DLF

The Directors have pleasure in presenting the 43rd Annual Report and
 the Audited Accounts for the financial year ended 31st March 2008.
 
 Financial Results
 
                                                    (Rs. in Crores)
                                                  Consoildated
                                               2007-08     2006-07
 
 Gross operating Profit                        9961.49     2,905.59
 
 Less : Finance Charges                         310.00       307.59
 
 Less: Depreciation                              90.06        57.81
 
 Profit before Tax                             9561.43     2,540.19
 
 Less: Provision for Tax                       1739.09       605.18
 
 Profit before minority interest               7822.34     1,935.01
 
 Share of Profit/(loss) in associates            26.41        (1.27)
 
 Minority interest                              (35.48)       (1.11)
 
 Profit after tax and minority interest        7813.27     1,932.63
 
 The Gross Operating Profit on consolidated basis was Rs.9,961.49 Crores
 against Rs.2,905.59 Crores in the previous year (2006-07), an increase
 of 243% and the net profit after tax for the year was Rs.7822.34 Crores
 as against Rs.1,935.01 Crores for the previous year (2006-07),
 representing an increase of about 304%.
 
 Review of Operations
 
 Over the past few years, the real estate sector has transformed from a
 nascent and unorganized sector to an emerging, professionally organised
 industry, which is contributing significantly to the GDP of the nation.
 Being the leader in the industry in terms of revenues, earnings and
 market capitalization, your Company has been able to capitalize the
 opportunities in an efficient manner. With its high quality land bank
 and 62 years track record of delivering quality real estate
 developments, your Company continues to lead the real estate industry
 in India and commands an impeccable reputation in its core businesses -
 homes, offices and retail. The Company is now all set to embark on a
 journey to be named among the leading players in its new businesses of
 hospitality, SEZs and infrastructure development with the best quality
 standards and delivery commitments.
 
 There has been a substantial increase in your Company’s land resource
 from 574 msf at the beginning of the year to 751 msf at the end of the
 year. 85% of the land resource is located in the top seven cities of
 the country. The operations extended to 32 cities across the country.
 The area of projects under construction increased significantly from 44
 msf to 62 msf, with work spanning across 14 cities.  Your Company’s
 various JVs added much needed momentum to the execution of the
 projects.
 
 Your Company’s development of IT/ITES SEZs has acquired further
 momentum. 7 SEZs have been notified and are under various stages of
 development. 4 SEZs are awaiting final approval and another 4 have been
 applied for.
 
 During the year under report, the Company bagged the prestigious 9,168
 acres Bidadi township project in association with Limitless Holdings,
 part of Dubai World Group. Now rechristened as New Bangalore, it will
 be the single largest township development by a private developer in
 the country.
 
 During the year, several premium homes segment targeting mid-income
 earners were launched.  The encouraging response of 4,850 apartments
 being booked in the first four months of 2008 is a vindication of your
 Company’s strategy to drive home sales of high quality products at
 reasonable prices.
 
 During the year, the Company has also entered into a JV with Prudential
 Financial Inc., USA for Asset Management business. The JV with
 Prudential Insurance of USA for Life Insurance business has already
 received R-3 license from IRDA to commence business.
 
 The JV with Hilton Hotels recorded significant progress with
 acquisition of 16 sites during the year. All the projects in these
 sites are at various stages of construction and development. Many more
 sites are expected to be acquired in the current year.
 
 The momentum in Hospitality business was further enhanced by your
 Company’s first acquisition in International arena - Aman Resorts - the
 most innovative and marquee name in luxury hotel groups across the
 globe. This Company operates 18 boutique resorts across the world and
 has several new projects in key exotic locations under development.
 Aman Lodhi, a super luxury hotel in Delhi, will be operational during
 2008-09.
 
 The performance of the Company on stand-alone basis for the year ended
 on 31st March, 2008 is as under:
 
                                                      (Rs. in Crores)
                                                    Stand Alone
                                               2007-08       2006-07
 
 Turnover                                      6058.46      1,429.49
 
 Gross operating Profit                        3591.25        986.02
 
 Less : Finance Charges                         447.65        356.25
 
 Less: Depreciation                              25.68          9.44
 
 Profit before Tax                             3117.92        620.33
 
 Less: Provision for Tax                        543.52        214.56
 
 Profit after Tax                              2574.40        405.77
 
 Earlier Year Items:
 
 Income Tax                                       0.19          1.14
 
 Balance as per last Balance Sheet              269.27        523.76
 
 Transfer from:
 
 Capital Reserve                                   -            1.40
 
 Profit available for appropriation            2843.86        932.07
 Appropriation
 
 Issue of Bonus Shares                            0.07        215.38
 
 General Reserve                                311.00         48.50
 
 Dividend on Equity Shares
 
 Interim                                        340.97
 
 Final                                          340.97#       340.97
 
 Tax on Dividend                                115.89         57.95
 
 Surplus carried to                            1734.96        269.27
 Balance Sheet
 
                                               2843.86        932.07 
 
 #Proposed
 
 Future Outlook
 
 With the economy growing at 7-7.5% p.a., the demand for premium real
 estate continues to be buoyant. While we expect a cautious outlook for
 the year ahead, our strong execution capabilities will help us in
 meeting the timelines and delivering the targeted double-digit growth
 in all facets of our business. Despite some macro economic concerns
 about slowdown in the sector, our long term outlook remains unchanged.
 Accordingly, we will continue to invest in creating distinctive
 products to satisfy the increasing demand arising from the growth of
 the Indian economy across various sectors.
 
