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Notes to Accounts of Indiabulls Housing Finance Ltd.

Mar 31, 2015

1. Indiabulls Financial Services Limited ("Erstwhile Holding Company") had issued Global Depository Receipts (GDR's) which were transferred under the Scheme of Arrangement in financial year 2012-13. As at March 31, 2015 723,461 (Previous Year 3,100,273) GDR's were outstanding and were eligible for conversion into Equity Shares. The Company does not have information with respect to holders of these GDR's. Holders of Global Depository Receipts (GDRs) will be entitled to receive dividends, subject to the terms of the Deposit Agreement, to the same extent as the holders of Equity Shares, less the fees and expenses payable under such Deposit Agreement and any Indian tax applicable to such dividends. Holders of GDRs will not have voting rights with respect to the Deposited Shares. The GDRs may not be transferred to any person located in India including Indian residents or ineligible investors except as permitted by Indian laws and regulations.

2. 312,511,167 (Previous Year 312,511,167) equity Shares were allotted by the Company, for consideration other than cash to the shareholders of Erstwhile Holding Company pursuant to and in terms of the Scheme of Arrangement, approved by the Hon'ble High Court of Delhi vide its Order dated December 12, 2012, which came into effect on March 8, 2013 from the Appointed Date April 1, 2012.(Refer Note 40)

3.(1) To impart greater focus and undivided accountability at the leadership level and to rationalize operations of the diverse businesses of the Indiabulls group, so as to put the Company firmly on the growth path, the promoters, during the year, had mutually decided to reorganize the management control of different group companies amongst themselves. As part of the restructuring, Mr. Sameer Gehlaut, Chairman of the Company and the entities promoted by him, namely, Orthia Land Development Private Limited, Orthia Developers Private Limited, Cleta Properties Private Limited, Cleta Buildtech Private Limited, Inuus Infrastructure Private Limited and Inuus Land Development Private Limited have continued as Promoters / Promoter Group / Persons acting in Concert with the promoters of the Company.

Further, with effect from July 18, 2014, Mr. Rajiv Rattan and the entities promoted by him, namely, Priapus Properties Private Limited, Priapus Real Estate Private Limited, Priapus Developers Private Limited, Priapus Constructions Private Limited and Mr. Saurabh Kumar Mittal and the entities promoted by him, namely, Hespera Infrastructure Private Limited, Hespera Properties Private Limited, Hespera Real Estate Private Limited, Hespera Realty Private Limited and Hespera Realcon Private Limited, have ceased to be the Promoters / Promoter Group / PACs with the promoters of the Company.

4. Employees Stock Options Schemes:

(a) Indiabulls Financial Services Limited ("Erstwhile Holding Company") (Refer Note 40) and its erstwhile subsidiary, Indiabulls Credit Services Limited ("ICSL") had announced ESOS / ESOP schemes for its employees and the employees of it's group companies wherein each option represents one Equity Share of the Company. The Company has adopted the ESOS / ESOP schemes in respect of its employees. A Compensation Committee constituted by the Board of Directors administers each of the plans.

(b) Indiabulls Housing Finance Limited Employees Stock Option Scheme-2013

The members of the Company at their Meeting dated March 6, 2013 approved the IHFL ESOS - 2013 scheme consisting of 39,000,000 stock options representing 39,000,000 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 / step down subsidiaries of the Company. The Compensation Committee constituted by the Board of Directors of the Company has, at its meeting held on October 11,2014, granted, 10,500,000 Stock Options representing an equal number of equity shares of face value of Rs. 2 each at an exercise price of Rs. 394.75, being the then latest available closing market price on the National Stock Exchange of India Ltd. as on October 10, 2014 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 vest with effect from the first vesting date i.e. October 11, 2015, whereby the options vest on each vesting date as per the vesting schedule provided in the Scheme.

(VI) During the year ended March 31, 2013, pursuant to the Scheme of Arrangement the Authorised Capital of the Company has been rearranged to Rs.16,000,000,000 divided into 3,000,000,000 Equity Shares of Rs. 2 each and 1,000,000,000 Preference Shares of Rs. 10 each.

(1) Vide Circular NHB(ND)/DRS/Pol. 62/2014 dated May 27, 2014, the National Housing Bank (NHB) has directed Housing Finance Companies to provide for deferred tax liability in respect of the balance in the "Special Reserve" created under Section 36(1)(viii) of the Income Tax Act, 1961. NHB has clarified that the deferred tax liability in respect of the opening balance in the Special Reserve as at April 1, 2014, may be created by adjusting the opening reserves as of that date. Accordingly, the Company has adjusted its opening reserves as at April 1, 2014, with the amount of deferred tax liability in respect of the opening balance in the Special Reserve as of that date.

(2) Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate Affairs amending Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates, the Company has exercised the option as per para 46A inserted in the said Standard for all long term monetary assets and liabilities. Consequently an amount of Rs. 84,395,733 (Previous Year Rs. Nil) representing translation difference on foreign currency loans is carried forward in the Foreign Currency Monetary Item Translation Difference Account as on March 31, 2015.

(3) In terms of Section 29C of the National Housing Bank ("NHB") Act, 1987, the Company is required to transfer at least 20% of its Profit after tax to a Reserve Fund before any dividend is declared. Transfer to a Reserve Fund in terms of Section 36(1)(viii) of the Income Tax Act, 1961 is also considered as an eligible transfer as transfer to Special Reserve under Section 29C of the National Housing Bank ("NHB") Act, 1987. The Company has transferred an amount of Rs. 1,860,000,000 (Previous Year Rs. 1,500,000,000) to reserve created in terms of Section 36(1)(viii) of the Income Tax Act, 1961 termed as "Special Reserve (III)" and also transferred an amount of Rs. 2,096,454,752 (Previous Year Rs. 1,519,996,370) to the Reserve in terms of Section 29C of the National Housing Bank ("NHB") Act, 1987 Fund as at the year end. Further an additional amount of Rs. 1,500,000,000 (Previous Year Rs. 1,000,000,000) has been set apart by way of transfer to Additional Reserve Fund in excess of the statutory minimum requirement as specified under Section 29C pursuant to Circular no. NHB(ND)/DRS/Pol-No. 03/2004-05 dated August 26, 2004 issued by the National Housing Bank. The additional amount so transferred may be utilised in the future for any business purpose.

(5) This pertains to reserve created under section 45-IC of the Reserve Bank of India Act 1934, by the Erstwhile Holding Company Indiabulls Financial Services Limited, which has been transferred to the Company under the Scheme of Arrangement during the year ended March 31, 2013.(Refer Note 40)

(6) Due to change in the method of calculating depreciation, on account of change in depreciation rate based on useful life of the assets in terms of schedule II of the Companies Act, 2013, the opening balance of accumulated depreciation as at April 1, 2014, has been recalculated. The remaining depreciation has been amortised over the balance useful life of the assets. The impact on account of change in method of calculating the depreciation has been debited (net of tax benefit) to the opening balance of Statement of Profit and Loss.

(5) (i) In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the erstwhile Holding Company during the financial year 2012-13, upon receipt of Shareholders approval, has on June 9, 2012, issued and allotted an aggregate of 20,700,000 warrants, to certain Promoter group entities and Key Management Personnel, at a conversion price of Rs. 218 per Equity Share, 25% of which amounting to Rs. 1,128,150,000 had already been received by the Erstwhile Holding Company from the respective Allottee's as upfront amount as at the Year ended March 31,2013. These warrants were convertible into an equivalent number of Equity Shares of face value Rs. 2 each, in the Company, upon receipt of balance conversion price, within a period of eighteen months from the date of allotment. During the year 2013-14 the Company has received from the warrant holders the balance amount of 75% amounting to Rs. 3,384,450,000 upon exercise of the rights to convert the warrants into equity shares.(Refer Note 40)

(ii) During the financial year 2009-10, 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 , the erstwhile Holding 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. During the current financial year the company has issued and allotted 20,856,300 equity shares of face value of Rs. 2 each at an exercise price of Rs.225 per equity share to the eligible warrant holders.(Refer Note 40)

(1) Provision for Contingencies includes Contingent provision against standard assets and other contingencies. As per National Housing Bank Circular No. NHB/HFC/DIR.3/CMD/2011 dated August 5, 2011 and NHB/HFC/DIR.9/ CMD/2013 dated September 6, 2013, in addition to provision for non performing assets, all housing finance companies are required to carry a general provision. (i) at the rate of 2% on housing loans disbursed at comparatively lower rate of interest in the initial few years, after which rates are reset at higher rates; (ii) at the rate of 0.75% of Standard Assets in respect of Commercial Real Estates (Residential Housing):, (iii) at the rate of 1.00% of Standard Assets in respect of other Commercial Real Estates and (iv) at the rate of 0.40% of the total outstanding amount of loans which are Standard Assets other than (i), (ii) & (iii) above. Accordingly, the Company is carrying a provision of Rs. 3,000,000,000 (Previous Year Rs. 2,500,000,000) towards standard assets (included in Provisions for Contingencies), which is well over the required minimum provision as per the NHB Guidelines.

