health Centres in Haryana. Each Centre
is catering to a village cluster for providing preventive and curative
health services to the under-privileged and rural population. Equipped with
medical consultancy, diagnostic facilities and medicine dispensation, these
Centres promote community health awareness and free health care for the
rural needy. Specialists are available at the Centres during clinic hours
and partnerships have been established with leading hospital brands in
Gurgaon for evacuation and treatment of patients for secondary and tertiary
care. The Company is taking definitive steps for starting mobile clinics
based on mobile vans to extend our reach into new villages where primary
health services are scanty.

* Eye Care camps:

A number of eye camps have been organised in rural areas around Gurgaon in
association with Arunodya Eye Centre. In these Camps eye care diagnostics
and surgical care were provided.

* Blood donation camp:

A blood Donation Camp was organised by Lioness Club Sukarma, Gurgaon and at
Delhi. There was a very enthusiastic response from DLF employees who
donated blood in large numbers.

Mid-Day Meals for the disabled:

DLF has partnered the Delhi Government's 'Hunger Free Delhi Campaign -
Aapki Rasoi' for providing daily free meals at a disabled workers site at
the India Gate Lawns in New Delhi.

Labour Welfare:

* Housing for Construction Workers:

Recognising the need to provide basic housing for the construction workers
employed in various DLF projects, DLF has built a number of labour camps
equipped with modern facilities. During the financial year, your Company
has established a new modern housing complex for construction workers in
Kherki Daula, Gurgaon. This complex caters to the housing, education and
health needs of about 5,000 construction workers and their families.

* Construction Training Centre:

A construction training centre has been established for training potential
supervisory level staff. This centre imparts training in various
construction disciplines and is fully residential. This aims to bring more
professionalism in construction activities.

Vocational Training Centres:

DLF Vocational Training Centres operating with the philosophy of end-to-end
livelihood solutions have trained and placed 1500 trainees in their
respective work fields so far. These training centres were established to
train unemployed youth from underprivileged backgrounds with the objective
to empower them with permanent skills thereby enabling them to earn their
livelihoods. More such vocational centres are planned to be established in
partnership with other reputed organisations in this field.

Community Outreach and Integrated Rural Development:

Community outreach activities were taken up pro-actively across all DLF
locations. Development activities were undertaken in association with NGOs,
Panchayats and local communities in the areas of:

a) Medical care through organizing awareness and health camps;

b) Introduction of modern education tools;

c) Enhancement of education standards by enlisting credible professional
organisations;

d) Renovation of village schools and upgradation of rural infrastructure;
and

e) Construction of rural roads.

Environment:

For holistic urban and rural development, DLF has paid special attention to
environmental improvements. The emphasis here is to give back as much if
not more as is being taken during the rigorous development process. The
Group's futuristic outlook encompasses a strong commitment towards the
environment. The landscaping and greening of the area around the
development projects is indicative of our endeavours in this regard. A
total of over 1.2 lakh trees have been planted by DLF over a period of
time, in Gurgaon. Out of this 30,000 trees have been planted and maintained
during the present financial year itself. HUDA has consistently over the
last seven years awarded DLF with 'Excellence in Horticulture Preservation'
award.

Promoting Green Building Technologies:

As a leading real estate Company in the country, DLF is committed to adopt
environment friendly practices in our buildings.

* The Company has installed gas co-generation technology in commercial
buildings leading to significant reduction in carbon emissions and
recycling waste heat for air-conditioning of these buildings resulting in
considerable energy savings. This initiative was recognised with the CII
conferring the 'CII National

Award for Excellence in Energy Management - 2008' to DLF.

* A pilot project has been undertaken in creation of energy efficient
buildings. The project has been initiated in Gandhinagar. The demonstration
project will for the first time enable comparison between an energy
efficient building and a similar conventional building, both constructed
adjacent to each other. This initiative is being undertaken in association
with US AID.

* DLF is constructing green buildings in Hyderabad under certification by
IGBC (Indian Green Building Council).

* DLF undertook an initiative with TERI in existing DLF Buildings to re-
engineer buildings for reducing energy consumption.

* DLF is a founder member of the Indian Green Building Congress (IGBC).

In addition to the above, the following green initiatives are being
undertaken in all DLF projects:-

* Recycling of waste water.

* Rainwater harvesting.

* Production of chilled water by Vapour Absorption Method thus eliminating
use of ozone depleting refrigerants.

* Use of high performance reflective glass in buildings.

* Pollution control measures during construction activity at project sites.

* Use of green materials like fly ash in construction

* Heat insulation roof treatment.

Award of Carbon Credits:

DLF's 150 MW wind power project at Gujarat has been registered on 18th June
2009 for carbon credits at the United Nations Framework Convention for
Climate Change (UNFCCC). This will generate about 3,00,000 carbon credits
annually. This brings DLF in the league of the select companies in the
country to have obtained carbon credits for their projects. A number of
other proposals for carbon credits are in the pipeline.

Improvement of Urban Infrastructure:

DLF is committed to sustaining and improving the urban infrastructure in
Gurgaon and has undertaken the initiative of improving the road network in
the area to international standards in partnership with HUDA. DLF under
this project is undertaking widening of HUDA roads from National Highway 8
to Sector 55/56 in Gurgaon and improvements along NH 8 from Delhi border to
end of Gateway Tower flyover. Under this project the road network will
include service roads, flyovers, underpasses and bypasses to facilitate
smooth traffic movement in the area. This will immensely benefit the local
community.

Employee Participation:

Employees form an important segment of the Group and are an important
stakeholder in the business. The medical needs of our own employees and
their families are catered for through an annual allowance and group
medical insurance. The Company has a gratuity policy for its employees in
place. The low attrition rate in the Company is indicative of their
satisfaction and in general, the employees are a happy lot.

The employees contributed towards the following social causes during the
year under review:

* Disaster Management - Fund-raiser for the Bihar Flood Victims:

* The disaster caused by floods in Bihar in 2008 had rendered many people
homeless and penniless. In order to make a small contribution towards the
ongoing relief and rehabilitation efforts, all employees of your Company
contributed their one day's salary towards the noble cause with the
management extending an equivalent amount. A total amount of Rs. 40 lacs
was donated to the Prime Minister Relief Fund.

