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Message from the Chairman:
In line with the concerns I shared in my Message to you last year with respect to the Indian economy, while the adopted combative monetary policy did yield intended dividends in the terms of curbing headline inflation, this was at the expense of predictable side-effect of severely stunted economic growth. Latest economic data confirms the loss of economic growth momentum to a disturbing 5% growth rate for Fiscal 2013, the lowest in the decade. This inflation-growth dynamics in the Indian context is broadly reflective of the overall fragile global economic scenario whereby, while both developed and emerging economies have seen moderation of commodity prices, the green shoots of growth are yet to take roots with almost all big national economies trying to return to an investment-led growth cycle.
Real Estate is not only a key economic sector in terms of its direct GDP contribution but with its forward and backward linkages with about 300 other sub-sectors of the economy, Real Estate development is also a key employment generator. However as highlighted by the Economic Survey for 2012-13, the sector continues to face more than its fair share of challenges. Some of these are the absence of a long-term funding mechanism, limited developer finance, the Urban Land Ceiling Regulations Act continuing in some States, existing lower floor area ratio in cities, high stamp duties and difficulties in land acquisition. These sector specific challenges became more glaring in the context of an increasingly fragile economic scenario last year and the sector's extended under performance.
Your own Company's performance in the near term and the strategic business choices it made for medium term are reflective of the overall politico-economic sentiment and sector specific challenges. The Company continued to steadfastly implement its strategy to focus on its core business of real estate development and leasing, launch of select residential and commercial projects in targeted geographies supported with development of world-class infrastructure for its key developments, divestiture of non-core assets and reduction in debt. I am happy to share with you that the success of the launches that your Company chose to make last year in Gurgaon, Chandigarh Tri-city and Lucknow reaffirm the confidence that our esteemed customers vest in your Company's products. The leasing businesses portfolio of offices and retail continue to provide a strong anchor to the Company's cash flows.
Your Company continues to reinforce its strong commitment towards serving the under served communities in areas of its business operations. DLF Foundation, in its fifth year since incorporation has consistently pursued its mission of empowering communities and initiated a number of charitable projects for the poor and underprivileged in areas of education, training, health, community development and environment. This year has also been remarkable with the success achieved by the three major flagship programmes i.e. "DLF Life" (Employability-linked Skill Development Programme), the DLF Choudhary Raghvendra Singh Scholarship Programme (for meritorious students among underprivileged) and the Village Cluster Development Programme.
Your Company continues to be guided by its underlying values of providing exemplary customer service, enhancing value for all our stakeholders and being socially responsible in all our business endeavours.
I look forward to your continued support in the year ahead and wish you the very best.
With best wishes,
(Dr. K. P. Singh)
30th May, 2013