Board of Directors

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3 Contents Board of Directors Message from the Chairman Milestones Management Notice Directors Report Management Discussion & Analysis Report Corporate Governance Report Financial Statements Auditors Report Balance Sheet Profi t & Loss Account Cash Flow Statement Schedules Consolidated Accounts Details of Subsidiary Companies

4 Board of Directors Executive Directors Dr. K.P. Singh Chairman Mr. Rajiv Singh Vice Chairman Mr. T.C. Goyal Managing Director Ms. Pia Singh Whole-time Director Mr. Kameshwar Swarup Senior Executive Director - Legal Non-Executive Directors Mr. G.S. Talwar Dr. D.V. Kapur Mr. K.N. Memani Mr. M.M. Sabharwal Mr. Ravinder Narain Mr. B. Bhushan Brig. (Retd.) N.P. Singh Reference Information Registered Office Shopping Mall, 3rd Floor, Arjun Marg Phase-I, DLF City, Gurgaon (Haryana) Corporate Office DLF Centre, Sansad Marg New Delhi Statutory Auditors M/s. Walker, Chandiok & Co Registrar & Share Transfer Agent M/s Karvy Computershare Private Ltd. Listed at Bombay Stock Exchange National Stock Exchange Company Secretary Mr. Subhash Setia 2

5 Message from the Chairman Dear Shareholders, In my Message to you last year, I had shared my apprehension that the Financial Year could prove to be a challenging year for your Company and that the liquidity, credit and infl ationary pressures on the domestic and global economies would impact the business scenario at large. As you have witnessed, the year gone by, the entire global economy has been in the grip of severe recession of unprecedented dimensions, adversely affecting all spheres of economic activity. In the face of such challenging conditions, your Company has endeavoured to withstand the severity of the economic slowdown by focussing on consolidating the position of the Company s core business in order to emerge stronger in the years ahead. Your Company adopted and implemented strategies and managed to effectively service all its debt and interest obligations, without restructuring any obligations. It ensured that all commitments to stakeholders were fully met. The Company has initiated strategic and comprehensive portfolio adjustments concentrating both on real estate assets and non-real estate business, with a view to exit non-core businesses. For your Company, Corporate Social Responsibility is not just an add-on; rather it is a business and social commitment that is mutually reinforcing. It has been the constant endeavour of your Company to create sustainable economies and transform stagnant lives into active partnerships through synergized proactive hand-holding in areas of infrastructure, education, training, health and environment. Your Company has initiated various measures in terms of improved and effi cient construction methodologies, adapting energy effi cient and conserving technologies towards developing energy effi cient buildings. 3

6 In my view, another major challenge for our economy is the provision of quality infrastructure whilst the Eleventh Five Year Plan ( ) has estimated an investment requirement of US$500 billion (Economic Survey ) in infrastructure for broad-based and inclusive growth. We all need to make our humble contribution towards the success of this challenging task. The future will throw many challenges and opportunities to the Company in terms of striking the right balance between the profi tability and sustainability. I foresee challenges for our business in terms of fresh land availability, rehabilitation and taking care of the interests of the all stakeholders particularly from the ecological perspective. I assure you that your Company will face the challenges resolutely and turn these into strategic opportunities to maintain its leadership position in the real estate business. With best wishes Sincerely, New Delhi (Dr. K. P. Singh) 30 th, July, 2009 Chairman 4

7 Milestones 5

8 Management 6

9 Notice Notice is hereby given that the Forty-fourth Annual General Meeting of DLF Limited will be held on Wednesday, the 30 th September, 2009 at A.M. at Epicentre, Apparel House, Sector 44, Gurgaon (Haryana) to transact the following business: Ordinary Business 1. To receive, consider and adopt the Audited Balance Sheet as at 31 st March, 2009, the Profi t & Loss Account for the year ended on that date together with the Reports of Directors and Auditors thereon. 2. To declare dividend. 3. To appoint a Director in place of Mr. Kameshwar Swarup, who retires by rotation and being eligible, offers himself for re-appointment. 4. To appoint a Director in place of Dr. D.V. Kapur, who retires by rotation and being eligible, offers himself for re-appointment. 5. To appoint a Director in place of Mr. M.M. Sabharwal, who retires by rotation and being eligible, offers himself for re-appointment. 6. To appoint Auditors of the Company to hold offi ce from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fi x their remuneration. M/s. Walker, Chandiok & Co, the retiring Auditors are eligible for re-appointment. Special Business 7. To consider and if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution: Resolved that pursuant to Article 93 of the Articles of Association of the Company and in accordance with the provisions of Section 198, 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (the Act) (including any statutory modifi cation or re-enactment thereof for the time being in force), the consent of the members be and is hereby accorded to the re-appointment of Mr. Kameshwar Swarup, as a Whole-time Director, designated as Senior Executive Director Legal for a period of two years with effect from 1 st January, 2010 on the terms and conditions including the remuneration as set out in the Explanatory Statement annexed to the Notice with liberty and authority to the Board of Directors to alter, vary, modify and revise the terms and conditions of the said appointment and/ or the remuneration, from time to time within the limits laid down in the then subsisting respective provisions of the Act. Resolved Further that in the event of absence or inadequacy of profi ts in any year during the tenure of his appointment, the aforesaid remuneration will be paid as minimum remuneration to Mr. Kameshwar Swarup. Resolved Further that the Board of Directors of the Company including any duly constituted Committee thereof (hereinafter referred to as the Board ) be and is hereby authorised to do all such acts, deeds and things including entering into such agreement(s), deed(s) of amendment or any such document(s) as the Board may, in its absolute discretion, consider necessary, expedient or desirable including to sub-delegate all or any of the powers herein conferred on it, in order to give effect to this resolution or as otherwise considered by the Board to be in the best interest of the Company. 8. To consider and if thought fit, to pass with or without modification(s), the following Resolution as a Special Resolution: Resolved that pursuant to the provisions of Section 314(1) and other applicable provisions of the Companies Act, 1956 (including any statutory modifi cation or re-enactment thereof, for the time being in force), the consent of the Company, be and is hereby accorded to the appointment of Ms. Savitri Devi Singh as Vice President, DLF Commercial Developers Limited (DCDL), a wholly owned subsidiary of the Company w.e.f. 1 st April, 2009 at a remuneration and terms & conditions as set out in the Explanatory Statement annexed to the Notice. Resolved Further that the Board of Directors of the Company including any duly constituted Committee thereof (hereinafter referred to as the Board ) be and is hereby authorised to take all such steps as may be necessary, proper or expedient to give effect to this Resolution. New Delhi 27 th August, 2009 By Order of the Board For DLF Limited Subhash Setia Company Secretary 7

10 Notes 1. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote on a poll instead of himself/ herself and the Proxy need not be a Member of the Company. The Proxies to be effective should be deposited at the Registered Office of the Company not later than 48 hours before the commencement of the meeting. Proxy Form is attached. 2. The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Special Business as set out above to be transacted at the meeting along with required details in terms of Clause 49 of the Listing Agreement are annexed hereto and forms part of this Notice. 3. M/s. Karvy Computershare Private Limited, Plot No , Vittalrao Nagar, Madhapur, Hyderabad , Ph.: , Fax No.: , mailmanager@karvy. com, website: is the Registrar and Share Transfer Agent (RTA) for Physical Shares. Karvy is also the depository interface of the Company with both NSDL and CDSL. However, keeping in view the convenience of the shareholders, documents relating to shares will continue to be accepted at Karvy Computershare Pvt. Ltd., at 1105, 11 th Floor, Arunachal Building, 19, Barakhamba Road, Connaught Place, New Delhi , Ph.: and at the Registered Offi ce of the Company & also at Corporate Affairs Department, 1-E, Jhandewalan Extension, Naaz Cinema Complex, New Delhi Corporate Members intending to send their authorised representatives to attend the meeting are requested to send a certifi ed copy of Board Resolution authorising their representatives to attend and vote on their behalf at the meeting. 5. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 24 th September, 2009 to Wednesday, 30 th September, 2009 (both days inclusive) for determining eligibility for payment of dividend, if declared at the meeting. 6. The dividend, if declared at the meeting, will be paid on or before 29 th October, 2009 to those Members or their mandates: (a) whose names appear at the end of the business hours on Wednesday, 23 rd September, 2009 in the list of Benefi cial Owners to be furnished by Depositories (NSDL and CDSL) in respect of the shares held in dematerialised form; and (b) whose names appear as Members on the Company s Register of Members after giving effect to valid share transfer requests in physical form lodged with Registrar & Share Transfer Agent (RTA) of the Company on or before Wednesday, 23 rd September, Relevant documents referred to in the accompanying Notice are open for inspection by the Members at the Registered Offi ce of the Company on all working days, between hrs. up to the date of the meeting. 8. Members holding shares in physical form are requested to advise about any change of address/ Bank account details to the Company or its Registrar. 9. Members who hold shares in dematerialised form may kindly note that their address and Bank account details, as furnished by their depositories to the Company, shall be printed on the dividend warrants as per applicable regulations of the depositories. The Company cannot entertain any direct request from such members for change in address/bank account details. Members who wish to change their address/bank account details are requested to advise their Depository Participants about such change. 10. Members desirous of obtaining any information/ clarifi cation(s) concerning the accounts and operations of the Company or intending to raise any query, are requested to forward the same at least 10 days prior to the date of meeting to the Company Secretary at the Registered Offi ce of the Company, so that the same may be attended to appropriately. 11. Pursuant to provisions of Section 205A(5) and 205C of the Companies Act, 1956 the Company has transferred all unpaid/unclaimed dividends upto the Financial Years to the Investor Education and Protection Fund (the Fund) of the Central Government. The Company is in the process of transferring the unpaid dividend for the Financial Year in December, The dividend for the Financial Years and thereafter, which remains unpaid/unclaimed for a period of 7 years will be transferred by the Company to the Fund. The members who have not encashed their dividend warrants so far for the Financial Years onwards are requested to make their claims to the RTA or at the Registered Offi ce of the Company. 8

11 It may please be noted that once the unclaimed dividend is transferred to the Fund, no claim shall lie in respect thereof. 12. Members are requested: (a) To bring their copies of Annual Report, Notice and Attendance Slip duly completed and signed at the meeting. Not to carry briefcase or bag inside the meeting venue for security reasons; (b) To quote their Folio No./DP Id and Client Id in all correspondence; (c) To note that no gift or gift coupons will be distributed at the meeting. EXPLANATORY STATEMENT Pursuant to Section 173(2) of the Companies Act, 1956 ITEM NO. 7 Mr. Kameshwar Swarup, a Whole-time Director designated as Senior Executive Director Legal of the Company is Post-Graduate in Commerce & Law and a Fellow Member of the Institute of Company Secretaries of India, with over 46 years of management experience in a number of corporate positions to his credit. The present term of offi ce of Mr. Swarup will come to an end on 31 st December, Considering his capabilities and to enable the Company to have benefi ts of his experience, the Board in its meeting held on 27 th August, 2009 on the recommendation of Remuneration Committee, subject to the approval of the Members, has re-appointed him for a further period of two years w.e.f. 1 st January, 2010 on the following terms and conditions: I. Salary (Basic) Rs. 2,57,475 per month II. Perquisites & Allowances Classifi ed into three categories A, B and C Category A i) House Rent Allowance 70% of the Basic Salary per month or Company s leased accommodation, subject to rental ceiling of 70% of the basic salary. ii) Personal Allowance Rs. 1,66,667 per month. iii) Superannuation Allowance 15% of the Basic Salary. iv) Hard Furnishings Provision/Purchase by Whole-time Director of hard furnishings will be governed by the rules of the Company, but shall not exceed a total value of Rs.15 lacs at any time. v) Performance Award Ranging between Rs. 25 lacs (minimum guaranteed) and Rs. 200 lacs (maximum achievable) per annum, as per the policy of the Company. Category B i) Contribution to Provident Fund as per the rules of the Company. ii) Gratuity payable shall not exceed half a month s salary for each completed year of service as per the rules of the Company. iii) Earned/Privilege Leave: As per rules of the Company. Category C III. i) Provision of Company maintained car with Chauffeur Provision of Company maintained Chauffeur driven Car with all expenses paid on actual basis as per the policy of the Company. Expenses on communication facilities will be reimbursed as per policy of the Company and will not be ii) Communication facilities treated as perquisites. The perquisite value of the above shall be evaluated, wherever applicable, as per Income Tax Act, 1961 and/or any rules framed thereunder. Other Terms: i) ii) iii) iv) He shall be entitled to reimbursement of entertainment expenses and other out-of-pocket expenses incurred in connection with the business of the Company. He shall be required to travel abroad for business promotion as and when required and all expenses incurred during such foreign travel will be governed by the Company s Policy regarding Foreign Travel. The appointment may be terminated by either party giving the other party three months notice in writing on the expiry of which, the appointment will come to an end. The Company may terminate his appointment by paying him basic salary for three months, in lieu of three months notice in writing. He shall not during the continuance of his employment or at any time thereafter divulge or disclose to any person whomsoever or make any use whatever for his own or for whatever purpose, of any confi dential information or knowledge obtained by him during his employment as to the business or affairs of the Company and shall during the continuance of his employment hereunder also use his best endeavours to prevent any other person from doing so. Mr. Swarup will be responsible for day-to-day management of the Legal Affairs of the Company, subject to the superintendence and control of the Board of Directors, and such other responsibilities as may be entrusted to him from time to time. 9

12 The Board considers that the re-appointment of Mr. Swarup is in the best interest of the Company. A brief resume of Mr. Swarup, nature of his expertise in specifi c functional areas and name of companies in which he holds directorship/membership of Board/ Committee, as stipulated under Clause 49 of the Listing Agreement is annexed hereto. Further, pursuant to the empowerment granted by the Members at the 42 nd Annual General Meeting and as per the policy of the Company and on the recommendation of the Remuneration Committee, the Board in its meeting held on 27 th August, 2009 has extended the benefi t entitling him to an amount equivalent to Value (in rupees) of 32,000 equity shares of the Company. The Value being the difference between the par value of Rs. 2 per equity share and the average closing market price of the Company s share on NSE for a 30 days period preceding the date of vesting. The aforesaid benefi t shall be deemed to have been granted as on 1 st July, 2008 (i.e. date of grant) and will be deemed to vest in two equal tranches of 50% each - 1st tranch on completion of two years from the date of grant i.e. 30 th June, 2010 and the 2nd tranch on completion of three years from the date of grant i.e. 30 th June, In case of Mr. Swarup s retirement between 1 st July, 2010 to 1 st July, 2011, the entire amount of 2nd tranch shall be payable on the date of retirement. In the unfortunate event of his tragic loss during the period of his employment with the Company, his nominees/legal heirs would be entitled to receive the entire/balance amount towards aforesaid payments, as the case may be. None of the Directors except the appointee may be deemed to be concerned or interested in the proposed re-appointment and benefi ts extended to him. The above may be treated as an abstract of the terms of re-appointment and the benefi ts extended to Mr. Swarup under Section 302 of the Companies Act, The Board of Directors of your Company recommends the resolution for approval. ITEM NO. 8 Ms. Savitri Devi Singh, General Manager, DLF Commercial Developers Limited (DCDL), a wholly owned subsidiary of the Company, has been elevated as Vice President, DCDL with effect from 1 st April, Your Board of Directors, on the recommendation of the Remuneration Committee, in its meeting held on 27 th August, 2009, subject to your approval, has approved her elevation on the following terms and conditions (Rs./month) 1. Basic Salary : 20, House Rent Allowance : 70% of Basic Salary 3. Conveyance Allowance : 52, Hard Furnishings : 4, Personal Allowance : 25, SAF Allowance : 3, Contribution to Provident : As per rules of the Fund and Gratuity Company 8. Annual Performance Award : Ranging between Rs lac (minimum guaranteed) and Rs lac (maximum achievable) as per policy of the Company. Ms. Savitri Devi Singh shall be entitled like any other employee annual increments / increase as per policy of the Company. Ms. Savitri Devi Singh, being related to Dr. K.P. Singh and Mr. Rajiv Singh, approval of the Members is being sought by way of Special Resolution for the above increase pursuant to the provisions of Section 314(1) of the Companies Act, None of the Directors of the Company, except Dr. K.P. Singh and Mr. Rajiv Singh, being her relatives, are interested or concerned in the passing of the said resolution. The Board of Directors of your Company recommends the resolution for approval. Registered Office Shopping Mall, 3rd Floor Arjun Marg, Phase-I, DLF City Gurgaon (Haryana) th August, 2009 New Delhi By Order of the Board For DLF Limited Subhash Setia Company Secretary The Ministry of Corporate Affairs, Government of India, vide its letter No. 47/527/2009-CL-III dated 24 th August, 2009 has granted exemption u/s 212(8) of the Companies Act, 1956 from attaching the Balance Sheet, Profi t & Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. The annual accounts of the subsidiary companies and the related detailed information will be made available upon request by the investors of the Company and of its subsidiary companies. These documents will be available for inspection by any investors at the Registered/Head Offi ce of the Company and that of subsidiary companies concerned. 10

13 Details of Directors seeking Re-appointment at the Annual General Meeting (In pursuance of Clause 49 of the Listing Agreement) Name of Director Mr. K. Swarup Dr. D.V. Kapur Mr. M.M. Sabharwal Date of Birth Age Date of Appointment 8 th August, yrs. 9 th September, yrs. 21 st August, yrs. 1 st January, st April, st April, 2006 Qualifications Expertise in specific functional areas Directorships held in other companies Committee positions* in DLF Limited Committee positions* in other public companies Post Graduate in Commerce & Law; Fellow Member of the Institute of Company Secretaries of India. Currently heading Legal Affairs of the Company for more than 11 years. Has over 46 years of management experience in a number of corporate positions. DLF Commercial Developers Ltd. DLF Estate Developers Ltd. DLF Home Developers Ltd. DLF Land Ltd. DLF Retail Developers Ltd. DLF Wind Power Pvt. Ltd. Shivajimarg Properties Ltd. Shareholders /Investors Grievance Committee -Member Audit Committee DLF Retail Developers Ltd. -Member Electrical Engineering (Hons.), D.Sc. Dr. Kapur had an illustrious career in the Government sector with a successful track record of building vibrant organisations and successful project implementation. He served Bharat Heavy Electricals Limited (BHEL) in various positions with distinction, but his most remarkable achievement was establishment of a fast growing systems oriented National Thermal Power Corporation (NTPC) of which he was the founder Chairman-cum-Managing Director. For the contribution to success and leadership of the fledgling organisation, he was described as Model Manager by the Board of Executive Directors of World Bank. Dr. Kapur served as Secretary to the Government of India in the Ministries of Power, Heavy Industry and Chemicals & Petrochemicals during He was also associated with a number of national institutions as Member, Atomic Energy Commission; Member, Advisory Committee of the Cabinet for Science and Technology; Chairman, Board of Governors, IIT Bombay; Member, Board of Governors, IIM Lucknow and Chairman, National Productivity Council. In recognition of his services and significant contributions in the field of Technology, Management and Industrial Development, Jawaharlal Nehru Technological University, Hyderabad conferred on him the degree of D. Sc. Drivetech Accessories Ltd. GKN Driveline (India) Ltd. Honda Siel Power Products Ltd. Reliance Industries Ltd. Zenith Birla (India) Ltd. Shareholders /Investors Grievance Committee - Chairman Audit Committee - Member Audit Committee Honda Siel Power Products Ltd. Chairman GKN Driveline (India) Ltd. Chairman Zenith Birla (India) Ltd. Member Shareholders /Investors Grievance Committee Honda Siel Power Products Ltd. Chairman Relationships between Nil Nil Nil Directors inter-se Number of Shares held 9,150 10,000 5,500 B.A. (Economics) Mr. M.M. Sabharwal has held various corporate positions including those of Chairman of Dunlop India Ltd., Bata India Ltd, Britannia Biscuit Co. Ltd., Indian Oxygen Ltd., Needle Industries India (Pvt.) Ltd., Precision Electronics Ltd.; Director of Oil India Ltd, National Aluminium Company Ltd., Fibre Glass Pilkington Ltd., Avery India Ltd. and Ranbaxy Laboratories Ltd. In addition, he is the Director of Nutrition Foundation of India and was President of PHD Chamber of Commerce and Industry, New Delhi, Director, Institute of Management, Kolkata and Dy. Chairman of International Management Institute, New Delhi. In recognition of his meritorious social services, Govt. of India has conferred Padma Shri Award on him. He has also been conferred with: -Honorary OBE in 1998 by the Government of U.K. for his role in promoting Indo-British partnership in Social Welfare; - Life Time Achievement Award for outstanding contribution towards the cause of elderly; - The Chirayushya Samman Award by the Union Minister for Social Justice & Empowerment, Govt. of India for being a pioneer in building Helpage India. Nil Audit Committee - Member Nil *Only Audit and Shareholders /Investors Grievance Committees included. 11

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15 Directors Report Your Directors have pleasure in presenting their 44 th Annual Report on the business and operations of the Company together with the audited results for the fi nancial year ended 31 st March, Financial Results (Rs. in Crores) Consolidated Gross operating Profi t 5, , Less : Finance Charges Less: Depreciation Profi t before Tax 5, , Less: Provision for Tax , Profi t before minority interest 4, , Share of Profi t/(loss) in associates (21.10) Minority interest (27.54) (35.48) Profi t after tax and minority interest 4, , The year under review was extremely challenging. The markets witnessed unprecedented turbulence in the wake of the global fi nancial meltdown. A runaway infl ation touching a high point of 12% early in the year, tight monetary policies followed by the authorities for most of the year to control infl ation 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 diffi cult 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 profi t 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 fi nancial year. Similarly, the gross operating profi t on consolidated basis reduced from Rs. 9,961 Crores to Rs. 5,986 Crores, resulting in a decrease of 40% and the net profi t after tax and minority interest for the year is Rs. 4,468 Crores as against Rs. 7,813 Crores for the previous year ( ), representing a decrease of about 43%. This revenue and profi t fi gures 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 diffi cult times through major initiatives in sustaining growth, cost-optimization, process improvement and effi cient management of working capital. The commitment to meet these challenges resulted in an optimistic start to FY 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 signifi cantly 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 effi cient 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 offi ce space. As on 31 st 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 offi ce 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 months. Your Company has also been granted in principle approval by the Central Government for de-notifi cation of 5 of its SEZs. 13

16 Your Company introduced price re-sets and extended other benefi ts to its customers in Feb- March, This was done in an endeavour to pass on the benefi ts 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 fi nancial 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 signifi cantly 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, 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 fi scal 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 fi rst quarter of FY10 has already started showing positive signs with 2.5 m.s.f. sold in homes segment in April, 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 31 st March, 2009 is as under: (Rs. in Crores) Stand Alone Turnover 3, , Gross operating Profit 2, , Less : Finance Charges Less: Depreciation Profit before Tax 1, , Less: Provision for Tax Profit after Tax 1, , Earlier Year Items Income Tax Prior-period expenses (net) Net Profit 1, , Balance as per last Balance Sheet 1, Balance Available for Appropriation 3, , Appropriation Transfer to Debenture Redemption Reserve Utilise for Bonus Issue Transfer to General Reserve Dividend on Equity Shares Interim Final # Tax on Dividend Excess provision of previous year written back (29.81) - Surplus carried to Balance Sheet 2, , , , # Proposed 14

17 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 specifi cations. Focussing on the sales model, your Company will also make selective launches of commercial complexes. For offi ces, we intend to expedite execution and deliveries wherever backlog exists and pump up the construction activity based on visibility of preleasing. 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 diffi cult 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 amounting to Rs Crores (Rs Crores towards Dividend and Rs Crores as Dividend tax). Buy-Back of Equity Shares The Board of your Company in its meeting held on 10 th 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 31 st 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, Accordingly, Public Announcement (PA) and Corrigendum to PA dated 30 th September and 15 th October, 2008 respectively, were issued by the Company. The Buy-back Offer was open from 17 th October, 2008 to 6 th May, During the period the Company bought-back 76,38,567 Equity Shares, for a total consideration (including transaction cost) of Rs Crores, i.e. at an average price of Rs 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 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 19 th June, Subsidiary Companies and Consolidated Financial Statements The consolidated fi nancial 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, Profi t & 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 Offi ce of the Company/its subsidiaries and at the Head Office of the Company during working hours up to the date of Annual General Meeting. 15

18 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 Offi ce 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) ii) iii) 14% NCDs aggregating to Rs.100 Crores to Standard Chartered Bank; 13.7% NCDs aggregating to Rs.500 Crores to Life Insurance Corporation of India; 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 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 As on 31 st 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 30 th July, 2009 has forfeited 43,680 partlypaid 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 Certifi cate from the Statutory Auditors of the Company, M/s. Walker, Chandiok & Co, 16

19 Chartered Accountants, confi rming 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 confi rm 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 fi nancial year and of the profi t of your Company for that period; c) taken proper and suffi cient 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 offi ce until the conclusion of the forthcoming Annual General Meeting and are recommended for re-appointment. Certifi cate 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, Auditors Report There is no qualifi cation or adverse remarks on the stand-alone fi nancials of the Company. Further, the observation given in Point No. 4 of the Auditors Report on consolidated fi nancials read with Note No. 19 of Schedule 24 to the consolidated fi nancials, 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 specifi c 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 signifi cant 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 reaffi rmation 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 fi ve 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: 17

20 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 28 th January, 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, 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 billion Term Loans and Overdraft Facility and P1 / Rating watch with developing implications to the Company s Rs 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 1 st 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 New Delhi 30 th July, 2009 (Dr. K.P. Singh) 18

21 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 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 d) Total energy consumption and energy per unit of production B. Technology Absorption Additional investment is being planned to install further co-generation plants. Use of solar energy for common area lighting is being practised. Electrical energy to the tune of approx. 11 lakh units per month is being saved. 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 iv) Export Plans NA The Company receives remittances of sale consideration for immovable properties located in India, purchased by the customers abroad. 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 offi ce in London. g) Total Foreign Exchange earned and used: (Rs. In Crores) a) Foreign Exchange earned b) Foreign Exchange used

22 FORM A Form for Disclosure of Particulars with respect to Conservation of Energy A. Power and Fuel Consumption Electricity Purchased Current Year Previous Year a) Unit 37,421,772 48,166,505 Total Amount (in Rs.) 178,127, ,157,596 Rate per Unit Own Generation Through diesel generation 1. Unit 109,431,014 59,596,491 i) Unit per litre of diesel oil b) Cost/Unit (in Rs.) Through gas turbine/generator ii) Unit 40,503,954 30,231,250 Unit per litre of fuel oil/gas Cost/Unit (in Rs.) Coal (Specify quantity and where used) 2. Quantity (tonnes) NA NA Total Cost (in Rs.) NA NA Average Rate NA NA Furnace Oil 3. 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.) B. Consumption per unit of Production Standards, (if any) Current Year Previous Year Products (with details) unit - NA NA Electricity - NA NA Furnace Oil - NA NA Coal (Specify quality) - NA NA Others (specify) - NA NA 20

23 FORM - B Research and Development (R&D) Form for disclosure of Particulars with respect to Absorption 1. Specifi c areas in which R & D carried out by the Company Company has initiated fi rst of its kind building cogeneration activities. The waste heat of the fl ue gases is used in absorption chillers. Efforts are being made with the help of USAID and TERI for building energy simulation. 2. Benefi ts 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 2. Benefi ts derived as a result of the above efforts 3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the fi nancial year) following information may be furnished a) Technology imported b) Year of import c) Has technology been fully absorbed d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action. Efforts are made for adopting the building cogeneration technology in a combination of residential and commercial projects. 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. NA 21

24 ANNEXURE - B Statement pursuant to Clause 12 Disclosure in the Directors Report of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, Total Grants made till Future Grants 2009 (a) (i) Options granted 40,42,134 18,05,579 58,47,713 Min - 3,81,559 (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 : (i) Senior Managerial Personnel (Directors on Board) (ii) Any other employee receiving grant in any one year of option amounting to 5% or more of the options granted during the year (iii) Identifi ed employees 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 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 the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost calculated using intrinsic value of stock options and the employee compensation cost recognized if the fair value of the options had been used and the impact of this difference on profits and EPS of the Company. (m) Weighted average exercise price and weighted average fair value of options whose exercise price equals or exceeds or is less than market price of the stock. (n) Description of method and significant assumptions used during the year to estimate fair value of options. Mr.T.C.Goyal, Managing Director Total Options Granted till = 4,05,700 Nil Nil Rs Difference in employee compensation cost: Reduction Rs lac. Impact on Profi t : Increase by Rs lac (net of Income Tax) Impact on EPS: Basic = ; Diluted = Max - 16,46,959 Rs.2 Weighted average fair value for options granted on 1 st July, 2008 : Rs Weighted average fair value for options granted on 10 th October, 2008 : Rs Weighted average information for options granted on 1 st July 2008 : (i) Risk free interest rate :9.46% (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 Weighted average information for options granted on 10 th 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

25 Corporate Social Responsibility DLF Foundation - An initiative This year, your Company embarked on an ambitious mission towards fulfi lling 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 signifi cant 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 benefi ciaries. 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 fi nancial year. SBM Senior Secondary School. Your Company is running a CBSE affi liated SBM ANNEXURE - C 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 10 th and 12 th has been very encouraging wherein a large number of students have achieved distinctions. DLF is also constructing a stateof-the-art and modern school premises with a completely new look at its own cost. DLF Summerfields School. DLF is running a CBSE affi liated 10+2 Summerfi elds 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 defi nitive 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 23

26 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 fi nancial 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 fi elds 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 fi eld. 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 fi nancial 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 signifi cant 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 24

27 Award for Excellence in Energy Management to DLF. A pilot project has been undertaken in creation of energy effi cient buildings. The project has been initiated in Gandhinagar. The demonstration project will for the fi rst time enable comparison between an energy effi cient 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 certifi cation 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 refl ective glass in buildings. Pollution control measures during construction activity at project sites. Use of green materials like fl y ash in construction Heat insulation roof treatment. Award of Carbon Credits DLF s 150 MW wind power project at Gujarat has been registered on 18 th 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 fl yover. Under this project the road network will include service roads, fl yovers, underpasses and bypasses to facilitate smooth traffi c movement in the area. This will immensely benefi t 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 fl oods 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. 25

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29 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 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 simplifi ed 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 infl ow, balanceof-payments metrics, merchandise exports, invisible accounts and foreign-exchangereserves have made a substantial contribution towards the growth rate of Indian GDP. After signifi cant global growth witnessed over almost a decade, the year of 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. Infl ation 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, fi scal stimuli were infused into the economy for curbing infl ation by the end of the year (from 13% in mid-2008 infl ation fell to 5% by end-2008). Despite the global slowdown, India is expected to be the second fastest growing economy in the Asia Pacifi c 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 fi rst quarter of FY09 attracted USD 10 billion. A sizeable portion of this FDI infl ow went into the real estate and housing sectors, with services and infrastructure being the other recipient sectors. Cushman & Wakefi eld research estimates that the pan-india cumulative demand projection for the real estate sector across offi ce, residential, retail and hospitality is expected to be approximately 1,098 m.s.f. by the year 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 While the demand for commercial offi ce space is Demand Projection - Pan India Million Sq. Ft E E 2010E 2011E 2012E Commercial Residential Retail Hospitality Sources : Cushman & Wakefield Research 27

30 Demand Pull Factors - Robust & sustained macro economic growth - Upsurge in industrial & business activities, especially new economic sectors - Favorable demographic parameters - Signifi cant rise in consumerism - Rapid urbanisation - Gamut of fi nancing options at affordable interest rates Supply Push Factors - Policy & Regulatory reforms (100 per cent FDI) - Positive outlook of global investors - Fiscal incentives to developers - Simplifi cation of urban development guidelines - Infrastructure support & development by Govt. FACTORS DRIVING REAL ESTATE Resultant Impact - Increasing occupier base - Signifi cant rise in demand for offi ce/industrial space - Demand for newer avenues for entertainment, leisure & shopping - Creation of demand for new housing Resultant Impact - Entry of number of Domestic & Foreign players - Increasing competition & consumer affordability - Easy access to means of project fi nancing - Increases developers risk appetite and allows large scale development - Improved quality of real estate assets - Development of new urban areas and effective utilization of prime land parcels in large cities Source: IBEF 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 offi ce 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 fi rst year. Other public and private banks followed suit by lowering mortgage rates. The demand for residential apartments has also picked up post February In a survey done by Jones Lang LaSalle Real Estate Intelligence Service, the actual sales of apartments grew during Jan-Mar, 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 & Wakefi eld estimates that the total supply for commercial offi ce 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 offi ce supply 28

31 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 offi ce 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 offi ce space absorption across major cities increased by nearly 6% in 2008 with almost 30% of the total dominated by precommitments 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 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 However, it was still a signifi cant shortfall of over 50% from earlier mall supply projections (Source: Cushman & Wakefi eld). 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 fi rst 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 signifi cant 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 A buoyant domestic economy, the government s open sky policy, an overall real estate boom, 29

32 II. 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 million in In keeping with the current growth rate, India s hospitality industry is anticipated to grow at 8 per cent per annum between 2007 and Cushman & Wakefi eld 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 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 FY09, 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 fi nance 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 diffi cult for most people. Moreover, MNCs as well as Indian Corporates withheld their expansion plans, thereby impacting the demand for offi ce 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 signifi cantly 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, fi nanciers 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 fl ows. The quality of the debt portfolio 30

33 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 fl ows to ensure that operating cashfl ows met all operating requirements, including fi nance 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 offi ce 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 modifi ed with a view to bring down the ticket size of the units for the benefi t 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 benefi ts 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 benefi ted with overall cost of the apartments reducing by approx %, 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 fi scal, 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 fl ows 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 31

34 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 profi le 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 signifi cant 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 profi le. 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 infl ow 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 nonstrategic 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, offi ce 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 offi ce 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 offi ce clients to grow leasing volumes at competitive rates. 32

35 nurtured, but are expected to contribute signifi cantly once they become operational in full swing. To provide maximum value to customers in diffi cult economic conditions, DLF announced / gave price reset and other benefi ts to customers amounting to a total revenue impact of Rs. 688 Crores, a part of which refl ected in the numbers for as well. Financial Review Revenue & Profitability During the fi scal , 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 profi t remained at Rs. 4,469 Crores, a fall of 43% from Rs. 7,813 Crores. The EPS for FY09 stood at Rs as compared to Rs 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 profi t fi gures of the Company during the year were after adjusting for losses contributed by noncore, like DLF Pramerica Life Insurance, Hotels & Power, amounting to Rs. 163 Crores. These are new businesses of the Company which are still being 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 fi scal. 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 fi nance 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 33

36 to contain its interest costs due to effi cient mix of various debt instruments. The direct tax outfl ow 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 fi nancial institutions, without any restructuring of debt. DLF also raised signifi cant long term debt to pay its short term obligations and met its operating requirements with prudent internal cash fl ow 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 fi xed 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-beleased 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 refl ected 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, refl ecting that other current liabilities have come down. BUSINESS REVIEW HOMES Built on a foundation of strong lineage and an established reputation, DLF has been a trendsetter in contemporary urban development and housing. These 34

37 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 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 This was primarily due to weak customer confi dence 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 FY09 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 35

38 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 fi rst 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 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, alongwith launching some strategic city-center housing projects, with an endeavour to generate buyer interest by providing excellent location and superior product specifi cations. 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 effi ciencies with aesthetic appeal and have been identifi ed 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 offi ce 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 offi ce space upto December With the economic 36

39 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 offi ce 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 offi ce space under construction against 17 m.s.f. of preleases in place. During the year, the Company also applied for de-notifi cation 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 offi ce 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. 37

40 Retail Malls DLF pioneered the retail revolution in the country and brought about a paradigm shift in the industry by redefi ning shopping, recreation and leisure experiences with the launch of City Centre in Gurgaon in 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. Benefi t 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 signifi cant sales in projects launched Corporate Greens in New Gurgaon and DLF Towers, Lucknow in the fi rst half of the year. However, the demand saw a decline 38

41 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 fi nest 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 , DLF suspended all hotel projects till the economic conditions and the industry revives. However, the fi rst 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 FY 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 Crores by March, 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 39

42 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 effi ciency. 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 fi nancial services leader with approximately USD 637 billion of assets under management as of September 30, 2007 and was the world s 14 th largest institutional asset manager based on worldwide assets under management, as ranked by Pensions & Investments, US trade publication, as of Dec. 31, 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 III. 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. 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, multifunctional 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 qualifi ed 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 40

43 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 fl ow of information with the employees. A knowledge sharing forum has also been launched in our intranet wherein the employees can seek clarifi cations 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 FINANCE AND CONTROL DLF s fi nance team at the corporate level is complemented by independent fi nance teams of various business units to ensure an effective and dynamic system of fl exibility and control. This structure ensures fi nancial 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 identifi es 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 41

44 Committee consisting of majority of independent Directors. The signifi cant 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 postconstruction 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 , 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 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 industryspecifi c 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 refl ected 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 offi ces/locations across the country. 42