* Adoption of an informal school in Kolkata:

DLF employees pooled in their resources to assist in educating children
coming from rag pickers and slum families at the Tiljala Society in
Kolkata.

Management Discussion & Analysis Report:

I. INDIAN ECONOMY & THE REAL ESTATE SECTOR:

In recent years, India has been amongst the fastest growing economies in
the world. The productivity growth rate of Indian economy is estimated to
be around 8% and it is expected to sustain until 2020. Moreover, at this
rate of GDP growth, India is poised to become the second largest economy in
the world after China. Further, the World Bank has ranked India as one of
the top economic reformers worldwide in the last decade. India has
simplified business registration procedures, cross-border trade and payment
of taxes. It has eased access to credit and strengthened investor's
interest. Factors like rapid industrial growth, Foreign Institutional
Investments and Foreign Direct Investments inflow, balance-of-payments
metrics, merchandise exports, invisible accounts and foreign-exchange
reserves have made a substantial contribution towards the growth rate of
Indian GDP.

After significant global growth witnessed over almost a decade, the year of
2008-09 saw some unforeseen events around the world. The global credit
meltdown that started with the collapse of Lehman Brothers soon percolated
into the real economy. By the fourth quarter of 2008, every nation was
experiencing effects of the worldwide recession and corrective actions were
being initiated by governments and central banks of all countries to tide
over the challenging times.

Inflation in India reached an all time high of 13% in August 2008 which
triggered the RBI to address the issue by raising the Cash Reserve Ratio
(CRR), Repo and Reverse Repo Rates. As the cash crunch gained prominence,
affecting growth rate and end user demand, fiscal stimuli were infused into
the economy for curbing inflation by the end of the year (from 13% in mid-
2008 inflation fell to 5% by end-2008).

Despite the global slowdown, India is expected to be the second fastest
growing economy in the Asia Pacific region. India's long-term growth story
continues to remain intact, against the backdrop of an increase in FDI in
FY08, which stood at USD 24 billion. According to the Department of
Industrial Policy and Promotion (DIPP), the first quarter of FY09 attracted
USD 10 billion. A sizeable portion of this FDI inflow went into the real
estate and housing sectors, with services and infrastructure being the
other recipient sectors.

Cushman & Wakefield research estimates that the pan-India cumulative demand
projection for the real estate sector across office, residential, retail
and hospitality is expected to be approximately 1,098 m.s.f. by the year
2012. The residential segment will continue to drive real estate demand in
the country accounting for nearly 63% of the total space demand during the
period 2008-12. While the demand for commercial office space is expected to
be 243 m.s.f. during this time frame, the retail and hospitality segments
are expected to constitute 95 m.s.f. and 73 m.s.f. of this total demand,
respectively.

Residential:

Rapid urbanization, increase in working age population and decreasing
household size are some of the key growth drivers for the residential
space.

The rapid increase in capital values, rise in mortgage rates and sustained
poor sentiment pertaining to employment scenario led to an abrupt decline
in housing demand in 2H/FY08. However, despite the short term aberrations
there is still a clear latent housing demand in the market at the right
price.

Even after witnessing the high growth rate in capital values, about 50% of
locations across major Indian cities remain affordable given the income
levels of the population. These are mainly suburban locations that are
witnessing an onslaught of construction activity in the office and retail
sectors, thus creating a demand for residential properties.

During Jan-Mar, 2009, some signs of mortgage rate softening were seen
wherein major Indian banks announced new schemes to attract customers. For
instance, the State Bank of India, the country's largest bank, announced a
mortgage rate of 8% for the first year. Other public and private banks
followed suit by lowering mortgage rates.

The demand for residential apartments has also picked up post February
2009. In a survey done by Jones Lang LaSalle Real Estate Intelligence
Service, the actual sales of apartments grew during Jan-Mar, 2009. The
National Capital Region (NCR) recorded sales of 4,491 apartments in Jan-
Mar, 2009, up 11% QoQ, while sales in Mumbai were flat at 740 apartments.

Commercial:

Cushman & Wakefield estimates that the total supply for commercial office
space across the top eight cities of India in 2008 was approximately 60
m.s.f.. While this was about 34% higher than supply of the previous year,
it was also 24% less than the office supply Demand Pull projected for 2008
at the beginning of the year. Delhi NCR accounted for the highest supply
(14.07 m.s.f.) in 2008, followed by Bangalore, Chennai and Mumbai. These
four metropolitan centres together accounted for nearly 74% of the total
office supply across the major cities. SEZ supply for the year was recorded
at approximately 19.3 m.s.f., with Bangalore accounting for the highest SEZ
supply (5.71 m.s.f.), followed by Pune (4.10 m.s.f.) and Chennai (3.87
m.s.f.).

Commercial office space absorption across major cities increased by nearly
6% in 2008 with almost 30% of the total dominated by pre commitments from
previous years. Delhi NCR saw nearly 5.86 m.s.f. of pre-commitments for
projects due in 2009, the highest among all major cities. Fresh pre-
commitments for the year (to be absorbed by 2009) amounted to 12.80 m.s.f.,
which was a 45% drop from that of 2007 and stands testimony to the cautious
expansion plans from the corporate sector in this current overcast economic
climate.

Retail:

The mall supply in India's top metropolitan centres in 2008 stood at 9.60
m.s.f., approximately 17% increase over that in 2007. However, it was still
a significant shortfall of over 50% from earlier mall supply projections
(Source: Cushman & Wakefield).

