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Directors’ Report
The Members
HDB Financial Services Limited
Your Directors have pleasure in presenting the Second Annual Report on the business and operations of your
Company together with the Audited Accounts for the Financial Year i.e.1st April, 2008 to 31st March 2009.
Financial Performance
(Rs. In Lakhs)
Particulars 2008-09 2007-08

(June -07 to
March-08)
Total Income 2354.35 48.22
Total Expenditure 3133.40 404.85
Profit/(Loss) before Depreciation & Tax (779.06) (356.63)
Less: Depreciation 139.97 2.71
Profit before Tax (919.02) (359.34)
Provision for Taxation 9.25 0.33
Profit / (Loss) after Taxation (928.27) (359.67)
The Company has posted total income of Rs. 2354.35 lakhs in the year 2008-09 as against Rs. 48.22 lakhs in 2007-
08 and net loss of Rs.928.27 lakhs during the second financial year ended 31st March, 2009 as against Rs. 359.67
lakhs in 2007-08.
Dividend
In view of the loss incurred in the period under review, your directors do not recommend any dividend.
Operations
During the year under review disbursements amounted to Rs 151 crores. The company expanded its distribution
network to 25 cities. The company expanded its product portfolio to Personal Loans, Loans against Property, Auto
refinance Loans and Loans against securities.
To service the Lending business, the company has its Data center hosted in Bangalore and a full-fledged central
processing unit in Hyderabad.
The company also expanded its services business during the year. The company has Six fully operational call
centers across the country with a capacity of 990 seats. The company also tied up with HDFC Standard Life
Insurance Company to distribute Life insurance through a corporate agency arrangement.
Fixed Deposits
The Company is a non deposit taking company (NBFC-ND-SI). The Company had not accepted any Fixed Deposit
during the period under review.
Increase in paid up Share Capital
During the period under review, the Company has allotted 65000 equity shares.
Credit Rating
The Credit Analysis & Research Limited (CARE) had assigned ‘CARE AA+ (Double A Plus) rating to the bank loan
borrowing programme of the Company aggregating to Rs.160 crores.
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Directors’ Report
Statutory Disclosures
1. The information required under Section 217(2A) of the Companies Act, 1956 (“the Act”) and the rules made
there under are given in the Annexure I appended hereto and forms part of this report.
2. The provisions of Section 217(1)(e) of the Act relating to conservation of energy and technology absorption do
not apply to your Company as it is not a manufacturing company.
3. The Company had no foreign exchange inflow and outgo for the period under review.
RBI Guidelines
The Company has complied with all the applicable regulations of the Reserve Bank of India.
Capital Adequacy
The Company’s capital adequacy ratio was at 57% as against the minimum regulatory requirement of 12% for non-
deposit accepting NBFCs.
Human Resources
People are a key element of your Company’s strategy to drive growth and organization competitiveness. The company
focused on talent acquisition during the year in line with its business plans. The company lays strong emphasis on
induction training as well as refresher programs for its frontline staff. As on date, the Company is a having total
strength of 1796 employees. Your Directors wish to place on record their appreciation of the contribution made by the
employees at all levels.
Directors Responsibility Statement
The Board of Directors hereby state that:
1. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures.
2. We have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end
of the financial year and of the profit and loss of the company for that period.
3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud
and other irregularities.
4. The annual accounts have been prepared on a going concern basis.