45 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 CERTIFICATION DLF IT has been awarded ISO 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, fi nancial 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 fl oor 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 offi ces. 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 profi tability 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-ofthe art technology FILENET. Faster processing of Payments - all payment processes to be automated through a Workfl ow 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 offi ces and Malls. 43

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47 Corporate Governance Report COMPANY S PHILOSOPHY The Company adheres to good corporate practices and is constantly striving to better them and adopt emerging best practices. It is believed that adherence to business ethics and commitments to corporate social responsibility have enabled the Company to achieve its goal of building India through maximizing value for all its stakeholders. By combining ethical values with the business acumen, strengthening of professional resources with national interests and core business with emerging business, the Company maintains its legendary status of the largest and most respected Real Estate Development Company. The Company will continue to focus its resources, strengths and strategies to achieve its vision of becoming the world s most valuable Real Estate Company, while upholding the core values of excellence, integrity, responsibility, quality and customer services, which are fundamental to the DLF group. In this pursuit, Company s philosophy is led by strong emphasis on human values, individual dignity and adherence to honest, ethical and professional conduct. This enables customers and all stakeholders to be partners in the Company s growth and prosperity. The Company continuously endeavours to improve-upon on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. Keeping in view the Company s size, complexity of operations and corporate tradition, the Corporate Governance framework is based on the following main principles: Strategic supervision by the Board of Directors of appropriate composition, size, varied experience and commitment to discharge their responsibilities; Ensuring timely fl ow of information to the Board and its Committees for meaningful and focused discussions in the meeting; Independent verifi cation of the Company s fi nancial reporting; A sound system of internal control to mitigate the risks; Timely and balanced disclosure of all material information to all the stakeholders; Compliance with applicable laws, rules, guidelines and regulations; Transparency and accountability; and Equitable and fair treatment to all its stakeholders including employees, customers, vendors, shareholders and investors. BOARD OF DIRECTORS The Board of Directors (the Board), an apex body formed by the shareholders, serve and protect the overall interests of stakeholders; provides and evaluates the strategic directions of the Company; formulates and reviews management policies and ensure their effectiveness. The Chairman, Vice Chairman, Managing Director and two Wholetime Directors manage the business of the Company under the overall supervision and guidance of the Board. COMPOSITION The Board represents an optimum mix of professionalism, knowledge and experience. The total strength of the Board is 12 members, comprising of: 5 (42%) Executive Directors and 7 (58%) Non- Executive Directors [6 (50%) of the total strength of the Board are Independent Directors]. The Company immensely benefits from the professional expertise of the Independent Directors. The composition of the Board is in conformity with Clause 49 of the Listing Agreement entered into with the Stock Exchanges. Board Meetings The meetings of the Board are mostly held at the Corporate office of the Company at DLF Centre, Sansad Marg, New Delhi. During the year , Eight Board meetings were held on: 30 th April, 3 rd June, 10 th July, 31 st July, 30 th September, 31 st October, 2008, 1 st January and 10 th March, The maximum interval between any two Board meetings was of 61 days. 45

48 The Company Secretary prepares the Agenda and Explanatory notes, in consultation with the Chairman and Managing Director for each meeting and circulates the same in advance to the Directors. A tentative annual calendar for the meetings of the Board and Audit Committee to be held in each quarter is circulated to facilitate and assist the Directors/ Members to plan their schedules for the meetings for meaningful, informed and focussed discussions. Every Director is free to suggest the inclusion of items on the agenda. The Board meets at least once in every quarter to review the quarterly results and other items on the agenda. The Board is given presentation covering industry environment, project implementation, project fi nancing and operations of the Company. Additional meetings are held, when necessary. The draft minutes of the proceedings of the Board of Directors/Committees are circulated in advance and the comments, if any, received from the Directors are incorporated in the minutes in consultation with the Chairman. Senior executives are invited to provide additional inputs at the Board Meetings for the items being discussed by the Board of Directors, as and when necessary. The Company has an effective post meeting follow up, review and reporting mechanism for the decisions taken by the Board / Committees. Action taken report on decisions of the previous meeting(s) is placed at the immediately succeeding meeting of the Board/Committee for noting/review by the members. The Company Secretary while preparing the agenda notes, minutes etc., of the Meeting(s) is responsible for ensuring adherence to all applicable provisions of the Companies Act, 1956 and allied laws, rules, regulations and guidelines. Composition and Attendance Name Financial Year Attendance at (a) Executive Directors Dr. K.P. Singh, Chairman DIN Mr. Rajiv Singh, Vice Chairman DIN Mr. T.C. Goyal, Managing Director DIN Ms. Pia Singh, Whole-time Director DIN Mr. K. Swarup, Sr. Executive Director Legal DIN (b) Non Executive Directors Mr. G.S. Talwar, Non Independent DIN Dr. D.V. Kapur, Independent DIN Mr. M.M. Sabharwal, Independent DIN Mr. K.N. Memani, Independent DIN Mr. Ravinder Narain, Independent DIN Mr. B. Bhushan, Independent DIN Brig. (Retd.) N.P. Singh, Independent DIN No. of Directorships in other public limited companies* No. of Committee positions held in public companies including DLF** Board Meeting Last AGM Listed Others Chairman Member 7 Yes Nil Nil Nil Nil 8 Yes Nil Nil Nil Nil 8 Yes Nil 12 Nil 1 8 Yes Nil 2 Nil Nil 7 Yes Nil 6 Nil 2 4 Yes Nil Nil Nil Nil 8 Yes Yes Nil Nil Nil 1 8 Yes Yes Yes 1 Nil Nil 1 8 Yes 2 2 Nil 1 *Excludes private, foreign, unlimited liability companies and companies registered under Section 25 of the Companies Act, **Indicates membership of Audit and Shareholders /Investors Grievance Committees. Notes: 1. The Directorship/Committee Membership is based on the latest disclosures received from Directors. 2. None of the Directors is a Member of the Board of more than 15 companies in terms of Section 275 of the Companies Act, 1956; Member of more than 10 Committees and Chairman of more than 5 Committees, across all companies in which he is a Director. 3. Dr. K. P. Singh, Mr. Rajiv Singh, Ms. Pia Singh and Mr. G. S. Talwar are related inter-se. 46

49 RESUME OF DIRECTORS PROPOSED TO BE RE-APPOINTED The brief resume of Directors retiring by rotation and seeking re-appointment is appended in the notice for calling Annual General Meeting. COMMITTEES OF THE BOARD (i) Audit Committee Composition The Audit Committee of the Board is headed under the stewardship of Mr. K.N. Memani, an Independent Non-executive Director. Mr. Memani is a Fellow Member of the Institute of Chartered Accountants of India and has vast, diverse and enriched experience in fi nancial management, corporate affairs, accounting and audit matters. The other members of the Committee are Dr. D.V. Kapur, Mr. M.M. Sabharwal, Mr. B. Bhushan, Independent Non-executive Directors and Mr. T.C. Goyal, Managing Director, having requisite fi nancial, accounting and management experience and have held or hold senior positions in other reputed organizations. The Composition of the Audit Committee meets the requirements of Section 292A of the Companies Act, 1956 read with Clause 49 of the Listing Agreement. Group Chief Financial Offi cer and Group Chief Internal Auditor are permanent invitees. Representatives of Statutory Auditors were invited to attend and participate in the meetings. Executives of the Finance, Accounts, Secretarial, Internal Audit and other departments are invited on need basis. Terms of Reference The terms of reference of Audit Committee are in accordance with Section 292A of the Companies Act, 1956 and the guidelines set out in Clause 49 of the Listing Agreement. The Audit Committee is entrusted with the responsibility to supervise the Company s fi nancial control and reporting process and inter-alia perform the following functions: 1. Overseeing fi nancial reporting process and disclosure of fi nancial information, to ensure that the fi nancial statements are correct, suffi cient and credible; 2. Recommending appointment and removal of the statutory auditors, fixation of audit fee and approval for payment of any other services; 3. Reviewing with the management, the periodical financial statements including of subsidiaries/ associates, in particular the investments made by the unlisted subsidiaries of the Company, before submission to the Board for approval; 4. Reviewing with the management and the statutory and internal auditors, the adequacy of internal control systems and recommending improvements to the management; 5. Reviewing the adequacy of internal audit function, approving internal audit plans and efficacy of the functions including the structure of the internal audit department, staffing, reporting structure, coverage and frequency of internal audit; 6. Discussion with internal auditor on any significant findings and follow-up thereon; 7. Reviewing the findings of any internal investigations by internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board; 8. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, as well as post-audit discussions to ascertain any area of concern; 9. Reviewing the management discussion and analysis of financial condition and results of operations, statement of significant related party transactions, management letters/letter of internal control weakness issued by statutory auditors, internal audit reports etc.; 10. Reviewing the Company s financial and risk management policies; 11. Reviewing the uses/applications of funds raised through public offerings; and 12. To perform such other function(s) as may be delegated by the Board from time to time. The previous Annual General Meeting held on 30 th September, 2008 was attended by Mr. K. N. Memani, Chairman, Audit Committee. 47

50 Meetings and Attendance During the year , ten meetings of the Audit Committee were held on 30 th April, 2 nd June, 31 st July, 12 th August, 12 th September, 31 st October, 12 th November & 24 th December, 2008, 31 st January and 24 th February, The maximum gap between any two meetings was of 59 days. Member No. of Meetings held Meetings attended Mr. K.N. Memani, Chairman Dr. D.V. Kapur Mr. M.M. Sabharwal Mr. B. Bhushan Mr. T.C. Goyal Permanent Invitees Mr. Ramesh Sanka, 10 8 Group Chief Financial Offi cer Mr. J.K. Gadi, Group Chief Internal Auditor Statutory Auditors Minutes of the meetings of the Audit Committee are approved by the Chairman of the Committee and are noted and confi rmed by the Board in its next meeting. The Company Secretary acts as the Secretary to the Audit Committee. (ii) Shareholders /Investors Grievance Committee Composition The Committee comprises of four Directors, namely Dr. D.V. Kapur, (Chairman), Brig. (Retd.) N. P. Singh, Mr. Ravinder Narain and Mr. K. Swarup, as Members. The Company Secretary acts as Secretary to the Committee. Terms of Reference The Committee oversees and reviews all matters connected with transfer of securities and also interalia approves issue of duplicate, split of share certificates, etc. Also the Committee looks into redressal of Shareholders /Investors complaints/ grievances pertaining to transfer or credit of shares, non-receipt of annual reports, dividend payments and other miscellaneous complaints. The Committee reviews performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services. The Board has delegated the powers of approving transfer etc. of securities to Sr. Executive Director (Legal) and /or the Company Secretary. Meetings and Attendance The Committee had four meetings during the year under review on 27 th April, 30 th July & 31 st October, 2008 and 31 st January, Member No. of Meetings held Meetings attended Dr. D.V. Kapur, Chairman 4 4 Brig. (Retd.) N.P. Singh 4 4 Mr. Ravinder Narain 4 3 Mr. K. Swarup 4 4 Minutes of the meetings of the Shareholders / Investors Grievance Committee are approved by the Chairman of the Committee and are noted and confirmed by the Board in its next meeting. Compliance Officer Mr. S.C. Setia, Company Secretary is the Compliance Officer for complying with the requirements of SEBI Regulations and the Listing Agreement with Stock Exchanges. Redressal of Investor Grievances The Company addresses all complaints, suggestions and grievances expeditiously and replies have been sent /issued usually within 7-10 days except in case of dispute over facts or other legal impediments. During the year under review, a total of 292 investors complaints were received and resolved. There was no pending complaint and/or request for share transfer, dematerialization etc., as on 31 st March, No. of Complaints Redressal of Investors, Grievances Received Attended 48

51 Investor Relations Department In line with global practice of valuing customer relationships, the Company has established an Investor Relations Department to maintain the highest standards of Corporate Governance. This department acts as a communication interface between the Company and its existing and potential investors. The Investor Relations Department communicates fi nancial information and corporate developments to the fi nancial community, obtains investor opinion/ feedback; analyse Company s perception outside and provides appropriate feedback to the management. It assists institutional investors, analysts, brokers and the general public appreciate Company s business strategy and help them to understand Company s fi nancial statements in appropriate context. The existing and potential investors can also interact with the department to get any information on the Company regarding its businesses, operations, performance and vision. In order to provide the best investor relations services, a core team comprising of senior and experienced professionals, headed by Group Chief Financial Offi cer, has been set up with roles and responsibilities clearly defi ned to achieve the set goals. The team is instrumental in maintaining close liaison with analysts and investors and represents the Company in investor-related events, road shows and investor conferences on a global platform. (iii) Finance Committee Composition The Finance Committee comprises of three Directors, namely Mr. Rajiv Singh (Chairman), Mr. T.C. Goyal and Mr. K. Swarup, as Members. The Company Secretary acts as Secretary to the Committee. The Group Chief Financial Offi cer is the permanent invitee to the Committee. Terms of Reference 1. Reviewing Company s fi nancial policies, strategies and capital structure, working capital, cash fl ow management, banking and cash management including authorisation for operations; 2. Reviewing credit facilities and to exercise all powers to borrow monies (otherwise than by issue of debentures) and take necessary actions connected therewith including refi nancing for optimization of borrowing costs and assignment of assets, both immovable or movable; 3. Authorising exercise of all powers for investment, loan and providing corporate guarantees/securities/letter of comforts etc. within the limits specifi ed by the Board. 4. Borrowing of monies by way of loan and/or issuing and allotting Bonds/Notes denominated in one or more foreign currency(ies) in international markets and possible strategic investments within the limits approved by the Board; 5. Approve opening and operation of Investment Management accounts with foreign Banks and appoint them as agents, establishment of representative/sales offi ces in or outside India etc; 6. Approve contributions to Statutory or other entities, Funds established by Central/ State Government for national importance, institutions, trusts, bodies corporate and other entities, etc.; 7. Authorising executives of the Company/ subsidiary/associate companies for acquisition of land including bidding and tenders, sell/ dispose off or transfer any of the properties and to delegate authorities from time to time to deal with various statutory, judicial authorities, local bodies, etc., to implement the decision of the Committee; and 8. Reviewing and make recommendations about changes to the Charter of the Committee. Meetings and Attendance During the year , twenty six meetings of Finance Committee were held and the attendance thereat was as under: 49

52 Member No. of Meetings held Meetings attended Mr. Rajiv Singh, Chairman Mr. T.C. Goyal Mr. K. Swarup Minutes of the meetings of the Finance Committee are approved by the Chairman of the Committee and are noted and confi rmed by the Board. (iv) Corporate Governance Committee Composition The Committee comprises of Dr. D.V. Kapur (Chairman), Mr. G.S.Talwar, Mr. K.N.Memani and Mr. M.M. Sabharwal, as Members. The Company Secretary acts as Secretary to the Committee. Terms of Reference 1. Overseeing implementation of mandatory and non-mandatory requirements of Clause 49 of the Listing Agreement; 2. Suggesting the best available Corporate Governance practices prevailing in the world for adoption; 3. Reviewing Corporate Governance Practices, Audit Reports and to recommend improvements thereto; 4. Reviewing Code of Conduct for Directors, Senior Management Personnel and other executives; and 5. Reviewing the functioning of Whistle Blower Mechanism. Meeting and Attendance During the year , one meeting of the Corporate Governance Committee was held on 3 rd June, 2008, which was attended by all the Members of the Committee. Minutes of the meeting of the Corporate Governance Committee are approved by the Chairman of the Committee and are noted and confi rmed by the Board in its next meeting. (v) Compliance Committee Composition The Committee comprises of Dr. D. V. Kapur (Chairman), Mr. M. M. Sabharwal, Mr. K. N. Memani, Mr. Ravinder Narain, Mr. T. C. Goyal and Mr. K. Swarup as Members. The Company Secretary acts as Secretary to the Committee. Terms of Reference 1. Monitoring compliance of applicable laws, rules, regulations, guidelines, etc.; 2. Suggesting mitigation mechanism for nonobservance; 3. Fixing responsibilities of the executives for compliance of applicable laws in their respective areas; and 4. Reviewing the fi ndings of compliance audit and to suggest remedial measures whenever necessary. Meetings and Attendance During the year , four meetings of Compliance Committee were held on 16 th May, 30 th July & 4 th October, 2008 and 15 th January, The attendance of members was as follows: Member No. of Meetings held Meetings attended Dr. D.V. Kapur, 4 4 Chairman Mr. M.M. Sabharwal 4 4 Mr. K.N. Memani* 3 2 Mr. Ravinder Narain* 3 3 Mr. T.C. Goyal 4 4 Mr. K. Swarup 4 4 *co-opted on 30 th July, 2008 Minutes of the meetings of the Compliance Committee are approved by the Chairman of the Committee and are noted and confi rmed by the Board in its next meeting. (vi) Remuneration Committee Composition The Remuneration Committee comprises of three Non-executive and Independent Directors- Brig. (Retd.) N.P. Singh (Chairman), Mr. M.M.Sabharwal and Mr. B. Bhushan, as Members. The Company Secretary acts as Secretary to the Committee. 50

53 Terms of Reference 1. Determining Remuneration Policy of the Company; 2. Recommending remuneration including periodic revision, performance bonus, incentives, commission, stock options, other services, perquisites and benefi ts payable to the Managing, Whole-time and other Director(s) including their relatives; 3. Framing policies and fi xation of compensation including salaries, incentives, bonuses, promotions, benefi ts, stock options and performance targets for executives of the Company; and 4. Formulation of the detailed terms and conditions of stock options, granting of administration and superintendence thereof. Meetings and Attendance During the year , three meetings of Remuneration Committee were held on 2 nd June, 30 th July and 31 st October, The attendance of members was as follows: Member No. of Meetings held Meetings attended Brig. (Retd.) N.P. Singh, Chairman 3 3 Mr. M.M. Sabharwal 3 3 Mr. B. Bhushan 3 3 Minutes of the meetings of the Remuneration Committee are approved by the Chairman of the Committee and are noted and confi rmed by the Board in its next meeting. The Chairman of the Remuneration Committee, Brig. (Retd.) N.P. Singh was present at the last Annual General Meeting held on 30 th September, Remuneration Policy The Remuneration Policy of the Company for managerial personnel is primarily based on the following criteria: Performance of the Company, its divisions, associates and units; Success, potential and performance of individual managers; and External competitive environment. The Company s remuneration policy is based on three tenets: pay for responsibility, performance, potential and growth. Individual performance pay is determined by business performance of the business unit and the group as a whole clubbed with performance of individuals measured through the annual appraisal process. Directors Remuneration The Company pays remuneration by way of salary, benefi ts, perquisites and allowances (fi xed component) and commission (variable component) to its Executive Directors based on the recommendations of the Remuneration Committee as per remuneration policy of the Company, within the ceilings fi xed by the shareholders. During the year, the Company paid sitting fee of Rs.20,000 per meeting to its non-executive Directors for attending meetings of the Board and Committees thereof. The Members have at the Annual General Meeting of the Company on 29 th September, 2005 approved payment of commission to the non-executive Directors within the ceiling of 1% of the net profi ts of the Company as computed under the applicable provisions of the Companies Act, The said commission is decided each year by the Board of Directors and distributed amongst the non-executive Directors. The Company also reimburses the out-of-pocket expenses incurred by the Directors for attending meetings. The service contract, notice period, severance fee are not applicable to the nonexecutive Directors. During the fi nancial year, there was no pecuniary relationship or transaction between the Company and of its non-executive Directors. The Company has not granted any stock options to any of its nonexecutive Directors. 51

54 The details of Remuneration paid/payable for the year ended 31 st March, 2009 were as follows: (a) Executive Directors Name Salary Benefits, perks and allowances Commission Contribution to Provident Fund Stock Options* (granted up to 31 st March, 2009)) Term up to Dr. K.P. Singh Nil Mr. Rajiv Singh Nil Mr. T.C. Goyal ,05, Ms. Pia Singh Nil Mr. K. Swarup** # Nil 3.71 Nil * Each vested option is exercisable into one equity share against payment of Rs.2 per share. The options granted are exercisable upon the expiry of three years from the date of vesting. 10%, 30% and 60% of the options shall be vested at the end of 2, 4 and 6 years, respectively from the date of grant. ** Entitled to benefi ts equivalent to value of 76,200 equity shares to be paid in equal tranches on & or date of superannuation, whichever is earlier. # Include Rs.100 lacs variable incentive pertaining to fi nancial year (b) Non-Executive Directors Name Sitting Fees Commission Total Mr. G.S. Talwar Dr. D.V. Kapur Mr. M.M. Sabharwal Mr. K.N. Memani Mr. Ravinder Narain Mr. B. Bhushan Brig. (Retd.) N.P. Singh (c) Stock Options The details of the Stock Options are attached to the Directors Report. (d) Equity Shares held by Directors as on 31 st July, 2009 Except as stated below, none of the Directors hold Equity Shares in the Company Name of Director No. of Shares Dr. K.P. Singh 1,04,61,000 Mr. Rajiv Singh 1,64,56, 320 Mr. T.C. Goyal 2,70,000 Ms. Pia Singh 3,87,76,000 Mr. K. Swarup 9,150 Mr. G.S. Talwar 1,00,000 Dr. D.V. Kapur 10,000 Mr. K.N. Memani 14,000 Mr. M.M. Sabharwal 5,500 Mr. Ravinder Narain 10,000 (vii) Other Functional Committees Apart from the above, the Board also from time to time, constitute Functional Committees with specifi c terms of reference as it may deem appropriate. Meetings of such Committees are held as and when required for discussing the matter concerning the purpose arising. Time schedule for holding the meetings of such functional Committees are fi nalized in consultation with the 52

55 Committee members. Minutes of the meetings of all such Committees are approved by the respective Chairman and are placed before the Board for noting and confi rmation. (viii) Code of Conduct The Code of Conduct (the Code) as recommended by the Corporate Governance Committee and adopted by the Board is a comprehensive Code to ensure good governance and to provide for ethical standards of conduct on matters including confl ict of interest, acceptance of positions of responsibility, treatment of business opportunities and the like. The Code is applicable to all the Directors and Senior Management Personnel of the Company including its subsidiaries. A copy of the Code of Conduct has been hosted on the Company s website An Annual affi rmation has been obtained from all members of the Board and Senior Management Personnel as on 31 st March, In terms of Clause 49 of the Listing Agreement, a declaration signed by the Managing Director is stated hereunder: I hereby confi rm that: All members of the Board and Senior Management Personnel of the Company have affi rmed compliance with DLF s Code of Conduct for the fi nancial year Sd/- New Delhi T. C. Goyal 30 th July, 2009 Managing Director (ix) Whistle Blower Mechanism The Company seeks to maintain the highest ethical and business standards in the course of its business and has put in place mechanism of reporting illegal or unethical behaviour. Directors, employees, vendors or customers may report violations of the laws, rules, regulations or unethical conduct in writing to the notifi ed person. The report received from employees is reviewed by Audit Committee. The Directors and management personnel are obligated to maintain confi dentiality of such reporting and ensure that the Whistle Blowers are not subjected to any discriminatory practices. No person has been denied access to the Audit Committee. A copy of the Whistle Blower Policy is also hosted on the website of the Company, (x) Policy for Prevention of Insider Trading In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Board has approved Policy for Prevention of Insider Trading. The Policy has been amended during the year in line with the amended Regulations of SEBI. The objective of the Policy is to prevent trading of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under the Policy, Insiders are prohibited to deal in the Company s shares during the closure of trading window. To deal in securities, permission of Compliance Offi cer is required over a specifi ed limit. All Directors/designated employees are required to disclose related information periodically as defi ned in the Code, which in turn is being forwarded to the Stock Exchanges. The Company Secretary has been designated as the Compliance Offi cer. A copy of the said Policy has also been hosted on the website of the Company, (xi) Subsidiary Monitoring Framework All subsidiaries of the Company are Boardmanaged with their respective Boards having rights and obligations to manage such companies in the best interest of their stakeholders. As a majority shareholder, the Company monitors and reviews the performance of such companies inter-alia, by the following means: a) Financial Statements, in particular, the investments made by the unlisted subsidiary companies, have been reviewed periodically by the Audit Committee; b) Minutes of the meetings of the unlisted subsidiary companies are placed before the Company s Board, periodically; 53

56 c) Statements containing signifi cant transactions and arrangements entered into by the unlisted subsidiary companies are periodically placed before the Board of Directors; and d) None of the unlisted company is material subsidiary in terms of Clause 49 of the Listing Agreement. (xii) Annual General Meetings (a) Location, date and time of last three Annual General Meetings (AGMs) and Special Resolutions passed thereat: Year Location Date & Time Special Resolutions passed DLF Gymkhana Club, Phase-I, For amendments in the Articles of Association. DLF City, Gurgaon A.M High School Site, Near Summer Field Nursery School, E-Block, Phase-I, DLF City, Gurgaon A.M. 1. For ratifi cation of Employees Stock Option Scheme 2006 for the employees of the Company. 2. For ratifi cation of Employees Stock Option Scheme 2006 for the employees of Company s subsidiaries High School Site, Near Summer Field Nursery School, E-Block, Phase-I, DLF City, Gurgaon A.M. 1. For raising of funds by issue of securities. 2. For appointment of Mrs. Kavita Singh as an Advisor to DLF Commercial Developers Limited (DCDL), a wholly owned subsidiary. 3. For appointment of Ms. Savitri Devi Singh as General Manager in DCDL. 4. For appointment of Dr. K.P. Singh as Chairman of the Company. (b) Resolution passed through Postal Ballot No Postal Ballot was conducted during the FY A Postal Ballot Notice dated 30 th April, 2009 along with accompanying documents, as detailed below, was dispatched to Shareholders under certifi cate of posting. A calendar of events along with Board Resolution was submitted to the Registrar of Companies, NCT of Delhi & Haryana, New Delhi. The Board appointed Mr. T.V. Narayanaswamy, Company Secretary in whole-time practice and Ms. Manisha Gupta, Company Secretary in wholetime practice, as Scrutinizer/alternate Scrutinizer to conduct the Postal Ballot process in a fair and transparent manner. The result of the Postal Ballot was announced on 10 th June, 2009 at the Registered Offi ce and was also published in The Financial Express (English) and Jansatta (Hindi) and hosted on the web-site of the Company. Details of voting pattern were as under: Description of Resolution No. of Valid votes polled (%age) Votes cast for the Resolution (%age) Votes cast against the Resolution (%age) Ordinary Resolution for transfer of Company s Wind Power Business Special Resolution for confi rmation of duties, functions and remuneration payable to Dr. K.P. Singh, Chairman and Mr. Rajiv Singh, Vice Chairman (100%) (100%) ( %) ( %) ( %) ( %) Accordingly, the said Resolutions were approved by the Shareholders, with requisite and overwhelming majority of over 99.99%. (xiii) Disclosures a) Material Contracts/Related Party Transactions None of the transactions with any of the related parties were in confl ict with the interest of the Company. Details of transactions with related parties are disclosed at Note No.11 of Schedule 25 to the Accounts in the Annual Report. All related party transactions are negotiated at arms length basis and are 54

57 only intended to further the interest of the Company. The Board has received disclosures from key management personnel relating to material, fi nancial and commercial transactions where they and / or their relatives have personal interest. b) Compliances During the past three years, no penalties or strictures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authorities, on any matter related to capital markets. The Company has complied with applicable rules and regulations prescribed by Stock Exchanges, SEBI or any other statutory authority relating to the capital markets. All Returns/Reports were fi led within stipulated time with Stock Exchanges/ other authorities. (xiv) Means of Communication The Company regularly intimates information like quarterly fi nancial results and media releases on signifi cant developments in the Company and also presentations that have been made from time to time to the media, institutional investors, analysts and are hosted on the Company s website and have also been submitted to the Stock Exchanges on which the Company s equity shares are listed, to enable them to put them on their own websites. The fi nancial results are normally published in The Economic Times (English) and Navbharat Times/Jansatta (Hindi) and other national dailies including Economic Times (Gujarati) and Gujarat Samachar. Annual Report containing inter-alia, Audited Accounts, Consolidated Financial Statements, Directors Report, Auditors Report, Management Discussion & Analysis Report and Corporate Governance Report including information for the Shareholders and other important information is circulated (xv) to the members and others entitled thereto. Reminders for claiming unpaid dividend and payment of call money were sent to the Shareholders as per record. Exclusive Designated id To enable investors to register their queries and/or grievances, the Company has dedicated an exclusive investorrelations@dlf.in. All investors are requested to avail this facility. General Shareholders Information a) Annual General Meeting Date : Wednesday, 30 th September, 2009 Time : A.M. Venue : Epicentre, Apparel House, Sector 44, Gurgaon (Haryana). No special resolution is proposed to be conducted by postal ballot. b) Financial Calendar (tentative) Financial Year 1 st April, 2009 to 31 st March, 2010 Adoption of Quarterly Results 3 rd /4 th week for the quarter ending: 30 th June, 2009 July, th September, 2009 October, st December, 2009 January, st March, 2010 April, 2010* *Instead of publishing quarterly fi nancial results, the Company may also opt to publish Audited Annual Accounts by June, c) Book Closure Dates From Thursday, the 24 th September, 2009 to Wednesday, the 30 th September, 2009 (both days inclusive) for payment of dividend. d) Dividend Payment Date On or before 29 th October, e) Liquidity of Shares The equity shares of the Company are listed on the Bombay Stock Exchange Limited (BSE), P.J. Tower, Dalal Street, Mumbai and National Stock Exchange Limited (NSE), Exchange 55

58 Plaza, Bandra Kurla Complex, Bandra (E), Mumbai DLF s shares form part of BSE-30 Indices and S&P CNX Nifty. The Company s shares are among the most liquid and actively traded shares consistently rank among top few frequently traded shares. The Company has paid the listing fees to BSE & NSE for The Company has also paid annual custody fee for to National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). f) (i) ISIN Demat No. : INE271C01023 (Fully paid) : IN9271C01013 (Partly paid) (ii) Stock Code Bombay Stock Exchange (BSE) : National Stock Exchange (NSE) : DLF i) Registrar and Share Transfer Agent (RTA) M/s. Karvy Computershare Private Limited, Plot No , Vittalrao Nagar, Madhapur, Hyderabad , g) Stock Market Data*: Month National Stock Exchange (NSE) Bombay Stock Exchange (BSE) High (Rs.) Low (Rs.) Volume High (Rs.) Low (Rs.) Volume April, May, June, July, August, September, October, November, December, January, February, March, * Source : NSE & BSE websites h) Performance in comparison to BSE Sensex and NSE S&P CNX Nifty Tel No.: , Fax No.: , mailmanager@ karvy.com, Website: is the Registrar and Share Transfer Agents (RTA) for Physical Shares. Karvy is also the depository interface of the Company with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). 56

59 j) Share Transfer Mechanism The share transfers received in physical form are processed through Registrar and Share Transfer Agent, within seven days from the date of receipt, subject to the documents being valid and complete in all respects. The share certifi cates duly endorsed are returned immediately to the shareholders by RTA. The Board has delegated the authority for approving transfer, transmission etc. to Senior Executive Director - Legal and/ or Company Secretary. The details of transfers/transmission so approved, is placed before the Shareholders / Investors Grievances Committee for its confi rmation. Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, Certifi cate on half yearly basis confi rming due compliance of share transfer formalities by the Company, certifi cates for timely dematerialization of the shares as per SEBI (Depositories and Participants) Regulations, 1996 and a Secretarial Audit Report for reconciliation of the share capital of the Company obtained from a practising Company Secretary have been submitted to stock exchanges within stipulated time. k) Share Ownership Pattern as on Sl. No. CategoryCategory No. of Shares held %age 1. Promoters and Promoter Group 1,50,28,03, * 2. Directors & their Relatives 5,75, Foreign Institutional Investors 10,59,18, NRIs & Foreign Nationals 20,71, Mutual Funds & UTI 16,12, Banks, FIs & Insurance Companies 43,30, Bodies Corporate 1,72,74, Public 6,26,28, TOTAL 1,69,72,14, *As on date, the promoters and promoter group holding is 1,33,48,03,120 Equity Shares (78.65%) Promoters &. Promoter Group % Shareholding Pattern Directors & their Relatives % Fils % NRIs & Foreign National % Public % Mutual Funds % Bodies Corporate % Banks & Fls % Promoters & Promoter Group Directors & their Relatives Fils NRIs & Foreign National Public Mutual Funds Bodies Corporate Banks & Fls 57

60 l) Distribution of Shareholding by Size, as on Sl. Category Physical Electronic Total No. (Shares) Holders % Shares % Holders % Shares % Holders % Shares % Above TOTAL m) Geographical Distribution of Shareholders, as on DELHI 9.78% OTHERS 50.22% BANGALORE 4.54% AHMEDABAD 4.78% VADODARA 2.34% MUMBAI 12.13% PUNE 1.79% CHENNAI 4.10% KOLKATA 6.99% HYDERABAD 3.34% DELHI BANGALORE AHMEDABAD VADODARA MUMBAI PUNE CHENNAI KOLKATA HYDERABAD OTHERS n) Dematerialization of Shares The shares of the Company are in compulsory dematerialized segment and are available for trading in depository system of both National Securities Depository Limited and Central Depository Services (India) Limited. As on 31 st March, 2009, 1,68,90,69,614 Equity Shares (constituting 99.52%) were in dematerialized form. o) Corporate Benefits Dividend History (Rs. in million) Year Rate(%) Amount (proposed) Transfer of Unpaid/Unclaimed Dividend Amount to Investor Education and Protection Fund (IEPF) During the year under review, an amount of Rs.1,51,204 pertaining to unpaid/unclaimed dividend for the fi nancial year has been transferred to IEPF on 7 th November, As per provisions of the Section 205A read with Section 205C of the Companies Act, 1956, the Company is required to transfer unpaid dividends remaining unclaimed and unpaid for a period of 7 years from the due date(s) to the Investor Education and Protection Fund (IEPF) set up by the Central Government. All Shareholders, whose dividend is unpaid/ unclaimed, are requested to lodge their claim to RTA/Company by submitting an application supported by an indemnity immediately. Kindly note that no claim will lie against the Company 58

61 or the IEPF once the dividend amount is deposited in IEPF. Members who have not encashed their dividend warrants within their validity period may write to the Company at its Registered Offi ce or M/s. Karvy Computershare Private Limited, Registrar & Transfer Agent of the Company, for revalidating the warrants or for obtaining duplicate warrants/payments in lieu of such warrants in the form of the demand draft. Given below are the dates when the unclaimed dividend is due for transfer to IEPF by the Company: Financial Year Date of Declaration Due Date of Transfer to IEPF* Interim Final Indicative dates, actual dates may vary. p) Outstanding GDRs/ADRs/Warrants or any Convertible instruments As of 31 st March, 2009, there were no outstanding ADRs /GDRs / Warrants or other convertible instruments except Stock Options issued to employees under the Employees Stock Option Scheme, 2006 at detailed in Note 15 of Schedule 25 of Standalone Financial Statements. q) Plant Locations The Company does not have any manufacturing or processing plants. The Registered Offi ce of the Company is situated at DLF Shopping Mall, 3 rd Floor, Arjun Marg, DLF City, Phase-I, Gurgaon , Haryana. The Corporate Offi ce of the Company is located at DLF Centre, Sansad Marg, New Delhi r) Address for Correspondence (i) Investor Correspondence For transfer/dematerialization of shares, payment of dividend on shares and any other queries relating to the shares For shares held in physical form - Karvy Computershare Private Limited Unit: DLF Limited Plot No.17-24, Vittalrao Nagar Madhapur, Hyderabad Ph.: Fax No.: mailmanager@karvy.com; Website: For shares held in demat form - To the investors depository participant(s) and/or Karvy Computershare Private Limited (ii) Any query on Annual Report The Company Secretary DLF Limited 1-E, Jhandewalan Extension Naaz Cinema Complex New Delhi (xvi) Risk Management As a part of the overall risk management strategy, the Company consistently insures its assets and operations against a wide range of risks. The Company continues to follow a suitable strategy to review and modify its risk profi le by eliminating and signifi cantly reducing key business risks. The Company has appointed a specialised agency to provide expert advice for further improvement. The framework for risk assessment and minimization thereto has been evaluated and for further improvement, services of domain experts have been engaged. (xvii) Utilization of IPO Proceeds The certifi cate dated on the utilization of IPO proceeds, issued by IDBI Ltd., the Monitoring Agency, were placed before the Audit Committee and the Board and were also fi led with the Stock Exchanges. (xviii) Compliance Certificate from the Auditors Certifi cate from the Auditors of the Company, M/s. Walker, Chandiok & Co, Chartered 59

