1.  A.  Contingent liability
 
 Contingent liability in respect of income tax demand disputed in appeal
 is Rs. 2,945,333,514/- (previous year Rs. 36,011,675/-). During the
 year, the Company received a notice of demand from the income tax
 department pursuant to completion of scrutiny assessment for the
 Assessment Year 2008-09. The additional tax liability arising out of
 the aforesaid notice, net of relevant deferred tax liability is Rs.
 2,909,321,839/-, inclusive of interest of Rs. 783,418,889/-. The demand
 of additional tax is mainly on account of income tax department
 treating the gain on sale of equity shares on termination of joint
 venture with Morgan Stanley as taxable under the head Business Income
 and not Capital Gains.
 
 The Company has challenged the assessment order before the appellate
 authority.
 
 B.  Capital commitments
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) is Rs. 6,542,192/-
 (previous year Rs. 6,808,521/-).
 
 2.  Employee stock option scheme (ESOS)
 
 The Employee Stock Option Scheme (the Scheme) provides for grant of
 stock options to the eligible employees and/or directors (the
 Employees) of the Company and/or its subsidiaries. The Scheme is in
 accordance with the Securities and Exchange Board of India (Employees
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999.  Options are granted at an exercise price, which is either equal
 to the fair market price of the underlying equity shares or at a
 premium, as may be determined by the Compensation Committee of the
 Board.
 
 The Scheme provides for grant of options to the Employees that vests in
 a graded manner, which are to be exercised within a specified period.
 During the financial year 2010-11, the Company has granted 3,750,000
 options at an exercise price of Rs. 54.80 per option.
 
 The Company has used intrinsic value based method of accounting for
 determining compensation cost for its stock-based compensation scheme.
 Since the exercise price is higher than fair market price, the
 compensation cost for the year ended March 31, 2011 is Nil (previous
 year Nil).
 
 The estimated fair value of each stock option granted in the Scheme is
 mentioned in the table below. This was calculated by applying
 Black-Scholes-Merton model as valued by an independent valuer. The
 model inputs were the share price at respective grant date, exercise
 price of Rs. 54.80, volatility of 61.52% to 64.30%, dividend yield of
 0.96%, expected term of options in the range of 5 years to 6 years, and
 a risk-free interest rate of 7.48% to 7.74%.
 
 3.  Share capital
 
 The issued, subscribed and paid-up capital, inter alia, includes an
 amount in respect of 287,500 shares (previous year 287,500 shares) held
 in abeyance under Section 206A of the Act.
 
 5. Under the head Current Liabilities & Provisions outstanding
 amount(s) due to Micro, Small and Medium Enterprises (MSME) as defined
 under Micro, Small and Medium Enterprises Development Act 2006 is being
 disclosed as Nil, as the Company has not received any reply from its
 Vendors to the letters written by the Company. This information as
 required to be disclosed under the Micro, Small and Medium Enterprises
 Development Act, 2006 has been determined to the extent such parties
 have been identified on the basis of information available with the
 Company.
 
 8.  Lease Transaction
 
 Finance lease
 
 The Company has acquired vehicles under the finance lease agreements.
 The tenure of lease agreements ranges between 36 and 60 months with an
 option to prepayments/foreclosure.
 
 Operating lease
 
 b) The Company had taken certain assets (premises and furniture &
 fixtures) on cancellable operating lease for a period ranging not more
 than 24 months. Lease payment recognised in the profit & loss account
 for the year in respect thereof aggregate to Rs. 10,200,577/- (previous
 year Rs. 7,176,167/-)
 
 Valuation assumptions
 
 - The estimates of future salary increases, takes into account
 inflation, seniority, promotion and other relevant factors in the
 employment market.
 
 - The above information is certified by the actuary.
 
 b) Compensated absences
 
 As per Companys policy, provision of Rs. 2,088,309/- (previous year
 Rs. 4,378,437/-) has been made towards compensated absences, calculated
 on the basis of unutilised leave as on the last day of the financial
 year.
 
 B.  Defined contribution plans
 
 Amount recognised as an expense and included in the Contribution to
 provident fund & other funds Rs. 4,764,500/- (previous year Rs.
 4,278,315/-).
 
