CORPORATE GOVERNANCE REPORT

Your Directors present the Company's Report on Corporate Governance in compliance with Clause 49 of the Listing Agreement executed with the Stock Exchanges.

Company's Philosophy

DLF firmly believes that maintaining the highest standards of corporate governance is imperative in our pursuit of industry leadership. We believe that good governance is a pre-requisite for establishing a relationship of trust between the Company and its stakeholders. The Company also believes that the quest for excellence in performance vests on unflinching adherence to the core values of honesty, transparency and accountability in all business transactions.

These beliefs are based on a rich legacy of fair and ethical business practices, commitment to corporate social responsibility and adherence to the basic tenets of upholding professional integrity, maintaining human values and protecting individual dignity.

The Board of Directors (the Board) performs the pivotal role in the governance system and they are primarily responsible for corporate governance of the Company. The Board has formed several Committees to assist them in specific areas resulting into sharper focus on governance in order to ensure that the endeavour to maximise value for the entire spectrum of its stakeholders leads to long-term benefits.

Board of Directors

The Board, an apex body formed by the shareholders, provides and evaluates the strategic directions of the Company; formulates and reviews management policies, serves and protects the overall interests of shareholders to ensure long-term value creation for stakeholders. The Chairman, Vice Chairman, Managing Director and two Whole-time Directors manage the business of the Company under the overall supervision and guidance of the Board.

Composition

The rich and vast professional expertise of Independent Directors gives immense benefits to the Company. The composition of the Board is in conformity with Clause 49 of the Listing Agreement.

Executive Directors are appointed by the shareholders for a maximum period of 5 years at a time or such shorter duration as recommended by the Board and are eligible for re-appointment upon completion of their term.

Non-executive Directors/Independent Directors do not have any specific term, but retire by rotation in accordance with the provisions of the Companies Act, 1956.

Profile of Directors

Dr. K. P. Singh (Kushal Pal Singh), Chairman of the Company, pursued Aeronautical Engineering in UK, after graduating in Science and was subsequently selected to the Indian Army by the British Officers Services Selection Board, UK and thereafter commissioned into a renowned cavalry regiment of the Indian Army. In 1960, he joined American Universal Electric Company and took over as the Managing Director after its merger with DLF Universal Limited (now DLF Limited).

In the early eighties, Dr. Singh took it upon himself to spearhead a total transformation in the Housing and Urban Development scenario in India. His visionary efforts were crowned with success, through the innovative Gurgaon satellite city project in the State of Haryana.

Dr. Singh has pioneered a national movement for Self-regulation and Ethics in the Indian Housing and Real Estate Industry that has blossomed into National Real Estate Development Council (NAREDCO) - the apex autonomous self-regulatory body of public and private sectors, functioning under the patronage of the Union Ministry of Housing and Urban Poverty Alleviation, Government of India, with State Real Estate Development Councils (State-REDCOs) being established in various States of the country.

Dr. Singh established DLF Foundation as the philanthropic arm of DLF Limited, providing structure and focus to the social outreach initiatives of the Company, in order to enlarge the canvas of conventional corporate social responsibility activities.

Dr. Singh is the recipient of numerous awards and honours. On 26th January, 2010 the President of India conferred on him the national award - Padma Bhushan, one of India's highest civilian honours in recognition for his contribution in the field of Trade and Industry. On 5th October, 2010, Dr. Singh was conferred the prestigious royal decoration of Officer of the Order of St. Charles, by HSH Prince Albert II of Monaco in recognition for his valuable contribution as Honorary Consul General of Monaco in Delhi for over 20 years. He is the recipient of the Delhi Ratna Award by the Government of Delhi for his valuable contribution towards urban development.

He is on the governing board of several well-known universities and educational institutions in India and abroad, including the Indian School of Business (ISB), Hyderabad; Indian Institute of Management (IIM), Ahmedabad and Indian Institute of Technology (IIT), Jodhpur. He has been conferred with an Honorary Doctorate by the G.B. Pant Agriculture University. NDTV, a well known media house, presented him with a Special Award at the Indian of the Year Award function held in January, 2008.

Mr. Rajiv Singh is the Vice Chairman of the Company. He is a graduate from the Massachusetts Institute of Technology, U.S.A. and holds a degree in Mechanical Engineering. Mr. Singh has over 29 years of professional experience. Mr. Singh spearheads the strategy implementation and oversees the operations of the Company.

Mr. T.C. Goyal has done his B.Com. (Hons.) from Shri Ram College of Commerce, University of Delhi and is a Fellow Member of the Institute of Chartered Accountants of India.

He has been holding the position of Managing Director of the Company since March, 1998. He has over four decades of experience in finance, real estate development and project counselling. Prior to joining the Company in 1981, he worked with the Birlas.

Mr. Goyal has been a Member of the Management Committee of PHD Chamber of Commerce & Industry for over a decade. He is also Managing Trustee of a number of charitable trusts engaged in education and welfare activities.