62 Accountants, confi rming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is annexed to this Report forming part of the Annual Report. The said certifi cate has been forwarded to Stock Exchanges. (xix) Adoption of Mandatory and Non- Mandatory Requirements The Company has complied with all the mandatory requirements and has adopted the following non-mandatory requirements of Clause 49: (a) Remuneration Committee: The Company has set-up a Remuneration Committee to recommend, review remuneration of managerial personnel including their relatives. The composition of the Committee and the details of meetings held and attendance of members thereat are given elsewhere in this Report. The Chairman and all the members of the Remuneration Committee were present at the last Annual General Meeting held on 30 th September, 2008 to answer the Shareholders queries. (b) The fi nancial statements of the Company, on stand-alone basis, are unqualified. (c) Whistle Blower Policy: The Company has adopted a Whistle Blower Policy to provide a mechanism for its Employees, Directors, Vendors or Customers to disclose any unethical and/or improper practice(s) taking place in the Company for appropriate action and reporting. This policy provides the necessary safeguards to all the whistle blowers for making disclosures in good faith. The disclosure can be made in writing to the Head of Legal Department or to the Chairman of the Audit Committee or Chairman of the Company. The Chairman of the Audit Committee is duly authorized to investigate/oversee any disclosures reported under this policy. (xx) (d) Presentations before Board/ Committees: Various presentations by Company s executives and expert agencies were made before the Audit Committee, Corporate Governance Committee, Compliance Committee and the Board in order to apprise the Directors about the business model of the Company, risk profi le of its business, assessment of their responsibilities and suggesting ways to effectively discharge them. Certificate from CEO and GCFO The Managing Director and Group Chief Financial Offi cer of the Company certifi es the fi nancial reporting and internal controls to the Board in terms of Clause 49. (xxi) Capital Integrity Audit The Audit Report, confi rming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL, is placed before the Board on a quarterly basis. A copy of the Audit Report is submitted to the Stock Exchanges where the securities of the Company are listed. (xxii) Fees to Statutory Auditors The fee paid to the Statutory Auditors for the year was Rs lacs (previous year Rs lacs) including certifi cation fee paid for fi nance and tax matters. (xxiii) Other Information Website The website of the Company contains a sub-menu on Investor Relations. It carries comprehensive database of information of interest to our investors including the results of the Company, any price sensitive information disclosed to the regulatory authorities from time to time, business activities of the Company and the services rendered/facilities extended by the Company to investors. 60

63 Auditors Certificate on compliance with the conditions of Corporate Governance under clause 49 of the Listing Agreement To the Members of DLF Limited We have examined the compliance of conditions of Corporate Governance by DLF Limited ( the Company ) for the year ended on March 31, 2009, as stipulated in clause 49 of the Listing Agreement of the Company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company, for ensuring the compliance of the conditions of Corporate Governance as stipulated in said clause. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, and as per representations made by Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the effi ciency or effectiveness with which the management has conducted the affairs of the Company. for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

64 62

65 Auditors Report To The Members of DLF Limited 1. We have audited the attached Balance Sheet of DLF Limited, (the Company ) as at March 31, 2009, and also the Profi t & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto (collectively referred as the Financial Statements ). These Financial Statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these Financial Statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor s Report) Order, 2003 (the Order ) (as amended), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act ), we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order. 4. Further to our comments in the Annexure referred to above, we report that: a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c. The Financial Statements dealt with by this report are in agreement with the books of account; d. On the basis of written representations received from the Directors, as on March 31, 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualifi ed as on March 31, 2009 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act; e. In our opinion and to the best of our information and according to the explanations given to us, the Financial Statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act and the Rules framed there under and give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, in the case of: i) the Balance Sheet, of the state of affairs of the Company as at March 31, 2009; ii) the Profi t & Loss Account, of the profi t for the year ended on that date; and iii) the Cash Flow Statement, of the cash fl ows for the year ended on that date. for Walker, Chandiok & Co Chartered Accountants by David Jones Partner Membership No New Delhi July 30,

66 Annexure to the Auditors Report of even date to the members of DLF Limited, on the financial statements for the year ended March 31, 2009 Based on the audit procedures performed for the purpose of reporting a true and fair view on the Financial Statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fi xed assets. (b) A major portion of the fi xed assets has been physically verifi ed by the management during the year. In our opinion, the frequency of verifi cation of the fixed assets is reasonable having regards to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification. (c) In our opinion, a substantial part of fi xed assets has not been disposed off during the year. (ii) (a) The inventory includes land, completed buildings, construction work-in-progress, construction and development material and development rights in identified land. Physical verification of inventory (except stocks represented by development rights, confirmations for which have been obtained) have been conducted at reasonable intervals by the management. (b) The procedures of physical verifi cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verifi cation. (iii) (a) There are eleven subsidiary companies of DLF Limited covered in the register maintained under Section 301 of the Act to which the Company has granted secured/ unsecured loans. The maximum amount outstanding during the year was Rs. 907, lacs and the year-end balance was Rs 686, lacs. (b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company. (c) In respect of loans granted, repayment of the principal amounts is as stipulated and payment of interest has been regular. (d) There is no amount overdue in respect of loans granted to companies, fi rms or other parties listed in the register maintained under Section 301 of the Act. (e) The Company has taken business advance and loans from two entities covered in the register (iv) maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs 86, lacs and the year-end balance was Rs 3, lacs. (f) In our opinion, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company. (g) In respect of loans taken, the principal amount and interest amount are payable on demand in accordance with the terms and conditions, and payment of interest has been regular in accordance with such terms and conditions. In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. (v) (a) In our opinion, the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered. (b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. (vi) (vii) (viii) The Company has issued 14% redeemable nonconvertible debentures amounting to Rs 10,000 lacs to a banking company during the year which is exempt under Section 58A of the Act and the Companies (Acceptance of Deposits) Rules, Accordingly, the provisions of clause 4(vi) of the Order are not applicable. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government under Section 209(1)(d) of the Act for the maintenance of cost records in respect of generation and sale of electricity from the Company s wind power operations and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete. (ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, salestax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, 64

67 as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding at the year end for a period of more than six months from the date they became payable. (b) There are no amounts in respect of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute except for the amounts mentioned below. Name of the statute Nature of dues Amount Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 Income-tax Act, 1961 The Finance Act, 2004 and Service-tax rules The Finance Act, 2004 and Service-tax rules Demand under Section 143(3) Demand under Section 143(3) Demand under Section 143(3) Demand under Section 143(3)/250/263 Demand under Section 143(3) Denial of Service-tax input credit Demand of Service-tax on import of service Period to which the amount relates Forum where dispute is pending Assessment year Income tax Appellate Tribunal ( ITAT ) Assessment year ITAT Assessment year ITAT Assessment year Commissioner of Income Tax ( CIT ) (Appeals) Assessment year CIT (Appeals) 1, Commissioner Service-tax till Directorate General of Central Excise Intelligence (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) (xvii) In our opinion, the Company has no accumulated losses at the end of the fi nancial year and it has not incurred cash losses in the current and the immediately preceding fi nancial year. In our opinion, the Company has not defaulted in repayment of dues to a fi nancial institution or a bank or debenture holders during the year. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefi t fund/ society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable. In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or fi nancial institutions are not, prima facie, prejudicial to the interest of the Company. In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained. In our opinion, no funds raised on short-term basis have been used for long-term investment. (xviii) (xix) (xx) (xxi) New Delhi July 30, 2009 The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Order are not applicable. The Company has created security in respect of debentures issued during the year. The Company has not raised any money by public issues during the year. The management of the Company has disclosed the end use of monies during the year, raised through a public issue in the previous year (refer Note 34 of Schedule 25 to the financial statements) and the same has been verified by us. No fraud on or by the Company has been noticed or reported during the period covered by our audit. for Walker, Chandiok & Co Chartered Accountants by David Jones Partner Membership No

68 Balance Sheet as at March 31, 2009 Schedule SOURCES OF FUNDS Shareholders funds Share capital 1 33, , Reserves and surplus 2 1,203, ,092, ,237, ,126, Loan funds Secured loans 3 797, , Unsecured loans 4 163, , , , Deferred tax liability (net) 5 5, , ,204, ,968, APPLICATION OF FUNDS Fixed assets 6 Gross block 196, , Less: Accumulated depreciation and amortization 15, , Net block 181, , Capital work-in-progress (including capital advances) 165, , , , Investments 7 295, , Current assets, loans and advances Stocks 8 662, , Sundry debtors 9 21, , Cash and bank balances 10 76, , Other current assets 11 66, , Loans and advances 12 1,044, , ,871, ,834, Less : Current liabilities and provisions Current liabilities , , Provisions , , , , Net current assets 1,561, ,458, ,204, ,968, Signifi cant accounting policies 24 Notes to the fi nancial statements 25 The schedules referred to above form an integral part of the Financial Statements. On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Balance Sheet referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

69 Profi t & Loss Account for the year ended March 31, 2009 Schedule INCOME Sales and other income , , EXPENDITURE Cost of land, plots, constructed properties and development rights 16 77, , Establishment expenses 17 10, , Finance charges 18 80, , Other expenses 19 21, , Depreciation and amortisation 20 11, , , , Profi t before tax 181, , Tax expense 21 26, , Profi t after tax 154, , Earlier year items: Tax - earlier years Prior period expenses (net) Net profi t 154, , Balance as per last balance sheet 173, , Balance available for appropriation 328, , APPROPRIATION Debenture redemption reserve 11, Utilised for bonus issue Transfer to general reserve 15, , Dividend on equity shares Interim - 34, Proposed 33, , Tax on dividend Interim - 5, Proposed 2, , Excess provision of previous year written back (2,980.54) - Balance carried to balance sheet 267, , , , EARNINGS PER SHARE 23 Basic earnings per share (Rs.) Diluted earnings per share (Rs.) Signifi cant accounting policies 24 Notes to the fi nancial statements 25 The schedules referred to above form an integral part of the Financial Statements. On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Profi t and Loss Account referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

70 Cash Flow Statement for the year ended March 31, 2009 A. CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax but after prior period expenses 180, , Adjustment for Depreciation 11, , Loss on sale of fi xed assets, net Loss/(profi t) on sale of investments, net 0.58 (56.00) Assets written off/ discarded Amounts written off Interest expense 80, , Interest income (96,851.14) (42,083.65) Loss/(profi t) from partnership fi rms, net (187.02) Exchange loss Dividend income (792.76) (8,533.10) Amount forfeited on properties (129.43) (284.08) Amortisation of deferred employee compensation 3, , Unclaimed balances written back (533.58) (16.71) Provision for discard of fi xed assets Provision for doubtful debts/ advances Provision for employee benefi ts Operating profit before working capital changes 180, , Adjustment for Trade and other receivables * 84, (112,719.38) Advance for land purchases 29, (95,360.13) Stocks (64,450.28) (26,701.30) Trade and other payables (16,429.29) 46, Earnest monies (paid)/ refunded to subsidiaries/ partnership fi rms 36, (105,801.91) Others (75.61) Payables to subsidiary companies (9,608.16) (8,386.15) Realisation under agreement to sell (74,632.01) (97,260.79) Cash from/ (used) in operations 166, (88,948.98) Direct taxes paid (net of refunds) (30,158.45) (61,044.08) Net cash flow from/ (used in) operating activities 136, (149,993.06) *Refer note no. 8 of Schedule 24- Signifi cant accounting policies B. CASH FLOW FROM INVESTING ACTIVITIES Acquisition of fi xed assets (including capital work-in-progress) (18,688.70) (225,805.74) Purchase of investments Subsidiary companies/ partnership fi rms (129,113.64) (109,085.15) Others (741,996.92) (2,073.38) Proceeds from disposal of : Fixed assets Investments: In subsidiary companies/ partnership fi rms 34, Others 741, , Interest received 94, , Dividend received , Loans and advances to subsidiary companies/ partnership fi rms, net (97,831.70) (377,047.48) Net cash used in investing activities (115,116.93) (648,787.73) 68

71 C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issue of debentures, net 132, * Proceeds from issue of share capital including securities premium , Buyback of shares (14,235.65) - Share issue expenses - (27,436.87) Proceeds from long term borrowings 463, , Repayment of long term borrowings (413,970.00) (382,405.25) (Repayment)/ proceeds from short term borrowings, net (58,926.37) 348, Interest paid (115,467.77) (78,397.42) Dividend paid (34,096.65) (68,193.30) Dividend tax paid (2,814.18) (11,589.46) Net cash flow (used in)/ from financing activities (43,754.07) 894, Net (decrease)/ increase in cash and cash equivalents (22,284.59) 95, Cash and cash equivalents at the beginning 98, , Cash and cash equivalents at the close 75, , (22,284.59) 95, *Supplementary disclosure Subsequently converted into equity shares of Rs. 2 each Notes 1. Cash and bank balance (as per Schedule 10 to the fi nancial statements) 76, , Less: Fixed deposit (pledged/ under lien/ earmarked) , Uncashed dividend Exchange loss (3.63) (2.27) 75, , Non cash transactions - Refer note no. 9 of Schedule 25- Notes to the fi nancial statements On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Cash Flow Statement referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

72 Schedules forming part of the Financial Statements for the year ended March 31, SCHEDULE : 1 SHARE CAPITAL Authorised 2,497,500,000 Equity shares of Rs. 2 each (Previous year 2,497,500,000 equity shares) 49, , ,000 Cumulative redeemable (Previous year 50,000 preference shares) preference shares of Rs. 100 each , , Issued and Subscribed 1,704,832,680 (Previous year 1,704,832,680 equity shares) Equity shares of Rs. 2 each 34, , Paid-up 1,704,832,680 (Previous year 1,704,832,680 equity shares) Equity shares of Rs. 2 each 34, , Less : Calls-in-arrears Less : Buyback of shares (7,623,567 * equity shares of Rs. 2 each) Net paid-up equity shares 1,697,209,113 (previous year 1,704,832,680) of Rs. 2 each 33, , *includes 5,000 equity shares extinguished on April 07, Refer note no. 1 of Schedule 25 Notes to the fi nancial statements SCHEDULE : 2 RESERVES AND SURPLUS Reserves Capital reserve As per last balance sheet Capital redemption reserve As per last balance sheet Transfer from general reserve* Securities premium account As per last balance sheet 876, Add: Received/receivable towards public issue - 915, Less: Issue expenses adjusted - 38, , , Less: Calls-in-arrears unpaid * *Net of Rs lacs received during the year 876, , Debenture redemption reserve Transfer from profi t & loss account 11, , General reserve As per last balance sheet 38, , Transfer from profi t & loss account 15, , Transfer to capital redemption reserve* (152.47) - Buyback of equity shares (premium) (14,083.17) - 39, , Employees stock options outstanding 23, , Less: Deferred employees compensation 15, , Employees stock options outstanding 7, , Surplus As per profi t & loss account 267, , ,203, ,092, * Refer note no. 2 of Schedule 25 Notes to the fi nancial statements 70

73 SCHEDULE : 3 SECURED LOANS From banks Term loans 408, , Overdraft facilities 76, , Interest accrued and due , , From others Term loans IL&FS Trust Company Limited - 25, GE Capital Services India 4, , Infrastructure Development Finance Company Limited 15, , Axis Bank Limited - Trust Series 120, , Axis Bank Limited - DAS Trust Series - 22, Housing Development Finance Corporation Limited 40, , Secured, non-convertible, redeemable debentures 5,000 (previous year Nil) 13.70% Non-convertible redeemable debentures face value Rs. 1,000,000 each, redeemable on August 18, , ,200 (previous year Nil) 14.00% Non-convertible redeemable debentures face value Rs. 1,000,000 each, redeemable on February 24, , ,000 (previous year Nil) 14.00% Non-convertible redeemable debentures face value Rs. 1,000,000 each, redeemable on January 03, , , , , , Refer note no. 3 of Schedule 25 Notes to the fi nancial statements SCHEDULE : 4 UNSECURED LOANS Fixed deposits Short term loans and advances From banks Standard Chartered Bank 6, , , , From others Axis Bank Limited ( Trustees ) 50, , Commercial paper* 77, , ICICI Home Finance Company Limited 15, Indian Loan Receivable Trust 15, Other body corporates , , , , Refer note no. 4 of Schedule 25 Notes to the fi nancial statements *Maximum amount outstanding at any time during the year Rs. 205,000 lacs (previous year Rs. 200,000 lacs) SCHEDULE : 5 DEFERRED TAX LIABILITY (NET) Deferred tax liability arising on account of : Depreciation 5, , Deduction claimed under Section 24(b) of the Income-tax Act, , , Less : Deferred tax asset arising on account of : Provision for : Diminution in value of investment Discard of assets Doubtful advances Employee benefi ts , ,

74 Schedules forming part of the Financial Statements (Contd.) SCHEDULE : 6 FIXED ASSETS Gross block 2008 Additions Disposals/ 2009 adjustments Intangible assets Computer software , , Tangible assets Land Lease hold 5, , , Free hold 28, , Buildings 4, , , Air conditioners and coolers Aircraft 12, , Leased plant and machinery 1, , Plant and machinery 96, , Furniture and fi xtures Vehicles 2, , Total - Current year 153, , , , Previous year 36, , , , Depreciation/ amortisation Intangible assets Computer software Tangible assets Land - lease hold Buildings Air conditioners and coolers Aircraft 1, , Leased plant and machinery 1, , Plant and machinery 2, , , Furniture and fi xtures Vehicles Total - Current year 5, , , , Previous year 3, , , Net block Intangible assets Computer software , Tangible assets Land Lease hold 5, , Free hold 28, , Buildings 4, , Air conditioners and coolers Aircraft 10, , Leased plant and machinery Plant and machinery 94, , Furniture and fi xtures Vehicles 1, , Total - Current year 147, , Previous year 32, ,

75 SCHEDULE: 7 INVESTMENTS Long term investments Class * Share Book value Share Book value In shares (No.) (No.) Trade investment (unquoted) In subsidiary companies DLF Akruti Info Parks (Pune) Limited Equity 1,339, ,339, DLF Cyber City Developers Limited@ Equity 75,025, , DLF Commercial Developers Limited Equity 400, , DLF Estate Developers Limited Equity 5, , Preference 4, , DLF Financial Services Limited Equity 240, , DLF Golf Resorts Limited Equity 400, , DLF Home Developers Limited Equity 17,489,190 3, ,489,190 3, DLF Housing and Construction Limited Equity 27, , Preference 2, , DLF Finvest Limited Equity 3,000, , (Formerly DLF Infocity Developers (Noida) Limited) DLF New Delhi Convention Centre Limited Equity 70, DLF Phase IV Commercial Developers Limited Equity 400, , Eastern India Powertech Limited Equity 69,320,037 6, ,320,037 6, (Formerly DLF Power Limited) DLF Pramerica Life Insurance Company Limited Equity 101,420,000 10, , DLF Retail Developers Limited@ Equity 44,000,000 2, ,000,000 2, DT Cinemas Limited (Formerly DLF Services Limited) Equity 7,803, ,803, DLF Projects Limited Equity 50, , DLF SEZ Holdings Limited Equity , DLF SEZ Developers Limited Equity 50, , DLF Haryana SEZ (Gurgaon) Limited Equity 45, , DLF Haryana SEZ (Ambala) Limited Equity 45, , DLF Hotel Holdings Limited Equity 1,176,600, , ,016,150, , DLF Brands Private Limited (Formerly DLF Retail Brands Private Limited) Equity 8,000, , DLF Telecom Limited Equity 11,150,000 1, ,150,000 1, DLF City Centre Limited# Equity 100, DLF Real Estate Builders Limited# Equity 100, DLF Property Developers Limited# Equity 100, DLF Residential Developers Limited# Equity 100, DLF Residential Partners Limited# Equity 100, DLF Residential Builders Limited# Equity 100, DLF Info Park Developers (Chennai) Limited Equity 320,000,000 32, Beverly Park Maintenance Services Limited Equity 9, , Preference 4, , Breeze Constructions Private Limited Equity 10, , Dankuni World City Limited Equity 50, , Caressa Builders & Constructions Private Limited Equity 60, , Cyrilla Builders & Constructions Limited Equity 50, (Formerly Cyrilla Builders & Constructions Private Limited) Dalmia Promoters and Developers Private Limited Equity 100, , Edward Keventer (Successors) Private Limited Equity 961,500 43, ,500 43, DLF Developers Limited Equity 50, , Jai Luxmi Real Estate Private Limited Equity 22, , Kairav Real Estate Private Limited Equity 50, , Lawanda Builders and Developers Private Limited Equity 10, NewGen Medworld Hospitals Limited Equity 50, ,

76 Schedules forming part of the Financial Statements (Contd.) SCHEDULE: 7 INVESTMENTS (Contd.) Class * Share Book value Share Book value In shares (No.) (No.) DLF Utilities Limited@ (Formerly DLF Utilities Private Limited) Equity 14,908,050 1, ,908,050 1, Paliwal Developers Limited Equity 10, , Preference 4, , Paliwal Real Estate Private Limited Equity 1,000, ,000, Valini Builders and Developers Private Limited Equity 6, VSK Investment and Finance Limited Equity 6, , Preference 4, , , , In other companies DLF SEZ Holdings Limited Equity 25, DLF Limitless Developers Private Limited Equity 201,255,000 20, , Alankrit Estates Limited Equity 3 -** 3 -** Anuroop Builders and Developers Private Limited Equity 10, , Digital Talkies Private Limited Preference 80, , Delanco Real Estate Private Limited Equity 5,000,000 1, ,000,000 1, Garv Developers Private Limited Equity 10, , Garv Promoters Private Limited Equity 10, , Garv Realtors Private Limited Equity 10, , Grism Builders and Developers Private Limited Equity 10, , Kirtimaan Builders Limited Equity 2 -** 2 -** Luvkush Builders Private Limited Equity 10, , Joyous Housing Limited (Rs. 100 each) Equity 37, , Nadish Real Estate Private Limited Equity 10, , Northern India Theatres Private Limited Equity Peace Buildcon Private Limited Equity 10, , Realest Builders and Services Private Limited Equity 50, , Skyrise Home Developers Private Limited Equity 10, , Ujagar Estates Limited Equity 2 -** 2 -** Vibodh Developers Private Limited Equity 10, , Vinesh Home Developers Private Limited Equity 10, , Vismay Builders and Developers Private Limited Equity 10, , , , , , Less : Provision for diminution in value , , Long term (Trade) In Debentures (Unquoted) Debentures (No.) Book Value Debentures (No.) Book Value Jawala Real Estate Private Limited 387,450 38, , In partnership firms DLF Commercial Projects Corporation DLF Office Developers 2, , DLF South Point 2, , DLF GK Residency Kavicon Partners Rational Builders and Developers DLF Property Developers# - 2, DLF Residential Builders# DLF Residential Partners# Real Estate Builders# - 1, DLF Residential Developers# DLF City Centre# , ,

77 SCHEDULE: 7 INVESTMENTS (Contd.) In Belaire receivables trust 8, , Current investments In mutual funds (Quoted) Axis Bank Limited - UTI Liquid Plus ## - 2, Reliance liquid fund ### - 1, , , , Current investments - purchased and sold during the year Refer note no. 19 of Schedule 25 Notes to the fi nancial statements * Equity shares of Rs. 10 each, Preference shares of Rs. 100 each - fully paid, unless otherwise stated ** Rounded off to Rs. Including bonus shares # Converted from partnership fi rm to Limited Company under Part IX of the Companies Act, 1956 ## NAV as on March 31, 2009: Nil (previous year Rs. 2, lacs) ### NAV as on March 31, 2009: Nil (previous year Rs. 1, lacs) SCHEDULE : 8 STOCKS Land (including development rights), plots and development cost thereon (including agreement to sell) Constructed properties Land and construction work-in-progress 179, , Development/construction materials , Development rights: payments made under agreement to purchase land/ development rights/constructed properties To subsidiary companies 7, , To fi rms in which the Company and/or its subsidiary 461, , companies are/is a partners To others , , Rented buildings (including land and related equipments) Lease hold 3, , Free hold 10, , , , Less: Depreciation on rented buildings and related equipments 1, , , , , SCHEDULE : 9 SUNDRY DEBTORS (Considered good unless otherwise stated) Debts over six months Secured Unsecured Subsidiary companies 2, Others [including Rs lacs (Previous year Rs lacs) doubtful)] 7, , , , Less: Doubtful and provided for , , Other debts Unsecured Subsidiary companies 1, , Others 10, , , , , ,

78 Schedules forming part of the Financial Statements (Contd.) SCHEDULE : 10 CASH AND BANK BALANCES Cash in hand Cheques in hand Bank balances : With scheduled banks in : Current accounts* 5, , Fixed deposit accounts Pledged/under lien/earmarked , Others 70, , With HSBC Bank plc, London, UK, in current account, a non - scheduled bank (maximum amount outstanding during the year Rs lacs, previous year Rs lacs) , , *Includes unutilised monies from public issue - Rs lacs (previous year Rs lacs) SCHEDULE : 11 OTHER CURRENT ASSETS Unbilled receivables* DLF Assets Private Limited 18, Others 44, , , , Interest accrued On investments in debentures From customers 1, From others , , * Refer policy no. 8 of Schedule 24 Signifi cant accounting policies SCHEDULE : 12 LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received Secured Unsecured [including Rs lacs (Previous year Rs lac) doubtful] 116, , , , Due from subsidiary companies Secured 18, , Others 776, , , , Due from fi rms in which the Company and/or its subsidiary companies are partners - current accounts 2, , Due from Niharika Shopping Mall - a jointly controlled operation Security deposits , Taxes paid 130, , ,045, , Less: Doubtful and provided for ,044, ,

79 SCHEDULE : 13 CURRENT LIABILITIES Sundry creditors Subsidiary companies 2, , Others 27, , , , Due to fi rms in which the Company and/or its subsidiary companies is/are partners - current account 1, , Realisation under agreements to sell Subsidiary companies 53, Others 3, , Uncashed dividend* Other liabilities Subsidiary companies 24, , Others 31, , Interest accrued but not due on loans 19, , , , *Not due for credit to Investor Education and Protection Fund SCHEDULE : 14 PROVISIONS Provision for tax 107, , Proposed dividend 33, , Tax on dividend * 2, , Employee benefi ts 1, , , , * Refer note no. 31(b) of Schedule 25 Notes to the fi nancial statements SCHEDULE : 15 SALES AND OTHER INCOME (a) Sales and other receipts Sale of land and plots 4, , Revenue from constructed properties 151, , Revenue from development charges 101, , Sale of development rights 8, , Revenue from windmills power generation 11, Service receipts Amount forfeited on properties Rental income 5, , , , (b) Income from investments Current (other than trade) Dividend from mutual funds , Profi t/ (loss) on sale of mutual fund investments (net) Interest on deposit in trust Long - term (trade investments) Interest (gross#) on debentures Profi t/(loss) from partnership fi rms DLF City Centre (0.12) (1.53) DLF Commercial Project Corporation (1,009.79) (314.97) DLF Offi ce Developers

80 Schedules forming part of the Financial Statements (Contd.) SCHEDULE: 15 SALES AND OTHER INCOME (Contd.) DLF Property Developers (0.05) (0.25) DLF Residential Builders (0.05) (0.04) DLF Residential Developers (0.05) (0.09) DLF Residential Partners (0.05) (0.04) DLF South Point 1.28 (19.38) DLF Recreational Foundation Kavicon Partners Rational Builders and Developers (2.87) Real Estate Builders (0.06) (0.07) DLF GK Residency 0.03 (1.37) (530.65) , , # Tax deducted at source on interest (c) Other income Interest (gross*) from : Bank deposits Customers 1, Loans and deposits 95, , Others , , Exchange loss (92.65) (2.27) Profi t on disposal of fi xed assets Unclaimed balances and excess provisions written back Miscellaneous income 1, , , , , , * Tax deducted at source on interest 21, , SCHEDULE : 16 COST OF LAND, PLOTS, CONSTRUCTED PROPERTIES AND DEVELOPMENT RIGHTS Land and Plots (including development cost) Opening stock , Purchases during the year Less: Closing stock (368.43) (646.48) Constructed properties Cost of land, development and construction 46, , Cost of development charges 23, , Cost of development rights sold 6, , , , SCHEDULE : 17 ESTABLISHMENT EXPENSES Salaries, wages and bonus 5, , Contribution to provident and other funds Employee benefi ts Amortization of deferred employees compensation 3, , Staff welfare , ,

81 SCHEDULE : 18 FINANCE CHARGES Interest Fixed periods loans Debentures 5, Other fi xed term loans 94, , , , Other loans 25, , Guarantee, fi nance and bank charges 6, , , , Less: Transferred to work-in-progress (40,159.73) (31,083.32) Less: Transferred to capital work-in-progress (10,638.51) (4,406.11) 80, , SCHEDULE : 19 OTHER EXPENSES Rent Rates and taxes Electricity, fuel and water Repair and maintenance Buildings Constructed properties/ colonies Computers Others Insurance Commission and brokerage 1, , Advertisement and publicity 3, , TraveIling and conveyance Vehicles running and maintenance Aircraft running and maintenance 2, , Operating and maintenance charges of windmill Printing and stationery Directors fee Commission to non-executive directors Sales promotion Communication Legal and professional 5, , Donation and charity Claim and compensation Loss on disposal of fi xed assets Loss on sale of mutual fund investments Assets written off/ discarded Amounts written off Provision for doubtful debts and advances Miscellaneous 1, , , SCHEDULE : 20 DEPRECIATION AND AMORTISATION * On fi xed assets 11, , On current assets , , * Net of capitalisation 79

82 Schedules forming part of the Financial Statements (Contd.) SCHEDULE : 21 TAX EXPENSE Income-tax 22, , Deferred-tax 2, Fringe benefi t tax (net) , , (Rs in lacs) SCHEDULE : 22 PRIOR PERIOD EXPENSES (NET) Prior period expenses Repair and maintenance Buildings Constructed properties/ colonies Computers Legal and professional Advertisement and publicity Operating and maintenance charges of windmill Insurance Prior period incomes Depreciation claimed, now written back (19.44) - Miscellaneous income (25.19) - (44.63) SCHEDULE : 23 EARNINGS PER SHARE Net profit attributable to equity shareholders Profi t after tax 154, , Earlier year items Income tax Prior period expenses (net) (209.37) - 154, , Nominal value of equity share (Rs.) Total number of equity shares outstanding at the beginning of the year 1,704,832,680 1,529,421,080 Total number of equity shares outstanding at the end of the year 1,697,209,113 1,704,832,680 Weighted average number of equity shares 1,703,074,486 1,662,676,836 Basic earnings per share (Rs.) (rounded off to two decimal places) Nominal value of equity share (Rs.) Weighted average number of equity shares used to compute diluted earnings per share 1,703,615,271 1,665,679,771 Diluted earnings per share (Rs.) (rounded off to two decimal places)

83 SCHEDULE : 24 SIGNIFICANT ACCOUNTING POLICIES 1. Basis of accounting The Financial Statements are prepared under historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles of India and to comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government in exercise of the power conferred under sub-section (I) (a) of Section 642 and the relevant provisions of the Companies Act, 1956 (the Act ). 2. Use of estimates The preparation of fi nancial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the fi nancial statements and the results of operations during the reporting periods. Although these estimates are based upon management s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods. 3. Intangible assets and amortization Software which are not integral part of the hardware are classifi ed as intangibles and is stated at cost less accumulated amortisation. Softwares are being amortised over the estimated useful life of 5 years. 4. Fixed assets and depreciation/ amortization a) Fixed assets (gross block) are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Building / specifi c identifi able portion of Building, including related equipments are capitalized when the construction is substantially complete or upon receipt of the occupancy certifi cate, whichever is earlier. Depreciation on assets (including buildings and related equipments rented out and included under current assets as stocks) is provided on straight-line method at the rates and in the manner prescribed in schedule XIV to the Companies Act, b) Capital work-in-progress represents expenditure incurred in respect of capital projects under development and are carried at cost. Cost includes land, related acquisition expenses, development / construction costs, borrowing costs and other direct expenditure including advances to contractors and others. c) Leasehold land, under perpetual lease, are not amortized. Leasehold lands, other than on perpetual lease, are being amortized over their respective lease periods. 5. Investments Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost and provision for diminution in their value, other than temporary, is made in the accounts. Profi t/ loss on sale of investments is computed with reference to the average cost of the investment. 6. Stocks Stocks are valued as under: a) Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ approximate average cost/ as revalued on conversion to stock and net realizable value. Cost includes land (including development rights) acquisition cost, borrowing cost, estimated internal development costs and external development charges. 81

84 Schedules forming part of the Financial Statements (Contd.) b) Constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials, and is valued at lower of cost/ estimated cost and net realizable value. c) In case of SEZ projects, constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials, and is valued at lower of cost/ estimated cost, and net realizable value. d) Development rights represents amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the company to acquire irrevocable and exclusive licenses/ development rights in identifi ed land and constructed properties, the acquisition of which is at an advanced stage. e) Cost of construction/ development material is valued at lower of cost and net realizable value. f) Rented buildings and related equipments are valued at cost less accumulated depreciation. 7. Revenue recognition a) Revenue from constructed properties: Revenue from constructed properties, other than SEZ projects, is recognised on the percentage of completion method. Total sale consideration as per the duly executed, agreements to sell / application forms containing salient terms of agreement to sell, is recognised as revenue based on the percentage of actual project costs incurred thereon to total estimated project cost, subject to such actual cost incurred being 30 per cent or more of the total estimated project cost. Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognised in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognised immediately. For SEZ projects, revenue from development charges is recognised on the percentage of completion method in accordance with the terms of the Codeveloper Agreements / MOU, read with addendum, if any. The total development charges is recognised as Revenue on the percentage of actual project cost incurred thereon to total estimated project cost subject to such actual cost incurred being 30% or more of the total estimated project cost. The estimated project cost includes estimated development and construction cost of such project. Revenue from Lease of land pertaining to such projects is recognised in accordance with the terms of the Co-developer Agreements on accrual basis. b) Sale of land and plots (including development rights) is recognised in the fi nancial year in which the agreement to sell/ application forms containing salient terms of agreement to sell is executed. Where the Company has any remaining substantial obligations as per the agreements, revenue is recognised on the percentage of completion method of accounting, as per a) above. c) Revenue from wind mill power projects is recognised on the basis of actual power sold (net of reactive energy consumed), as per the terms of the power purchase agreements entered into with the respective purchasers. d) Income from interest is accounted for on time proportion basis taking into account 82

85 the amount outstanding and the applicable rate of interest. e) Dividend income is recognised when the right to receive is established. f) Share of profi t/ loss from fi rms in which the Company is a partner is accounted for in the fi nancial year ending on (or immediately before) the date of the balance sheet. g) Rent, service receipts and interest from customers under agreement to sell is accounted for on accrual basis except in cases where ultimate collection is considered doubtful. 8. Unbilled receivables Unbilled receivables disclosed under Schedule 11 - Other Current Assets represents revenue recognized based on Percentage of completion method (as per para no. 7a and 7b above), over and above the amount due as per the payment plans agreed with the customers. 9. Cost of revenue a) Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the profi t and loss account based on the percentage of revenue recognised as per accounting policy no. - 7 above, in consonance with the concept of matching costs and revenue. Final adjustment is made upon completion of the specifi c project. For SEZ projects, cost of constructed properties includes estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the profi t & loss account based on the percentage of revenue recognised as per accounting policy no. - 7 above, in consonance with the concept of matching costs and revenue. Final adjustment is made upon completion of the specifi c project. b) Cost of land and plots includes land (including development rights) acquisition cost, estimated internal development costs and external development charges, which is charged to profi t & loss account based on the percentage of land/ plotted area in respect of which revenue is recognised as per accounting policy no.- 7 above to the saleable total land/ plotted area of the scheme, in consonance with the concept of matching cost and revenue. Final adjustment is made upon completion of the specifi c scheme. 10. Borrowing costs Borrowing costs that are attributable to the acquisition and/or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with Accounting Standard AS-16 Borrowing Costs. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Capitalisation of borrowing costs is suspended in the period during which the active development is delayed due to, other than temporary interruption. All other borrowing costs are charged to the profi t & loss account as incurred. 11. Taxation Provision for tax for the year comprises current income tax, deferred tax and fringe benefi t tax. Current income tax is determined in respect of taxable income with deferred tax being determined as the tax effect of timing differences representing the difference between taxable income and accounting income that originate in one period, and are capable of reversal in one or more subsequent period(s). Such deferred tax is quantified using rates and laws enacted or substantively enacted as at the end of the fi nancial year. Provision for Fringe Benefi t Tax for the year has been determined in accordance with the provisions of Section 115WC of the Income Tax Act,