(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.

(3) 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, 2015.

(1) 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 the books of account.

As at March 31,2015, the Company holds 100% of the Equity capital of Indiabulls Asset Holding Company Limited and Indiabulls Life Insurance Company Limited at a cost of Rs. 500,000 each. Based on the audited financials of these companies, as at March 31, 2015, 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. As the Management considers 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 their carrying values has been made in the books of account.

(2) The Company was holding 57.50% of the capital of Indiabulls Finance Company Private Limited (IFCPL), which has become a subsidiary of the Company pursuant to the Scheme of Arrangement. The balance 42.50% or 3,233,696 Equity Shares were held by Amaprop Limited (Amaprop), vide a Share Subscription and Shareholders Agreement (SHA) entered into between the erstwhile Holding Company[Indiabulls Financial Services Limited(IBFSL)], IFCPL and Amaprop.

During the year 2013-14, the Company has purchased the remaining 42.50% or 3,233,696 Equity Shares, which were earlier held by Amaprop Limited at a consideration of Rs. 2,616,891,255. Post this transaction IFCPL is a wholly owned subsidiary of the Company.

During the current financial year, the Company has further invested Rs. 1,000,020,000 by subscribing to 3,333,400 Equity Shares of face value Rs. 10 per share at a premium of Rs. 290 per equity share.

(3) During the financial year 2012-13, the Company has invested Rs. 2,025,000,000 by subscribing to 22,500,000 Compulsorily Convertible Cumulative Preference Shares of face value Rs. 10 per share, issued by its wholly owned subsidiary namely Indiabulls Commercial Credit Limited((formerly known as Indiabulls Infrastructure Credit Limited).

(4) On December 13, 2010 the Erstwhile Holding Company (IBFSL) had sold 26% shares held by it in Indian Commodity Exchange Limited (ICEX) to Reliance Exchange Next Limited (R-Next) for a total consideration of Rs. 473,500,000 against a proportionate cost of Rs. 260,000,000. As a result thereof, the stake of IBFSL in ICEX has been reduced from 40% to 14% and the same has been reclassified as a long term investment from the earlier classification of being an Associate. MMTC filed a petition before the Company Law Board (CLB) against ICEX, R-Next and IBFSL alleging that the transfer is null and void in terms of the Shareholders Agreement in view of the Forward Markets Commission (FMC) guidelines. IBFSL contends that such view of MMTC is based on the old FMC guidelines and without considering the amended FMC Guidelines dated June 17, 2010 wherein the transfer norms were relaxed. IBFSL had filed its objections on maintainability of the petition which is pending adjudication before the CLB.

(5) During the current financial year, the Company has invested Rs. 490,000,000 (Previous Year Rs. 60,000,000) by subscribing to 49,000,000 (Previous year 6,000,000) Equity Shares of face value Rs. 10 per share, issued by its wholly owned subsidiary namely Indiabulls Asset Management Company Limited.

(6) During the previous financial year 2013-14 the Company had advanced a sum of Rs. 49,400,000 by way of loan to its wholly owned subsidiary Indiabulls Life Insurance Company Limited. The subsidiary was not able to pursue the business and the resulted in losses. Based upon the availability of resources with the subsidiary as at the financial year end to repay this loan, the Company had written off loan given as bad loans /advances written off.

(1) Employee Benefits - Provident Fund, ESIC, Gratuity and Compensated Absences disclosures as per Accounting Standard (AS) 15 (Revised) - Employee Benefits:

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 employee's salary. The Company has recognised an amount of Rs. 18,529,706 (Previous year Rs. 7,509,939) in the Statement of Profit and Loss towards Employers contribution for the above mentioned funds.

Provision for unfunded Gratuity and Compensated Absences for all employees is based upon actuarial valuations carried out at the end of every financial year. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Pursuant to the issuance of the Accounting Standard (AS) 15 (Revised) on 'Employee Benefits', commitments are actuarially determined using the 'Projected Unit Credit' Method. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

II. INR Interest Rate Swaps (Fixed to Floating) for Notional Principal of Rs. 750,000,000 (Previous Year Rs. 750,000,000) for a total of 3 contracts (Previous Year 3 contracts) against fluctuations in interest rate changes.

III. USD Interest Rate Swaps (Floating to Fixed) for Notional Principal INR of Rs. 5,148,475,000 against USD 82,802,351.54 (Previous Year Rs. Nil) for a total of 6 contracts (Previous Year Nil contracts) against fluctuations in USD Libor.

5. Contingent Liability and Commitment:

(a) Demand pending u/s 143(3) of the Income Tax Act,1961

(i) For Rs. 2,414,210 with respect to FY 2007-08 (Previous Year Rs. 2,414,210) against disallowance U/s 14A of the Income Tax Act,1961, against which appeal is pending before ITAT.

(ii) For Rs. 12,301,239 with respect to FY 2008-09 ( Previous Year Rs. NIL ) against disallowance u/s 14A of the Income Tax Act,1961,against which the department has filed appeal before the ITAT against the order of CIT (Appeal ).

(iii) For Rs.Nil with respect to FY 2009-10 (Previous Year Rs.17,807,253) against disallowance U/s 14A of the Income Tax Act,1961, against which appeal is pending before CIT ( Appeals).

(iv) For Rs. 11,625,706 with respect to FY 2011-12 ( Previous Year Rs. NIL ) against disallowances u/s 14A and 32 (1 ) of the Income Tax Act,1961 against which appeal is pending before CIT ( Appeal ).

(b) Demand pending u/s of 25, 55,56 & 61 of The Rajasthan Value Added Tax Act, 2003 for Rs. 14,505,873 (Including interest & Penalty) with respect to FY 2007-08 to FY 2012-13 (Previous Year Rs. 14,505,873) against which appeal is pending before Rajasthan Tax Board, Ajmer. The Company has paid tax along with interest for Rs. 6,231,069(Previous Year Rs. 6,231,069) under protest.

(c) Corporate counter guarantees outstanding in respect of securitisation/ assignment agreements entered by the Company with different assignees as at March 31, 2015 is Rs. 1,879,775,887 ( Previous Year Rs.3,044,792,269) against which collateral deposit of Rs. 63,516,470 (Previous Year Rs. 172,908,806 for the period ended March 31, 2015 is being provided to the assignees by the Company in the form of Fixed Deposit Receipts. 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.

(d) The Company in the ordinary course of business, has court cases pending, however, the management does not expect any unfavourable outcome resulting in material adverse effect on the financial position of the Company.

(e) Capital commitments for acquisition of fixed assets at various branches as at the year end (net of capital advances paid) Rs. 2,109,736,611 (Previous Year Rs. 2,052,467,864 ).

6. Segment Reporting:

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 Company's primary business segment is reflected based on principal business activities carried on by the Company. The Company's primary business comprises of investing and financing related activities (investing in various subsidiaries, financing of loans and credit activities) and fee income which mainly comprises of financial service related fee from services income, commission on insurance and other fee based activities.

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 (Refer Note 1) above.

7. Disclosures in respect of Related Parties as per Accounting Standard (AS) - 18 'Related Party Disclosures'.

Nature of relationship Related party

(a) Related party where control exists:

Subsidiary Companies Indiabulls Asset Reconstruction Company Limited

(Subsidiary of Indiabulls Advisory Services Limited)

Indiabulls Finance Company Private Limited

Indiabulls Commercial Credit Limited (formerly Indiabulls Infrastructure Credit Limited)

Indiabulls Insurance Advisors Limited

Indiabulls Life Insurance Company Limited

Indiabulls Capital Services Limited

Indiabulls Collection Agency Limited

Ibulls Sales Limited

Indiabulls Advisory Services Limited

Nilgiri Financial Consultants Limited

(Subsidiary of Indiabulls Insurance Advisors Limited)

Indiabulls Asset Holding Company Limited

Indiabulls Asset Management Company Limited

Indiabulls Trustee Company Limited

Indiabulls Holdings Limited

Indiabulls Venture Capital Management Company Limited

(Subsidiary of Indiabulls Holdings Limited)

Indiabulls Venture Capital Trustee Company Limited

(Subsidiary of Indiabulls Holdings Limited)

Key Management Personnel Mr. Sameer Gehlaut, Chairman & Executive Director

Mr. Gagan Banga, CEO & Managing Director

Mr. Ashwini Omprakash Kumar, Deputy Managing Director

Mr. Ajit Kumar Mittal, Executive Director

Mr. Rajiv Rattan, Non -Executive Director(upto July 18, 2014)

Mr. Saurabh Kumar Mittal, Non - Executive Director(upto July 18, 2014)

8. Earnings Per Equity Share

Earnings Per Equity Share (EPS) as per Accounting Standard (AS)-20 "Earnings Per Share",:

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.