 15.  a) As the Company is a Core Investment Company, its ‘investment
 activities is considered as the only segment in context of AS 17 on
 ‘Segment Reporting.
 
 b) Geographical segment is also not applicable to the Company.
 
 16.  Disclosure in respect of related parties is attached as per
 Annexure ‘I.
 
 17.  Statement of cash flow is attached as per Annexure ‘II.
 
 18.  Interest expense includes Rs. 221,177/- (previous year Rs.
 383,546/-) towards interest on fixed loan and Rs. 28,605/- (previous
 year Rs. 5,995/-) towards interest other than fixed loan.
 
 19.  During the year, the Company earned dividend of Rs.14,377,808/-
 (previous year Rs. 378,030,000/-) from trade investments and dividend
 of Rs. 3,728,086/- (previous year Rs. 1,631,612/-) from other
 investments.
 
 20.  Group support fees are net of Group support charges of Nil
 (previous year Rs. 68,285,588/-).
 
 21.  Other income includes Rs. 1,155,000/- (previous year Rs.
 11,000,000/-) being net reversal of provision for diminution in the
 value of investments.
 
 22.  Other additional disclosures require under paras 3, 4C and 4D of
 Part II of Schedule VI to the Act are not applicable to the Company.
 
 23.  Previous years figures have been re-grouped and re-arranged
 wherever necessary.
 
 A.  List of related parties
 
 I) Parties where control exists
 
 a) Subsidiaries
 
 JM Financial Consultants Private Limited (IBD)
 
 JM Financial Institutional Securities Private Limited (IED)
 
 JM Financial Investment Managers Limited (Investment Managers)
 
 JM Financial Ventures Limited (SSF)
 
 JM Financial Services Private Limited (Financial Services)
 
 JM Financial Commtrade Limited (Commtrade)
 
 JM Financial Insurance Broking Private Limited (Insurance Broking)
 
 JM Financial Products Limited (NBFC)
 
 JM Financial Securities Private Limited (FID)
 
 JM Financial GILTS Limited (GILTS)
 
 JM Financial Asset Management Private Limited (AMC)
 
 JM Financial Overseas Holdings Private Limited (Overseas)
 
 JM Financial Holdings (Mauritius) Limited (JMFM) (upto June 30, 2010)
 
 JMF-BR Investments Holdings (Mauritius) Limited (JMFBR)
 
 Oracle Enterprises Private Limited (Oracle)
 
 Persepolis Investments Limited (PIL)
 
 Persepolis PIPE Investments Limited (PPIL)
 
 Infinite India Investment Management Private Limited (Infinite)
 
 b) Partnership Firm
 
 Stellar Investments (Stellar)
 
 II) Other parties with whom the Company has entered into transactions
 during the year
 
 a) Associates
 
 JM Financial Asset Reconstruction Company Private Limited (ARC) 
 
 JM Financial Trustee Company Private Limited (Trustee) 
 
 Financial Engineering Solutions Private Limited (FES)
 
 b) Key management personnel
 
 Mr. Nimesh N Kampani (NNK)
 
 c) Relative of key management personnel
 
 Mr. Ashith N Kampani (ASNK)
 
 d) Enterprise over which Key management personnel is able to exercise
 significant influence
 
 J.M. Financial & Investment Consultancy Services Private Limited
 (JMFICS) 
 
 J.M. Assets Management Private Limited (J.M.Assets) 
 
 JSB Securities Limited (JSB) 
 
 Kampani Consultants Limited (KCL) 
 
 Persepolis Investment Company Private Limited (PICPL) 
 
 SNK Investments Private Limited (SNK) 
 
 FICS Consultancy Services Limited (FICS) 
 
 Kampani Properties and Holdings Limited (KPHL) 
 
 B.  I) No amounts in respect of related parties have been written
 off/back during the year.
 
 II) During the year, the amount provided for diminution in the value of
 investments in respect of one of the related parties is Rs. 6,000,000/-
 (previous year Nil) As on the balance sheet date, the provision in
 respect thereof is Rs. 21,000,000/- (previous year Rs.15,000,000/-).
 
 III) Related party relationships have been identified by the management
 and relied upon by the auditors.