The soaring rentals of malls and main streets in major metropolitan cities
have turned retailers cautious with many stalling their immediate expansion
plans or altering their business strategy by entering value retailing, for
instance. This movement is likely to open a plethora of opportunities for
developers and investors alike, particularly in the Tier II and Tier III
cities that offer quality space and affordable rentals for retailers with
product offerings that are suited for consumers at these locations.
Established global retailers such as the German Metro AG, the South African
Shoprite, Wal-Mart and now UK's Tesco, etc., have already made their entry
into India. Luxury brands such as Armani, Aigner, Versace, Louis Vuitton,
Dolce & Gabbana, Zegna and Hugo Boss among many others have also
established their presence across major Indian cities. The collection at UB
City, Bangalore and DLF Emporio at New Delhi's Vasant Kunj are the
country's first operational luxury malls for Indian consumers.

The concept of specialised malls is also gaining popularity with auto
malls, jewellery malls, furniture malls and electronics malls anticipated
to be part of the sector in the future. Many developers are further setting
up mixed-use projects offering hotels, amusement facilities and commercial
space. Rising income levels and a changing outlook towards branded goods is
expected to translate into higher demand for shopping mall space, fuelling
strong growth in mall development activities. CRISIL research expects an
investment of Rs. 176 billion in organised retailing over the next 5 years.
Even though mall development activity was initially restricted to a few
major cities like Mumbai and Gurgaon, it is now expected to extend to other
cities like Surat, Pune and Ahmedabad, thus resulting in increases in real
estate activity in those cities.

Hotels:

Business in the hotel industry, much like any other sector, is cyclical in
nature. Any significant change in the economy, such as the slowdown
witnessed in 2H FY09, affects the sector resulting in lower occupancy
levels, delays in upcoming projects and anticipated decrease in room
rentals.

Despite the temporary slowdown that the Indian hospitality industry faced
due to the global economic crisis, India is still one of the world's
fastest growing hotel markets. With an overall increase in leisure and
business travellers over the past few years, India's hospitality industry
has attracted global attention. Hotels across all segments achieved healthy
occupancy levels until end-2007. A buoyant domestic economy, the
government's open sky policy, an overall real estate boom, initiatives to
liberalise foreign investment and especially the Ministry of Tourism's
(MoT) efforts to communicate the Incredible India' campaign together
contributed to a robust demand for hospitality space in major cities across
India.

Foreign tourist arrival increased by almost 65%, from 2.38 million in 2002
to 3.92 million in 2005, while foreign exchange earnings have grown by over
95% during the same period. In 2007 inbound tourist arrival touched 5
million, registering an annual growth of approximately 12%. Foreign
exchange earnings from tourism for the same period also witnessed an
impressive annual growth of 33% from USD 9 million in 2006 to USD 11.96
million in 2007. In keeping with the current growth rate, India's
hospitality industry is anticipated to grow at 8 per cent per annum between
2007 and 2016.

Cushman & Wakefield estimates that India needs to build another 50,000
rooms in the luxury 5-star up market category and 100,000 rooms in the mid
market category. The upcoming new room inventory should not cause much
concern for Mumbai & Delhi as both the cities can easily absorb another
3,000 to 5,000 rooms in the next 2-3 years. Between 25,000 to 27,000 new
up-scale hotel rooms are expected to be added in major Indian cities by the
year 2011 as compared to a total of nearly 35,000 rooms in mid-scale and
budget segment. Total stock of hotel rooms is expected to lag behind demand
till 2011.

II. YEAR GONE BY:

Even in a year of tight credit and liquidity conditions, the Company took
strategic initiatives to face the challenges and reiterated its leadership
position in the industry.

1. CHANGING MACRO ENVIRONMENT:

During the second half of FY 09, events around the world and the stringent
regulations by RBI led to a situation of tight liquidity and tight credit
availability for Indian corporates. At times when the economic environment
and sentiments were weakening globally, real estate came to be seen as a
sector with a high degree of credit constraints and a higher risk
weightage. This was further aggravated by the increase in interest rates,
whereby the cost of finance for Indian companies kept increasing.

The situation became more adverse with buyer sentiments becoming weak on
account of job uncertainties impacting their future income in the
prevailing recessionary environment. This led the buyers to defer their
decision of buying a house, which was coupled with an anticipation of fall
in prices. Investing in property in such circumstances became extremely
difficult for most people.

Moreover, MNCs as well as Indian Corporates withheld their expansion plans,
thereby impacting the demand for office and retail spaces.

Due to the above reasons, the months post September 2008 witnessed low
demand and low volumes of fresh sale and lease.

2. STRATEGY:

In order to weather the tough economic environment over the last year, DLF
adopted and implemented a strategy which allowed it to be in a relatively
comfortable liquidity position, whilst it tested the right market
conditions where it could attract significantly larger number of end
customers. DLF managed to effectively service all its debt and interest
obligations, without taking the restructuring route. It ensured that all
commitments to stakeholders, customers, financiers and employees continue
to be met in time.

During the year, the Company succeeded in re-paying short term debt by
raising long term debt mainly by securitizing cash flows. The quality of
the debt portfolio improved substantially with an average maturity in
excess of 4 years. In order to reduce debt, the Company also initiated a
strategic and comprehensive portfolio review, of both real estate assets
and non-real estate businesses, with a view to aggressively exit/bringing
in new third party investors in the non-strategic assets/businesses. The
Company, post a review, decided to exit its large township projects in
Bidadi and Dankuni given the uncertainties regarding land acquisition on
the part of the government. DLF is further contemplating similar measures
for other long gestation projects/assets.

Additionally, the Company continued its focus on cost reduction in all
areas and maintained tight focus on cash flows to ensure that operating
cashflows met all operating requirements, including finance charges. The
completion schedule of various projects in commercial and retail categories
has also been moderated in line with market requirement and customer
commitments. Accordingly, it slowed down construction on 27 m.s.f. of
office and retail projects combined.

For better value to its customers, DLF rescued its product offering at
various locations. Looking at the changed scenario, the Company revamped
the apartment size and altered the launch price of new projects - like The
Summit in Hyderabad and The Westend Heights in Bangalore - in line with the
expectations of customers. The pricing and apartment size in new projects
were modified with a view to bring down the ticket size of the units for
the benefit of the buyers.

