1.  Overview:
 
 Indiabulls Financial Services Limited (the Company, IBF5L) was
 incorporated on January 10, 2000 as a Private Limited Company to invest
 in various subsidiaries and also to invest, acquire, hold, purchase or
 procure equity shares, debentures, bonds, mortgages, obligations,
 securiiies of any kind issued or guaranteed by any company end provide
 loan and other credit facilities.
 
 On March 30, 2001, the Company was registered under section 45-IA of
 the Reserve Bank of India (RBI) Act, 1934 to carry on the business of a
 Non Banking Financial Company but does not have permission from the RBI
 to accept public deposits. The Company was converted into a public
 limited company pursuant to Section 44 of the Companies Act, 1956 on
 February 03, 2004.
 
 2.  Contingent liability not provided for in respect of:
 
 (a) Corporate counter guarantees outstanding in respect of credit
 facilities availed by subsidiaries for the year ended March 31, 201 1
 amounting to Rs.  500,000,000 (Previous Year Rs.  1,868,625,530).
 
 (b) Corporate counter guarantees outstanding in respect of assignment
 agreements entered by companys subsidiary with different assignees as
 at March 31, 2011 is Rs. 69,536,145 (Previous Year Rs. 256,162,252)
 against which collateral deposit of Rs.  142,800,000 for year ended
 March 31, 2011 (Previous Year Rs. 1 61,924,000) is being provided to
 the assignees by the companys subsidiary in the form of Fixed Deposit
 Receipts.
 
 (c) Corporate counter guarantee outstanding in respect of credit
 facilities availed by erstwhile subsidiary companies Rs. Nil (Previous
 Year Rs.  1,200,000,000) against which collateral fixed deposits of Rs.
 Nil (Previous Year Rs. 600,000,000) has been provided by those
 erstwhile subsidiaries for whom the counter guarantee was given.
 
 (d) Capital commitments as at March 31, 2011 (net of advances) Rs.
 8,277,368 (Previous Year Rs. 984,863).
 
 (e) Demand raised u/s 143(3) of the Income Tax Act, 1961 for Rs.
 33,821,339 with respect to the Financial Year 2007-08 (Previous Year
 Rs. Nil) against which an appeal has been filed with CIT (Appeals).
 
 (f) Arbitration award passed by the international arbitrator against
 the Company for Rs. 1,920,007,000 (Previous Year Rs. Nil) for purchase
 of 42.5% stake in Indiabulls Finance Company Limited (IFCPL), which is
 disputed by the Company. The company currently holds 57.5% equity stake
 in IFCPL (Refer Note No. 35).
 
 3.  During the year the Company has complied with the Non-Banking
 Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms
 (Reserve Bank) Directions, 2007 as issued by the Reserve Bank of India
 vide notification dated February 22, 2007.
 
 4.  Changes in capital structure during the year from April 01, 201 0
 to March 31, 2011:
 
 On April 9, 2010, the Company has issued 22,650 Equity Shares of Rs. 2
 each, at a premium of Rs.93.95 per share in terms of the Employees
 Stock Option Plan - 2008.
 
 On April 27, 2010, the Company has issued 30,000 Equity Shares of Rs. 2
 each, at a premium of Rs.93.95 per share in terms of the Employees
 Stock Option Plan - 2008, and 26,640 Equity Shares of Rs. 2 each, at a
 premium of Rs.39.67 per share in terms of the IBFSL - ICSL Employees
 Stock Option Plan 2006.
 
 On May 24, 2010, the Company has issued 201,987 Equity Shares of Rs. 2
 each, at a premium of Rs.93.95 per share in terms of the Employees
 Stock Option Plan - 2008, 75,028 Equity Shares of Rs. 2 each, at a
 premium of Rs.39.67 per share in terms of the IBFSL - ICSL Employees
 Stock Option Plan 2006, and 5,016 Equity Shares of Rs. 2 each, at a
 premium of Rs.98.00 per share in terms of the IBFSL - ICSL Employees
 Stock Option Plan II 2006.
 
 On September 1, 2010, the Company has issued 77,710 Equity Shares of
 Rs. 2 each, at a premium of Rs.93.95 per share in terms of the
 Employees Stock Option Plan - 2008,
 
 4,248 Equity Shares of Rs. 2 each, at a premium of Rs.39.67 per share
 in terms of the IBFSL - ICSL Employees Stock Option Plan 2006, and
 3,828 Equity Shares of Rs. 2 each, at a premium of Rs.98.00 per share
 in terms of the IBFSL - ICSL Employees Stock Option Plan II 2006.
 
 On October 22, 2010, the Company has issued 125,066 Equity Shares of
 Rs. 2 each, at a premium of Rs.93.95 per share in terms of the
 Employees Stock Option Plan - 2008, 39,500 Equity Shares of Rs. 2 each,
 at a premium of Rs.93.95 per share in terms of the IBFSL - ICSL
 Employees Stock Option Plan 2006, and 22,296 Equity Shares of Rs. 2
 each, at a premium of Rs.98.00 per share in terms of the IBFSL - ICSL
 Employees Stock Option Plan II 2006.
 
 On December 1, 2010, the Company has issued 260,842 Equity Shares of
 Rs. 2 each, at a premium of Rs.93.95 per share in terms of the
 Employees Stock Option Plan - 2008, 5,978 Equity Shares of Rs. 2 each,
 at a premium of Rs.39.67 per share in terms of the IBFSL - ICSL
 Employees Stock Option Plan 2006, and 19,932 Equity Shares of Rs. 2
 each, at a premium of Rs.98.00 per share in terms of the IBFSL - ICSL
 Employees Stock Option Plan II 2006.
 
 On January 19, 2011, the Company has issued 1 76,282 Equity Shares of
 Rs. 2 each, at a premium of Rs.93.95 per share in terms of the
 Employees Stock Option Plan - 2008, and 594 Equity Shares of Rs. 2
 each, at a premium of Rs.98.00 per share in terms of the IBFSL - ICSL
 Employees Stock Option Plan II 2006.
 
 As a consequence of the above, as at March 31, 2011, the Issued,
 Subscribed and Paid-up Equity Share Capital of stands Rs. 621,984,236
 divided into 310,992,118 no. of shares of face value Rs. 2 each fully
 paid up.
 