86 Schedules forming part of the Financial Statements (Contd.) 12. Foreign currency transactions Transactions in foreign currency and nonmonetary assets are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are converted at the yearend exchange rate. Income and expenditure of the liaison office at London, is translated at the yearly average rate of exchange. The Exchange differences arising on such conversion and on settlement of the transactions are recognised in the profi t & loss account. In terms of the clarifi cation provided by the Institute of Chartered Accountants of India for Accounting Standard Changes in Foreign Exchange Rates (AS)-11, the exchange gain/ loss on transaction with regard to the Fixed Assets has been capitalized along with Fixed Assets. The other exchange gains related to current assets has been charged to the profi t & loss account 13. Employees benefits Expenses and liabilities in respect of employee benefi ts are recorded in accordance with Revised Accounting Standard 15 - Employee Benefi ts (Revised 2005) issued by the Institute of Chartered Accountants of India (the ICAI ). (i) Provident fund The Company makes contribution to statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provision Act, In terms of the Guidance on implementing the revised AS 15, issued by the Accounting Standard Board of the ICAI, the provident fund set up by the Company is treated as a defi ned benefi t plan since the Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any is recognized as an expense in the period in which services are rendered by the employee. (ii) Gratuity Gratuity is a post employment benefi t and is in the nature of a defi ned benefi t plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defi ned benefi t/ obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defi ned benefi t/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the profi t & loss account in the year in which such gains or losses are determined. (iii) Compensated absences Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefi t expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. (iv) Cash Settled Options Accounting value of Cash Settled Options granted to employees under the Employees Shadow Option Scheme is determined on the basis of intrinsic value representing the excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. The same is charged as employee benefi ts over the vesting period, in accordance with Guidance Note No 18 Share Based Payments, issued 84

87 by The Institute of Chartered Accountants of India ( ICAI ). (v) Other short term benefits Expense in respect of other short-term benefi ts is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards Superannuation Fund (funded by payments to Life Insurance Corporation of India (LIC) are charged to revenue on accrual basis. 14. Leases Assets subject to operating leases are included under fi xed assets or current assets as appropriate. Rent (Lease) income is recognised in the profi t & loss account on a straight-line basis over the lease term. Costs, including depreciation, are recognised as an expense in the profi t & loss account. 15. Employees stock option plan (ESOP) Accounting value of stock options is determined on the basis of intrinsic value representing the excess of the market price on the date of grant over the exercise price of the options granted under the "Employees Stock Option Scheme" of the Company, and is being amortised as "Deferred employees compensation" on a straight-line basis over the vesting period in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Guidance Note 18 "Share Based Payments" issued by the ICAI. 16. Impairment of assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the profi t & loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refl ected at the recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the profi t & loss account. 17. Contingent liabilities and provisions Depending upon the facts of each case and after due evaluation of legal aspects, claims against the Company are accounted for as either provisions or disclosed as contingent liabilities. In respect of statutory dues disputed and contested by the Company, contingent liabilities are provided for and disclosed as per original demand without taking into account any interest or penalty that may accrue thereafter. The Company makes a provision when there is a present obligation as a result of a past event where the outfl ow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Possible future or present obligations that may but will probably not require outfl ow of resources or where the same cannot be reliably estimated, is disclosed as contingent liability in the Financial Statements. 18. Earnings per share Basic earnings per share is calculated by dividing the net profi t or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profi t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity 85

88 Schedules forming part of the Financial Statements (Contd.) shares. The period during which, number of dilutive potential equity shares change frequently, weighted average number of shares are computed based on a mean date in the quarter, as impact is immaterial on Earnings per Share. SCHEDULE : 25 NOTES TO THE FINANCIAL STATEMENTS 1. Share capital (a) 5,877,850 equity shares of Rs. 2 each (originally 1,175,570 shares of Rs. 10 each) fully paid up allotted pursuant to a scheme of amalgamation of DLF United Limited with the Company, without payment being received in cash. 1,338,603,595 equity shares of Rs. 2 each fully paid issued as bonus shares by way of capitalisation of free reserves and share premium account. (b) During the year, the calls in arrears reduced by Rs lacs, comprising Share Capital of Rs lacs and Share Premium of Rs lacs. (c) During the year the Company issued Public Announcement (PA) and Corrigendum to PA dated September 30, 2008 and October 15, 2008 respectively, for buy back of its shares from the open market at a price not exceeding Rs.600 per share for an aggregate amount not exceeding Rs.110,000 lacs. Under the buy back programme, the Company has bought back 7,623,567 equity shares till March 31, Out of the above, 7,618,567 equity shares were extinguished before March 31, 2009 and remaining 5,000 shares were extinguished after March 31, (d) Pursuant to the above transactions, in (b) and (c) above, the paid up share capital of the Company decreased by Rs lacs, during the year. 2. Reserves and Surplus Pursuant to the above buyback programme, Capital redemption reserve has been created out of General reserve for Rs lacs being the nominal value of shares bought back under the buyback programme in terms of Section 77AA of the Companies Act, Secured loans a) Facilities with banks comprise, term loans and overdraft facilities which are secured by equitable mortgages of certain freehold and leasehold lands/properties of the Company/ subsidiary Companies / sellers / lessors, land under agreement to sell and/ or against future receivables of the Company/subsidiary companies. b) Loan from others comprise of term loans from fi nancial institutions which are secured by equitable mortgages of certain lands/properties of some subsidiary entities/associates/group companies and the receivables and/ or against future receivables of the Company/subsidiary companies. c) Loans in respects of aircraft, wind mill projects and vehicles are secured by hypothecation of the respective assets, thus purchased. d) i) 5000, 13.70% Non Convertible Redeemable Debentures and 7200, 14% Non Convertible Redeemable Debentures, issued to the Life Insurance Corporation of India are secured by Pari Passu charge over certain lands / properties of the Company / subsidiary companies. ii) 1000, 14% Non Convertible Redeemable Debentures, issued to Standard Chartered Bank are secured by a charge over the land of the Company. e) Loans due within one year Rs. 159, lacs (previous year Rs. 221, lacs). 86

89 4. Unsecured loans has been credited to Investor Education a) Fixed deposits include unclaimed deposits and Protection fund. amounting to Rs. Nil lacs (previous year b) Loans due within one year Rs. 133, Rs lacs) as the unclaimed deposits lacs (previous year Rs. 243, lacs) 5. Particulars regarding partnership firms in which the Company is a partner Name of partnership firms Profit/loss Capital sharing ratios a) DLF Commercial Projects Corporation % DLF Limited DLF Housing and Construction Limited b) DLF Office Developers DLF Limited 85 2, Kirtimaan Builders Limited Ujagar Estates Limited Alankrit Estates Limited , c) DLF South Point DLF Limited 10 2, DLF Commercial Developers Limited DLF Housing and Construction Limited DLF Utilities Limited (formerly DLF Utilities Private Limited) , d) DLF GK Residency DLF Limited DLF Home Developers Limited Hiemo Builders and Developers Private Limited Khem Buildcon Private Limited e) Kavicon Partners DLF Limited DLF Housing and Construction Limited Nilayam Builders and Developers Limited f) Rational Builders and Developers DLF Limited Kirtimaan Builders Limited Alankrit Estates Limited g) DLF Property Developers* DLF Limited DLF Home Developers Limited Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) Mens Buildcon Private Limited Mhaya Buildcon Private Limited Nambi Buildwell Private Limited Rati Infratech Private Limited h) DLF Residential Builders* DLF Limited DLF Home Developers Limited Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) Mens Buildcon Private Limited Mhaya Buildcon Private Limited

90 Schedules forming part of the Financial Statements (Contd.) Name of partnership firms Profit/loss Capital sharing ratios Nambi Buildwell Private Limited Rati Infratech Private Limited i) DLF Residential Partners* DLF Limited DLF Home Developers Limited Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) Mens Buildcon Private Limited Mhaya Buildcon Private Limited Nambi Buildwell Private Limited Rati Infratech Private Limited j) Real Estate Builders* DLF Limited DLF Home Developers Limited Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) Mens Buildcon Private Limited Mhaya Buildcon Private Limited Nambi Buildwell Private Limited Rati Infratech Private Limited k) DLF Residential Developers* DLF Limited DLF Home Developers Limited Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) Mens Buildcon Private Limited Mhaya Buildcon Private Limited Nambi Buildwell Private Limited Rati Infratech Private Limited l) DLF City Centre * DLF Limited DLF Retail Developers Limited DLF Housing and Construction Limited Aadarshini Real Estate Developers Private Limited Gulika Home Developers Private Limited Falguni Builders Private Limited Ganika Builders Private Limited * During the year converted from partnership fi rm to Limited Company under Part IX of the Companies Act, Profi t / Loss sharing ratio and capital mentioned are as on the date of conversion. 6. a) The profi t/loss from sale of land /developed plots/constructed properties in DLF City, Gurgaon (Complex) is accounted as per revenue recognition policy 7 stated in Schedule 24 Signifi cant accounting policies. The Complex comprises lands owned by the Company as also those under agreements to purchase entered into with subsidiary/ coordinating companies. In terms of such agreements, the Company has purchased 3.01 lacs sq. mts. of plotted area during the year (previous year 5.15 lacs sq. mts.) from the land owning companies consequent to registration of the sale deeds/ transfer of ownership in favour of the customers at the average cost of land to the Company and/ or the land owning companies. The average estimated internal development costs and external development charges, 88

91 in respect of the plots sold have been written off in terms of accounting policy 9 stated in Schedule 24 Signifi cant accounting policies. Final adjustment, if any, is made on completion of the applicable scheme/ project. b) The profi t/ loss from sale of agricultural land comprising land owned by the Company and its subsidiary/ coordinating companies, covered under agreement to sell the land to the Company is accounted for on execution of the sale agreements in favour of the customers. During the year the Company has purchased Nil acres of land (previous year 2.37 acres) from the land owning companies, consequent to registration of the sale deeds/ transfer of ownership in favour of the customers at the average cost of land to the Company and/ or the land owning companies c) In terms of the agreement with DLF Housing and Construction Limited and Mayur Recreational and Development Limited, since merged with the Nachiketa Real Estates Private Limited, the Company has agreed to develop their lands along with its own lands at Loni (Ankur Vihar) into a colony. In terms of the said agreement, the Company is entitled to realise and retain the entire sale proceeds and pay the cost of land, incidentals etc. plus a sum of Rs lacs per acre to the aforesaid land owners on registration of the properties and revenue is recognised on proportionate realisation basis. d) In respect of Dilshad Garden II Scheme, the profi t/loss on sale of developed plots is accounted by adjusting cost proportionate to the realisations made. e) The Company on November 3, 2006 has entered into an agreement to sell in terms of the resolution passed by the Board of Directors in their meeting held on March 28, 2006, with one of its wholly owned subsidiary company namely, DLF Home Developers Limited ( DHDL ) to sell a parcel of land of saleable area consisting 30 million sq. ft built up area under construction / to be constructed. Further, DHDL will complete all the finishing work before selling the same to its customers. In terms of the accounting policy 7 in Schedule 24 Significant accounting policies to the financial statements on revenue recognition, revenue in respect of this agreements to sell is being recognised based on percentage of completion method. 7. The Company has entered into business development agreements with DLF Commercial Project Corporation and Rational Builders and Developers (partnership fi rms). As per these agreements, the Company has acquired sole irrevocable development rights in identifi ed lands which are acquired / to be acquired by these Partnership fi rms. In terms of accounting policy 6 in Schedule 24 Signifi cant accounting policies the amount paid to these partnership fi rms pursuant to the above agreements, are classifi ed as stock of Development rights. 8. The following expenses have been directly charged to work-in-progress, adjustable on sale. Particulars Salaries, wages and other benefi ts Legal, professional and 6, , consultancy Repairs and maintenance of machinery Hire charges of machinery Power and fuel Insurance Finance charges 40, , Others 1, , , , Non cash transactions During the year, the Company converted advance given Rs. 15,000 lacs for land purchase into a long term investment in DLF Limitless Developers Private Limited, a joint venture. 89

92 Schedules forming part of the Financial Statements (Contd.) 10. Employee benefits A. Gratuity (non funded) Amount recognised in the profit & loss account is as under Description Current service cost Interest cost Actuarial loss recognised during the year Past service cost Movement in the liability recognised in the balance sheet is as under Description Present value of defi ned benefi t obligation as at the start of the year Current service cost Interest cost Actuarial loss recognised during the year Benefi ts paid (47.26) Past service cost Present value of defi ned benefi t obligation as at the end of the year For determination of the gratuity liability of the Company, the following actuarial assumptions were used Description Particulars Discount rate 8.00% Rate of increase in compensation levels 7.50% B. Compensated absences (non funded) Amount recognised in the profit & loss account is as under Description Current service cost Interest cost Actuarial loss recognised during the year Past service cost Movement in the liability recognised in the balance sheet is as under Description Present value of defi ned benefi t obligation as at the start of the year Current service cost Interest cost Actuarial loss recognised during the year Benefi ts paid (58.53) Past service cost Present value of defi ned benefi t obligation as at the end of the year For determination of the liability in respect of compensated absences, the Company has used following actuarial assumptions Description Particulars Discount rate 8.00% Rate of increase in compensation levels 7.50% C. Provident fund Contribution made by the Company to the provident fund trust setup by the Company during the year is Rs lacs (previous year Rs lacs). As at the year end, no interest shortfall in provident fund remains unprovided for as there is surplus in the fund. In the absence of guidance on actuarial valuation of Fund liability, which is to be issued by the Actuarial Society of India, the actuarial valuation liability towards Provident Fund is not feasible. Accordingly, other related disclosures in respect of provident fund have not been furnished. 11. Related party disclosures a) Relationship (i) Subsidiaries companies at any time during the year 1 Aadarshini Real Estate Developers Private Limited 2 Abhiraj Real Estate Private Limited 3 Adelie Builders & Developers Private Limited 4 Adriatic Properties d.o.o. 5 Adrienne Builders and Constructions Private Limited 6 Aidway Investments Limited 7 Alastair Builders & Developers Private Limited 8 Alta Builders and Developers Private Limited 9 Alvernia Limited 10 Amancruises (2006) Company Limited 11 Amancruises Company Limited 12 Amancruises Indonesia Limited 13 Amankila Resorts Limited 14 Amanproducts Limited 15 Amanresorts Asia Limited 16 Amanresorts B.V. 17 Amanresorts International Pte. Limited 18 Amanresorts IPR B.V. 19 Amanresorts Limited 20 Amanresorts Mangement B.V. 21 Amanresorts Services Limited 22 Amanresorts Technical Services B.V. 23 Amanusa Limited 24 Americus Real Estate Private Limited 25 Amishi Builders & Developers Private Limited 90

93 26 Amoda Builders and Developers Private Limited 27 Andaman Development Company Limited 28 Andaman Holdings Limited 29 Andaman Resorts Co. Limited 30 Andaman Thai Holding Co. Limited 31 Anjuli Builders & Developers Private Limited 32 Annabel Builders & Developers Private Limited 33 Aradal Company N.V. 34 Argent Holdings Limited 35 ARL Marketing Inc. 36 ARL Marketing Limited 37 ASL Management (Palau) Limited 38 Balina Pansea Company Limited 39 Barbados Holdings Limited 40 Bedelia Builders & Construction Private Limited 41 Belmount Estate Developers Limited 42 Berenice Real Estate Private Limited 43 Beverly Park Maintenance Services Limited 44 Bhamini Real Estate Developers Private Limited 45 Bhoruka Financial Services Limited 46 Bhosphorous Investments Limited 47 Bhutan Hotels Limited 48 Bhutan Resorts Private Limited 49 Bodrum Development Limited 50 Breeze Constructions Private Limited 51 Calantha Builders & Developers Private Limited 52 Callista Builders and Constructions Private Limited 53 Caressa Builders & Constructions Private Limited 54 Catriona Builders & Constructions Private Limited 55 Cee Pee Maintenance Services Limited 56 Ceylon Holdings B.V. 57 Chaitra Realty Limited 58 Chakrita Real Estate Developers Private Limited 59 Chandrajyoti Estate Developers Private Limited 60 City Icon Limited 61 Columbo Resort Holdings N.V. 62 Comfort Buildcon Private Limited 63 Current Finance Limited 64 Cyrilla Builders & Constructions Limited (formerly Cyrilla Builders & Constructions Private Limited) 65 Dalmia Promoters and Developers Private Limited 66 Dankuni World City Limited 67 Delanco Home and Resorts Private Limited 68 Delanco Realtors Private Limited 69 Deltaland Buildcon Private Limited 70 Dhoomketu Builders & Developers Private Limited 71 Diwakar Estates Limited 72 DLF Airport Hotels Private Limited 73 DLF Akruti Info Parks (Pune) Limited 74 DLF Aspinwal Hotels Private Limited 75 DLF Brands Private Limited (formerly DLF Retail Brands Private Limited) 76 DLF Budget Venture Hotels Private Limited 77 DLF Business Hotels Venture Private Limited 78 DLF City Centre Limited 79 DLF Cochin Hotels Private Limited 80 DLF Comfort Hotels Private Limited 81 DLF Commercial Complexes Limited 82 DLF Commercial Developers Limited 83 DLF Conventions and Hotels Private Limited 84 DLF Cyber City Developer Limited 85 DLF Deluxe Hotels Private Limited 86 DLF Developers Limited 87 DLF Emporio Restaurants Limited 88 DLF Estate Developers Limited 89 DLF Estates (Delhi) Private Limited (formerly BES Buildcon Private Limited ) 90 DLF Exhibition Center Private Limited 91 DLF Exotica Hotels Private Limited 92 DLF Financial Services Limited 93 DLF Finvest Limited [formerly DLF Info City Developers (Noida) Limited] 94 DLF Food Courts Private Limited 95 DLF Garden City Indore Private Limited 96 DLF Global Hospitality Limited 97 DLF Golf Resorts Limited 98 DLF Green Power Private Limited 99 DLF Haryana SEZ (Ambala) Limited 100 DLF Haryana SEZ (Gurgaon) Limited 101 DLF Hilton Hotels Limited 102 DLF Hilton Hotels (Mysore) Private Limited 103 DLF Home Developers Limited 104 DLF Homes Services Private Limited 105 DLF Homes Ambala Private Limited (formerly Nabhoj Builders & Developers Private Limited) 106 DLF Homes Durgapur Private Limited 107 DLF Homes Goa Private Limited (formerly Saravati Builders & Constructions Private Limited) 108 DLF Homes Kokapet Private Limited (formerly Kanan Real Estates Private Limited ) 109 DLF Homes Panchkula Private Limited 110 DLF Homes Pune Private Limited 111 DLF Homes Rajapura Private Limited 112 DLF Hospitality and Recreational Limited 113 DLF Hotel Holdings Limited 114 DLF Hotel Venture Private Limited 115 DLF Hotels & Apartments Private Limited 116 DLF Housing & Construction Limited 117 DLF Info City Developers (Ahmedabad) Limited *** 118 DLF Info City Developers (Bangalore) Limited 119 DLF Info City Developers (Chennai) Limited 120 DLF Info City Developers (Delhi) Limited *** 121 DLF Info City Developers (Gandhinagar) Limited *** 122 DLF Info City Developers (Goa) Limited *** 123 DLF Info City Developers (Hyderabad) Limited 124 DLF Info City Developers (Mumbai) Limited *** 125 DLF Info City Developers (Vadodra) Limited *** 126 DLF Info Park Developers (Chennai) Limited 127 DLF Infra Holdings Limited 128 DLF Inns Limited 129 DLF International Holdings Pte. Limited (formerly DLF Trust Holdings Pte. Limited) 130 DLF International Hospitality Corp. 131 DLF Jaipur Convention Center Private Limited 132 DLF Jaipur Hotels Private Limited 133 DLF Land Limited 91

94 Schedules forming part of the Financial Statements (Contd.) 134 DLF Leisure & Entertainment Private Limited 135 DLF Luxury Hotels Limited 136 DLF Metro Limited 137 DLF Minor Restaurants Private Limited 138 DLF Mumbai Hotels Private Limited 139 DLF New Delhi Convention Center Limited 140 DLF New Gurgaon Homes Developers Private Limited 141 DLF New Gurgaon Offi ces Developers Private Limited 142 DLF New Gurgaon Retail Developers Private Limited (formerly Lacey Builders & Construction Private Limited) 143 DLF Phase IV Commercial Developers Limited 144 DLF Pleasure Hotels Private Limited 145 DLF Pramerica Life Insurance Company Limited 146 DLF Premium Homes Private Limited (formerly Lennox Builders & Developers Private Limited) 147 DLF Projects Limited 148 DLF Property Developers Limited 149 DLF Real Estate Builders Limited 150 DLF Real Estates Limited *** 151 DLF Recreational Foundation Limited 152 DLF Residential Builders Limited 153 DLF Residential Developers Limited 154 DLF Residential Partners Limited 155 DLF Retail Developers Limited 156 DLF Retail Services Limited 157 DLF Rohini Hotels Private Limited) 158 DLF Service Apartments Limited 159 DLF Services Limited [formerly DLF Info City Developers (Gujrat) Limited] 160 DLF SEZ Developers (Amritsar) Limited *** 161 DLF SEZ Developers Limited 162 DLF SEZ Holdings Limited 163 DLF Sikkim Hotels Private Limited 164 DLF Southcourt Hotels Private Limited 165 DLF Southern Homes Private Limited 166 DLF Southern Towns Private Limited 167 DLF Telecom Limited 168 DLF Trust Management Pte. Limited 169 DLF Universal Limited (formerly known as Dominga Builders & Constructions Limited) 170 DLF Utilities Limited (formerly DLF Utilities Private Limited) 171 DT Cinemas Limited (formerly DLF Services Limited) 172 Eastern India Powertech Limited (formerly DLF Power Limited ) 173 Edward Keventer (Successors) Private Limited 174 Eila Builders & Developers Private Limited 175 Enki Retail Private Limited (formerly Enki Buildwell Private Limited) 176 Eros Retail Private Limited (formerly Eros Buildtech Private Limited ) 177 Falguni Builders Private Limited 178 Fonton Limited 179 Forerum Group Limited 180 Forgiant Agents Limited 181 G.S.R.Properties Private Limited 182 GVR Properties Private Limited 183 Gajjala Constructions Private Limited 184 Gajjala Ram Reddy Properties Private Limited 185 Galaxy Mercantiles Limited 186 Galleria Property Management Services Private Limited 187 Ganesar Ginning Co Private Limited 188 Ganika Builders Private Limited 189 Gavin Builders and Developers Private Limited 190 Geocities Airport Infrastructures Private Limited 191 G.G.R. Properties Private Limited 192 GMR Constructions Private Limited 193 Goyo Services Limited 194 Grandbay Estate Developers Limited 195 Guardian International Private Limited 196 Gulika Home Developers Private Limited 197 Gulliver Enterprises Limited 198 Gyan Real Estate Developers Private Limited 199 Harini Resorts and Properties Private Limited 200 Heritage Resorts Private Limited (Amanbagh) 201 Highvalue Builders Private Limited 202 Hospitality Tradings Limited 203 Hotel Finance International Limited 204 Hotel Sales Service Limited 205 Hotel Sales Service Private Limited 206 Incan Valley Holdings Limited 207 Irama Estates Private Limited 208 Isabel Builders & Developers Private Limited 209 Jackson Hole Holdings Limited 210 Jackson Street Heritage Limited 211 Jackson Street Holdings Limited 212 Jai Luxmi Real Estate Private Limited 213 Jalisco Holdings Pte. Limited 214 Janya Estate Developers Private Limited 215 Jawala Real Estate Private Limited 216 K G Infrastructure Private Limited 217 Kairav Real Estate Private Limited 218 Kapo Retail Private Limited 219 L P Hospitality Company Limited 220 Laman Real Estates Private Limited 221 Lao Holdings Limited 222 Lawanda Builders and Developers Private Limited 223 Le Savoy Limited 224 Leandra Builders and Developers Private Limited 225 Life Style Homes Private Limited 226 Lodhi Property Company Limited 227 Marrakech Investments Limited 228 Mens Buildcon Private Limited 229 Mhaya Buildcon Private Limited 230 Monroe Builders & Developers Private Limited 231 Mouna Constructions Private Limited 232 Mouna Estates Private Limited 233 Mouna Properties Private Limited 234 Mulvey B.V. 235 Mulvey Venice Sri 236 Naman Consultants Private Limited 237 Nambi Buildwell Private Limited 238 Necia Builders and Developers Private Limited 239 Nelia Retail Private Limited (formerly Ferragamo Retail India Private Limited) 240 Nellis Builders & Developers Private Limited 241 NewGen MedWorld Hospitals Limited 242 Nilayam Builders & Developers Limited 92

95 243 NOH (Hotel) Private Limited (Amangalla) 244 Nusantara Island Resorts Limited 245 Overseas Hotels Private Limited 246 P.T. Amanresorts Indonesia (Amanusa) 247 P.T. Amanusa Resort Indonesia 248 P.T. Indrakila Villatama Development 249 P.T. Jawa Express Amanda Indah (Amanjiwo) 250 P.T. Moyo Safari Abadi (Amanwana) 251 P.T. Nusantara Island Resorts (Amankila) 252 P.T. Tirta Villa Ayu 253 P.T. Villa Ayu (Amandari) 254 Palawan Holdings Limited 255 Paliwal Developers Limited 256 Paliwal Real Estate Private Limited 257 Parkridge Info City Developers Limited *** 258 PAT Infrastructures Private Limited 259 Pee Tee Property Management Services Limited 260 Phraya Riverside (Bangkok) Co. Limited 261 Princiere Resorts Limited (Amansara) 262 Prompt Real Estate Private Limited 263 Puri Limited 264 Rati Infratech Private Limited 265 Red Acres Development Limited 266 Regency Park Property Management Services Private Limited 267 Regent Asset Finance Limited 268 Regent Land Limited 269 Regional Design & Research B.V. 270 Regional Design & Research N.V. 271 Richmond Park Property Management Services Limited 272 Riveria Commercial Developers Limited (formerly Riveria Info City Developers Limited) 273 Rod Retail Private Limited 274 Saket Courtyard Hospitality Private Limited (formerly DLF Saket Hotels Private Limited) 275 Samali Builders & Developers Private Limited 276 Sandesh Constructions Private Limited 277 Sandesh Estates Private Limited 278 Serendib Holdings B.V. 279 Shivajimarg Properties Limited 280 Silver - Two (Bangkok) Company Limited 281 Silver Oaks Property Management Services Limited 282 Silverlink (Mauritius) Limited 283 Silverlink (Thailand) Company Limited 284 Silverlink Holdings Limited 285 Single Ginius Company Limited 286 Sinonet Holding Limited 287 Societe Nouvelle de L'Hotel Bora Bora 288 Solid Buildcon Private Limited 289 Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited ) 290 Sunbreaze Estate Developers Limited 291 Sunlight Promoters Private Limited 292 Tahitian Resorts Limited 293 Tangalle Property (Private) Limted (Amanwella) 294 Toscano Holdings Limited 295 Triumph Electronics Private Limited 296 Udipti Estate Developers Limited *** 297 Universal Hospitality Limited 298 Urvasi Infratech Private Limited 299 Valini Builders & Developers Private Limited 300 Var Infratech Private Limited 301 Venezia Estate Developers Limited 302 Villajena Development Company Limited 303 Vkarma Capital Investment Management Company Private Ltd. 304 Vkarma Capital Trustee Company Private Limited 305 VSK Investments & Finance Limited 306 Zola Real Estate Private Limited 307 Zoria Infratech Private Limited 308 DLF City Centre Limited (ii) Partnership firms 1 DLF Commercial Projects Corporation 2 DLF Offi ce Developers 3 DLF South Point 4 Kavicon Partners 5 Rational Builders and Developers 6 DLF Property Developers 7 DLF Recreational Foundation 8 DLF City Centre 9 DLF Residential Builders 10 DLF Residential Developers 11 DLF Residential Partners 12 Real Estate Builders (iii) Joint Venture 1 Niharika Shopping Mall 2 Delanco Real Estate Private Limited 3 Kujjal Builders Private Limited 4 DLF Laing O' Rourke (India) Limited 5 DLF SEZ Holdings Limited 6 DLF Gayatri Home Developers Private Limited (formerly Arsh Real Estates Private Limited) 7 DLF SBPL Developers Private Limited 8 DLF Limitless Developers Private Limited 9 Mount Mary Residential Project 10 GSG DRDL Consortium 11 WSP Engineering Services Limited 12 Saket Courtyard Hospitality Private Limited (formerly DLF Saket Hotels Private Limited) 13 Banjara Hills Hyderabad Complex (iv) Associates 1 DLF Pramerica Advisory Private Limited 2 Ferragamo Retail India Private Limited (formerly Nelia Retail Private Limited) 3 Joyous Housing Limited 4 Giorgio Armani India Private Limited 5 DLF New Gurgaon Homes Developers Private Limited) 6 Thalia Infratech Private Limited 7 Turan Infratech Private Limited 8 Regional D & R Limited 9 Seven Seas Resorts and Leisure Inc 10 Islan Aviation Limited 11 Revlys SA 12 Villajena 13 Surin Bay Co. Limited 14 P.T Jawa Express Amanda Indah 93

96 Schedules forming part of the Financial Statements (Contd.) 15 Lillion Builders and Developers Private Limited 16 Zeus Infrastructure Private Limited *** Companies merged during the year with the DLF Commercial Developers Limited., a 100% subsidiary company. (v) Key Management Personnel Name Designation Relatives (Relation)* a) Mr. K.P. Singh Chairman Mrs. Renuka Talwar (Daughter) b) Mr. Rajiv Singh Vice Chairman Mrs. Kavita Singh (Wife) Ms. Savitri Devi Singh (Daughter) c) Mr. T.C. Goyal Managing Director d) Ms. Pia Singh Whole Time Director e) Mr. K. Swarup Sr. Executive Director Mr Dhiraj Sarna (Husband) Mrs. Veena Swarup (Wife) * Relatives of key management personnel (other than key management personnel themselves) with whom there were transactions during the year (vi) Other enterprises under the control of the key management personnel and their relatives 1 A.S.G. Realcon Private Limited 2 Adampur Agricultural Farm 3 Adept Real Estate Developers Private Limited 4 Aeshya Estates Private Limited 5 AGS Buildtech Private Limited 6 Altamount Real Estate Developers Private Limited 7 Angus Builders & Developers Private Limited 8 Antriksh Properties Private Limited 9 Anubhav Apartments Private Limited 10 Aquarius Builders and Developers Private Limited 11 Arihant Housing Company* 12 Atria Partners 13 Bansal Development Company Private Limited 14 Belicia Builders & Developers Private Limited 15 Beryl Builders & Constructions Private Limited Beverly Park Operation and Maintenance Services 16 Private Limited 17 Buland Consultants and Investments Private Limited 18 Caraf Builders & Constructions Private Limited 19 Centre Point Property Management Services Private Limited 20 Ch.Lal Chand Memorial Charitable Trust 21 Desent Promoters and Developers Private Limited 22 Diana Retail Private Limited 23 Digital Talkies Private Limited 24 Dilly Builders & Developers Private Limited 25 Dinky Builders & Developers Private Limited 26 DLF Assets Private Limited 27 DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) 28 DLF Commercial Enterprises 29 DLF Foundation 30 DLF Info City Developers (Chandigarh) Limited 31 DLF Info City Developers (Kolkata) Limited 32 DLF Investments Private Limited DLF M.T.FBD Medical and Commiunity Facility 33 Charitable Trust 34 DLF Q.E.C. Educational Charitable Trust 35 DLF Q.E.C. Medical Charitable Trust 36 DLF Raghvendra Temple Trust 37 DLF SEZ Parks Private Limited (formerly Cian Builders and Developers Private Limited) 38 Elanor Builders & Developers Private Limited 39 Excel Housing Construction Private Limited 40 Exe. of The Estate of Lt. Ch. Raghvendra Singh 41 Exe. of The Estate of Lt. Smt. Prem Mohini 42 Family Idol Shri Radha Krishan Ji 43 Family Idol Shri Shiv Ji 44 Galena Builders & Constructions Private Limited 45 Gangrol Agricultural Farm & Orchard 46 General Marketing Corporation 47 Glaze Builders and Developers Private Limited 48 Haryana Electrical Udyog Private Limited 49 Herminda Builders & Developers Private Limited 50 Hitech Property Developers Private Limited 51 Indira Trust 52 Ishtar Retail Private Limited 53 Jhandewalan Ancillaries and Investments Private Limited 54 K. P. Singh HUF 55 Kohinoor Real Estates Company* 56 Krishna Public Charitable Trust 57 Lal Chand Public Charitable Trust 58 Lion Brand Poultries 59 Lyndale Holdings Private Limited 60 Maaji Properties and Development Company* 61 Macknion Estates Private Limited 62 Madhukar Housing and Development Company* 63 Madhur Housing and Development Company* 64 Magna Real Estate Developers Private Limited 65 Mallika Housing Company* 66 Megha Estates Private Limited 67 Northern India Theatres Private Limited 68 Pace Financial Services 69 Panchsheel Investment Company* 70 Panchvati Estates Private Limited 71 Parvati Estates Private Limited 72 Pia Pariwar Trust 73 Plaza Partners 74 Power Overseas Private Limited 75 Prem Traders & Investments Private Limited 76 Prem's Will Trust 77 Pushpak Builders and Developers Private Limited 78 Pushpavali Builders and Developers Private Limited 79 Raghvendra Public Charitable Trust 80 Raisina Agencies and Investments Private Limited 81 Rajdhani Investments and Agencies Private Limited 82 Realest Builders and Services Private Limited 83 Renkon Agencies Private Limited 84 Renkon Partners 85 Renuka Pariwar Trust 86 R.R Family Trust 87 Sagarika Real Estate Developers Private Limited 94

97 88 Sambhav Housing and Development Company * 89 Sanidhya Constructions Private Limited 90 Savitri Studs and Farming Company Private Limited 91 Sidhant Housing and Development Company * 92 Singh Family Trust 93 Sketch Investment Private Limited 94 Smt.Savitri Devi Memorial Charitable Trust 95 Solace Housing and Construction Private Limited 96 Solange Retail Private Limited 97 Sudarshan Estates Private Limited 98 Sukh Sansar Housing Private Limited 99 Sukomal Builders and Developers Private Limited 100 Sulekha Builders and Developers Private Limited 101 Super Mart One Property Management Services Private Limited 102 Super Mart Two Property Management Services Private Limited 103 Trinity Housing and Construction Company * 104 Udyan Housing and Development Company * 105 Ultima Real Estate Developers Private Limited 106 Universal Management and Sales Private Limited 107 Upeksha Real Estate Developers Private Limited 108 Uplift Real Estate Developers Private Limited 109 Urva Real Estate Developers Private Limited 110 Uttam Builders and Developers Private Limited 111 Uttam Real Estates Company * 112 Vanutsar Properties Private Limited 113 Vishal Foods and Investments Private Limited Windsor Complex Property Management Services 114 Private Limited 115 Yashika Properties and Development Company * * A private company with unlimited liability. b) The following transactions were carried out with related parties in the ordinary course of business Subsidiary Entities Joint venture/ Associates Description Sale of land and constructed properties , Sale of gas Sale of development rights 8, , , Sale of fi xed assets 1, Interest income loan 95, , Interest income debentures Miscellaneous income# Rent received # Maintenance and service charges paid # Expenses recovered # 5, , , Purchase of land and developed plots 1, , Purchase of fi xed assets Rent paid # Interest paid , Expenses paid 3, , Technical/ professional charges paid 1, Payments under construction contracts , , Investment purchased 60, , , Reduction in investment 1, , Debentures purchased 68, Debentures sold 29, Profi t / (loss) from partnership fi rms (net) (530.69) Loans given 858, ,433, , , Loan received back 845, ,079, Guarantees given (net) 126, , Advances received under agreement to sell 16, , , Advances received under agreement to sell refunded - 54, Earnest money paid under agreement to purchase land/ development rights 22, , Earnest money paid under agreement to purchase land/ development 29, rights refunded Advances given 2, , Purchase of development rights 5, , Cancellation of sale of constructed properties - 1, Loans taken 1, Loans refunded 1, Claims paid Share application money paid # Figures shown above are net of service tax 95

98 Schedules forming part of the Financial Statements (Contd.) Balance at the end of the year Subsidiary entities/ partnership firms Joint venture/ associates Debtors 3, , Investments in shares 226, , , , Investments in debentures 38, Loans and advances 795, , , , Earnest money and part payments under agreement to purchase land/ development rights/ constructed properties 469, , Creditors/ amounts payable 3, , , Guarantees given 388, , Advances received under agreement to sell 53, , Earnest money received 23, , Share application money paid Security deposit received Description Key Management Personnel (KMP) and their relatives Enterprises over which KMP is able to exercise significant influence Purchase of land and material Sale of constructed properties , Development income , , Remuneration paid 1, , Interest income , Rent paid Interest paid , , Lease money received Expenses recovered Miscellaneous income Expenses paid Loan given Loan received back , Cancellation of sales of constructed properties , Balance at the end of the year Unbilled receivables , Security deposit given Investment Earnest money and part payments under agreement to purchase land/ constructed properties Amount recoverable/advances Creditors/ amounts payable , Managerial commission payable , Realisation under agreement to sell , Above includes the following material transactions. 96

