Dear Shareholders,
 
 The Directors are pleased to present the 27th Annual Report on the
 business and operations of your Company together with the Audited
 Statement of Accounts for the year ended 31st March, 2011.
 
 FINANCIAL RESULTS
 
 The Financial performance of the Company for year ended March 31, 2011
 is summarized below:-                                  (Rs. in Crore)
 
                                              2010-2011     2009-2010
 
 Gross Income                                  1,451.24        992.55
 
 Less : Interest                                 964.55        669.84
 
 Overheads                                       176.91        117.69
 
 Depreciation                                      3.73          2.83
 
 Profit before Tax & Exceptional Items           306.05        202.19
 
 Add:Exceptional Items                            35.43             -
 
 Profit before Tax                               341.48        202.19
 
 Less:Provision for taxation                      76.35         51.50
 
 Profit after tax                                265.13        150.69
 
 Add : Balance b/d from the previous year         30.35         24.74
 
 Surplus available for appropriations            295.48        175.43 
 
 Appropriations
 
 Transferred to Special Reserve under
 
 Section 36(1)(viii) of the Income Tax Act, 1961  40.00         35.00
 
 Transferred to General Reserve                  100.00         75.00
 
 Transfer to Contingency Reserve                  35.00             -
 
 Dividend on Preference Shares                    00.02           .03
 
 Dividend for Earlier Year                         6.59          5.34
 
 Proposed Equity Dividend                         36.57         24.61
 
 Tax on proposed Dividends                         7.34          5.09
 
 Balance carried over to Balance Sheet            69.96         30.36
 
 Total                                           295.48        175.43
 
 PERFORMANCE
 
 Your Company registered a remarkable growth in its operations. The
 operating profit before charging depreciation and tax amounted to Rs.
 309.78 crore as against Rs. 205.02 crore in the preceding year;
 representing a rise of 51.10%. Profit After Ta x (PAT) went up by
 75.94% to Rs. 265.13 crore from Rs. 150.69 crore in the previous year. The
 EPS improved to Rs. 26.43 as against Rs. 19.78 of the previous year.
 
 The Company''s core business is providing housing finance, and also
 carries on vertical businesses such as insurance and property services.
 These vertical businesses are operated through Company''s
 subsidiary/associate companies which have strong synergies with the
 Company and offers customers a wide range of financial products and
 services under DHFL brand. Detailed review of the operations of each
 subsidiary companies are presented in the respective company''s
 Directors'' Report, a brief overview of the major developments thereof
 is also presented in the Management Discussion and Analysis, forming
 part of this Report.
 
 Lending Operations
 
 The cumulative loans disbursement of the Company as at the end of
 financial year 2010-11 was Rs. 19739.79 crore as compared to Rs. 13234.22
 crore in the previous year. The housing loans/other loan sanctioned
 during the year ended 31st March, 2011 were to the extent of Rs. 8,949.48
 crore as against Rs. 5,273.96 crore sanctioned during the previous year.
 
 Disbursement
 
 The loan disbursed during the year ended 31st March, 2011 was to the
 extent of Rs. 6,505.57 crore as against Rs. 3865.56 crore disbursed during
 the previous year.
 
 DIVIDEND
 
 In view of the overall performance of the Company and the objective of
 rewarding shareholders, while retaining capital to maintain a healthy
 capital adequacy ratio to support future growth, the Board of Directors
 has recommended a higher dividend of Rs. 3.50 per share (35%) on
 10,44,26,402 equity shares of Rs. 10 each for the financial year ended
 31st March, 2011, subject to approval of the shareholders at the
 ensuing Annual General Meeting, as compared to dividend of Rs. 3.00 per
 share (30%) for the financial year ended 31st March, 2010. This
 dividend shall be subject to tax on dividend to be paid by the Company.
 The total outgo on account of dividend (including dividend distribution
 tax) will be Rs. 43.91 crore as against Rs. 29.70 crore in the previous
 year.
 
 As required under the Listing Agreement of the Stock Exchange(s), your
 Company has paid dividend of Rs. 6.59 crore and Rs. 1.12 crore as tax on
 the distribution of dividend for the financial year 2009-10 to new
 shareholders as on 31st March, 2010 on account of allotment of equity
 shares under QIP, Preferential issue and exercise of options under
 Employee Stock Option Scheme before the date of the book closure but
 prior to record date for the dividend payment.
 
 Equity shares that may be allotted on allotment of equity shares under
 Employee Stock Option Scheme before the date of the book closure for
 payment of dividend which ranks pari passu with the existing shares
 will be entitled to receive the dividend for the financial year
 2010-11.
 
 SHARE CAPITAL
 
 During the year, the Company had focused on measure to improve its net
 worth.
 