Directors
The Board at its meeting held on 13th January, 2009 appointed Mr. Kaizad Bharucha as an Additional Director of the
Company. As per the provisions of Section 260 of the Act, Mr. Bharucha will hold office till the conclusion of ensuing
Annual General Meeting of the Company. The Company has received notices in writing under Section 257 of the Act,
proposing candidatures of Mr. Bharucha for the office of Director of the Company.
Mr. Vinod Yennemadi will retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.
Auditors
M/s. Haribhakti & Co., Chartered Accountants were appointed as Statutory Auditors of the Company who hold office
until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Your Directors
recommend their re-appointment.
Employees Stock Option Scheme (ESOS)
On recommendation of Compensation Committee of your company, the Company has granted 265,000 stock options
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Directors’ Report
to eligible employees of the Company during the year under review. A detailed note on this subject is placed in the
notes forming part of accounts at point no.15.
Management Discussions and Analysis Report
A detailed discussion on the Company’s operations is presented in Management Discussions and Analysis Report
which forms part of this Annual Report.
Corporate Governance Report
A report on Corporate Governance is set in the Annexure forming part of this report.
Acknowledgement
The Directors of the Company wish to convey their gratitude to the Company’s Auditors, Customers, Bankers and
Shareholders for their valued support and look forward to their continued contribution in the progress of the Company.
By order of the Board
Vinod Yennemadi
Chairman
April 15, 2009
Regd. Office:
HDFC Bank House, Final Plot No. 287,
Ellisbridge Township Scheme No. 3,
Navrangpura, Ahmedabad - 380 009.
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Management Discussions & Analysis Report
Macro Economic Environment
The global economic outlook deteriorated sharply over the last year or so with all the advanced economies – the
United States, Europe and Japan - having firmly gone into recession.
India too has been impacted by the crisis. There is clear evidence of economic activity slowing down i.e. demand for
the goods dampened, GDP growth has declined, the services sector is slowing, exports have declined, the demand
for bank credit is slackening despite comfortable liquidity in the system etc. Despite the adverse situation prevailing
in the world, the Indian economy has sustained and looks to come out of the situation faster than the world. India’s
financial markets have shown admirable resilience notwithstanding the severity and multiplicity of global events, as
India’s financial system is healthy, well capitalized and prudently regulated. As a large majority of Indians do not
participate in equity and asset market, the negative impact of the wealth loss effect plaguing the advanced economies
should be quite muted. India’s consumption demand is expected to hold up well.
Industry Structure and Developments
The current situation prevailing in India and world has its effect on Indian Financial Sector and Non-Banking Financial
Companies in particular. NBFCs which depended heavily on money markets for funding requirements were impacted
due to freezing of credit facilities. However, various measures taken by the Government should ease the financing
constraints of NBFCs.
Opportunities
Domestic consumption continues to drive growth. India is expected to be least impacted due to the global slowdown
due to its diverse economic base and favourable demographics. The Company has focused on direct to consumer
lending, innovative structuring of credit solutions, strong processes and prudent risk management. The company
follows a micro market approach to geographic segmentation of markets.
The company plans to expand its product portfolio by adding General Insurance services and Investment / Savings
Products such as sale of Mutual funds to its portfolio.
Threats
Irrational pricing, lenient credit norms in the past have led to increase in Non-performing assets across the retail
lending space.
The markets will continue to mature leading to rising expectation from consumers and your Company’s growth will
depend on its ability to differentiate its products / services to compete effectively.
Growth of the company’s asset book, quality of assets and ability to raise funds depends significantly on the
economy. Unfavourable events in the Indian economy can affect consumer sentiment. Changes in Government
policy, regulatory framework could impact the company’s operations.
Operations
Products and Services
Retail lending, besides individuals, also addresses requirements of businesses whose borrowing needs are akin to
individual borrowers. Thus, requirements of small and micro enterprises that are too small to be serviced by corporate
Lending Institutions are also well serviced by Retail Lenders.
The segments being addressed are typically underserviced by the larger commercial banks thus creating a profitable
niche for the Company to address.
The Company has launched the following products and services:
l Loans – The Company offers a range of Loans in the Unsecured and Secured Loans space that fulfill the
financial needs of its target Segment.
l Insurance Services – The Company is a corporate agent for HDFC Standard Life Insurance Company Limited.
The Company sells Insurance bundled with its Loan as a value-add as well as a standalone product.
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Management Discussions & Analysis Report
l Collection Services – The Company has a contract with HDFC Bank for collection services. The Company has
set up call centres across the country with a capacity of over 990 seats to meet current business requirements.
Infrastructure
The Company has established branches across various locations, thus creating the right distribution network to sell
company’s Products and Services. The Company has six collection centre and has established Data Centre at
Bangalore and centralized operations at Hyderabad.
Internal Control Systems
In the opinion of the Management, the Company has adequate systems and procedures to provide assurance of
recording transactions in all material respects.
The Company has appointed M/s K S Aiyar & Co., Chartered Accountants, to conduct an internal audit and such
audit reports envisages all areas and the reports were placed before the Audit Committee of the Board.
Outlook
Despite the global economic uncertainties, India continues to be a strong growth story due to favorable demographics,
Innovative culture and strong Institutions.
The markets will continue to grow and mature leading to differentiation of products and services. Each financial
intermediary will have to find his niche in order to add value to consumers. The company continues to be optimistic
in its outlook for the year 2009-10.
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1. Company’s philosophy on code of Governance
The Company’s philosophy of Corporate Governance is aimed at assisting the management of the Company
in the efficient conduct of its business and meeting its obligations to stakeholders and is guided by a strong
emphasis on transparency, accountability and integrity.
2. Board of Directors
i. Composition and size of the Board
The present strength of Board of Directors is Five Directors. The Board comprises of Non-Executive
Directors. The Non-Executive Directors bring independent judgment in the Board’s deliberations and
decisions.
The Directors of the Company have wide experience in the field of finance, banking and broking.
ii. Board Meetings & Attendance
Five Board meetings were held during the year 2008-09. The dates on which meetings were held and
Directors attendance is given as below:
Board Mr. Vinod Mr. G. Mr. Pralay Mr. Aseem Mr. Kaizad
meeting Yennemadi Subramanian Mondal Dhru Bharucha
date (w.e.f. 13/01/2009)
12/04/2008 Y Y Y Y -
20/06/2008 Y Y Y Y -
01/07/2008 Y Y Y Y -
18/11/2008 Y Y Y Y -
13/01/2009 Y Y Y Y Y
No sitting fees were paid to any of the Directors of the Company.
iii. Directors with materially significant related party transactions, pecuniary or business relationship with
the Company.
There have been no materially significant related party transactions, pecuniary transactions or relationships
between the Company and its Directors that may have potential conflict with the interest of the Company
at large.
iv. Details of Directors appointment/re-appointment
As per the Companies Act, 1956 and the Articles of Association of the Company, two third of the
Directors are liable to retire by rotation. One third of these retiring Directors are required to retire every
year by rotation and if eligible, these Directors qualify for reappointment.
At present, the Board of Directors of the Company consists of following directors:
Sr. No. Name of Director Date of appointment at General Meeting
1 Mr. Vinod Yennemadi 31/12/2007
2 Mr. G. Subramanian 25/06/2008
3 Mr. Pralay Mondal 25/06/2008
4 Mr. Aseem Dhru 25/06/2008
5 Mr. Kaizad Bharucha Forthcoming AGM
Two-third i.e. Three (3) out of the Five (5) rotational Director of the Company shall be persons whose
period of office is liable to determination by retirement by rotation. Out of Three (3) Directors as mentioned
above, one-third i.e. One (1) Director will retire at the ensuing Annual General Meeting of the Company.
Since, Mr. Vinod Yennemadi was longest in office, he is liable to retire at the ensuing Annual General
Meeting of the Company and is eligible to be reappointed.
The Board at its meeting held on 13th January, 2009 appointed Mr. Kaizad Bharucha as an Additional
Director of the Company. As per the provisions of Section 260 of the Companies Act, 1956, Mr. Bharucha
will hold office till the conclusion of ensuing Annual General Meeting of the Company. The Company has
received notices in writing under Section 257 of the Act, proposing candidatures of Mr. Bharucha for the
office of Director of the Company.
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3. Committees of the Board
The Brief particulars of various committees of the Board, name of members, attendance and scope of the
Committees are given as below:
List of Audit Committee Members
Sr. Name of Director Position Number of Scope