 During the year, the Company has received share application money
 towards exercise of ESOPs by certain eligible employees aggregating to
 Rs. 2,732,718 (Previous Year Rs. Nil). The same has been shown as Share
 application money pending allotment.
 
 5.  During the financial year 2007-08, the Company had restructured its
 business operations through a scheme of arrangement Under Sections 391
 - 394 of the Companies Act, 1956(duly sanctioned by the Honble
 
 High Court of Judicature at Delhi on November 23, 2007). The Scheme of
 Arrangement provided for the amalgamation of Indiabulls Credit Services
 Limited (ICSL) with the Company and the demerger of the securities
 broking and advisory business (a part of fee income) of the Company as
 a going concern, to Indiabulls Securities Limited (ISL). Upon coming
 into effect of the Scheme on December 24, 2007 and with effect from the
 Appointed Date on April 01, 2007, ICSL stands amalgamated with the
 Company and the securities broking and advisory business (a part of Fee
 Income) of the Company stands demerged from the Company and transferred
 to and vested in ISL on a going concern basis.
 
 6.  During the financial year 2004-2005, the Company completed listing
 of its equity shares on the Bombay Stock Exchange, Mumbai and the
 National Stock Exchange by way of an Initial Public Offering consisting
 of 27,187,519 Equity Shares of Rs. 2 each at a premium of Rs. 1 7 per
 share.
 
 During the financial year 2004-05, the Company issued 24,489,000 Global
 Depository Receipts (GDRs) which were listed at the Luxembourg Stock
 Exchange, at an offer price of US$ 2.45 per GDR. Each GDR represents 1
 Equity Share of Rs. 2 each of the Company.
 
 During the financial year 2005-06, the Company issued 27,600,000 Global
 Depository Receipts (GDRs) which were listed at the Luxembourg Stock
 Exchange, at an offer price of US$ 5.42 per GDR. Each GDR represents 1
 Equity Share of Rs. 2 each of the Company.
 
 During the financial year 2006-07, the Company allotted 11,000,000
 Equity shares of Rs. 2 each at a price of Rs. 82 per share to its
 promoters on conversion of Share Warrants I which was allotted to them
 on August 9, 2005.
 
 During the financial year 2007-08, the Company has issued 22,970,903
 Global Depository Receipts (GDRs) which were listed at the Luxembourg
 Stock Exchange, at an
 
 offer price of US$ 13.06 per GDR. Each GDR represents 1 Equity Share of
 Rs. 2 each of the Company.
 
 The Company during the financial year 2007-08 also allotted 10,000,000
 Equity Shares of face value of Rs. 2 each, to its Promoters at a price
 of Rs. 134.87 per share on conversion of the Share Warrants-ll which
 were allotted to them on June 8, 2006.
 
 As at the year end 7,125,441 (Previous Year: 13,049,556) GDRs were
 outstanding and were eligible for conversion into equity shares.
 
 During the financial year 2009-10, the Company issued 56,140,350 fully
 paid-up Equity Shares at a price of Rs. 1 71/- per Equity Share
 (including a premium of Rs. 169/- per Equity Share), aggregating to Rs.
 9,599,999,850 (Rupees Nine Hundred Fifty Nine Crore, Ninety Nine Lacs,
 Ninety Nine Thousand, Eight Hundred and Fifty only) to Qualified
 Institutions Buyers (QIBs) in terms of Chapter Xlll-A of the SEBI
 (Disclosure and Investor Protection) Guidelines, 2000, as amended.
 
 During the current financial year, in terms of Chapter VIII of the SEBI
 (Issue of Capital and Disclosure Requirements) Regulations, 2009 in
 respect of the issue of the Secured Non Convertible Debentures of the
 Company to QIBs under Qualified Institutions Placement (Refer Note no.
 14), the Company issued 27,500,000 Share Warrants being issued at a
 Warrant Issue Price of Rs. 5 per Share Warrant, with a right
 exercisable by the Warrant holder to exchange each Warrant with one
 equity share of the Company of face value Rs. 2 each, any time before
 the expiry of 60 months from the date of allotment of the Warrants, at
 a Warrant Exercise Price of Rs. 225 per equity share. Subscription
 amount received on Warrant Issue Price of Rs. 5 per Share Warrant is
 neither adjustable with the Warrant Exercise Price, nor refundable by
 the Company; hence the same has been credited to Capital Reserve
 Account.
 
 7.  Employees Stock Options Schemes:
 
 Stock option schemes in lieu of stock options schemes of erstwhile
 subsidiary Indiabulls Credit Services Limited of the Company:
 
 On January 02, 2006, the erstwhile Indiabulls Credit Services Limited
 (ICSL or the erstwhile Company) established the Indiabulls Credit
 Services Limited Employees Stock Options Scheme (ICSL ESOS or
 Plan).  Under the plan, the erstwhile Company was authorised to issue
 up to 6,000,000 equity settled options of Rs. 1 0 each to eligible
 employees including employees of other Indiabulls Group Companies.
 Employees covered by the plan were granted an option to purchase shares
 of the erstwhile Company subject to the requirements of vesting. A
 Compensation Committee constituted by the Board of Directors of the
 erstwhile Company administered the plan.
 
 On January 02, 2006, the erstwhile Company granted 6,000,000 equity
 settled options at an exercise price of Rs. 1 2.50 per share. These
 options were to vest uniformly over a period of 5 years, with effect
 from April 01, 2007, whereby 20% of the options were to vest on each
 vesting date as per the vesting schedule.
 
 On July 28, 2006, the erstwhile Company established the Indiabulls
 Credit Services Limited Employees Stock Option Plan II (ICSL ESOP II
 or Plan II). Under the plan, the erstwhile Company was authorized to
 issue up to 9,000,000 equity settled options of Rs. 10 each to eligible
 employees including employees of
 
 other Indiabulls Group Companies. Employees covered by the plan were
 granted an option to purchase shares of the erstwhile Company subject
 to the requirements of vesting. A Compensation Committee constituted by
 the Board of Directors of the erstwhile Company administered the plan.
 
 On July 28, 2006, the erstwhile Company granted 3,000,000 equity
 settled options at an exercise price of Rs. 30 per share and on October
 25, 2006, granted further 6,000,000 options under the ICSL ESOP (M)
 II as described below. The 3,000,000 options were to vest uniformly
 over a period of 5 years, with effect from November 01, 2007, whereby
 20% of the options were to vest on each vesting date as per the vesting
 schedule.
 