 Pursuant to the approval of the shareholders at the Extra-Ordinary
 General Meeting held on 18th May, 2010, for placement of equity shares
 to Qualified Institutional Buyers (QIBs) and preferential issue of
 equity shares to the Promoter Group Entities and M/s. Caledonia
 Investment Plc. Accordingly the Committee of the Board of Directors has
 issued and allotted aforesaid equity shares along with the equity
 shares under DHFL ESOS Scheme''s as under :
 
 Qualified Institutional Placement :
 
 During the year under review, your Company successfully completed issue
 of 1,68,69,095 equity shares of Rs. 10/- each, at a price of Rs. 222.30 per
 equity share, including premium of Rs. 212.30 per equity share,
 aggregating to Rs. 375 crore to Qualified Institutional Buyers (QIBs) in
 terms of Chapter VIII of the Securities and Exchange Board of India
 (Issue of Capital and Disclosure Requirements) Regulations, 2009 (SEBI
 ICDR Regulations), as amended. The QIP was opened for subscription to
 QIBs on Thursday, 27th May, 2010 and closed Friday, 28th May, 2010. The
 said QIP issue was overwhelmed by strong investor response and has been
 successfully subscribed. The said QIP was allotted on 2nd June, 2010.
 The BSE and the NSE had given trading permission for the equity shares
 issued to QIBs on 9th June, 2010.
 
 Equity Shares on Preferential Allotment Basis :
 
 To further strengthen the Company''s financial position and to generate
 resources, inter alia, for investing in the businesses of the Company,
 on 12th June, 2010, your Company issued and allotted 40,00,000 and
 10,00,000 equity shares respectively of Rs. 10/- each, at a price of Rs.
 222.30 per equity share (including a premium of Rs. 212.30 per equity
 share), aggregating to Rs. 111.15 crore to Promoter Group Entities and
 M/s. Caledonia Investment Plc.  respectively on a preferential basis in
 terms of the relevant Guidelines for Preferential Issues issued by the
 Securities and Exchange Board of India. The equity shares allotted to
 the Promoters Group Entities are locked-in for a period of three years
 and M/s. Caledonia Investment Plc for a period of one year from the
 date of allotment as per the SEBI guidelines.
 
 Employee Stock Option Scheme''s:
 
 During the year under review, the Company allotted in tranches 5,30,763
 equity shares of Rs. 10/- each upon exercise of stock options to the
 eligible employees of the Company under the Employee Stock Option
 Scheme – 2008 and 2009.
 
 In view of above, the issued, subscribed and paid- up equity share
 capital of the Company increased from 8,20,26,544 equity shares of Rs. 10
 each as on 31st March, 2010 to 10,44,26,402 equity shares of Rs. 10/-
 each as on 31st March, 2011.
 
 Details of the shares issued and allotted under DHFL ESOS scheme''s, as
 well as the disclosures in compliance with Clause 12 of the Securities
 and Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure to this
 Report.
 
 The Company has paid the listing fees payable to the BSE and the NSE
 for the financial year 2010-11.
 
 Redemption of Preference Shares:
 
 During the year 30,00,000, 1% Redeemable Non-Convertible Preference
 Shares of Rs. 10/- each at a premium of Rs. 90/- per share aggregating to Rs.
 30 crore allotted to ICICI Bank Ltd, carrying divided at @ 1% per annum
 were redeemed by your Company on 9th December, 2010 @ Rs. 136 per
 preference share. The aforesaid preference shares were redeemed by
 utilizing share premium.
 
 RESOURCE MOBILISATION
 
 The Indian economy however started showing revival during the latter
 half of the year. Due to Inflationary pressures, Reserve Bank of India
 had to tighten the monetary policy by increasing the key interest
 rates. The Company''s average cost of borrowings for the year was 10.70%
 as against 10.97% in the previous year.
 
 Subordinated Debt:
 
 During the year, your Company raised Rs. 500 crore through the issue of
 long-term Unsecured Redeemable Non-Convertible Subordinated Debentures.
 The subordinated debt was assigned an ''AA'' rating from both CARE and
 Brickworks.
 
 As at 31st March, 2011, your Company''s outstanding subordinated debt
 stood at Rs. 580 crore. The debt is subordinated to present and future
 senior indebtedness of your Company and has been assigned the highest
 rating by CARE and Brickworks. Based on the balance term to maturity,
 as at 31st March, 2011, Rs. 580 crore of the book value of subordinated
 debt is considered as Tier II under the guidelines issued by the
 National Housing Bank (NHB) for the purpose of capital adequacy
 computation.
 
 Non-Convertible Debentures (NCD) :
 
 During the year, your Company issued NCDs amounting to Rs. 585.00 crore
 on a private placement basis. The Company''s NCD issues have been listed
 on the Wholesale Debt Market segment of the NSE. The Company''s NCDs
 have been assigned the highest rating of ''AA'' by both CARE and
 Brickworks. As at 31st March, 2011, NCDs outstanding stood at Rs. 1190.67
 crore.
 
 Commercial Paper:
 
 The Commercial Paper (CP) programme of your Company has been rated by
 Credit Rating and Information Services of India Limited (CRISIL) and is
 assigned the highest rating of P1  (P One Plus) having validity period
 of twelve months. During the year your Company issued CPs to the extent
 of Rs. 580 crore in two tranches and placed them with investors at the
 most competitive rates of interest. As at 31st March, 2011, commercial
 papers outstanding stood at Rs. 97.49 crore.
 
