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Sunday, September 07, 2008

Oil Remaining in the World

Grey Market - 20 Microns, Chemcel Biotech

20 MICRONS Ltd. 50 to 55 7 to 9

Chemcel Biotech Ltd. 16 4 to 5

India US Nuclear Deal Beneficiaries

Larsen & Toubro

Bharat Heavy Electricals

National Thermal Power Corporation

Areva T&D India

Alstom Projects India

Rolta India

Gammon India

Hindustan Construction Company


Crompton Greaves

Walchandnagar Industries

Reliance Energy

Tata Power Company

Larsen & Toubro has done engineering, procurement and construction projects for nuke power plants. It is currently working on the 2,000 megawatt Kudankulam nuclear project.

Bharat Heavy Electricals supplies up to 500 megawatt of equipment to Nuclear Power Corporation. It has an existing tie-up with Siemens for nuclear technology.

National Thermal Power Corporation is reportedly in talks with Nuclear Power Corporation of India for setting up a 2000 megawatt nuclear plant.

Areva T&D is reportedly looking at a plant for uranium mining and recycling. The plant would be set up after nod from Nuclear Power Corporation.

Alstom Projects India already makes nuclear reactors and rotors. Its parent company is a world leader in conventional nuclear projects. It makes turbines for nuclear power stations.

Rolta India along with its joint venture Stone and Webster provides reactor-building technology. Stone & Webster’s parent has 20% in Westinghouse Electric, a nuclear reactor maker.

Gammon India has undertaken turnkey construction for nuclear projects.

Hindustan Construction Company has constructed four nuclear power projects in India. It is an engineering procurement and construction contractor for nuclear projects.

ABB makes components for power projects. Its parent company’s exposure includes new nuclear power plants, systems and components.

Crompton Greaves works with Nuclear Power Corporation of India. It has completed a switchyard for nuclear project.

Walchandnagar Industries makes critical equipment for India’s nuclear power facilities.

Reliance Energy reportedly plans to invest additional Rs 12,000 crore in nuclear power capacity. It plans to install 2000 megawatt of nuclear power capacity.

Tata Power Company has tied up with some major nuclear equipment suppliers like Areva. It already has a relationship with Toshiba.

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Ultratech Cement - Annual Report - 2007-2008





Dear Shareholders,

Your Directors present the Eighth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2008:

FINANCIAL RESULTS (Rs. in crores) 2007-08 2006-07

Gross Turnover 6,286.24 5,484.35

Gross Profit 1,744.24 1,392.44

Less: Depreciation 237.23 226.25

Profit Before Tax 1,507.01 1,166.19

Tax Expenses 499.40 383.91

Profit After Tax 1,007.61 782.28

Add: Balance brought forward from Previous Year 775.16 180.57

Surplus available for Appropriation 1,782.77 962.85


Debenture Redemption Reserve (8.17) 30.92

General Reserve 120.00 100.00

Dividend 62.24 49.79

Corporate tax on Dividend 10.58 6.98

Balance transferred to Balance Sheet 1,598.12 775.16

Total 1,782.77 962.85


During the year, your Company produced 15.07 MMT of cement (14.64 MMT). Effective capacity utilisation remained flat at 101%. Exports were curtailed to cater to the growing domestic demand. This supported domestic volume growth of 7%. Variable cost increased by over 8% mainly on account of escalation in the cost of raw materials, including imported coal and mounting freight charges.

Continuous de-bottlenecking efforts across your Company's Units resulted in a capacity increase of 1.2 MMT.

Your Company's turnover at Rs. 6,286.24 crores was up by 15% compared to Rs. 5,484.35 crores achieved in the previous year. Profit after tax stood at Rs.1,007.61 crores (Rs.782.28 crores) after providing for depreciation - Rs. 237.23 crores (Rs. 226.25 crores) and tax Rs. 499.40 crores (Rs. 383.91 crores).


Your Directors recommended a dividend of Rs. 5/- per equity share of Rs. 10/- each for the year ended 31st March, 2008. The dividend distribution would result in a cash outgo of Rs. 72.82 crores (including tax on dividend of Rs. 10.58 crores) compared to Rs. 56.77 crores (including tax on dividend of Rs. 6.98 crores) paid for the year 2006-07.


Your Company initiated various expansion and de-bottlenecking programs to maintain growth and improve efficiencies.

The Clinkerisation (pyrosection) unit at Andhra Pradesh Cement Works (APCW) was commissioned during the fourth quarter of the financial year ended 31st March, 2008. The balance work on capacity expansion at APCW is progressing and the split grinding Unit at Ginigera in Karnataka is on track. The Unit will be operational in the first half of the current fiscal.

Upon commissioning of expanded capacity at APCW your Company's total capacity will be 23.1 MMT.

Trials have begun on the 1st Stream of the Thermal Power Plant (TPP) of 23MW at Gujarat Cement Works (GCW) in Gujarat. All four Streams aggregating to 92MW will be fully operational by HIFY09. In addition, TPP's aggregating to 135MWs are being set up at Awarpur Cement Works (ACW) in Maharashtra, APCW and Hirmi Cement Works (HCW) in Chhattisgarh. These power plants, except ACW will be commissioned in a phased manner in FY09.

In FY08 15 Ready Mix Concrete (RMC) plants have been set up across the country.


The ESOS Compensation Committee of the Board of your Company formulated the Employee Stock Option Scheme - 2006 ('ESOS-2006') at its meeting held on 23rd August, 2007.

The ESOS Compensation Committee granted 1,68,070 stock options to eligible employees of your Company. The disclosure, as required under Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexure I to this Report.


Your Company was the recipient of the following awards:

* The Top Exporter Award from CAPEXIL for the eleventh consecutive year.

* State level award for excellence in energy conservation and management for 2006 for ACW.

* The CII National award for excellence in Energy Management 2007 - Energy Efficient Unit' and Innovative Project' for APCW

* Mines safety award - First prize in Method of Working' and Second prize in Drilling and Blasting' for APCW.

* National Safety Award for outstanding performance in industrial safety for HCW


Your Company continued its efforts towards maximising waste utilisation, search for alternative sources of fuel and chemical and mineral evaluation of captive limestone mines. These measures will aid in conserving natural resources.


At your Company, employees continue to be the key driving force of the organisation and remain a strong source of our competitive advantage. We believe in aligning business priorities with the aspirations of employees leading to the development of an empowered and responsive human capital. We strive to create a work environment which encourages innovation and creativity.

Through our strong Employer Brand, we were able to attract quality people with required skills who have become part of our competent and committed workforce. Appropriate measures are being planned by your Company to ensure talent retention and employee engagement.

Your Company continued to support learning and development initiatives to enhance the functional as well as the behavioural competencies of our people. At Gyanodaya' - The Aditya Birla Institute of Management Learning, executives of your Company were enlisted for various high quality learning interventions. These programs supplemented with a combination of developmental assignments, classroom and web based training, has enabled our people to continuously learn, develop and grow.

Our performance management system is primarily based on competencies and values. We closely monitor growth and development of top talent in your Company, to align personal aspirations with the organisation purpose.


Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company complied with the provisions of Clause 49 of the Listing Agreement with the stock exchanges which relates to corporate governance.

A separate section on corporate governance together with a certificate from your Company's Statutory Auditors forms a part of this Annual Report.


In terms of Section 212 of the Companies Act, 1956, ('the Act') the Accounts together with the Report of Directors and the Auditor's Report of your Company's subsidiaries viz. Dakshin Cements Limited (Dakshin) and U1traTech Ceylinco (Pvt) Limited (U1traTech Ceylinco) forms a part of this Report.

In line with the provisions of the Accounting Standards prescribed by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the stock exchanges, the duly audited Consolidated Financial Statement has been prepared after considering the financial statements of your Company's subsidiaries viz. Dakshin and U1traTech Ceylinco.


CRISIL has upgraded your Company's rating from 'AA+/Stable' to 'AAA/Stable'. Your Company is also one of the few companies to have its bank loan facilities rated. CRISIL has assigned your Company's bank loan facility, the highest rating of 'AAA/Stable/Pl+'. Such a rating allows your Company to borrow on competitive terms.

Your Company has raised Rs.90 crores by way of fully hedged Buyers Credit for a tenure of three years. These funds have been used for various ongoing capex.

Your Company has repaid debentures and loans amounting to Rs. 285 crores.

Your Company has not invited or renewed deposits from the public/ shareholders in accordance with Section 58A of the Act.


Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure II and forms part of this Report.


In accordance with the provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts as therein set out, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of your Company.


The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substances of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations.

Your Directors confirm that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(ii) The accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2008 and of the profit of your Company for the year ended on that date;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

(iv) The Annual Accounts of your Company have been prepared on a going concern basis.


Mr. S. Rajgopal, Nominee Director resigned from the Board of your Company with effect from 20th October, 2007 consequent to the withdrawal of his nomination by the Administrator of the Specified Undertaking of the Unit Trust of India. However, considering his vast knowledge and experience, the Board inducted Mr. Rajgopal as an Additional Director with effect from that date. Mr. Rajgopal holds office upto the conclusion of the ensuing Annual General Meeting. Notice pursuant to Section 257 of the Act has been received from a Member of your Company proposing Mr. Rajgopal's appointment as Director.

Mrs. Rajashree Birla, Mr. V T. Moorthy and Mr. R. C. Bhargava retire from office by rotation and being eligible, offer themselves for re-appointment.

A brief resume of the Directors being appointed / re-appointed are attached to the Notice of the ensuing Annual General Meeting.


M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai being eligible, offer themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai as Joint Statutory Auditors of your Company based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditors of your Company's Unit's at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra, based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions of the Act the Board also seeks your approval for the appointment of Branch Auditors in consultation with your Company's Statutory Auditors for any other Branch / Unit / Division of your Company, which may be opened / acquired / installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor's Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Act.


Pursuant to the provisions of Section 233E of the Act, your Directors have appointed M/s. N. 1. Mehta & Co., Cost Accountants, Mumbai as the Cost Auditor to conduct the cost audit of your Company for the financial year ending 31st March, 2009, subject to the approval of the Central Government.


Your Directors place on record their appreciation of the contribution made by employees at all levels. Your Company's growth was made possible by employee's support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Central and State Governments, banks, financial institutions, shareholders and business associates for their co-operation and support and look forward to their continued support in future.

For and on behalf of the Board

Mumbai Kumar Mangalam Birla22nd April, 2008 Chairman


Disclosure pursuant to Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

Particulars ESOS - 2006 Tranche I [23rd August, 2007]

a. No. of Options granted 99,010

b. The Pricing formula The exercise price is the average price of the equity shares of the Company in the immediate preceding seven days period (at a stock exchange as determined by the ESOS Compensation Committee) on the date prior to the date on which the ESOS Compensation Committee finalised the specific number of Options to be granted to the employees, discounted by 30%.