99 Description Subsidiary companies/ partnership firms under control Transactions during the year Name of the entity Sale of land and constructed properties DLF Home Developers Limited # 50, Sale of gas DLF Utilities Limited (formerly DLF Utilities Private Limited) Sale of development rights DLF Homes Ambala Private Limited (formerly Nabhoj Builders 1, & Developers Private Limited) DLF Garden City Indore Private Limited 1, , DLF Southern Towns Private Limited , DLF New Gurgaon Homes Developer Private Limited 3, DLF Homes Panchkula Private Limited - 22, Sale of fi xed assets DLF Utilities Limited (formerly DLF Utilities Private Limited) 1, DLF Commercial Developers Limited Interest income on loan DLF Retail Developers Limited 37, , DLF Home Developers Limited 22, , Interest income on debentures Jawala Real Estate Private Limited Miscellaneous income# DLF Utilities Limited (formerly DLF Utilities Private Limited) DLF Housing and Construction Limited Edward Keventor (Successors) Private Limited Bhoruka Financial Services Limited Paliwal Developers Limited Galleria Property Management Services Private Limited Regency Park Property Management Services Private Limited DLF South Point Beverly Park Maintenance Services Limited Rent received # DLF Retail Developers Limited DLF Brands Private Limited (formerly DLF Retail Brands Private Limited) DLF Commercial Developers Limited Maintenance and service charges paid # DT Cinemas Limited (formerly DLF Services Limited) DLF Estate Developers Limited Expenses recovered # DLF Cyber City Developers Limited DLF Utilities Limited (formerly DLF Utilities Private Limited) 2, DLF Retail Developers Limited DLF Commercial Developers Limited DLF Home Developers Limited Purchase of land and developed plots DLF Utilities Limited (formerly DLF Utilities Private Limited) , DLF Housing & Construction Limited Purchase of fi xed assets DLF Land Limited Rent paid # DLF Offi ce Developers Interest expense Bhoruka Financial Services Limited DLF Commercial Projects Corporation - 2,

100 Schedules forming part of the Financial Statements (Contd.) Description Subsidiary companies/ partnership firms under control Transactions during the year Name of the entity Expenses paid # DLF Projects Limited 3, DLF Commercial Developers Limited , DLF Home Developers Limited , Technical/professional charges paid# DLF Hotel Holding Limited 1, Investment purchased DLF Info Park Developers (Chennai) Limited 32, DLF Hotel Holdings Limited 16, , DLF Pramerica Life Insurance Company Limited 10, Reduction in Investment DLF Offi ce Developers DLF South Point DLF City Centre - 1, Kavicon Partners Debentures purchased Jawala Real Estate Private Limited 38, DLF SEZ Developers Limited 29, Debentures sold DLF SEZ Developers Limited 29, Profi t / (loss) on partnership fi rms (net) DLF Offi ce Developers Kavicon Partners DLF Commercial Projects Corporation (1,009.79) (314.97) DLF Recreational Foundation DLF South Point 1.28 (19.37) Rational Builders & Developers (2.87) Loans given DLF Retail Developers Limited 190, , DLF Commercial Developers Limited 181, , DLF Home Developers Limited 316, , Loan received back DLF Retail Developers Limited 249, , DLF Commercial Developers Limited 196, , DLF Home Developers Limited 251, , DLF Cyber City Developers Limited 14, , Guarantees given (net) DLF Commercial Developers Limited (44,500.00) - Regency Park Property Management Services Private Limited 41, DLF Cyber City Developers Limited 117, , Jawala Real Estate Private Limited (90,000.00) - Advances received under agreement to sell DLF New Gurgaon Homes Developer Private Limited 16, DLF Home Developers Limited - 16, Advances received under agreement to DLF Southern Homes Private Limited - 10, sell refunded Earnest money paid under agreement to DLF Commercial Projects Corporation 16, , purchase land/ development rights Rational Builders & Developers 5, , Earnest money paid under agreement to DLF Commercial Projects Corporation 25, , purchase land/ development rights refunded Rational Builders & Developers 4, Advances given (net) DLF Projects Limited 2, DLF Housing and Construction Limited Purchase of development rights DLF Commercial Projects Corporation 3, , Rational Builders and Developers 2, , Cancellation of sale of constructed properties DLF Home Developers Limited - 1,

101 Description Subsidiary companies/ partnership firms under control Transactions during the year Name of the entity Loan taken Bhoruka Financial Services Limited 1, Loan refunded Bhoruka Financial Services Limited 1, Claim paid DLF Hilton Hotels Limited Share application money paid DLF Hotel Holdings Limited #Figures shown above are net of service tax Subsidiary companies/ partnership firms under control Balance at the end of the year Name of the entity Debtors DLF Homes Ambala Private Limited (formerly Nabhoj Builders 1, & Developers Private Limited) DLF Garden City Indore Private Limited , DLF Southern Towns Private Limited DLF Southern Homes Private Limited Investments in shares DLF Info Park Developers Chennai Limited 32, Edward Keventor (Successors) Private Limited 43, , DLF Hotel Holdings Limited 117, , Investments in debentures Jawala Real Estate Private Limited 38, Loans and advances given DLF Retail Developers Limited 294, , DLF Home Developers Limited 278, , Earnest money and part payments under DLF Commercial Projects Corporation 371, , agreement to purchase land/ development rights/ constructed properties Rational Builders & Developers 90, , Creditors/ amounts payable DLF Hotel Holdings Limited 1, , DLF Commercial Projects Corporation 1, , DLF Commercial Developers Limited - 4, DLF Home Developers Limited - 1, Guarantees given DLF Commercial Developers Limited 43, , Regency Park Property Management Services Private Limited 41, DLF Cyber City Developers Limited 159, , DLF Info City Developers (Chennai) Limited 27, , Jawala Real Estate Private Limited - 90, Advances received under agreement DLF New Gurgaon Homes Developer Private Limited 53, to sell DLF Financial Services Limited DLF Utilities Limited (formerly DLF Utilties Private Limited) Diwakar Estates Limited Earnest money received DLF Home Developers Limited 23, , DLF Hilton Hotel Limited - 5, Share application money paid DLF Hotel Holdings Limited Security deposit received DT Cinemas Limited (formerly DLF Services Limited) DLF Brands Private Limited (formerly DLF Retail Brands Private Limited) Kapo Retail Private Limited DLF Food Courts Private Limited

102 Schedules forming part of the Financial Statements (Contd.) Description Joint Ventures/ Associates Transactions during the year Name of the entity Sale of development rights DLF New Gurgaon Homes Developer Private Limited - 21, Interest income on loan Delanco Real Estate Private Limited Expenses recovered # DLF New Gurgaon Homes Developer Private Limited 2, Kenneth Builders and Developers Private Limited Expenses paid Delanco Real Estate Private Limited Advances received under agreement DLF New Gurgaon Homes Developer Private Limited 17, to sale Technical/ professional charges paid WSP Engineering Services Limited Payments under construction contracts DLF Laing O'Rourke (India) Limited 29, , Investment purchased DLF Limitless Developers Private Limited 20, Loans given Delanco Real Estate Private Limited 1, , Loan received back Delanco Real Estate Private Limited Advances given Joyous Housing Limited , # Figures shown above are net of service tax Joint Ventures/ Associates Balance at the end of the year Name of the entity Investments in shares DLF Limitless Developers Private Limited 20, Delanco Real Estate Private Limited , Loans and advances Delanco Real Estate Private Limited 2, , Joyous Housing Limited 7, , Creditors/ amounts payable DLF Laing O'Rourke (India) Limited. 4, Advances received under agreement to sell DLF New Gurgaon Homes Developer Private Limited - 22, Description Enterprises over which KMP is able to exercise significant influence Transactions during the year Name of the entity Purchase of land and material DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) Sale of constructed properties Caraf Builders & Constructions Private Limited - 22, Development income DLF Assets Private Limited 101, , Interest income DLF Q.E.C. Medical Charitable Trust DLF Info City Developers ( Chandigarh) Limited DLF Info City Developers ( Kolkata) Limited Rent paid # Realest Builders & Services Limited DLF Q.E.C. Medical Charitable Trust DLF Q.E.C. Educational Charitable Trust Interest paid DLF Assets Private Limited 14, , Lease money received DLF Assets Private Limited Expenses recovered # DLF Assets Private Limited DLF Info City Developers ( Chandigarh) Limited DLF Info City Developers ( Kolkata) Limited DLF Commercial Enterprises Miscellaneous income # DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited)

103 Description Enterprises over which KMP is able to exercise significant influence Transactions during the year Name of the entity Expenses paid DLF Q.E.C. Medical Charitable Trust DLF Q.E.C. Educational Charitable Trust Pace Financial Services DLF Foundation Loan given DLF Q.E.C. Medical Charitable Trust Loan received back DLF Q.E.C. Medical Charitable Trust DLF Info City Developers (Chandigarh) Limited - 8, DLF Info City Developers (Kolkata) Limited - 21, Cancellation of sales of constructed properties Caraf Builders & Constructions Private Limited - 22, # Figures shown above are net of service tax Balance at the end of the year Unbilled receivables DLF Assets Private Limited 18, Security deposit given DLF Q.E.C. Medical Charitable Trust DLF Q.E.C. Educational Charitable Trust Investments Digital Talkies Private Limited Earnest money and part payments under agreement to purchase land/ constructed properties Amount recoverable/advances DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) DLF Info City Developers (Chandigarh) Limited DLF Commercial Enterprises Creditors/ amounts payable DLF Q.E.C. Educational Charitable Trust DLF Q.E.C. Medical Charitable Trust Realisation under agreement to sell DLF Assets Private Limited 3, , Description Key Management Personnel (KMP) and their relatives Transactions during the year Name of the Director Remuneration paid Mr. K.P. Singh Mr. Rajiv Singh Mr. K Swarup Mr. T.C. Goyal Ms. Pia Singh Rent paid Mrs. Veena Swarup Balance at the end of the year Creditors/ amounts payable Mr. K.P. Singh Mr. Rajiv Singh Ms. Pia Singh Mr. K Swarup Managerial commission payable Mr. K.P. Singh Mr. Rajiv Singh Mr. T.C. Goyal Ms. Pia Singh

104 Schedules forming part of the Financial Statements (Contd.) (c) Non cash transactions with the related parties (subsidiary companies) Bonus shares received by the Company Face value per share DLF Cyber City Developers Limited Rs ,000,000 - DLF Retail Developers Limited Rs ,000,000 DLF Utilities Limited (formerly known as DLF Utilities Private Limited) Rs ,411, Information pursuant to clause 32 of the listing agreements with stock exchanges a. Loans and advances in the nature of loans to Subsidiaries/ Associates/Joint ventures/ partnership firms/others Balance as on March 31 Maximum balance during the year Name of the entity Status Kairav Real Estate Private Limited Subsidiary 5, , , , DLF Housing and Construction Limited Subsidiary DLF Commercial Developers Limited Subsidiary 10, , , , DLF Retail Developers Limited Subsidiary 293, , , , DLF Home Developers Limited Subsidiary 275, , , , Paliwal Developers Limited Subsidiary 1, , , , Beverly Park Maintenance Services Limited Subsidiary 34, , , , DLF Cyber City Developers Limited Subsidiary - 2, , , Breeze Construction Private Limited Subsidiary 13, , , , DLF Utilities Limited (formerly DLF Utilities Subsidiary 11, , , , Private Limited) 11 VSK Investment and Finance Limited Subsidiary 14, , , , DLF Brands Private Limited (formerly DLF Subsidiary 5, , Retail Brands Private Limited) 13 DT Cinema Limited (formerly DLF Services Limited) Subsidiary 4, , DLF Services Limited (formerly DLF Infocity Subsidiary Developers Gujarat Limited) 15 DLF Estate Developers Limited Subsidiary , , , NewGen MedWorld Hospitals Limited Subsidiary Dalmia Promoters and Developers Private Limited Subsidiary DLF Finvest Limited (formerly DLF Info City Developers (Noida) Limited) Subsidiary Eastern India Powertech Limited (formerly Subsidiary 38, , , , DLF Power Limited) 20 DLF Hotel Holdings Limited Subsidiary - 7, , , DLF SEZ Developers Limited Subsidiary Edwards Keventors (Successors) Private Limited Subsidiary 7, , Bhoruka Financial Services Limited Subsidiary , , DLF Info City Developers (Chennai) Limited Subsidiary 1, , , Delanco Real Estate Private Limited Joint Venture , , , DLF Akruti Info Parks (Pune) Limited Subsidiary 14, , , , DLF Emporio Restaurent Limited Subsidiary DLF Green Power Private Limited Subsidiary DLF Financial Services Limited Subsidiary Galleria Property Management Services Subsidiary 2, , , , Private Limited 31 Regency Park Property Management Subsidiary 1, , , , Services Private Limited 32 DLF City Centre Limited Subsidiary 5, , DLF Food Court Private Limited Subsidiary

105 a. Loans and advances in the nature of loans to Subsidiaries/ Associates/Joint ventures/ partnership firms/others Balance as on March 31 (Rs in lacs) Maximum balance during the year Name of the entity Status Jawala Real Estate Private Limited Subsidiary 2, , DLF Property Developers Limited Subsidiary DLF Commercial Complex Limited Subsidiary 21, , DLF GK Residency Partnership 2, , DLF QEC Medical Charitable Trust Other There are no transactions of loans and advances to subsidiaries, associate fi rms/ companies in which Directors are interested other than as disclosed above. There are no loans and advances in the nature of loans where there is no repayment schedule or repayment beyond seven years or no interest or interest below Section 372A of Companies Act Operating leases A) Assets given on lease* Class of assets Gross block Depreciation Cumulative as on March 31, 2009 for the year depreciation March 31, 2009 a) Fixed assets (Leasehold land and building) 42, b) Current assets (Constructed buildings and related equipments including land) Lease hold 3, Free hold 10, * Includes partly self occupied properties. B) The Company has leased facilities under non- cancelable operating leases. The future minimum lease payment in respect of these leases as at March 31, 2009 are Minimum lease payments receivables: March 31, 2009 March 31, 2008 (i) Not later than one year 6, , (ii) Later than one year and not later than fi ve years 9, , (iii) Later than fi ve years - - Total 16, , Investments in Joint ventures S. No Joint venture Location Principal activities Ownership interest 1 Niharika Shopping Mall Joint Venture Mumbai Development and construction of shopping mall 50% 2 Mount Mary Residential Project Mumbai Development and construction of residential building 50% 3 Delanco Real Estate Private Limited New Delhi Real estate consulting and brokerage 50% 4 DLF Limitless Developers Private Limited New Delhi Development and construction of townships 5 DLF SEZ Holdings Limited New Delhi Development and construction of townships 50% 50% 103

106 Schedules forming part of the Financial Statements (Contd.) A) The Company s share of the assets, liabilities, income and expenditure of the significant Joint Venture (under jointly controlled operations) are as follows Amount in respect of Niharika Shopping Mall Joint Venture Balance Sheet Reserves and surplus Secured loans 3, Unsecured loans Fixed Assets (less accumulated depreciation) Inventories 7, , Cash and bank Sundry debtors Loans and advances Current liabilities and provisions Amount in respect of Niharika Shopping Mall Joint Venture Statement of Profit & Loss account Selling, general and administrative expenses Interest received Dividend Net profi t / (loss) after tax & prior period item (0.48) 1.75 B) Amounts in case of Mount Mary Project (under jointly controlled operations) is Rs. Nil, as the project has not yet commenced. C) Amount in respect of Delanco Real Estate Private Limited Balance Sheet Reserves and surplus Secured loans Unsecured loans 1, Fixed Assets (less accumulated depreciation) Investments Sundry debtors Cash and bank Loans and advances 2, , Current liabilities and provisions Amount in respect of Delanco Real Estate Private Limited Profit & Loss account Service and maintenance income Interest received Miscellaneous income Selling, general and administrative expenses Net profi t / (loss) after tax & prior period item (77.64) D) Amount in respect of DLF Limitless Developers Private Limited Balance Sheet Cash and bank Loans and advances 20, , Current liabilities and provisions Reserves and surplus Amount in respect of DLF Limitless Developers Private Limited Profit & Loss Account Selling, general and administrative expenses (115.05) Net loss after tax & prior period item (13.91) (115.05) 104

107 # E) Amount in respect of DLF SEZ Holdings Limited Balance Sheet # Cash and bank Current liabilities and provisions Reserves and surplus Amount in respect of DLF SEZ Holdings Limited Profit & Loss Account Selling, general and administrative expenses Net loss after tax (1.67) - # Joint venture entered into during the year, accordingly previous year fi gures are not furnished. Note: Disclosure of fi nancial data as per Accounting Standard -27 Financial Reporting of interest in the joint venture has been done based on the audited fi nancial statements of the above mentioned Joint Venture Operation or Joint entities, as the case may be, as on March 31, Employees Stock Option Scheme, 2006 (ESOP) a) During the year ended March 31, 2007, the Company had announced an Employee Stock Option Scheme (the Scheme ) for all the eligible employees of the Company and its subsidiaries. Under the Scheme, 17,000,000 equity shares have been earmarked to be granted under the Scheme and the same will vest as follows: Block I Block II Block III Year 2 Year 4 Year 6 10% of the total grant 30% of the total grant 60% of the total grant Pursuant to the above Scheme, the employee will have the option to exercise the right within three years from the date of vesting of shares at Rs. 2 per share, being its exercise price. b) As per the Scheme, the Remuneration Committee has granted Options as per details below :- Grant No. Date of Grant No. of options Granted Outstanding options as on March 31, 2009 (Net of forfeiture) I June 27, ,34,057 31,84,900 II October 10, ,08,077 2,91,177 III July 01, ,45,520 15,14,040 IV October 10,2008 1,60,059 1,57,659 According to the Guidance Note 18 on Share Based Payments issued by ICAI, Rs. 3, lacs have been provided during the year as proportionate cost of these options [including the proportionate cost of 4,51,226 (net of forfeiture 3,81,559 number of options) committed to be granted in the future]. c) Outstanding stock options for equity shares of the Company under the Employees Stock Option Scheme Grant No. Date of grant Exercise price Rs. Particulars 2009 Numbers granted Number of options committed to be granted in the future I July 1, ,84,900 2,93,300 34,78,200 II October 10, ,91,177 88,259 3,79,436 III July 01, ,14, ,14,040 IV October 10, ,57, ,57,659 Total 105

108 Schedules forming part of the Financial Statements (Contd.) d) In accordance with the Guidance Note - 18 Share based payments the following information relates to the stock options granted by the Company. Particulars Stock options (numbers) 2009 Range of exercise prices (Rs.) Weightedaverage exercise prices (Rs.) Weightedaverage remaining contractual life (years) Outstanding, beginning of the year 49,62, Granted (Including committed to be 12,76, granted in future) during the year Forfeited during the year 7,10, Exercised during the year Lapsed during the year Outstanding, end of the year 55,29, Exercisable at the end of the year e) The following table summarizes information about stock options outstanding as at March 31, 2009 Range of exercise prices (Rs.) Numbers Options outstanding Weighted average remaining contractual life (Years) Weighted average exercise price (Rs.) Numbers Options exercisable Weighted average exercise price (Rs.) 2 55,29, The Company has calculated the employee compensation cost using the Intrinsic value of the stock options. Had compensation cost been determined in a manner consistent with the fair value method, based on Black Scholes model, the employees compensation cost would have been lower by Rs lacs and proforma profi t after tax would have been Rs. 155, lacs (higher by Rs lacs). On a proforma basis, the basic and diluted earnings per share would have been Rs and Rs respectively. The fair value of the options granted is determined on the date of the grant using the Black- Scholes option pricing model with the following assumptions Grant 1 Grant ll Grant lll Grant IV Dividend yield (%) Expected life (no. of years) Risk free interest rate (%) Volatility (%) Cash Settled Options As per the scheme of Employee Shadow Option, employees are entitled to get cash compensation based on the average market price of Equity Share of the Company, upon exercise of Shadow Option on a future date. As per the scheme, Shadow options will vest as follows:- Block I Block II End of Year 2 End of Year 4 50% of the total grant 50% of the total grant 106

109 Details of outstanding options and the expenses recognized under the employee shadow option scheme is as under :- No. of Shadow options outstanding as on March 31, 2009 Exercise price Average market price Fair value of shadow option Total expenses charged to Profit and Loss Account (Included in Schedule-17 Employee benefits) Liability as on March 31, 2009 (Included in Schedule 14- Provision Employee Benefits) No. Rs./Option Rs./Option Rs./Option Rs. In lacs Rs. In lacs 487, a) The Company uses Forward contracts and Swaps to hedge its risks associated with fl uctuations in foreign currency and interest rates. The use of Forward contracts and Swaps is covered by Company s overall strategy. The Company does not use forward covers and Swaps for speculative purposes. As per the strategy of the Company, foreign currency loans are covered by comprehensive hedge, considering the risks associated with the hedging of such loans, which effectively fi xes the principal and interest liability of such loans and further there is no additional risk involved post hedging of these loans. The following are the outstanding forward contracts and swaps as at March 31, 2009: (Rs. In lacs) For Hedging any Risks Secured Loans 69, , Interest on Secured Loans Unsecured Loans 3, Interest on Unsecured Loans 0.88 b) The detail of foreign currency exposure that are not hedged by derivative instrument or other wise included in the creditors is as mentioned below: INR USD* INR USD Secured Loans 5, Interest on Secured Loans Unsecured Loans Interest on Unsecured Loans * Conversion rate applied 1 USD = Rs Contingent liabilities, not provided for, exist in respect of a) Guarantees issued by the Company on behalf of : Subsidiary companies 388, , Others 12, b) Claims against the Company (including unasserted 12, , claims) not acknowledged as debts c) Income tax demand in excess of provisions (pending 53, , in appeals) d) Undertaking to buy back preference shares in subsidiary/ associate companies* 170, , * acres of land of the Company and acre land of subsidiary companies is also pledged as collateral securities against these undertakings. 107

110 Schedules forming part of the Financial Statements (Contd.) 19. Following current investments were purchased and sold during the year a) Mutual funds Sl. No. Scheme name Total quantity purchased (nos.) Total value of purchases (Rs. In lacs) Total quantity redeemed (nos.) Total value of redemption (Rs. In lacs) 1 SBI-Liquid 264,188,768 26, ,188,768 26, SBI-Liquid Plus 215,741,450 21, ,741,450 21, Birla-Liquid Plus 225,433,194 22, ,433,194 22, Birla-Cash Plus 364,398,899 36, ,398,899 36, Religare-Liquid Plus 24,998,247 2, ,998,247 2, Religare- Ultra Short Term Fund 25,015,972 2, ,015,972 2, Fortis-Money Plus 25,088,366 2, ,088,366 2, Fortis-Overnight Fund 25,003,727 2, ,003,727 2, HSBC-Cash Plus 179,943,314 18, ,943,314 18, HSBC-Liquid Plus 150,284,093 15, ,284,093 15, JM Financial-Liquid Plus 49,926,423 5, ,926,423 5, JM Financial-Liquid Super Plus 50,097,376 5, ,097,376 5, DWS-Money Plus 25,036,890 2, ,036,890 2, DWS-Cash Plus 24,955,676 2, ,955,676 2, Reliance-Liquid Plus 11,761, , ,761, , Reliance-Liquidity Fund 1,254,867, , ,254,867, , IDFC-Liquid 1,499,942 15, ,499,942 15, IDFC-Liquid Plus 250,457,929 25, ,457,929 25, IDFC-Cash Fund 130,004,239 13, ,004,239 13, HDFC-Cash Management 24,980,978 2, ,980,978 2, HDFC-Liquid Fund Premium 20,395,343 2, ,395,343 2, Kotak-Flexi Debt Scheme 74,947,062 7, ,947,062 7, Kotak-Liquid 61,345,001 7, ,345,001 7, ICICI-Flexible Income Plan 23,701,554 2, ,701,554 2, ICICI-Liquid Plan 25,003,061 2, ,003,061 2, DSP-Liquid Plus 2,752,871 27, ,752,871 27, DSP-Cash Plus 1,253,617 12, ,253,617 12, DSP-Liquidity Fund 3,700,306 37, ,700,306 37, DSP-Floating Rate Fund 12,601, , ,601, , Tata Asset Managment-Liquid Super High Investment Fund 448,704 5, ,704 5, Tata Asset Management-Floater Fund 49,916,493 5, ,916,493 5, Principal-Cash Management Fund 50,004,748 5, ,004,748 5, Principal-Liquid Plus 50,013,768 5, ,013,768 5, UTI-Liquid Plus 1,354,337 13, ,554,492 15, UTI-Cash Plan Institutional 1,324,483 13, ,324,483 13, Reliance Institutional Dividend Plan 651, ,534,074 1, b) Long term Investments Purchase and sale of debentures during the year amounting to Rs. 29, lacs of DLF SEZ Developers Limited, (a subsidiary company). 20. The Company is primarily engaged in the business of colonization and real estate development, which as per Accounting Standard 17 on Segment Reporting issued by the ICAI is considered to be the only reportable business segment. The Company is primarily operating in India which is considered as a single geographical segment. 108

111 21. Capital expenditure commitments 22. Directors remuneration* , , Salaries and bonus Commission Whole time Directors , Commission Non executive Directors Directors fee Provident and other funds Other perquisites and benefi ts , , * Exclusive of provisions for gratuity, compensated absence, premium for personal accidental policy, Share based payment, made in the fi nancial statements as per accounting policy number 13 and 15 as stated in Schedule 24. Computation of net profi ts in accordance with Section 349 of the Companies Act, 1956 and commission payable to Directors Profi t before tax as per the profi t & loss account 181, Add: Directors remuneration (including directors fee) 1, Add: Loss on sale of fi xed assets Add: Assets written off /discarded Add: Provision for discard of fi xed assets - Add: Provision for doubtful debts and advances Less: Profi t on sale of fi xed assets (1.21) Net profi t as per Section 349 of the Companies Act, , Commission Whole-time Directors Non Executive Directors Overall limit of managerial remuneration allowed as per Section 198 of the Companies Act, , Managerial remuneration paid 1, Due from Directors/officers Amount due from an offi cer - - Maximum balance at any time during the year Dividend to non-resident shareholders (in foreign currency) Number of shareholders 3 2,570 Number of shares held 16, ,867,979 Dividend remitted , Year to which it relates and

112 Schedules forming part of the Financial Statements (Contd.) 25. Expenditure in foreign currency (on cash basis) Travelling Professional charges 2, , Interest paid Others 3, , Receipts in foreign currency (on cash basis) Receipts from customers (against agreements to sell) 9,918,74 12, Interest from customers (under agreement to sell) CIF value of import Material (including material purchased in high seas) 7, , Payment to auditors Audit fee Tax audit fee Taxation matters Certifi cation and related matters Others (including IPO and related fees in previous year) Service tax Details of stocks, purchases and turnover Land and plots (including development cost) Area (In acres) Amount Area (In acres) Amount Opening stock , Purchases/ transfer Sales , , Closing stock Details of Capital work-in-progress as on March 31, Land 121, , Development and construction expenses 27, , Finance charges 15, , Advances to contractors and others Computer softwares under development / implementation , ,

113 31. (a) Wind Mill projects of the Company are entitled for tax holiday under Section 80-IA of the Income Tax Act, The computation of tax (current and deferred) has been done as per Accounting Standard 22 Accounting for taxes on Income and Accounting Standard Interpretation 3, issued by the ICAI. (b) The Company s profi ts from Special Economic Zone ( SEZ ) business are exempt under Section 80-IAB of the Income Tax Act, 1961 and the Dividend declared out of such SEZ profi ts are exempt from Dividend Distribution Tax under the provisions of Section 115-O(6) of the Income Tax Act, In line with the above provisions, the Company has provided dividend tax only on the proportionate amount of dividend declared out of non SEZ profi ts. 32. During the year, the Income tax appellate tribunal disposed off the cases relating to the assessment years , , , , and in favour of the Company. No formal order of the appeal effect has yet been given by the assessing offi cer. Pending the formal order from the Income Tax department, no adjustment in respect of the above orders has been made in the fi nancial statements. 33. Based on the information available with the Company, there are no dues outstanding in respect of Micro, Small and Medium enterprises at the balance sheet date. No amounts were payable to such enterprises which were outstanding for more than 45 days. Further, no interest during the year has been paid or payable in respect thereof. The above disclosure has been determined to the extent such parties have been identifi ed on the basis of information available with the Company. This has been relied upon by the auditors. 34. Utilisation of money raised by Public issue (IPO) of the Company upto March 31, 2009 S. No Nature of expenditure Acquisition of land and development rights 566, ,955 2 Development and construction costs for existing projects 63,625 63,625 3 Prepayment of loans 257, ,700 4 Issue related expenses 30,298 30,298 Total 918, ,578 Unutilized money from public issue (IPO) - Money remain unutilized ( lying in bank balances Current account) Rs lacs. ( Previous year - Rs Lacs ) 35. Events after Balance Sheet date a) Subsequent to the balance sheet date, the Board of Directors approved sale of Wind Power Business as going concern, on a slump sale basis to DLF Wind Power Private Limited (a wholly owned subsidiary of the Company), on such terms and conditions and in such form and manner as the board may decide in the best interest of the Company. No effect has been given to the proposed sale in these fi nancials statements in the line with the Accounting Standard-4 on Contingencies and Events Occurring After the Balance Sheet. b) The Company has entered into a co-developer agreement with DLF Assets Private Limited (the DAL ), an enterprise over which the KMPs are able to exercise signifi cant infl uence, for the SEZ Project at Silokhera, Gurgaon. Based upon the revenue recognition policy, as on March 31, 2009 Rs 18, lacs was the amount due, shown under the unbilled receivables in Schedule 11 Other current assets, from DAL on account of development charges from such SEZ Project. However subsequent to the balance sheet date, Rs 18, lacs has been recovered against such unbilled receivables. 111

114 Schedules forming part of the Financial Statements (Contd.) c) Subsequent to the balance sheet date, on May 6, 2009, the Company received an assessment order for the AY , from the Income tax authorities creating an additional tax demand amounting to Rs. 48, lacs on the Company. The Company has fi led an appeal against the order and based on advice from experts, is confi dent that the additional tax demanded will not be sustained by the appellate authorities. Pending the order of the appellate authorities, no adjustment has been made in the current year fi nancial statements for the additional tax so demanded and the same has been disclosed as a contingent liability. d) Subsequent to the balance sheet date, the Company bought back 15,000 shares under the buy back programme. The buy back programme was closed on May 6, 2009 as per the announcement dated May 1, e) Subsequent to the balance sheet date, the SEZ Board of approvals ( BOA ) granted approval for de-notifi cation of 4 sector specifi c Special Economic Zones ( the SEZ ) for IT/ ITES of the Company in Gandhinagar Gujarat, Rai, Sonepat Haryana, Kolkata West Bengal and Bhubaneshwar Orissa. The approval granted is subject to returning all benefi ts availed by the Company in these SEZ units. The formal order shall be passed by the Government of India after receiving the confi rmation from the concerned authorities including customs, excise and income tax that all the benefi ts availed by the Company have been returned. Following is an estimate of benefi ts availed by these units upto the balance sheet date. Sl. No. Location of SEZ unit Amount of benefits availed 1 Gandhinagar, Gujarat Kolkata, West Bengal Rai, Sonepat, Haryana Bhubaneshwar, Orissa Nil Pending the fi nal order approving the said denotifi cation, no adjustment has been made in the current year fi nancial statements for the amounts to be returned to the authorities and the same has been disclosed as a contingent liability. 36. Previous year figures have been regrouped/recast wherever considered necessary to make them comparable with those of the current year. On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman New Delhi July 30,

115 BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE i) Registration details Registration Number 2484 Balance Sheet Date 31 March, 2009 State Code 05 ii) Capital Raised during the year (Amount in Rs. Thousands) Public Issue Nil Right Issue Nil Bonus Issue Nil Private Placement Nil iii) Position of Mobilization and Deployment of Funds (Amount in Rs. Thousands) Total Liabilities (including shareholding fund) 251,413,496 Total Assets 251,413,496 Sources of Funds Paid-up Capital 3,394,374 Reserves & Surplus* 120,353,863 Secured Loans 79,799,690 Unsecured Loans 16,350,000 Deferred Tax Liabilities (Net) 583,291 *Inclusive of Revaluation Reserves 25,008 Application of Funds Net Fixed Assets 34,732,577 Investments 29,563,150 Net Current Assets 156,185,491 Misc. Expenditure Nil Accumulated Losses Nil iv) Performance of Company (Amount in Rs. Thousands) Turnover and other Income 38,390,446 Total Expenditure 20,281,764 Turnover 28,278,996 Other Income 10,111,450 Profi t before Tax 18,108,682 Profi t after Tax 15,498,640 Earnings per shares in Rs Dividend Rate % 100% v) Generic Names of Three principal Not applicable, since the Company is neither engaged in products/ services of the Company : manufacturing activities nor in service rendering. On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman New Delhi July 30,

116 114

117 Auditors Report To The Board of Directors of DLF Limited We have audited the attached consolidated balance sheet of DLF Limited, its subsidiaries, associates and joint ventures (as per list appearing in Note 17 on Schedule 24 and hereinafter collectively referred to as the Group ), as at March 31, 2009 and also the consolidated profi t & loss account and the consolidated cash fl ow statement for the year ended on the date annexed thereto (collectively referred as the Consolidated Financial Statements ). These Consolidated Financial Statements are the responsibility of the management and have been prepared by the management on the basis of separate financial statements and other fi nancial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the Consolidated Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Consolidated Financial Statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that; 1. The Consolidated Financial Statements have been prepared by the management in accordance with the requirements of Accounting Standard 21 on Consolidated Financial Statements, Accounting Standard 23 on Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27 on Financial Reporting of Interests in Joint Venture, notifi ed pursuant to the Companies (Accounting Standards) Rules, We did not audit the fi nancial statements of some consolidated entities, whose fi nancial statements refl ect total assets of Rs. 779, lacs as at March 31, 2009, total revenues of Rs. 85, lacs and cash outfl ows of Rs.19, lacs for the year then ended. These fi nancial statements and other fi nancial information have been audited by other auditors whose reports have been furnished to us and our opinion in respect thereof is based solely on the reports of such other auditors. 3. The Consolidated Financial Statements include total assets of Rs. 190, lacs, revenues of Rs. 40, lacs and total cash outfl ows of Rs. 10, lacs of Silverlink Holdings Limited and its subsidiaries ( Silverlink ), a subsidiary of the Company which has been consolidated based on the audited consolidated fi nancial statements of Silverlink as at and for the year ended December 31, No further adjustment is considered necessary in the Consolidated Financial Statements as the management has confi rmed that no material event, affecting the fi nancial position of the subsidiary and its constituents, has occurred during the period from January 1, 2009 to March 31, Without qualifying our opinion, we draw attention to note no. 19 of Schedule 24 to the Consolidated Financial Statements, relating to an observation of the auditors of Silverlink in respect of a legal claim by shareholders for breach of contract to issue secured redeemable convertible notes and a previous shareholder has joined as a third party to the action. As per the note, there are certain existing and previous shareholders of the Company who have ongoing claims against the Company which include the repurchase of shares held by the shareholders in the Company in exchange for secured convertible notes to be issued by the Company, the entitlement to appoint Director to the Company s board, injunction to restrain the Company from taking additional secured loans above US$2 115

118 million and damages in relation to the above breaches. Based on the legal advice of the Company s legal counsel, the Directors of the Company are of the view that the Company has reasonable chance to defend the claims. Based on current information, the Directors are not able to quantify the potential fi nancial impact on the Company should the above shareholders succeed in their claims against the Company. No impact of the same has been considered in these results since the resulting liability, if any, is considered contingent by management. accounting principles generally accepted in India, in the case of: (a) the consolidated balance sheet, of the state of affairs of the Group as at March 31, 2009; (b) the consolidated profi t & loss account, of the profi t for the year ended on that date; and (c) the consolidated cash fl ow statement, of the cash fl ows for the year ended on that date. Based on our audit and consideration of reports of other auditors on the separate fi nancial statements of some consolidated entities and on the other fi nancial information of the components, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the New Delhi July 30, 2009 for Walker, Chandiok & Co Chartered Accountants by David Jones Partner Membership No

119 Consolidated Balance Sheet as at March 31, 2009 Schedule SOURCES OF FUNDS Shareholders funds Capital 1 173, , Reserves and surplus 2 2,241, ,839, ,415, ,968, Minority interests 63, , Loan funds Secured loans 3 1,326, , Unsecured loans 4 305, , ,632, ,220, Deferred tax liability (net) 5-3, ,110, ,232, APPLICATION OF FUNDS Goodwill 226, , Fixed assets 6 Gross block 848, , Less: Accumulated depreciation and amortisation 57, , Net block 791, , Capital work-in-progress (including capital advances) 568, , Deferred tax asset (net) 5 4, Investments 7 140, , Current assets, loans and advances Stocks 8 1,092, , Sundry debtors 9 216, , Cash and bank balances , , Other current assets , , Loans and advances , , ,162, ,660, Less : Current liabilities and provisions Current liabilities , , Provisions , , , , Net current assets 2,379, ,931, ,110, ,232, Signifi cant accounting policies 23 Notes to the consolidated fi nancial statements 24 The schedules referred to above form an integral part of the consolidated fi nancial statements On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Consolidated Balance Sheet referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