The Company also revised pricing of some projects that had already been
booked to keep the price in line with the prevalent market value. In an
endeavour to pass on the benefits of reduced construction cost to its
customers, DLF revised the price of its apartments in Gardencity, DLF OMR
in Chennai and New Town Heights in New Gurgaon.

While the customers benefited with overall cost of the apartments reducing
by approx. 15-25%, the gross margins for the Company on these projects
declined by 10% to 20-25%.

In terms of new launches, DLF followed a cautious approach given the poor
customer sentiments. New leasing volume was also subdued, while there were
marginal cancellations of pre-leases during the year.

However, in a continued effort to test new markets and offer optimum
product to customers for which demand exists, DLF launched few projects at
aggressive price points in the beginning of current fiscal, further
establishing its position as the industry leader. These projects included
city centric project - DLF Capital Greens (in New Delhi) and affordable
housing projects - DLF Westend Heights (in Bangalore) and The Summit
(Hyderabad).

Going forward, DLF will continue to focus on liquidity preservation and
launch projects in line with market demand after adequate research of the
same. DLF plans to adopt the following steps as a part of its corporate
strategy:

* Relinquish marginal projects:

The Company intends to relinquish its projects where the development
margins are low in today's economic context. The objective is to improve
cash flows today rather than developing those projects over a period of 2-3
years while running a risk during the period of construction of these
projects.

* Rationalise construction:

The focus of the Company is on timely execution and delivery of its
projects to meet the timelines committed to its customers. It, thus,
intends to prioritize its construction activity and construction spend with
focus on conserving capital. DLF has already slowed down construction of 27
m.s.f. of capital intensive office and retail projects.

* Conserve liquidity:

* Improved debt profile:

The Company is focusing on improving its debt profile with a clear
visibility of the action plan which is expected to reduce debt by half. DLF
has met all its commitments and made long term arrangements for balance
debt, without any restructuring. DLF has already raised significant long
term debt to meet short term obligations. The average maturity of debt
portfolio is in excess of 48 months, showing improved quality of debt
profile.

The average interest cost for the debt is at 12.38%. The Company has its
debt repayment schedule well in place and expects to bring down its net
debt to equity ratio to 0.3 in the near future from a level of 0.6.

* Payment of short term loans:

DLF intends to pay all its short term obligations without any restructuring
/ rescheduling. Since October 2008, the Company repaid its obligations in
excess of Rs. 5,000 Crores and successfully raised Rs. 2,800 Crores in the
form of rent/sales securitized loans to pay short term obligations.

* Successful fund raising:

The Company also plans to raise Rs. 5,500 Crores from sale of non-core
assets and expects an additional inflow of more than Rs. 2,000 Crores from
DLF Assets Private Limited (DAL).

* Focus on core businesses going forward:

During the year, DLF focussed on portfolio adjustments towards liquidity
preservation and de-leveraging through unlocking value from non-strategic
assets or assets which do not have any short to medium term utilization.

Going forward, DLF intends to focus on its key business verticals - homes,
office and retail (commercial complexes and retail malls). The primary
focus will be on execution and delivery of projects which have been pre-
sold/pre-leased. Following this, DLF plans to make new launches of saleable
projects, with a target to launch around 16 m.s.f. of homes. It will plan
fresh launches for office and retail malls for leasing depending on the
visibility on pre-leasing in the coming quarters.

The Company will continue to aggressively test the market for affordable
housing across newer locations, with plans to launch 6-7 m.s.f. of mid-
income homes during FY10. It also plans to launch 8-9 m.s.f. of 'city-
centric' housing projects. Apart from these, the Company also plans to
launch 1-2 m.s.f. of commercial complexes as well as engage with office
clients to grow leasing volumes at competitive rates.

Financial Review 2008-09:

Revenue & Profitability:

During the fiscal 2008-09, DLF consolidated revenues of Rs. 10,431 Crores
for FY09 down by 29% from Rs. 14,684 Crores for FY08. EBIDTA stood at
Rs.5,986 Crores, down by 40% as compared to Rs. 9,961 Crores in the
previous year. Net profit remained at Rs. 4,469 Crores, a fall of 43% from
Rs.7,813 Crores. The EPS for FY09 stood at Rs. 26.24 as compared to
Rs.46.90 for FY08.

The decline in revenue was primarily on account of limited new sales and
fresh leases as a result of lower demand witnessed in the year. The
revenues recognized from DAL also declined to Rs. 4,004 Crores from
Rs.6,943 Crores in the previous year with the management's decision to stop
recognizing further revenues from DAL on account of low pre-leasing
activity for DAL properties.

The revenue recognized on PoCM basis also fell as a result of
reprioritisation of projects to tide over the adverse credit and liquidity
conditions.

The revenue and profit figures of the Company during the year were after
adjusting for losses contributed by non-core, like DLF Pramerica Life
Insurance, Hotels & Power, amounting to Rs. 163 Crores. These are new
businesses of the Company which are still being nurtured, but are expected
to contribute significantly once they become operational in full swing.

To provide maximum value to customers in difficult economic conditions, DLF
announced / gave price reset and other benefits to customers amounting to a
total revenue impact of Rs. 688 Crores, a part of which reflected in the
numbers for 2008-09 as well.

The rental income during the year increased to Rs. 520 Crores from Rs. 285
Crores in the previous year, despite subdued volumes of fresh leasing and
marginal cancellations of pre-leases during the year. The year saw launch
of commercial complexes across the country and premium homes targeted at
mid-income segment.

Total expenditure declined to Rs. 4,445 Crores from Rs. 4,722 Crores during
last fiscal. The construction cost was contained at Rs. 3,229 Crores from
Rs. 4,000 Crores as a result of decline in construction costs and reduced
construction activity, with certain projects being put on hold. The staff
cost increased to Rs. 454 Crores from Rs. 300 Crores and the other
expenditure rose to Rs. 762 Crores from Rs. 424 Crores.

The finance charges increased to Rs. 555 Crores (excluding capitalized
interest) as against Rs. 310 Crores (excluding capitalized interest) in the
previous year, despite high interest rates prevailing for most of the year.
The Company was able to contain its interest costs due to efficient mix of
various debt instruments.