Exercise Price : Rs. 606/- per option

c. Options vested Nil

d. Options exercised Nil

e. The total number of shares N.Aarising as a result of exerciseof the options

f. Options lapsed Nil

g. Variation of terms of options Nil

h. Money realised by exercise N.Aof options

i. Total number of optionsin force:

- Vested Nil

- Unvested 99,010

j. Employee wise details ofoptions granted to:

i. Senior Managerial Personnel Mr. S. Misra, 32,640Managing Director

ii. Any other employee who Nil receives a grant in any oneyear of option amounting to5% or more of option granted during that year

iii. Identified employees who Nil were granted option, during any one year, equal to orexceeding 1% of the issuedcapital (excluding outstandingwarrants and conversions)of the company at the timeof grant

ESOS - 2006 Tranche II [25th January, 2008]

a. No. of Options granted 69,060

b. The Pricing formula The exercise price is the average price of the equity shares of the Company in the immediate preceding seven days period (at a stock exchange as determined by the ESOS Compensation Committee) on the date prior to the date on which the ESOS Compensation Committee finalised the specific number of Options to be granted to the employees, discounted by 2%.

Exercise Price : Rs. 794/- per option

c. Options vested Nil

d. Options exercised Nil

e. The total number of shares N.Aarising as a result of exercise of the options

f. Options lapsed Nil

g. Variation of Nilterms of options

h. Money realised by exercise N.Aof options

i. Total number of options Nilin force:

- Vested Nil- Unvested 69,060

j. Employee wise details of

options granted to:

i. Senior Managerial Personnel Mr. S. Misra, 51,650Managing Director

ii. Any other employee who Nil receives a grant in any oneyear of option amounting to5% or more of option granted during that year

iii. Identified employees who Nilwere granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant

ESOS - 2006 Tranche I Tranche II [23rd August, 2007] [25th January, 2008]

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

1. Where the company has The Company has calculated the employee calculated the employees compensation cost using theintrinsic compensation cost using the value method of accounting to account intrinsic value of the for options issued under the stock options: ESOS - 2006.

i. The difference between the Employee compensation cost:employee compensation cost so - intrinsic value based Rs. 0.77 crorescomputed and the employee - fair value based Rs. 1.84 crorescompensation cost that shall Difference Rs. 1.07 croresbe recognised if it had used the fair value of the options shall be disclosed.

Reported Adjustedii. The impact of this difference:

- on profits Net Profit Rs. 1007.61 Rs. 1,006.54 crores crores

- EPS Basic: Rs. 80.94 Rs. 80.86 Diluted: Rs. 80.91 Rs. 80.83

m. Weighted average exerciseprices of options:

i. Equal to market price of -the stock

ii. less than market price of Rs. 683/the stock

Weighted average fair values of ontions

i. Equal to market price of thestock -

ii. less than the market priceof the stock. Rs. 462/-

n. A description of the methodused during the year to estimate Black - Scholes Methodthe fair values of options.

Significant assumptions usedduring the year to estimate the fair values of options including the following weighted average information:

i. Risk - free interest rate 8%

ii. Expected life Period up to vesting plus the average of the exercise period corresponding to each vesting.

iii. Expected volatility Implied volatility of the Company's stock prices on NSE based on the price data of last one year up to the date of grant

Tranche I = 49% Tranche II = 52%

iv. Expected dividend Adjustment of the closing price of the Company's share on the NSE for the expected dividend yield over the expected life of the options (dividend for FY 2006-07 and a growth factor have been considered, which are then discounted and an average present value of dividend ascertained)

v. The price of the underlying Rs. 829/-share in the market at thetime of option grant.




a) Energy Conservation Measures taken:

Installation of Variable Frequency Drives Use of fuel efficient and higher capacity mining equipments Optimisation of Grinding Media size distribution in mills Close circuiting of cement mills Cooler Gas waste heat recovery system installed.

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

Close circuiting of cement mills Installation of Roller Press Installation of Vertical roller mill for fuel grinding Installation of Dry Fly Ash handling and feeding system Modification of clinker characteristic to improve clinker grindability Increased Fly Ash absorption and Blended Cement production.

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

The proposals stated above shall result in reduction in power consumption and recovery of waste heat to use for productive purpose thereby reduction in cost.

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

As per FORM-A of this Annexure


Efforts made in technology absorption as per FORM-B of this Annexure.


The information on foreign exchange earnings and outgo is contained in Schedule 22(6) and (5) of the Accounts.

FORM - A(See Rule 2)

Form for disclosure of particulars with respect to conservation of energy

A. POWER AND FUEL CONSUMPTION Current Year Previous Year 2007-08 2006-071. Electricity (a) Purchased Units 000 Kwh 923400 847582 Total Amount Rs. crores 432.69 405.70 Rate/unit Rs. 4.69 4.79 (b) Own generation* (i) Through Diesel generator Units 000 Kwh 176961 188908 Units (Kwh) per Ltr. of fuel oil 3.96 4.03 Cost/Unit Rs. 5.62 4.91 (ii) Through Steam Turbine/Generator Units 000 Kwh 316750 309571 Units(Kwh) per kg of coal 0.70 0.73 Cost/Unit Rs. 1.73 1.40 (iii) Through Steam Turbine/Generator Units 000 Kwh 5527 64249 Units(Kwh) per kg of Naphtha 3.80 4.73 Cost/Unit Rs. 15.05 7.40 (iv) Waste Heat Recovery system Units 000 Kwh 19064 477.05 Cost/Unit Rs. 0.35 0.25

2. Coal (S1ack,Steam & ROM including lighting Coal) For Co-generation of Steam & Power Tonnes 454839 425246 Total Cost Rs. crores 46.95 35.23 Average rate Rs./Tonnes 1032 828 For Process in Cement Plants Quantity Tonnes 2157186 1991666 Total Cost Rs. crores 650.76 543.99 Average rate Rs./Tonnes 3017 2731

3. Furnace Oil (Including Naphtha) Quantity K. Ltrs 47020 66184 Total amount Rs. crores 86.70 122.70 Average rate Rs./K.ltr 18438 18539

4. Light Diesel Oil (LDO) Quantity K. Ltrs 1332 1431 Total amount Rs. crores 3.70 4.24 Average rate Rs./K ltr 27765 29626

5. High Speed Diesel Oil (HSD) Quantity K. Ltrs 358 265 Total amount Rs. crores 1.20 0.95 Average rate Rs./K ltr 33531 35661


Electricity # Kwh /T of Cement 84.69 86.93

Furnace oil $ Ltr /T of Clinker 0.11 0.10

Coal Kcal /Kg of 713 707 Clinker

* Excludes Auxillary & Wheeling# Excludes non production power consumption$ Furnace oil used for kiln light up

FORM - B(See Rule 2)

Form for disclosure of particulars with respect to absorption


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

Evaluation of use of

* Mineralisers

* Performance improver to enhance quality

* Higher % of Fly Ash Content in PPC without affecting quality

* CFD technique for optimising Plant operations

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

The above initiatives have resulted in increase in production, energy efficiency, resources conservation and reduction in related cost of production.

3. Future plan of action

* Commercialisation of alternative fuels

* Optimisation of chemistry of raw mix and fuel mix to improve mines life

* Installation of waste heat recovery system for power generation

(Rs. in crores)4. Expenditure on R&D 2007-08 2006-07 a. Capital expenditure 0.53 1.12 b. Recurring expenditure 8.82 4.90 c. Total expenditure 9.36 6.02 d. Total R & D expenditure 0.17 0.12as % of turnover


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

* Participation in national and international conferences

* Imparting training to personnel by foreign technicians in various manufacturing techniques by foreign and Indian experts and technology suppliers

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

* Improvement in existing processes and reducing consumption of scarce raw

materials and fuel

* Cost reduction

3. Information regarding technology imported during the last 5 years : Nil


Fresh investments can be considered in the stock of Everest Kanto Cylinders, a leading manufacturer of high-pressure CNG (compressed natural gas) and industrial cylinders. At the current market price of Rs 288, the stock trades at about 14 times its likely FY-10 per share earnings on a diluted equity base.

While prima facie the valuation may appear pricey, it is supported by the growing demand for EKC’s products. At a time when many engineering and capital goods companies are battling with a slowing demand, EKC’s prospects are stable.

Driven by high oil prices, most countries, including India, have been on the lookout for cheaper energy options and CNG fits this bill well. Cheap and viable, the demand for CNG-based applications is likely to remain buoyant over the next couple of years, irrespective of short-term blips in oil prices. This bodes well for EKC, which enjoys over 80 per cent market share in India and derives close to 57 per cent of its consolidated revenues from exports.

Investors, nevertheless, should accumulate the stock in lots to take advantage of volatility in the broad markets.
Expansion in capacities

In the last two years, the company has, on a consolidated basis, reported a compounded sales and earnings growth of 50 per cent and 77 per cent respectively. This may well continue over the next couple of years as EKC has put in place expanded capacities that would help it cater to most of the incremental demand in the coming years.

The company has four manufacturing facilities (three in Gujarat, India and one in Dubai) that together have a capacity to manufacture over one million cylinders per year. Further, it has recently commenced production at its new facility in China (capacity of 200,000 cylinders per year) and proposes to expand it further.

Having a manufacturing presence in China will not only help EKC leverage on the demand-supply mismatch in that region, but also help it build on its relationship with Chinese suppliers of seamless tubes — the key raw material.

Besides this, EKC has also undertaken addition in capacities for the manufacture of industrial cylinders to its existing facility at Gandhidham, Guajrat. It further plans to introduce a product line — Jumbo cylinders — offering higher margins, at this facility. In total, this would imply an addition of over 200,000 cylinders per annum capacity; commissioning of these plants is expected by the third quarter of this year.

That EKC’s existing facilities are running at full capacity and the company has its order book full for the next year reduces concerns on its ability to optimally utilise additional capacities.

However, given the high gestation period in this segment, it may take a couple of years for the company to reap the full benefits of its expanded capacities, which reiterates the need for a two-year holding period on this stock.
CP Industries, key to growth

In February 2008, EKC had sealed its entry into the US market through the acquisition of CP Industries, a division of Reunion Industries for a consideration of about $67 million (about 1.7 times CPI’s reported revenues last year).

Being the world leader in the manufacture of very large, seamless, high-pressure vessels, CPI’s acquisition will be a strategic fit, bringing in a complementary product portfolio. It will also bring to the table CPI’s design capabilities, which are in compliance with the US and Chinese standards and its well-established set of clientele, which includes makers of alternative fuel vehicles, NASA, the US Navy and others in the transportation and aerospace industries. Funded primarily through debt, this acquisition may burden EKC’s books with interest cost in the near-term, but will be a long-term positive.
Funding growth

Another factor that lends comfort to the company’s growth prospects is the fact that a significant portion of the funds required for its expansion plans — be it for its existing facilities or for setting up new facilities at Kandla SEZ and China — has already been raised. Last year, the company had raised about Rs 236 crore through a combination of private equity and FCCBs (due for conversion in 2012 at Rs 303). This assumes significance since the recent bouts of interest rate hikes have made money dearer.

Among other factors that lend strength to the EKC’s business prospects is its ability to pass on input price hikes to its customers. Despite there being pressure on the input cost front, the company has not only been able to maintain its margins (at about 29 per cent last quarter); it has also bettered its average realisation in recent times. This was also achieved partly by tilting the product mix in favour of CNG cylinders (which enjoy higher margins). In the coming quarters, even if there were no respite on the raw material cost front, better capacity utilisation and economies of scale may give it sufficient leeway to sustain margins at the current levels.

On this score, EKC’s strategy of broad-basing its raw material supplier base to include Chinese and Japanese suppliers (low cost) besides Tenaris, a global manufacturer and supplier of seamless tubes, would also help. That said, domestic growth would, to a great extent, depend on the improvement in CNG infrastructure in the country.

