Indiabulls Securities

The Directors have pleasure in presenting the Thirteenth Annual Report
 and the audited accounts of the Company for the year ended March
 31,2008.
 
 FINANCIAL RESULTS
 
 The highlights of the financial results for the year ended March
 31,2008 are as under:
 
                                                   (Amount in Rs.)
                                 For the year ended  For the year ended
                                    March 31,2008       March 31 2007
 
 Profit before Tax and Depreciation   3,929,824,318    2.142,568,830
 Less: Depreciation                     212,106,607      144,388,279
 Profit before Tax                    3,717,717,711    1,998,180.551
 Less: provision for taxation & 
 prior period tax adjustments         1,231,134,077      624,238.128
 Profit after Tax and prior 
 period tax adjustment                2,486,583,634    1,373,942,423
 Add: balance brought forward         2,553,201,079    1,179,258,656
 Profit available for appropriation   5,039,784,713    2,553,201,079
 Appropriations
 Dividend on Preference Shares            2,664,511
 Proposed dividend on Equity Shares   1,900,702,418
 Corporate Dividend Tax on:
 -     Preference dividend                  452,834
 -    dividend proposed on Equity 
 Shares                                 323,024,376
 Transfer to General Reserve            248,658,363
 Balance of profit carried forward 
 to Balance Sheet                     2,564,282,211    2,553,201,079
 
 OPERATIONS REVIEW
 
 The Company is in the business of providing securities broking and
 advisory services and is a corporate member of the capital market,
 wholesale debt market and derivative segment of the NSE and of the
 capital market and derivative segment of the BSE. Advisory services
 include risk management, equity analysis and securities data
 management, securities brokerage including equities .wholesale debt,
 futures and options, depository services, research services, mutual
 fund and IPO distribution to its clients. The Company offers automated
 on-line investment trading facilities as well as broker assisted trade
 execution to its customers.
 
 Total Income of the Company during the year stood at Rs. 628.67 crores
 with the net profit after tax of Rs.248.66 crores.  The consolidated
 revenues and PAT of the Company along with its subsidiaries for the
 year ended March 31,2008 stood at Rs. 646.77 crores and Rs. 251.76
 crores respectively.
 
 The figures for the current year include the figures relating to the
 security broking and advisory business, carried on by Indiabulls
 Financial Services Ltd.(IBFSL) on or after the 1st April, 2007, i.e.,
 Appointed Date under the Scheme of Arrangement, on behalf of the
 Company on a going concern basis. Accordingly the figures in respect of
 the current year are not comparable with those of previous year.
 
 FUTURE BUSINESS OUTLOOK
 
 Having closed the financial year 2007-2008 with highly impressive
 revenues and profitability, your Company is expected to keep up the
 momentum in the coming years.
 
 Inspite of the minor set backs suffered during the year 2007-2008
 sentiments in the capital market are still enthusiastic.
 
 Economic and financial health of the country is strong.  Rising
 disposable income along with a growing number of investment options and
 their complexities necessitate the role of a financial advisers to
 Facilitate investments in viable options.
 
 These factors alongwith the presence of a state of art technology
 platform, robust and fool proof risk management systems and the
 nationwide network & reach would continue to provide an impetus to the
 investors confidence translating into huge investments in the
 securities and commodities market from within the country and outside.
 This in turn would result in commensurate increase in the business of
 the Company thereby further consolidating its position in the market.
 
 SIGNIFICANT DEVELOPMENTS
 
 The Scheme of Arrangement (the Scheme) between the Company and
 Indiabulls Financial Services Limited (IBFSL) has been sanctioned by
 the Honble Delhi High Court and it has come into effect on December
 24,2007, Accordingly w.e.f. the Appointed Date of the Scheme, i.e.,
 April 1, 2007 the securities broking and advisory business of IBFSL has
 been transferred to and vested in favour of the Company on a going
 concern basis.  The Pre arrangement equity capital of 17,834,099 shares
 of face value Rs.  10 each of the Company was cancelled and the fresh
 equity capital of 222,789,128 shares and 30,637,861 GDRs underlying the
 equivalent number of equity shares of face value Rs. 2 each aggregating
 253,426,989 equity shares and 9,966,667 cumulative, non-convertible
 redeemable Preference Shares of Rs. 4.61 each were issued on January
 10,2008.  The Equity shares of the Company have been listed on NSE and
 BSE with effect from the 2nd of April 2008 and the GDRs have been
 listed on Luxembourg Stock Exchange with effect from 16th July, 2008
 During the year ended CRISIL has assigned a CRISIL BQ 1 rating to the
 Company reflecting the highest quality of operations and service
 offered by the Company.
 