 Loans from Banks:
 
 As part of its liability management, your Company endeavors to
 diversify its resource base in order to achieve an appropriate maturity
 structure and minimize the weighted average cost of borrowed funds.
 During the year under review, fresh term loans of Rs. 4,559.12 crore were
 availed from the commercial banks and financial institutions, taking
 the total term loan outstanding to Rs. 11,099.01 crore
 
 Refinance from National Housing Bank (NHB) :
 
 NHB has an internal rating mechanism for Housing Finance Companies
 (HFCs) and your Company has been assigned the highest rating for its
 refinance schemes by NHB. During the year, your Company has drawn
 refinance amounting to Rs. 100 crore under NHB''s Refinance Scheme to
 Housing Finance Companies, 2003.
 
 Deposits:
 
 Deposits continued to grow during the financial year under review
 despite strong competition from banks. DHFL deposit portfolio has
 reached Rs. 557 crore as on 31st March 2011 with the customer base of
 44,000. The year on year the net inflow of Company''s Fixed Deposit was
 Rs. 377 crore through 22,000 new accounts of which new Trust Deposit was
 Rs. 200 crore through 1144 accounts. Your Company effected revision in
 interest rates on deposits during the year in line with market
 conditions.
 
 Despite the 2nd half of the last financial turning quite unfavourable
 leading to repayment of Rs. 50 crore of deposits, thanks to focused
 efforts made by the Company with its agents, Company''s deposit products
 continue to be a preferred investment for households and trusts.,
 DHFL''s deposit portfolio has grown from Rs. 182.15 Crore in 31st March,
 2010 to Rs. 557 Crore as on the 31st March, 2011, expanding the deposit
 base from 21,000 in 31st March, 2010 to 44,000 in 31st March, 2011.
 
 During the year Company initiated the growth strategy for mobilization
 of fixed deposit by introduction of ECS for periodical interest w.e.f
 1st of April, 2010, which cover 95% of non cumulative depositor.
 
 During the year under review your Company launched Aashray Deposit
 Plus, 20 Months and 30 Months Schemes, 365 Trust Deposit and 400 days
 Deposit Schemes.
 
 CARE and Brickworks have, reaffirmed their CARE ''AA '' and BWR FAAA
 rating respectively for DHFL''s deposits. This rating represents
 ''highest safety, attractive returns and impeccable service standards''
 as regards timely repayment of principal and interest.
 
 Unclaimed Deposits:
 
 As of March 31, 2011, public deposits amounting to Rs. 3.67 crore had not
 been claimed by 697 depositors. Since then, 240 depositors have claimed
 or renewed deposits of Rs. 1.82 crore. Depositors were intimated
 regarding the maturity of deposits with a request to either renew or
 claim their deposits.
 
 CREDIT RATING
 
 Your Company has received a P1  (pronounced as ''P one plus'')credit
 rating from CRISIL for our short term debt (up to Rs. 1,500 crore) which
 indicates strong capacity for timely payment of our financial
 commitments. Your Company has also received ratings from CARE as CARE
 AA  (FD) credit rating indicating ''high safety'' and BWR FAAA credit
 rating indicating ''outlook stable'' for our fixed deposits (up to Rs.
 1,000 crore). With respect to our non-convertible debentures, we have
 received a CARE AA  (FD) credit rating indicating ''high safety'' (non-
 convertible debentures up to Rs. 1,190.67 crore, of which Rs. 585 crore was
 issued as at 31st March, 2011) and a BWR AAA indicating ''outlook
 stable'' (non-convertible debentures up to Rs. 1,000 crore).  Our Company
 has also received a CARE AA rating for our redeemable preference shares
 and for our subordinate debts.
 
 CAPITAL ADEQUACY
 
 Your Company is presently required by the NHB to maintain a minimum
 capital adequacy of 12% on a stand-alone basis. In addition, the NHB
 also requires that our Company transfers 20% of its annual profits to a
 reserve fund. In line with international norms, the RBI has also
 reduced the risk weight on individual housing loans to 50% for banks.
 The following table sets out our stand-alone capital adequacy ratios as
 at March 31 2009, 2010 and 2011.
 
 Particulars                      As on 31st March
 
                         2011     2010      2009
 
 Capital Adequacy       19.39%   17.26%    16.21%
 Ratio (Stand-alone)
 
 Your Company''s capital adequacy ratio has followed a general increasing
 trend during the three fiscal years ended 31st March, 2011. Your
 Company''s stand-alone capital adequacy ratio was at 19.39% as on 31st
 March, 2011, which we believe provides an adequate cushion to withstand
 business risks and is above the minimum requirement of 12% stipulated
 by the NHB.
 
 NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY
 
 Your Company scrupulously adhered to the prudential guidelines for
 Non-Performing Assets (NPAs), issued by the National Housing Bank (NHB)
 under its Directions of 2010, as amended from time to time As per the
 prudential norms prescribed by NHB, an asset is a non-performing asset
 (NPA) if the interest or principal installment is overdue for 90 days.
 HFCs have to set aside 2 per cent of the outstanding amount of teaser
 loans as provisions.  For other housing loans, the NHB has mandated
 provisioning of 0.2 per cent by 31st March and 0.4 % by 30th September
 depending on the ageing of such overdues. As per the prudential norms,
 the income on such NPAs is not to be recognised.
 