120 Consolidated Profi t & Loss Account for the year ended March 31, 2009 Schedule INCOME Sales and other income 15 1,043, ,468, ,043, ,468, EXPENDITURE Cost of revenues , , Establishment expenses 17 45, , Finance charges 18 55, , Other expenses 19 76, , Depreciation, amortisation and impairment 20 23, , , , Profi t before tax and minority interests / share of profi t (loss) in associates 519, , Tax expense 21 67, , Profi t before minority interests / share of profi t (loss) in associates 451, , Share of profi t/(loss) in associates (2,110.05) 2, Minority interests (2,754.13) (3,548.23) Profi t after tax, minority interests and before prior period items 446, , Prior period items Income tax (net) (598.31) Deferred tax Other expenses (290.47) Depreciation Net profit after tax, minority interest and prior period items 446, , Balance as per last balance sheet 876, , Transfer to share capital account-bonus issue - (7.20) Transfer to capital reserve (153,852.37) (4,683.34) Balance available for appropriation 1,169, , APPROPRIATION Transfer to general reserve 15, , Transfer to capital redemption reserve Proposed/interim dividend on equity/preference shares 34, , Tax on dividend 2, , Excess provision of previous year written back (2,980.54) - Transfer to debenture redemption reserve 11, Balance carried to reserves and surplus 1,107, , ,169, , EARNINGS PER SHARE 22 Basic earnings per share (Rs.) Diluted earnings per share (Rs.) Signifi cant accounting policies 23 Notes to the consolidated fi nancial statements 24 The schedules referred to above form an integral part of the consolidated fi nancial statements On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Consolidated Profi t & Loss Account referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

121 Consolidated Cash Flow Statement for the year ended March 31, 2009 Particulars A. CASH FLOW FROM OPERATING ACTIVITIES Net profit before taxation, minority interest and after prior period items 519, , Adjustments for: Depreciation 23, , (Profi t) /loss on sale of fi xed assets, net Interest/guarantee charges 55, , Provision for doubtful debts and advances 6, , Advances written off Exchange (gain)/loss, net (725.48) (Profi t)/loss on sale of investments (7,512.51) (1,547.54) Provision for diminution of current investment 1, , Unclaimed balances and provisions written back (1,196.02) (363.66) Employee stock option cost 3, , Interest/ dividend income (23,531.16) (21,215.74) Operating profit before working capital changes 578, , Movements in working capital Advance for land purchase/development rights (40,323.00) (551,604.00) (Increase)/decrease in trade and other receivables (293,734.05) (366,870.77) (Increase)/decrease in inventories (75,252.44) (153,753.62) Increase/(decrease) in current liabilities and provisions (40,663.58) 95, Cash generated from/(used) in operations 128, , Direct taxes paid (net of refunds) (111,154.57) (182,079.97) Net cash generated from/(used) in operating activities (A) 17, (178,091.41) B. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fi xed assets (including capital work-in-progress) (337,831.49) (478,314.37) Proceeds from sale of fi xed assets 12, , Interest/dividend received 10, , Purchase of investments (61,736.43) (164,592.34) Proceeds from sale of investment 17, , Net cash generated from/(used in) investing activities (B) (359,011.55) (601,419.88) C. CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of debentures 184, Proceeds from long-term borrowings 798, , Repayment of long-term borrowings (620,251.92) (574,131.23) Proceeds from issue of preference shares 44, Proceeds from short term borrowings (net) 48, , Dividend paid (34,333.83) (68,198.21) Dividend tax paid (2,862.92) (11,590.29) Increase in share capital - 3, Share premium received - 943,

122 Particulars Share issue expenses - (27,436.87) Buy back of equity shares (14,235.65) - Interest/guarantee charges paid (160,100.45) (109,466.69) Net cash generated from financing activities (C) 244, , Net increase/ (decrease) in cash and cash equivalents (A + B + C) (97,240.80) 182, Cash and cash equivalents at the beginning of the year 206, , Cash and cash equivalents at the end of the year 109, , Net increase/ (decrease) in cash and cash equivalents (97,240.80) 182, Note Cash and bank balance (as per Schedule 10 to the fi nancial statements) 119, , Less: Fixed deposit (pledged/under lien/earmarked) 6, , Margin money 3, , Unclaimed dividend Exchange gain/(loss) (38.63) 109, , Note : Non cash transactions : Refer note no. 7 of Schedule 24 Notes to consolidated fi nancial statements On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Senior Executive Director (Finance) and Group Chief Financial Offi cer Company Secretary Managing Director Vice Chairman This is the Consolidated Cash Flow Statement referred to in our report of even date for Walker, Chandiok & Co Chartered Accountants by David Jones New Delhi Partner July 30, 2009 Membership No

123 Schedules forming part of the Consolidated Financial Statements SCHEDULE : 1 SHARE CAPITAL Authorised 2,497,500,000 ( Previous year 2,497,500,000 ) Equity shares of Rs. 2 each 49, , ,000 (Previous year 50,000 ) Cumulative redeemable preference shares of Rs. 100 each , , Issued 1,704,832,680 (Previous year 1,704,832,680) equity shares of Rs. 2 each fully paid up 34, , Subscribed and paid 1,704,832,680 (Previous year 1,704,832,680) Equity shares of Rs. 2 each fully paid up 34, , Less : Call-in-arrears Less : Buy back of shares* ( 7,623,567 Equity shares of Rs. 2 each) Net paid up 1,697,209,113 (previous year 1,704,832,680) equity shares of Rs. 2 each 33, , Preference share capital issued by subsidiary companies (Refer note no. 21 of Schedule 24 Notes to consolidated fi nancial statements) 139, , , , *includes 5,000 equity shares extinguished on April 07, (Refer note no. 1 of Schedule 24 Notes to consolidated fi nancial statements) SCHEDULE : 2 RESERVES AND SURPLUS* Reserves Capital reserve 167, , Capital redemption reserve* 2, , Amalgamation reserve Share premium 905, , Statutory reserve fund As per last balance sheet Transfer from profi t & loss account 11, Transfer to general reserve (203.09) Revaluation reserve 1, Foreign currency translation reserve (3,787.73) (636.15) General reserve As per last balance sheet 39, , Transfer from profi t & loss Account 15, , Transfer from statutory reserve fund Buy back of equity shares (premium) (14,083.18) - Transfer to capital redemption reserve account* (152.47) (20.26) 40, , Employees stock option scheme Employees stock options outstandings 23, , Less: Deferred employees compensation (15,830.13) (23,542.71) 7, , Surplus As per profi t & loss account 1,107, , ,241, ,839, * Refer note no. 2 of Schedule 24 Notes to consolidated fi nancial statements SCHEDULE: 3 SECURED LOANS Debentures 90 (previous year 90) 10% non - cumulative non-redeemable debentures of Rs. 1,000 each ,000 (previous year nil) 13.70% non-convertible redeemable debentures of Rs. 1,000,000 each redeemable on August 18, ,

124 Schedules forming part of the Consolidated Financial Statements (Contd...) SCHEDULE: 3 SECURED LOANS (Contd ) 7,200 (previous year nil) 14% non-convertible redeemable debentures of Rs. 1,000,000 each 72, redeemable on February 24, ,000 (previous year nil) 14% non-convertible redeemable debentures of Rs. 1,000,000 each 10, redeemable on January 03, , From banks Term loans 888, , Overdraft facilities 78, , , , From others GE Capital Services India 5, , Infrastructure Development Finance Company Limited 15, , IL & FS Trust Company Limited - 25, Housing Development Finance Corporation Limited 83, , DSP Merrill Lynch Capital Limited - 2, Axis Bank Limited -Trust Series 123, , Axis Bank Limited -DAS Trust Series - 22, SREI Infrastructure Finance Limited TML Finance Service Limited Others , , Interest accrued and due ,326, , (Refer note no. 3 of Schedule 24 Notes to consolidated fi nancial statements) SCHEDULE: 4 UNSECURED LOANS Fixed deposits Interest accrued and due Other term loans and advances Directors - Subsidiary company Banks Standard Chartered Bank 27, , The Hong Kong Shanghai Banking Corporation Limited 4, Others Axis Bank Limited ( Trustees ) 50, , Commercial Papers 77, , ICICI Home Finance Company Limited 27, Indian Loan Receivable Trust 15, Other body corporate(s) 18, , Interest accrued and due 2, , Debentures 20,116 (previous year 100) 12.5% compulsory convertible debentures of Rs. 225,000 each 45, ,972 (previous year 22,972) 12% compulsory convertible debentures of Rs. 50,000 each 11, , ,821 (previous year 9,573) 12.5% compulsory convertible debentures of Rs. 75,000 each 9, , ,433 (previous year nil) 12.5% compulsory convertible debentures of Rs.27,500 each 4, Debenture application money pending allotment - 18, From a share holder of a subsidiary company 11, , , (Refer note no. 4 of Schedule 24 Notes to consolidated fi nancial statements) 122

125 SCHEDULE : 5 DEFERRED TAX (ASSET)/LIABILITY Deferred tax liability arising on account of : Depreciation 7, , Pre-construction period interest allowed in current year 4, Others , , Less Deferred tax asset arising on account of Brought forward losses 14, Expenditure debited to profi t & loss account but allowable for tax purposes in subsequent years Doubtful debts and advances Employee benefi ts Others , , (4,139.12) 3, Aggregate of net deferred tax liabilities jurisdictions , Aggregate of net deferred tax assets jurisdictions ( ) (1,263.50) Net (asset)/liability (4,139.12) 3, SCHEDULE: 6 FIXED ASSETS 2008 Additions Gross block Disposals/ Adjustments Intangible assets Computer softwares 1, , , Tangible assets Land Lease hold 101, , , Free hold 79, , , Buildings 153, , , , Plant and machinery 154, , , , Furniture, fi xtures and equipments 7, , , , Air conditioners and coolers Vehicles 3, , Leasehold improvement 1, , , Aircraft 12, , Leased plant and machinery 1, , Total - Current year 516, , , , Previous year 180, , , , Depreciation and amortisation Intangible assets Computer softwares Tangible assets Land-Lease hold Buildings 5, , , Plant and machinery 23, , , Furniture, fi xtures and equipments 1, , , , Air conditioners and coolers Vehicles ,

126 Schedules forming part of the Consolidated Financial Statements (Contd...) SCHEDULE: 6 FIXED ASSETS (Contd...) 2008 Additions Disposals/ Adjustments 2009 Leasehold improvement Aircraft 1, , Leased plant and machinery 1, , Total - Current year 34, , , , Previous year 24, , , Net block Intangible assets Computer softwares 1, , Tangible assets Land Lease hold 101, , Free hold 79, , Buildings 147, , Plant and machinery 131, , Furniture, fi xtures and equipments 5, , Air conditioners and coolers Vehicles 2, , Leasehold improvement 1, , Aircraft 10, , Leased plant and machinery Total - Current year 481, , Previous year 156, , SCHEDULE : 7 INVESTMENTS Class* 2009 Share (No.) 2008 Share (No.) 2009 Book value 2008 Book value Long Term In Shares (Quoted) (Trade) Symphony International Holding Limited Equity 50,000,000 50,000,000 25, , Akruti City Limited (Formerly Akruti Nirman Limited) Equity 430, ,553 2, , Aggregate Book Value of Quoted Investments (Trade) 28, , Aggregate Market Value of Quoted Investments (Trade) 10, , In shares (Unquoted) (Trade) Ripple Infrastructure Private Limited Equity 90,100 90, Prudent Management Strategies Private Limited Equity 90,100 90, SKH Construct Well Private Limited Equity 92,550 92, SKH Infrastructure Developers Private Limited Equity 92,550 92, Nachiketa Real Estate Private Limited Preference 12,000 12, Eigen Technical Services Limited Equity 10, Mohak Real Estate Private Limited Equity 3,000 3, Webcity Builders and Developers Private Limited Equity 3,000 3, Ishayu Builders and Developers Private Limited Equity 4,000 4, Luxurious Bus Seals Co. Private Limited. Equity 98, Radiant Sheet Metal Components Private Limited. Equity 98, Qabil Builders & Constructions Private Limited. Equity 2, Fadey Builders & Developers Private Limited. Equity 2, Cadence Builders & Constructions Private Limited. Equity 2, Felicite Builders & Constructions Private Limited Equity 219, YG Realty Private Limited. Equity 39, CCD 3,266,480-25, Alvita Builders & Developers (P) Limited Equity Flora Real Estate Private Limited Equity Bodrum Demirbuku Equity 125,

127 Class* 2009 Share (No.) 2008 Share (No.) 2009 Book value 2008 Book value Milos Resort Holdings Limited Equity 1, Urbana Limited Equity 1,000, Australian Resort Limited Equity 9,000, D.E. Shaw Composite Fund Equity 4,000,000-2, Delmer Builders and Constructions Private Limited Equity - 2, Eskana Builders and Developers Private Limited Equity - 2, Mughith Real Estates Private Limited Equity - 2, Odette Builders and Constructions Private Limited Equity - 2, Eldoris Builders and Developers Private Limited Equity - 2, Soleil Builders and Constructions Private Limited Equity - 2, Fuensanta Builders and Constructions Private Limited Equity - 2, Berit Builders and Developers Private Limited Equity - 2, Manini Real Estates Private Limited Equity - 2, Madeira Builders and Constructions Private Limited Equity - 2, Dominique Builders and Constructions Private Limited Equity - 2, Ialeta Builders and Constructions Private Limited Equity - 2, Montague Builders and Construction Private Limited Equity - 2, Prewitt Builders and Construction Private Limited Equity - 2, Murdock Builders and Developers Private Limited Equity - 2, Muhannad Builders and Developers Private Limited Equity - 2, Lioinel Builders and Constructions Private Limited Equity - 2, Ciel Builders and Developers Private Limited Equity - 2, Nevili Builders and Construction Private Limited Equity - 2, Nerice Builders and Developers Private Limited Equity - 2, Alankrit Estates Limited Equity ** Anuroop Builders and Developers Private Limited Equity 10,000 10, Digital Talkies Private Limited Equity 8,850 8, Preference 80,680 80, Garv Developers Private Limited Equity 10,000 10, Garv Promoters Private Limited Equity 10,000 10, Garv Realtors Private Limited Equity 10,000 10, Grism Builders and Developers Private Limited Equity 10,000 10, Ivory Consultancy Limited Equity 10,000 80,000 1, , Nairne Builders and Developers Private Limited Equity - 2, Kirtimaan Builders Limited Equity ** - ** Luvkush Builders Private Limited Equity 10,000 10, Nadish Real Estate Private Limited Equity 10,000 10, Northern India Theaters Private Limited (Rs 100 each) Equity Peace Buildcon Private Limited Equity 10,000 10, Realest Builders and Services Private Limited Equity 50,012 50, Skyrise Home Developers Private Limited Equity 10,000 10, Ujagar Estates Limited Equity ** - ** Vibodh Developers Private Limited Equity 10,000 10, Vinesh Home Developers Private Limited Equity 10,000 10, Vismay Builders and Developers Private Limited Equity 10,000 10, Bansal Development Company Private Limited Equity 16,320 16, Magna Real Estate Developers Private Limited Equity 10,000 10, Preference 4,000 4,

128 Schedules forming part of the Consolidated Financial Statements (Contd...) Class* 2009 Share (No.) 2008 Share (No.) 2009 Book value 2008 Book value Super Mart One Property Management Services Private Limited Equity 40,000 40, Preference 3,000 3, Zeugma Limited Equity Queensdale Management Limited Equity ** Puri Limited Equity ** Surin Bay Company Limited Equity ** Raititi Lagoon Cruises Equity Amanresorts Hawali Inc. Equity - 5, Urbana Limited Equity - 1,000, Maha Holdings Limited Equity - 12, ** Alevernita Limited Equity - 1, DLF City Centre Limited Equity - 2, Turan Infratech Private Limited *** Equity 36, Thalia Infratech Private Limited *** Equity 36, , , Less : Provision for diminution in value , , In Associates (Trade unquoted) Regional D & R Limited Equity ** - ** Seven Seas Resorts and Leisure Inc Equity 151,600,000 31,914, Preference 188,256,000 55,330, Islan Aviation Limited Equity 624, , Revlys SA Equity 160, ,000 1, Villajena Equity 5,000 5, Surin Bay Co. Limited Equity 449, ,999 5, , P.T. Jawa Express Amanda Indah Equity 9, Turan Infratech Private Limited *** Equity - 108, Thalia Infratech Private Limited *** Equity - 108, Joyous Housing Limited (Rs 100 each) Equity 37,500 37, DLF New Gurgaon Homes Developers Private Limited (till June 30, 2008) Equity - 4, Ferragamo Retail India Private Limited ( formerly Nelia Retail Private Limited) Equity 7,350, Giorgio Armani India Private Limited Equity 2,940, DLF Pramerica Advisory Services Private Limited Equity 5,850, Lillion Builders and Developers Private Limited Equity 3,100 3, Zeus Infrastructure Private Limited Equity 100, , , Add / Less: Profi t/ (Loss) in Associates 8, , , , In Investment properties 13, , In Trusts Belaire Receivables Trust 8, , Zensi Real Estate Trust 9, , , , In Government Securities 11.83PCT GOI (12NV14) 20,000, PCT GOI (02JL10) 45,000, PCT GOI(21OT11) 200,000,000-2, PCT GOI(02FB19) 50,000,

129 2008 Book value Class* 2009 Share (No.) 2008 Share (No.) 2009 Book value 7.38PCT GOI (03SP15) 1,000, PCT GOI (09JL17) 50,000, National Saving Certifi cate , In Treasury Bills 91 DAYS T BILL(01MY09) 20,000, DAYS T BILL(12JU09) 20,000, DAYS T BILL (15MY09) 70,000, DAYS T BILL(24AP09) 45,000, , In Infrastructure Bonds IRFC 8.46PCT LBD (15JN14) SR-63 50,000, PGCIL 9.20PCT L BD (12MR18)XXIXF 50,000, POW.FIN.10.75PCT BD(15JL11)SRXLVIII 12,000, POW.FIN.11.4PCT BD(28NV13)SR52-A 38,000, POW.FIN.8.7PCT L BD (09JL10)SR53 20,000, , In Fixed Deposits With CITI Bank With HDFC Bank In Partnership firms DLF GK Residency DLF Finance Corporation Short Term In Shares (Quoted) (Non-trade) # Reliance Power Ltd. Equity 228, , Reliance Industries Ltd. Equity , Reliance Communications Ltd. Equity 80,902 80, GVK Power and Infrastructures Ltd. Equity - 105, Reliance Infrastructure Ltd. Equity 254 8, Adlabs Films Ltd. Equity 115, , Crompton Greaves Ltd. Equity 2,406 10, Eastern Silk Industries Ltd. Equity - 7, EIH Ltd. Equity 177, , Ispat Profi les India Ltd. Equity Unitech Ltd. Equity 19, Andhra Cements Ltd. Equity ** - IDBI Bank Ltd Equity - 382, Indiabulls Real Estate Ltd. Equity - 20, Jaiprakash Associates Ltd. Equity - 50, JHS Svendgaard Laboratories Ltd. Equity - 15, Jindal Steel & Power Ltd. Equity - 11, Larsen & Toubro Ltd. Equity 426 4, Mphasis Ltd. Equity 683 7, National Thermal Power Corporation Ltd. Equity 1,509 25, Orient Abrasives Ltd. Equity 62,000 62, Petron Engineering Construction Ltd. Equity 5,000 5, Power Grid Corporation of India Ltd. Equity 1,391 50, Ranbaxy Laboratories Ltd. Equity - 23, Reliance Industrial Infrastructure Ltd. Equity - 4, Reliance Petroleum Ltd. Equity - 20,

130 Schedules forming part of the Consolidated Financial Statements (Contd...) Class* 2009 Share (No.) 2008 Share (No.) 2009 Book value 2008 Book value Subex Ltd. Equity - 8, Videocon Industries Ltd. Equity - 40, Axis Bank Ltd. Equity Bajaj Auto Ltd. Equity Balarampur Chini Mills Ltd. Equity Bharat Electronics Ltd. Equity Bharat Heavy Electricals Ltd. Equity Bharat Petroleum Corporation Ltd. Equity Bharti Airtel Ltd. Equity Cairn India Ltd. Equity 2, Century Textiles Ltd. Equity Cipla Ltd. Equity 1, Gail India Ltd. Equity Glenmark Pharmacutical Ltd. Equity Grasim Industries Ltd. Equity HDFC Bank Ltd. Equity Hero Honda Motors Ltd. Equity Hindustan Unilever Ltd. Equity 1, ICICI Bank Ltd. Equity Indian Oil Corporation Ltd. Equity Infosys Technologies Ltd. Equity ITC Ltd. Equity 2, IVRCL Infrastructures & Projects Ltd. Equity KEC International Ltd. Equity Mahindra & Mahindra Ltd. Equity Maruti Suzuki India Ltd. Equity Nestle India Ltd. Equity Punjab National Bank Equity Siemens Ltd. Equity State Bank of India Equity Steel Authority of India Ltd. Equity 2, Sterlite Industries India Ltd. Equity Sun Pharmacutical Industries Ltd. Equity TATA Consultancy Services Ltd. Equity TATA Motors Ltd. Equity TATA Power Company Ltd. Equity TATA Steel Ltd. Equity 1, Union Bank of India Equity 1, Voltas Ltd. Equity # Valued at lower of cost or market value , In Mutual fund (Quoted) # # Reliance Liquid Fund - 1, Axis Bank Limited - 2, Birla Sun Life- Mutual Fund 5, DSP Black Rock - Cash Flex Fund 4, SBI Premier -Liquid Fund 1, HDFC-Liquid Fund Reliance-Liquid Fund SBI Magnum Insta Cash Birla Cash Plus ICICI Pru-Liquid Fund DSP Merrill Lynch - Cash Plus Fund - 2, SBI Mutual Fund - Insta Cash Fund Reliance Mutual Fund - 1,

131 Class* Share (No.) Share (No.) Book value Book value DSP Merrill Lynch - Super Institutional Cash Plus Fund , , # # Aggregate market value as on March 31, 2009 Rs. 11, lacs (Previous year Rs.7, lacs) In Mutual fund (Unquoted) Urban Infrastructure Opportunities Fund 11, , Thai Farmers Bank - Open End Equity (Fixed Inc.) , , , , *Equity shares of Rs. 10 each, Preference shares of Rs. 100 each unless otherwise stated. **Rounded off to zero ***These entities were associates till January 26, 2009 SCHEDULE: 8 STOCKS Land and plots including related development cost 703, , Development rights: payments under agreement to purchase land/constructed properties 371, , Constructed buildings (including land and related equipments) Lease hold 3, , Free hold 10, , , , Less: Depreciation on buildings and related equipments 1, , , Food & beverages 2, Stores and spares 2, , Stock in Trade - Retail chain outlets ,092, , SCHEDULE : 9 SUNDRY DEBTORS (Considered good unless otherwise stated) Debts over six months Secured Unsecured 83, , Considered doubtful 13, , , , Other debts Secured 2, Unsecured Considered Good 129, , Considered doubtful , , Less: Doubtful and provided for 13, , , , SCHEDULE : 10 CASH AND BANK BALANCES Cash in hand , Cheques in hand Bank balances: With scheduled banks in Current accounts* 24, , Pledged accounts Fixed deposit accounts Pledged/under lien/earmarked 6, , Margin money 3, , Others 81, , With non-scheduled banks in current account 3, , , , * includes unutilised money from public issue Rs.6.96 lacs ( Previous year Rs lacs) 129

132 Schedules forming part of the Consolidated Financial Statements (Contd...) SCHEDULE : 11 OTHER CURRENT ASSETS Investment in lease (net of unearned fi nance income Rs. 4, lacs) 8, Interest accrued from customers 7, from fi xed deposits 1, on loans and advances 6, Unbilled receivable * 738, , , , * Refer Accounting policy no. 10 of Schedule 23 Signifi cant accounting policies SCHEDULE :12 LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received Secured 2, , Unsecured [including Rs lacs (previous year Rs lacs) doubtful] 530, , , , Security deposits 39, , Taxes paid 358, , Forward cover receivable (net) 2, Debenture / share application money 38, , , , Less: Doubtful and provided for , , SCHEDULE :13 CURRENT LIABILITIES Sundry creditors 232, , Realisation under agreement to sell 15, , Advance from recreational facility members 9, , Security deposits 48, , Uncashed dividend* Interest accrued but not due on loans 29, , Other liabilities 79, , , , *Not due for credit to Investor Education and Protection Fund SCHEDULE : 14 PROVISIONS Proposed dividend 33, , Tax on dividend * 2, , Income tax 326, , Employee benefi ts 5, , , , * Refer note no. 6(b) of Schedule 24 Notes to consolidated fi nancial statements SCHEDULE : 15 SALES AND OTHER INCOME a) Sales and other receipts Sale of land and plots (including sale of development right) 36, , Revenue from constructed properties 417, , Income from development charges 394, , Sale of fi touts under fi nance lease 9, Rent 50, , Service and maintenance income 31, ,

133 Revenue from retail chain outlets Revenue from food court / restaurant business 1, Revenue from hotel business 29, Revenue from power generation 25, , Revenue from cable operations Revenue from cinemas operations 1, , Revenue from recreational facility 3, , Revenue from insurance business 1, Revenue from sale of shares - 39, Amount forfeited on properties ,003, ,443, b) Income from investments Current (Other than trade) Dividend from mutual funds , Dividend others Long Term (Trade) Dividend Interest on debentures Profi t/(loss) from partnership fi rms (1.49) (1.99) , c) Other income Interest from: Bank deposits 2, , Income tax refunds Customers 9, , Loans and deposits 10, , Others , , , Exchange gain/(loss) (38.63) Profi t on disposal of fi xed assets Income from display of advertisements Unclaimed balances and excess provisions written back 1, Profi t from sale of investment 8, , Commission Miscellaneous income 4, , , , ,043, ,468, SCHEDULE : 16 COST OF REVENUES Cost of land, plots and constructed properties 182, , Cost of development charges 92, , Cost of development rights sold 1, , Cost of fi t outs under fi nance lease 9, Cost of shares sold Cost of power generation 2, , Food and beverages and facility management expenses - hotel business 8, Consumption of food and beverages - food court and restaurants Cost of goods sold - retail chain outlets Cost of service and maintenance 23, , Cost of cinema operations Cost of recreational facility 1, , Cost of insurance business , ,

134 Schedules forming part of the Consolidated Financial Statements (Contd.) SCHEDULE : 17 ESTABLISHMENT EXPENSES Salaries, wages and bonus 39, , Contribution to provident and other funds Amortization of deferred employees compensation 3, , Staff welfare , , SCHEDULE : 18 FINANCE CHARGES Interest Fixed periods loans Debentures 5, Others term loans 37, , , , Others 2, , , , Guarantee, fi nance and bank charges 10, , , , SCHEDULE : 19 OTHER EXPENSES Rent 4, , Rates and taxes 1, , Power, fuel and electricity 2, Repair and maintenance Building Constructed properties/colonies Machinery 1, , Others 2, , Insurance Commission and brokerage 12, , Advertisement and publicity 8, , Travelling and conveyance 2, , Running and maintenance Vehicle Aircraft 2, , Printing and stationery Directors fee Sales promotion 2, Communication 1, Legal and professional (including audit fees) 13, , Charity and donations Claims paid Loss on disposal of fi xed assets Loss on sale of short term investments Amounts written off Preliminary expenses written off Provision for doubtful debts and advances 6, , Provision for diminution of current investments 1, , Miscellaneous expenses 6, , , ,

135 SCHEDULE : 20 DEPRECIATION, AMORTISATION AND IMPAIRMENT On fi xed assets (net of capitalisation) 23, , On current asset On investment properties Impairment of goodwill , , SCHEDULE : 21 PROVISION FOR TAX Income tax 74, , Deferred tax (7,446.27) 1, Fringe benefi t tax, (net of recovery) , , SCHEDULE : 22 EARNINGS PER SHARE Profit after tax, minority interest and before prior period items 446, , Prior period items Income-tax (net) (598.31) Depreciation Deferred tax Other expenses (290.47) 446, , Nominal value of equity share (Rs.) Weighted average number of equity shares 1,703,074,486 1,662,676,836 Basic earnings per share (Rs.) (rounded off to two decimal places) Nominal value of equity share (Rs.) Number of equity shares used to compute diluted earning per share 1,703,615,271 1,665,679,771 Diluted earnings per share (Rs.) (rounded off to two decimal places) SCHEDULE: 23 SIGNIFICANT ACCOUNTING POLICIES 1. Nature of operations DLF Limited ( DLF or the Company ), a public limited company, together with its subsidiaries, joint ventures and associates (collectively referred to as the Group ) is engaged primarily in the business of colonisation and real estate development. The operations of the Group span all aspects of real estate development, from the identifi cation and acquisition of land, to planning, execution, construction and marketing of projects. The Group is also engaged in the business of generation of power, provision of maintenance services, hospitality & recreational activities, life insurance and retail chain outlets. 2. Basis of accounting The Consolidated Financial Statements are prepared under historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles of India and to comply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government in exercise of the power conferred under sub-section (I) (a) of Section 642 and the relevant provisions of the Companies Act, 1956 (the Act ). 3. Principles of consolidation The Consolidated Financial Statements include the fi nancial statements of DLF Limited, its subsidiaries, joint ventures, partnership fi rms and associates. The Consolidated Financial Statements of the Group have been prepared in accordance with Accounting Standard AS 21 Consolidated Financial Statements, AS 23 Accounting for Investments in Associates in Consolidated Financial Statements and AS 27 Financial Reporting of Interests in Joint Ventures, as 133

136 Schedules forming part of the Consolidated Financial Statements (Contd...) applicable issued by the Institute of Chartered Accountants of India ( ICAI ) and notifi ed pursuant to the Companies (Accounting Standards) Rules, The consolidated fi nancial statements are prepared on the following basis: i. Consolidated fi nancial statements normally include consolidated balance sheet, consolidated statement of profi t & loss, consolidated statement of cash fl ows and notes to the consolidated fi nancial statements and explanatory statements that form an integral part thereof. The consolidated fi nancial statements are presented, to the extent possible, in the same format as that adopted by the parent for standalone fi nancial statements. ii. The consolidated fi nancial statements include the fi nancial statements of the Company and all its subsidiaries, which are more than 50 per cent owned or controlled and partnership fi rms where the Company s share in the profi t sharing ratio is more than 50 per cent as at March 31, Investments in entities that were not more than 50 per cent owned or controlled and partnership fi rms where the profi t sharing ratio was not more than 50 per cent as at March 31, 2009 have been accounted for in accordance with the provisions of Accounting Standard 13 Accounting for Investments, or Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements, or Accounting Standard 27 Financial Reporting of Interests in Joint Ventures, issued by the ICAI and notifi ed pursuant to the Companies (Accounting Standards) Rules, 2006, as applicable. iii. The consolidated fi nancial statements have been combined on a line-by-line basis by adding the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances / transactions and resulting elimination of unrealised profi ts in full. The amounts shown in respect of reserves comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post-acquisition increase in the relevant reserves of the entity to be consolidated. Financial interest in joint ventures has been accounted for under the proportionate consolidation method. iv. Investments in Associates are accounted for using the equity method. The excess of cost of Investment over the proportionate share in equity of the Associate as at the date of acquisition of stake is identifi ed as Goodwill and included in the carrying value of the investment in the Associate. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the share of net assets of the Associate. However, the share of losses is accounted for only to the extent of the cost of investment. Subsequent profits of such Associates are not accounted for unless the accumulated losses (not accounted for by the Group) are recouped. Where the associate prepares and presents consolidated fi nancial statements, such consolidated fi nancial statements of the associate are used for the purpose of equity accounting. In other cases, standalone fi nancial statements of associates are used for the purpose of consolidation. v. Minority interest represents the amount of equity attributable to minority shareholders/ partners at the date on which investment in a subsidiary/ partnership fi rm is made and its share of movements in equity since that date. Any excess consideration received from minority shareholders of subsidiaries/ minority partners of partnership fi rms over the amount of equity attributable to the minority on the date of investment is refl ected under Reserves and Surplus. vi. As per Accounting Standard interpretation (AS)-15 on Notes to the 134

137 Consolidated Financial Statements, only the notes involving items which are material need to be disclosed. Materiality for the purpose is assessed in relation to the information contained in the consolidated fi nancial statements. Further, additional statutory information disclosed in separate fi nancial statements of the subsidiary and/or a parent having no bearing on the true and fair view of the consolidated fi nancial statements need not be disclosed in the consolidated fi nancial statements. 4. Use of estimates The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the Consolidated Financial Statements and the results of operations for the reporting periods. Although these estimates are based upon management s knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognised in the current and future periods. 5. Fixed assets, Capital work-in-progress and depreciation/ amortisation i) Fixed assets (gross block) are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Building / specifi c identifi able portion of Building, including related equipments are capitalized when the construction is substantially complete or upon receipt of the occupancy certifi cate, whichever is earlier. ii) In respect of certain overseas hotel properties that have commenced commercial operations, are stated in the balance sheet at their revalued amounts, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation increase arising on the revaluation of such hotel properties is credited to the property revaluation reserve. iii) Capital work-in-progress represents expenditure incurred in respect of capital projects under development and is carried at cost. Cost includes land, related acquisition expenses, development / construction costs, borrowing costs capitalised and other direct expenditure and advances to contractors and others. iv) Depreciation on Fixed assets (including buildings and related equipment rented out and included under current assets as stocks) is provided on a straight line method, at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, or based on the estimated useful lives of assets (as mentioned below), whichever is higher, as applicable: Description Estimated useful life (years) Leasehold land Over the effective life of the lease Buildings Plant and machinery 4-20 Computers and software 2-6 Furniture and fi xtures Offi ce equipment 8 Vehicles 2-10 Intangibles software 3-5 Depreciation in respect of assets relating to the power generating division of one of the subsidiary companies of the Group is provided on the straight line method in terms of the Electricity (Supply) Act, 1948 on the basis of Central Government Notifi cation No. S.O 266 (E) dated March 29, 1994, from the year immediately following the 135

138 Schedules forming part of the Consolidated Financial Statements (Contd...) year of commissioning of the assets in accordance with the clarifi cation issued by the Central Electricity Authority as per the accounting policy specifi ed under the Electricity (Supply) Annual Accounts Rules, Depreciation on revalued properties of certain overseas hotel properties is charged to profi t or loss. On subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the property revaluation reserve is transferred directly to retained earnings. v) Leasehold land under, perpetual lease are not being amortised. The leasehold land, other than perpetual lease, are being amortized over their respective lease periods. 6. Intangibles Computer Softwares Softwares which are not integral part of the hardware are classifi ed as intangibles and is stated at cost less accumulated amortisation. Softwares are amortised over the effective useful life of fi ve years. Goodwill The difference between the cost to the Group of Investment in Subsidiaries and Joint Ventures and the proportionate share in the equity of the investee company as at the date of acquisition of stake is recognized in the consolidated fi nancial statements as Goodwill or Capital Reserve, as the case may be. 7. Investments Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost and provision for diminution in their value, other than temporary, is made in the fi nancial statements. Profi t/ loss on sale of investments is computed with reference to the average cost of investment. In respect of Life Insurance business, investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory & Development Authority (Investment) Regulations, These Investments are recorded at cost on date of purchase including brokerage & statutory levies. 8. Stocks Stocks are valued as under i) Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ approximate average cost/ as revalued on conversion to stock and net realizable value. Cost includes land (including development rights) acquisition cost, borrowing cost, estimated internal development costs and external development charges. ii) Constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials, and is valued at lower of cost/ estimated cost and net realisable value. iii) In case of SEZ projects, constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost, development construction materials, and is valued at lower of cost/ estimated cost, and net realisable value. iv) Development rights represents amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in identifi ed land and constructed properties, the acquisition of which is at an advanced stage. v) Cost of construction/ development material is valued at lower of cost or net realisable value. vi) Rented buildings and related equipments are valued at cost less accumulated 136