 DIVIDEND
 
 Your Directors recommend a dividend of Rs. 7.50 per share (375% on the
 face value of Rs. 2 per share), which, if approved at the ensuing
 Annual General Meeting, will be paid to (i) all those Members whose
 names appear in the Register of Members as on Book Closure date
 indicated in the Notice convening the AGM, which forms a part of this
 Annual Report and (ii) all those Members whose names appear on that
 date as beneficial owners in the data as furnished by National
 Securities Depository Limited and Central Depository Services (India)
 Limited.
 
 Further, in terms of the Scheme of Arrangement, an amount of Rs.
 1,148,658/ alongwith the Corporate Dividend Tax of Rs.  195.215/-,
 being the Companys share of proportionate dividend on the preference
 shares and corporate dividend tax on the same for the six months period
 upto September 30,2007 has been devolved upon the Company.
 
 In addition to the above, the Company has paid preference dividend @ 5%
 for the period from October 01, 2007 upto February 02, 2008 and
 thereafter @10% aggregating Rs. 1,565,853/- to Oberon Limited, a
 foreign entity, as per the agreed terms.
 
 The dividend alongwith the Corporate Dividend Tax on equity and
 preference shares has consumed / would consume the aggregate amount of
 Rs. 2,226,844,139.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Managements Discussion and Analysis Report for the year under review,
 as stipulated under clause 49 of the Listing Agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 EMPLOYEE STOCK OPTIONS
 
 Your company looks upon its employees as an important component in its
 growth and success and as a key resource in its continued development.
 To motivate them and to inculcate in them a sense of belongingness, the
 Company had during the financial year 2006- 2007 introduced the
 Employee Stock Option Scheme and granted 3,000,000 stock options to its
 employees entitling them to receive an equivalent number of Equity
 shares of face value Rs. 10 each in the Company at the exercise price
 of Rs. 200 per share.
 
 Consequent to the change in the face value of shares of the Company
 from Rs. 10 per share to Rs. 2 per share, in terms of the Scheme of
 Arrangement, the number of stock options so granted to the employees
 proportionately increased to 15,000,000 entitling the option holders to
 receive an equivalent number of Equity shares of face value Rs. 2 each
 over a period often years, 10% every year, in the Company at the
 exercise price of Rs. 40 per share.
 
 Further, with a view to provide greater flexibility to the employees
 for exercising their options it is proposed to increase the exercise
 period to 5 years from the date of vesting as against 90 days
 originally provided under the Scheme.
 
 DIRECTORS
 
 In accordance with the provisions of Section 255 and 256 of the
 Companies Act, 1956 and Articles of Association of the Company, Mr.
 Aishwarya Katoch and Mr Ashok Sharma retire by rotation at the ensuing
 Annual General Meeting of the Company and being eligible offer
 themselves for reappointment.
 
 During the year the Board of Directors was broadbased and Mr Saurabh K.
 Mittal, Mr Prem Prakash Mirdha, Mr Karan Singh and Brig. Labh Singh
 Sitara were appointed as additional directors. They all hold the office
 upto the date of ensuing Annual General Meeting of the Company. To
 continue to avail the benefit of their services, the Board proposes to
 appoint them as directors liable to retire by rotation except Mr.
 Saurabh K. Mittal, whose appointment is being proposed as a Director
 not liable to retire by rotation.
 
 Brief resume of the Directors proposed to be appointed / reappointed,
 nature of their expertise in specific functional areas and names of
 companies in which they hold directorships and memberships/
 chairmanships of Board Committees, as stipulated under Clause 49 of
 Listing Agreement with the Stock Exchanges in India, are provided in
 the Report on Corporate Governance forming part of the Annual Report.
 