 The Non Performing Assets (NPA) consisting of the principal loans
 outstanding where payments of EMI/PEMI were in arrears for 90 days or
 more amounted to Rs. 94.29 crore. As per the prudential norms prescribed
 by NHB, the Company is required to carry a contingency provision of Rs.
 36.42 crore in respect of Non Performing Housing Loan, Non Housing
 Standard Assets and other loans. However, as a matter of prudence, over
 the years, your Company has been transferring additional amounts to
 provision for contingencies. Provision for contingencies has been
 further strengthened during the year by a transfer of Rs. 9.00 crore,
 taking the total provision to Rs. 45.35 crore. With these provisions,
 your Company has not only provided for the standard non-housing loan
 assets at the prescribed rate of 0.40% but also provided fully for NPAs
 of Rs. 94.29 crore. As a result, your Company''s net NPAs stood at 0.10%
 (0.73%) of the outstanding loans of Rs. 14,111.21 crore as at 31st March,
 2011.
 
 The Securitizations and Reconstructions of Financial Assets and
 Enforcement of Security Interest Act 2002 (SARFAESI) has proved to be a
 useful recovery tool and the Company has been able to successfully
 initiate recovery action under this Act in the case of willful
 individual and corporate defaulters.
 
 BRANCH EXPANSION & BUSINESS TIE-UP
 
 Your Company has a strong marketing and distribution network, with a
 presence at 193 locations throughout India as on 31st March, 2011
 including 100 branches and 67 service centers and 26 camp locations
 spread across the length and breadth of India. Additionally, your
 Company has international representative offices located in London and
 Dubai to cater to the needs of non-resident Indians. Your Company has
 entered into tie-ups with public sector banks (PSBs) including Punjab
 & Sind Bank to penetrate the northern Indian region, United Bank of
 India to penetrate the eastern Indian region and Central Bank of India
 across pan India. DHFL''s tie-ups with PSBs provide us with access to
 their customer database and extensive branch network.  Our strong
 network coverage is designed to provide increased penetration to cater
 to the evolving needs of our existing customer base and tapping a
 growing potential customer base throughout India.
 
 INVESTMENTS
 
 The Investment Committee constituted by the Board of Directors is
 responsible for approving investments in line with limits as set out by
 the board.
 
 The decisions to buy and sell upto the approved limit delegated by the
 board are taken by the Chairman & Managing Director, who is assisted by
 three Senior Executives. The investment function is carried out
 primarily to support the core business of housing finance to ensure
 adequate levels of liquidity and to maintain investment in approved
 securities in respect of public deposits raised as per the norms of
 NHB.
 
 Considering the time lag between raising of resources and its
 deployment, the surplus funds are generally being parked with liquid
 fund schemes of mutual funds and short term deposits with banks.
 During the year, your Company earned Rs. 6.85 lacs by way of Income from
 Mutual funds and Rs. 7.81 crore by way of interest on deposits placed
 with banks. At the end of the year, your Company maintained Rs. 86.03
 crore by way of short term deposits with banks.
 
 As per NHB guidelines, HFCs are required to maintain Statutory Liquid
 Ratio (SLR) in respect of public deposits raised. Currently the SLR
 requirement is 12.50% of the public deposits. As at 31st March, 2011,
 your Company has invested Rs. 30.20 crore in approved securities
 comprising of government securities, government guaranteed bonds and
 NHB bonds. It is maintained within the limits prescribed by NHB.
 
 Acquisition of Deutsche Postbank Home Finance Limited (DPHFL):
 
 During the year, your Company along with Wadhawan Housing Private
 Limited, M/s. Caledonia Investment Plc, U.K and Amber 2010 Ltd., has
 acquired from BHW Holding AG, Germany 100% equity stake in Deutsche
 Postbank Home Finance Limited (DPHFL), a Housing Finance Company
 registered with the National Housing Bank. The business acquisition was
 made by entering into Share Sale Agreement for a consideration of Rs.
 1079 crore.
 
 Your Company acquired 67.56% equity stake in DPHFL which is eventually
 held through its a special purpose vehicle company i.e. DHFL Holdings
 Private Limited (a 100% subsidiary company) and the balance 32.44% has
 been acquired by other purchasers i.e. Wadhawan Housing Private
 Limited, Caledonia Investment Plc, U.K and Amber 2010 Ltd.
 
 INSURANCE OF PROPERTY
 
 Your Company has insured its various properties and facilities against
 the risk of fire, theft, etc., so that financials are not impacted in
 the unfortunate even of such incidents.
 
 The employees of the Company are covered under the mediclaim facility
 against hospitalization.
 
 DIRECTORS'' AND OFFICER LIABILITIES
 
 This policy covers the Director''s and officer of the company against
 the risk of third party actions arising out of their actions
 /directions which may have resulted in financial loss to any third
 party. The Company has appropriately insured itself to mitigate such
 risk coming from any third party
 
 INSURANCE COVERAGE TO BORROWERS
 
 All the borrowers of the company were insured against accidental death,
 Property Insurance & Loss of Employment up to 3 EMI''s by ICICI Lombard
 GIC.
 
 Your Company has tied up with market leader, ICICI Prudential LIC for
 ''Home Assure'' product for Mortgage Reducing Term Assurance, whereby the
 borrower gets insurance cover on his / her life to the extent of
 outstanding home loan amount as on the day of death. The primary
 objective is to ensure protection of the loan portfolio from default
 due to sudden demise of the borrowers.
 