He is Chairman of DLF Universal Limited and Vice Chairman of DLF Home Developers Limited and is on the Board of several other companies.

Ms. Pia Singh is a graduate from the Wharton School of Business, University of Pennsylvania, U.S.A. with a degree in Finance. She has worked for the risk-undertaking department of GE Capital, the investment division of General Electric.

Having over 16 years of experience, Ms. Singh is actively engaged in developing the Company's luxury and super-luxury retail destinations across the country.

Mr. K. Swarup is a post graduate in Commerce and Law from the University of Lucknow and a Fellow Member of the Institute of Company Secretaries of India. He joined the DLF Board on 1st January, 2006. Mr. Swarup has an experience of over four decades in a number of senior corporate positions.

Prior to joining the Company, he has worked as the Senior General Manager of the Delhi Stock Exchange Association Limited and represented the Exchange on the Committees formed by SEBI, on listing agreements and a uniform code numbering system for securities. Mr. Swarup is also the Co Chairman of Law & Justice Committee of PHD Chamber of Commerce & Industry and a member of Building Committee of ASSOCHAM, New Delhi.

Mr. G.S. Talwar is the founding Chairman and Managing Partner of Sabre Capital Worldwide, a private equity and investment company focused on financial services. He holds a Bachelor of Arts (Hons.) degree in Economics from St. Stephen's College, University of Delhi. He was previously Chairman of Centurion Bank of Punjab Limited (merged with HDFC Bank Limited) and Non-executive Director of Fortis Group (Belgium and Netherlands), Schlumberger Limited and Pearson PLC. Prior to joining the Board of the Company, he has worked for Standard Chartered PLC as Group Chief Executive and for Citigroup in various positions including as its Executive Vice President.

He is a Founding Member of the Governing Board of Indian School of Business (ISB), Hyderabad and is a former Governor of the London Business School (LBS).

Mr. Talwar is on the Board of several companies including Great Eastern Energy Corporation Limited.

Dr. Dharam Vir Kapur is an honours graduate in Electrical Engineering with wide experience in Power, Capital Goods, Chemicals and Petrochemicals Industries.

Dr. Kapur had an illustrious career in the Government sector with a successful track record of building vibrant organisations and successful project implementation. He served Bharat Heavy Electricals Limited (BHEL) in various positions with distinction. One of the most remarkable achievements of his career was the establishment of a fast growing systems oriented National Thermal Power Corporation (NTPC) of which he was the founder Chairman-cum-Managing Director. ENERTIA Awards 2010 conferred Life Time Achievement Award on Dr. Kapur for his contribution to the Power and Energy Sector and for his leadership in the fledgling NTPC for which he was described as a Model Manager by the Board of Executive Directors of World Bank.

As Secretary to the Government of India in the Ministries of Power, Heavy Industry and Chemicals & Petrochemicals during 1980-86, Dr. Kapur made significant contributions with introduction of new management practices and liberalisation initiatives including authorship of "Broad banding" and "Minimum economic sizes" in industrial licensing. He was also associated with a number of national institutions as Member, Atomic Energy Commission; Member, Advisory Committee of the Cabinet for Science and Technology; Chairman, Board of Governors, IIT Bombay; Member, Board of Governors, IIM Lucknow and Chairman, National Productivity Council.

In recognition of his services and significant contributions in the field of Technology, Management and Industrial Development, Jawaharlal Nehru Technological University, Hyderabad conferred on him the degree of D. Sc. Dr. Kapur is recipient of "India Power, Life Time Achievement Award" presented by the Council of Power Utilities, for his contributions to Energy and Industry sectors.

Dr. Kapur is Chairman (Emeritus) of Jacobs H&G (P) Limited and Chairman of GKN Driveline (India) Limited and Drivetech Accessories Limited. He is also a Director on the Boards of Reliance Industries Limited, Honda Seil Power Products Limited, Zenith Birla (India) Limited. Earlier he was a Director on the Boards of Tata Chemicals Limited, Larsen & Toubro Limited and Ashok Leyland Limited.

Mr. M.M. Sabharwal, a Graduate in Arts (Economics) has held various corporate positions including those of Chairman of Dunlop India Limited, Bata India Limited, Britannia Limited, Indian Oxygen Limited, Needle Industries India (Private) Limited, Precision Electronics Limited; Director of Oil India Limited, National Aluminum Company Limited, Fibre Glass Pilkington Limited, Avery India Limited and Ranbaxy Laboratories Limited.

Mr. Sabharwal, President (Emeritus) of Helpage India, is a Director of Nutrition Foundation of India and was President of PHD Chamber of Commerce & Industry; Director, Institute of Management, Kolkata and Vice Chairman of International Management Institute, New Delhi.

In recognition of his meritorious social services, the Government of India has conferred Padma Shri Award on him.