The direct tax outflow from DLF was Rs. 750 Crores.

EBIDTA margins saw a decline to 57% from 68% in the previous year, owing to
focus on launch of mid-income homes, and decline in launch of commercial
complexes and luxury homes. Decline in revenues booked on account of DAL
also contributed to the decline in the margins.

Balance Sheet:

With a net worth of Rs. 24,154 Crores, net gearing of 61% and cash reserves
of Rs. 1,196 Crores, DLF has a strong balance sheet even after a turbulent
year.

The Company met all its stakeholders' commitments in time during the year,
including its commitments towards debt servicing to banks and financial
institutions, without any restructuring of debt.

DLF also raised significant long term debt to pay its short term
obligations and met its operating requirements with prudent internal cash
flow management. The Company's debt now has an average maturity of over
forty eight months.

The shareholders' funds improved to Rs. 24,154 Crores from Rs. 19,688
Crores. The loan funds saw an increase to Rs. 16,320 Crores from Rs. 12,209
Crores. The net debt-equity ratio stood at 0.62 as compared to 0.51 at the
beginning of the year, which is amongst the lowest in the real estate
sector.

Net fixed assets grew to Rs. 7,912 Crores from Rs. 4,819 Crores on account
of capitalization of leased-out assets and movement of some land parcels
from stocks. Capital work-in-progress rose to Rs. 5,688 Crores from
Rs.5,184 Crores as area under construction for to-be-leased out assets
grew.

Investments grew marginally to Rs. 1,402 Crores from Rs. 911 Crores on
account of investments in joint ventures and consolidation of investments
made by Insurance JV. Stocks grew on account of increase in work-in-
progress as projects under construction grew.

The increase in sundry debtors was owing largely due to increase in
receivables from DLF Assets during the year, while receivables from non-DAL
sales remained similar. Receivables from non-DAL sales usually remain high
as revenues get booked under percentage of completion method (PoCM) on the
balance sheet date while the customer payments would be due a few days
later. The increase in sundry debtors need also be seen in light with
advances from customers, which is reflected in current liabilities and
stands at Rs. 1,700 Crores.

The cash and bank balances reduced to Rs. 1,196 Crores from Rs. 2,142
Crores at the beginning of the year as cash got deployed in working
capital. The increase in loans and advances to Rs. 9,712 Crores from
Rs.7,369 Crores was on account of increase in advance tax payment, increase
in advances during course of business and partly on account of advances
outside the group.

The current liabilities include advances received for sale of properties
that were not recognized in sales revenue. While the current liabilities
stood at Rs. 4,140 Crores, the advances from customers amounted to Rs.1,700
Crores, reflecting that other current liabilities have come down.

BUSINESS REVIEW 2008-09:

1. HOMES:

Built on a foundation of strong lineage and an established reputation, DLF
has been a trendsetter in contemporary urban development and housing. These
developments have always been all embracing with comprehensive solutions
for eminent and quality living.

DLF has pioneered some of the best-known urban housing and retail
destinations in Delhi including South Extension, Greater Kailash, Rajouri
Garden, Model Town, Hauz Khas and Kailash Colony.

The product categories of the Company in homes segment deliver the
strengths of good architecture, appropriate designs, impressive aesthetics
and safety features.

DLF's dominant position in Indian homes segment:

* Trusted brand with superior execution track record.

* Pioneered townships and group housing in India.

* Complete offering of super luxury, luxury and mid-income homes.

* 195 m.s.f. of plots and 21 m.s.f. of group housing developed.

* 290 m.s.f. of development potential.

* 16 m.s.f. under construction.

Performance FY09:

The year 2008-09 started with carrying forward the success of mid-income
homes launched in FY09. However, with the change in the overall economic
environment, the sales saw a slump post October 2008. This was primarily
due to weak customer confidence in buying homes on account of uncertainty
of future incomes, coupled with a perception and anticipation of price of
homes being reduced.

Looking at the changed scenario, DLF revamped few of its offerings and
launched new projects in line with the expectations of customers. It also
restructured some of its projects and revised prices in some others.

Launches FY 09:

* Westend Heights in BTM, Bangalore.
* Green Estate in DLF Nandigama, Hyderabad
* DLF Express Towers in DLF New Gurgaon
* DLF Express Greens in DLF New Gurgaon
* The Summit in Kokapet, Hyderabad
* New Town Heights, DLF Kakkanad

Outlook:

Given the prevalent sentiments, DLF plans to follow a cautious approach
towards new launches. However, as economic conditions stabilize, it plans
to make selective new launches based on targeted market research in
different markets to catch the changing demand scenario.

The first quarter of FY10 has already started showing positive signs with ~
3 m.s.f. sold in homes segment. 1,389 apartments were booked in a single
day in the newly launched project - Capital Greens - in the heart of Delhi
during April 2009. Even in Bangalore, over 700 apartments were booked in Q1
FY10 alone. Seeing these positive trends, the Company will continue to
launch new residential projects in various locations across the country,
after adequate research of market demand, at the best prices.

The Company will continue to focus on affordable housing with test launches
across newer locations, along with launching some strategic 'city-center'
housing projects, with an endeavour to generate buyer interest by providing
excellent location and superior product specifications.

2. OFFICES:

With over six decades of excellence, DLF is a name synonymous with global
standards, new generation workspaces and lifestyles. It has the distinction
of developing commercial projects and IT parks that are at par with the
best in the world.

DLF has pioneered the walk-to-work' concept with the 3,000-acre DLF City,
where well-planned residential developments are integrated with modern
business and commercial complexes.

DLF's contemporary workplaces are equipped with modern facilities that
synchronize functional efficiencies with aesthetic appeal and have been
identified as preferred destinations by leading MNCs and Indian corporate,
including many Fortune 500 companies.