 Your Company insured close to 87% of the new home loan portfolio
 acquired in the year 2010-11.  With consistent growth in retail
 Insurance business your company has taken a big leap in Retail Cross
 sell business this year with a growth of 305% over the last fiscal
 year. Over all insurance Fee income growth in FY 2010-11 was 147% over
 2009-10.
 
 NHB GUIDELINES
 
 The Company has been following the various Circulars, Notifications and
 Guidelines issued by National Housing Bank (NHB) from time to time.
 
 The Circulars and the Notifications issued by NHB are also placed
 before the Board at regular intervals along with the compliance of the
 same.
 
 During the year under review, NHB has conducted an inspection of the
 Company under Section 34 of the NHB Act, 1987 and Company has furnished
 the replies to the same.
 
 CODES AND STANDARDS
 
 During the year under review, the National Housing Bank has issued
 revised comprehensive Know Your Customer (KYC) Guidelines and Anti
 Money Laundering Standards in the context of recommendations made by
 the Financial Action Task Force on Anti Money Laundering Standards and
 on Combating Financing of Terrorism Standards.  During the year, the
 Board reviewed and noted the amendments to the Company''s KYC and
 Prevention of Money Laundering Policy as stipulated by NHB. Your
 Company has adhered to the compliance requirements in terms of the said
 policy for monitoring and reporting cash/suspicious transactions.
 
 The Fair Practices Code framed by NHB seeks to promote good and fair
 practices by setting minimum standards in dealing with customers,
 increase transparency so customers have a better understanding of what
 they can reasonably expect of the services being offered, encourage
 market forces through competition to achieve higher operating
 standards, promote fair and cordial relationships between customers and
 the housing finance company and foster confidence in the housing
 finance system. During the year, your Company has adhered to the Fair
 Practices Code as approved by the Board of Directors.
 
 Code of Conduct:
 
 Your Company has adopted a revised Code of Conduct for its Board
 Members and Senior Management personnel. The code of conduct has also
 been posted on the official website of the Company. A copy of the code
 of conduct has been circulated to the directors and senior Management.
 The Declaration by the Chairman & Managing Director of the Company
 regarding compliance with the Code of Conduct for Board Members and
 
 Senior Management is annexed with the Corporate Governance report
 
 Risk Management Framework:
 
 Your Company has a Risk Management Framework, which provides the
 mechanism for risk assessment and mitigation. The ALCO Management
 Committee (AMC) comprises the Chairman & Managing Director, the Chief
 Executive Officer, Chief Operating Officer and members of senior
 management.
 
 During the year, the AMC reviewed the risks associated with the
 business of your Company, its root causes and the efficacy of the
 measures taken to mitigate the same. Thereafter, the Board of Directors
 also reviewed the key risks associated with the business of your
 Company, the procedures adopted to assess the risks and their
 mitigation mechanisms.
 
 BRANDING
 
 We believe that the ''DHFL'' brand is one of the most important
 intangible assets that we own. During this fiscal year, the Company
 was, by the following bodies in recognition of Company''s operation and
 conduct of business:
 
 - Ranked as POWER BRAND amongst the top 200 brands in India by M/s
 Planman Marcom,
 
 - Ranked at the best company to work for in India by Times of India ''s
 survey of Best Companies to Work For
 
 - Greentech Foundation, India has chosen the Company for the
 prestigious Greentech HR Excellence Award.
 
 - has been chosen as The Newsmaker of the Year by a leading real
 estate publication – Realty Plus.
 
 We had over a million visits to our website on business and property
 related topics on our website www.dhfl.com during the year. We
 continued to have leadership presence at premier housing finance
 industry and real estate property events.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 Corporate Social Responsibility is a sustained activity wherein an
 organization and its employees take up social causes with a view to
 serve the society. The real work in CSR extends beyond the statutory
 obligations and sees organizations and its people voluntarily taking up
 programmes and initiatives to improve the quality of life of the local
 community and also the society at large.
 
 Your Company in association with Mumbai Mobile Crèches participated in
 Standard Chartered Mumbai Marathon - 2010 on 16th January, 2011.
 
 Your Company had taken initiatives to help support the cause of
 children of construction workers at the construction sites in Mumbai.
 
 In line of agreement with Concern India Foundation (CIF), based in
 Mumbai, your Company continues to support for promoting activities
 linked to upliftment of members belonging to weaker sections of
 society. Concern India Foundation is undertaking the activities linked
 to the following major issues:
 
 - Education
 
 - Community Development
 
 - Health
 
 - Environment
 
 The financial support to Concern India Foundation will directly benefit
 the following important constituents of the society:
 
 - Women
 
 - Children
 
 - Senior citizens
 
 Education Trust
 
 Your Company also provides learning assistance to its employees who
 aspire to undertake higher education through its trust Late Shri
 Rajesh Kumar Wadhawan DHFL Employees Welfare Trust.  Besides
 education, the said Trust also support exigency family medical support,
 marriage support for deserving employees of DHFL across locations
 especially the staff in lower grades who runs out of cash in case of
 any exigencies and with such other objects of charitable nature.
 