He has also been conferred with:

• Honorary 'OBE' in 1998 by the Government of U.K. for his role in promoting Indo-British partnership in Social Welfare;

• 'Life Time Achievement Award' for outstanding contribution towards the cause of elderly;

• 'The Chirayushya Samman Award' by the Union Minister of Social Justice and Empowerment, Government of India for being a pioneer in building 'Helpage India'.

• 'Life Time Achievement Award' at 105th Annual Session of PHD Chamber of Commerce & Industry by the Hon'ble Finance Minister of India.

Currently, Mr. Sabharwal is a Member of three Government Committees in the Ministry of Social Justice and Empowerment.

Mr. K.N. Memani, a Fellow Member of the Institute of Chartered Accountants of India is a former Chairman and Country Managing Partner of Ernst & Young, India. He was also Member of the Ernst & Young Global Council.

He specialises in business and corporate advisory, foreign taxation, financial consultancy etc. and is consulted on corporate matters by several domestic and foreign companies.

Mr. Memani headed Quality Review Board - an oversight board to review the quality of auditors set up by the Government of India. He was associated with National Advisory Committee on Accounting Standards (NACAS) and an expert committee for amendments in the Companies Act, 1956 constituted by the Government of India. He was also associated with the External Audit Committee of International Monetary Fund (IMF).

Currently, he is on the managing committee/ governing boards of various industry chambers, educational institutions and social organisations.

Mr. Memani is on the Board of several companies including Aegon Religare Life Insurance Company Limited, Chambal Fertilisers and Chemicals Limited, Emami Limited, Great Eastern Energy Corporation Limited, HEG Limited, HT Media Limited, ICICI Venture Funds Management Company Limited, JK Lakshmi Cement Limited, National Engineering Industries Limited, Invest India, Spice Digital Limited and Spice Mobility Limited.

Mr. Ravinder Narain is an active practitioner in Supreme Court and High Courts having experience of over four decades.

He has been actively associated with leading constitutional, taxation and commercial matters. His expertise in the field of indirect taxes and competition laws is well recognised. He was a member of High Level Committee set up by the Ministry of Finance, Government of India to review and suggest simplification of Central Excise and Customs Laws.

Mr. Narain is on the Board of Nestle India Limited, Shree Rajasthan Syntex Limited, DCM Shriram Industries Limited and Shriram Pistons & Rings Limited.

Mr. B. Bhushan, a Fellow Member of the Institute of Chartered Accountants of India and an Associate Member of the Institute of Cost and Works Accountants of India, has over four decades of experience in finance, capital markets, taxation, corporate affairs and general management.

Mr. Bhushan is Chairman of Integrated Capital Services Limited.

Brig. (Retd.) N.P. Singh a Graduate of Army Staff College of Camberley (U.K.) and National Defence College of India, holds a Master degree in Arts and

Science and was an Associate Member of the British Institute of Management. He served the Indian Army for over 34 years, prior to joining the Company's Board of Directors in 1993.

He is a trained Personnel Selection Officer from Psychological Research Wing, Ministry of Defence, Government of India.

Brig. Singh is on the Board of several companies including Dhanvantri Laboratories Limited.

Board Meetings

The meetings of the Board are mostly held at the Corporate Office of the Company at DLF Centre, Sansad Marg, New Delhi.

Meetings: During the year 2010-11, five Board meetings were held on 30th April, 14th May, 28th July, 10th November, 2010 and 31st January, 2011. The maximum interval between any two Board meetings was 104 days. The Board meets at least once in every quarter to review the quarterly results along with other items on the agenda. Additional meetings are held, as and when necessary.

Reviews: The Board regularly reviews inter-alia, industry environment, annual business plans, project implementation, finance and operations, sales & marketing, major business segments, business opportunities including investments/divestment, compliance process including material legal issues, strategy, risk management practices, adoption of quarterly /half-yearly/annual results and compliance reports on all laws applicable. Senior executives are invited to provide additional inputs at the Board meetings for the items being discussed by the Board of Directors, as and when required.

Minutes: The draft minutes of the proceedings of the Board of Directors are circulated in advance and the observations, if any, received from the Directors are incorporated in the minutes in consultation with the Chairman and signed at the subsequent meeting upon confirmation.

Follow-up: The Company has an effective post meeting follow-up, review and reporting process for the decisions taken by the Board. The significant decisions of the Board are promptly communicated to the concerned departments/business units. Action taken reports on decisions of the previous meeting(s) are placed at the immediately succeeding meeting for review by the Board.

Compliance: DLF has implemented a robust and comprehensive compliance management system covering the Company and its subsidiaries. All project/business and functional heads submit compliance certificate confirming compliance with the provisions of statutes applicable to their areas of operations. In addition, the Managing Director and Group Chief Financial Officer certify that the financial results present true and fair view of the Company's affairs and are in compliance with the existing accounting standards, applicable laws and regulations. The Company Secretary ensures compliance of relevant corporate laws including SEBI regulations and the provisions of the Listing Agreement. The Company Secretary, as Compliance Officer submits a consolidated compliance certificate confirming compliance of all laws, rules, regulations, guidelines, bye-laws applicable to the Company for review of the Board, periodically.