 Pursuant to the Scheme of Arrangement (the Scheme) under Sections 391
 to 394 of the Companies Act, 1956, duly approved by the Honble High
 Court of Delhi vide order dated November 23, 2007. Indiabulls Credit
 Services Limited stands amalgamated with Indiabulls Financial Services
 Limited (IBFSL, the Company) with effect from the Appointed Date i.e.
 April 01, 2007 and effective from December 24, 2007 (the Effective
 Date) the ICSL PLANS stand terminated and in lieu, in terms of Clause
 15 (c) (i) of the Scheme, NEW PLANS have been created in IBFSL for the
 outstanding, unvested options, for the benefit of the erstwhile
 Indiabulls Credit Services Limited option holders, on terms and
 conditions not less favourable than those provided in the erstwhile
 ICSL PLANS and taking into account the share exchange ratio i.e. 3
 (three) equity shares of face value Rs. 2 each of IBFSL for every 10
 (ten) equity shares of face value Rs. 10 each of ICSL .
 
 Accordingly, pursuant to Shareholders approval, in lieu of ICSL PLANS,
 IBFSL had created the following Employees Stock Option Plans which are
 collectively referred to as NEW PLANS.
 
 S. No.  ERSTWHILE ICSL PLANS              NEW PLANS
                  
 1       Indiabulls Credit Services 
         Limited Employees Stock           IBFSL - ICSL Employees Stock 
         Option Plan 2006 dated            Option Plan 2006
         January 2, 2006
 
 2       Indiabulls Credit Services 
         Limited Employees Stock           IBFSL - ICSL Employees Stock 
         Option Plan II - 2006 dated       Option Plan II - 2006
         July 28, 2006
 
 The NEW PLANS have been treated as continuation of respective ICSL
 PLANS except the number and exercise price of options which have been
 adjusted taking into account the share exchange ratio i.e. 3 (three)
 equity shares of face value Rs. 2 each of the Company for every 10
 (ten) equity shares of face value Rs. 10 each of ICSL.
 
 Employees Stock Option Plan - 2008
 
 Pursuant to a resolution passed by the shareholders on December 8,
 2008, the Company had established Employees Stock Option Plan - 2008
 (ESOP - 2008 or Scheme) in accordance with the provisions of the
 Securities and Exchange Board of India (Employee Stock Option Scheme
 and Employee Stock Purchase Scheme) Guidelines, 1999 ( SEBI
 Guidelines).Under the Scheme, the company was authorised to grant
 7,500,000 equity settled options to eligible employees including its
 directors (other than promoter directors) and employees of its
 subsidiary companies including their directors. All options under the
 Scheme are exercisable for equity shares of the Company. Employees
 covered by the plan were granted an option to purchase shares of the
 Company subject to the requirements of vesting. A Compensation
 Committee constituted by the Board of Directors of the Company
 administered the plan. In terms of Scheme, on December 8, 2008, the
 Company had granted 7,500,000 options at an exercise price of Rs.
 95.95, being the then latest available closing market price on the
 National Stock Exchange of India Ltd. as on December 7, 2008 following
 the intrinsic method of accounting as is prescribed in the Guidance
 Note issued by the Institute of Chartered Accountants of India on
 Accounting for Employees Share based Payments (the Guidelines). As the
 options have been granted at intrinsic value, there is no employee
 stock compensation expense on account of the same. These options will
 vest with effect from first vesting date i.e. December 8h, 2009,
 whereby the options vest on each vesting date as per the vesting
 schedule provided in the Scheme.
 
 The expected volatility was determined based on historical volatility
 data.
 
 IBFSLESOP- 2010
 
 The members of the Company at their Extraordinary General Meeting dated
 September 30, 2010 approved the IBFSL ESOP -2010 scheme consisting of
 30,000,000 stock options representing 30,000,000 fully paid up equity
 shares of Rs. 2/- each of the Company to be issued in one or more
 tranches to eligible employees of the Company or to eligible employees
 of the subsidiaries of the Company. The same has not yet been granted
 till March 31, 2011.
 
 Indiabulls Employees Welfare Trust
 
 During the year, pursuant to the approval accorded at an Extra Ordinary
 General Meeting of the members of the Company held on September 30,
 2010, the Indiabulls Employees Welfare Trust (Trust) has been formed
 on October 04, 2010 with an initial corpus of Rs. 50,000, contributed
 equally by the Company and four other listed Settlor entities, to
 administer and implement the Companys current un granted Employee
 Stock Option Schemes (ESOP) and any future ESOP / Employee Stock
 Purchase Schemes of the Settlor entities. IBFSL being one of the
 Settlors, has contributed its share of Rs. 10,000 as its initial
 contribution towards the Corpus of the said Trust. The Trust is
 administered by independent Trustees. In terms of the Trust Deed,
 Equity shares of the Settlor entities are purchased by the Trust to the
 extent permissible in terms of the ESOP scheme as approved by the
 Members of the Company for the purposes of allotment of the same to
 eligible Employees of settlor companies and their subsidiaries, upon
 exercise of options granted by the Compensation Committee of settlor
 companies, at a price to be determined by the Trust based on its
 carrying cost. During the year, there has been no new grants made by
 the Company which is required to be administered by the Trust.
 
 * The number and exercise price of options have been adjusted taking
 into account the share exchange ratio i.e. 3 (three) equity shares of
 face value Rs. 2 each of the Company for every 10 (ten) equity shares
 of face value Rs. 10 each of ICSL.
 
 ** The Vesting Period has been revised by the approval of the
 Shareholders of the Holding Company in the 9th Annual General Meeting
 held on 5th September, 2008. The revised vesting percentage has been
 calculated on the unvested options i.e 1,080,000 options as on the date
 of approval.
 
 *** The Vesting Period has been revised by the approval of the
 Shareholders of the Holding Company in the 9th Annual General Meeting
 held on 5th September, 2008.
 
