Integrated Finance Company Ltd Directors Report

To the Members,

Your directors are pleased to present the Twenty-eighth Annual Report together with the Audited Accounts for the year ended 31^st March 2011.

		(Rs. in lakhs)
1. FINANCIAL RESULTS:	For the year ended 31.03.2011	For the year ended 31.03.2010
Gross Profit/Loss before Interest,
Depreciation and Tax	(813.59)	(215.16)
Interest	269.46	855.84
Profit /Loss before depreciation & Tax	(1083.05)	(1071.00)
Depreciation	6.95	7.89
Prior year adjustment	4.19	(0.33)
Profit before tax	349.93	(1079.22)
Provision for tax (FBT)	-	-
Profit/Loss after tax	349.93	(1079.22)
Amount brought forward from the previous year	(26442.34)	(25363.13)
Balance carried to Balance sheet	(26092.40)	(26442.34)

2. DIVIDEND

The Board of Directors has not recommended any dividend on Equity shares for this year.

3. MANAGEMENT DISCUSSIONS AND ANALYSIS:

Management Discussion and Analysis of financial condition and results of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given under.

All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, market, position, expenditures and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. Important factors that could influence the companys operations that include the recovery of all overdue, policies of regulatory authorities, changes in government regulation and other matters. The Financial Statements have been prepared in compliance with the requirements of the Companies Act, 1956. The management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgements used therein.

Performance of the Company:

Your Company has changed its business lines and worked out new organisation plans. Regarding the restructuring programme of the Company, the Division Bench of the Madras High Court on 30.04.2008 has allowed the appeals filed by RBI and others against the order of the Single Judge of Madras High Court favouring restructuring under Petition No. 160/2005. However, the Company has filed a Special leave petition in the Supreme Court, New Delhi on 09.05.2008 and the same was admitted and ordered notices to the RBI and others.

As already reported, your Company is negotiating with the Consortium of Banks. Many banks have shown keen interest for the OTS settlement of our Company and we are awaiting clearance of the restructuring package.

4. SUBSIDIARY COMPANIES:

In terms of the amendment made by the SEBI in their notifications SEBI/CFD/LA/2/2007/2614 DT 26.04.2007, the reports of the Board of Directors and Auditors, balance sheet and profit and loss account of the following subsidiaries have not been attached to the balance sheet of the Company. The Company believes that the consolidated annual accounts which form part of the Annual Report present a full and fair picture of the state of affairs. The company will make available the audited annual accounts and related details upon request by any member of the Company. These documents will also be available for inspection during the business hours at the registered office of the Company. The financial data of the subsidiaries have been furnished in the consolidated balance sheet forming part of the Annual Report.

a) INDUSTRIAL VENTURE CAPITAL LIMITED (IVCL)

The Company has reported a loss of Rs. 1255922/- after depreciation for the year. There were no fresh investments by the Company during the year. The Company is negotiating with the Companies in which investments were made for dis-investing its holdings. The Company continued to enjoy registration status with the Securities and Exchange Board of India (SEBI). The Companys entire earnings are exempt from Income tax as per the amended provisions of the Income Tax Act, 1961.

b) INTEGRATED STOCK BROKING SERVICES PVT LTD (ISBS)

The performance of the Company has declined during the year due to turmoil in the global market. The Company hopes that the market will improve at the earliest.

The total revenue earned during the year was Rs. 4883490/- while the net loss before depreciation stands at Rs. 799179/-. The Depository division reached its maximum possible llimit as per the SEBI norms, necessitating an additional investment in its capiatl by IFCL in March 2005. Application has been made for the enhancement of limit and is shortly expected. The primary market division which aims at providing all financial services under one roof also registered a loss due to turmoil in the global market.

FUTURE PROSPECTS

The Company has made arrangements to extend broking operations to more towns in Tamil Nadu, Andhra Pradesh and Karnataka with the hope of improvement in the present market conditions. On the basis of the progress in the trading of securities, the company is at the threshold of a turning point in business volumes and profit.

5. DEPOSITS/BONDS:

The Company has discontinued acceptance of fresh deposits including renewals with effect from 7^th December 2003. The interest rates offered by the Company on deposits and bonds are far above the current rates. This has resulted in higher cost of funds and has affected the liability of your company. To overcome with this situation, your Company has filed an application for restructuring under Section 391 of the Companies Act, 1956.

The Single Judge of the Hnble High Court, Madras has pronounced its order on 19.08.2006 to convert all deposits and bonds into 6% convertible debentures with a conversion into equity shares within 12 months from the date of issue. However, the Division Bench of the Madras High Court on 30.04.2008 has set aside the order of the Single Bench of Madras High Court and allowed the appeals filed by RBI and others. The Company has filed a Special leave Petition in the Supreme Court, New Delhi on 09.05.2008 against the order of the Division Bench of the Madras High Court and the same has been admitted and ordered notices to RBI and others.

6. PRUDENTIAL NORMS FOR NBFCs:

The Capital to Risk Assets Ration of your company stood at a negative as against the minimum of 12%. This trend will not be continued as the Company has filed an appeal in the Supreme Court, New Delhi against the order of the Division Bench of the Madras High Court setting aside the order of the Single Bench of Madras High Court. The Company is confident of winning the appeal in the Supreme Court which would result in the addition of Rs. 150 crores (apprx.) to net worth.

7. CORPORATE GOVERNANCE:

The Company has complied with the statutory provisions of Corporate Governance as prescribed under the Listing Agreement of the Stock Exchanges with which the Companys shares have been listed. A separate Report on Corporate Governance is enclosed as part of this Annual Report. A certificate as to compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

8. DIRECTORS:

Mr. D. G. Nayar retires by rotation and being eligible offers himself for re-appointment.

9. INFORMATION AS PER SECTION 217(1) (E) OF THE COMPANIES ACT, 1956:

The Company has no activity relating to conservation of energy or technology absorption.

10. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign Exchange Earnings: Rs. NIL	(Previous year Rs. NIL)
Foreign Exchange Outgo: Rs. NIL	(Previous year Rs. NIL)

11. PARTICULARS OF EMPLOYEES

There are no employees drawing salary in excess of the monetary ceiling prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 during the financial year 2010-11

12. AUDITORS:

M/s. Brahmayya & Co., Chartered Accountants, Chennai retire at the ensuing Annual general Meeting and being eligible offers themselves for re-appointment.

13. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956:

The Directors, to best of their knowledge and belief, confirm that:

1. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure.

2. that the selected accounting policies were applied consistently and the directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March 2011 and of the Profit of the company for the year ended on that date.

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. that the annual accounts have been prepared on a going concern basis.

14. ACKNOWLEDGEMENTS:

The Board of Directors place on records its appreciation for the assistance and co-operation received from the Financial Institutes, Banks, Government Authorities, Vendors, members, bondholders and depositiors during the year under review. The Board also places on record its gratitude to the employees at all levels for their commitment and dedicated efforts.

Place: Chennai	By Order of the Board
Date : 01.10.2011	GEORGE KURUVILLA
	Managing Director