DLF deploys a robust system of internal controls to allow optimum use and protection of assets, facilitate accurate and timely compilation of financial statements and management reports and ensure compliance with statutory laws, regulations and company policies including identification, review and management of risks.

A dedicated internal audit team supported by Deloitte Haskins & Sells and KPMG ensures that the established systems, procedures are diligently adhered to and the Company conducts its business with high standards of legal, statutory and regulatory compliances. The reports submitted by the internal auditors are regularly reviewed by the Audit Committee.

Resume of Directors proposed to be Re-appointed

The brief resume of Directors retiring by rotation and seeking re-appointment is appended in the notice for convening the Annual General Meeting (AGM).

Committees of the Board

The Board has constituted the following standing Committees:

1. Audit Committee

2. Shareholders'/Investors' Grievance Committee

3. Finance Committee

4. Corporate Governance Committee

5. Remuneration Committee

In addition, the Board also constitutes functional committees, from time to time, depending on the business needs.

The terms of reference of the Committees are reviewed and modified by the Board from time to time. The Committee meetings facilitate the decision making process at the meetings of the Board in an informed and efficient manner. Meetings of each Committee are convened by the respective Committee Chairman. The Company Secretary prepares the agenda and explanatory notes, in consultation with the respective Committee Chairman and circulates the same in advance to all the members. Every member is free to suggest inclusion of items on the agenda. Minutes of the Committee meetings are approved by the respective Committee and thereafter noted and confirmed by the Board.

The Company has an effective post meeting follow up, review and reporting process for the decisions taken by the Committees. The significant decisions are promptly communicated to the concerned departments/business units. Action taken report on decisions of the previous meeting(s) is placed at the immediately succeeding meeting for review by the respective Committee.

(i) Audit Committee Composition

The Audit Committee constituted as per the Clause 49 of the Listing Agreement read with Section 292A of the Companies Act, 1956, comprises of 5 Directors including 4 Independent Directors. Mr. K.N. Memani, a Fellow Member of the Institute of Chartered Accountants of India, an Independent Non-executive Director, is the Chairman of the Committee. Dr. D.V. Kapur, Mr. M.M. Sabharwal, Mr. B. Bhushan, Independent Non-executive Directors and Mr. T.C. Goyal, Managing Director are the other members. All the members possess financial, management and accounting knowledge expertise/exposure and/or have held or hold senior positions in other reputed organizations.

The Company Secretary acts as Secretary to the Committee.

Group Chief Financial Officer, Group Chief Internal Auditor and representatives of Statutory Auditors and Internal Auditors (for internal audit matters), are permanent invitees to the Committee meetings. Other executives of the Company are invited as and when required.

Objective

The Audit Committee monitors and provides re-assurance to the Board on the existence of an effective internal control environment by supervising the financial reporting process, timely and proper disclosures and transparency, integrity and quality of financial reporting.

Terms of Reference

The broad terms of reference are as under:

1. Overseeing financial reporting process and disclosure of financial information, to ensure that the financial statements are correct, sufficient and credible;

2. Recommending appointment, re- appointment and removal of the statutory and internal auditors, fixation of audit fees and approval for payment of any other services;

3. Reviewing with the management, the periodical financial statements including subsidiaries/associates, in particular the investments made by the unlisted subsidiaries of the Company, before submission to the Board for approval;

4. Reviewing with the management and the statutory and internal auditors, the adequacy of internal control systems and recommending improvements to the management;

5. Reviewing the adequacy of internal audit function, approving internal audit plans and efficacy of the functions including the structure of the internal audit department, staffing, reporting structure, coverage and frequency of internal audit;

6. Discussion with internal auditors on any significant findings and follow-up thereon;

7. Reviewing the findings of any internal investigations by internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board;

8. Discussion with statutory auditors before the audit commences, about the nature and scope of audit, as well as post-audit discussions to ascertain any area of concern;

9. Reviewing with the management discussion and analysis of financial condition and results of operations, statement of significant related party transactions, management letters/letter of internal control weakness issued by statutory auditors, internal audit reports etc.;

10. Reviewing the Company's financial and risk management policies; and

11. Such other functions as may be delegated by the Board from time to time.

Meetings and Attendance

During the year 2010-11, ten meetings of the Audit Committee were held on 20th April, 14th & 25th May, 12th & 28th July, 20th August, 10th November, 17th December, 2010, 31st January and 29th March, 2011. The maximum interval between any two meetings was 81 days.