 $ The Board Compensation Committee of the Company, at its meeting held on
 December 31, 2009, regranted 367,350 (Three Lac Sixty Seven Thousand
 Three Hundred Fifty) Stock Options under its Employees Stock Option
 Plan 2008 to the Eligible Employees at an exercise price of Rs.
 125.90, being the then latest available closing market price on the
 National Stock Exchange of India Ltd. as on December 30, 2009 following
 the intrinsic method of accounting as is prescribed in the Guidance
 Note issued by the Institute of Chartered Accountants of India on
 Accounting for Employees Share based Payments (the Guidelines). As the
 options have been regranted at intrinsic value, there is no employee
 stock compensation expense on account of the same.
 
 $$ The Board Compensation Committee of the Company, at its meeting held on
 August 27, 2009, regranted 395,000 (Three Lac Ninety Five Thousand
 Stock Options under its IBFSL-ICSL Employees Stock Option Plan 2006
 and 219,000 (Two Lac Nineteen Thousand) IBFSL - ICSL Employees Stock
 Option Plan II - 2006 to the Eligible Employee at an exercise price of
 Rs. 95.95 and Rs. 100.00 respectively. As the options have been
 regranted at less than the intrinsic value, the employee stock
 compensation expense on account of the same amounting to Rs.
 24,994,201 has been debited to the Profit and Loss Account for the year
 ended March 31, 2011.
 
 $$$ The Board Compensation Committee of the Company, at its meeting held on
 July 16, 2010, regranted 230,400 (Two Lac Thirty Thousand Four Hundred)
 Stock Options under its Employees Stock Option Plan 2008 to the
 Eligible Employees at an exercise price of Rs. 158.50, being the then
 latest available closing market price on the National Stock Exchange of
 India Ltd. as on July 15, 2010 following the intrinsic method of
 accounting as is prescribed in the Guidance Note issued by the
 Institute of Chartered. Accountants of India on Accounting for
 Employees Share Based Payments (the Guidelines). As the options have
 been regranted at intrinsic value, there is no employee stock
 compensation expense on account of the same.
 
 $$$$ The Board Compensation Committee of the Company, at its meeting held on
 January 11, 2011, regranted 200,000 (Two Lac) Stock Options under its
 Employees Stock Option Plan 2008 to the Eligible Employees at an
 exercise price of Rs. 153.65, being the then latest available closing
 market price on the National Stock Exchange of India Ltd. as on January
 10, 2011 following the intrinsic method of accounting as is prescribed
 in the Guidance Note issued by the Institute of Chartered Accountants
 of India on Accounting for Employees Share Based Payments (the
 Guidelines). As the options have been regranted at intrinsic value,
 there is no employee stock compensation expense on account of the same.
 
 8.  During the financial year 2008-09 there was a variation in the
 terms of Appointment of Mr. Rajiv Rattan pursuant to Section 302 of the
 Companies Act, 1956. Mr. Rajiv Rattan who was appointed as a Whole-time
 Director of the Company on February 27, 2004(effective from February
 28, 2004) and had been drawing remuneration from the Company with
 effect from August 1, 2005, pursuant to the shareholders approval,
 accorded in the Annual General Meeting of the Company dated July 26,
 2005. Subsequently effective from March 6, 2008, he was designated as
 Vice Chairman of the Company. While the terms of his remuneration as
 approved by the Shareholders authorise him to receive remuneration from
 the Company uptil February 27, 2009, in the Board meeting dated July
 25th 2008 Mr. Rajiv Rattan expressed his desire to continue as the Vice
 Chairman of the Company, without any remuneration, effective September
 1, 2008.  The last drawn remuneration by Mr. Rajiv Rattan was
 Rs.3,690,500 per month. Accordingly, in deference of his desire the
 Board had decided that with effect from September 1, 2008 Mr. Rajiv
 Rattan would be Vice Chairman of the Company without any remuneration.
 
 9.  During the financial year 2008-09 the Company had advanced a sum of
 Rs. 1,455,673,000 by way of loans to three of its wholly owned
 subsidiaries - viz. Indiabulls Insurance Advisors Limited, Indiabulls
 Capital Services Limited and Indiabulls Advisory Services Limited
 (formerly Divya Shakti Trading Services
 
 Limited). Those subsidiaries had incurred / provided for losses
 aggregating to Rs. 2,275,330,373 primarily as a result of dealing in
 securities in the previous financial year 2008-09. Based upon the
 availability of resources with those subsidiaries as at the previous
 financial year end to repay those loans, the Company had written off
 loans given to two of those subsidiaries -viz. Indiabulls Insurance
 Advisors Limited and Indiabulls Capital Services Limited aggregating to
 Rs. 1,136,173,000 as bad loans /advances. During the current financial
 year Indiabulls Capital Services Limited has repaid an amount of Rs.
 147,000,000 out of the Loan outstanding of Rs. 1 80,000,000 as a
 consequence of the same the outstanding balance is Rs. 33,000,000 as at
 March 31, 2011.
 
 10.  Investments by the company in the equity share capital of
 Indiabulls Insurance Advisors Limited and Indiabulls Capital Services
 Limited are considered as strategic and long term in nature and are
 held at a cost of Rs. 500,000 and Rs. 50,000,000 respectively. The
 company considers the losses suffered by these subsidiaries as
 temporary in nature and accordingly no provision for diminution in
 value has been made in books of account.
 
 11.  As at March 31, 2011, the Company holds 100% of the equity capital
 of Indiabulls Asset Holding Company Limited, Indiabulls Life Insurance
 Company Limited at a cost of Rs. 500,000 each. Based on the audited
 financials those companies as at and for the year ended March 31, 2011,
 there has been an erosion in the value of investment made in those
 companies as the operations in those companies have not yet commenced /
 are in the process of being set up. Considering the investment in these
 companies as strategic and long term in nature, the company considers
 the losses suffered by these subsidiaries as temporary in nature and
 accordingly no provision for diminution in value has been made in books
 of account.
 
 12.  The Company has entered into various agreements for the
 assignment/securitisation of loans with assignees, wherein it has
 assigned/securitised a part of its secured and unsecured loan portfolio
 amounting to Rs. 43,579,594,51 7 (Previous Year Rs. 37,705,716,297)
 upto March 31, 2011, being the principal value outstanding as on the
 date of the deals. The Company does not anticipate any losses on
 account of the said corporate guarantees, in the event of the rights
 under guarantee being exercised by the assignees:
 
 The Company assigned/securitised various loan portfolios to banks
 and/or other institutions which are derecognised in the books of
 accounts of the Company in terms of accounting policy mentioned at
 Schedule 1 8 A (v) above and the purchase consideration not received
 upfront is recognised as deferred purchase consideration under loans
 and advances. Due to foreclosures and repurchase transactions with
 different assignees during the year, the company has repurchased and
 reinstated the loan balances in the books of account aggregating to Rs.
 159,666,716 (Previous Year Rs. 2,524,013,972) The Company has also
 reversed the proportionate upfront income so accounted on
 assignment/securitisation. The Company has recognized income on
 assignment of Rs. NIL which is net of income reversal on account of
 foreclosure and repurchase of assigned loans during the year amounting
 to Rs. 24,548,130 (Previous Year Rs. 139,908,779) in the Profit & Loss
 Account.
 