DLF Commercial offers ready-to-move-in as well as built-to-suit options in
Campus Style development with scalable growth and large landscaped greens,
effective disaster management plan, integrated retail and recreation areas,
provision for amenities like gym, food court, health club, business centre,
24x7 medical services, etc.

DLF has become a preferred name with many IT & ITES majors and leading
Indian and International corporate giants, including GE, IBM, Microsoft,
Canon, Citibank, Vertex, Hewitt, Fidelity Investments, WNS, Bank of
America, Cognizant, Infosys, CSC, Symantec and Sapient, among others.

DLF's dominant position in Indian offices segment...:

* Founder and pioneer of Grade A office leasing market.

* Leveraging location advantages and deep customer relationships.

* Occupancy levels of ~ 98%

* More than two-third of client base belongs to Fortune 500 list.

* Mix of IT/ITES and non-IT/ITES businesses.

* 18 m.s.f. of completed commercial space.

* 68 m.s.f. of development potential.

* 16 m.s.f. under construction.

Performance FY09:

DLF had tied up leases for office space upto December 2009. With the
economic environment changing through the second half of FY09, the Company
focused its strategy on execution and delivery of the pre-leased space with
reduced stress on fresh bookings. The Company also slowed down construction
on some of its projects and focussed on projects where the delivery was
round the corner.

Through the year, DLF pre-leased 1.12 m.s.f. of fresh office space while
some marginal cancellations were witnessed in the space booked earlier.
With its strong emphasis on execution and meeting commitments of delivery,
DLF delivered 4.98 m.s.f. of space to its customers. DLF has 16 m.s.f. of
office space under construction against 17 m.s.f. of pre-leases in place.

During the year, the Company also applied for de-notification of 5 of its
SEZs, and received in principle approval from the Central Government for
the same.

Outlook:

DLF intends to expedite execution and deliveries wherever backlog exists
and heighten the construction activity based on visibility of pre-leasing.
The strategic locations of Company's land resource for office development
and excellent client relationships over the years will enable it to
increase its leasing activity as and when the markets improve and
corporates revive their expansion plans.

3. RETAIL:

DLF has different retail real estate development formats catering to the
entire spectrum of the retail market. Through this broad based approach,
the Company is able to serve the needs of customers with different buying
patterns and purchasing power.

Retail Malls:

DLF pioneered the retail revolution in the country and brought about a
paradigm shift in the industry by redefining shopping, recreation and
leisure experiences with the launch of City Centre in Gurgaon in 2000.
Changing lifestyles, an accent on quality entertainment, transition in
consumer preferences from conventional modes to a wholesome entertainment
experience, enhanced income levels and a higher propensity to spend have
further triggered the growth in the retail market in the country. DLF's
retail activities in the exciting arena of mall development synchronize
well with its other activities in the entertainment business with a chain
of multiplexes - DT Cinemas.

DLF's expansion in Indian retail segment:

* Quality portfolio of premium locations across India.

* Complete portfolio of luxury malls, shopping malls and neighborhood
malls.

* Benefit of established brand name and strong track record.

* Adequate mix of luxury, premium and semi-premium brands - International
as well as Indian.

Performance FY09:

During the year, DLF opened four retail malls in New Delhi and one in
Chandigarh. These include DLF Place (Saket), DLF Place & DLF Emporio
(Vasant Kunj), DT City Centre (Shalimar Bagh) and DT City Centre
(Chandigarh).

DLF Place, Vasant Kunj, has the maximum number of screens (seven) across
all cinemas in Delhi and NCR. DLF now has 26 screens of DT Cinemas across
Delhi, NCR and Chandigarh.

Although fresh leasing was subdued owing to the slowdown in the economy,
DLF continued to remain focussed on execution and delivery of pre-leased
projects.

Commercial Complexes:

Since its inception in 2007, DLF has successfully launched commercial
complexes and is in the process of marking its presence across various
locations in India. DLF is credited with introducing and pioneering the
revolutionary concept of developing commercial complexes in the vicinity of
residential areas. The success of the commercial complexes by DLF can be
attributed to its implementation of successful business models, which
include development of innovative business strategies, strengthening its
professional resources and driving market penetration that is adaptive to
local market needs. The strategic positioning of its projects and scale of
operations makes DLF the indispensable leader in the commercial real estate
business.

A strong Pan-India presence backed by a full range of project planning,
management and execution skills makes DLF a leader in the business.

Performance FY09:

DLF proved its business model for commercial complexes with significant
sales in projects launched - Corporate Greens in New Gurgaon and DLF
Towers, Lucknow - in the first half of the year. However, the demand saw a
decline with the dampening of economic environment, due to which the sales
declined in later part of the year. DLF Tower in Lucknow, launched during
Q2 FY09 saw a good response.

Outlook:

Focussing on the sales model, DLF plans to make selective launches of
commercial complexes across the country with plans to launch 1-2 m.s.f. It
will also seek to further enhance the existing standards of mall management
for success in retail malls.

It will continue to focus on execution of projects which are pre-sold to
meet its commitments.

4. HOTELS:

DLF plans to develop world-class hospitality properties under the luxury,
business, leisure & recreational segments of the hospitality industry. The
Company seeks to tie-up with the finest and most comprehensive global
operators to suit 'individual property' theme with some of the leading
brands of hotels in the world.

DLF has acquired AMAN Resorts to establish its presence in the hotel
business internationally. It also has a JV with Hilton hotels for the
development and management of hotels pan-India. Aman Lodhi, a luxury
property of AMAN Resorts in New Delhi, opened in FY09. Due to market
conditions prevalent in the second half of 2008-09, DLF suspended all hotel
projects till the economic conditions and the industry revives. However,
the first hotel under the DLF-Hilton JV, the Hilton Garden Inn Saket in
Delhi, which got delayed due to certain regulatory approvals, is now
expected to open in second quarter of FY10.

5. LIFE INSURANCE:

DLF Pramerica Life Insurance Company Ltd. (DPLI), a joint venture between
DLF Limited and Prudential International Insurance Holdings (PIIH), has
been incorporated to develop, promote, market and sell life insurance
products in India on an exclusive basis. DLF holds 74% of the equity share
capital of the joint venture Company and Prudential Insurance holds 26% of
the equity share capital of the joint venture Company.