(ii) Shareholders'/Investors' Grievance Committee

Composition

The Committee comprises of four Directors, namely Dr. D.V. Kapur (Chairman), Brig. (Retd.) N. P. Singh, Mr. Ravinder Narain, Independent Non-executive Directors and Mr. K. Swarup, Gr. Executive Director (Legal), as Members.

The Company Secretary acts as Secretary to the Committee.

Terms of Reference

The broad terms of reference are as under: The Committee inter-alia, oversees and reviews all matters connected with transfer of shares, approve issue of duplicate and split of share certificates, redressal of shareholders'/ investors' complaints/ grievances including transfer of shares, non-receipt of annual report and dividend etc. The Committee also reviews performance of the Registrar and Share Transfer Agent and recommends measures for overall improvement in the quality of investor services. With a view to expedite the process of share transfer etc., on fast track basis, the Board has delegated the powers of approving share transfer etc. to Gr. Executive Director (Legal) and /or the Company Secretary.

Meetings and Attendance

During the year 2010-11, the Committee held four meetings on 13th May, 23rd July & 9th November, 2010 and 28th January, 2011.

Redressal of Investor Grievances

The Company addresses all complaints, suggestions, grievances and other correspondence expeditiously and replies are sent usually within 7-10 days except in case of other impediments. The Company endeavours to implement suggestions as and when received from the investors. During the year under review, a total of 128 investors' complaints were received and resolved.

(iii) Finance Committee Composition

The Finance Committee comprises of three Executive Directors, namely Mr. Rajiv Singh (Chairman), Mr. T.C. Goyal and Mr. K. Swarup as Members. The Company Secretary acts as Secretary to the Committee. The Group Chief Financial Officer is the permanent invitee to the Committee.

Terms of Reference

The broad terms of reference are as under:

1. Reviewing Company's financial policies, strategies and capital structure, working capital, cash flow management, banking and cash management including authorisation for operations;

2. Reviewing credit facilities and to exercise all powers to borrow monies (otherwise than by issue of debentures) and take necessary actions connected therewith including refinancing for optimisation of borrowing costs and assignment of assets, both immovable or movable;

3. Authorising exercise of all powers for investment, loan and providing corporate guarantees/securities/letter of comforts etc. within the limits specified by the Board;

4. Borrowing of monies by way of loan and/ or issuing and allotting Bonds/Notes denominated in one or more foreign currency(ies) in international markets and possible strategic investments within the limits approved by the Board;

5. Approve opening and operation of Investment Management accounts with foreign Banks and appoint them as agents, establishment of representative/sales offices in or outside India etc.;

6. Approve contributions to statutory or other entities, Funds established by Central/ State Government for national importance, institutions, trusts, bodies corporate and other entities, etc.;

7. Authorising executives of the Company/ subsidiaries/associate companies for acquisition of land including bidding and tenders, sell/dispose off or transfer any of the properties and to delegate authorities from time to time to deal with various statutory, judicial authorities, local bodies, etc., to implement the decision of the Committee; and

8. Reviewing and make recommendations about changes to the Charter of the Committee.

(iv) Corporate Governance Committee

Composition

The Corporate Governance Committee comprises of Dr. D.V. Kapur (Chairman), Mr. M.M. Sabharwal, Mr. K.N. Memani, Mr. Ravinder Narain, Non-executive Independent Directors, Mr. G.S. Talwar, Non-executive Director, Mr. T.C. Goyal, Managing Director and Mr. K. Swarup, Gr. Executive Director (Legal) as Members.

The Company Secretary acts as Secretary to the Committee.

Terms of Reference

The broad terms of reference are as under:

1. Overseeing implementation of mandatory and non-mandatory requirements of Clause 49 of the Listing Agreement;

2. Recommending the best in class available Corporate Governance practices prevailing in the world for adoption;

3. Reviewing Corporate Governance practices, Audit Reports and to recommend improvements thereto;

4. Reviewing Code of Conduct for Directors, Senior Management Personnel and other executives, including its subsidiaries.

5. Reviewing compliance mechanism, compliance and audit reports and to recommend improvements thereto and to review mitigation mechanism for non-observance;

6. Suggesting to the Board, the changes required in the compliance system in consonance with the changes in legal environment affecting the business of the Company;

7. Recommending to the Board, the changes required for charging of officials pursuant to changes in the officials charged and/or structural changes in the organisation; and

8. Performing such other functions as may be delegated by the Board from time to time.

Meetings and Attendance

During the year 2010-11, three meetings of Committee were held on 12th April & 28th July, 2010 and 28th January, 2011.

(v) Remuneration Committee Composition

The Remuneration Committee comprises of three Independent Directors namely, Brig. (Retd.) N.P. Singh (Chairman), Mr. M.M. Sabharwal and Mr. B. Bhushan, as Members.

The Company Secretary acts as Secretary to the Committee.