While the government is certainly inclined towards improving CNG infrastructure, in the midst of an economic slowdown, this may not figure in its priority list. Delays in the expansion of EKC’s capacities may also pose a risk to the company’s earnings.


Investments with a long-term perspective can be considered in the stock of PSL, which is the country’s largest manufacturer of high grade helical pipes.

At the current market price of Rs 308, the stock trades at about nine times its estimated FY09 per share earnings, assuming full equity dilution. This leaves considerable headroom for further appreciation in the stock’s price given PSL’s expanding order book, capacity additions and promising demand prospects.

Better realisations and margins from recently bagged orders and the likely contribution from its overseas units in the UAE and the US in the coming quarters also suggest strong earnings prospects.

PSL’s regional distribution presence and large installed capacity has helped it meet its customers’ need for compressed delivery schedules, giving it an edge over its competitors. Over the last three years, it has enjoyed sales and earnings growth of about 16 per cent and 37 per cent respectively, on a compounded annual basis.

The growth rates may improve further, considering the company’s current order book of Rs 6,000 crore (2.7 times its FY08 consolidated revenues). That a bulk of its current order book was bagged only recently amidst tough competition also points to PSL’s strong position in the market.

Another factor that highlights our optimism on the company’s business prospects is its raw material procurement policy. It covers its entire steel requirement within the shortest possible time after the receipt of any order, giving itself sufficient leeway to protect margins.

While operating margins had dipped by a percentage point to 9 per cent for the year ended March 2008, it is likely to improve in future as its US and UAE plants are slated to start production soon. The average realisation per tonne for pipes, which is currently around $100-200 per tonne net of steel price, may see improvement when these facilities begin contributing to the overall revenues. That both these ventures already have orders in hand also reduces any concerns regarding PSL’s ability to break into new markets.

The only flip side is PSL’s relatively high reliance on debt for working capital requirements for inventory maintenance and capacity expansion. While the costs may be easily absorbed with the current scenario of high demand and utilisation, the same could pose a threat to earnings if there were execution delays or orders, due to reduced capex spending by its user industries such as oil and gas.


Investors can consider buying the SAIL India stock, now trading at a price-earnings multiple of about 8.2 times its 2007-08 earnings. The valuation is at a discount compared to Tata Steel (9.4 times) and global steel majors. SAIL’s ongoing capacity expansion programme, backward integration to source iron ore and its wide product mix and distribution reach, amid a good long-term demand environment for steel, favour investment in the stock.
Business Overview

SAIL has five integrated steel plants at Bhilai, Durgapur, Bokaro, Rourkela and Burnpur and special steel plants as well. SAIL’s production capacity of 14 million tonnes (MT) is slated to increase to 26 MT by 2010-11, due to ongoing greenfield and brownfield expansion projects. The expansion plan is expected to address technology obsolescence, achieve energy savings and enrich the product-mix, while addressing the expected global deficit in steel.

The programmes entail an investment of Rs 54,000 crore (factoring in recent cost overruns). The financing is to be done in such a manner that SAIL’s debt-equity ratio remains within 1:1. The total capex for 2007-08 was Rs 2,181 crore and the estimated capex for 2008-09 is Rs 5,000 crore.

These requirements may not impose any fresh borrowings on SAIL in the current high interest cost environment, given the comfortable cash position and internal accruals. The debt-equity ratio has fallen from 0.18 in FY-07 to 0.11 in the latest June quarter, as internal accruals were used to steadily reduce borrowings. This suggests room for the balance-sheet for future leveraging.

Integration moves

On the inputs front, as of now, the company’s captive iron ore mines feed its entire requirements and SAIL plans to expand its existing mines to meet the rising demand for iron ore as output grows.

Its current mining capacity is 26 MT and it will need 43 MT by the end of 2009-10. The iron ore linkages for FY-2010 and beyond would come from the mines in Raoghat, Chiria, Taldih and Thakurani, apart from the existing mines.

Linkages have been formulated between each of SAIL’s plants and specific mines, with plans put in motion for the development of the mines. It has envisaged a Rs 13,000-15,000-crore brownfield expansion programme in the next eight years.

As regards coal, the current import component of 70 per cent (out of which 80 per cent is through long-term contracts from Australia, New Zealand and US and 20 per cent from spot market) is slated to increase from 2010 onwards. Further, the long-term component is likely to go up to 90 per cent from FY-09, which may shield margins to a greater extent from short-term spikes in price.

SAIL has also seen a significant improvement in its operating efficiencies with reductions in coke and fuel rates and energy consumption.
Product mix

The company is focusing on improving its product mix by increasing the proportion of value-added products. The production of value-added products has increased from 1.26 MT (2005-06) to 3.36 MT (2007-08).

The hot-rolled (HR) coils constitute 24.1 per cent, plates 21.2 per cent and semis 17.9 per cent of the sales mix for the year ended 2007-08. The proportion of rounds/bars is slated to increase from 10.2 per cent to 23.3 per cent, structurals from 5.2 per cent to 15 per cent and cold-rolled coils from 8.7 per cent to 10.4 per cent by 2010-11.

This has been accompanied by an expansion in the dealer network, from 653 in March 2007 to 1801 in June 2008.

SAIL’s net sales registered a Compounded Annual Growth Rate (CAGR) of 16.95 per cent over a four year period coinciding with the upturn in the commodity cycle.

Net profits witnessed a better CAGR of 31.6 per cent during the same period. In the latest June quarter, SAIL’s operating profit margins suffered a setback on account of wage revisions and higher raw material costs. SAIL appears more vulnerable to constraints on domestic steel prices than Tata Steel, which has a globally diversified presence. Domestic steel producers, who agreed to a moratorium on prices in May for three months, have once again acceded to holding the price line in August.

Despite this, SAIL clocked strong Q1 numbers, which can be attributed to the thrust on value-added products and improvement in operating efficiencies.

Going forward, while the policy pressures on steel prices and softening global steel prices may limit margins in the near term, prospects for strong demand growth, expansion in volumes and improving product mix augur well for SAIL’s earnings over the medium-long term.

Some primary and secondary steel producers have taken a 4 per cent cut in steel prices recently. However, this is to be viewed only as a temporary phenomenon in the light of lower global prices of steel.

Notwithstanding the economic slowdown, the domestic demand scenario for steel continues to be sanguine, given the growth potential of infrastructure and construction sectors.

via BL

DLF - Annual Director's Report - 2007-2008




Your Directors have pleasure in presenting the 43rd Annual Report and the Audited Accounts for the financial year ended 31st March 2008.

Financial Results:

(Rs. in Crores) Consolidated 2007-08 2006-07

Gross operating Profit 9961.49 2905.59Less: Finance Charges 310.00 307.59Less: Depreciation 90.06 57.81Profit before Tax 9561.43 2540.19Less: Provision for Tax 1739.09 605.18Profit before minority interest 7822.34 1935.01Share of Profit/(loss) in associates 26.41 (1.27)Minority interest (35.48) (1.11)Profit after tax and minority 7813.27 1932.63interest

The Gross Operating Profit on consolidated basis was Rs.9,961.49 Crores against Rs.2,905.59 Crores in the previous year (2006-07), an increase of 243% and the net profit after tax for the year was Rs.7822.34 Crores as against Rs.1,935.01 Crores for the previous year (2006-07), representing an increase of about 304%.

Review of Operations:

Over the past few years, the real estate sector has transformed from a nascent and unorganized sector to an emerging, professionally organised industry, which is contributing significantly to the GDP of the nation. Being the leader in the industry in terms of revenues, earnings and market capitalization, your Company has been able to capitalize the opportunities in an efficient manner. With its high quality land bank and 62 years track record of delivering quality real estate developments, your Company continues to lead the real estate industry in India and commands an impeccable reputation in its core businesses homes, offices and retail. The Company is now all set to embark on a journey to be named among the leading players in its new businesses of hospitality, SEZs and infrastructure development with the best quality standards and delivery commitments.

There has been a substantial increase in your Company's land resource from 574 msf at the beginning of the year to 751 msf at the end of the year. 85% of the land resource is located in the top seven cities of the country. The operations extended to 32 cities across the country. The area of projects under construction increased significantly from 44 msf to 62 msf, with work spanning across 14 cities. Your Company's various JV's added much needed momentum to the execution of the projects.

Your Company's development of MITES SEZs has acquired further momentum. 7 SEZs have been notified and are under various stages of development. 4 SEZs are awaiting final approval and another 4 have been applied for.

During the year under report, the Company bagged the prestigious 9,168 acres Bidadi township project in association with Limitless Holdings, part of Dubai World Group. Now rechristened as New Bangalore, it will be the single largest township development by a private developer in the country.

During the year, several premium homes segment targeting mid-income earners were launched. The encouraging response of 4,850 apartments being booked in the first four months of 2008 is a vindication of your Company's strategy to drive home sales of high quality products at reasonable prices.

During the year, the Company has also entered into a JV with Prudential Financial Inc., USA for Asset Management business. The JV with Prudential Insurance of USA for Life Insurance business has already received R-3 license from IRDA to commence business.

The JV with Hilton Hotels recorded significant progress with acquisition of 16 sites during the year. All the projects in these sites are at various stages of construction and development. Many more sites are expected to be acquired in the current year.

The momentum in Hospitality business was further enhanced by your Company's first acquisition in International arena - Aman Resorts - the most innovative and marquee name in luxury hotel groups across the globe. This Company operates 18 boutique resorts across the world and has several new projects in key exotic locations under development. Aman Lodhi, a super luxury hotel in Delhi, will be operational during 2008-09.

The performance of the Company on stand-alone basis for the year ended on 31st March, 2008 is as under:

(Rs. in Crores) Stand Alone 2007-08 2006-07

Turnover 6058.46 1429.49Gross operating Profit 3591.25 986.02Less: Finance Charges 447.65 356.25Less: Depreciation 25.68 9.44Profit before Tax 3117.92 620.33Less: Provision for Tax 543.52 214.56Profit after Tax 2574.40 405.77Earlier Year Items:Income Tax 0.19 1.14Balance as per last Balance Sheet 269.27 523.76Transfer from:Capital Reserve - 1.40Profit available for appropriation 2843.86 932.07Appropriation:Issue of Bonus Shares 0.07 215.38General Reserve 311.00 48.50Dividend on Equity Shares:Interim 340.97Final 340.97# 340.97Tax on Dividend 115.89 57.95Surplus carried to Balance Sheet 1734.96 269.27 2843.86 932.07

* Proposed.

Future Outlook:

With the economy growing at 7-7.5% p.a., the demand for premium real estate continues to be buoyant. While we expect a cautious outlook for the year ahead, our strong execution capabilities will help us in meeting the timelines and delivering the targeted double-digit growth in all facets of our business. Despite some macro economic concerns about slowdown in the sector, our long term outlook remains unchanged. Accordingly, we will continue to invest in creating distinctive products to satisfy the increasing demand arising from the growth of the Indian economy across various sectors.

All your Business Units (BUs) - offices, retail and homes, have now reached the steady platform for execution and delivery. While launching of new projects across verticals would be part of the usual business, management focus would increase on project execution and delivery within timelines. Some of DLF's key projects have ambitious timelines, including the prestigious Dwarka Convention and Exhibition Centre at New Delhi, which is targeted to be completed before Commonwealth Games, 2010.

Your Company's JV, DLF Pramerica Life Insurance will commence its operations during the year 2008-09.

With multiple opportunities for growth and diversification in the real estate sector, DLF is well poised to achieve its growth plans across all lines of business.