No. meetings attended
• review and approve the Company’s audit
1 Mr. Vinod Yennemadi Chairman 2 out of 3 policies, procedures and techniques,
and monitor the implementation thereof;
• review the state and effectiveness of the
2 Mr. Pralay Mondal Member 3 out of 3 financial reporting systems and control
procedures relating to all significant
operational risks within the Company;
• monitor compliance with RBI guidelines/
3 Mr. G. Subramanian Member 3 out of 3 instructions as may be applicable to
NBFC-ND.
List of Risk Committee Members

1 Mr. Vinod Yennemadi Chairman 1 out of 1 • approve and monitor the Company’s risk
management policies and procedures;
2 Mr. Pralay Mondal Member 1 out of 1 • approve and review the dealing
authorities / limits for the Company’s
various operations keeping in view the
3 Mr. Aseem Dhru Member 1 out of 1
Company’s policies and regulatory
(up to 13/01/2009)
requirements; and
• review the Company’s risk management
4 Mr. Kaizad Bharucha Member -
system and risk reporting procedures.
(w.e.f. 13/01/2009)
List of Nomination Committee Members

1 Mr. Vinod Yennemadi Chairman 1 out of 1 • adopt the criteria for identifying ‘Fit &
Proper’ persons for recommending their
appointment as independent / non-
2 Mr. Pralay Mondal Member 1 out of 1 executive directors on such as
competence of the candidates Board as
3 Mr. C.N. Ram Member - assessed in terms of formal
(up to 12/04/2008) qualification, previous experience
andtrack record and integrity.
4 Mr. G. Subramanian Member -
(w.e.f.13/01/2009)
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List of Compensation Committee Members

• review the overall compensation structure
1 Mr. Vinod Yennemadi Chairman 1 out of 1 and policies with a view to retain and
motivate the company’s employees.
2 Mr. Pralay Mondal Member 1 out of 1 • review the company’s positioning in the
industry in relation to compensation levels,
through compensation surveys etc.
3 Mr. C.N. Ram Member - • consider giving stock options to the
(up to 12/04/2008) employees in the form of equity shares
of the company.
4 Mr. Aseem Dhru Member - • consider any other compensation related
(w.e.f.13/01/2009) issues or matters relating to the
company’s employees.
4. General Body Meetings (Since Incorporation)

Meeting Date & Time Venue Resolutions passed
th
Statutory 3:00 p.m. 5 Floor, HDFC Bank House, Nil
Meeting December Senapati Bapat Marg,
4, 2007 Lower Parel (West),
Mumbai 400 013.
EGM 4:30 p.m. 5th Floor, HDFC Bank House, i. Appointment of Mr. Vinod Yennemadi as
December Senapati Bapat Marg, Director
31, 2007 Lower Parel (West), ii. Appointment of Mr. G. Subramanian as
Mumbai 400 013. Director
iii. Appointment of Mr. C.N. Ram as Director
iv. Appointment of Mr. Vinod Yennemadi as
part-time Chairman for a period of 5 years.
v. Issue of shares under Employee Stock
Option Scheme (ESOS).
AGM 3.00 p.m. HDFC Bank House, 3rd Floor, i. Audited Results as on 31/03/2008
June 25, 2008 Final Plot No.287,Ellisbridge ii. Appointment of M/s. Haribhakti & Co.,
Township Scheme No.3, Chartered Accountants as Statutory Auditor
Navrangpura, iii. Reappointment of Mr. G.Subramanian as
Ahmedabad-380009. Director
iv. Appointment of Mr. Pralay Mondal as
Director
v. Appointment of Mr. Aseem Dhru as Director
EGM 4.00 p.m. 5th Floor, HDFC Bank House, i. Amendment to the Object clause of
July 25, 2008 Senapati Bapat Marg, Memorandum of Association
Lower Parel (West), ii. Commencement of new business
Mumbai 400 013.
EGM 11.00 a.m. 5th Floor, HDFC Bank House, i. Borrowing in excess of Paid-up capital and
February 9, Senapati Bapat Marg, free reserves
2009 Lower Parel (West), ii. Appointment of Mr. Haren Parekh as
Mumbai 400 013. Manager
5. Shareholding pattern as at 31.03.2009
Name of Shareholders Shares held Percentage
HDFC Bank Ltd 10,00,00,000 95.23
Others 50,07,000 4.77
Total (Issued & Paid-up Shares) 10,50,07,000 100
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Auditors’ Report
To the members of HDB Financial Services Limited
1. We have audited the attached Balance Sheet of HDB Financial Services Limited as at 31st March 2009 and
also the Profit and Loss Account and the cash flow statement for the period ended on that date, annexed
thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors’ Report) Order, 2003, as amended, issued by the Central Government
of India in terms of Section 227 (4A) of the Companies Act 1956, and on the basis of such checks of the books
and records as we considered appropriate and according to the information and explanations given to us, we
annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent
applicable to the Company.
4. Further to our comments in the Annexure referred to above, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this
report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
(e) On the basis of the written representations received from the directors of the Company as on 31st March,
2009, and taken on record by the Board of Directors of the Company, we report that none of the directors
is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Companies Act, 1956.
(f) In our opinion and to the best of our information and according to the explanations given to us, the said
financial statements together with the accounting policies and notes thereon and attached thereto give
the information required by the Companies Act, 1956 in the manner so required, and give a true and fair
view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009 and
(ii) in the case of the Profit and Loss Account, of the loss of the Company for the period ended on that
date.
(iii) in the case of cash flow statement, of the cash flows for the period ended on that date.
For Haribhakti & Co.,