Terms of Reference

The broad terms of reference are as under:

1. Guidance on the broad parameters of the remuneration policy of the Company;

2. Recommending remuneration to the Board by way of salary, perquisites, including periodic revision, performance award, commission, stock options etc. payable to Executive Directors and their relatives engaged in the employment of the Company; and

3. Formulation of the detailed terms and conditions under employees' stock options scheme and administration thereof.

Meetings and Attendance

During the year 2010-11, three meetings of Remuneration Committee were held on 28th July & 20th August, 2010 and 28th January, 2011.

Remuneration Policy

The Remuneration Policy of the Company is aimed at inculcating a performance driven culture. Through its comprehensive compensation programme, the Company endeavours to attract, retain, develop and motivate a high performance workforce.

The guiding principles of remuneration policy in DLF are as follows:

1. To reinforce DLF's standing as premier employer in the industry;

2. To attract and retain high talent human capital; and

3. To motivate employees to achieve high standards of performance in line with business strategy.

The Company pays remuneration by way of salary, perquisites, allowances, retirals benefits that are fixed and a variable component which is linked directly to Company and individual performance which is measured through a comprehensive annual appraisal process.

Directors' Remuneration

i) Executive Directors

The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and commission (variable component) to its Executive Directors based on the recommendations of the Remuneration Committee within the limits prescribed under the Companies Act, 1956 and approved by the shareholders. The performance based commission paid to the Executive Directors is based on qualitative and quantitative assessment of Company's performance.

ii) Non-executive Directors

The Non-executive Directors are entitled to a sitting fee of Rs. 20,000 per meeting for attending Board and Committee meetings. In addition, the Non-executive Directors are paid commission within the limits prescribed under the Companies Act, 1956, as determined by the Board based, inter-alia, on the Company's performance and as approved by the shareholders.

The Company also reimburses out-of pocket expenses incurred by the Directors for attending the meetings. The service contract, notice period, severance fee etc. are not applicable to the Non-executive Directors.

The Company has also obtained a Directors' & Officers' Liability Insurance Policy.

Disclosures

a) Material Related Party Transactions

None of the materially significant transactions with any of the related parties was in conflict with the interest of the Company. Details of the material related party transactions are disclosed at Note No. 10 of Schedule 25 to the Accounts in the Annual Report.

b) Compliances

No penalties or strictures have been imposed on the Company during the past three years by Stock Exchanges or SEBI or any statutory authorities, on any matter related to capital markets. The Company has complied with applicable rules and regulations prescribed by Stock Exchanges, SEBI or any other statutory authority relating to the capital markets.

All Returns/Reports were filed within the stipulated time with the Stock Exchanges/other authorities.

c) Code of Conduct

The Code of Conduct (Code) is applicable to all Directors and employees of the Company including its subsidiaries. The Code is comprehensive and ensures good governance and provides for ethical standards of conduct on matters including conflict of interest, acceptance of positions of responsibility, treatment of business opportunities and the like. A copy of the Code is posted on the Company's website www.dlf.in. All the Board Members and senior management personnel have affirmed compliance to the Code for the year ended on 31st March, 2011.

d) Whistle Blower Mechanism

In pursuit to maintain the highest ethical standards in the course of its business, the Company has put in place a mechanism for reporting of instances of conduct which is not in conformity with its Code. Directors, employees, vendors, customers or any person having dealings with the Company may report non-compliance of the Code to the notified person. The report received from the notified person is reviewed by Audit Committee. The Directors and management personnel maintain confidentiality of such reporting and ensure that the whistle blowers are not subjected to any discrimination.

A copy of the Whistle Blower Policy is posted on the website of the Company, www.dlf.in.

e) Policy for Prevention of Insider Trading

With a view to prevent trading of shares of the Company by an insider on the basis of unpublished price sensitive information, the Board has approved "Policy for Prevention of Insider Trading" (the Policy) in pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. Under the policy, insiders are prohibited to deal in the Company's shares while in possession of unpublished price sensitive information. A copy of the policy has also been hosted on the website of the Company, www.dlf.in.

Subsidiary Monitoring Framework

All subsidiaries of the Company are Board managed with their respective Boards having rights and obligations to manage such companies in the best interest of their stakeholders. As a majority shareholder, the Company monitors and reviews the performance of such companies inter-alia, by the following means:

a) Financial Statements, in particular, the investments made by the unlisted subsidiary companies, are reviewed periodically by the Audit Committee;

b) Minutes of the meetings of the unlisted subsidiary companies are placed before the Company's Board, periodically; and

c) Statements containing significant transactions and arrangements entered into by the unlisted subsidiary companies are periodically placed before the Board of Directors.

The Company has nominated/appointed an Independent Director on the Board of DLF Home Developers Limited (DHDL), a wholly-owned material subsidiary in compliance to Clause 49.III of the Listing Agreement.