Your Company paid an interim dividend of 100% in October, 2007. The Board of Directors has recommended a final Dividend of 100%, making the aggregate dividend at Rs. 4 per share (200%) of a par value of Rs.2 each. (2006-07 - total dividend was Rs.2 per share).

Credit Rating:

During the year under review, ICRA Limited, an associate of Moody's Investor Service and a leading credit rating agency, assigned Highest Credit Quality Rating 'A1+' to Rs. 2,000 Crore Short Term Debts/ Commercial Paper programme of the Company.

Further, CRISIL, a unit of Standard & Poor's, assigned AA Rating to Company's Rs. 5,000 Crore Non-Convertible Debentures, 'P1+' Rating to Company's Rs. 3,000 Crore Short-Term Debt and AA Rating to Company's Rs.6,791 Crore Term Loans with a stable outlook.

Buy-Back of Equity Shares:

Your Directors in their meeting held on 10tn July, 2008 approved buy-back of not exceeding 2,20,00,000 Company's fully paid-up Equity shares of Rs. 2 each, at a price not exceeding Rs. 600 per Equity share, upto a maximum amount of Rs. 1,100 crore, i.e., within the limits of 9.80% of the aggregate of the Company's total paid-up equity capital and free reserves as on 31St March, 2008.

The buy-back is proposed to be made from the current surplus and/or cash balances and/or internal accruals of the Company by way of open market purchases through the Bombay Stock Exchange Ltd., and National Stock Exchange of India Ltd., using their nationwide electronic trading facilities as per the provisions contained in the Securities and Exchange Board of India (SEBI) (Buy-Back of Securities) Regulations, 1998.

Further, the buy-back is subject to the necessary exemption approval to be granted by SEBI under Regulation 4(2) of the SEBI (Substantial Acquisition of Shares & Takeover Regulations), 1997 to promoters, promoter group, persons in control and persons acting in concert (Promoters) from the requirement of making an open offer under the Regulations.

The application for seeking exemption from making open offer, has been submitted to SEBI. Upon receipt of the said exemption approval, the Company will proceed with the buy-back of Equity shares.

Fixed Deposits:

As on 31st March 2008, an outstanding/unclaimed public deposit of Rs.0.27 lac (previous year Rs.0.27 lac) is lying with the Company. The Company has not accepted/renewed any fixed deposits during the year under review.

Subsidiary Companies:

During the year, the Company entered into various new business dimensions through 166 subsidiaries such as SEZs, Life Insurance, Hospitality, Asset Management, Township Development etc.

In terms of the approval granted by the Central Government vide letter No.47/385/2008-CL-III dated 6th June, 2008 under Section 212(8) of the Companies Act, 1956, the audited statement of accounts and the Auditors' Report thereon for the year ended 31st March, 2008 along with the Reports of the Board of Directors of the Company's subsidiaries have not been annexed. The Company will make available these documents upon request by any Member of the Company interested in obtaining the same. However, as desired by the Central Government, the financial data of the subsidiaries have been furnished under the heading 'Subsidiary Companies Particulars' forming part of the Annual Report. Further, pursuant to Accounting Standard-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report includes the financial information of its subsidiaries. There is no material change in the nature of business carried on by the subsidiaries of the Company.

Consolidated Financial Statements:

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standard-21 on Consolidated Financial Statement read with Accounting Standard-23 on Accounting for Investments in Associates.

Joint Ventures:

Some of the major joint ventures entered into by your Company are:

* Laing O'Rourke Plc., UK for construction and execution of projects;

* WSP Group Plc., UK for design and engineering consultancy;

* Limitless Holdings - part of Dubai World Group for mega township development;

* Prudential Insurance of USA for life insurance products;

* Prudential Financial of USA for AMC; and

* Fraport for airports construction and maintenance.

Significant Development and Acquisitions:

* Integrated township project (knowledge city) on the outskirts of Bangalore.

* Township projects in western outskirts of Kolkata.

* Acquired land parcels for office development including Tidal Park, Chennai.

* Expanded footprints to new locations like Gandhinagar, Nagpur, Rai (Sonepat), Mumbai and Bhubaneshwar.

* Setting up of super luxury Mall for luxury brands.

* Launched six new commercial space projects across the country in Delhi, Hyderabad and Kolkata.

* Acquired majority stake in Aman Resorts, a chain of luxury and super-luxury hotels.

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

The particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure-A annexed hereto and forms part of this Report.

Particulars of Employees:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of the employees are set out in the annexure to the Directors' Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Employee Stock Option Scheme (ESOS):

Information regarding the Employee Stock Option Scheme (ESOS) is at Annexure-B.

Listing at Stock Exchanges:

The equity shares of your Company continue to be listed on BSE and the NSE. During the year under review, the equity shares form part of S&P CNX Nifty & BSE - 30 indices. The listing and custody fees for the year 2008-09 have been paid to the Stock Exchanges, NSDL and CDSL, respectively.

Management Discussion and Analysis Report:

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

Corporate Governance Report:

The Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance practices and have implemented all the stipulations prescribed. The Company has implemented several best corporate governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report.

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

Directors' Responsibility Statement:

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

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

b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

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

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


The Auditors, M/s. Walker Chandiok & Co., Chartered Accountants, hold office until the conclusion of the forthcoming Annual General Meeting and are recommended for re-appointment. Certificate from the Auditors has been received to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Notes on accounts and observations of the Auditors in their report on the Accounts of the 26 Company are self-explanatory and therefore, in the opinion of Directors, do not call for any further explanation.


Pursuant to Section 256 of the Companies Act, 1956 read with the Clause 102 of Articles of Association of the Company, Ms. Pia Singh, Mr. G.S. Talwar, Mr. K.N. Memani and Mr. Ravinder Narain retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

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

Corporate Social Responsibility:

Corporate Social Responsibility is integrated into the Company's business strategy of Building India and becoming the world's most valued real estate developer.

Your Company has been the forerunner in introducing structured development of world class townships, plotted colonies, commercial and retail towers and condominiums in India. It has been the first to introduce internationally recognized lifestyle improvements in India, which have now been adopted by other developers and are slowly transforming the Indian landscape. While DLF continues to create world class infrastructure, it has not lost sight of its responsibilities as a social and economic change agent across various segments. At DLF, we are committed to build India from the grassroots, thereby enriching and enhancing the quality of life of its people. The Company has made significant investments in community welfare initiatives for employees, community and the under-privileged through education, training, health, environment, capacity building and rural-centric interventions as detailed at Annexure-C.

Promotion of Sports:

As a responsible corporate citizen, your Company is committed to develop and promote sports, 27 games and adventure activities, inter-alia:

* Sponsored Title for DLF Indian Premier League (IPL) for five years of Twenty: 20 Cricket;

* Sponsored title for DLF Cup Abu Dhabi and DLF Cup Malaysia; and

* Hosted Johnnie Walker Classic Golf Tournament - Asia's most prestigious and longest-running luxury golf experience.

Awards and Accreditions:

Your Directors report that your Company has excelled in various dimension of Corporate achievement, recognized through peer and public evaluation. The details of awards and recognitions to your Company are as under:

* Mr. K.P. Singh, Chairman was conferred 'Honorary Degree of Doctorate in Science' by the prestigious G.B. Pant University of Agriculture & Technology, Pant Nagar in recognition of his 'invaluable contribution in the field of Business Administration';

* Mr. M.M. Sabharwal was conferred 'Padma Shree' by Government of India;

* Mr. K.P. Singh - NDTV 'Special Award for Business Man of the Year';

* Most Diversified Real Estate Developer Award by CNBC Awaz-Crisil Real Estate Awards 2007;

* Best Builder and Developer Award by MAPSOR Indian Property Awards- 2007; and

* Real Estate Excellence Awards for Best Developer (Residential)- 2007.


Your Company continues to occupy a place of respect amongst stakeholders, most of all our valuable customers. Your Directors would like to express their sincere appreciation for assistance and co-operation received from the vendors and stakeholders including financial institutions, banks, Central & State Government authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review. Your Directors take this opportunity to place on record their gratitude and appreciation for the committed services of the employees at all levels of the Company.

For and on behalf of the Board of Directors

Place: New Delhi (Dr. K.P. Singh)Dated: 31st July, 2008 Chairman


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 160 MWe of capacity has been installed. ii) Energy conservation done by using gas based generators and Vacuum Absorption Machines (VAMs) installed in four projects which have already been commissioned. For another four projects procurement of generators & VAMs is in progress. iii) Energy saved by using exhaust gas and water approx. 11 lacs units per month.

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

Additional investment is being done to install 150 MWe of Wind power plants.

To procure 30 more VAMs for commercial complexes and retail outlets this year.

Use of solar energy for common area lighting is being practised.

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

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

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


B. Technology absorption:

e) Efforts made in technology absorption:


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 immoveable properties to customers in India and abroad. ii) Initiatives taken to increase exports:

The Company does not have any export as such, as the immoveable properties are incapable of being exported.

iii) Development of new export markets:

The Company receives remittances of sale consideration for immovable properties for products and services located in India, purchased by the customers' abroad. iv) Export plans:

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

g) Total foreign exchange earned and used:

(Rs. in Crores) 2007-08 2006-07

a) Foreign exchange earned 120.31 199.04b) Foreign exchange used 109.23 55.791


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

Current Year Previous Year

A. Power and fuel consumption:

1. Electricity:a) Purchased Unit 48,166,504.8 40,138,754Total Amount (in Rs.) 219,157,596 182,549,538Rate per unit 4.55 4.55b) Own Generation:i) Through diesel generator:Unit 59,596,491 49,253,299Unit per liter of diesel oil 3.82 3.82Cost/Unit (in Rs.) 9.16 8.76ii) Through gas turbine/generator:Unit 30,231,250 24,185,000Unit per liter of fuel oil/gas 3.7 3.7Cost/Unit (in Rs.) 3.40 2.952. Coal (Specify quantity and where used):Quantity (tones) NA NATotal Cost (in Rs.) NA NAAverage Rate NA NA3. Furnace Oil:Quantity (K. Liters) NA NATotal Amount (in Rs.) NA NAAverage Rate NA NA4. Others/internal generation through wind energy:Quantity 28,563,397 NATotal Cost (in Rs.) 8,854,653 NARate/Unit (in Rs.) 0.31 NA

B. Consumption per unit of production:

Standards Current Previous (if any) Year Year

Products (with details) unit - NA NAElectricity - NA NAFurnace Oil - NA NACoal (Specify quality) - NA NAOthers (specify) NA NA


Form for disclosure of Particulars with respect to Absorption:

Research and Development (R&D):

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

Study being done to reduce energy consumption as per ECBC norms in association with TERI &U USAID in commercial complex projects which includes use of Solar power for common area lighting loads.

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

Appx. 1.75 Lacs Units saving on account of use of Solar energy.

3. Future plan of action:

Exploring the possibility of use of the Wind energy & Solar power in future commercial & retail projects.

4. Expenditure on R&D :

a. Capital Nilb. Recurring Nilc. Total Nil5. Total R & D expenditure as a percentage of total turnover Nil

Technology absorption, adaptation and innovation:

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

Efforts are made for design & detailing and also study of most efficient & economical equipment selection and use of non-conventional source of energy.