 SECRETARIAL AUDIT
 
 As directed by the Securities and Exchange Board of India (SEBI)
 Secretarial Audit is being carried out at the specified period, by
 practicing company secretary. As a measure of good corporate governance
 the Company had appointed M/s. Aabid & Co, practicing company
 secretaries to conduct Secretarial Audit of the Company. The
 Secretarial Audit Report for the Financial Year ended 31st March, 2011
 is provided in this Annual Report.
 
 HUMAN RESOURCES
 
 Improved performance and renewed commitment of the employees apart from
 improvement in various systems like Performance Management have
 triggered the consolidation, diversification and growth of your
 Company.
 
 Your Company has covered considerable ground in establishing itself as
 a preferred employer in the Indian Housing Sector. During the year,
 your Company managed to attract talent from leading banks,
 multinational organizations and leading business schools.
 
 A study conducted jointly by The Economic Times & ''Great Place to Work
 Institute'' recognizing India''s best companies to work for in 2010 rated
 your Company among the 100 Best Companies.
 
 As a part of this re-positioning, your Company engaged the services of
 globally renowned firm - Price Watehouse Cooper and IBM in reorienting
 and restructuring the HR systems and processes including Organization
 Diagnostics & Structuring, Performance Management System Design &
 Implementation. Thereby, your Company is realigning the compensation in
 line with the market, in phases and has also revamped the Performance
 Management System in accordance with the business imperatives.
 
 Your Company has made an endeavour to constantly upgrade the knowledge
 and enhance the skill-set of the employees.
 
 As part of the development initiatives, in-house functional and
 behavioral interventions were organized at regular intervals. Employees
 were nominated to leading institutes for Executive Development Programs
 and Seminars/Workshops conducted by various Chambers of Commerce to
 keep them abreast with the latest developments in the financial as well
 as other sectors.
 
 The work force strength of your Company as on 31st March 2011 was
 1,137. The total work force cost during the year has gone up by 57.31%
 from Rs. 39.05 crore to Rs. 61.43 crore. This is mainly due to the increase
 in work force to meet the requirements on account of significant
 expansion in terms of geography as well as in business volumes and the
 salary revisions effected during the year. Few additional positions are
 added for meeting business requirements and to give greater focus to
 functions like Credit Appraisal and Operations.
 
 Your Company has entered into Deed of Trust with Life Insurance
 Corporation of India which covers the Company''s employees under the
 group gratuity schemes with the Life Insurance Corporation of India
 (''LIC''). The schemes are defined benefit schemes and are funded in line
 with the LIC''s actuarial valuation carried out at year end.
 
 PARTICULARS OF EMPLOYEES
 
 In accordance with the provisions of Section 217(2A) of the Companies
 Act, 1956 and the rules framed thereunder, the names and other
 particulars of employees are set out in the annexure to the Directors''
 Report.
 
 DHFL EMPLOYEES STOCK OPTION SCHEME (ESOS)
 
 Besides the existing DHFL Employees Stock Option Scheme 2008 and 2009,
 the Remuneration & Compensation Committee, during the year under
 review, considered and approved grant of 12,34,670 (out of 12,75,000)
 Stock Options available for grant, to the employees of the Company, at
 the pre-determined price under the DHFL ESOS Scheme''s – 2009 Plan II.
 
 The Remuneration & Compensation Committee of the Board of Directors has
 also considered re-issue of 1,45,800 stock options out of 1,70,000
 stock options, which were cancelled/lapsed without being exercised and
 available under ESOS–2008 Plan–I, to the employees, at the
 pre-determined price under the DHFL ESOS Scheme''s –2008 Plan-I.
 
 The particulars of options issued under the said Plan as required by
 SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999 are appended as Annexure and forms part of this
 report.
 
 INFORMATION TECHNOLOGY AND COMMUNICATIONS
 
 Information Technology department has set up ''Central Integrated
 Information System (CIIS)'' which is an umbrella providing solutions to
 almost all areas of activities of your Company.
 
 During the year 2010-11, apart from upgrading the existing software
 applications with enhanced/added features to meet the current and
 emerging business needs, certain new application systems were
 implemented. The new systems developed and implemented include a system
 of on-line monitoring of loan assets. The Asset-liability system was
 upgraded to facilitate auto-generation of gap report on daily basis for
 major assets and liabilities.  System for projecting and analyzing
 future cash inflows and outflows under various financial, market and
 business scenarios has been developed which also facilitates gap
 analysis. IT infrastructure platform like VPN (Virtual Private
 Network), routers, switches and firewalls were upgraded to enhance the
 performance and security of the network. The e- mailing facility was
 upgraded with an efficient and improved solution. With an objective to
 strengthen and facilitate technological support in the organization, IT
 hardware and software infrastructure is being upgraded.
 
 IT security mechanism was also strengthened to prevent virus attacks
 and unauthorized access. The initiative to create a paperless
 environment in the Company was further taken forward by using Document
 Management System, scanning and e- storing large volume of documents.
 
 SUBSIDIARY COMPANIES
 
 In accordance with the general circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet Profit and
 Loss Account and other documents of the subsidiary companies are not
 being attached with the Balance Sheet of the Company. The Company will
 make available the Annual Accounts of the subsidiary companies and the
 related detailed information to any members of the Company who may be
 interested in obtaining the same. The annual accounts of the subsidiary
 companies will also be kept open to inspection at the Registered Office
 of the Company and that of the respective subsidiary companies. The
 Consolidated Financial Statements presented by the Company include the
 financial results of its subsidiary companies. The same will also be
 hosted on our website, www.dhfl.com.
 