Means of Communication

The quarterly financial results and media releases on significant developments in the Company including presentations that have been made from time to time to the media, institutional investors, analysts are posted on the Company's website www.dlf.in and are submitted to the stock exchanges on which the Company's equity shares are listed, to enable them to put them on their respective websites. The financial results are published in at least two widely circulated dailies, one in English and one in Hindi. Annual Report containing inter-alia, Audited Consolidated and Standalone Financial Statements, Directors' Report, Auditors' Report, Management Discussion & Analysis Report and Corporate Governance Report including information for the Shareholders and other important information is circulated to the members and others entitled thereto. Printed copy of the Chairman's Speech is distributed at the Annual General Meeting. The same is also placed on the Company's website www.dlf.in. Reminder letters for claiming unpaid dividend was sent to the shareholders as per record.

Exclusive Designated e-mail id

The Company has designated a dedicated email id investor-relations@dlf.in exclusively for investors' servicing for faster registration of their queries and/or grievances. All investors are requested to avail this facility.

General Shareholders' Information

a) Annual General Meeting

Date: Thursday, 4th August, 2011

Time: 10:30 A.M.

Venue: Epicentre, Apparel House, Sector 44, Gurgaon - 122 003 (Haryana).

b) Financial Calendar (tentative)

Financial Year April 01, 2011 to March 31, 2012

Adoption of Quarterly Results for the quarter ending:

June 30, 2011: 3rd/4th week of July, 2011

September 30, 2011: 3rd/4th week of October, 2011

December 31, 2011: 3rd/4th week of January, 2012

March 31, 2012: 2nd /3rd week of May, 2012

c) Book Closure

Friday, the 29th July, 2011 to Thursday, the 4th August, 2011 (both days inclusive) for payment of dividend.

d) Dividend Payment Date

On or before 3rd September, 2011

e) Liquidity

i) Equity Shares

The equity shares of the Company of the face value of t 2 each (fully paid) are listed on the following Stock Exchanges:

a) Bombay Stock Exchange Limited (BSE), P.J. Tower, Dalal Street, Mumbai - 400 001 and;

b) National Stock Exchange Limited (NSE), Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai-400 051.

Stock Code

Bombay Stock Exchange (BSE): 532868

National Stock Exchange (NSE): DLF

DLF's shares form part of BSE-30 Indices and S&P CNX Nifty.

The Company has paid the listing fees to BSE & NSE for 2011-12. The Company has also paid annual custody fee for 2011-12 to National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL).

The International Securities Identification Number (ISIN) allotted to Company's shares under the Depository System is INE271C01023.

(ii) Debt Instruments

Non-convertible debentures issued by the Company on private placement basis are listed at National Stock Exchange at its Wholesale Debt Market (WDM) segment.

ISIN No.

i) INE271C07012;

ii) INE271C07038

iii) INE271C07046;

iv) INE271C07053

v) INE271C07079;

vi) INE271C07061

vii) INE271C07087

Debenture Trustees

i) IL&FS Trustee Company Limited; and

ii) Axis Trustee Services Limited.

f) Registrar and Share Transfer Agent (RTA)

M/s. Karvy Computershare Private Limited, Plot No. 17-24, Vittalrao Nagar, Madhapur, Hyderabad-500081,

Phone No. 040-44655000

Fax No. 040-23420814;

E-mail: einward.ris@karvy.com;  

Contact Persons: Mr. V.K. Jayaraman,

General Manager (RIS)/Ms. Varalakshmi, Sr. Manager (RIS);

Website: www.karvy.com, is the Registrar and Share Transfer Agent (RTA) for Physical Shares. Karvy is also the depository interface of the Company with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

g) Share Transfer Mechanism

The share transfer requests received in physical form are processed through Registrar and Share Transfer Agent, within 7-10 days from the date of receipt, subject to the completeness of documents in all aspects. The share certificates duly endorsed are returned immediately to the shareholders by RTA. The Board has delegated the authority for approving share transfer, transmission etc. to Gr. Executive Director (Legal) and/or Company Secretary. The details of transfers/transmission so approved from time to time, is placed before the Shareholders'/ Investors' Grievances Committee & the Board for noting and confirmation.

Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchanges, Certificate on half-yearly basis confirming due compliance of share transfer formalities by the Company, certificates for timely dematerialisation of the shares as per SEBI (Depositories and Participants) Regulations, 1996 and Reconciliation of the Share Capital Audit obtained from a practising Company Secretary have been submitted to stock exchanges within stipulated time.

h) Investors' Relations

Investors' Relations function seeks to serve promptly, efficiently and with constant interface the Company's large institutional shareholder base comprising foreign institutional investors, financial institutions, banks, mutual funds & insurance companies. All queries from any shareholder are promptly attended to.

The function assists the investor community in understanding better the Company's strategy, vision and long term growth plans in order for them to take informed decisions on their investment.

i) Dematerialisation of Shares

The equity shares of the Company are tradable in compulsory dematerialised segment of the Stock Exchanges and are available in depository system of National Securities Depository Limited and Central Depository Services (India) Limited. As on 31st March, 2011, 1,69,04,71,206 equity shares (constituting 99.58%) were in dematerialised form.