9. 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, 2015.

10. An amount of Rs. 1,000/- has been levied as penalty by National Housing Bank in terms of provisions of paragraph 29(5) of the Housing Finance Companies(NHB) Directions, 2010 on account of delay in submission of filing of Short Term Dynamic Statement for position as on September 30, 2014.

11. As per the Housing Finance Companies (NHB) Directions 2010, non-performing assets are recognised on the basis of ninety days and above overdue of interest/installment. The Company has made the Provision for Loans and Other Credit Facilities in respect of Housing and Non-Housing Loans in terms of paragraph 28 of the Housing Finance Companies (NHB) Directions 2010 and NHB Notification No. NHB.HFC.DIR.3/CMD/2011 dated August 05, 2011 and NHB.HFC.DIR.4/CMD/2012 dated January 19, 2012. The same is disclosed in terms of paragraph 29(2) of the Housing Finance Companies (NHB) Directions, 2010 and NHB Circular No. NHB(ND)/DRS/Pol.No.41/2010-11 dated September 26, 2011.

Further as at March 31,2015 , the Company has additional provision of Rs 15.84 Crore (Previous Year Rs.69.77 Crore) and Rs 198.13 Crore (Previous Year Rs. 111.70 Crore) for Standard Assets/other contingencies and for non standard assets (including Doubtful and loss assets) respectively.

The balance loan outstanding as at March 31, 2015 for standard assets is Rs. 43,415.12 Crore (Previous Year Rs. 33,523.18 Crore) out of which housing loan is Rs 31,244.16 Crore (Previous Year Rs 22,776.40 Crore) and Non housing loan is Rs 12,170.95 Crore (Previous Year Rs 10,746.78 Crore).

The balance loan outstanding as at March 31, 2015 for sub-standard assets is Rs. 191.02 Crore (Previous Year Rs. 255.46 Crore) out of which housing loan is Rs 122.06 Crore (Previous Year Rs 27.59 Crore) and Non housing loan is Rs 68.97 Crore (Previous Year Rs 227.87 Crore).

The balance loan outstanding as at March 31, 2015 for doubtful assets upto one year category is Rs. 174.43 Crore (Previous Year Rs 4.43 Crore ) out of which housing loan is Rs 5.22 Crore (Previous Year Rs 1.22 Crore) and Non housing loan is Rs 169.21 Crore (Previous Year Rs. 3.21 Crore).

The balance loan outstanding as at March 31,2015 for doubtful assets one to three years category is Rs. 7.18 Crore (Previous Year Rs. 59.57 Crore) out of which housing loan is Rs. 2.22 Crore (Previous Year Rs 2.40 Crore ) and Non housing loan is Rs 4.96 Crore (Previous Year Rs.57.17 Crore).

The balance outstanding as at March 31,2015 for doubtful assets more than three years category is Rs. 21.41 Crore (Previous Year Rs. 3.73 Crore) out of which housing loan is Rs 1.90 Crore (Previous Year Rs 0.44 Crore ) and Non housing loan is Rs 19.51 Crore (Previous Year Rs. 3.29 Crore ).

Provision for contingencies on standard assets and loan assets as on March 31, 2015 amounting to Rs. 597.67 Crore (Previous Year Rs. 494.66 Crore ) includes provisions for non-performing assets, standard assets and all other contingencies.

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 loan portfolio amounting to Rs. 114,059,975,916 upto March 31, 2015 (Rs. 93,398,990,025 upto March 31, 2014), being the principal value outstanding as on the date of the deals that are outstanding as on the Balance Sheet date.

The Company assigned/securitized 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 in Significant Accounting policies in Note 1 (v) above and residual income on these Loans is being recognised over the life of the underlying loans and not on an upfront basis.

13. The Board of Directors at their meeting held on April 27, 2012 had approved the Scheme of Arrangement involving the merger of Indiabulls Financial Services Limited (IBFSL, the Holding Company) with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 (the "Scheme of Arrangement"). The Appointed Date of the proposed merger fixed under the Scheme of Arrangement was April 1,2012. The Hon'ble High Court of Delhi, vide its Order dated December 12, 2012, received by the Company on February 8, 2013, approved the Scheme of Arrangement (Order). In terms of the Court approved Scheme of Arrangement, with the filing of the copy of the Order, on March 8, 2013 with the office of ROC, NCT of Delhi & Haryana (the Effective Date), IBFSL, as a going concern, stands amalgamated with IBHFL with effect from the Appointed Date, being April 1, 2012 (Under the Accounting Standard 14 - Pooling of interest method). Consequent to the Scheme of Arrangement becoming effective, the Board of Directors of the Company, at their meeting held on March 25, 2013, issued and allotted -

i) 312,511,167 Equity Shares of Rs. 2 each of the Company,

ii) 27,500,000 Warrants of the Company (against the listed warrants of IBFSL), and

iii) 20,700,000 Warrants of the Company (against the unlisted warrants of IBFSL held by certain promoter group entities and Key Management Personnel of IBFSL) to the Equity Shareholders / Warrants holders of IBFSL, against their holdings in such Equity Shares / Warrants, as on March 20, 2013 i.e. the record date fixed by IBFSL in this regard. The issue of Equity Shares / warrants by the Company was in terms of the share exchange ratio as mentioned in the Court approved Scheme of Arrangement. The Company's Shares and Warrants (issued in lieu of listed warrants of IBFSL) got listed with National Stock Exchange of India Limited and BSE Limited w.e.f. July 23, 2013.

14. The Company has complied with the NHB Directions, 2010 including Prudential Norms and as amended from time to time.

15. Previous Year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosures.


Mar 31, 2014

(1) Corporate Information:

The Board of Directors of Indiabulls Housing Finance Limited (100% subsidiary of "IBFSL") and Indiabulls Financial Services Limited ("IBFSL", "Erstwhile Holding Company") at their meeting held on April 27, 2012 had approved the Scheme of Arrangement involving the reverse merger of IBFSL with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 (the "Scheme of Arrangement"). The Appointed Date of the proposed merger fixed under the Scheme of Arrangement was April 1, 2012. The Hon''ble High Court of Delhi, vide its Order dated December 12, 2012, received by the Company on February 8, 2013, approved the Scheme of Arrangement. In terms of the Court approved Scheme of Arrangement, with the filing of the copy of the Order, on March 8, 2013, with the office of ROC, NCT of Delhi & Haryana (the Effective Date), IBFSL, as a going concern, stands amalgamated with IBHFL with effect from the Appointed Date, being April 1, 2012. Accordingly, Earnings Per Share and previous year figures are not comparable.

Indiabulls Financial Services Limited ( "IBFSL") was incorporated on January 10, 2000 as a Private Limited Company. 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. The Company was converted into a public limited Company pursuant to Section 44 of the Companies Act, 1956 on February 03, 2004.

Indiabulls Housing Finance Limited ("the Company") ("IBHFL") was incorporated on May 10, 2005. On December 28, 2005 the Company was registered under Section 29A of the National Housing Bank Act, 1987 to commence / carry on the business of a Housing Finance Institution without accepting public deposits. The Company is required to comply with provisions of the National Housing Bank Act, 1987, the Housing Finance Companies (NHB) Directions, 2010 and other guidelines / instructions / circulars issued by the National Housing Bank from time to time.

The Company is engaged in the business to provide finance and to undertake all lending and finance to any person or persons, co-operative society, association of persons, body of individuals, companies, institutions, firms, builders, developers, contractors, tenants and others either at interest or without and/or with or without any security for construction, erection, building, repair, remodeling, development, improvement, purchase of houses, apartments, flats, bungalows, rooms, huts, townships and/or other buildings and real estate of all descriptions or convenience there on and to equip the same or part thereof with all or any amenities or conveniences, drainage facility, electric, telephonic, television, and other installations, either in total or part thereof and /or to purchase any free hold or lease hold lands, estate or interest in any property and such other activities as may be permitted under the Main Objects of the Memorandum of Association of the Company.

(I) Indiabulls Financial Services Limited ("Erstwhile Holding Company") had issued Global Depository Receipts (GDR''s) which were transferred under the Scheme of Arrangement in financial year 2012-13. As at March 31, 2014 3,100,273 (Previous Year 5,608,131) GDR''s were outstanding and were eligible for conversion into Equity Shares. The Company does not have information with respect to holders of these GDR''s. Holders of Global Depository Receipts (GDRs) will be entitled to receive dividends, subject to the terms of the Deposit Agreement, to the same extent as the holders of Equity Shares, less the fees and expenses payable under such Deposit Agreement and any Indian tax applicable to such dividends. Holders of GDRs will not have voting rights with respect to the Deposited Shares. The GDRs may not be transferred to any person located in India including Indian residents or ineligible investors except as permitted by Indian laws and regulations.