DPLI commenced operations in India in September, 2008, with the
introduction of two innovative insurance products - DLF Pramerica Family
Income Plan and DLF Pramerica Wealth+. The Company has recently launched
DLF Pramerica Golden Age, a Unit-Linked Pension Plan with many advantages,
including built-in safety measures to help safeguard an individual's
retirement investments.

Performance FY09:

Within a short period, the Company has established itself in the industry

that it operates in. Some of the major milestones include:

* 2,778 policies issued with Annualized Premium of Rs.6.45 Crores and a
Sum assured of Rs.66.52 Crores by March, 2009.

* 13 branches opened and functional across NCR, Haryana and Punjab.

* Third party distribution has been initiated through corporate agents and
brokers.

* 5 products and 4 riders have been introduced. This includes protection


oriented term plans as well as unit link product options.

* As on March 31, 2009 the Company had 434 employees on board.

Outlook:

* Scale-up the agency sales force deeper into the Punjab, Haryana and NCR
markets. The Company also plans to enter select new states in the current
year.

* Establish third party distribution and form select deep partnerships. The
Company will customize products and operating processes to provide superior
customer service to third party distributors.

* Expand the product suite by introducing market-leading products.

* Maintain the high focus on cost and capital efficiency.

* Strengthen brand awareness and recognition.

6. ASSET MANAGEMENT:

DLF-Pramerica Asset Managers Private Limited is a joint venture between DLF
Limited and Prudential Financial, Inc. (PFI) to carry on asset management
business with investment expertise primarily focussed on the Indian capital
markets.

PFI is the financial services leader with approximately USD 637 billion of
assets under management as of September 30, 2007 and was the world's 14th
largest institutional asset manager based on worldwide assets under
management, as ranked by Pensions & Investments, US trade publication, as
of Dec. 31, 2006.

Under the terms of the agreement, PFI is the majority shareholder in the
joint venture with 61 per cent interest, while DLF owns 39 per cent. The
Company will provide a broad array of mutual fund and investment products,
including domestic oriented term plans as well as unit link product
options.

* As on March 31, 2009 the Company had 434 employees on board.

Outlook:

* Scale-up the agency sales force deeper into the Punjab, Haryana and NCR
markets. The Company also plans to enter select new states in the current
year.

* Establish third party distribution and form select deep partnerships. The
Company will customize products and operating processes to provide superior
customer service to third party distributors.

* Expand the product suite by introducing market-leading products.

* Maintain the high focus on cost and capital efficiency.

* Strengthen brand awareness and recognition.

6. ASSET MANAGEMENT:

DLF-Pramerica Asset Managers Private Limited is a joint venture between DLF
Limited and Prudential Financial, Inc. (PFI) to carry on asset management
business with investment expertise primarily focussed on the Indian capital
markets.

PFI is the financial services leader with approximately USD 637 billion of
assets under management as of September 30, 2007 and was the world's 14th
largest institutional asset manager based on worldwide assets under
management, as ranked by Pensions & Investments, US trade publication, as
of Dec. 31, 2006.

Under the terms of the agreement, PFI is the majority shareholder in the
joint venture with 61 per cent interest, while DLF owns 39 per cent. The
Company will provide a broad array of mutual fund and investment products,
including domestic


and eventually international mutual funds to Indian retail and
institutional clients.

The AMC has received in-principle approval from SEBI and is awaiting
approval to commence business.

III. CORPORATE FUNCTIONS:

1. HUMAN RESOURCE:

Human resource in DLF continues to be a core strength and always endeavours
to work towards having sound, proactive & progressive HR strategies and
practices in place so as to align Company's objectives and employee
aspirations. The function continues to strive towards ensuring that the HR
philosophy is translated into action.

Performance - FY09:

* Resource planning & talent acquisition:

Looking at the economic downturn during the year, the focus was on ensuring
optimum utilization of manpower by redeploying personnel from low priority,
slow moving projects to high priority projects. Along side, it was also
ensured that operations do not get affected due to any shortfall of
manpower. DLF now has a high caliber, well experienced, multi-functional
team of 2,882 employees across various group companies. DLF continues to
nurture a blend of experienced and fresh employees in its talent pool,
including highly qualified professionals, both technical and non-technical.

* Compensation & performance management:

DLF recognizes that compensation is a key driver to attract and retain the
talent. Our compensation structure continues to be attractive and a
benchmark in the industry. We continue with our variable component of pay
linked to business and individual performance.

* The grant of stock / shadow options to the employees was also linked with
employee performance.

* Training & development:

Even in the time of slow down, the HR team continued to provide relevant
need based training activities through the following initiatives:

- Discover yourself as a trainer:

Giving platform to the employees to unleash their hidden potential as a
trainer and share their knowledge with the DLF Family.

- 'Express learning':

An e-learning initiative for knowledge sharing with employees.

- Developing Functional modules on various functions of the business which
are available on the intranet for employees.

- Helping employees cope with tough times and manage stress through stress
management and meditation workshops.

* Employee engagement & welfare:

The employees remain connected & updated on the developments in the Company
through various communication channels including Townhalls, update letters
from Vice Chairman's Desk, fortnightly HR Newsletter-SAMPARK, intranet (DLF
Connect) and internal HR help lines to ensure a two-way flow of information
with the employees. A knowledge sharing forum has also been launched in our
intranet wherein the employees can seek clarifications and information,
share their apprehensions, views and give suggestions.

Welfare focus includes helping employees cope up with their personal/work
related problems through counselling by a professional counsellor, health
check up camps, yoga and meditation sessions, etc.

DLF has now also implemented several events and programmes that connect not
only our employees but also touch base with their families. Events like
Cricket tournaments, photography/painting competitions, online quiz,
festivals, have now become a way of life at DLF.