139 depreciation. vii) In respect of the power generating division of one of the subsidiary company (Eastern India Powertech Limited), materials & components and stores & spares are valued at lower of cost or net realisable value. The cost is determined on the basis of moving weighted average. Loose tools are valued at depreciated value. Depreciation has been provided on a straight line method at the rate of ten per cent per annum. viii) Stocks for maintenance and recreational facilities are valued at cost or net realisable value, whichever is lower. Cost of inventories is ascertained on weighted average basis. ix) Inventories at retail chain outlets are valued at lower of cost, computed on a moving weighted average basis and estimated net realisable value after providing for cost of obsolescence & other anticipated losses wherever considered necessary. 9. Revenue recognition (i) Revenue from constructed properties Revenue from constructed properties other than SEZ projects is recognised on the percentage of completion method. Total sale consideration as per the duly executed agreement to sell / application containing salient terms of agreement to sell, is recognised as revenue based on the percentage of actual project costs incurred thereon to total estimated project cost, subject to such actual cost incurred being 30 per cent or more of the total estimated project cost. Project cost includes cost of land, cost of development rights, estimated construction and development cost of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognised in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognised immediately. For SEZ projects, revenue from development charges is recognised on the percentage of completion method in accordance with the terms of co-developers agreements. The total development charges as per the co-developer agreement / MOU, read with addendum, if any, entered into is recognised as revenue based on the percentage of actual project cost incurred thereon to total estimated project cost subject to such actual cost incurred being 30% or more of the total estimated project cost. The project cost includes estimated construction and development cost of such project. Revenue from lease of land pertaining to such projects is recognised in accordance with the terms of the Co-developer agreements on accrual basis. (ii) Sale of land and plots Sale of land and plots (including development rights) is recognised in the fi nancial year in which the agreement to sell / application containing salient terms of agreement to sell is executed. Where the Company has any remaining substantial obligations as per agreements, revenue is recognised on percentage of completion method as per (i) above. (iii) Construction contracts (relating to one of the Joint Ventures) a. Revenue from cost plus contracts is recognised with respect to the recoverable costs incurred during the period plus the margin in accordance with the agreement. b. Revenue from fi xed price contract is recognized under percentage of completion method. Percentage of completion method is determined as a proportion of cost incurred upto the 137

140 Schedules forming part of the Consolidated Financial Statements (Contd...) (iv) reporting date to the total estimated contract cost. Power Supply a. Revenue from power supply together with claims made on customers is recognised in terms of power purchase agreements entered into with the respective purchasers. b. Revenue from energy systems development contracts is recognised on percentage of completion method and accounted for inclusive of excise duty recovered, where applicable. Accordingly, revenue is recognised when cost incurred (including appropriate portion of allocable overheads) on the contract is estimated at 30 per cent or more, on the total cost to be incurred (including all foreseeable losses and an appropriate portion of allocable overheads) for the completion of contract, wherever applicable. c. Revenue from wind mill power projects is recognised on the basis of actual power sold (net of reactive energy consumed), as per the terms of the relevant power purchase agreements with the purchasers. (v) Hospitality services and Recreational facility income a. Subscription and non refundable membership fee is recognised on proportionate basis over the period of the subscription/ membership. b. Revenue from food and beverage is recorded net of sales tax/ value added tax and discounts. c. Sales of merchandise are stated net of goods sold on consignment basis as agents. d. Revenue from hotel operations and related services is recognised net of discounts and sales related taxes in the period in which the services are rendered. e. Income from golf operations, course capitation, sponsorship etc. is fi xed and recognised as per the agreement with the parties, as and when services are rendered. f. Sale of cinema tickets is stated net of discounts. (vi) Life Insurance a. Premium is recognized as income when due. Unallocated premium on lapsed policies is not recognized as income unless reinstated. b. For linked business, premium income is recognized when the associated units are allocated. Top up premium (i.e. premium paid in excess of annual target premium as per policy contract) are recognized as single premium. Fees on linked policies including fund charges etc. are recovered from the linked fund & recognized in accordance with terms & conditions of the policies. c) Premium ceded is accounted at the time of recognition of premium income in accordance with treaty or in principle agreement with the reinsurers. (vii) Retail Chain Outlets Sales are recognized when signifi cant risks and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts, rebates and duties. (viii) Others a. Revenue from design and consultancy services is recognised on percentage of completion method to the extent it is probable that the economic benefi ts will fl ow to the group and the revenue can be reliably measured. b. Revenue in respect of maintenance services is recognised on an accrual 138

141 basis, in accordance with the terms of the respective contract. c. Dividend income is recorded when the right to receive the dividend is established. d. Service receipts and interest from customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful. e. Interest Income is accounted for on time proportion basis taking into account the amount outstanding and the applicable rate of interest. f. Share of profi t/ loss from fi rms in which the company is a partner is accounted for in the fi nancial year ending on (or immediately before) the date of the balance sheet. 10. Unbilled receivables Unbilled receivables disclosed under schedule 11 - Other Current Assets represents revenue recognized based on Percentage of completion method (as per para no. 9(i) and 9(ii) above), over and above the amount due as per the payment plans agreed with the customers. 11. Cost of revenues i) Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, cost of development rights, construction and development cost, construction materials, which is charged to the profi t & loss account based on the percentage of revenue recognised as per accounting policy 9 (i) above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the applicable project. For SEZ projects, cost of constructed properties includes estimated internal development costs, external development charges, construction costs and development/ construction materials, which is charged to the profi t & loss account based on the percentage of revenue recognised as per accounting policy 9(i) above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the applicable project. ii) Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the profi t & loss account based on the percentage of land/ plotted area in respect of which revenue is recognised as per accounting policy 9 (ii) above to the saleable total land/ plotted area of the scheme, in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the applicable scheme. 12. Borrowing costs Borrowing costs that are attributable to the acquisition and/or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with Accounting Standard AS-16 Borrowing Costs. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Capitalisation of borrowing costs is suspended in the period during which the active development is delayed due to, other than temporary, interruption. All other borrowing costs are charged to the profi t & loss account as incurred. 13. Taxation Tax expense comprises current, deferred tax and fringe benefi t tax and is determined and computed at the individual entity level. Current income-tax and fringe benefi t tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 and in the overseas 139

142 Schedules forming part of the Consolidated Financial Statements (Contd...) branches / companies as per the respective tax laws. Deferred income tax refl ects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Provision for fringe benefi t tax for the year has been determined in accordance with the provisions of Section 115 WC of the Income Tax Act, Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities across various countries of operation are not set off against each other as the Company does not have a legal right to do so. Deferred tax assets are recognized only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Group entity has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supposed by convincing evidence that they can be realized against future taxable profi ts. At each balance sheet date, the Group reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain, as the case may be, that suffi cient future taxable income will be available against which such deferred tax assets can be realized. 14. Lease transactions a) Where a Group entity is the lessee Finance Leases, which effectively transfer to the lessee substantially all the risks and benefi ts incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the fi nance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized. If there is no reasonable certainty that the Group entity will obtain the ownership by the end of lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. Leases, where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased item, are classifi ed as operating leases. Operating lease payment are recognized as an expense in the profi t & loss account on straight line basis over the lease term. b) Where a Group entity is the lessor Leases which effectively transfer to the lessee substantially all the risks and benefi ts incidental to ownership of the leased item are classifi ed and accounted for as fi nance lease. Assets subject to operating leases are included in fi xed assets / current assets/ investment properties. Rent (Lease) income is recognized in the profi t & loss account on a straight line basis over the lease term. Costs, including depreciation are recognized as an expense in the profi t & loss account. Initial direct costs such as legal costs, brokerage costs etc. are recognized immediately in the profi t & loss account. 15. Foreign currency transactions a) Relating to Overseas entities Indian Rupee is the reporting currency for the Group. However, reporting currencies of certain non-integral overseas subsidiaries are different from the reporting currency of the Group. The translation of local currencies into Indian Rupee is performed for assets and liabilities (excluding share capital, 140

143 opening reserves and surplus), using the exchange rate as at the balance sheet date. Revenues, costs and expenses are translated using weighted average exchange rate during the reporting period. Share capital, opening reserves and surplus are carried at historical cost. The resultant currency translation exchange gain/ loss is carried as foreign currency translation reserve under reserves and surplus. Investments in foreign entities are recorded at the exchange rate prevailing on the date of making the investment. Income and expenditure items of integral foreign operations are translated at the monthly average exchange rate of their respective foreign currencies. Monetary items at the balance sheet date are translated using the rates prevailing on the balance sheet date. Non - monetary assets are recorded at the rates prevailing on the date of the transaction. b) Relating to Indian entities Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are converted at the year-end exchange rate. Income and expenditure of the liaison offi ce at London, is translated at the yearly average rate of exchange. The exchange differences arising on such conversion and on settlement of the transactions is recognised in the profi t and loss account. In terms of the notifi cation and further clarifi cation issued by the Institute of Chartered Accountants of India for Accounting Standard Changes in Foreign Exchange Rates (AS)-11, the exchange differences on long term foreign currency monetary items are adjusted in the cost of depreciable capital assets. 16. Employee benefits Expenses and liabilities in respect of employee benefi ts are recorded in accordance with Revised Accounting Standard 15 - Employee Benefi ts (Revised 2005) issued by the Institute of Chartered Accountants of India (the ICAI ). i) Provident fund Certain entities of the group make contributions to a statutory provident fund trust set up in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, In terms of the Guidance on implementing the revised AS 15, issued by the Accounting Standard Board of the ICAI, the provident fund trust set up by the Company is treated as a defi ned benefi t plan since the Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any is recognized as an expense in the period in which services are rendered by the employee. Certain other entities of the Group, make contribution to the statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provision Act, 1952 which is a defi ned contribution plan and contribution paid or payable is recognized as an expense in the period in which the services are rendered. ii) Gratuity Gratuity is a post employment benefi t and is in the nature of a defi ned benefi t plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defi ned benefi t/ obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defi ned benefi t/ obligation is calculated at or near the balance sheet 141

144 Schedules forming part of the Consolidated Financial Statements (Contd...) date by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the profi t & loss account in the year in which such gains or losses are determined. For certain consolidating entities, contributions made to an approved gratuity fund (funded by contributions to LIC under its group gratuity scheme) are charged to revenue on accrual basis. iii) Compensated absences Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefi t expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. iv) Superannuation benefit Superannuation is in the nature of a defi ned benefi t plan. For certain consolidating entities, contributions made towards superannuation fund (funded by payments to Life Insurance Corporation of India under its Group Superannuation Scheme) are charged to revenue on accrual basis. v) Cash Settled Options Accounting value of Cash Settled Options granted to employees under the Employees Shadow / Phantom Option Scheme is determined on the basis of intrinsic value representing the excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. The same is charged as employee benefits over the vesting period, in accordance with Guidance Note No. 18 Share Based Payments, issued by the ICAI. vi) Other short term benefits Expense in respect of other short term benefi ts is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. vii) Overseas entities Post employment benefits Defined contribution Payments to defi ned contribution retirement benefi t plans are charged as an expense as they fall due. Payments made to state-managed retirement benefi t schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defi ned contribution plans where the Group s obligations under the plans are equivalent to those arising in a defi ned contribution retirement benefi t plan. Defined benefit liability Management estimates the defi ned benefi t liability annually. The actual outcome may vary due to estimation uncertainties. The estimate of its defi ned benefi t liability is based on standard rates of infl ation, medical cost trends and mortality. It also takes into account the Group s specifi c anticipation of future salary increases. Discount factors are determined close to each year-end by reference to high quality corporate bonds that are denominated in the currency in which the benefi ts will be paid and that have terms to maturity approximating to the terms of the related pension liability. Estimation uncertainties exist particularly with 142

145 regard to medical cost trends, which may vary signifi cantly in future appraisals of the Group s defi ned benefi t obligations. Employee Leave Entitlement Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. 17. Employee Stock Option Plan (ESOP) The accounting value of stock options is determined on the basis of intrinsic value representing the excess of the market price on the date of the grant over the exercise price of the shares granted under the Employees Stock Option Scheme of the parent Company, and is amortised as Deferred employees compensation on a straight line basis over the vesting period in accordance with the SEBI (Employees stock option scheme and Employees stock purchase scheme) Guidelines, 1999 and guidance note 18 Share Based payments issued by the ICAI. 18. Impairment of assets Goodwill Goodwill is tested for impairment on an annual basis. If on testing, any impairment exists, the carrying amount of Goodwill is reduced to the extent of any impairment loss and such loss is recognised in the profi t & loss account. Other assets At each balance sheet date, the Group assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the profi t & loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refl ected at the recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the profi t & loss account. 19. Contingent liabilities and provisions The Group makes a provision when there is a present obligation as a result of a past event where the outfl ow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Possible future obligations or present obligations that may but will probably not require outfl ow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the consolidated Financial Statements. 20. Earnings per share Basic earnings per share is calculated by dividing the net profi t or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split, and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profi t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The period during which, number of dilutive potential equity shares change frequently, weighted average number of shares are computed based on a mean date in the quarter as impact is immaterial on earnings per share. 143

146 Schedules forming part of the Consolidated Financial Statements (Contd.) SCHEDULE: 24 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Share capital of the Company a. Share capital includes: 5,877,850 equity shares of Rs. 2 each (originally 1,175,570 shares of Rs. 10 each) fully paid were allotted pursuant to a scheme of amalgamation of DLF United Limited with the Company, without payment being received in cash. 1,338,603,595 equity shares of Rs. 2 each fully paid issued as bonus shares by way of capitalisation of free reserves and share premium account. b. During the year, calls-in-arrears reduced by Rs lacs, comprising Share Capital of Rs lacs and Share Premium of Rs lacs. c. During the year the Company issued Public Announcement (PA) and Corrigendum to PA dated September 30, 2008 and October 15, 2008 respectively, for buy back of its shares from the open market at a price not exceeding Rs. 600 per share for an aggregate amount not exceeding Rs. 110,000 lacs. Under the buy back programme, the Company has bought back 7,623,567 equity shares till March 31, Out of the above, 7,618,567 equity shares were extinguished before March 31, 2009 and the remaining 5,000 shares were extinguished after March 31, d. Pursuant to the transactions in (b) & (c) above, the paid up share capital of the Company decreased by Rs lacs, during the year. 2. Reserves and Surplus Pursuant to the above buyback programme, Capital redemption reserve has been created out of General reserve for Rs lacs being the nominal value of shares bought back under the buyback programme in terms of Section 77AA of the Companies Act, Secured loans a. Facilities with banks comprise, term loans and overdraft facilities which are secured by equitable mortgages of certain freehold and leasehold lands/ properties of the Company/ subsidiary Companies/ sellers / lessor, land under agreement to sell and/ or against future receivables of the Company / Subsidiary Companies. b. Loan from others comprise of term loans from fi nancial institutions which are secured by equitable mortgages of certain lands / properties of some subsidiary entities/associates/group companies and the receivables and / or against future receivables of the Company/subsidiary companies. c. Loans in respect of aircraft, wind mill projects, power projects and vehicles are secured by hypothecation of the respective assets thus purchased. d. i) 5000, 13.70% non-convertible redeemable debentures and 7200, 14% non-convertible redeemable debentures, issued to the Life Insurance Corporation of India are secured by Pari Passu charge over certain lands/properties of the company/subsidiary companies. ii) 1000, 14% non-convertible redeemable debentures, issued to Standard Chartered Bank are secured by a charge over the land of the company. 4. Unsecured Loans i) Fixed deposits include unclaimed deposits amounting to Rs. Nil (previous year Rs lacs) as the unclaimed deposits have been credited to Investor Education and Protection Fund. ii) a) 12.50% compulsory convertible debentures of Rs. 225,000 each are 144

147 convertible into equity shares of Rs. 10 each on the expiry of 7 years from the date of their respective allotment. b) 12% compulsory convertible debentures of Rs. 50,000 each are convertible into equity shares of Rs. 10 each on the expiry of 6 years from the date of their respective allotment. c) 12.50% compulsory convertible debentures of Rs. 75,000 each are convertible into equity shares of Rs. 10 each on the expiry of 7 years from the date of their respective allotment. d) 12.50% compulsory convertible debentures of Rs. 27,500 each are convertible into equity shares of Rs. 10 each on the expiry of 7 years from the date of their respective allotment. 5. A subsidiary of the Company has purchased land with an obligation to provide built up area to third parties in consideration of settlement of disputes, claims, rights and entitlements of such parties. As the cost in this respect is not currently ascertainable, no accrual for these liabilities is considered necessary at present. 6. a) Wind Mill projects of the Company and of one of the subsidiary company, are entitled for tax holiday under Section 80-IA of the Income tax Act, The computation of tax (current and deferred) has been done as per Accounting Standard 22 Accounting for taxes on Income and Accounting Standard Interpretation 3, issued by the ICAI. b) Profi ts from Special Economic Zone ( SEZ ) business of the Company and three of subsidiary companies are exempt under Section 80-IAB of the Income Tax Act, The Dividend declared out of such SEZ profi ts are also exempt from Dividend Distribution Tax under the provisions of Section 115-O(6) of the Income Tax Act, In line with the above provisions, the Company has provided dividend tax only on the proportionate amount of dividend declared out of non SEZ profi ts. 7. Non cash transactions During the year, the Company converted advance of Rs. 15,000 lacs given for land purchase into a long term investment in DLF Limitless Developers Private Limited, a joint venture. 8. Employee Benefits a) Gratuity (Non Funded) Amount recognised in the profi t & loss account is as under Description Amount Current service cost Interest cost Actuarial loss recognised during the year Movement in the liability recognised in the balance sheet is as under: Description Amount Present value of defi ned benefi t obligation 1, as at March 31, 2008 Prior period adjustment 0.00 Current service cost Interest cost Actuarial (gain)/ loss recognised during the year Benefi ts paid (412.20) Present value of defi ned benefi t obligation 1, as at March 31, 2009 b) Gratuity (Funded) Changes in Defined Benefit Obligation Amount Present value obligation as at March 31, Interest cost Past service cost 0.00 Current service cost Benefi ts paid (10.69) Acturial (gains) / losses on obligations Present value obligation as at March 31,

148 Schedules forming part of the Consolidated Financial Statements (Contd.) Change in Fair Value of Plan Assets Fair value of Plan assets as at March 31, Expected return on plan assets 7.55 Actuarial gain (6.20) Contribution Benefi ts paid (10.69) Fair value of Plan assets as at March 31, Reconciliation of present value of defined benefit obligation and the fair value of plan assets Present value obligation as at March 31, Fair value of plan assets as at March 31, Net asset / (liability) recognized in Balance Sheet (47.54) Expense recognised in the profit & loss account Current service cost Past service cost 0.00 Interest cost 7.93 Expected return on plan assets (7.11) Net actuarial (gain)/loss recognised in the year 9.74 Total expenses recognized in the profi t & loss account For determination of the gratuity liability of the Company, the following actuarial assumptions were used: Description Particulars Discount Rate (per annum) 8.00% Rate of increase in compensation levels 7.50% c) Compensated absences (non funded) Amount recognised in the profi t & loss account is as under: Description Amount Current service cost Interest cost Actuarial loss recognised during the year Capitalized during the year - Past service cost (4.73) Movement in the liability recognised in the balance sheet is as under: Description Amount Present value of defi ned benefi t obligation as at March 31, , Prior period adjustment 0.00 Current service cost Interest cost Actuarial loss recognised during the year Benefi ts paid (439.38) Present value of defi ned benefi t obligation as at March 31, , d) Compensated Absences (Funded) Changes in Defined Benefit Obligation Amount Present value obligation as at March 31, Interest cost 7.01 Past service cost 0.00 Current service cost Benefi ts paid (42.06) Acturial (gains) / losses on obligations (4.36) Present value obligation as at March 31, Change in Fair Value of Plan Assets Amount Fair value of Plan assets as at March 31, Expected return on plan assets 0.00 Actuarial gain 0.00 Contribution 0.00 Benefi ts paid Fair value of plan assets as at March 31, Reconciliation of present value of defi ned benefi t obligation and the fair value of plan assets Present value obligation as at March 31, 2009 Fair value of plan assets as at March 31, 2009 Amount Net asset / (liability) recognized in balance sheet (195.40) Expense recognised in the profit & loss account Current service cost Past service cost 3.00 Interest cost 4.17 Expected return on plan assets 0.00 Net actuarial (gain)/loss recognised in the year Total expenses recognized in the profi t & loss account For determination of the liability in respect of compensated absences, the following actuarial assumptions were used: 146

149 Description Particulars Discount rate (per annum) 8.00% Rate of increase in compensation levels 7.50% e) Provident fund Contribution made by the group companies, to the provident fund trust setup by the Company and to the Employee Provident Fund Commissioner during the year is Rs. 1, lacs (previous year Rs lacs). Relating to Provident Fund Trust, at the year end, no interest shortfall in provident fund remains unprovided for as there is surplus in the fund. In the absence of guidance on actuarial valuation of Fund liability, which is to be issued by the Actuarial Society of India, the actuarial valuation liability towards Provident Fund is not feasible. Accordingly, other related disclosures in respect of provident fund have not been furnished. 9. Related party disclosures a) Relationship (i) Joint Ventures 1 Delanco Real Estates Private Limited 2 DLF Laing O' Rourke (India) Limited 3 DLF Limitless Developers Private Limited 4 DLF SBPL Developers Private Limited 5 Kujjal Builders Private Limited 6 Niharika Shopping Mall 7 WSP Engineering Services Private Limited 8 Mount Mary Residential Projects 9 GSG DRDL Consortium 10 DLF SEZ Holdings Limited 11 DLF Gayatri Home Developers Private Limited (formerly Arsh Real Estates Private Limited) 12 Saket Courtyard Hospitality Private Limited ( formerly DLF Saket Hotels Private Limited) 13 Banjara Hills Hyderabad Complex (ii) Associates 1 Joyous Housing Limited 2 Thalia Infratech Private Limited 3 Turan Infratech Private Limited 4 DLF New Gurgaon Homes Developers Private Limited Ferragamo Retail India Private Limited ( earlier 5 Nelia Retail Private Limited) 6 Giorgio Armani India Private Limited 7 DLF Pramerica Advisory Private Limited 8 Regional D & R Limited 9 Seven Seas Resorts and Leisure Inc. 10 Islan Aviation Limited 11 Revlys SA 12 Villajena 13 Surin Bay Co. Limited 14 P.T Jawa Express Amanda Indah 15 Lillion Builders and Developers Private Limited 16 Zeus Infrastructure Private Limited (iii) Key Management Personnel (of the parent Company) a) b) c) d) e) Name Dr. K.P. Singh Mr. Rajiv Singh Mr. T.C. Goyal Ms. Pia Singh Mr. K. Swarup Designation Chairman Vice Chairman Managing Director Whole-time Director Executive Director Relatives (Relation)* Ms. Renuka Talwar (Daughter) Mrs. Kavita Singh (Wife), Ms. Savitri Devi Singh (Daughter) Mr. Dhiraj Sarna (Husband) Mrs. Veena Swaroop (Wife) *Relatives of key management personnel (other than key management personnel themselves) with whom there were transactions during the year (iv) Other enterprises under control of the key management personnel (of parent company) and their relatives : 1 A.S.G. Realcon Private Limited 2 Adampur Agricultural Farm 3 Adept Real Estate Developers Private Limited 4 Aeshya Estates Private Limited 5 AGS Buildtech Private Limited 6 Altamount Real Estate Developers Private Limited 7 Angus Builders & Developers Private Limited 8 Antriksh Properties Private Limited 9 Anubhav Apartments Private Limited 10 Aquarius Builders and Developers Private Limited 11 Arihant Housing Company* 12 Atria Partners 13 Bansal Development Company Private Limited 14 Belicia Builders & Developers Private Limited 147

150 Schedules forming part of the Consolidated Financial Statements (Contd.) 15 Beryl Builders & Constructions Private Limited 16 Beverly Park Operation and Maintenance Services Private Limited 17 Buland Consultants and Investments Private Limited 18 Caraf Builders & Constructions Private Limited 19 Centre Point Property Management Services Private Limited 20 Ch.Lal Chand Memorial Charitable Trust 21 Desent Promoters and Developers Private Limited 22 Diana Retail Private Limited 23 Digital Talkies Private Limited 24 Dilly Builders & Developers Private Limited 25 Dinky Builders & Developers Private Limited 26 DLF Assets Private Limited 27 DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) 28 DLF Commercial Enterprises 29 DLF Foundation 30 DLF Info City Developers (Chandigarh) Limited 31 DLF Info City Developers (Kolkata) Limited 32 DLF Investments Private Limited 33 DLF M.T.FBD Medical and Commiunity Facility Charitable Trust 34 DLF Q.E.C. Educational Charitable Trust 35 DLF Q.E.C. Medical Charitable Trust 36 DLF Raghvendra Temple Trust 37 DLF SEZ Parks Private Limited (formerly Cian Builders and Developers Private Limited) 38 Elanor Builders & Developers Private Limited 39 Excel Housing Construction Private Limited 40 Exe. Of The Estate of Lt. Ch. Raghvendra Singh 41 Exe. Of The Estate of Lt. Smt. Prem Mohini 42 Family Idol Shri Radha Krishan Ji 43 Family Idol Shri Shiv Ji 44 Galena Builders & Constructions Private Limited 45 Gangrol Agricultural Farm & Orchard 46 General Marketing Corporation 47 Glaze Builders and Developers Private Limited 48 Haryana Electrical Udyog Private Limited 49 Herminda Builders & Developers Private Limited 50 Hitech Property Developers Private Limited 51 Indira Trust 52 Ishtar Retail Private Limited 53 Jhandewalan Ancillaries and Investments Private Limited 54 K. P. Singh HUF 55 Kohinoor Real Estates Company * 56 Krishna Public Charitable Trust 57 Lal Chand Public Charitable Trust 58 Lion Brand Poultries 59 Lyndale Holdings Private Limited 60 Maaji Properties and Development Company* 61 Macknion Estates Private Limited 62 Madhukar Housing and Development Company * 63 Madhur Housing and Development Company* 64 Magna Real Estate Developers Private Limited 65 Mallika Housing Company* 66 Megha Estates Private Limited 67 Northern India Theatres Private Limited 68 Pace Financial Services 69 Panchsheel Invetsment Company* 70 Panchvati Estates Private Limited 71 Parvati Estates Private Limited 72 Pia Pariwar Trust 73 Plaza Partners 74 Power Overseas Private Limited 75 Prem Traders & Investments Private Limited 76 Prem s Will Trust 77 Pushpak Builders and Developers Private Limited 78 Pushpavali Builders and Developers Private Limited 79 Raghvendra Public Charitable Trust 80 Raisina Agencies and Investments Private Limited 81 Rajdhani Investments and Agencies Private Limited 82 Realest Builders and Services Private Limited 83 Renkon Agencies Private Limited 84 Renkon Partners 85 Renuka Pariwar Trust 86 R.R Family Trust 87 Sagarika Real Estate Developers Private Limited 88 Sambhav Housing and Development Company * 89 Sanidhya Constructions Private Limited 90 Savitri Studs and Farming Company Private Limited 91 Sidhant Housing and Development Company * 92 Singh Family Trust 93 Sketch Investment Private Limited 94 Smt. Savitri Devi Memorial Charitable Trust 95 Solace Housing and Construction Private Limited 96 Solange Retail Private Limited 97 Sudarshan Estates Private Limited 98 Sukh Sansar Housing Private Limited 99 Sukomal Builders and Developers Private Limited 100 Sulekha Builders and Developers Private Limited 101 Super Mart One Property Management Services Pvt. Ltd. 102 Super Mart Two Property Management Services Pvt. Ltd. 103 Trinity Housing and Construction Company* 104 Udyan Housing and Development Company* 105 Ultima Real Estate Developers Private Limited 106 Universal Management and Sales Private Limited 107 Upeksha Real Estate Developers Private Limited 108 Uplift Real Estate Developers Private Limited 109 Urva Real Estate Developers Private Limited 110 Uttam Builders and Developers Private Limited 111 Uttam Real Estates Company* 112 Vanutsar Properties Private Limited 113 Vishal Foods and Investments Private Limited 114 Windsor Complex Property Management Services Private Limited 115 Yashika Properties and Development Company * * A private company with unlimited liability. 148

151 b) The following transactions were carried out with related parties in the ordinary course of business (Net of Service Tax, if any) Description # Joint ventures and Associates Key Management Personnelt (KMP) and their relatives Enterprises over which KMP is able to exercise significant influence Interest received 1, , Rent and licence fee received Directors remuneration - - 1, , Expenses recovered 2, Expenses paid Technical fees and Professional charges paid Payment for construction work 30, , Rent paid Loan taken , Loan refunded Interest paid , , Miscellaneous receipts (Income) Loans and advances given 2, , Loans refunded back , Purchase of investments (Gross) 20, Advances given , Share Application money paid Advance received under agreement to sell 17, , , Guarantees given , Sale of constructed properties , , Sale of development rights - 21, Purchase of land and material Reimbursement claimed for material cost , Cancellation of sale of constructed properties ,89, c) Balance at the end of the year Description #Joint ventures and Associates Key Management Personnel (KMP) and their relatives (Rs. In lacs) Enterprises over which KMP is able to exercise significant influence Investments 36, , Share application money Earnest money and part payments under agreement to purchase land/ constructed properties Creditors/Payables 5, , , Managerial commission payable , Loans (Liability)-Unsecured Loan 1, , Security deposit given Advances/Amount recoverable 8, , , , Expenses recoverable

152 Schedules forming part of the Consolidated Financial Statements (Contd.) Description #Joint ventures and Associates Key Management Personnel (KMP) and their relatives Enterprises over which KMP is able to exercise significant influence Guarantees given , Loans and interest receivable 1, , Unbilled receivables , , Realisation under agreement to sale - 22, , # Complete transactions have been reported before inter group elimination. Description Joint Ventures/ Associates Transactions during the year Name of the entity Interest received Thalia Infratech Private Limited 1, Turan Infratech Private Limited Rent and licence fee received WSP Engineering Services Private Limited Expenses recovered DLF New Gurgaon Homes Developers Private Limited 2, Sale of Development rights DLF New Gurgaon Homes Developers Private Limited - 21, Expenses paid Delanco Real Estate Private Limited Technical Fees & Professional WSP Engineering Services Private Limited Charges paid Payment for Construction Work DLF Laing O Rourke (India) Limited 30, , Rent paid DLF Laing O Rourke (India) Limited Loan taken Delanco Real Estate Private Limited , Loan refunded Delanco Real Estate Private Limited Interest paid Delanco Real Estate Private Limited Miscellaneous receipts (Income) WSP Engineering Services Private Limited DLF Limitless Developers Private Limited Loans and advances given Delanco Real Estate Private Limited Kujjal Builders Private Limited Ferragamo Retail India Private Limited (earlier Nelia 1, Retail Private Limited) Thalia Infratech Private Limited - 10, Turan Infratech Private Limited - 2, Loans refunded back Ferragamo Retail India Private Limited (earlier Nelia Retail Private Limited ) Thalia Infratech Private Limited Delanco Real Estate Private Limited Purchase of investments (Gross) DLF Limitless Developers Private Limited 20, Thalia Infratech Private Limited Turan Infratech Private Limited Advances given Joyous Housing Limited {formerly Mangal Shrusti , Gruh Nirmiti Private Limited} Share Application money paid Ferragamo Retail India Private Limited (earlier Nelia Retail Private Limited) Advance received under agreement to sell DLF New Gurgaon Homes Developers Private Limited 17,

153 (Rs. In lacs) Balance at the end of the year Name of the entity Investments DLF Limitless Developers Private Limited 20, Kujjal Builders Private Limited 4, , Surin Bay Co. Limited 5, , Share application money Ferragamo Retail India Private Limited (earlier Nelia Retail Private Limited ) Earnest money and part payments DLF Laing O Rourke (India) Limited under agreement to purchase land/ constructed properties Creditors/Payables DLF Laing O Rourke (India) Limited 5, , Loans (Liability)-Unsecured Loan Delanco Real Estate Private Limited 1, , Security deposit given DLF Laing O Rourke (India) Limited Advances/Amount recoverable Joyous Housing Limited { formerly Mangal Shrusti 7, , Gruh Nirmiti Private Limited } DLF Limitless Developers Private Limited - 2, Expenses recoverable DLF Laing O Rourke (India) Limited Loans and interest receivable Delanco Real Estate Private Limited 1, Kujjal Builders Private Limited Thalia Infratech Private Limited - 10, Turan Infratech Private Limited - 2, Sundry Debtors WSP Engineering Services Private Limited Realisation under agreement to sell DLF New Gurgaon Homes Developers Private Limited - 22, Description Enterprises over which KMP is able to exercise significant influence Transactions during the year Name of the entity Interest received DLF Q.E.C. Medical Charitable Trust DLF Info City Developers (Chandigarh) Limited DLF Info City Developers (Kolkata) Limited - 2, Rent and licence fee received DLF Assets Private Limited Expenses recovered DLF Assets Private Limited DLF Info City Developers (Kolkata) Limited DLF Commercial Enterprises Expenses paid DLF Assets Private Limited DLF Q.E.C. Educational Charitable Trust Pace Financial Services Rent paid DLF Q.E.C. Medical Charitable Trust DLF Q.E.C. Educational Charitable Trust Realest Builders and Services Private Limited DLF Info City Developers (Kolkata) Limited Interest paid DLF Assets Private Limited 16, , Miscellaneous receipts (Income) DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) Loans and advances given DLF Q.E.C. Medical Charitable Trust Loans refunded back DLF Q.E.C. Medical Charitable Trust DLF Info City Developers (Chandigarh) Limited - 9, DLF Info City Developers (Kolkata) Limited - 33, Advance received under agreement to sell DLF Assets Private Limited 22, , Guarantees given DLF Assets Private Limited 80, Sale of constructed properties DLF Assets Private Limited 394, , Caraf Builders & Constructions Private Limited - 1,89, Purchase of land & material DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited)

154 Schedules forming part of the Consolidated Financial Statements (Contd.) Description Enterprises over which KMP is able to exercise significant influence Transactions during the year Name of the entity Reimbursement claimed for material cost DLF Assets Private Limited - 10, Cancellation of sale of constructed properties Caraf Builders & Constructions Private Limited - 1,89, Balance at the end of the year Name of the entity Investments Digital Talkies Private Limited Earnest money and part payments under agreement to purchase land/ constructed properties DLF Building & Services Private Limited (formerly Nachiketa Real Estates Private Limited) (Rs. In lacs) (Rs. In lacs) Creditors/Payables DLF Assets Private Limited 3, DLF Q.E.C. Medical Charitable Trust Security deposit given DLF Q.E.C. Educational Charitable Trust DLF Q.E.C. Medical Charitable Trust Advances/amount recoverable Caraf Builders & Constructions Private Limited 64, , Expenses recoverable DLF Commercial Enterprises Guarantees given DLF Assets Private Limited 80, Sundry debtors DLF Assets Private Limited 266, , Unbilled receivables DLF Assets Private Limited 219, , Realisation under agreement to sell DLF Assets Private Limited - 16, Description Key Management Personnel (KMP) and their relatives Transactions during the year Name of the Director Remuneration paid Dr. K.P. Singh Mr. Rajiv Singh Mr. K Swarup Mr. T.C. Goyal Ms. Pia Singh Rent paid Mrs. Veena Swarup Balance at the end of the year Creditors/ amounts payable Dr. K.P. Singh Mr. Rajiv Singh Ms. Pia Singh Mr. K Swarup Managerial commission payable Dr. K.P. Singh Mr. Rajiv Singh Mr. T.C. Goyal Ms. Pia Singh The Group is primarily engaged in the business of colonisation and real estate development, which as per accounting standard 17 on Segment Reporting is considered to be the only reportable business segment. The group is primarily operating in India which is considered as a single geographical segment. 152

155 11. Information to be disclosed in accordance with AS 19 Leases, as issued by the ICAI A. Assets given on lease* Class of Assets Gross Block Depreciation Cumulative As on March 31, 2009 for the year Depreciation as on March 31, 2009 i) Fixed assets Land & Building including interiors 295, , , ii) Current assets (Constructed buildings including land and related equipments) Lease hold 3, Free hold 10, *(includes partly self occupied) The Company has leased facilities under non-cancelable operating leases. The future minimum lease payment receivables in respect of these leases as at March 31, 2009 are Minimum lease payments receivables Amount March 31, 2009 Amount March 31, 2008 (i) Upto one year 56, , (ii) Two to fi ve years 63, , (iii) More than 5 years 3, , Total 124, , B. Assets taken on lease i) Operating lease The minimum operating lease payments for the initial lease period are as under Particulars Not later than one year 5, Later than one year but not later than fi ve years 11, Later than fi ve years 3, Nil Lease payment made during the year recognized in the statement of profi t & loss account 2, , Sub-lease payment received, recognized in the statement of profi t & loss account In respect of DT Cinemas Ltd. ( formerly DLF Services Limited), a subsidiary of DLF Limited, the buildings for Multiplex Theatres are taken on lease with the initial lease terms ranging from 3 to 4.5 years. These leases are further renewable subject to enhancement of rent by 10% on the expiry of the lease period. There are no restrictions imposed for sub leasing as per the lease arrangement. The Company sub-leases the areas in the multiplexes for food courts. 153