(II) 312,511,167(Previous Year 312,511,167) Equity Shares were allotted by the Company, for consideration other than cash to the shareholders of Erstwhile Holding Company pursuant to and in terms of the Scheme of Arrangement, approved by the Hon''ble High Court of Delhi vide its Order dated December 12, 2012, which came into effect on March 8, 2013 from the Appointed Date April 1, 2012.(Refer Note 39)

(III) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the financial year:-

*Includes 706,596 Equity Shares of Rs. 2 each issued during the year, under various ESOP Schemes by the Erstwhile Holding Company aggregating to Rs. 1,413,192.

**Includes 831,276 Equity Shares of Rs. 2 each issued during the year, under various ESOP Schemes aggregating to Rs. 1,662,552 and 20,700,000 Equity Shares of Rs. 2 each issued during the year to certain promoter entities and Key Management Personnel''s against outstanding Share warrants aggregating to Rs. 41,400,000.

(V) Employees Stock Options Schemes:

Indiabulls Financial Services Limited ("Erstwhile Holding Company") (Refer Note 39) and its erstwhile subsidiary, Indiabulls Credit Services Limited ("ICSL") had announced ESOS / ESOP schemes for its employees and the employees of it''s group companies wherein each option represents one Equity Share of the Company. The Company has adopted the ESOS / ESOP schemes in respect of its employees. A Compensation Committee constituted by the Board of Directors administers each of the plans.

(a) Stock option schemes of the erstwhile Holding Company including schemes in lieu of stock options schemes of erstwhile fellow subsidiary Indiabulls Credit Services Limited transferred under the Court approved Scheme of Arrangement (Refer Note 39) :

*The name of the schemes have been revised by the approval of the Shareholders of the Company in the 8th Annual General Meeting held on July 1, 2013.

(b) IHFL ESOS - 2013

The members of the Company at their Meeting dated March 6, 2013 approved the IHFL ESOS - 2013 scheme consisting of 39,000,000 stock options representing 39,000,000 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 / step down subsidiaries of the Company. The same has not yet been granted till March 31, 2014.

The Fair value of the options as determined by an Independent firm of Chartered Accountants, which has been regranted by the Erstwhile Holding Company under the respective plans using the Black-Scholes Merton Option Pricing Model based on the following parameters are as under:-

*The expected volatility was determined based on historical volatility data.

Fair Value Methodology:

As all the other plans were issued based on the fair value of the options on the date of the grant, there is no impact of the same on the net profit and earnings per share. The IHFL - IBFSL Employees Stock Option Plan – 2008 (including re-grant) were issued at the Intrinsic value of the options on the date of the grant. Had the compensation cost for the stock options granted under IHFL - IBFSL Employees Stock Option Plan – 2008 (including re-grant) been determined based on the fair value approach, the Company''s net profit and earnings per share would have been as per the pro forma amounts indicated below:-

(VI) During the year ended March 31, 2013, pursuant to the Scheme of Arrangement the Authorised Capital of the Company has been rearranged to Rs.16,000,000,000 divided into 3,000,000,000 Equity Shares of Rs. 2 each and 1,000,000,000 Preference Shares of Rs. 10 each.

(VII) 30,909,521 Equity Shares of Rs. 2 each (Previous year 52,587,066) are reserved for issuance as follows:- (a) 3,409,521 Equity shares of Rs. 2 each (Previous Year 4,387,066) towards Employees Stock options as granted. (b) 27,500,000 Equity shares of Rs. 2 each (Previous Year 48,200,000) towards outstanding share warrants.

(1) During the year ended March 31, 2013, the difference between the carrying amount of Investment in Indiabulls Housing Finance Limited held by Indiabulls Financial Services Limited, and amount of Capital issued earlier has been debited to Securities Premium account as per Scheme of Arrangement on cancellation of said investment.

(2) Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate Affairs amending Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates, as notified by the Companies (Accounting Standards) Rules, 2006, as amended, the Company has exercised the option as per para 46A inserted in the said Standard for all long term monetary assets and liabilities. Consequently an amount of Rs. Nil (Previous Year Rs. 27,523,476) representing translation difference on foreign currency loans is carried forward in the Foreign Currency Monetary Item Translation Difference Account as on March 31, 2014.

(3) In terms of Section 29C of the National Housing Bank ("NHB") Act, 1987, the Company is required to transfer at least 20% of its Profit after tax to a Reserve Fund before any dividend is declared. Such a Reserve Fund is also considered as an eligible transfer in terms of Section 36(1)(viii) of the Income Tax Act, 1961. The Company has transferred an amount of Rs. 3,019,996,370 (Previous Year Rs. 2,455,813,911) to the Reserve Fund as at the year end. Further an additional amount of Rs. 1,000,000,000 (Previous Year Rs. 2,000,000,000) has been set apart by way of transfer to Additional Reserve Fund in excess of the statutory minimum requirement as specified under Section 29C pursuant to Circular no. NHB(ND)/DRS/Pol-No. 03/2004-05 dated August 26, 2004 issued by the National Housing Bank. The additional amount so transferred may be utilised in the future for any business purpose.

(4) Disclosure in terms of Circular No. NHB(ND)/ DRS/ Pol.Circular.61/ 2013-14 dated April 7, 2014:-

(5) This pertains to reserve created under section 45-IC of the Reserve Bank of India Act 1934, by the Erstwhile Holding Company Indiabulls Financial Services Limited, which has been transferred to the Company under the Scheme of Arrangement during the year ended March 31, 2013.

(6) During the year, in addition to the charge of Rs. 1,284,555,172 (Previous Year Rs. 547,181,041 ) towards provision for loan assets and standard assets to the Statement of Profit and Loss, an amount of Rs. Nil (net of Deferred Tax of Rs. Nil ) [(Previous Year Rs. 1,320,200,000) (net of deferred tax of Rs. 679,800,000)], being one time charge of provision for standard assets and other contingencies due to merger between the Company and the Erstwhile Holding Company (Refer note 39) and changes in the provisioning requirements by the National Housing Bank vide Circulars no. NHB.HFC.DIR.4/CMD/2012 dated January 19, 2012 has been transferred from Additional Reserve created as per Section 29C of the National Housing Bank Act, 1987 pursuant to Circular No. NHB(ND)/DRS/Pol- 03/2004-05 dated August 26, 2004 as under:

(5) In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the erstwhile Holding Company during the financial year 2012-13, upon receipt of Shareholders approval, has on June 9, 2012, issued and allotted an aggregate of 20,700,000 warrants, to certain Promoter group entities and Key Management Personnel, at a conversion price of Rs. 218 per Equity Share, 25% of which amounting to Rs. 1,128,150,000 had already been received by the Erstwhile Holding Company from the respective Allottee''s as upfront amount as at the Year ended March 31, 2013. These warrants were convertible into an equivalent number of Equity Shares of face value Rs. 2 each, in the Company, upon receipt of balance conversion price, within a period of eighteen months from the date of allotment. During the Current financial year the Company has received from the warrant holders the balance amount of 75% amounting to Rs. 3,384,450,000 upon excercise of the rights to convert the warrants into equity shares.(Refer Note 39)

(1) Provision for Contingencies includes Contingent provision against standard assets and other contingencies. As per National Housing Bank Circular No. NHB/HFC/DIR.3/CMD/2011 dated August 5, 2011 and NHB/HFC/DIR.9/CMD/ 2013 dated September 6, 2013, in addition to provision for non performing assets, all housing finance companies are required to carry a general provision. (i) at the rate of 2% on housing loans disbursed at comparatively lower rate of interest in the initial few years, after which rates are reset at higher rates; (ii) at the rate of 0.75% of Standard Assets in respect of Commercial Real Estates (Residential Housing):, (iii) at the rate of 1.00% of Standard Assets in respect of other Commercial Real Estates and (iv) at the rate of 0.40% of the total outstanding amount of loans which are Standard Assets other than (i), (ii) & (iii) above. Accordingly, the Company is carrying a provision of Rs. 2,500,000,000 (Previous Year Rs. 2,500,000,000) towards standard assets (included in Provisions for Contingencies), which is well over the required minimum provision as per the NHB Guidelines.

* Secured by hypothecation of Loan Receivables (Current and Future) / Current Assets / Cash and Cash Equivalents of the Company.

** Redeemable Non-Convertible Debentures are secured against Immovable Property / Current Assets and pool of

Current and Future Loan Receivables of the Company. *** Maximum balance outstanding during the year Rs. 58,790,000,000 (Previous year Rs. 29,880,000,000).

# As at the year end, the Company was in the process of creating the charge / security on assets against Redeemable, Non Convertible Debentures of Rs. 6,000,000,000(Previous Year Rs. Nil).

(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 regarding to Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

(3) Amount payable on assigned loans is net of amount receivable from related parties amounting to Rs. Nil (Previous Year Rs 18,460,081).

(4) 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, 2014.

(1) 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 the books of account.