Chartered Accountants
____________________
Manoj Daga
Place: Mumbai Partner
Date: April 15, 2009 Membership No.48523
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Auditors’ Report
The annexure referred to in Paragraph 4 of the Auditors’ Report of even date to the members of HDB Financial
Services Limited (the Company) on the accounts for the period ended 31st March 2009. We report that:
1. The Company has maintained proper records showing full particulars including quantitative details and situation
of fixed assets held for own use.
2. We have been informed that, the company has a regular programme of verification of all the fixed assets which,
in our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets and no
material discrepancies were noticed on such verification as compared to book records.
3. Based on the information and explanations given by the management and on the basis of audit procedures
performed by us, we are of the opinion that the Company has not disposed off substantial part of its fixed assets
during the year.
4. As the Company does not hold any item of inventory defined in AS 2, the relevant clauses are not applicable.
5. According to the information and explanations provided to us by the management, the Company has not
granted and/or taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
6. In our opinion and according to the information and explanations given to us, there is an adequate internal
control system commensurate with the size of the Company and the nature of its business for the purchase of
fixed assets. Further, on the basis of our examination, and according to the information and explanations given
to us, we have not observed any instances of major weaknesses in the aforesaid internal control system.
7. a. According to the information and explanations given to us, we are of the opinion that the transactions that
need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been
so entered.
b. According to the information and explanations given to us, the transactions made in pursuance of contracts
or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 are
not exceeding the value of rupees five lakhs in respect of any party during the year.
8. According to the information and explanations provided to us, the Company has not accepted any deposit from
the “public” attracting the directives issued by the Reserve Bank of India and the provisions of sections 58A and
58AA of the Companies Act, 1956 or any other relevant provisions and the rules framed there under.
9. The company is registered under Non Banking Financial (Non–Deposit taking or Holding) company, holding
certificate of registration No. 01-00477 dated 31st December, 2007 issued by Reserve Bank of India
u/s. 45-IA of the Reserve Bank of India Act, 1934. According to the information and explanations provided to us,
a. The Board of Directors has passed a resolution for the non-acceptance of any public deposits.
b. The Company has not accepted any deposit from the “public” attracting the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA of the Companies Act, 1956 or any
other relevant provisions and the rules framed there under.
c. The Company has complied with the prudential norms relating to income recognition, accounting
standards, asset classification and provisioning for bad and doubtful debts as applicable to it in terms of
Non Banking Financial [Non Deposit Accepting or Holding Companies Prudential Norms (Reserve Bank)
Directions, 2008]
d. The capital adequacy ratio is in compliance with the minimum CRAR prescribed by Reserve Bank of
India.
10. In our opinion, the company has an internal audit system commensurate with the size and nature of business.
11. According to the books and records of the Company as produced and examined by us and according to the
information and explanations provided to us, the Company is regular in depositing undisputed statutory dues
with the appropriate authorities.
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Auditors’ Report
12. According to the information and explanations provided to us, no undisputed amounts payable in respect
Income Tax, Cess and any other statutory dues were outstanding as at 31st March, 2009 for a period of more
than six months from the date they became payable.
13. According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom
Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute.
14. In our opinion and according to the information and explanations given to us, the company has not defaulted in
repayment of dues to a bank.
15. We are of the opinion that the company has maintained adequate records where the company has granted
loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
16. According to the information and explanations provided to us, the Company has not given any guarantee for
loan taken by others from banks or financial institutions.
17. In our opinion, the term loans have been applied for the purpose for which they were raised.
18. According to the information and explanations given to us and on an overall examination of the balance sheet of
the company, we report that no funds raised on short term basis have been used to finance long term investment
and no long term funds have been used to finance short term assets.
19. According to the information and explanations given to us, the company has not made any preferential allotment
of shares to parties and companies covered in the register maintained under section 301 of the Act.
20. Based upon the audit procedures performed and the information and explanations provided to us by the
management, we report that no fraud on or by the Company has been noticed or reported during the course of
our audit.
21. The Clauses viii, x, xiii, xiv, xix, xx of the Order are not applicable to the Company and hence the same are not
reported upon.
For Haribhakti & Co.,