156 Schedules forming part of the Consolidated Financial Statements (Contd.) ii) Finance Lease The minimum fi nance lease payments for the initial lease period are as under Particulars Principal Not later than one year Later than one year but not later than fi ve years 5, Later than fi ve years 1, Interest Not later than one year 1, Later than one year but not later than fi ve years 2, Later than fi ve years Employees Stock Option Scheme, 2006 (ESOP) a) During the year ended March 31, 2007, the Company had announced an Employee Stock option scheme (the Scheme ) for all the eligible employees of the Company and its subsidiaries. Under the Scheme, 17,000,000 equity shares have been earmarked to be granted under the Scheme and the same will vest as follows: Block I Block II Block III Year 2 Year 4 Year 6 10% of the total grant 30% of the total grant 60% of the total grant Pursuant to the above Scheme, the employee will have the option to exercise the right within three years from the date of vesting of shares at Rs. 2 per share, being its exercise price. b) As per the Scheme, the remuneration committee has granted options as per details below Grant No. Date of Grant No. of options Granted Outstanding options as on March 31, 2009 (Net of forfeiture) I June 27, ,34,057 31,84,900 II October 10, ,08,077 2,91,177 III July 01, ,45,520 15,14,040 IV October 10, ,60,059 1,57,659 According to the Guidance Note 18 on Share Based Payments issued by ICAI, Rs. 3, lacs have been provided during the year as proportionate cost of these options [including the proportionate cost of 4,51,226 (net of forfeiture 3,81,559 number of options) committed to be granted in the future]. c) Outstanding stock options for equity shares of the Company under the Employees Stock Option Scheme Grant No. Date of Grant Particulars 2009 Exercise Price Rs. Numbers Granted Number of options committed to be granted in the future I July 1, ,84,900 2,93,300 34,78,200 II October 10, ,91,177 88,259 3,79,436 III July 01, ,14, ,14,040 IV October 10, ,57, ,57,659 Total 154

157 d) In accordance with the guidance note 18 Share based payments the following information relates to the stock options granted by the Company. Particulars Stock options (numbers) Range of exercise prices (Rs.) Weightedaverage exercise prices (Rs.) 2009 Weighted-average remaining contractual life (years) Outstanding, beginning of the year 49,62, Granted (Including committed to be 12,76, granted in future) during the year Forfeited during the year 7,10, Exercised during the year Lapsed during the year Outstanding, end of the year 55,29, Exercisable at the end of the year e) The following table summarizes information about stock options outstanding as at March 31, 2009 Options outstanding Options exercisable Range of exercise prices (Rs.) Numbers Weighted average remaining contractual life (Years) Weighted average exercise price (Rs.) Numbers Weighted average exercise price 2 55,29, The Company has calculated the employee compensation cost using the Intrinsic value of the stock options. Had compensation cost been determined in a manner consistent with the fair value method, based on Black Scholes model, the employees compensation cost would have been lower by Rs lacs and proforma profi t after tax would have been Rs. 447, lacs (higher by Rs lacs). On a proforma basis, the basic and diluted earnings per share would have been Rs and Rs respectively. The fair value of the options granted is determined on the date of the grant using the Black- Scholes option pricing model with the following assumptions: Grant 1 Grant ll Grant lll Grant IV Dividend yield (%) Expected life (no. of years) Risk free interest rate (%) Volatility (%) Cash Settled Options As per the scheme of Employee shadow / phantom option, employees are entitled to get cash compensation based on the average market price of Equity Share of the company, upon exercise of Shadow option on a future date. As per the scheme, Shadow options will vest as follows:- Block I Block II End of Year 2 End of Year 4 50% of the total grant 50% of the total grant 155

158 Schedules forming part of the Consolidated Financial Statements (Contd.) Details of outstanding options and the expenses recognized under the employee shadow option scheme is as under :- No. of shadow options outstanding as on March 31, 2009 Exercise price Average market price Fair value of shadow option Total expenses charged to Profit and Loss Account Liability as on March 31, 2009 (No.) Rs./Option Rs./Option Rs./Option Rs. in lacs Rs. in lacs 1,531, , , Investment in Joint Ventures The interest of the Group in major Joint Ventures is listed below Sl. No. Joint Venture Location Principal activities 1. Niharika Shopping Mall Joint venture Mumbai Development and construction of shopping mall Ownership interest 2. DLF Laing O Rourke (India) Limited Gurgaon Construction 50% 3. Kujjal Builders Private Limited New Delhi Construction and development of 50% hotels 4. Delanco Real Estate Private Limited New Delhi Real estate consulting and brokerage 50% 5. WSP Engineering Services Private Gurgaon Project management services 50% Limited ( Till March 30, 2009) 6. Mount Mary Residential Projects Mumbai Development and construction of residential projects 50% 7. DLF Limitless Developers Private Limited New Delhi Construction and development of townships 8. GSG DRDL Consortium Hyderabad Development and construction of shopping malls 9. DLF SEZ Holdings Limited (from August 28, 2008) 10. DLF Gayatri Home Developers Private Limited (formerly Arsh Real Estates Private Limited) 11. DLF SBPL Developers Private Limited (formerly Gazit Builders & Developers Private Limited) 12. Saket Courtyard Hospitality Private Limited (formerly DLF Saket Hotels Private Limited) New Delhi Hyderabad New Delhi Construction and development of townships Development and construction of residential projects Construction and development of townships 50% 50% 50% 50% 50% 50% Gurgaon Hotel operations 50% 13. Banjara Hills Hyderabad Complex Hyderabad Development and construction of shopping malls 50% 15. Contingent liabilities not provided for Particulars a) Guarantees on behalf of third parties 13, , b) Undertaking to buy back preference shares in subsidiary/ associate companies Nil 46, c) Claims against the Group (including unasserted claims) not acknowledged as debts * 16, ,

159 Particulars d) Demand in excess of provisions (pending in appeals): Income-tax 61, , Other taxes 6, e) Letter of credit issued Nil 1, *Interest on certain claims may be payable as and when the outcome of the related claim is determined and has not been included above Capital expenditure commitments 131, , Consolidated fi nancial statements comprise the fi nancial statements of DLF Limited and its subsidiaries, joint ventures and associates as at March 31, 2009 listed below A) Subsidiaries (i) Subsidiaries having accounting year ended March 31, 2009 with the percentage of ownership of DLF Group. Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Aadarshini Real Estate Developers Private Limited India Abhiraj Real Estate Private Limited India Adelie Builders & Developers Private Limited India Adrienne Builders & Constructions Private Limited India Alastair Builders & Developers Private Limited India Alta Builders and Developers Private Limited India Americus Real Estate Private Limited India Amishi Builders & Developers Private Limited India Amoda Builders & Developers Private Limited India Anjuli Builders & Developers Private Limited India Annabel Builders & Developers Private Limited India Bedelia Builders & Constrcutions Private Limited India Belmount Estate Developers Limited India Berenice Real Estate Private Limited India Beverly Park Maintenance Services Limited India Bhamini Real Estate Developers Private Limited India Bhoruka Financial Services Limited India Breeze Constructions Private Limited India Calantha Builders & Developers Private Limited India Callista Builders & Constructions Private Limited India Caressa Builders and Constructions Private Limited India Catriona Builders & Constructions Private Limited India Cee Pee Maintenance Services Limited India

160 Schedules forming part of the Consolidated Financial Statements (Contd.) Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Chaitra Realty Limited India Chakrita Real Estate Developers Private Limited India Chandrajyoti Estate Developers Private Limited India Comfort Buildcon Private Limited India Cyrilla Builders & Constructions Limited India Dalmia Promoters and Developers Private Limited India Dankuni World City Limited (Formerly Brisa Builders & Developers Private Limited) India Delanco Home & Resorts Private Limited India Delanco Realtors Private Limited India Deltaland Buildcon Private Limited India Dhoomketu Builders & Developers Private Limited India Diwakar Estates Limited India DLF Akruti Info Parks (Pune) Limited India DLF Aspinwal Hotels Private Limited India DLF Business Hotels Venture Private Limited India DLF City Centre Limited India DLF Cochin Hotels Private Limited India DLF Comfort Hotels Private Limited India DLF Commercial Complexes Limited India DLF Commercial Developers Limited India DLF Cyber City Developers Limited India DLF Developers Limited (formerly Gandhari Estate Developers Limited) India DLF Emporio Restaurants Limited India DLF Estate Developers Limited India DLF Estates (Delhi) Private Limited (formerly BES Buildcon Private Limited) India DLF Financial Services Limited India DLF Finvest Limited (formerly DLF Info City Developers (Noida) Limited) India DLF Food Courts Private Limited (Formerly DLF Minor Food Courts Private Limited) India DLF Garden City Indore Private Limited (Formerly Ayushi Builders & Developers Private Limited) India DLF Golf Resort Limited India DLF Green Power Private Limited India DLF Haryana SEZ (Ambala) Limited India DLF Haryana SEZ (Gurgaon) Limited India DLF Hilton Hotels (Mysore) Private Limited India DLF Hilton Hotels Limited (Formerly DLF Hotels & Resorts Limited ) India DLF Home Developers Limited India DLF Home Durgapur Private Limited (Formerly Logas Real Estate Developers Private Limited) DLF Homes Ambala Private Limited(formerly Nabhoj Builders & Developers Private Limited) India India

161 Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, DLF Homes Goa Private Limited (formerly Saravati Builders & Constructions Private Limited) India DLF Homes Kokapet Private Limited (formerly Kanan Real Estate Private Limited) India DLF Homes Panchkula Private Limited (Formerly Hina Buildcon Private Limited) India DLF Homes Pune Private Limited (Formerly DLF Homes Indore Private Limited) India DLF Homes Rajapura Private Limited (Formerly Muafa Real Estate Private Limited) India DLF Homes Services Private Limited (Formerly Aedos Realtors Private Limited) India DLF Hospitality and Recreational Limited India DLF Hotel Holdings Limited India DLF Hotels & Apartments Private Limited India DLF Housing and Construction Limited India DLF Info City Developers (Bangalore) Limited India DLF Info City Developers (Chennai) Limited India DLF Info City Developers (Hyderabad) Limited India DLF Info Park Developers (Chennai) Limited India DLF Infra Holdings Limited India DLF Inns Limited India DLF Jaipur Convention Center Private Limited India DLF Land Limited India DLF Luxury Hotels Limited India DLF Metro Limited India DLF New Delhi Convention Centre Limited India DLF New Gurgaon Homes Developers Private Limited India DLF New Gurgaon Offi ces Developers Private Limited (Formerly Nevina Builders & Developers Private Limited) India DLF New Gurgaon Retail Developers Private Limited India DLF Phase-IV Commercial Developers Limited India DLF Pleasure Hotels Private Limited India DLF Pramerica Life Insurance Company Limited India DLF Premuim Homes Private Limited (formerly Lennox Builders & Developers Private Limited) India DLF Projects Limited (formerly Capucine Builders and Construction Limited) India DLF Property Developers Limited India DLF Real Estate Builders Limited India DLF Recreational Foundation Limited India DLF Residential Builders Limited India DLF Residential Developers Limited India DLF Residential Partners Limited India DLF Brands Private Limited (formerly DLF Retail Brands Private Limited) India

162 Schedules forming part of the Consolidated Financial Statements (Contd.) Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, DLF Retail Developers Limited India DLF Retail Services Limited India DLF Service Apartments Limited India DLF Services Limited (formerly DLF Info City Developers (Gujarat) Limited) India DLF SEZ Developers Limited India DLF Sikkim Hotels Private Limited India DLF Southcourt Hotels Private Limited India DLF Southern Homes Private Limited (Formerly Carmen Builders & Constructions Private Limited) India DLF Southern Towns Private Limited (Formerly Prateep Estate Private Limited) India DLF Telecom Limited (Formerly Bhuvaneshwar IT Park Developers Limited) India DLF Universal Limited (Formerly Dominga Builders & Constructions Private Limited) India DLF Utilities Limited (Formerly Nilgiri Cultivations Private Limited) India DT Cinemas Limited (formerly DLF Services Limited) India Eastern India Powertech Limited (formerly DLF Power Limited) India Edward Keventer (Successors) Private Limited India Eila Builders & Developers Private Limited India Enki Retail Private Limited (formerly Enki Buildwell Private Limited) India Eros Retail Private Limited (formerly Eros Buildtek Private Limited) India Falguni Builders Private Limited India Gajjala Constructions Private Limited India Gajjala Ram Reddy Private Limited India Galaxy Mercantiles Limited India Galleria Property Management Services Private Limited India Ganesar Ginning Company Private Limited India Ganika Builders Private Limited India Gavin Builders & Developers Private Limited India Geocities Airport Infrastructures Private Limited (Formerly Linette Builders & Constructions Private Limited) India GGR Properties Private Limited India GMR Constructions Private Limited India Grandbay Estate Developers Limited India GSR Properties Private Limited India Guardian International Private Limited India Gulika Home Developers Private Limited India GVR Properties Private Limited India Gyan Real Estate Developers Private Limited India Harini Resorts & Properties Private Limited India Heritage Resorts Private Limited India Highvalue Builders Private Limited India

163 Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Irama Estates Private Limited India Isabel Builders & Developers Private Limited India Jai Luxmi Real Estate Private Limited India Janya Estate Developers Private Limited India Jawala Real Estate Private Limited India K G Infrastructure Private Limited India Kairav Real Estate Private Limited India Kapo Retail Private Limited India Laman Real Estates Private Limited India Lawanda Builders & Developers Private Limited India Leandra Builders & Developers Private Limited India Lifestyle Homes Private Limited India Lodhi Property Company Limited (Formerly Hotel Scopevista Limited) India Mens Buildcon Private Limited India Mhaya Buildcon Private Limited India Monroe Builders & Developers Private Limited India Mouna Constructions Private Limited India Mouna Estates Private Limited India Mouna Properties Private Limited India Nambi Buildwell Private Limited India Necia Builders & Developers Private Limited India Nellis Builders & Developers Private Limited India NewGen MedWorld Hospitals Limited India Nilayam Builders and Developers Limited India Paliwal Developers Limited India Paliwal Real Estate Private Limited India Pat Infrastructures Private Limited India Pee Tee Property Management Services Limited India Prompt Real Estate Private Limited India Rati Infratech Private Limited India Regency Park Property Management Services Private Limited India Richmond Park Property Management Services Limited India Riveria Commercial Developers Limited (formerly Riveria Info City Developers Limited) India Rod Retail Private Limited India Samali Builders & Developers Private Limited India Sandesh Constructions Private Limited India Sandesh Estates Private Limited India Shivajimarg Properties Limited India Silver Oaks Property Management Services Limited India Solid Buildcon Private Limited India Springhills Infratech Private Limited (formerly Mariana Buildwell Private Limited) India Sunbreeze Estate Developers Limited India Sunlight Promoters Private Limited India Urvasi Infratech Private Limited India Valini Builders & Developers Private Limited India Var Infratech Private Limited India Venezia Estate Developers Limited India Vkarma Capital Investment Management Company Private Limited (Formerly Muawiyah Builders & Developers Private Limited) India

164 Schedules forming part of the Consolidated Financial Statements (Contd.) Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Vkarma Capital Trustee Company Private Limited (Formerly Kundalika Builders & Developers Private Limited) India VSK Investment & Finance Limited India Zola Real Estate Private Limited India Zoria Infratech Private Limited India DLF Airport Hotels Private Limited +++ India DLF Budget Venture Hotels Private Limited +++ India DLF Conventions and Hotels Private Limited +++ India DLF Deluxe Hotels Private Limited +++ India DLF Exhibition Center Private Limited +++ India DLF Exotica Hotels Private Limited +++ India DLF Hotel Venture Private Limited +++ India DLF Jaipur Hotels Private Limited +++ India DLF Leisure & Entertainment Private Limited +++ India DLF Minor Restaurants Private Limited +++ India DLF Mumbai Hotels Private Limited +++ India DLF Rohini Hotels Private Limited +++ India Relevant documents fi led with Registrar of Companies for striking of names under Section 560 of Companies Act, ii) The accounting year for the below entities being the calendar year, their fi nancial statements as at December 31, 2008 have been considered for consolidation in these Consolidated Financial Statements. Further, no adjustment is considered necessary in the Consolidated Financial Statements for the period from January 1, 2009 to March 31, 2009, as the management believes that no material event, affecting the fi nancial position of the subsidiary and its constituents, has occurred during this period. Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Amancruises (2006) Company Limited (formerly General Facilities Company Limited) Thailand Amancruises Company Limited Thailand Amankila Resorts Limited British Virgin Islands Amanproducts Limited British Virgin Islands Amanresorts B.V. Netherlands Amanresorts International Private Limited Singapore Amanresorts IPR B.V. Netherlands Amanresorts Limited Hong Kong Amanresorts Mangement B.V. Netherlands Amanresorts Services Limited British Virgin Islands Amanresorts Technical Services B.V. Netherlands Andaman Development Company Limited Thailand Andaman Holdings Limited British Virgin Islands Andaman Resorts Co. Limited Thailand Andaman Thai Holding Co. Limited Thailand Aradal Company N.V. Netherlands ARL Marketing Inc. USA ARL Marketing Limited (formerly Amanmalaysia Limited) British Virgin Islands Balina Pansea Company Limited British Virgin Islands Barbados Holdings Limited British Virgin Islands

165 Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, Bhosphorous Investments Limited British Virgin Islands Bhutan Hotels Limited British Virgin Islands Bodrum Development Limited British Virgin Islands Butan Resorts Private Limited Bhutan Ceylon Holdings B.V. Netherlands Columbo Resort Holdings N.V. Netherlands Current Finance Limited British Virgin Islands Forgiant Agents Limited British Virgin Islands Goyo Services Limited British Virgin Islands Gulliver Enterprises Limited British Virgin Islands Hotel Finance International Limited British Virgin Islands Jackson Hole Holdings Limited British Virgin Islands Jalisco Holdings Private Limited Singapore L P Hospitality Company Limited Lao PDR Lao Holdings Limited British Virgin Islands Le Savoy Limited British Virgin Islands Marrakech Investments Limited British Virgin Islands Naman Consultants Limited British Virgin Islands NOH (Hotel) Private Limited Sri Lanka Nusantara Island Resorts Limited British Virgin Islands P.T. Amanresorts Indonesia Indonesia P.T. Amanusa Resort Indonesia Indonesia P.T. Indrakila Villatama Development Indonesia P.T. Moyo Safari Abadi Indonesia P.T. Nusantara Island Resorts Indonesia P.T. Tirta Villa Ayu Indonesia P.T. Villa Ayu Indonesia Palawan Holdings Limited British Virgin Islands Phraya Riverside (Bangkok) Company Limited Thailand Princiere Resorts Limited Cambodia Regent Asset Finance Limited British Virgin Islands Regional Design and Research B.V. Netherlands Regional Design and Research N.V. Netherlands Serendib Holdings B.V. Netherlands Silver Two (Bangkok) Company Limited Thailand Silverlink (Mauritius) Limited Mauritius Silverlink (Thailand) Company Limited Thailand Silverlink Holdings Limited British Virgin Islands Societe Nouvelle de L Hotel Bora Bora France Tahitian Resorts Limited British Virgin Islands Tangalle Property (Private) Limted Sri Lanka Toscano Holdings Limited British Virgin Islands

166 Schedules forming part of the Consolidated Financial Statements (Contd.) Sl. No. Name of Entity Country of Incorporation Proportion of ownership (%) as at March 31, DLF City Centre Limited Cyprus Gainway Group Limited* British Virgin Islands New Montana Limited* British Virgin Islands Ecotech Ventures Limited* Kenya Dutch Lanka Properties Pte Ltd* Sri Lanka Queensdale Management Ltd* British Virgin Islands Zeugma Limited* British Virgin Islands Alvernia Limited Cyprus Argent Holdings Limited British Virgin Islands ASL Management (Palau) Limited Palau City Icon Limited Cyprus DLF Global Hospitality Limited Cyprus DLF International Holdings Pte Limited (formerly DLF Trust Holdings Pte Limited) Singapore DLF International Hospitality Corp British Virgin Islands DLF Trust Management Pte Limited Singapore Fonton Limited (from April 4, 2008) British Virgin Islands Forerum Group Limited British Virgin Islands Hospitality Tradings Limited British Virgin Islands Hotel Sales Service Limited British Virgin Islands Hotel Sales Service Private Limited Sri Lanka Incan Valley Holdings Limited United States of America Mulvey B.V (from May 14, 2008) Netherland Mulvey Venice Sri Italy Overseas Hotels Private Limited British Virgin Islands Puri Limited British Virgin Islands Red Acres Development Limited British Virgin Islands Regent Land Limited Cambodia Sinonet Holding Limited British Virgin Islands Universal Hospitality Limited British Virgin Islands Villajena Development Company Limited British Virgin Islands * These subsidiaries do not form part of the consolidation as they are immaterial to the Group. B. Partnership firms Sl. No. Name of Partnership firm Country of Incorporation Proportion of ownership(%) as at March 31, DLF Commercial Projects Corporation India DLF Offi ce Developers India DLF South Point India Kavicon Partners India Rational Builders and Developers India

167 Sl. No. Name of Partnership firm Country of Incorporation Proportion of ownership(%) as at March 31, DLF Property Developers* India DLF Recreational Foundation* India DLF City Centre* India DLF Residential Builders* India DLF Residential Developers* India DLF Residential Partners* India Real Estate Builders* India *During the year converted from partnership fi rm to Limited company under part IX of the Companies Act, Proportion of ownership mentioned above are on the date of conversion. C. Joint ventures Sl. No. Name of Joint venture Country of Incorporation Proportion of ownership (%) as at March 31, Delanco Real Estate Private Limited India DLF Laing O Rourke (India) Limited. India DLF Limitless Developers Private Limited India DLF SBPL Developer Private Limited (formerly Gazit Builders and Developers Private Limited ) India Kujjal Builders Private Limited India Niharika Shopping Mall India WSP Engineering Services Private Limited ( Till March 30,2009) India 50.00* 8 GSG DRDL Consortium India DLF SEZ Holdings Limited India DLF Gayatri Home Developers Private Limited (formerly Arsh Real Estates Private Limited) India Mount Mary Residential Project India Saket Courtyard Hospitality Private Limited (formerly DLF Saket Hotels Private Limited) India Banjara Hills Hyderabad Complex India * Till March 30, D. Associates Sl. No. 1 Name of Associates Joyous Housing Limited { formerly Mangal Shrusti Gruh Nirmiti Private Limited } Country of Incorporation Proportion of ownership (%) as at March 31, 2009 India Thalia Infratech Private Limited (Till January 26, 2009) India 45.00* 3 Turan Infratech Private Limited (Till January 26, 2009) India 45.00* 4 5 DLF New Gurgaon Homes Developers Private Limited (formerly Caitlin Builders & Developers Private Limited) India Ferragamo Retail India Private Limited (earlier Nelia Retail Private Limited) India

168 Schedules forming part of the Consolidated Financial Statements (Contd.) Sl. No. Name of Associates Country of Incorporation Proportion of ownership (%) as at March 31, Giorgio Armani India Private Limited India DLF Pramerica Advisory Private Limited India Regional D & R Limited U.K Seven Seas Resorts and Leisure Inc. Phillippines Islan Aviation Limited Phillippines Revlys SA Moracco Villajena Moracco Surin Bay Co. Limited Thailand P.T Jawa Express Amanda Indah Indonesia Lillion Builders and Developers Private Limited +++ India Zeus Infrastructure Private Limited India * Till January 26, Relevant documents fi led with Registrar of Companies for striking of names under Section 560 of the Companies Act, During the year March 31, 2009 certain blocks of shuttering & generators forming part of plant & machinery in one of joint venture company, namely DLF Laing O Rourke (India) Limited were impaired by Rs. 1, lacs on account of the economic downturn affecting the future outfl ows.the impairment loss is based on a value in use considering a pre tax discount rate 12%. 19. The auditors of Silverlink Holding Limited, have given an observation in respect of a legal claim by shareholders for breach of contract to issue secured redeemable convertible notes and a previous shareholder has joined as a third party to the action. There are certain existing shareholders of the Silverlink Holding Limited (Silverlink), have ongoing claims against Silverlink, which include the repurchase of shares held by the shareholders in Silverlink in exchange for secured convertible notes to be issued by Silverlink, the entitlement to appoint a Director to Silverlink s board, injunction to restrain Silverlink from taking additional secured loans above US$2million and damages in relation to the above breaches. Based on legal advice of Silverlink s legal counsel, the Directors are of the view that Silverlink has reasonable chance to defend the claims. Based on current information, the Directors are not able to quantify the potential fi nancial impact on Silverlink, should the above shareholders succeed in their claims against Silverlink. 20. Amalgamation / Merger of subsidiaries a) During the year, a Petition for Amalgamation has been fi led before the Hon ble Delhi High Court on December 12, 2008 for amalgamating DLF Real Estates Ltd.; DLF Info City Developers (Goa) Ltd.; DLF Info City Developers (Vadodara) Ltd.; DLF Info City Developers (Delhi) Ltd.; DLF Info City Developers (Gandhinagar) Ltd.; DLF Info City Developers (Mumbai) Ltd.; DLF Info City Developers (Ahmedabad) Ltd.; Parkridge Info City Developers Ltd.; Udipti Estate Developers Ltd. & DLF SEZ Developers (Amritsar) Ltd. with DLF Commercial Developers Limited (subsidiary), the transferee company. The Hon ble High Court has approved / sanctioned the Scheme of amalgamation vide its order dated March 19, 2009, which was fi led with the Registrar of Companies, NCT of Delhi & Haryana on March 30, 2009, thereby making the scheme of amalgamation effective from the appointed date i.e. April 1, Accordingly fi nancials of these companies are merged with the fi nancials of DLF Commercial Developers Limited to effect the merger. All transferor companies and the transferee company are subsidiaries of DLF Limited. 166

169 b) The following subsidiary companies have also fi led amalgamation petitions as per under-noted details before the Hon ble High Court of Delhi and Hon ble High Court of Punjab & Haryana at Chandigarh as per applicable jurisdiction. The order for sanction of the scheme from the respective High Courts are awaited and hence, no effect thereto has been given in consolidated fi nancial statement. Sl. No. Name of Transferee Company Name of Transferor Companies Date of Board Meeting approving the Scheme of Amalgamation* Appointed / Transfer Date as per the Scheme of Amalgamation (i) DLF Commercial Developers Limited (Wholly owned subsidiary company of DLF Limited) DLF Info City Developers (Hyderabad) Ltd.; DLF Info City Developers (Bangalore) Ltd.; Grandbay Estate Developers Ltd.; Sunbreeze Estate Developers Ltd.; Belmount Estate Developers Ltd.; Venezia Estate Developers Ltd. & DLF Green Power Pvt. Ltd. March 25, 2009 April 1, 2008 (All companies are wholly owned subsidiary company of DLF Commercial Developers Limited) (ii) DLF Retail Developers Limited (Wholly owned subsidiary company of DLF Limited) Necia Builders & Developers Pvt. Ltd.; PAT Infrastructures Pvt. Ltd.; Adrienne Builders & Constructions Pvt. Ltd.; DLF Food Courts Pvt. Ltd.; DLF Retail Services Ltd.; DLF Commercial Complexes Ltd.; Callista Builders & Constructions Pvt. Ltd.; Gavin Builders & Developers Pvt. Ltd.; Alastair Builders & Developers Pvt. Ltd.; Amoda Builders & Developers Pvt. Ltd. and Leandra Builders & Developers Pvt. Ltd. May 13, 2009 April 1, 2008 (All companies are wholly owned subsidiary company of DLF Retail Developers Limited) (iii) DLF Home Developers Limited (Wholly owned subsidiary company of DLF Limited) Irama Estates Pvt. Ltd. & DLF Estates (Delhi) Pvt. Ltd. (formerly Bes Buildcon Pvt. Ltd.) (All companies are wholly owned subsidiary company of DLF Home Developers Limited) May 14, 2009 April 1, 2008 (iv) DLF Real Estate Builders Limited VSK Investment & Finance Ltd. May 18, 2009 January 1, 2009 (v) DLF Residential Partners Limited Chakrita Real Estate Developers Private Limited July 23, 2009 September 1, 2008 *In view of above mentioned proposed mergers, as per the approval granted by Board of Directors of respective companies, the interest on inter-company loans between transferor and transferee company has not been charged w.e.f. Appointed / Transfer Date, in accordance with the Scheme of Amalgamation as given above. 167

170 Schedules forming part of the Consolidated Financial Statements (Contd.) 21. Details of preference shares issued by subsidiary companies: Sl. No.. Name of subsidiary company Shivaji Marg Properties Limited (See Note 1 below) 4,80,00,000 (previous year 4,80,00,000) Preference Shares of Rs.100 each fully paid up 2 Galaxy Mercantiles Limited (See Note 2 below) 12,00,000 (previous year 12,00,000) 0.5% Cumulative Redeemable Preference shares of Rs. 100 each fully paid up * *Preference shares shall be redeemed at a premium of Rs. 450 per preference share out of the profi ts of the company from the end of the 3rd year of the development completion date. 3 Regency Park Property Management Services Limited 48, , , , (previous year 100) 12% Non Cumulative Redeemable Preference shares of Rs. 100 each fully paid up (Redeemable on or before December 11, 2022) 4,000 (previous year 4,000) 9% Non Cumulative Redeemable Preference shares of Rs. 100 each fully paid up (Redeemable on or before January 22, 2023) Galleria Property Management Services Limited 100 (previous year 100) 12% Non Cumulative Redeemable Preference shares of Rs. 100 each fully paid (Redeemable on or before December 11, 2022) 4,000 (previous year 4,000) 9% Non Cumulative Redeemable Preference shares of Rs. 100 each fully paid (Redeemable on or before January 22, 2023) DLF Southern Homes Private Limited (formerly Carmen Builders and Construction Private Limited) 4,57,50,000 (previous year 4,57,50,000) Non Convertible Non Cumulative 0.01% Redeemable Preference Shares of Rs. 100 each fully paid up (Redeemable at a premium of Rs per share on March 10, 2010) 6 DLF New Gurgaon Home Developers Private Limited (See Note 3 below) 2,232,000 Cumulative Redeemable A Preference shares of Rs.100 each fully paid (Redeemable at a premium of Rs per share on December 16, 2009) 42,408,000 Cumulative Redeemable B Preference shares of Rs.100 each fully paid (Redeemable at a premium of Rs per share on December 16, 2009) 45, , , ,39, , Notes 1) DLF Limited has entered into a put option agreement dated January 23, 2007 with Lehman Brothers Asia Limited and IDBI Trusteeship Services Limited against the subscription agreement for issue of 48,000,000 non convertible non-cumulative preference shares at a price of Rs.100 each to secure the performance on the preference shares issued by Shivaji Marg Properties Limited. 2) Galaxy Mercantiles Limited had issued 1,200, % Cumulative Redeemable Preference Shares of Rs.100 each amounting to Rs.12 Crores on which cumulative dividend of Rs lacs (Previous year Rs lacs) is provided as at March 31, ) DLF Limited, DLF Cyber City Developers Limited and Western India Trustee and Executor Company has entered into a contribution agreement dated December 04, 2006, with IDBI Trusteeship Services Limited, to secure the obligation of New Gurgaon Home Developers Private Limited, under the subscription agreement dated December 05, 2006 and December 12, 2006 for the issue of 44,640,000 Cumulative 0.5% Redeemable Preference shares of Rs. 100 each. 168

171 22. Utilisation of funds received through Initial Public Offer (IPO) uptil March 31, 2009 (Rs. in Lacs) Sl.No. Nature of expenditure Acquisition of land and development rights 566, ,955 2 Development and construction costs for existing projects 63,625 63,625 3 Prepayment of loans 2,57, ,700 4 Issue related expenses 30,298 30,298 Total 918, ,578 Unutilized IPO Money- Money remain unutilized as on March 31,2009 (lying in bank balances Current account) Rs lacs. (Previous year - Rs lacs) 23. a) The Group uses forward contracts and swaps to hedge its risks associated with fl uctuations in foreign currency and interest rates. The use of forward contracts and swaps is covered by Group s overall strategy. The Group does not use forward covers and swaps for speculative purposes. As per the strategy of the Group, foreign currency loans are covered by comprehensive hedge, considering the risks associated with the hedging of such loans, which effectively fi xes the principal and interest liability of such loans and further there is no additional risk involved post hedging of these loans. The following are the outstanding forward contracts and swaps as at March 31, 2009: (Rs. in Lacs) For hedging any risks Secured Loans 109, , Interest on secured loans Unsecured loans 20, , Interest on unsecured loans b) The detail of foreign currency exposure that are not hedged by derivative instrument or other wise included in the creditors is as mentioned below:- (Rs. in Lacs) INR USD* INR USD Secured loans 10, Interest on secured loans Unsecured loans 5, (**) Interest on unsecured loans (***) (** $ lacs and JPY 6, lacs) (*** $ 0.35 lacs and JPY lacs) *Conversion rate applied 1 USD = Rs.50.95, 1 JPY = Rs During the year, the Income Tax Appellate Tribunal disposed off the cases relating to the assessment years , , , , and in favour of the Company. No formal order of the appeal effect has yet been given by the assessing offi cer. Pending the formal order from the income tax department, no adjustment in respect of the above orders has been made in the fi nancial statements. 169

172 Schedules forming part of the Consolidated Financial Statements (Contd.) 25. Events after the Balance sheet date a) Subsequent to the balance sheet date, the Board of Directors approved sale of Wind Power Business as going concern, on a slump sale basis to DLF Wind Power Private Limited (a wholly owned subsidiary of the Company), on such terms and conditions and in such form and manner as the Board may decide in the best interest of the Company. No effect has been given to the proposed sale in these fi nancials statements in line with the Accounting Standard-4 on Contingencies and Events Occurring After the Balance Sheet date. b) Subsequent to the balance sheet date, the Board of Directors of one subsidiary company namely DLF Home Developers Limited, approved sale of Wind Power Business as going concern, on a slump sale basis to DHDL Wind Power Private Limited (a wholly-owned subsidiary of DLF Home Developers Limited), on such terms and conditions and in such form and manner as the Board may decide in the best interest of the Company. No effect has been given in theses fi nancial statements of the proposed sale in line with the Accounting Standard 4 Contingencies and Events Occurring after the Balance Sheet date. c) The Company and 3 of its subsidiary companies have entered into a co-developer agreement with DLF Assets Private Limited (the DAL ), an enterprise over which the KMPs are able to exercise signifi cant infl uence, for 4 SEZ Projects. Based upon the revenue recognition policy, as on March 31, 2009, Rs 438, lacs was due, shown under the unbilled receivables, from DAL on account of development charges from such SEZ Projects. Subsequent to year-end, Rs 204, lacs have been recovered against such unbilled receivables. d) Subsequent to the balance sheet date, on May 6, 2009, the Company received an assessment order for the AY from the Income tax authorities creating an additional tax demand amounting to Rs. 48, lacs on the Company. The Company has fi led an appeal against the order and based on advise from experts, is confi dent that the additional tax demanded will not be sustained by the appellate authorities. Pending the order of the appellate authorities, no adjustment has been made in the current year fi nancial statements for the additional tax so demanded and the same has been disclosed as a contingent liability. e) Subsequent to the balance sheet date, the Company bought back 15,000 shares under the buy back programme. The buy back programme was closed on May 6, 2009 as per the announcement dated May 1, f) Subsequent to the balance sheet date, the SEZ Board of approvals ( BOA ) granted approval for de-notification of 4 sector specifi c Special Economic Zones (the SEZ ) for IT/ ITES of the Company in Gandhinagar Gujarat, Rai, Sonepat Haryana, Kolkata West Bengal and Bhubaneshwar Orissa. The approval granted is subject to returning all benefi ts availed by the Company in these SEZ units. The formal order shall be passed by the Government of India after receiving the confi rmation from the concerned authorities including customs, excise and income tax that all the benefi ts availed by the Company have been returned. Following is an estimate of benefi ts availed by these units upto the balance sheet date. Sl. No. Location of SEZ unit Amount of benefi ts availed 1 Gandhinagar, Gujarat Kolkata, West Bengal Rai, Sonepat, Haryana Bhubaneshwar, Orissa Nil 170

173 Pending the fi nal order approving the said denotifi cation, no adjustment has been made in these fi nancial statements for the amounts to be returned to the authorities and the same has instead been disclosed as a contingent liability. g) Subsequent to the balance sheet date, the company / subsidiary companies have sold their total investment in following Subsidiaries/Associates / Joint ventures. Name of the Company Subsidiary / Joint Venture / Associate Proportionate of Ownership (%) as on March 31, 2009 Chaitra Realty Limited Subsidiary Niharika Shopping Centre Jointly Control Operation 50 Sandesh Estates Private Limited Subsidiary 100 Gajjala Ram Reddy Properties Private Limited Subsidiary 100 Mouna Estates Private Limited Subsidiary 100 Sandesh Constructions Private Limited Subsidiary 100 G.V.R. Properties Private Limited Subsidiary 100 Mouna Properties Private Limited Subsidiary 100 G.S.R. Properties Private Limited Subsidiary 100 Gajjala Constructions Private Limited Subsidiary 100 Life Style Homes Private Limited Subsidiary 100 GMR Constructions Private Limited Subsidiary 100 Harini Resorts & Properties Private Limited Subsidiary 100 GGR Properties Private Limited Subsidiary 100 Mouna Constructions Private Limited Subsidiary Previous year fi gures have been regrouped/ recast wherever considered necessary to make them comparable with those for the current year. On behalf of the Board of Directors Ramesh Sanka Subhash Setia T.C. Goyal Rajiv Singh Sr. Executive Director Company Secretary Managing Director Vice Chairman (Finance) & Group Chief Financial Offi cer New Delhi July 30,

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