As at March 31, 2014, the Company holds 100% of the Equity capital of Indiabulls Asset Holding Company Limited and Indiabulls Life Insurance Company Limited at a cost of Rs. 500,000 each. Based on the audited financials of these companies, as at March 31, 2014, 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. As the Management considers 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 their carrying values has been made in the books of account.

(2) The Company was holding 57.50% of the capital of Indiabulls Finance Company Private Limited (IFCPL), which has become a subsidiary of the Company pursuant to the Scheme of Arrangement. The balance 42.50% or 3,233,696 Equity Shares were held by Amaprop Limited (Amaprop), vide a Share Subscription and Shareholders Agreement (SHA) entered into between the erstwhile Holding Company[Indiabulls Financial Services Limited(IBFSL)], IFCPL and Amaprop.

During the Current financial year, the Company has purchased the remaining 42.50% or 3,233,696 Equity Shares, which were earlier held by Amaprop Limited at a consideration of Rs. 2,616,891,255. Post this transaction IFCPL is a wholly owned subsidiary of the Company.

(3) During the financial year 2012—13, the Company has invested Rs. 2,025,000,000 by subscribing to 22,500,000 Compulsorily Convertible Cumulative Preference Shares of face value Rs. 10 per share, issued by its wholly owned subsidiary namely Indiabulls Infrastructure Credit Limited.

(4) On December 13, 2010 the Erstwhile Holding Company (IBFSL) had sold 26% shares held by it in Indian Commodity Exchange Limited (ICEX) to Reliance Exchange Next Limited (R—Next) for a total consideration of Rs. 473,500,000 against a proportionate cost of Rs. 260,000,000. As a result thereof, the stake of IBFSL in ICEX has been reduced from 40% to 14% and the same has been reclassified as a long term investment from the earlier classification of being an Associate. MMTC filed a petition before the Company Law Board (CLB) against ICEX, R—Next and IBFSL alleging that the transfer is null and void in terms of the Shareholders Agreement in view of the Forward Markets Commission (FMC) guidelines. IBFSL contends that such view of MMTC is based on the old FMC guidelines and without considering the amended FMC Guidelines dated June 17, 2010 wherein the transfer norms were relaxed. IBFSL had filed its objections on maintainability of the petition which is pending adjudication before the CLB.

(5) During the year ended March 31, 2013, investment in subsidiaries were transferred from Indiabulls Financial Services Limited under the Scheme of Arrangement. (Refer Note 39)

(6) During the current financial year, the Company has invested Rs. 60,000,000 by subscribing to 6,000,000 Equity Shares of face value Rs. 10 per share, issued by its wholly owned subsidiary namely Indiabulls Asset Management Company Limited.

(7) During the financial year 2012—13, Indiabulls Advisory Services Limited (IASL), a wholly owned subsidiary of the Company has invested Rs. 26,000,000 by purchasing 2,600,000 Equity Shares of face value Rs. 10 each per Equity Share from the earlier shareholders of Indiabulls Asset Reconstruction Company Limited (IARCL), an associate of the Company. After this purchase, the stake in IARCL has increased from 24.02% to 75.00% (together with IASL) and then IARCL has become a subsidiary of the Company from the earlier classification of being an Associate.

(8) During the financial year 2012—13, the Company has written off its investment in Indiabulls Alternative Asset Management Private Limited, as the Company was struck off from the records of Accounting And Corporate Regulatory Authority of Singapore, on February 7, 2013.

(15) Deferred tax assets (Net)

Pursuant to Accounting Standard (AS) – 22 ''Accounting for Taxes on Income'' as notified by the Companies (Accounting Standards) Rules, 2006, as amended, the Company has credited an amount of Rs. 162,272,004 (Previous Year debited Rs. 142,616,472) as deferred tax charge (net) to the Statement of Profit and Loss arising on account of timing differences. Further Deferred Tax Asset of Rs. Nil (Previous Year Rs. 679,800,000) (Included in Provision for loan assets and contingent provision against standard assets below) has been recognised against the utilisation of Additional Reserve u/s 29C (Refer Note. 4(6)). The breakup of deferred tax into major components as at March 31, 2014 is as under:

(1) Secured Loans and Other Credit Facilities given to customers amounting to Rs. 293,296,569,746 (Previous Year Rs. 262,200,912,305) are secured / partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of shares / debentures, units, other securities, assignment of life insurance policies and / or

(c) Hypothecation of assets and / or

(d) Company guarantees or personal guarantees and / or

(e) Negative lien and / or Undertaking to create a security.

(1) Deposits accounts with bank of Rs.12,412,688 (Previous Year Rs. 3,977,205) are under lien. The Company has the complete beneficial interest on the income earned from these deposits. # includes Rs. 24,186,444 (Previous Year Rs. 19,287,496) in designated unclaimed dividend accounts.

(1) Secured Loans and Other Credit Facilities given to customers amounting to Rs. 43,772,598,454 (Previous Year Rs. 34,221,462,013) are secured / partly secured by :

(a) Equitable mortgage of property and / or

(b) Pledge of shares / debentures, units, other securities, assignment of life insurance policies and / or

(c) Hypothecation of assets and / or

(d) Company guarantees or personal guarantees and / or

(e) Negative lien and / or Undertaking to create a security.

(1) Employee Benefits – Provident Fund, ESIC, Gratuity and Compensated Absences disclosures as per Accounting Standard (AS) 15 (Revised) – Employee Benefits as notified by the Companies (Accounting Standards) Rules, 2006, as amended:

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 employee''s salary. The Company has recognised an amount of Rs. 7,509,939 (Previous year Rs. 8,295,159) in the Statement of Profit and Loss towards Employers contribution for the above mentioned funds.

Provision for unfunded Gratuity and Compensated Absences for all employees is based upon actuarial valuations carried out at the end of every financial year. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Pursuant to the issuance of the Accounting Standard (AS) 15 (Revised) on ''Employee Benefits'', as notified by the, Companies (Accounting Standards) Rules, 2006, as amended, commitments are actuarially determined using the ''Projected Unit Credit'' Method. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

The actuarial calculations used to estimate commitments and expenses in respect of unfunded Gratuity, Compensated absences and Superannuation (Pension & Medical coverage) are based on the following assumptions which if changed, would affect the commitment''s size, funding requirements and expenses:

The employer''s best estimate of contributions expected to be paid during the annual period beginning after the Balance Sheet date, towards Gratuity, Compensated Absences and Superannuation is Rs. 27,306,579 (Previous Year Rs. 28,452,477) Rs. 11,888,995 (Previous Year Rs. 9,557,623) and Rs. 92,101,824 (Previous Year Rs. 55,346,782) respectively.

(1) During the year, the Company has recognised Premium on Options Contracts amounting to Rs. 121,398,049 (Previous Year Rs. 20,085,000) included in Interest on Loans and unrealised marked to market loss towards derivatives (Interest Rate Swaps) amounting to Rs. Nil (Previous Year Rs. 439,933) which has been included under Bank / Finance Charges . Derivative instruments that are outstanding as at March 31, 2014 is as given below:—

I. Forward Options contracts entered for hedging purposes as at March 31, 2014 for USD Nil (Previous Year USD 37,277,984 (Buy)) against cross currency of Rs. Nil (Previous Year Rs. 2,000,000,000).

II. Interest Rate Swaps for Notional Principal of Rs. 750,000,000 (Previous Year Rs. 4,000,000,000) for a total of 3 contracts (Previous Year 8 contracts) against fluctuations in interest rate changes.

(1) The Company has taken office premises on Lease and Leave & License basis at various locations in India. Lease rent / License fees aggregating to Rs. 302,193,145 (Previous Year Rs. 349,980,322 ) in respect of the same have been charged to the Statement of Profit and Loss. The agreements are executed for periods ranging from 11 months to 9 years with a renewable clause. In many cases, the agreements also provide for termination at will by either party by giving a prior notice period between 30 to 90 days. The minimum lease rentals outstanding as at March 31, 2014, are as under:

(2) During the year, in addition to the charge of Rs. 1,284,555,172 (Previous Year Rs. 547,181,041 ) towards provision for loan assets and standard assets to the Statement of Profit and Loss, an amount of Rs. Nil (net of Deferred Tax of Rs. Nil ) [(Previous Year Rs. 1,320,200,000) (net of deferred tax of Rs. 679,800,000)], being one time charge of provision for standard assets and other contingencies due to merger between the Company and the erstwhile Holding company(Refer note 39) and changes in the provisioning requirements by the National Housing Bank vide Circulars no. NHB.HFC.DIR.4/CMD/2012 dated January 19, 2012 has been transferred from Additional Reserve created as per Section 29C of the National Housing Bank Act, 1987 pursuant to Circular No. NHB(ND)/DRS/Pol— 03/2004—05 dated August 26, 2004 as under;

(1) Current Maturity of Long Term Non Convertible Debentures as at March 31, 2014

(2) Current Maturity of Long Term Non Convertible Debentures as at March 31, 2013

(3) Redeemable at premium

*Redeemable Non—Convertible Debentures are secured against Immovable Property / Current Assets and pool of Current and Future Loan Receivables of the Company.

