Dear Shareholders,
 
 I take great pleasure and privilege in presenting the Annual Report &
 Financial Statements for the year 2010-2011.
 
 The Financial Year 2010-11 has been a remarkably eventful year for
 DHFL. The year has marked us crossing a total balance sheet size of Rs.
 20,000 crore and achieving the coveted position of Third Largest
 Housing Finance Company in India.
 
 Twenty-seven years ago our Founder Chairman, the Late Shri Rajesh Kumar
 Wadhawan started this Company with a vision to provide easy Housing
 Finance to the multitudes of Marginalized Indians enabling them to
 realize their ''Dream to Own a Shelter'' on ''FAIR TERMS ''.
 
 Our late Chairman Shri Rajesh Kumar Wadhawan''s Vision has now become a
 reality, with DHFL becoming the fastest growing Housing Finance Company
 in the country as well as one of the most Powerful Brands - as reckoned
 by POWER BRANDS
 
 Our recent acquisition of 100% stake in Deutsche Post Bank Home Finance
 Ltd., (DPHFL), has added one more feather in our cap, strengthening our
 position as a leading housing finance company in the country.
 
 Our strategic move to reach ''LOWER & MIDDLE INCOME SEGMENT'' through
 Aadhar Housing Finance Pvt. Ltd., in collaboration with International
 Finance Corporation (IFC), Washington, an arm of World Bank, has
 further strengthened our footprint in this segment.
 
 OUR TEAM: With the economic environment and competitive landscape
 changing at an unprecedented pace, our Board of Directors extended
 their unstinted support and helped us withstand all challenges enabling
 us to build a team of self-motivated individuals, who in turn, helped
 build a sustainable organization. These self-motivated people have made
 the difference and helped us in formulating & implementing the right
 strategies. Our constant effort to recruit the right people and to
 continuously work towards upgrading their skills and efficiency has not
 only paid high dividends but has also helped in securing a coveted
 place in ''INDIA''S TOP 100 BEST EMPLOYERS'', in the survey conducted by
 ''GREAT PLACE TO WORK INSTITUTE'' in association with the ECONOMIC TIMES,
 a testimony to our concentrated efforts on ''PEOPLE FOCUS''.
 
 The overall success of DHFL, majorly would not have been possible but
 for the contributions of its people, robust process systems and a
 culture of discipline for excellence. Our constant questioning about
 things around for improvements has definitely made the difference as
 our ''WINSIGHTS''.
 
 Though our achievements over the years have been satisfying, our
 craving to do better and achieve greater heights and cater to the vast
 needy shelterless people of our rapidly growing country, saw us
 constantly working on newer strategies for continuous improvement.
 Recently we concluded a process and system evaluation to understand
 gaps, keeping in perspective, the next five years growth to achieve our
 goals and to improve our operational capabilities.
 
 Today, DHFL disburses more than 60% of its loans in less than 7.5 lakh
 ticket-size, through its 200 strong location network primarily in Tier
 I and Tier II cities. As per National Housing Bank report, there is a
 housing shortfall of 90% in India, majorly in lower and middle income
 groups. Our learning and domain expertise, over the past 27 years will
 definitely be ''''The Engine, to pull us through for further growth in
 the years to come.
 
 Opportunities to grow, though rosy, the share of challenges and
 impediments related to this segment cannot be ignored. Affordability
 being the main cause for concern in the Indian context, it is
 imperative to ensure that every income generating household should have
 access to housing finance, as an increase in home
 
 ownership would ultimately lead to the economic well being of
 individuals and the society at large.  Thus, it is imperative that we
 focus and overcome certain salient points mentioned below to increase
 ownership of homes and bring in more affordability to the common man in
 the lower and middle income segments.
 
 The Indian housing market is still at a nascent stage with very few
 affordable housing projects with focus restricted to tier I & tier II
 cities. Most of the developers focus mainly on projects which yield
 higher returns and not on low cost housing projects which requires
 greater government intervention. There is a greater need to control the
 supply & price of housing stock in the country.  Land prices are
 currently market driven which needs to come under the direct control of
 government. Also, there is a lack of a mechanism to ensure that housing
 remain affordable for the masses.
 
 Active participation from both government & private players is required
 for framing national as well as state level policies, especially for
 low cost housing projects. Effective tracking of housing stock will
 help in identifying the demand- supply gap & planning for creation of
 further housing stock.
 
 Government needs to proactively facilitate housing supply at both
 National and state level and provide subsidies (e.g. land at low cost)
 in a transparent manner to encourage private players to build more low
 cost housing projects which in turn will create healthy competition
 leading to lending on fair terms and affordability for all.
 
 With the acquisition of Deutsche Post Bank Home Finance Ltd., (DPHFL)
 and our tie up with IFC in launching ''Aadhar Housing Finance Pvt.
 Ltd.'', we are bound to make inroads into areas so far untapped and set
 up a new trend in enlarging our market share in housing finance to a
 larger section of people from lower and middle income groups.
 
 Looking forward, your Company faces exciting business opportunities.
 With our major thrust areas now being beyond Tier I and Tier II cities,
 we envisage a huge market share in our focus segment. Our inherent
 strengths are our Long term vision, strategies, motivated workforce and
 network. We will certainly capitalize on the opportunities, overcome
 challenges and consolidate our position in the market.
 
 Our commitment to ''affordable housing finance, to the discerning
 multitudes in the lower and middle income groups of people is certain
 and reassuring''. In the process of achieving our goals, we will
 constantly strive to enjoy the trust and confidence of our esteemed
 shareholders, employees and all stakeholders in any form while
 achieving our prime objective of providing housing finance.
 
 Kapil Wadhawan
 
 Chairman & Managing Director
 
 Place : Mumbai
 
 Dated : 13th May, 2011