 13.  Secured loans from banks and others include:
 
 Vehicle Loans amounting to Rs. 3,226,849 (Previous Year Rs. 6,535,522)
 from Banks which are secured against hypothecation of vehicles and
 Secured loans from Banks amounting to Rs. 109,175,852,305 (Previous
 Year Rs. 30,682,172,212) which are secured against book debts and
 balances of receivables included in loans and other credit facilities.
 As at the year end, the Company is in the process of creating the
 charges/security on assets for bank loans amounting to Rs.
 18,000,827,658.
 
 Secured Non-Convertible Debentures amounting to Rs. 36,225,000,000
 (Previous Year Rs. 5,450,000,000) are secured by an equitable charge
 against immovable property and balance pool of receivables. As at the
 year end, the Company is in the process of creating the
 charges/security on assets for 4,100 Non- Convertible Debentures of Rs.
 1,000,000 each amounting to Rs. 4,100,000,000.
 
 14.  During the year, in terms of Chapter VIII of the SEBI (Issue of
 Capital and Disclosure Requirements) Regulations, 2009 in respect of
 the issue of the Securities of the Company to QIBs under Qualified
 Institutions Placement, the Company issued and allotted the following
 Securities:
 
 (i) 5,500 - 10 per cent, secured redeemable non-convertible debentures
 of face value of Rs. l,000,000 each due August 2015 for cash
 aggregating Rs. 5,500,000,000;
 
 (ii) 1,000 - 8.9 per cent, secured redeemable non-convertible
 debentures of face value of Rs.l,000,000 each due February 2012 for
 cash aggregating Rs. l,000,000,000.
 
 Redeemed on respective maturity dates given above.
 
 (1)Call option exercised and redeemed before the due date on April 13,
 2010.
 
 (2)Call option exercised and redeemed before the due date on April 9,
 2010.
 
 (3)Call option exercised and redeemed before the due date on April 20,
 2010.
 
 (4)Call option exercised and redeemed before the due date on April 15,
 2010.
 
 (5)Call option exercised and redeemed before the due date on April 30,
 2010.
 
 (6)Call option exercised and redeemed before the due date on May 4,
 2010.
 
 (7)Call option exercised and redeemed before the due date on April 29,
 2010.
 
 (8)Call option exercised and redeemed before the due date on April 26,
 2010.
 
 (9)Call option exercised and redeemed before the due date on April 26,
 2010.
 
 (10)Call option exercised and redeemed before the due date on May 7,
 2010.
 
 (11)Call option exercised and redeemed before the due date on May 26,
 2010.
 
 (12)Call option exercised and redeemed before the due date on April 30,
 2010.
 
 (13)Call option exercised and redeemed before the due date on May 21,
 2010.
 
 (14)Call option exercised and redeemed before the due date on May 6,
 2010.
 
 (15)Call option exercised and redeemed before the due date on May 14,
 2010.
 
 (16)Call option exercised and redeemed before the due date on June 21,
 2010.
 
 (17)Call option exercised and redeemed before the due date on June 21,
 2010.
 
 (18)Call option exercised and redeemed before the due date on June 22,
 2010.
 
 # Secured Non convertible debentures.  
 
 $ Redeemable at a premium.
 
 15.  (a) Secured Loans and Other Credit Facilities given to customers
 amounting to Rs. 149,492,304,908 (Previous Year Rs. 65,152,710,003) are
 secured against securities both tradable and listed, Commercial
 Vehicles, Farm Equipments and Mortgage of Properties.
 
 (b) Secured Loans comprising loan against shares given to customers are
 secured against
 
 - securities both tradable and listed and;
 
 - equitable mortgage of property / properties or registered mortgage of
 property / properties.
 
 (c) Secured loans in the nature of Commercial Vehicle, Tractor finance
 are secured against hypothecation of the respective vehicle. Other
 secured loans are secured by equitable mortgage of property or
 registered mortgage of property / properties, securities and personal
 guarantees accepted as collateral security.
 
 (d) Unsecured Loans comprise of Business Loans, Personal Loans,
 Personal Loans Plus, Small Business Loans, and Commercial Credit
 Unsecured Loans given to customers aggregating to Rs.  9,077,919,925
 (Previous Year Rs. 30,140,205,683).
 
 (e) Provision for Loans and Other Credit Facilities in respect of
 Unsecured and Secured Loans granted is made as per the Non Banking
 Financial (Non- Deposit Accepting or Holding) Companies Prudential
 Norms (Reserve Bank) Directions, 2007 (RBI Directions, 2007). The
 Company has made additional provisions based on the underlying risk
 factors and on the best estimates of the management taking into
 consideration the outstanding balances / ageing of the loans.
 
 (f) In terms of RBIs Notification No. RBI/2010-11/370
 DNBS.PD.CC.No.207/ 03.02.002 /2010-11 dated January 17, 201 1, every
 Non Banking Financial Company is required to make an additional
 provision on standard assets at 0.25 percent of the outstanding,
 standard assets. Accordingly, the Company has recognized Contingent
 Provisions against Standard Assets of Rs. 391,878,816 (Previous Year
 N.A.) as at the year end.
 
 (g) The Company has provided loans to the Indiabulls Employees
 Welfare Trust (Trust) (Refer Note no.  7) for purchase of equity
 shares, of which Rs. 5,629,700,000 (excluding Rs. 284,423,573 being
 interest accrued but not due) (Previous year Rs. Nil) was outstanding
 as at March 31, 201 1. The said loan has been utilised by the Trust
 towards the purchase of shares of Settlor entities in terms of the
 Trust deed from the open market. The repayment of the loan granted by
 the Company to the Trust is dependent on the exercise of the options by
 the eligible employees, at the exercise price as determined by the
 Trust based on its carrying cost and the market price of the underlying
 shares of the unexercised options, as at the end of the exercise
 period. The fall in value of the underlying equity shares on account of
 the above, if any, can be determined only at the end of the exercise
 period.
 