** As at the year end, the Company was in the process of creating the charge / security on assets.

(1) Loan taken other than from banks

(2) Includes Loan taken other than from banks for Rs. 2,999,999,999

*Secured by hypothecation of Loan Receivables(Current and Future) / Current Assets / Cash and Cash Equivalents of the Company.

(1) Loan taken other than from banks for Rs. 1,635,000,000

(2) Includes Loan taken other than from banks for Rs. 2,999,999,999

*Secured by hypothecation of Loan Receivables(Current and Future) / Current Assets / Cash and Cash Equivalents of the Company.

(29) Contingent Liability not provided for in respect of:

(a) Contingent Liabilities not provided for in respect of Capital commitments for acquisition of fixed assets at various branches as at the year end (net of capital advances paid) Rs. 2,052,467,864 (Previous Year Rs. 3,004,174,116 ).

(b) Demand pending u/s 143(3) of the Income Tax Act,1961 in relation to the merged company Indiabulls Financial Services Limited("IBFSL")

(i) For Rs. 2,414,210 with respect to FY 2007—08 (Previous Year Rs. 2,414,210) against disallowance U/s 14A of the Income Tax Act,1961, against which appeal is pending before ITAT.

(ii) For Rs.17,807,253 with respect to FY 2009—10 (Previous Year Rs.17,807,253) against disallowance U/s 14A of the Income Tax Act,1961, against which appeal is pending before CIT ( Appeals)

(c) Demand pending u/s of 25, 55 , 56 & 61 of The Rajasthan Value Added Tax Act, 2003 in relation to the merged company IBFSL for Rs. 14,505,873 (Including Interest & Penalty) with respect to FY 2007—08 to FY 2012—13 (Previous Year Rs. 14,505,873) against which appeal is pending before Rajasthan Tax Board, Ajmer. The company has paid tax along with interest for Rs. 6,231,069(Previous Year Rs. 6,231,069) under protest.

(d) Arbitration award passed by the international arbitrator against merged company Indiabulls Financial Services Limited("IBFSL") for Rs. Nil (Previous Year Rs. 1,920,007,000) for purchase of 42.50% stake in Indiabulls Finance Company Private Limited (IFCPL), which is disputed by the Company. (Refer Note 14(2)).

(e) Corporate counter guarantees outstanding in respect of securitisation/ assignment agreements entered by the Company with different assignees as at March 31, 2014 is Rs.3,044,792,269 (Previous Year Rs.3,044,792,269) against which collateral deposit of Rs. 172,908,806 (Previous Year Rs. 172,908,806) for the year ended March 31, 2014 is being provided to the assignees by the Company in the form of Fixed Deposit Receipts. 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.

(30) Segment Reporting:

Segment information for the year ended March 31, 2014, as per Accounting Standard (AS)—17 "Segment Reporting", as notified by the Companies (Accounting Standards) Rules, 2006, as amended.

#Includes Dividend Income on units of Mutual Fund, Profit on Appreciation of Mutual Fund Investments and Profit on sale of current investments included in other income.

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 Company''s primary business segment is reflected based on principal business activities carried on by the Company. The Company''s primary business comprises of investing and financing 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, commission on insurance and other fee based activities.

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 (Refer Note 1) above.

(31) Disclosures in respect of Related Parties as per Accounting Standard (AS) – 18 ''Related Party Disclosures'' as notified by the Companies (Accounting Standards) Rules, 2006, as amended. Nature of relationship Related party

(a) Related party where control exists: Subsidiary Companies

Key Management Personnel

Indiabulls Asset Reconstruction Company Limited

(Associate upto January 10, 2013)(Subsidiary of

Indiabulls Advisory Services Limited)

Indiabulls Finance Company Private Limited

Indiabulls Infrastructure Credit Limited

Indiabulls Insurance Advisors Limited

Indiabulls Life Insurance Company Limited

Indiabulls Capital Services Limited

Indiabulls Collection Agency Limited

Ibulls Sales Limited

Indiabulls Advisory Services Limited

Nilgiri Financial Consultants Limited

(Subsidiary of Indiabulls Insurance Advisors Limited)

Indiabulls Asset Holding Company Limited

Indiabulls Asset Management Company Limited

Indiabulls Trustee Company Limited

Indiabulls Holdings Limited

Indiabulls Alternative Asset Management Private

Limited (upto February 7, 2013)

Indiabulls Venture Capital Management Company Limited

(Subsidiary of Indiabulls Holdings Limited)

Indiabulls Venture Capital Trustee Company Limited

(Subsidiary of Indiabulls Holdings Limited)

Mr. Sameer Gehlaut, Chairman & Executive Director

Mr. Gagan Banga, CEO & Managing Director

Mr. Ashwini Omprakash Kumar, Deputy Managing Director

Mr. Ajit Kumar Mittal, Executive Director

Mr. Rajiv Rattan, Non —Executive Director

Mr. Saurabh Kumar Mittal, Non —Executive Director

Mr. Sachin Chaudhary (CEO—Executive Director upto March 19, 2013

(33) Earnings Per Equity Share

Earnings Per Equity Share (EPS) as per Accounting Standard (AS)-20 "Earnings Per Share", as notified by the Companies (Accounting Standards) Rules, 2006, as amended:

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.

Dilutive potential Equity Shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The number of Equity Shares and potential diluted Equity Shares are adjusted for potential dilutive effect of Employee Stock Option Plan as appropriate. Potential dilutive Equity Shares on account of Share warrants are not adjusted being anti dilutive in nature.

(34) 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, 2014.

(35) Disclosures in terms of Circular no. NHB/ND/DRS/Pol—No. 35/2010—11 dated October 11, 2010: (i) Disclosure for Capital to Risk Asset Ratio (CRAR) :—

(iii) Asset Liability Management

(36) As per the Housing Finance Companies (NHB) Directions 2010, non-performing assets are recognised on the basis of ninety days and above overdue of interest/installment. The Company has made the Provision for Loans and Other Credit Facilities in respect of Housing and Non-Housing Loans in terms of paragraph 28 of the Housing Finance Companies (NHB) Directions 2010 and NHB Notification No. NHB.HFC.DIR.3/CMD/2011 dated August 05, 2011 and NHB.HFC.DIR.4/CMD/2012 dated January 19, 2012. The same is disclosed in terms of paragraph 29(2) of the Housing Finance Companies (NHB) Directions, 2010 and NHB Circular No. NHB(ND)/DRS/Pol.No.41/2010-11 dated September 26, 2011.

Further as at March 31, 2014 , the Company has additional provision of Rs 69.77 Crore (Previous Year Rs.64.51 Crore) and Rs 111.70 Crore (Previous Year Rs. 82.23 Crore) for Standard Assets/other contingencies and for non standard assets ( including Doubtful and loss assets) respectively.

The balance loan outstanding as at March 31, 2014 for standard assets is Rs. 33,523.18 Crore (Previous Year Rs. 29,809.25 Crore) out of which housing loan is Rs 22,776.40 Crore (Previous Year Rs 18,462.76 Crore) and Non housing loan is Rs 10,746.78 Crore (Previous Year Rs 11,346.48 Crore).

The balance loan outstanding as at March 31, 2014 for sub-standard assets is Rs. 255.46 Crore (Previous Year Rs. 152.09 Crore) out of which housing loan is Rs 27.59 Crore (Previous Year Rs 23.27 Crore) and Non housing loan is Rs 227.87 Crore (Previous Year Rs 128.82 Crore).

The balance loan outstanding as at March 31, 2014 for doubtful assets upto one year category is Rs. 4.43 Crore (Previous Year Rs 92.97 Crore ) out of which housing loan is Rs 1.22 Crore (Previous Year Rs 1.36 Crore) and Non housing loan is Rs 3.21 Crore (Previous Year Rs. 91.61 Crore).

The balance loan outstanding as at March 31, 2014 for doubtful assets one to three years category is Rs. 59.57 Crore (Previous Year Rs. 23.47 Crore) out of which housing loan is Rs. 2.40 Crore (Previous Year Rs 2.12 Crore ) and Non housing loan is Rs 57.17 Crore (Previous Year Rs.21.35 Crore).

The balance outstanding as at March 31, 2014 for doubtful assets more than three years category is Rs. 3.73 Crore (Previous Year Rs. 2.27 Crore) out of which housing loan is Rs 0.44 Crore (Previous Year Rs Nil ) and Non housing loan is Rs 3.29 Crore (Previous Year Rs. 2.27 Crore ).

Provision for contingencies on standard assets and loan assets as on March 31, 2014 amounting to Rs. 494.66 Crore (Previous Year Rs. 4,59.16 Crore ) includes provisions for non–performing assets, standard assets and all other contingencies.

(37) 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 loan portfolio amounting to Rs. 93,398,990,025 (Previous Year Rs. 56,291,685,659) upto March 31, 2014, being the principal value outstanding as on the date of the deals that are outstanding as on the Balance Sheet date.