 Your Company has 5 subsidiaries, namely, DHFL Vysya Housing Finance
 Limited, Deutsche Postbank Home Finance Limited, Aadhar Housing Finance
 Private Limited, DHFL Property Services Limited and DHFL Holdings
 Private Limited.
 
 During the year under review your Company subscribed equity shares in
 the subsidiary companies. The details are as given below :
 
 - 21,60,10,000 equity shares of Rs. 10/- each at par in DHFL Holdings
 Private Ltd.
 
 - 5,00,00,000 equity shares of Rs. 10/- each at par in Aadhar Housing
 Private Ltd.
 
 Details of aforesaid subsidiaries companies are covered in Management
 Discussion and Analysis Report forming part of the Annual Report.
 
 Review of Subsidiary Companies:
 
 DHFL Vysya Housing Finance Ltd. (DVHFL) is a housing finance company
 registered with NHB and has operations primarily in the States of
 Karnataka, Andhra Pradesh, Tamil Nadu and Maharashtra.
 
 For the year ended March, 31, 2011, DVHFL has reported a profit after
 tax of Rs. 12.11 crore as compared to Rs. 8.55 crore in the previous year.
 The Board of Directors of the subsidiary company has declared an
 interim dividend of 15% and has recommended a final dividend of 10%
 making the total dividend to 25%.
 
 DHFL Property Services Limited [DPSL] a wholly- owned subsidiary of the
 Company offers real estate/property services under one roof, as a value
 added services along with housing. It also provides Real Estate &
 Property Advisory Services to leverage wide database of customers and
 relationship with developers and builders.
 
 The operations of the said company began during the financial year
 2009-10. For the year ended March, 31, 2011, DPSL has reported a profit
 after tax of Rs. 32 crore as compared to Rs. 18 crore in the previous year.
 
 DHFL Holdings Private Limited [DHPL] was incorporated on 3rd January,
 2011 and is a wholly- owned subsidiary of the Company. The subsidiary
 manages investments in equity, acquire and hold shares, stocks,
 debentures, debenture stock, bonds mutual funds, real estate, fixed
 income and structured products.
 
 Aadhar Housing Finance Private Limited - Your Company, along with its
 subsidiary DHFL Vysya Housing Finance Ltd., promoted and incorporated a
 new company Aadhar Housing Finance Private Limited [Aadhar Housing]
 as a Housing Finance Company registered with a National Housing Bank
 (NHB) with equity participation agreement between your Company, DHFL
 Vysya Housing Finance and International Finance Corporation –
 Washington in ratio of 50:30:20 respectively. Aadhar Housing commenced
 its operations on 8th February, 2011 in the State of Uttar Pradesh, in
 Lucknow and it further proposes to market retail housing loans for the
 low income segment of the Indian population in the states of Uttar
 Pradesh, Madhya Pradesh, Bihar, Chhatisgarh, Jharkhand and Orissa.
 
 Deutsche Postbank Home Finance Ltd.
 
 Deutsche Postbank Home Finance Ltd. (DPHFL), was incorporated in India
 on 2nd March 1995, a National Housing Bank (NHB) registered housing
 finance company having its registered office in New Delhi & Corporate
 Office in Gurgaon. Deutsche Postbank Home Finance Limited has a network
 of 40 Branches and sales offices across India offices across India.
 
 In terms of Share Sale Agreement DHFL acquired 67.56% equity stake in
 Deutsche Postbank Home Finance Limited (DPHFL) which is held through
 its 100% owned SPV and the balance 32.44% has been acquired by other
 purchasers i.e. Wadhawan Housing Private Limited, Caledonia Investment
 Plc, U.K and Amber 2010 Ltd.
 
 CONSOLIDATION OF ACCOUNTS
 
 The audited Consolidated Accounts and Cash Flow Statement, comprising
 of DHFL and its subsidiary Companies namely DHFL Vysya Housing Finance
 Ltd., DHFL Property Services Ltd, DHFL Holdings Pvt. Ltd., Aadhar
 Housing Finance Pvt. Ltd. and Deutsche Postbank Home Finance Ltd., are
 annexed to this Annual Report. The Auditors'' Report on the Consolidated
 Accounts is also attached. The Consolidated Accounts have been prepared
 in accordance with the Accounting Standards prescribed by the Institute
 of Chartered Accountants of India in this regard.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNING AND OUTGO
 
 The particulars regarding foreign exchange earnings and expenditure
 appear as Item No. B–41 in the ''Other Notes to Accounts''. (Schedule Q)
 Since the Company is not engaged in any manufacturing facility, the
 other particulars relating to conservation of energy and technology
 absorption as stipulated in the Companies (Disclosure of Particulars in
 the Report of the Board of Directors) Rules, 1988 are not applicable.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 read with
 the Clause 158 of the Articles of Association of the Company, Shri Ajay
 Vazirani and Shri V. K. Chopra, directors of your Company retire by
 rotation and being eligible; offer themselves for re-appointment at the
 ensuing Annual General Meeting. Necessary resolutions for the
 re-appointment of the aforesaid directors have been included in the
 notice convening the ensuing AGM.
 