 16.  The Company has taken office premises on Lease and Leave & License
 basis at various locations in India.  Lease rent / License fees
 amounting to Rs. 289,584,451 (Previous Year: License Fees Rs.
 91,466,860) in respect of the same have been charged to Profit and Loss
 account. The agreements have been executed for a period ranging from 1
 1 months to 10 years with a renewable clause and also provide for
 termination at will by either party giving a prior notice period
 between 30 to 90 days. The minimum lease rentals outstanding as at
 March 31, 2011, are as under:
 
 Furniture and Fixtures include an amount of Rs. 142,853,882 towards
 assets held as Leasehold Improvements, for which the amortisation
 charge of Rs. 36,628,846 is included under depreciation / amortization
 expenses for the year.
 
 17.  Employee Benefits - Provident Fund, ESIC, Gratuity, Leave
 (Compensated absences) and Superannuation (Pension & Medical coverage)
 benefit plans disclosures as per Accounting Standard (AS) 1 5 (Revised)
 - Employee Benefits as notified by the Companies (Accounting Standards)
 Rules, 2006:
 
 Contributions are made to Government Provident Fund and Family Pension
 Fund, ESIC and other statutory funds which cover all eligible employees
 under applicable Acts. Both the employees and the Company make
 predetermined contributions to the Provident Fund and ESIC. The
 contributions are normally based on a certain proportion of the
 employees salary. The Company has recognised an amount of Rs.
 5,206,548(Previous year Rs. 2,105,827) towards employer contribution
 for the above mentioned funds.
 
 Provision for unfunded Gratuity, Leave encashment (long term
 compensated absences) for all employees and unfunded Superannuation
 (Pension & Medical coverage) payable to a Promoter Director on
 retirement is based upon actuarial valuation carried out at the end of
 every financial year. Major drivers in actuarial assumptions,
 typically, are years of service and employee compensation. After the
 issuance of the Accounting Standard (AS) 1 5 (Revised) on Employee
 Benefits, as notified by the Companies (Accounting Standards) Rules,
 2006, commitments are actuarially determined using the Projected Unit
 Credit Method.  Gains and losses on changes in actuarial assumptions
 are accounted for in the Profit and Loss account.
 
 18. Profit and Loss account disclosures as per Schedule VI of the
 Companies Act, 1 956
 
 *Out of the above an amount of Rs. Nil (Previous Year Rs. 2,411,550)
 has been adjusted against securities premium account as shares issue
 expenses for Qualified Institutional Placement of equity shares.
 
 c) Remittances during the year in foreign currency on account of
 dividends:
 
 Final Dividend (Year End March 31, 2010)
 
 Number of Shareholders: 3 (Previous Year 3)
 
 Equity Shares held on which dividend is remitted: - 18,752,135 Equity
 Shares (Previous Year 32,958,351)
 
 Amount Remitted- Rs. 93,760,675 (Previous Year Rs. 65,916,702 for Year
 end March 31, 2009)
 
 Interim Dividend (Year End March 31, 2011)
 
 Number of Shareholders: 3 (Previous Year Nil)
 
 Equity Shares held on which dividend is remitted: - 12,828,020 Equity
 Shares (Previous Year Nil)
 
 Amount Remitted- Rs. 64,140,100 (Previous Year Rs. Nil)
 
 Note: The Company does not have information as to the extent to which
 remittances, if any, in foreign currencies on account of dividends have
 been made by non- resident shareholders.
 
 d) Remittances during the year in foreign currency on account of
 redemption of Preference Share capital: Amount Remitted- Rs. Nil
 (Previous Year Rs. 1,568,653,719)
 
 19.  Segment Reporting:
 
 Segment information for the year ended March 31, 2011, as per
 Accounting Standard AS-1 7, Segment Reporting, as notified by the
 Companies (Accounting Standards) Rules, 2006.
 
 b) The Company operates solely in one Geographic segment namely Within
 India and hence no separate information for Geographic segment wise
 disclosure is required.
 
 c) The Companys primary business segment is reflected based on
 principal business activities carried on by the Company. The Companys
 primary business comprises of investing and finance related activities
 (investing in various subsidiaries, financing of loans and credit
 activities) and Fee Income which mainly comprises of Financial Service
 related fee based advisory services income.
 
 d) Segment revenue, results, assets and liabilities include amounts
 identifiable to each segment and amounts allocated on a reasonable
 basis.
 
 e) The accounting policies adopted for segment reporting are in line
 with the accounting policies adopted for preparation of financial
 information as disclosed in Significant Accounting Policies (A) above.
 
 20.  Disclosures in respect of Related Parties as per Accounting
 Standard, AS-18, Related Parties Disclosures as notified by the
 Companies (Accounting Standards) Rules, 2006:
 
 Nature of relationship      Related party
 
 a) Related parties where 
    control exists:
 
    Subsidiaries             Indiabulls Insurance Advisors Limited
 
                             (Formerly known as Indiabulls Insurance 
                              Advisors Private Limited)
 
                             Indiabulls Finance Company Private Limited
 
                             Indiabulls Capital Services Limited
 
                             Indiabulls Housing Finance Limited
 
                             Indiabulls Infrastructure Credit Limited 
                             (Formerly known as
 
                             Indiabulls Commercial Credit Limited)
 
                             Indiabulls Collection Agency Limited
 
                             Ibulls Sales Limited
 
                             (Formerly known as Fast Loans Services 
                              Limited)
 
                             Indiabulls Advisory Services Limited
 
                             (Formerly known as Divya Shakti Trading 
                              Services Limited)
 
                             Nilgiri Financial Consultants Limited
 
                             (Subsidiary of Indiabulls Insurance 
                              Advisors Limited)
 
                             Indiabulls Life Insurance Company Limited
 
                             Indiabulls Asset Holding Company Limited
 
                             Indiabulls Asset Management Company Limited
 
                             Indiabulls Trustee Company Limited
 
                             Indiabulls Holdings Limited
 
                             Indiabulls Alternative Asset Management 
                             Pvt Ltd
 
                             Indiabulls Venture Capital Management
 
                             Company Limited (Subsidiary of Indiabulls 
                             Holdings Limited)
 