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 in Significant Accounting policies in Note 1 (v) above and residual income on these Loans is being recognised over the life of the underlying loans and not on an upfront basis.

(38) The Company being a HFC has to follow the concentration of Credit Norms as per the NHB guidelines. Post merger of Indiabulls Financial Services Limited (the holding company ) with the Company, the company has followed these norms based on the combined Balance sheet of the Company as merged with the Holding company from March 8, 2013 being the effective date of the merger as per the Order of the Hon''ble High Court of Delhi.

(39) The Board of Directors at their meeting held on April 27, 2012 had approved the Scheme of Arrangement involving the merger of Indiabulls Financial Services Limited (IBFSL, the Holding Company) with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 (the "Scheme of Arrangement"). The Appointed Date of the proposed merger fixed under the Scheme of Arrangement was April 1, 2012. The Hon''ble High Court of Delhi, vide its Order dated December 12, 2012, received by the Company on February 8, 2013, approved the Scheme of Arrangement (Order). In terms of the Court approved Scheme of Arrangement, with the filing of the copy of the Order, on March 8, 2013 with the office of ROC, NCT of Delhi & Haryana (the Effective Date), IBFSL, as a going concern, stands amalgamated with IBHFL with effect from the Appointed Date, being April 1, 2012 (Under the

Accounting Standard 14 - Pooling of interest method). Consequent to the Scheme of Arrangement becoming effective, the Board of Directors of the Company, at their meeting held on March 25, 2013, issued and allotted –

i) 312,511,167 Equity Shares of Rs. 2 each of the Company,

ii) 27,500,000 Warrants of the Company (against the listed warrants of IBFSL), and

iii) 20,700,000 Warrants of the Company (against the unlisted warrants of IBFSL held by certain promoter group entities and Key Management Personnel of IBFSL) to the Equity Shareholders / Warrants holders of IBFSL, against their holdings in such Equity Shares / Warrants, as on March 20, 2013 i.e. the record date fixed by IBFSL in this regard. The issue of Equity Shares / warrants by the Company was in terms of the share exchange ratio as mentioned in the Court approved Scheme of Arrangement. The Company is in the process of getting its Shares and Warrants (issued in lieu of listed warrants of IBFSL) listed with National Stock Exchange of India Limited and BSE Limited, for which the necessary applications are being finalised to be filed with the Stock Exchanges.

(2) The Company has complied with the NHB Directions, 2010 including Prudential Norms and as amended from time to time.

(3) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosures.


Mar 31, 2013

(1) Corporate Information:

The Board of Directors of Indiabulls Housing Finance Limited (100% subsidiary of "IBFSL") and Indiabulls Financial Services Limited ("IBFSL") at their meeting held on April 27, 2012 had approved the Scheme of Arrangement involving the reverse merger of IBFSL with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 (the "Scheme of Arrangement"). The Appointed Date of the proposed merger fixed under the Scheme of Arrangement was April 1, 2012. The

Hon''ble High Court of Delhi, vide its Order dated December 12, 2012, received by the Company on February 8, 2013, approved the Scheme of Arrangement. In terms of the Court approved Scheme of Arrangement, with the filing of the copy of the Order, on March 8, 2013, with the office of ROC, NCT of Delhi & Haryana (the Effective Date), IBFSL, as a going concern, stands amalgamated with IBHFL with effect from the Appointed Date, being April 1, 2012. Accordingly, Earnings Per Share and previous year figures are not comparable. Indiabulls Financial Services Limited ( "IBFSL") was incorporated on January 10, 2000 as a Private Limited Company. 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. The Company was converted into a public limited Company pursuant to Section 44 of the Companies Act, 1956 on February 03, 2004. Indiabulls Housing Finance Limited ("the Company") ("IBHFL") was incorporated on May 10, 2005. On December 28, 2005 the Company was registered under Section 29A of the National Housing Bank Act, 1987 to commence/ carry on the business of a Housing Finance Institution without accepting public deposits.

The Company is required to comply with provisions of the National Housing Bank Act, 1987, the Housing Finance Companies (NHB) Directions, 2010 and other guidelines / instructions / circulars issued by the National Housing Bank from time to time. The Company is engaged in the business to provide finance and to undertake all lending and finance to any person or persons, co-operative society, association of persons, body of individuals, companies, institutions, firms, builders, developers, contractors, tenants and others either at interest or without and/or with or without any security for construction, erection, building, repair, remodeling, development, improvement, purchase of houses, apartments, flats, bungalows, rooms, huts, townships and/or other buildings and real estate of all descriptions or convenience there on and to equip the same or part thereof with all or any amenities or conveniences, drainage facility, electric, telephonic, television, and other installations, either in total or part thereof and /or to purchase any free hold or lease hold lands, estate or interest in any property and such other activities as may be permitted under the Main Objects of the Memorandum of Association of the Company.

(2) Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate Affairs amending Accounting Standard 11 – The Effects of Changes in Foreign Exchange Rates, as notified by the Companies (Accounting Standards) Rules, 2006, as amended, the Company has exercised the option as per para 46A inserted in the said Standard for all long term monetary assets and liabilities. Consequently an amount of Rs. 27,523,476 representing translation difference on foreign currency loans is carried forward in the Foreign Currency Monetary Item Translation Difference Account as on March 31, 2013. This amount is to be amortised over the balance period of such monetary liabilities.

(3) In terms of Section 29C of the NHB Act, 1987, the Company is required to transfer at least 20% of its Profit after tax to a Reserve Fund before any dividend is declared. Such a Reserve Fund is also considered as an eligible transfer in terms of Section 36(1)(viii) of the Income Tax Act, 1961. The Company has transferred an amount of Rs. 2,455,813,911 (Previous Year Rs. 499,974,672) to the Reserve Fund as at the year end. Further an additional amount of Rs. 2,000,000,000 (Previous Year Rs. 1,980,000,000) has been set apart by way of transfer to Additional Reserve Fund in excess of the statutory minimum requirement as specified under Section 29C pursuant to Circular no. NHB(ND)/DRS/Pol-No. 03/2004-05 dated August 26, 2004 issued by the National Housing Bank. The additional amount so transferred may be utilised in the future for any business purpose.

(4) This pertains to reserve created under section 45-IC of the Reserve Bank of India Act 1934, by the Erstwhile Holding Company Indiabulls Financial Services Limited, which has been transferred to the Company under the Scheme of Arrangement.

(5) During the year, in addition to the charge of Rs. 547,181,041 (Previous Year Rs. 109,022,196) towards provision for loan assets and standard assets to the Statement of Profit and Loss, an amount of Rs. 1,320,200,000 (net of Deferred Tax of Rs. 679,800,000) [(Previous Year Rs. 190,447,091) (net of deferred tax of Rs. Nil)], being one time charge of provision for standard assets and other contingencies due to merger between the Company and the Erstwhile Holding Company (Refer note 39) and changes in the provisioning requirements by the National Housing Bank vide Circulars no. NHB.HFC.DIR.4/CMD/ 2012 dated January 19, 2012 has been transferred from Additional Reserve created as per Section 29C of the National Housing Bank Act, 1987 pursuant to Circular No. NHB(ND)/DRS/Pol- 03/2004-05 dated August 26, 2004 as under;

(5) In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the erstwhile Holding Company during the current financial year, upon receipt of Shareholders approval, has on June 9, 2012, issued and allotted an aggregate of 20,700,000 warrants, to certain Promoter group entities and Key Management Personnel, at a conversion price of Rs. 218 per Equity Share, 25% of which amounting to Rs. 1,128,150,000 has already been received by the Erstwhile Holding Company from the respective allottees as upfront amount. These warrants are convertible into an equivalent number of Equity Shares of face value Rs. 2 each, in the Company, upon receipt of balance conversion price, within a period of eighteen months from the date of allotment. In the event the warrants are not converted into shares within the said period, the Company is eligible to forfeit the amount received towards the warrants.(Refer Note 39)

(1) Contingent Liability not provided for in respect of:

(a) Contingent Liabilities not provided for in respect of Capital commitments for acquisition of fixed assets at various branches as at the year end (net of capital advances paid) Rs. 3,004,174,116 (Previous Year Rs.202,372 ).

(b) Demand pending u/s 143(3) of the Income Tax Act,1961 in relation to the merged company Indiabulls Financial Services Limited("IBFSL")

(i) For Rs. 2,414,210 with respect to FY 2007-08 against disallowance U/s 14A of the Income Tax

Act,1961, against which appeal is pending before ITAT. (ii) For Rs.17,807,253 with respect to FY 2009-10 against disallowance U/s 14A of the Income Tax Act,1961, against which appeal is pending before CIT ( Appeals)

(c) Demand pending u/s of 25, 55 , 56 & 61 of Rajasthan Sales Tax Act, 2003 in relation to the merged company IBFSL for Rs. 14,505,873 (Including interest & Penalty) with respect to FY 2007-08 to FY 2012-13 against which appeal is pending before DC( Appeals).The company has paid tax alongwith interest for Rs. 6,231,069 under protest.