 All your Business Units (BUs) - offices, retail and homes, have now
 reached the steady platform for execution and delivery. While launching
 of new projects across verticals would be part of the usual business,
 management focus would increase on project execution and delivery
 within timelines. Some of DLF’s key projects have ambitious timelines,
 including the prestigious Dwarka Convention and Exhibition Centre at
 New Delhi, which is targeted to be completed before
 
 Commonwealth Games, 2010.
 
 Your Company’s J V, DLF Pramerica Life Insurance will commence its
 operations during the year 2008-09.
 
 With multiple opportunities for growth and diversification in the real
 estate sector, DLF is well poised to achieve its growth plans across
 all lines of business.
 
 Dividend
 
 Your Company paid an interim dividend of 100% in October, 2007. The
 Board of Directors has recommended a final Dividend of 100%, making the
 aggregate dividend at Rs. 4 per share (200%) of a par value of Rs.2
 each. (2006-07 – total dividend was Rs.2 per share).
 
 Credit Rating
 
 During the year under review, ICRA Limited, an associate of Moody’s
 Investor Service and a leading credit rating agency, assigned Highest
 Credit Quality Rating ‘A1+’ to Rs. 2,000 Crore Short Term Debts/
 Commercial Paper programme of the Company.
 
 Further, CRISIL, a unit of Standard & Poor’s, assigned ‘AA’ Rating to
 Company’s Rs. 5,000 Crore Non-Convertible Debentures, ‘P1+ Rating to
 Company’s Rs. 3,000 Crore Short-Term Debt and ‘AA’ Rating to Company’s
 Rs. 6,791 Crore Term Loans with a stable outlook.
 
 Buy-Back of Equity Shares
 
 Your Directors in their meeting held on 10th July, 2008 approved
 buy-back of not exceeding 2,20,00,000 Company’s fully paid-up Equity
 shares of Rs. 2 each, at a price not exceeding Rs. 600 per Equity
 share, upto a maximum amount of Rs. 1,100 crore, 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.
 
 The buy-back is proposed to be made from the current surplus and/or
 cash balances and/or internal accruals of the Company by way of open
 market purchases through the Bombay Stock Exchange Ltd., and National
 Stock Exchange of India Ltd., using their nationwide electronic trading
 facilities as per the provisions contained in the Securities and
 Exchange Board of India (SEBI) (Buy-Back of Securities) Regulations,
 1998.
 
 Further, the buy-back is subject to the necessary exemption approval to
 be granted by SEBI under Regulation 4(2) of the SEBI (Substantial
 Acquisition of Shares & Takeover Regulations), 1997 to promoters,
 promoter group, persons in control and persons acting in concert
 (Promoters) from the requirement of making an open offer under the
 Regulations.
 
 The application for seeking exemption from making open offer, has been
 submitted to SEBI.  Upon receipt of the said exemption approval, the
 Company will proceed with the buy-back of Equity shares.
 
 Fixed Deposits
 
 As on 31st March 2008, an outstanding/unclaimed public deposit of
 Rs.0.27 lac (previous year Rs.0.27 lac) is lying with the Company. The
 Company has not accepted/renewed any fixed deposits during the year
 under review.
 
 Subsidiary Companies
 
 During the year, the Company entered into various new business
 dimensions through 166 subsidiaries such as SEZs, Life Insurance,
 Hospitality, Asset Management, Township Development etc.
 
 In terms of the approval granted by the Central Government vide letter
 No. 47/385/2008-CL-III dated 6th June, 2008 under Section 212(8) of the
 Companies Act, 1956, the audited statement of accounts and the
 Auditors’ Report thereon for the year ended 31st March, 2008 along with
 the Reports of the Board of Directors of the Company’s subsidiaries
 have not been annexed. The Company will make available these documents
 upon request by any Member of the Company interested in obtaining the
 same.  However, as desired by the Central Government, the financial
 data of the subsidiaries have been furnished under the heading
 ‘Subsidiary Companies Particulars’ forming part of the Annual Report.
 Further, pursuant to Accounting Standard-21 issued by the Institute of
 Chartered Accountants of India, Consolidated Financial Statements
 presented by the Company in this Annual Report includes the financial
 information of its subsidiaries. There is no material change in the
 nature of business carried on by the subsidiaries of the Company.
 
 Consolidated Financial Statements
 
 Your Directors have pleasure in attaching the
 
 Consolidated Financial Statements pursuant to Clause 32 of the Listing
 Agreement entered into with the Stock Exchanges and prepared in
 accordance with the Accounting Standard-21 on Consolidated Financial
 Statement read with Accounting Standard-23 on Accounting for
 Investments in Associates.
 