The employees are also encouraged to participate in community service
activities in partnership with several NGOs, viz. blood donation camps,
tree plantation campaigns, Teach India initiative, Aapki Rasoi- making food
available for the poor, 'Vastradaan'- collecting clothes for the down
trodden in collaboration with an NGO, among others.

* Employee Services:

All our employee related systems have been integrated on RAMCO
applications. Various employee services and HR systems including employees'
records have been made available online through our Employee Self Service
(ESS) system in FY 2008-09.

2. FINANCE AND CONTROL:

DLF's finance team at the corporate level is complemented by independent
finance teams of various business units to ensure an effective and dynamic
system of flexibility and control. This structure ensures financial
propriety and accurate reporting of business transactions, ensuring that
all statutory requirements are strictly adhered to and continuously
monitored. This is supported by a compliance monitoring system, an
enterprise-wide MIS that identifies any deviations from compliances and
prompts remedial action.

DLF has a strong internal audit team that performs a pre-audit, ensuring
compliance of procedures and internal controls, and plays an important role
in improving checks and balances. The team is headed by a Chief Internal
Auditor, who reports directly to the Audit Committee consisting of majority
of independent Directors. The significant observations made in the internal
audit reports and their implementation status is regularly presented and
reviewed by the Audit Committee of the Board.

DLF has also implemented a stringent external audit mechanism, as required
by applicable statutes.

3. LEGAL:

It is well known that Real Estate industry requires legal due diligence in
all its activities. This necessitates compulsory observance and compliance
of all the applicable laws as may be applicable to Company's business in
various states of the country from time to time. This is where the role of
Company's Legal Department comes into play. It has to constantly ensure
that all projects - at pre-construction as well as post-construction stages
- get completed with due compliance and strict observance of laws both at
the Central and at the State level. The Company employs a dedicated team of
legal professionals who believe in corporate ethos that blends talent,
creativity, professionalism, dedication with corporate governance. The
Company has achieved many milestones in successfully concluding various
important litigations in Company's favour, thus providing paramount support
and thrust to the Company's business.

During the year 2008-09, a 'Task Force' was set up to ensure that the
compliance management system for complying with various regulatory issues
introduced last year functioned smoothly and all applicable laws to the
Company's business were fully followed and complied with diligently.

The grievances aired through the 'Whistle Blower' policy were promptly
attended. It was ensured by the legal team that all concerned in the
Company excel in maintaining the highest observance of corporate governance
principles in letter and spirit. A new benchmark in Corporate Excellence
was established when our Company was selected by the World Council of
Corporate Governance for 'Golden Peacock Award' for Corporate Governance in
2008.

Last but not the least, the Compliance Committee of the Board of Directors
made valuable contributions in giving suggestions and rendering advice from
time to time in strengthening the Legal Compliance System of various laws
applicable to the Company in various States, thus minimizing the risk
areas. The compliance team has a clear vision and a futuristic mission to
ensure that the Company continues to be a 100% law compliant Company' in
times to come and the team is striving tirelessly across the Company to
meet this corporate goal.

4. INFORMATION TECHNOLOGY:

IT function has played an important role in DLF Limited since the Company's
inception. DLF IT function takes care of all the IT-related aspects across
the group (including all Business Units and Joint Ventures), from
infrastructure management to procurement of industry specific standard
software and their implementation, implementation of advanced technological
products that are reviewed from time-to-time.

After the partnership with IBM 3 years ago, distinct improvements have been
made in the total information life cycle - from procurement, installation,
maintenance, enhancement and tracking of Infrastructure as reflected in
service level monitoring, customer satisfaction and number of technological
innovations carried out.

DLF has also tied up with Bharti Airtel to achieve secured connectivity to
all DLF offices/locations across the country.

Performance - FY 2009:

All servers, including the critical mail server, have been migrated to IBM
Data Centre at Bangalore and domains have been migrated to dlf.in in line
with the corporate website.

* ISO 27001 CERTIFICATION:

DLF IT has been awarded ISO 27001 CERTIFICATION in Security Management
system for the provision of information technology services to Real estate
business and support functions.

* ERP implementation:

ERP implementation concluded in DLF Limited in May'08. With transaction
system in place, work has now started on MIS through RAMCO Business
Intelligence reporting tool. Also, work has been started on RAMCO Customer
Relationship Module.

* Implemented SAP in our Retail Venture which includes Business
Intelligence.

* Compliance-Monitoring System:

Statutory compliance monitoring system has been implemented across the
group to ensure timely submission of returns.

* Digitization of Records:

Since its inception, DLF has maintained a repository of huge physical
records of customer copies of agreements, financial records, approved
drawings, copies of approvals and government sanctions and other statutory
records. The current repository of digitized records has grown to about 11
million records.

* Setup of state-of-art Document Centre:

Work is on in full swing on state-of-art documentation centre with floor
space of approx. 43, 000 sq. ft. in one of DLF's own building in Cyber
city, Gurgaon. This centre will have Technical Reference Section, Media
room, Scanning Stations, etc.

* Geographical Information System:

To test the capability of GIS land information system, a pilot project with
one of the business units of DLF was done.

* The entire corporate website of DLF was redesigned to make it much more
attractive and interactive with users. A micro-site for Emporio was also
made live.

* A Computerized Digital Video Surveillance System was installed and tested
out at one of our offices.

Outlook:

The IT team of DLF intends to focus on the following areas going forward:

* Execution skills - enhanced Project Planning Process using state-of-the
art Project Planning Software like Prima Vera.

* Increased control over expenditure and profitability at Project level.

* Project compliances monitoring (pre construction, construction, post
construction) - implement a robust Work-Flow System which will enable Top
Management review of compliance status as well as storage of all relevant
documents in a repository using state-of the art technology FILENET.

* Faster processing of Payments - all payment processes to be automated
through a Workflow Package.

* Customer interaction to be a key - we intend to establish improved
Customer Relationship Management which can be acquired only by more
automated interfaces with the customer using CRM packages.

* More on-line Management Information System through Business Intelligence
Packages.

* Extension of Automated Attendance System and Digital Video Surveillance
Systems to all our offices and Malls.