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

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

3. In case of imported technology (imported } N.A.during the last 5 years reckoned from the }beginning of the financial year) following }information may be furnished: } }a) Technology imported } } b) Year of import } } c) Has technology been fully absorbed } } d) If not fully absorbed, area where this }has not taken place, reasons therefore and }future plan of action }


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

(a) (i) Options granted:


(ii) Options committed to be granted in future:




(b) The pricing formula:

Intrinsic Value

(c) Options vested:


(d) Options exercised:


(e) The total number of shares arising as a result of exercise of option:


(f) Options lapsed:


(g) Variation of terms of options:


(h) Money realised by exercise of options:


(i) Total number of options in force:


(j) Employee wise details of options granted to:

(i) Senior managerial personnel:

Mr. T.C. Goyal, Managing Director-285,700 options (ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year:

Mr. Ramesh Sanka, Gr.CFO-214,300 optionsMr. A.D. Rebello, Advisor-214,300 optionsMr. Ravi Kachru, Joint MD-214,300 options (iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant:


(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with [17] [Accounting Standard (AS)-20 Earnings Per Share]:


(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed.

Difference in employee compensation cost:

Reduction of Rs. 6,49,64,533.Impact on Profits : Increase by Rs. 4,28,83,088(net of Income tax)Impact on EPS: Basic = +0.03Diluted = +0.02

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock:

Grant I Rs.2 & Rs.442.52 respectively.Grant II Rs.2 & Rs.735.04 respectively.

(n) A description of the method and Black Scholes Option Valuation significant assumptions used during method has been adopted for the year to estimate the fair values estimating the fair value of theof options, including the following options.weighted-average information:

(i) Risk-free interest rate, Weighted-average information for Grant I are as follows:

(ii) Expected life,

(iii) Expected volatility, (i) Risk free interest rate: 8.37%

(iv) Expected dividends, and (ii) Expected life: 6.50 years

(v) The price of the underlying share (iii) Expected volatility: 52.3%in market at the time of option grant. (iv) Expected dividends: 70% (v) Price of underlying share: Rs.525 Weighted-average information for Grant II are as follows: (i) Risk free interest rate: 8.09% (ii) Expected life: 6.50 years (iii) Expected volatility: 52.3% (iv) Expected dividends: 70% (v) Price of underlying share: Rs.865.40


Corporate Social Responsibility:


* Set up a Summerfields school, Gurgaon for the urban and rural communities. Presently there are 1800 students studying in this school.

* Established a non formal school called 'Swapan Sarthak' for underprivileged children. All facilities including uniforms and text material are provided free of cost. Various excursions are organized for a wider exposure.

* Partnered with NGO 'Pratham' to set up the DLF-Pratham Learning Excellence Centres to facilitate a systematic learning process to achieve specific targets in 25 villages in the state of Haryana.


* Set up Rural Primary Health Centres in Haryana, each centre catering to a village cluster for providing promotive and curative health services to the underprivileged and rural population, providing free medical consultancy, health checkups and subsidized medicines. The first such centre has been set up at village Shikopur and three more centres are under establishment at village Sakatpur, Nawada Fatehpur and Hayatpur.

* Established First Aid Centres and Clinics at construction sites, and made arrangements for emergencies by providing 24-hour ambulances at the sites.

* Holds regular health camps in DLF for the larger community through a network of medical professionals. The Company held a number of camps in 2007-08.

* Funded the CII - Lifeline Express (Hospital on Wheels) Health Camp at Hingoli, Maharashtra. Patients with cleft lip, ear deafness, polio and cataract disabilities were operated free of cost.

* Organised Blood Donation Camps. 249 employees donated blood to the Lion's Blood Bank.

Construction Workers:

* Provision of respectable housing through hutments on various DLF-Laing O' Rourke construction sites, funded by DLF, a mix of cemented/pre fabricated sheet family rooms and dormitories with electricity, fans, beds and linen facilities and a separate washing and toilet block-all easily approachable by paved roads and drainage which are linked to a soak pit for replenishing the ground water.

* Setting up of a Sewage Treatment Plant at all the above sites for meeting the internal requirement for the toilet block, cleaning of roads and for gardening.

* A garbage management system.

* Facilities like dining area, subsidized canteen, 24-hour ambulance on site medical help and first-aid centres.

* Organisation of mobile creches to take care of the children - eight hours a day tie-up with NGO (Mobile creches).

* Establishment of a residential non-profit school in carpentry and masonry for training potential employees. This is an ongoing project currently being executed in over 21 construction sites benefiting approximately 15,000 construction workers.

Employment linked Training:

* Establishment of Employment linked training centres (three) in Maharashtra for training 1500 trainees annually in hospitality, customer relations, sales and ITES with the objective to train and empower the underprivileged youth with permanent skills enabling them to earn their future livelihoods. Assured job placements are provided by DLF.


* Obtained requisite environmental clearances and follow environmental norms at construction sites.

* Pursuing environment friendly technologies for construction of projects and adopting green technologies.

* Incorporating Rain Water Harvesting systems in the basic design.

* Installation of Water recycling plants for waste water management upto tertiary level at all DLF Commercial buildings.

* Installation of first of its kind gas-based power generation system at the Infinity Tower in Gurgaon.

* Utilisation of waste heat for airconditioning thereby saving 30% of power.

Employee Welfare:

Employees form an important segment of the DLF 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 medical insurance. The Company has a pension policy in place. The low attrition rate in the Company is indicative of their satisfaction and in general employees in DLF are a happy lot. Employees participate in voluntary activities such as donating blood and various CSR initiatives of the Company as well as brainstorming on new initiatives.

The Company is in the process of constituting an Employee Welfare Trust by the name of 'DLF Employee Welfare Trust ' to implement various specific employee welfare schemes.

Management Discussion & Analysis Report:


Superior Business Model:

Low risk business mode/ with independent verticals delivering growth:

DLF has a low risk, robust model with a mix of development and rental earnings. Multibusiness, multi-segment within business and operations across geographies mitigates risk due to cycles in the business.

DLF's successful business model is based on independent business verticals - homes, offices, retail and hotels - organized and operating on an independent basis. The organisation structure flows down to the regional/local levels as well. Playing the role of an aggregator at the corporate level, DLF aligns the interests of all its business units, gearing each of them to contribute to the growth of the Company. Inter-business traction, whether project-linked or performance-linked, drives performance of each business vertical, as well as of the Company as a whole.

Scaling Up Project Execution:

Enablers in place to deliver sustainable growth:

Land Resource:

DLF has high quality land resource, concentrated in top Indian cities as it believes that economic activity in these cities would result in a better absorption potential for its real estate development. Top seven Indian cities - Delhi, Mumbai, Bangalore, Kolkata, Chennai, Pune and Hyderabad - account for 85% of its land resource.

During 2007-08, DLF's land resource grew from 574 msf to 751 msf, sufficient to meet more than 10 years of development activity.

Year Development potential (msf)

31 March, 2007 57431 March, 2008 751

Total development potential: 751 msf

(As on March 31, 2008)

* 92% of completely owned land

* 90% available as large, contiguous plots of land

* Sufficient land resource to meet more than 10-year requirement

Total development potential by geography:

Super Metros 33%Metros 46%Tier-I 17%Tier-II 4%

Total development potential by business units:

Homes 64%Offices 22%Retail 12%Hotels 2%

Yet, DLF has charted out a pan-India foothold, with projects across 32 cities in India at various stages of development, execution and completion. 92% of the land resource is fully owned by DLF, whilst only 8% is in JV with others. The land resource as represented here constitutes only of DLF's share in respect of land resource which is jointly owned.

Best-in-class alliances:

DLF has built world-class organization to deliver across the value chain - from design and engineering to construction to operations. DLF has set up an organisation to manage projects across verticals to ensure delivery par excellence. This helps strategic business units (SBUs) to exclusively focus on commercial aspects of the business, leaving project execution to a specially dedicated team. This endeavour has helped DLF in improving the quality of its real estate development and reducing the time to market, thereby improving the economic viability of the projects.

DLF has leveraged best-in-class alliances to strengthen its current businesses and develop new opportunities. These include JVs with Hilton for hotels, Laing O'Rourke for construction, WSP Group for design and engineering, Nakheel for mega-township developments, Prudential Insurance of America for life insurance products, Prudential Financial Inc. for Asset Management and MoU with Fraport for airport development, among others.

Year Area under construction (msf)

31 March, 2007 4431 March, 2008 62

Effective alliances have helped in faster execution and added value to overall project delivery.

The area of projects under construction by DLF grew from 44 msf last year to 62 msf at the end of fiscal 08.

Robust Financial Performance:

Strengthening leadership position:

Revenue Fr Profitability Growth:

During the financial year 2007-08, DLF validated its business strategy of leading a multi-business, multi-segment across geographies, with mitigating cycles in the business, by exhibiting enhanced financial performance. DLF recorded consolidated revenues of Rs 146,839 mn, an increase of 262% from Rs 40,533 mn in 2006-07. EBIDTA improved to Rs 99,615 mn, posting a 243% increase over Rs 29,056 mn recorded in 200607. Net profit surged 304% to Rs.78,120 mn from Rs 19,336 mn in the previous fiscal.

This has helped DLF in further consolidating its leadership position as India's largest real estate Company in terms of revenues, earnings and market capitalization. DLF now has a healthy mix of developmental earnings and rental earnings. The rental earnings, which stood at Rs 2,847 mn for 2007-08, is set to grow further as leased-out assets (both offices and retail malls) increase further on the balance sheet.

Financial Performance (mn):

FY07 FY08

Turnover 40,533 148,839EBIDTA 29,056 99,615 PAT 19,336 78,120

Strong Balance Sheet:

With a net worth of Rs 196,883 mn, net gearing of 51 % and cash reserves of Rs. 21,421 mn, DLF has a strong balance sheet to withstand any downtimes, as well as leverage opportunities in the market. DLF has been assigned AA rating, denoting high safety, by CRISIL.

DLF has a philosophy to maintain the gearing at 51%, to ensure that balance sheet can easily tide over any down cycles in the business. The management expects that DLF would be free cash positive by FY 2011.

To ensure adequate replenishment of its land resources, DLF has carved out a land replenishment fund, wherein 15% of the sale value of its real estate development is credited.


During the year, DLF not only established higher benchmarks of performance & leadership position in Indian real estate industry but also catapulted itself amongst the top 5 real estate companies in the world.

The market opportunity for DLF continues to be huge, given the backlog of shortages in the real estate industry. The latest figures from the Eleventh Five-year plan estimate a shortage of 24.17 mn dwelling units in the housing sector alone. These shortages continue to accumulate due to execution bottlenecks and restrictive credit flows into the real estate sector. Even in the office and retail sectors, it is estimated that shortages shall continue to plague the industry as large number of launches continue to be only on paper or delayed due to archaic system of approvals or availability of credit. To mitigate these factors, DLF has set up professional teams, at corporate and local levels, to address the issue of project approvals. Corporate finance team takes care of funding requirements through alternative mechanisms.

The strategy of DLF to establish independent JV's in the execution space paid off handsomely during the financial year. The construction JV with Laing O'Rourke has substantially scaled up its business-executing more than 40 msf of projects across the country out of a total 62 msf. Additionally, the JV with WSP for engineering and design services added much needed strength and technical expertise to the project design capabilities of DLF. Apart from the JVs to scale up project execution, DLF also made small 'pure' equity investments like JV with Prudential Financial Inc., US to form Asset Management Co.