 Brief resume of the Directors proposed to be appointed / re-appointed,
 nature of their expertise in specific functional areas and names of
 companies in which they hold directorship and membership / chairmanship
 of Board committees, as stipulated under Clause 49 of Listing Agreement
 with the Stock Exchanges in India, are provided in the Report on
 Corporate Governance forming part of the Annual Report. All the
 directors of the Company have confirmed that they are not disqualified
 for being appointed/ reappointed as directors in term of Section
 274(1)(g) of the Companies Act, 1956.
 
 AUDITORS
 
 M/s. B.M. Chaturvedi & Co., Mumbai, Chartered Accountant [Firm
 Registration No.114317W], retire at the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment.  M/s. B.M.
 Chaturvedi & Co., have sought reappointment and confirmed that their
 reappointment shall be within the limits of Section 224 (1B) of the
 Companies Act, 1956. The necessary eligibility certificate under
 Section 224(1B) of the Companies Act, 1956, was received from them.
 M/s. B. M.  Chaturvedi & Co. was earlier a proprietary concern and has
 been converted into partnership concern by including new partners. The
 Audit Committee and Board of Directors recommend the appointment of
 M/s. B.M. Chaturvedi & Co., Chartered Accountants, as the auditors of
 your Company.
 
 AUDITORS REPORT
 
 The notes to the accounts referred to in Auditors Report are
 self-explanatory and therefore do not call for any further comments.
 
 The Company has also internal audit system implemented by in-house
 department and supported by various independent Chartered Accountants
 firms appointed by Concurrent Auditors to carry out concurrent Audit of
 the branches.
 
 Systems and procedures are being upgraded to provide checks and alerts
 for avoiding/detecting fraud arising out of misrepresentation given by
 borrower/s while availing the housing loans.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Your Directors would like to inform that the audited accounts
 containing the Financial Statement for the year ended 31st March 2011
 are in conformity with the requirements of the Companies Act, 1956 and
 they believe that the financial statements reflect fairly the form and
 substance of transactions carried out during the year and reasonably
 present the Company''s financial condition and results of operations.
 These Financial Statements are audited by the Statutory Auditors, M/s.
 B. M. Chaturvedi & Co., Chartered Accountants, Mumbai.
 
 In accordance with the provisions of section 217 (2AA) of the Companies
 Act, 1956 and based on the information provided by the management, your
 directors state that:
 
 (i) in the preparation of accounts, the applicable accounting standards
 have been followed;
 
 (ii) they have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at 31st March, 2011 and of the profit of the Company for
 year ended on date;
 
 (iii) they have 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 the Company and for
 preventing and detecting fraud and other irregularities and
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 CORPORATE GOVERNANCE
 
 Your Company has complied with all the provisions of Corporate
 Governance as prescribed under the amended Listing Agreements of the
 Stock Exchanges, with which the Company''s shares are listed. Pursuant
 to Clause 49 of the Listing Agreements with the Stock Exchanges, the
 followings form part of this Annual Report :
 
 (i) Chairman & Managing Director''s declaration regarding compliance of
 Code of Conduct by Board Members and Senior Management personnel;
 
 (ii) Management Discussion & Analysis
 
 (iii) Report on the Corporate Governance;
 
 (iv) Auditors'' Certificate regarding compliance of conditions of
 Corporate Governance.
 
 Future Outlook
 
 Housing / real estate sector which is slowly coming out of the mid 2008
 slump, has received good support from Union Budget 2011- 2012. While
 the budget has encouraged housing sector finance as given below:
 
 - Existing scheme of interest subvention of 1 per cent on housing loan
 further liberalized.
 
 - Existing housing loan limit enhanced to Rs. 25 lakh of dwelling units
 under priority sector lending.
 
 - Provision under Rural Housing Fund enhanced to Rs. 5,000 crore.
 
 With the recent recovery in the demand for housing and real estate
 sectors, activities in the housing, real estate sectors and
 infrastructure sectors are expected to remain healthy in the coming
 quarters.  This will lead to a rise in credit demand for housing.  The
 liquidity conditions of your Company have remained comfortable during
 the year, so far. Your Company has successfully raised funds from bank
 as well as non bank sources. Your Company does not expect any pressure
 on the liquidity front in the months to come either. This is because
 liquidity conditions in the banking system will continue to remain
 comfortable. A healthy demand for credit for home loan seeks coupled
 with comfortable liquidity conditions will lead to a rise in
 disbursement
 
 ACKNOWLEDGMENTS
 
 Your Directors wish to place on record their gratitude to the NHB, the
 Company''s Customers, Bankers, Shareholders, Debenture holders,
 Depositors and others for their assistance and co- operation and who
 have helped the Company in its endeavour. The Board also places on
 record its deep appreciation for the excellent support received from
 the employees at all levels during the year.  The Directors also like
 to thank The Stock Exchange, Mumbai, the National Stock Exchange, NSDL,
 CDSL and the Credit Rating Agencies for their co-operation.
 
                                      for and on behalf of the Board
 
                                                      Kapil Wadhawan
 
                                        Chairman & Managing Director
 
 Dated: 13th May, 2011
 
 Place : Mumbai