                             Indiabulls Venture Capital Trustee
 
                             Company Limited (Subsidiary of Indiabulls 
                             Holdings Limited)
 
 b) Related Party where 
    significant influence 
    exists:
 
    Associate                Indiabulls Asset Reconstruction Company 
                             Limited
 
                             Indian Commodity Exchange Limited 
                             (Associate upto December 12, 2010)
 
                             (Formerly known as International Multi 
                             Commodity Exchange Limited)
 
 c) Other related parties:
 
    Key Management Personnel Mr. Rajiv Rattan, Director
 
                             Mr. Sameer Gehlaut, Director 
 
                             Mr. Saurabh Mittal, Director 
 
                             Mr. Gagan Banga, Director
 
 
 21.  Earnings Per Share (EPS):
 
 The basic earnings per share is computed by dividing the net profit
 attributable to equity shareholders for the year by the weighted
 average number of equity shares outstanding during the year. Diluted
 earnings per share are computed using the weighted average number of
 equity shares and also the weighted average number of equity shares
 that could have been issued on the conversion of all dilutive potential
 equity shares. The dilutive potential equity shares are adjusted for
 the proceeds receivable, had the shares been actually issued at fair
 value.
 
 22.  Deferred Tax:
 
 In compliance with AS - 22 Accounting for Taxes on Income as notified
 by the Companies (Accounting Standards) Rules, 2006, the Company has
 credited an amount of Rs. 360,766,064 (Previous Year Rs. 42,724,671) as
 deferred tax credit to the profit and loss account.
 
 23.  Personnel Costs:
 
 Personnel Costs include an amount of Rs. 168,234,934 (Previous Year Rs.
 13,035,772) being cost of employees on deputation from other Group /
 erstwhile Group companies on specific job basis. The above has been
 apportioned from Indiabulls Housing Finance Limited a wholly owned
 subsidiary company, amounting to Rs. 168,234,934 (Previous Year Rs.
 13,035,772 apportioned from Indiabulls Securities Limited - the
 erstwhile subsidiary company).
 
 Other Administrative Costs apportioned from indiabulls Housing Finance
 Limited a wholly owned Subsidiary Company aggregated to Rs. 21,145,972
 (Previous Year Rs. Nil),
 
 24.  No borrowing costs have been capitalised during the year.
 
 (c) During the year March 31, 201 1 the Company did not enter/ settle
 into any Equity Futures and Options contracts (Previous Year Rs. Nil).
 
 Note: The above disclosure towards maturity pattern is as classified
 and computed by the company for its regulatory submissions and has been
 relied upon by the auditors.
 
 (Figures in respect of previous years are stated in italics)
 
 29.  Disclosures under the Micro, Small and Medium Enterprises
 Development Act, 2006:
 
 (a) An amount of Rs. Nil and Rs. Nil was due and outstanding to
 suppliers as at the end of the accounting year on account of Principal
 and Interest respectively.
 
 (b) No interest was paid during the year in terms of section 16 of the
 Micro, Small and Medium Enterprises Development Act, 2006 and no amount
 was paid to the supplier beyond the appointed day.
 
 (c) No interest is payable at the end of the year other than interest
 under Micro, Small and Medium Enterprises Development Act, 2006.
 
 (d) No amount of interest was accrued and unpaid at the end of the
 accounting year.
 
 The above information and that given in Schedule 11 - Current
 Liabilities and Provisions regarding Micro, Small and Medium
 Enterprises has been determined to the extent such parties have been
 identified on the basis of information available with the Company. This
 has been relied upon by the Auditors.
 
 30.  During the year, the Company has booked Premium on Forward
 Contracts amounting to Rs. 14,387,634 and unrealised marked to market
 loss towards derivatives (Interest Rate Swaps) amounting to
 
 Rs. 34,445,424 which has been included under Bank / Finance Charges of
 Schedule 1 7. Derivative instruments that are outstanding as at March
 31, 2011 is as given below:-
 
 I.  Forward Exchange contracts entered for hedging purposes as at March
 31, 201 1 is for USD 16,472,655 (Buy) (Previous Year Nil) against cross
 currency of INR.
 
 II.  Interest Rate Swaps for Notional Principal of Rs. 5,000,000,000
 (Previous Year Rs. Nil) for a total of twelve contracts (Previous Year
 Nil) against fluctuations in interest rate changes.
 
 III.  Year end foreign currency exposures that have not been hedged by
 a derivative instrument or otherwise for professional charges is for
 Rs. 8,622,612 (Previous Year Rs. Nil) (USD 193,116).
 
 32.  As per the best estimate of the management, no provision is
 required to be made as per Accounting Standard (AS) 29 - Provisions,
 Contingent Liabilities and Contingent Assets as notified under the
 Companies (Accounting Standards) Rules, 2006, in respect of any present
 obligation as a result of a past event that could lead to a probable
 outflow of resources, which would be required to settle the obligation.
 
 33.  During the financial year 2008-09, the Company had entered into a
 Memorandum of Understanding with MMTC Limited, to establish a
 Commodities Exchange with 26% ownership with MMTC and had advanced an
 amount of Rs. 1 53,840,000 as share money pending allotment as at March
 31, 2009. As on March 31, 2009 the Company held 50,000 equity Shares
 (Face value of Rs. 10/- each) in Indian Commodity Exchange Limited.
 Subsequent to March 31, 2009, in line with the Government of India
 ownership guidelines, Indian Commodity Exchange Limited (ICEX) (earlier
 known as International Multi Commodity Exchange Limited) has received
 its entire capital contribution of Rs. 10,000 Lacs from Indiabulls
 Financial Services Ltd (40%), MMTC Ltd (26%), Indian Potash Ltd (10%),
 Infrastructure Development Finance Company Limited (5%), Krishak
 Bharati Cooperative Limited (5%) and Abhinay Trading Private Ltd (14%).
 Consequently during the current financial year ICEX issued 99,950,000
 Equity shares (Face value of Rs. 10/ - each) - 39,950,000 to IBFSL,
 26,000,000 to MMTC Limited, 5,000,000 to Infrastructure Development
 Finance Company Limited, 5,000,000 to Krishak Bharati Cooperative
 Limited, 10,000,000 to Indian Potash Limited and 14,000,000 to Abhinay
 Trading Private Ltd.. After the allotment process the shareholding of
 the Company has been reduced to 40% from the earlier 100%. Consequently
 ICEX has been classified as an Associate company from the previous
 status of subsidiary company as IBFSL control does not exist. During
 the year, in compliance with the directions of Forward Market
 Commission, ICEX also refunded Rs. 1,000 Lakhs received earlier from
 United Stock Exchange of India Ltd in the form of Share application
 money.  ICEX passed a resolution in the general meeting of shareholders
 held on 29th September 2009 for increase in the authorized share
 capital from Rs.100 Crores to Rs. 110 Crores and for sub-division of
 equity share of nominal value Rs.10/- each into two equity shares of
 nominal value of Rs.5 each. As a result of above, the authorized share
 capital of ICEX increased from Rs.100 Crores comprising of 100,000,000
 equity shares having nominal value of Rs.10/- each to Rs.l 10 Crores
 comprising 220,000,000 equity shares having nominal value of Rs.5/-
 each. ICEX has gone live effective November 27, 2009. As on March 31,
 2010 the Company held 80,000,000 equity shares (Face value of Rs. 5/-
 each) in ICEX. On December 13, 2010 the Company has sold 26% of its
 stake in Indian Commodity Exchange Limited (ICEX) to Reliance
 Exchangenext Limited for a total consideration of Rs. 473,500,000
 against proportionate cost of Rs. 260,000,000. As a result thereof, the
 stake of the Company in ICEX has been reduced to 1 4% and the same has
 been reclassified as a long term investment from the earlier status of
 an associate.
 