Chartered Accountants
____________________
Manoj Daga
Place: Mumbai Partner
Date: April 15, 2009 Membership No.48523
13
Balance Sheet
as at March 31, 2009
Schedule As at As at As at As at
March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008
Amount in Rs. Amount in Rs. Amount in Rs. Amount in Rs.
Sources of Funds :
Shareholders Fund
Share Capital 1 1,050,070,000 1,049,420,000
Loan Fund
Secured Loans 2 900,000,000 -
Total Funds 1,950,070,000 1,049,420,000
Application of Funds :
Fixed Assets 3
Gross Block 99,550,843 28,768,860
Less: Accumulated
Depreciation 14,268,652 271,798
Net Block 85,282,191 28,497,062
Capital Advances 1,445,709 -
Current Assets, Loans
and Advances
Interest Accrued but not
Due 126,028 2,533,433
Receivables under
Financing Activity 4 1,443,255,027 -
Cash & Bank Balances 5 350,055,663 979,888,538
Sundry Debtors 6 48,048,180 -
Loans & Advances 7 30,547,180 27,176,117
1,872,032,078 1,009,598,088
Less: Current Liabilities
and Provisions
Current Liabilities 8 133,111,200 24,232,136
Provisions 9 4,373,275 410,150
137,484,475 24,642,286
Net Current Asset 1,734,547,603 984,955,802
Profit & Loss A/c 128,794,497 35,967,136
Total Assets (Net) 1,950,070,000 1,049,420,000
Accounting Policies and
Notes to Accounts 11
The Schedules referred to above and Notes to Accounts form an integral part of the Balance sheet
As per our report of even date
For Haribhakti & Co. For and on behalf of the Board.
Chartered Accountants Vinod Yennemadi
Manoj Daga Chairman
Partner Pralay Mondal
Membership No.48523 Director
Place: Mumbai Haren Parekh
April 15, 2009 Finance Controller
14
Profit and Loss Account
for the period ended March 31, 2009
Schedule For the For the For the For the