Transfer of Unpaid/Unclaimed Dividend Amount to Investor Education and Protection Fund (IEPF)

As per the provisions of Section 205A read with Section 205C of the Companies Act, 1956, the Company is required to transfer unpaid dividends remaining unclaimed and unpaid for a period of 7 years from the due date(s) to the Investor Education and Protection Fund (IEPF) set up by the Central Government.

During the year under review, an amount of t 1,35,376 pertaining to unpaid / unclaimed dividend for the financial year 2002-03 has been transferred to IEPF on 30th December, 2010.

All Shareholders, whose dividend is unclaimed pertaining to FY'2003-04, are requested to lodge their claim with RTA/Company by submitting an application supported by an indemnity on or before 30.09.2011. Subsequently, no claim will lie against the Company, once the dividend amount is deposited in IEPF.

j) Outstanding GDRs/ADRs/Warrants or any Convertible instruments

The Company has not issued any ADRs /GDRs/ Warrants or any other convertible instruments except the stock options to its employees.

k) Plant Locations

The Company does not have any manufacturing or processing plants. The Registered Office of the Company is situated at Shopping Mall, 3rd Floor, Arjun Marg, DLF City, Phase-I, Gurgaon-122 002, Haryana.

The Corporate Office of the Company is located at DLF Centre, Sansad Marg, New Delhi- 110 001.

l) Address for Correspondence

(i) Investor Correspondence

For transfer/dematerialisation of equity shares, non-payment of dividend and any other queries relating to the equity shares, Investors shall write to:

Karvy Computershare Private Limited

Unit: DLF Limited Plot No.17 - 24, Vittalrao Nagar Madhapur, Hyderabad - 500 081

Phone No. 040-44655000

Fax No. 040-23420814

E-mail: einward.ris@karvy.com

Contact Persons:

Mr. V. K. Jayaraman, General Manager (RIS)/ Ms. Varalakshmi, Sr. Manager(RIS);

Website: www.karvy.com.

For dematerialisation of equity shares, the investors shall get in touch with their respective depository participant(s).

(ii) Any query on Annual Report

The Company Secretary DLF Limited

1-E, Jhandewalan Extension Naaz Cinema Complex New Delhi- 110 055

Risk Management

DLF has evolved an integrated approach aligned with the organisational structure and strategic objectives for managing risks inherent in our business. The details of Risk Management are forming part of Management Discussion and Analysis (MDA) Report, appended to the Annual Report.

Compliance Certificate from the Auditors

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 Clause 49 of the Listing Agreement, is annexed to this Report forming part of the Annual Report.

Adoption of Mandatory and Non-Mandatory Requirements

Apart from complying with all the mandatory requirements, the Company has adopted following non-mandatory requirements of Clause 49:

(a) Remuneration Committee: Remuneration Committee was constituted to approve and review compensation policies for executives of the Board. The composition of the Committee and the details of meetings held and attendance of members thereat are given elsewhere in this Report.

(b) Financial Statements: The financial statements of the Company, on stand-alone basis, are unqualified.

(c) Whistle Blower Policy: The Company has adopted a Whistle Blower Policy, the details are given elsewhere in this Report.

Certificate from CEO and GCFO

The Managing Director and Group Chief Financial Officer of the Company give Annual certification on the financial reporting and internal controls to the Board in terms of Clause 49 of the Listing Agreement.

The Managing Director and Group Chief Financial Officer also give quarterly certification on the financial results while placing the same before the Board in terms of Clause 41 of the Listing Agreement.

Reconciliation of Share Capital

The certificate of Reconciliation of Share Capital Audit confirming that the total issued capital of the Company is in agreement with the total number of shares in physical form and the total number of dematerialised shares held with NSDL and CDSL, is placed before the Board on a quarterly basis and also submitted to the stock exchanges.

Secretarial Audit

Secretarial Audit pertaining to areas covered under the Companies Act, 1956, Depositories Act, 1996, SEBI Act, 1992, Listing Agreement and the rules, regulations, guidelines and bye-laws made thereunder, including the following, is carried out as a part of the Internal Audit process:

• SEBI (Substantial Acquisition and Takeover) Regulations, 1997;

• SEBI (Prohibition of Insider Trading) Regulations, 1992;

• SEBI (Employees Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999.

Fees to Statutory Auditors

The fee paid to the Statutory Auditors for the FY'2010-11 was Rs. 1.12 Crore (previous year Rs. 2.16 Crore) including other certification fee.

Investors

The website of the Company www.dlf.in carries information on Financial Results, Corporate Announcements, Presentations, Credit Rating and Institutional Investors/ Analysts Query, in addition to other relevant information for investors.