DLF's unique business organization - based on verticals is geared up to deliver superior results, both in the short and long run. High quality teams managing these independent verticals are fully motivated and empowered to meet their P&L objectives, with DLF at the top gradually emerging as an aggregator of these businesses.

Whilst DLF has high quality of land resource, enough for more than 10 year development pipeline, DLF has not lost sight of the fact that it is the human resources that convert these land resources into earnings. During the year, the number of professionals employed has gone up from 2478 to 3700, managing businesses at the regional and local levels. Not only were teams empowered to take forward their business plans, but incentive schemes were structured in such a manner that these management teams have their incentives linked to the projects/P&Ls they are managing along with ESOPs.



The Indian economy is one of the fastest growing economy in the world. It is a part of the BRIC nations - growth engines of world economy in the 21st century.

Growing at a steady pace, Indian real estate industry has been among the most appealing investment areas for domestic and foreign investors for the past few years. Linked to about 250 ancillary industries like cement, steel, etc. through backward and forward linkages, real estate is an extremely important sector of the Indian economy.

Nine percent of the Indian GDP is contributed by the real estate sector. It is estimated that one rupee invested in this sector results in 78 paise being added to the country's GDP.

The Indian real estate has been instrumental in India emerging among the top destination in Asia in attracting private equity investments during 2007.


After years of unplanned and haphazard development, the housing sector in India has gradually metamorphosed into an organised one with improved product offerings and geographic spread. Residential segment is leading the growth trajectory of the fast expanding real estate sector in India with nearly 75-80% of the total real estate demand originating from this sector. If the economy grows at 8%, the housing sector has the capacity to grow at 12.5%.

The housing market has grown rapidly in the last few years due to demand growth stemming from the services-industry-led economic boom, lower interest rates and changing consumer mindset.

According to United Nations, India's rate for urbanisation is faster than the rest of the world and as per State of the World Population Report 2007, Indian population in urban areas, which currently is less than 30%, is expected to rise to 40.7% by 2030. This growing urbanisation will result in an incremental demand for housing in suburban locations of urban areas.

Some of the key factors that have spurred demand for housing in India are rising income levels, a growing middle class, rising incidence of nuclear families and favourable government policies. Change in the attitude of the young working population from 'save and buy' to 'buy and repay' has boosted housing demand.


India's growth continues to run at plus 7.5% and the services sector GDP, which more directly affects office demand and thereby rents, is running at over 11% growth. Office space segment looks bright in India with the demand for new Grade-A office spaces still outstripping supplies.

CRISIL Research expects the Indian ITES industry to grow at a CAGR of 22 per cent over the next 5 years. MITES alone is estimated to require 150 msf across urban India by 2010. Engineering services outsourcing, the next growth engine for the industry, is likely to expand at a CAGR of 26 per cent over the next 5 years. The domestic industry's proven capability to understand and develop processes and domain expertise across services, along with the large talent pool, will ensure that India remains a premier destination for offshoring. Most of the geographical locations are continuously exhibiting more than 90% of occupancy rates.

As much as 39 msf of new office supply was absorbed in 2007, and the overall commercial office stock was increased by approximately 53 mn sq. ft. to take the total Grade A (leased) stock to 190 msf, with the rental trend line continuously rising in markets like Gurgaon and Bangalore. There is also an increased interest emerging in Tier II and Tier III markets of India as destinations for creating quality office spaces. Occupiers have been looking closely at these non-metro markets that offer lower costs.

The year ahead is expected to see continued demand for IT SEZ space with pre commitments, to avail tax sops. In the short to medium term, the rentals and capital values are expected to remain stable, with NCR market continuing to fuel its growth as a corporate destination, with its overall competitiveness including infrastructure and manpower.


Modern retail formats in India command just 3% of total retail market. This is far lower than developed markets (US - 85% share) and even lower than other Asian countries (Malaysia --- 55%, Thailand --- 40%, China -- 20%). Given the huge demand for organised retail space in the country, it is expected that organised retailing would grow at a rate of 25-30% over the next five years in India. This would require around 350-400 msf of retail real estate by 2015. This growth is being driven by a widening middle class with higher disposable incomes, a consumption-oriented consumer mindset, increasing investments by both - domestic and international players, as well as supply chain improvements due to stronger infrastructure.

The Indian retail market is expected to grow from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$637 billion by 2015 with the organised segment expected to account for 22 per cent by 2010, up from the present four per cent.

The malls coming up in India are spurring the vertical versions of their US counterparts, housing almost every international brand alongwith multiplex cinemas, escalators and huge parking lots. India also remained as the most attractive retail market for the third year in a row in an index prepared by consulting firm AT Kearney.

Hotels, clubs and convention centres:

There is a huge domestic tourist market in India, including business and leisure travellers. International tourist arrivals in India grew in 2007 by 3% to a record level of 4.3 mn. As the economy grows further, the demand-supply gap is expected to widen. The shortage in rooms has resulted in spiralling prices in India.

Hospitality majors are ramping up investment in new projects, which is expected to be USD 2 billion, over the next two years on the back of a massive growth in business and leisure travel. Many PE funds are allocating as much as 50% of their planned real estate investments into the sector.

Another 1,25,000 hotel rooms are needed in the country by 2010 to meet the surging demand, particularly in upper and middle ranges.



DLF is a trusted brand with superior execution record in the Homes business comprising diverse residential developments like super luxury homes, luxury group housing, rowhouses/villas, integrated townships and plotted colonies. Historically, DLF has a dominant position in the National Capital Region (NCR) and is now in the process of expanding its presence across India.

As a result of its high quality residential dwellings delivered in time, DLF has seen distinctive appreciation in its property values. The strong brand affiliation that DLF enjoys in its core markets is evidenced by its ability to command a premium on its properties relative to that of the peers in the industry.

Performance - FY 08:

The year 2007-08 saw aggressive launch of premium homes targeted at mid-income earners with specific focus on affordability and actual user. DLF expanded its footprint to 5 new cities -Chennai, Kochi, Indore, Kolkata and New Gurgaon with the launch of premium housing in these areas. The enthusiastic customer response to each project launched, revealed enormous pent up demand for DLF properties, across India.

DLF attracted private equity investment amounting to Rs 16,750 mn from Merrill Lynch & Brahma Investments in 8 residential projects in Chandigarh, Chennai, Kochi, Bangalore and Indore, reflecting the confidence of global institutions investing in DLF and the economic viability of the projects. This also enabled DLF to partially monetise the value of its land resource at a premium and significantly improve the rate of returns from these projects.

Year Under Construction (Homes) (msf)

31 March, 2007 7 31 March, 2008 12

Year Development potential (Homes)

31 March, 2007 40131 March, 2008 477

Development potential by Geography (Homes):

Super Metros 31%Metros 50%Tier-I 16%Tier-II 3%

Development potential by Category (Homes):

Super luxury 1%Luxury 9%Mid-Income/Vilas/Plots 90%

Significant Developments & Acquisitions:

* Bagged the prestigious Bidadi (christened as New Bangalore) integrated township project spread over 9,168 acres on the outskirts of Bangalore. This township, will have a development potential in excess of 300 msf and is being developed in partnership with Limitless - part of Dubai World group.

* Acquired Swantantra Bharat Mills, which will have a development potential of approximately 10 msf along with preowned lands

* Bagged the project for developing 5,000 acres of township on the western outskirts of Kolkata

Significant launches:

* Riverside, Kochi

* Garden City, Indore

* New Town Heights, Kolkata

* Garden City, Chennai

* New Town Heights, New Gurgaon


DLF has now segmented its product category in homes into Super-luxury and Luxury homes, Lifestyle homes and Premium homes. Within each category, specifications and designs are being standardized, as far as possible, to expedite execution and optimum value engineering.

DLF has plans to launch projects in all these different categories in every

major city in India to offer a wide array of choice to the end users with different income-levels. To achieve this, substantial land resource has been procured across India in places like Delhi, Kasauli, Goa, Pune, Kochi, Bangalore, Chennai, Coimbatore, Hyderabad, Chandigarh, Ambala, Jalandhar, Lucknow and Indore.


DLF's offices business develops commercial space across various formats such as large MITES facilities, multi-tenant corporate office buildings, built-to-suit properties and integrated commercial complexes. Besides its dominant presence in NCR, DLF commercial projects are spread across Mumbai, Kolkata, Hyderabad, Pune, Chennai and Bangalore.

DLF's contemporary workplaces are equipped with modern facilities like wi-fi environment, business centre, food courts, ambulance service etc. that synchronize functional efficiencies with aesthetic appeal. DLF's offices are being identified as preferred destinations by leading MNCs and Indian corporate, including many Fortune 500 companies.

Performance - FY 08:

2007-08 has been another exciting year for Indian/IT BPO sector, where India continues to be the 'nerve centre' for Global sourcing with over two-third of the Fortune 500 and majority of the Global 2000 firms leveraging Global service delivery - sourcing from India. Along-with this contribution coming from service sector dominated by MITES sectors, DLF also saw increasing demand emerging from the 'domestic' MNC's leading to strong demand for Grade-A office space.

DLF being the name synonymous with global standards, new generation workspaces and lifestyles achieved a pre-leasing rate of a total of 12 msf approx. in all major metros including Gurgaon, Chennai, Hyderabad, Noida and Pune.

31 March, 2007 2008Under Construction (Offices) 24 39Development Potential (msf) 124 164

Development Potential by Geography (Offices) (msf):

Super Metros 39%Metros 42%Tier-I 16%Tier-II 3%

With the notification of the SEZ Act, attractive tax incentives are available for the MITES industry as well as the developer. With growing demand for IT SEZ spaces, DLF is aggressively pursuing the development of MITES SEZs across India and has invested heavily in the same.

DLF has 7 MITES SEZs that have been notified, along with 4 for which approvals are pending and another 4 that have been applied for. DLF's MITES SEZs have already started operations in Gurgaon, Chennai and Hyderabad.

Significant Developments & Acquisitions:

* Acquired quality land parcels for office development, including TIDEL Park - Chennai, spread over 42 acres with a potential of 4.7 msf of developable office space.

* Further expanded footprint to new locations like Gandhinagar, Nagpur, Rai in Sonepat, Mumbai and Bhubaneshwar.

DLF started construction on 18 msf of office space and delivered 5.65 msf of office space in FY08.


Envisioning the ways of the contemporary corporate culture along with setting new benchmarks in architectural finesse DLF Offices is one of the Group's most progressive verticals. With around 40 msf of ongoing projects, DLF is poised to change the landscape of India's work spaces.

DLF expects to retain its leadership position in the commercial segment by targeting development of IT and non-IT commercial space over the next 10 years. The demand for quality workspace is expected to continue to be strong over the coming years and DLF, with its pan-India dominance, can service prime customers, both MNCs and Indian corporates, across the country.


DLF's retail malls and shopping centres consist of an array of different formats of malls, resulting in a distinctive package of a superior shopping experience with quality ambience, parking, safety, security and entertainment. DLF has embarked upon an ambitious plan to develop approx. 25 msf of retail space in leased mall category in next 5 years. The Company has acquired land for construction of large retail space of about 92 msf.

Beginning 2006-07, DLF introduced a concept of commercial complexes on a build and sale model. These include commercial spaces for small offices or small shops, typically about 1000 sq. ft., with or without retail space on one or two floors. The initial sales in this segment started well, with entire area on offer being booked by customers at attractive realisations to DLF.

