Indiabulls Financial Services

Dear Shareholders,
 
 The vibrant economic landscape of India has propelled the country on a
 high growth trajectory.  The domestic GDP growth rate, during 2007-08,
 was 9% and is projected to grow at the rate of 8% in the forthcoming
 fiscal. As a backbone to the economy, the financial services industry
 is on the threshold of a steadily increasing growth curve. At this
 juncture, Id describe India as an opportunity- rich canvas for
 ambitious enterprises such as ours.
 
 And the numbers prove it. During 2007-08, our topline displayed a
 noteworthy increase of 110.8%, from Rs. 801.3 crore in 2006-07 to Rs.
 1688.8 crore, during the year under review.  Our consolidated profits
 after tax are up 91%, from Rs. 304 crore in the year 2006-07 to Rs.
 580.6 crore during 2007-08. Outstanding loans for the year 2007-08
 reached Rs. 10,441 crore.
 
 Towards Sustainable Growth
 
 While sub prime crisis and worsening liquidity situation has recently
 brought home some bitter truths before the financial world, your
 company had been ahead of the curve in anticipating its fall out on the
 macro landscape, and had taken enough prudent measures to protect the
 company from potential adverse consequences.
 
 Not only did we de-risk our credit portfolio by moving away from
 unsecured to secured form of lending, but kept our loan to value (LTV)
 ratio extremely conservative, even if it meant reduced margins in our
 revised portfolio mix. As part of our conscious strategy, we churned
 our portfolio from high return to low risk-medium return category of
 assets, in retrospect, the rock solid belief the management of your
 company had in safety first has paid off as reflected in its robust
 asset profile.
 
 We could also sense the looming liquidity crunch in the wake of
 inflationary pressures, and chose to carry enough cash on our balance
 sheet even though we had to bear the pressure of negative carry on our
 bottom line in the near term.  Notwithstanding the short term impact on
 the profitability, these measures will stand your company in good stead
 in the more opportune times.
 
 Robust Asset Quality
 
 Our robust asset growth has been accompanied by an equally strong asset
 quality. Our gross NPAs represent a mere 0.7% of the loan portfolio
 with a provision cover of almost twice that amount.
 
 integration, Our Way Forward Having reached a preeminent place in the
 Indian Financial Services sector, weve now set our sights on the newer
 frontiers beyond the realm of just consumer finance. Today, the
 domestic Financial Services Industry presents several interesting
 opportunities. IBFSL is geared to benefit from these promising
 prospects and emerge as an integrated financial services provider. Our
 strategic joint venture with Sogecap, a Subsidiary of Societe Generate
 (SocGen), marks our foray into the lucrative life insurance market. Im
 also pleased to inform you that your Company has already received
 approval for setting up an Asset Management Company (AMC) to expedite
 its plans to venture into the Mutual Funds sector.  Were also working
 towards the establishment of a Multi Commodities Exchange, in
 partnership with MMTC. With these initiatives in place, Im optimistic
 and excited about our future in the industry.
 
 Focussed Approach
 
 A maxim I truly believe in is Focus differentiates the leader from the
 pack.  Today, the business model of the Group is based on the core
 objective of approaching our goals with unwavering focus. The de-merger
 of India Bulls Securities Limited (ISL) as a separate entity is a
 significant accomplishment during the bygone fiscal. The year also
 witnessed the merger of Indiabulls Credit Services Limited with IBFSL.
 
 People, the imperatives for Success I recognise IBFSL as an
 extraordinary venture, with people as key to its success. We maintain a
 corporate culture that allows our employees to utilise their potential
 to the fullest. We empower our people to hone their entrepreneurial
 abilities that aid the company in achieving its objectives.
 
 Appreciation
 
 Id like to place on record, my sincere appreciation to our
 shareholders, our customers, our bankers and our employees for their
 trust and belief in our abilities.
 
 
 Sameer Gehlaut,
 Founder and Chairman