(d) Arbitration award passed by the international arbitrator against IBFSL for Rs. 1,920,007,000 (Previous Year Rs. N.A.) for purchase of 42.50% stake in Indiabulls Finance Company Private Limited (IFCPL), which is disputed by the Company. The Company currently holds 57.50% Equity stake in IFCPL. (Refer

Note 2(2))

(e) Corporate counter guarantees outstanding in respect of securitisation/ assignment agreements entered by the Company with different assignees as at March 31,2013 is Rs.3,044,792,269 (Previous Year Rs.302,366,480) against which collateral deposit of Rs 172,908,806 (Previous Year Rs. 19,048,758) for the year ended March 31, 2013 is being provided to the assignees by the Company in the form of Fixed Deposit Receipts. 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.

(3) Segment Reporting:

Segment information for the year ended March 31, 2013, as per Accounting Standard (AS)-17 "Segment Reporting", as notified by the Companies (Accounting Standards) Rules, 2006, as amended. (a) Primary segment information (by business segments)

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 Company''s primary business segment is reflected based on principal business activities carried on by the Company. The Company''s primary business comprises of investing and financing 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, commission on insurance and other fee based activities.

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 (Refer Note 1) above.

(4) Disclosures in respect of Related Parties as per Accounting Standard (AS) - 18 ''Related Party Disclosures'' as notified by the Companies (Accounting Standards) Rules, 2006, as amended. Nature of relationship Related party

(a) Related party where control exists:

Holding Company Indiabulls Financial Services Limited

(upto March 31, 2012)(Refer Note. 39) Subsidiary Companies Indiabulls Asset Reconstruction Company Limited

(Associate upto January 10, 2013) (Subsidiary of Indiabulls Advisory Services Limited) Indiabulls Finance Company Private Limited Indiabulls Infrastructure Credit Limited Indiabulls Insurance Advisors Limited Indiabulls Life Insurance Company Limited Indiabulls Capital Services Limited Indiabulls Collection Agency Limited Ibulls Sales Limited Indiabulls Advisory Services Limited Nilgiri Financial Consultants Limited (Subsidiary of Indiabulls Insurance Advisors Limited) Indiabulls Asset Holding Company Limited Indiabulls Asset Management Company Limited Indiabulls Trustee Company Limited Indiabulls Holdings Limited Indiabulls Alternative Asset Management Private Limited (upto February 7, 2013) Indiabulls Venture Capital Management Company Limited (Subsidiary of Indiabulls Holdings Limited) Indiabulls Venture Capital Trustee Company Limited (Subsidiary of Indiabulls Holdings Limited)

Key Management Personnel Mr. Sameer Gehlaut, Chairman & Executive Director

Mr. Gagan Banga, CEO & Managing Director (Non Executive Chairman upto March 19, 2013) Mr. Ashwini Omprakash Kumar, Deputy Managing Director (Managing Director upto March 19, 2013) Mr. Sachin Chaudhary

(CEO-Executive Director upto March 19, 2013) Mr. Ajit Kumar Mittal, Executive Director (Non Executive Chairman upto March 19, 2013) Mr. Rajiv Rattan, Non -Executive Director Mr. Saurabh Kumar Mittal, Non -Executive Director

(5) Earnings Per Equity Share

Earnings Per Equity 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.

Dilutive potential Equity Shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The number of Equity Shares and potential diluted Equity Shares are adjusted for potential dilutive effect of Employee Stock Option Plan as appropriate. Potential dilutive Equity Shares on account of Share warrants are not adjusted being anti dilutive in nature.

(6) 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, 2013.

(7) As per the Housing Finance Companies (NHB) Directions 2010, non-performing assets are recognised on the basis of ninety days and above overdue of interest/installment. The Company has made the Provision for Loans and Other Credit Facilities in respect of Housing and Non-Housing Loans in terms of paragraph 28 of the Housing Finance Companies (NHB) Directions 2010 and NHB Notification No. NHB.HFC.DIR.3/CMD/2011 dated August 05, 2011 and NHB.HFC.DIR.4/CMD/2012 dated January 19, 2012. The same is disclosed in terms of paragraph 29(2) of the Housing Finance Companies (NHB) Directions, 2010 and NHB Circular No. NHB(ND)/DRS/Pol.No.41/2010-11 dated September 26, 2011.

Further the Company has made an additional provision as at March 31, 2013 of Rs. 822,349,495 (Previous Year Rs. 31,480,057)

The balance loan outstanding as at March 31, 2013 for sub-standard assets is Rs. 1,520,889,853 (Previous Year Rs. 119,971,406) out of which housing loan is Rs 233,697,149 (Previous Year Rs 23,110,915) and Non housing loan is Rs 1,288,192,704 (Previous Year Rs 96,860,491).

The balance loan outstanding as at March 31, 2013 for doubtful assets upto one year category is Rs. 929,664,370 (Previous Year Rs 69,090,578) out of which housing loan is Rs 13,578,721 (Previous Year Rs 19,224,515) and Non housing loan is Rs 916,085,649 (Previous Year Rs. 49,866,063).

The balance loan outstanding as at March 31, 2013 for doubtful assets one to three years category is Rs. 234,670,779 (Previous Year Rs. 203,382,674) out of which housing loan is Rs. 21,185,529 (Previous Year Rs 6,016,765) and Non housing loan is Rs 213,485,250 (Previous Year Rs.197,365,908).

The balance outstanding as at March 31, 2013 for doubtful assets more than three years category is Rs. 22,668,634 (Previous Year Rs. Nil) out of which housing loan is Rs Nil (Previous Year Rs Nil) and Non housing loan is Rs 22,688,634 (Previous Year Rs. Nil).

Provision for contingencies on standard assets and loan assets as on March 31, 2013 amounting to Rs. 4,591,598,678 (Previous Year Rs. 510,459,152) includes provisions for non-performing assets, standard assets and all other contingencies.

(8) 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 loan portfolio amounting to Rs. 56,291,685,659 (Previous Year Rs. 37,237,447,576) upto March 31, 2013, being the principal value outstanding as on the date of the deals that are outstanding as on the Balance Sheet date.

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 in Significant Accounting policies in Note 1 (v) above and residual income on these Loans is being recognised over the life of the underlying loans and not on an upfront basis.

(9) The Company being a HFC has to follow the concentration of Credit Norms as per the NHB guidelines. Post merger of Indiabulls Financial Services Limited (the holding company) with the Company , the company has followed these norms based on the combined Balance sheet of the Company as merged with the Holding company from March 8, 2013 being the effective date of the merger as per the Order of the Hon''ble High Court of Delhi.

(10) The Board of Directors at their meeting held on April 27, 2012 had approved the Scheme of Arrangement involving the merger of Indiabulls Financial Services Limited (IBFSL, the Holding Company) with the Company in terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 (the "Scheme of Arrangement"). The Appointed Date of the proposed merger fixed under the Scheme of Arrangement was April 1, 2012. The Hon''ble High Court of Delhi, vide its Order dated December 12, 2012, received by the Company on February 8, 2013, approved the Scheme of Arrangement (Order). In terms of the Court approved Scheme of Arrangement, with the filing of the copy of the Order, on March 8, 2013 with the office of ROC, NCT of Delhi & Haryana (the Effective Date), IBFSL, as a going concern, stands amalgamated with IBHFL with effect from the Appointed Date, being April 1, 2012 (Under the Accounting Standard 14 – Pooling of interest method). Consequent to the Scheme of Arrangement becoming effective, the Board of Directors of the Company, at their meeting held on March 25, 2013, issued and allotted -

i) 312,511,167 Equity Shares of Rs. 2 each of the Company,

ii) 27,500,000 Warrants of the Company (against the listed warrants of IBFSL), and

iii) 20,700,000 Warrants of the Company (against the unlisted warrants of IBFSL held by certain promoter group entities and Key Management Personnel of IBFSL) to the Equity Shareholders / Warrants holders of IBFSL, against their holdings in such Equity Shares / Warrants, as on March 20, 2013 i.e. the record date fixed by IBFSL in this regard. The issue of Equity Shares / warrants by the Company was in terms of the share exchange ratio as mentioned in the Court approved Scheme of Arrangement. The Company is in the process of getting its Shares and Warrants (issued in lieu of listed warrants of IBFSL) listed with National Stock Exchange of India Limited and BSE Limited, for which the necessary applications are being finalised to be filed with the Stock Exchanges.

(11) The Company has complied with the NHB Directions, 2010 including Prudential Norms and as amended from time to time.

(12) On account of merger as mentioned in Note No. 39, the Earnings Per Equity Share and the figures in respect of the current year are not comparable with the previous comparable year presented.

(13) Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosures.

 
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