DLF operates the Cinemas business in the brand name of 'DT Cinemas' in various malls. Currently, it has 2 operational properties at City Centre and Mega Mall in Gurgaon. DT Cinemas also started operations at DT City Centre, Chandigarh in April, 2008.

DT Cinemas are multiplexes well equipped to provide latest movies and exciting entertainment to its clientele. DT Cinemas features advanced projection systems procured from US-based Christie, a company known to have the best projection systems in the world.

Performance - FY 08:

a) Retail Malls:

Having introduced new concepts like destination malls and theme malls in the arena of retail space, DLF completed and handed over three malls in the affluent areas of Saket and Vasant Kunj in New Delhi, which are expected to commence in the current fiscal.

Retail (msf):

Year Under Construction Development potential

31 March, 2007 13 90 31 March, 2008 11 62

Development potential by geography (Retail):

Super Metros 36%Metros 39%Tier-I 15%Tier-II 10%

DLF Emporio is the first super-luxury mall in India. Some of the luxury brands that Emporio will house include brands such as Louis Vuitton, Dior, Georgio Armani, Dolce & Gabbana, Cartier, Burberry and Ferrogama.

Promenade in Vasant Kunj is a destination mall housing a 7 screen multiplex with 5 mini-anchors. It will have an exciting mix of premium brands such as Calvin Klein, FCUK, Lerros, Lacoste and Apple Store.

Between both these malls, a landscaped open air entertainment has been planned which will be a centre of activity for performances, concerts, plays, exhibitions and a host of other shows.

Courtyard in Saket, New Delhi will boast of largest food court in India.

Apart from these, there are 9 new projects that will be launched for leasing in FY09. Also there are 13 projects going under construction in the current fiscal.

b) Commercial Complexes:

DLF successfully launched 6 new projects spanning over 2.69 msf of commercial space across various locations in India in fiscal 08.

Significant launches:

* SIEL-1 - Delhi * Hyderabad Towers* SIEL-2 - Delhi * Kolkata Towers* Okhla - Delhi * Ludhiana Galleria

Offices in Okhla (Delhi), Banjara Hills (Hyderabad), SIEL-2 (Delhi) and Kolkata booked almost 100% within a week from its date of launch.

The success of projects in Hyderabad and Kolkata, has validated the scale-up and sustainability of this new segment of commercial complexes in the company's business model.

DLF has plans to launch another 12 commercial complexes in the current fiscal across various locations like Delhi, Gurgaon, Lucknow, Hyderabad, Pune, Panipat and Baroda.

c) DT Cinemas:

There are plans to increase the spread of DT Cinemas with a vision to open multiplexes across various places like Shalimar Bagh, Saket, Vasant Kunj and Greater Kailash. This will take the total number of screens of DT Cinemas to 29. Plans are also at final stages for destinations like Noida, Mumbai, Hyderabad, Bangalore, Ludhiana, etc.


Indian retail market today is at an inflection point with exponential growth potential in the next decade. Growing consumerism will be a key driver for organized retail in India. Several demographic trends - rapid income growth with greater purchasing power, increased urbanization, growing young population and tendency to spend rather than save - are favourable for the growth of organized trade. With strong demand of organized retail, real estate development for malls will be the critical driver to build scale.

Catering to this potential, DLF envisages to provide 'next generation theme malls' to cater to different tastes and lifestyles of people.

Apart from developing high-end malls in super-metros and metro cities, DLF will also expand its foothold across other cities in India. DLF plans to position itself strategically in the retail space in India by offering a mix of Luxury malls, City malls and Super malls, to provide differentiated products with value-added facilities. It also expects to close few significant JVs with large international brands, which will also create significant pull for other brands to lease space in DLF malls.

For commercial complexes, DLF expects to roll-out pan-India projects, given the acute shortage of quality space for small offices. It expects this 'build and sell' model with quick turnaround of projects to bring in a healthy cash flow for the retail unit. DLF envisages to develop some of the finest commercial complexes, which combine the best in design, aesthetics and comfort offering the finest business solutions to their customers.


DLF has strategic intent to become a leading hospitality player in the country through integrated hotel development and management. DLF Hotels will be developing, acquiring and actively managing world class properties across a range of hospitality and related formats including Luxury Hotels & Resorts, Business Hotels, Service Apartments, Convention & Exhibition Centres and Family Recreational Clubs. DLF Hotels is well poised to open 4000 plus keys by 2011. The projects are located across India and will be managed and operated by global partners and alliances.

DLF has strategic business partners like Hilton International to manage and operate business hotels and service apartments, Four Seasons to manage and operate a super luxury hotel at DLF Golf Links and AEG Ogden of Australia to manage and operate Convention & Exhibition Centres.

Performance - FY 08:

DLF has acquired 51 sites for hotel developments, which are under various stages of design, development and execution.

Total number of alliances under the DLF-Hilton alliance increased to 16 in the FY08.

Significant Developments & Acquisitions:

* DLF Hotels recently acquired controlling stake in AMAN Resorts, one of the pre-eminent and most innovative luxury hotel groups in the world. 'Aman' - an outstanding brand and winner of over 500 awards since 1988, such as Conde Nast 'The Gold List', Gallivanter's Guide 'Best Hotel Worldwide' etc. - owns and operates 18 boutique resorts across countries such as Indonesia, Thailand, Sri Lanka, India, Morocco, Bhutan, France and the USA.

Aman Lodhi, a super luxury hotel in Delhi of the Aman Resorts, is scheduled to open by end 2008.

Several new projects in key exotic locations like Gocek (Turkey), Venice (Italy), Luang Prabang (Laos), Bodrum (Turkey), Playa Grade (Dominic Republic), Kyoto (Japan), Chaing Mai (Thailand), Yaukuve Island (Fiji), etc. are at advanced stages of development.

* DLF bagged the prestigious project for development of the International Convention Et Exhibition Centre at Dwarka (New Delhi).

* Also acquired land for development of hotels in Old Mahabalipuram Road (Chennai) and EM Bypass (Kolkata).


DLF aims to become a leading hospitality player in the country with plans to develop around 20,000 business hotel keys, 5,000 luxury hotel keys and 5 world-class convention Et exhibition centres. Along with this, there are plans to develop around 40 clubs, as a strategic partner to residential/ township developments in 30 cities around India.

To achieve these goals, DLF has identified and finalized tying up with leading international panel of architects, consultants and vendors. With 4,000 keys planned to go under construction in FY09 and clubs slated to open in Phases II, III and V in Gurgaon, DLF looks well-poised to achieve its targets.

DLF also plans to cater to the ever-growing demand for quality fairs, conventions and exhibition space by creating Convention Et Exhibition centres as per International standards. It is planning to open the first of these centres at Dwarka (New Delhi) by 2010.



To facilitate introduction of world class construction and modern techniques, DLF entered into a 50:50 JV with Laing O'Rourke Plc, UK's largest private construction company. The JV has invested significantly in modern construction equipment which has been instrumental in accelerating construction schedules and raising the overall construction quality standards.

* Strategic Sourcing: DLF has been importing essential items like cement, reinforcement steel, reflective glass etc. from neighbouring countries. This has helped DLF in meeting material requirements on time and also saved cost. DLF has also entered into long term contracts with various vendors for cement, steel and electromechanical equipments for timely Et cost effective delivery. During the financial year 2007-08, DLF effected a saving of Rs 800 mn on the value of materials ordered and also by making use of Higher Grade Reinforcement Steel.

DLF has an independent world-class procurement function for all organizational purchases. In this hub-and-spoke structure, the hub represents the central procurement group supported by spokes comprising project-based procurement groups. While the central procurement group focuses on purchase strategy, responsible for vendor selection, rate/contract finalization and long-term alliances at the project level, the procurement team is responsible for the execution of purchase contracts based on the rates agreed by the central group. This structure facilitates the negotiating power at the central level and promotes operational flexibility at the project level.

Innovation and Technology:

DLF-LOR has introduced advanced technology and updated construction methodology by using imported Aluminium Table form with large sized tables, and adopted high strength concrete & Pos - tensioning system to reduce cycle time. DLFLOR has installed manufacturing plant for precast building components, especially hollow Core/EP slab plant, which would produce building elements in advance, ready for subsequent assembling & thus improving the delivery. DLF-LOR has mechanised the construction processes as far as possible by using Tower Cranes, Batching Plants,Transit Mixers, Pumps etc. to expedite the construction process.

Time Management:

DLF-LOR has implemented working in two extended shifts of 10 hours each, on large projects to increase productivity in the same time frame and thus reducing the completion time of the project.

Labour welfare:

For execution of projects, DLF-LOR has provided well constructed &furnished labour camps with all necessary civic amenities and provisions for creche, medical facilities etc.

Staff strength of DLF-LOR has increased to 1,000 at present.

DLF would be working in 26 cities in India in this fiscal as compared to 14 in 2007-08. The Company would target to increase the area under construction to around 100 msf at the end of current fiscal.


DLF tied up with WSP Group Plc., UK, one of the world's fastest growing design, engineering and management consultancies. WSP Engineering Services Ltd. (WSPESL), a joint venture Company was formed to provide engineering and design consultancy for DLF projects.

The Company draws technical expertise from the worldwide offices of WSP Group, reinforcing DLF's position as an industry leader in detailed design. The bench strength for the WSPESL stands at 102 at the end of FY08.


Complex projects requiring very high degree of planning and resource allocation, have to be closely monitored. DLF has adopted 'primavera' as a project planning, monitoring and resource allocation tool. All the Company's projects are well connected and real time information for project management is updated and provided.



Human resource is a critical element as DLF converts raw land into monetisable real estate assets. DLF has pioneered innovative human resources policies with an aim to retain its position as a preferred employer of the best talent through a performance-oriented and opportunity-enhancing environment. To ensure HR philosophy is translated into action, the Company continuously strives towards having sound, proactive and progressive HR strategies and practices in place. It is ensured that Company's objectives and employee aspirations and needs are aligned.


The Company has high caliber, multi-functional team of over 3700 employees at the end of FY08, up from 2478 in FY 2006-07. DLF has built a young and vibrant team (average age of 37 years) of highly qualified professionals and fresh graduates from technical and non-technical backgrounds.

Key highlights:

Year No. of employees

31 March, 2007 247831 March, 2008 3700

* Partnering with international consultants for key hiring.

* Sustaining and building DLF Brand in top notch B-Schools and professionalinstitutes and recruiting from premier institutes.

* Overseas Recruitment:

- Reaching out to Expatriates;

- Encouraging reverse brain drain by reaching out to NRIs/PIOs; and

* Equal opportunity employer and working towards improving gender ratios.

DLF endeavours to institutionalize a structured process for manpower planning and optimize the Company's manpower utilization in the current year.

Compensation and performance management:

DLF recognizes that compensation is a key driver to attract and retain talent. FY 2007-08 witnessed introduction of variable component in the salary structure linked to individual KPI's.

Employee Stock Options Schemes introduced by the Company have been extremely successful across different levels.

Training & Human Development:

To cope up with the dynamic real estate sector, it is important to unleash the latent capabilities of the employees. For this purpose, the training and development team of DLF has been substantially strengthened. Training initiatives rolled out include:

* Streamlined induction & orientation processes across all levels;

* MT/GET training on an ongoing basis;

* Programmed orientation for hiring from Armed Forces;

* Sponsorship for functional and behavioral training; and

* Conducting ongoing team integration and work effectiveness programs.