 34.  The Company-had, during the financial year 2007-08 entered into an
 MOU with Sogecap, the life insurance arm of Societe Generale of France,
 for its upcoming life insurance Joint Venture. Sogecap would subscribe
 to 26% of the paid up capital in the Joint Venture. During the current
 financial year, the Company and Sogecap, have mutually agreed not to
 pursue the life insurance joint venture in India. The Company had also
 earlier received Reserve Bank of Indias (RBI) approved to hold up to
 74% in its life insurance venture. The life insurance company has
 already received the Rl approval from Insurance Regulatory and
 Development Authority (IRDA). The company intends to pursue its
 insurance venture.
 
 35.  The Company holds 57.5 % of the capital in Indiabulls Finance
 Company Private Limited (IFCPL), a subsidiary of the Company. The
 balance 42.5% or 3,233,969 equity shares are held by Amaprop Limited
 (Amaprop), vide a Shareholders Subscription and Shareholders Agreement
 (Shareholders Agreement)
 
 entered into between IFCPL, the Company and Amaprop. In terms of the
 said Shareholders Agreement, Amaprop has, inter-alia, exercised its put
 option seeking the Company to acquire the entire stake of Amaprop in
 IFCPL.
 
 Certain disputes arose between the Company and Amaprop as the put price
 arrived at in accordance with the Shareholders Agreement was rejected
 by the Reserve Bank of India (RBI) being in excess of the Fair Market
 Value as per the then prevailing pricing guidelines as stipulated by
 the RBI. The matter was under arbitration in New York, USA where
 towards the year end, the Arbitral Tribunal has passed an award in
 favour of Amaprop requiring the Company to pay Rs. 1,920,007,000
 alongwith interest and costs thereon (as given in the award) to
 Amaprop, for acquiring the 42.5% stake held by Amaprop in IFCPL.
 Implementation of the Award would result in IFCPL becoming a 100%
 subsidiary of the Company.
 
 This Award has been contested by the company before the Honble High
 Court of Judicature at Delhi (the High Court). During the course of the
 hearing the High Court has suggested that the company should prefer an
 application to the RBI for its approval to make the remittance of Rs.
 1,1 90,000,1 28, which in the opinion of the Arbitration Tribunal is
 the value likely to be accepted by the RBI, as is recorded by it to be
 in compliance with Circular 49 dated May 4, 201 0, issued by the RBI.
 Subsequent to the year end, the Company has preferred an application to
 the RBI seeking its approval for purchase of the abovementioned shares
 in IFCPL from Amaprop at a cost of Rs. 1,190,000,128.
 
 36.  During the year, the Company has further invested in fully paid up
 Equity Shares in one of its wholly owned subsidiary namely Indiabulls
 Housing Finance Limited amounting to Rs. 3,000,000,120 being 20,689,656
 fully paid up Equity Shares of Rs. 10 each issued at a premium of Rs.
 135 per equity share.
 
 37.  During the year, the Company has fully divested two of its wholly
 owned subsidiaries with a share capital of Rs. 500,000 each to another
 of its wholly owned subsidiary, Indiabulls Holdings Limited.
 
 38.  In terms of Section 45-IC of the RBI Act, 1 934, the Company is
 required to transfer at least 20% of its Net Profits to a reserve
 before any dividend is declared. As at the year end, the Company has
 transferred an amount of Rs. 1,21 7,381,928 (Previous Year Rs.
 528,320,556) to the Reserve Fund.
 
 39.  In terms of Section 36 (1 )(viii) of the Income-tax Act, 1 961,
 the Company has, as at the year end, transferred an amount of Rs. 1
 90,000,000 (Previous Year Rs. Nil) to a special reserve created to
 claim deduction in respect of eligible business under the said section.
 
 40.  The Company is involved in various legal proceedings as
 respondents / defendants for various claims including those related to
 regulatory matters relating to conduct of its business. In respect of
 these claims, the Company believes, these claims do not constitute
 material litigation matters and with its meritorious defenses the
 ultimate disposition of these matters will not have material adverse
 effect on its Financial Statements.
 
 41.  During the financial year 2007-08, the Securities and Exchange
 Board of India (SEBI) has approved setting up of an Asset Management
 Company and a Trustee Company for setting up a Mutual Fund. As a result
 thereof, during the previous financial year Indiabulls Asset Management
 Company Limited and Indiabulls Trustee Company Limited have been formed
 as 100% subsidiaries of the Company. During the current financial year
 on March 24, 201 1 the regulatory approvals for commencing operations
 of Indiabulls Trustee Company Limited and Indiabulls Asset Management
 Company Limited (wholly owned subsidiaries of the Company) has been
 received from SEBI.
 
 42.  In respect of amounts as mentioned under Section 205C of the
 Companies Act, 1956, there were no dues required to be credited to the
 Investor Education and Protection Fund as on March 31, 201 1.
 
 43.  Previous years figures have been regrouped and / or re-arranged
 wherever necessary to confirm to current years groupings and
 classifications.