 Joint Ventures
 
 Some of the major joint ventures entered into by your Company are:
 
 - Laing O’Rourke Plc., UK for construction and execution of projects;
 
 - WSP Group Plc., UK for design and engineering consultancy;
 
 - Limitless Holdings – part of Dubai World Group for mega township
 development;
 
 - Prudential Insurance of USA for life insurance products;
 
 - Prudential Financial of USA for AMC; and
 
 - Fraport for airports construction and maintenance.
 
 Significant Development and Acquisitions
 
 - Integrated township project (knowledge city) on the outskirts of
 Bangalore
 
 - Township projects in western outskirts of Kolkata
 
 - Acquired land parcels for office development including Tidal Park,
 Chennai
 
 - Expanded footprints to new locations like Gandhinagar, Nagpur, Rai
 (Sonepat), Mumbai and Bhubaneshwar.
 
 - Setting up of super luxury Mall for luxury brands
 
 - Launched six new commercial space projects across the country in
 Delhi, Hyderabad and Kolkata
 
 - Acquired majority stake in Aman Resorts, a chain of luxury and
 super-luxury hotels.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings/Outgo
 
 The particulars relating to energy conservation, technology absorption
 and foreign exchange earnings and outgo as prescribed 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
 in the Annexure-A annexed hereto and forms 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 as
 amended the names and other particulars of the employees are set out in
 the annexure to the Directors’ Report.
 
 However, having regard to the provisions of Section 219(1)(b)(iv) of
 the said Act, the Annual Report excluding the aforesaid information is
 being sent to all the Members of the Company and others entitled
 thereto. 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 regarding the Employee Stock Option Scheme (ESOS) is at
 Annexure - B.
 
 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 listing and custody fees for the year
 2008-09 have been paid to the Stock Exchanges, NSDL and CDSL,
 respectively.
 
 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.
 
 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.
 
 The Notes on accounts and observations of the Auditors in their report
 on the Accounts of the Company are self-explanatory and therefore, in
 the opinion of Directors, do not call for any further explanation.
 
 Directors
 
 Pursuant to Section 256 of the Companies Act, 1956 read with the Clause
 102 of Articles of Association of the Company, Ms. Pia Singh, Mr.  G.S.
 Talwar, Mr. K.N. Memani and Mr. Ravinder Narain 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 re- appointed, 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
 
 Corporate Social Responsibility is integrated into the Company’s
 business strategy of Building India and becoming the world’s most
 valued real estate developer.
 
 Your Company has been the forerunner in introducing structured
 development of world class townships, plotted colonies, commercial and
 retail towers and condominiums in India. It has been the first to
 introduce internationally recognized lifestyle improvements in India,
 which have now been adopted by other developers and are slowly
 transforming the Indian landscape. While DLF continues to create world
 class infrastructure, it has not lost sight of its responsibilities as
 a social and economic change agent across various segments.  At DLF, we
 are committed to build India from the grassroots, thereby enriching and
 enhancing the quality of life of its people. The Company has made
 significant investments in community- welfare initiatives for
 employees, community and the under-privileged through education,
 training, health, environment, capacity building and rural- centric
 interventions as detailed at Annexure - C.
 
 Promotion of Sports
 
 As a responsible corporate citizen, your Company is committed to
 develop and promote sports, games and adventure activities, inter-alia:
 
 - Sponsored Title for DLF Indian Premier League (IPL) for five years of
 Twenty: 20 Cricket;
 
 - Sponsored title for DLF Cup Abu Dhabi and DLF Cup Malaysia; and
 
 - Hosted Johnnie Walker Classic Golf Tournament - Asia’s most
 prestigious and longest-running luxury golf experience.
 
 Awards and Accreditions
 
 Your Directors report that your Company has excelled in various
 dimension of Corporate achievement, recognized through peer and public
 evaluation. The details of awards and recognitions to your Company are
 as under:
 
 - Mr. K.P. Singh, Chairman was conferred ‘Honorary Degree of Doctorate
 in Science’ by the prestigious G.B. Pant University of Agriculture &
 Technology, Pant Nagar in recognition of his ‘invaluable contribution
 in the field of Business Administration’;
 
 - Mr. M.M. Sabharwal was conferred ‘Padma Shree’ by Government of
 India;
 
 - Mr. K.P. Singh - NDTV ‘Special Award for Business Man of the Year’;
 
 - Most Diversified Real Estate Developer Award by CNBC Awaz-Crisil Real
 Estate Awards 2007;
 
 - Best Builder and Developer Award by MAPSOR Indian Property Awards-
 2007; and
 
 - Real Estate Excellence Awards for Best Developer (Residential)- 2007.
 
 Acknowledgements
 
 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. Your Directors
 take this opportunity to place on record their gratitude and
 appreciation for the committed services of the employees at all levels
 of the Company.
 
                            for and on behalf of the Board of Directors
 
 New Delhi                                        (Dr. K.P. Singh)
 31st July, 2008                                      Chairman