Apart from the regular training program for the employees, the Company also intends to carry on various organizational development processes, primarily to bring about transformation process within the organization. DLF also seeks to grow and develop talent internally.

Employee Engagement & Welfare:

HR philosophy is communicated to the employees through various interactions with the top management -Town halls, Business Reviews etc. Various channels to provide information and receive feedback, including fortnightly HR Newsletter-SAM PARK, intranet (DLF Connect) and internal HR helplines have been successfully launched.

Welfare focus includes counselling for employees', health check ups etc. Also, momentum has been stepped up in team building initiatives like Outbound Fiesta, Cricket Cups, competitions and quizzes, etc.

DLF seeks to accelerate momentum of employee engagement initiatives. A process for Grievance Resolution for employees is also under formalization.


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

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

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


With presence in 32 cities across India, DLF has to comply with laws in various states, along with complying with various regulatory issues as a real estate developer. For this, DLF has setup a large legal department for efficient legal management, ensuring compliance of all statutes periodically applicable across all business units and functions.

The Compliance Committee of the Board of Directors supervises the overall legal compliance of the Company. The Committee has also adopted a legal compliance manual for implementation across business segments.

DLF has implemented a state-of-the-art legal compliance system to ensure compliance at every level of the organization, and a risk management system to undertake complete risk assessment and risk mitigation exercise.


With DLF's growth, both in terms of geographical spread and diversification, the roles and responsibilities of IT function have also been fast changing over a period of time. DLF's IT-function takes care of all the IT-related aspects across the group (excluding JVs) ---infrastructure management, procurement of industry-specific standard software and their implementation, implementation of advanced technological products.

With DLF having joined hands with IBM for technology partnership, extensive IT initiatives are being taken in terms of bringing the latest infrastructural and software technologies to DLF, to support its vast infrastructure across India, forming the backbone of all processes and functions.

Performance - FY 08:

Technology-partnership with IBM:

DLF has pitched in IBM as a technology partner, through a Technology Partnership Agreement, for tenure of 10-years to bring-in innovativeness and world-class technologies to keep pace with the current trends.

Bharti as connectivity partner:

DLF has tied up with Bharti Airtel to support its huge infrastructural connectivity. This tie up provides DLF with MPLS VPN connectivity backbone through a dedicated leased line with secured connections to all DLF offices/ locations across the country.

Implementation of ERP: ERP, implemented with the help of Ramco Systems, has been rolled-out successfully replacing the standalone legacy systems residing on different platforms. Ramco ERP is an integrated web-based system that comprises all modules pertaining to DLF's business functions based on a unified platform. This has helped in standardization of processes across the Company and its business units.

Intranet & Workflow Management:

DLF, with the help of IBM, has developed DLF Intranet portal for in-house employees. Corporate intranet facilitates communication and access to Company's sharable corporate resources/information. It has also integrated workflows to incorporate departments' functions and processes, making it more reliable and fast.

Compliance-Monitoring System:

To track adherence to filing of statutory statements to respective government bodies, a system is in place that ensures all the compliances are met on time.

Digitization of Records:

All records since DLF's inception - including customer copies of agreements, financial records, approved drawings, copies of approvals and government sanctions and other statutory records, etc. - have been digitized to ensure preservation of records in databases as well as to facilitate a faster retrieval as and when required.

Geographical Information System:

As tracking of huge land bank has become very crucial for effective utilization or decision-topurchase purposes; DLF has undergone a pilot for digitization of land records for one of its business units. The application is intended to keep track of acquired lands as well as prospective lands for acquisition purposes, providing real-time availability of such records to the management. The application is being unleashed to the requirements of DLF's other business units involved in land procurement.

Going forward...:

Set-up of state-of-art Document Centre:

Work is in progress to set up state-of-art document centre in an area of approximately 43,000 sq. ft. in the Cyber City, Gurgaon. All documents and records are planned to be digitized and integrated into a workflow for effective management of documents apart from migration of existing ones.

ERP Enhancements:

The scope of ERP has also been planned to expand beyond its regular transactional cycles. Tools have been proposed for data analysis, data mining and decision support systems, for better planning and control.

Project Planning & Control:

Project management systems are being put in place for real-time project tracking/monitoring, scheduling and execution for management that will have visibility across business units. This will be helpful in controlling expenditures, costing and timely execution of projects.

Effective Customer Relationships:

DLF is in the process of setting up systems capable of handling a huge integrated database that shall be used for auto communication, call/lead management and interactive web communication. Revamping of corporate website to accommodate customer facilities like online payments, auto-communication, 3D-walkthroughs for new projects and community blogs have also been initiated.

Employee Services:

Initiatives are on to provide employee services with ease and speed. IT developments have been targeted to enhance employee productivity and employee retention by facilitating Internal Job-posting module on the intranet.


Efforts are on to provide maximum data security in the organization. The proposed plan will also take care of physical security of DLF facilities through advanced DVS systems. Data security will be facilitated by introducing RSA tokens for access to computers. The IT infrastructure processes are also being planned in accordance with the ISO 20000 certification.

Support to Retail Joint-Ventures:

IT function will also provide support to the DLF's retail joint-venture companies in setting up the required infrastructure at their facilities. This will include managing commercial contracts, providing state-of-art systems for malls including kiosks, web-interfaces, LCDs etc.


Profit and Loss Account:

DLF reported robust financial performance in FY 2007-08 with a strong improvement in topline and bottomline. The total revenue increased by 262% to Rs 146,839 mn from Rs 40,533 mn in the previous year, while net profit after minority interest increased by 304% to Rs 78,120 mn from Rs 19,336 mn in the previous year.

The increase in revenues were led by robust sales and strong execution across various segments of the business, and increase in rental earnings, which stood at Rs 2,847 mn for the year. The year saw launch of commercial complexes across the country and premium homes targeted at mid-income segment.

Total expenditure increased from Rs 11,477 mn to Rs 47,224 mn, commensurate with increase in revenues. As a percentage of revenues, the total expenditure saw a marginal jump due to change in business mix, resulting from sales of premium homes, which have lower gross margins. The increase in expenditure as a percentage of revenues was contained, despite challenges on increased cost of construction owing to wage inflation and rising commodity prices. The increase in cost of construction was mitigated to a large extent by rationalization of work processes, adoption of latest construction techniques and value engineering.

The staff cost increased to Rs 2,998 mn from Rs 1,051 mn, partly owing to increase in number of employees on the rolls. The implementation of employee stock option scheme during the year led to a charge of Rs 560 mn in the employee costs. During the year, the Company also introduced a variable pay structure amongst its senior and middle management, which also led to increase in the wage costs.

The finance charges stood at Rs 3,100 mn (excluding interest capitalised) as against Rs 3,076 mn in the previous year, despite loan funds increasing to Rs 122,771 mn from Rs 99,327 mn. The Company was able to contain its interest costs due to efficient mix of various debt instruments. Also, the Company raised Rs 91,680 mn through issue of fresh equity during the year.

The direct tax outflow from DLF trebled to Rs 18,208 mn in 2006-07, as against Rs 6,033 mn.

The EBITDA margins saw a marginal decline to 67.8% from 71.7% in the previous year, owing to changed product mix, which saw launch of premium homes and higher share of leased assets.

The key drivers of robust performance during the year were:

* Increased sales and strong execution across different SBUs - homes, offices and retail;

* Higher realizations and increased lease rentals across different SBUs; and

* Launch of premium homes targeted at mid-income earners and commercial complexes.

Balance Sheet:

DLF's balance sheet size improved significantly with the launch of its public offering in the equity markets. The shareholders' funds improved to Rs 196.9 bn from Rs 35.6 bn. The loan funds saw an increase to Rs 122.8 bn from Rs 99.3 bn. The net debt-equity ratio reduced to very comfortable figure of 0.51 as compared to 2.67 at the beginning of the year, despite the land resource with the company increasing to 751 msf from 574 msf during the year. This debt-equity ratio is the lowest in the industry, showing a strong balance sheet of the Company.

Net fixed assets grew to Rs. 48.2 bn from Rs.15.6 bn as leased-out assets on the balance sheet rose to over 8 msf. Capital work-in-progress rose to Rs. 51.8 bn from Rs 26.2 bn as projects under execution rose significantly to 62 msf from 44 msf at the beginning of the year.

Investments and Goodwill on consolidation showed a sharp increase owing to various land purchases, which is made through subsidiary companies and consolidation of Aman Resorts, which was acquired during the year. The increase in stocks to Rs 94.5 bn from Rs 56.8 bn reflected increased land resource and increase in construction work-in-progress on various projects.

The increase in sundry debtors was owing largely due to increase in booking revenue on account of percentage of completion method (PoCM) on the balance sheet date while the customer payments would be due a few days later. The increase in sundry debtors need also be seen in light with advances from customers, which is reflected in current liabilities and stands at Rs 26 bn.

The cash and bank balances increased to Rs 21.4 bn from Rs 4.1 bn at the beginning of the year. The increase in loans and advances to Rs 73.7 bn from Rs 52.2 bn was on account of advances given to subsidiaries and others in relation to land purchase agreements.

The current liabilities include advances received for sale of properties that were not recognized in sales revenue. While the current liabilities increased to Rs 43 bn from Rs 33 bn, the advances from customers amounted to Rs 26 bn, reflecting that other current liabilities have come down.


DLF is committed to pro active awareness, appraisal and action with an integrated risk management framework, comprising risk identification, creation of an appropriate risk management structure and evaluation of performance. Risk management is centrally initiated and prudently decentralised, percolating to line managers and helping them mitigate risks at all the transactional levels. Some of the prominent risks faced by the organisation as a whole and the steps taken to mitigate them are:

Market recession:

To mitigate the risk of demand recession owing to the nature of the industry, DLF has created a diverse and comprehensive portfolio spanning across residential, commercial, retail and hotel properties of various sizes, locations and prices. This strategy of leading a multi-business, multi-segment business across geographies, backed by along experience in managing huge land banks, catapults DLF in a strong position to counter any downtrend.


DLF has consciously built a compliance system to ensure legal and regulatory compliance across all business units and at each level, to avoid any risks associated with not meeting statutory regulations.

Project execution:

To mitigate any risk arising out of non-completion of existing projects, DLF has moved to a project-based organisation structure, enhancing project flexibility and control, improving the quality of real estate construction and reducing the time taken for commercialization.

Human resources:

DLF's business growth is dependent on the capabilities of its people. Business growth could be affected due to a dearth of qualified professionals. To mitigate this risk, the Company completed a round of major recruitment in 2006-07, implemented a rewarding human resource policy to attract and retain talent and provided incentives for self-development.

Financial resources:

DLF has a strong balance sheet (post IPO) and most of its projects are already under construction, expected to generate attractive returns over the coming years. This helps in mitigating any concerns about the Company's ability to mobilize funds for its projects.

Land availability:

DLF has created a large land bank sufficient to meet its needs for the next 10 years. The Company has also created a strategic land acquisition team possessing all capabilities to identify, pursue and acquire any more significant and quality land banks. This step helps guard against concerns regarding inability to add to the existing land bank or the quality of land titles.

Also, to ensure adequate replenishment of its land resources, DLF has carved out a land replenishment fund, wherein 15% of the sale value of its real estate development is credited.

Natural disasters:

DLF has consciously diversified its businesses and expanded its presence across several geographies to protect against natural calamities like floods and earthquakes in a certain area.