 Further, during the year Mr Tejinderpal Singh Miglani and Mr Gagan
 Banga resigned as directors of the Company The Board places on record
 its appreciation for the services rendered by both of them during their
 tenure with the Company,
 
 FIXED DEPOSITS
 
 The Company has not accepted any deposits from the public during the
 year under review.
 
 SUBSIDIARIES
 
 The statement pursuant to Section 212(1) (e) of the Companies Act, 1956
 relating to subsidiary companies forms a part of the financial
 statements.
 
 In terms of approval granted by the Ministry of Corporate Affairs,
 Government of India vide letter No. 47/281 /2008-CL-111 dated May 7,
 2008, under Section 212(8) of the Companies Act, 1956, copies of the
 Balance Sheet, Profit and Loss Account, Reports of the Board of
 Directors and Auditors of the subsidiaries of the Company as of March
 31,2008 have not been attached with the Balance Sheet of the Company.
 These documents will be made available upon request by any Member of
 the Company interested in obtaining the same. However, as directed by
 the Ministry of Corporate Affairs, the financial data of the
 subsidiaries have been furnished under detail of Subsidiary Companies
 at page no. 109 forming part of the Annual Report. Further, pursuant to
 Accounting Standard AS-21 issued by The Institute of Chartered
 Accountants of India, Consolidated Financial Statements presented by
 the Company includes financial information of its subsidiaries.
 
 CORPORATE GOVERNANCE REPORT
 
 Pursuant to clause 49 of the Listing Agreements with the Stock
 Exchanges, a detailed report on Corporate Governance is included in the
 Annual Report. A Practicing Company Secretarys Certificate certifying
 the Companys compliance with the requirements of Corporate Governance
 in relation to clause 49 of the Listing Agreement is attached with the
 Corporate Governance Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956 your
 Directors confirm that:
 
 1.  in the preparation of the annual accounts, the applicable
 accounting standards have been followed and that there are no material
 departures from the same;
 
 2.  the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31 st March, 2008 and the profit of the Company
 for the year ended on that date;
 
 3.  the Directors have taken proper and sufficient care for maintaining
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 4.  the Directors have prepared the Annual Accounts of the Company on a
 going concern basis.  
 
 AUDITORS & AUDITORSREPORT
 
 M/s Deloitte Haskins & Sells, Chartered Accountants, Auditors of the
 Company will retire at the conclusion of the ensuing Annual General
 Meeting and being eligible offer themselves for reappointment. The
 Company has received a certificate from the Auditors to the effect that
 their reappointment, if made would be in accordance with Section 224(1
 B) of the Companies Act, 1956. The Board recommends their
 re-appointment.
 
 Remarks in para 4 (VI) of Auditors Report are only clarificatory in
 nature vis-a-vis compliance of High Court Order pursuant to the
 Composite Scheme of Arrangement.
 
 The Notes to the Accounts referred to in the Auditors Report are self
 explanatory and therefore do not call for any further explanation.
 
 INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
 
 The information required to be disclosed under Section 217 (1) (e) of
 the Companies Act, 1956, read with the Companies (Disclosure of
 Particulars in the Report of the Board of Directors) Rules, 1988 with
 respect to Conservation of Energy, Technology Absorption and Foreign
 Exchange Earnings and Outgo, is given in the Annexure and forms a part
 of this Report.
 
 In terms of the provisions of Section 217 (2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of the employees are required
 to be set out in the Annexure to the Directors Report. However, as per
 the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
 Report excluding the aforesaid information is being sent to all the
 Members of the Company and others entitled thereto.  Any member who is
 interested in obtaining such particulars may write to the Company
 Secretary at the Registered Office of the Company.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to express their gratitude for the continuous
 assistance and support received from the investors, clients, bankers,
 regulatory and government authorities, during the year. Your Directors
 also wish to place on record their deep sense of appreciation for the
 contributions made and committed services rendered by the employees of
 the Company.
 
                         For and on behalf of the Board of Directors
 
 Date: 25th July, 2008     Rajiv Rattan          Divyesh B, Shah
 Place: New Delhi            Director                Director