year ended year ended period ended period ended
Income
Interest Income 116,406,313 4,822,976
Other Financial Charges 31,773,917 -
Fee Based Income 85,749,785 -
Profit on Sale
of Investments 1,505,117
Total Income 235,435,132 4,822,976
Expenditure
Financial Charges 7,894,370 -
Administrative &
Other expenses 10 305,375,705 19,714,732
Depreciation 13,996,854 271,798
Provisions & write offs 70,564 -
Preliminary expense W/off - 20,770,582
Total Expenditure 327,337,493 40,757,112
Profit/(Loss) Before tax (91,902,361) (35,934,136)
Provision for taxation
Fringe Benefit Tax 925,000 33,000
Profit/(Loss) After Taxation - (92,827,361) - (35,967,136)
Balance B/F from
Previous period (35,967,136) - 0
Balance Carried to
Balance Sheet (128,794,497 ) - (35,967,136)
Earning Per Share (Rs.)
Basic Earning per Share
(annualized) (Rs.) (0.88) (6.42)
Diluted Earning per Share
(annualized) (Rs.) (0.88) (6.42)
Face Value Per Share (Rs.) 10 10
Accounting Policies and
Notes to Accounts 11
The Schedules referred to above and Notes to Accounts form an integral part of the Profit and Loss Account
As per our report of even date
For and on behalf of the Board.
For Haribhakti & Co.
Chartered Accountants Vinod Yennemadi
Chairman
Manoj Daga
Partner Pralay Mondal
Membership No.48523 Director
Place: Mumbai Haren Parekh
April 15, 2009 Finance Controller
15
Schedules to the Accounts as at March 31, 2009
Schedule - 1
Share capital
Authorised
1,000,000,000 Equity Shares

of Rs.10/- each 10,000,000,000 10,000,000,000
Issued, Subscribed and Paid up
105,007,000 Equity Shares

of Rs.10/- each fully paid up 1,050,070,000 1,049,420,000
(Of the above 100,000,000

Fully paid shares are held by
HDFC Bank Ltd.
”The Holding Company”)
Schedule - 2
Secured Loan (Secured against

Receivables of the company)
Term Loan from Banks 900,000,000 900,000,000 - -
(Repayble during the next year

30 crores, Previous year NIL)
Schedule - 3
Fixed Asset (Amount In Rs.)
Particulars Gross Block Depreciation Net Block
As at Adjust- Additions As at As at Adjust- Additions As at As at As at

April 1, ment for the March 31, April 1, ment for the March 31, March 31 March 31
2008 year 2009 2008 year 2009 2009 2008
Software 11,854,382 9,888 11,469,447 23,333,717 146,227 7 4,283,970 4,430,204 18,903,513 11,718,036
Computers & Hardware 16,591,828 - 1,316,140 17,907,968 117,383 - 2,832,559 2,949,942 14,958,026 16,474,445
Furniture & Fixtures - - 20,411,251 20,411,251 - - 3,969,017 3,969,017 16,442,234 -
Leasehold Improvements 93,338 - 22,081,791 22,175,129 2,098 - 1,423,946 1,426,044 20,749,085 91,240
Office Equipment 219,424 - 15,503,354 15,722,778 6,083 - 1,487,362 1,493,445 14,229,333 213,341
Total 28,758,972 9,888 70,781,983 99,550,843 271,791 7 13,996,854 14,268,652 85,282,191 28,497,062
There is no Sale of fixed asset during the current year and previous year
16
Schedule - 4
Receivables under Financing Activity
Secured
Loans against Immovable Property 615,434,975 -
Other Secured Loans 6,960,230 622,395,205 - -
Unsecured
Loans 820,957,831 -
Less: Provisions against
doubtful loans (98,009) 820,859,822 - -
Total 1,443,255,027 -
Schedule - 5
Cash and Balances with
Scheduled Bank
In Current Account - 38,293,691
Cash in Hand 55,663 -
In Fixed Deposits 350,000,000 350,055,663 941,594,847 979,888,538
Schedule - 6
Sundry Debtors (Considered Good)
More than Six Months - -
Others 48,048,180 48,048,180 - -
Schedule - 7
Loans & Advances (Unsecured
Considered good)
Deposits 17,381,879 26,000,000
Advances Recoverable in Cash or in kind 2,437,273 164,306
Advance payment against taxes 10,728,028 30,547,180 1,011,811 27,176,117
Schedule - 8
Current Liabilities
In Current Account with Bank
(overdrawn balances) 79,589,148 -
Sundry Creditors 49,697,631 20,558,025
Other liabilities 3,824,421 133,111,200 3,674,111 24,232,136
Schedule - 9
Provisions
Provisions for Fringe Benefit Tax 958,000 33,000
Provisions for Gratuity 641,433 47,574
Provisions for Compensated Absences 2,773,842 4,373,275 329,576 410,150
17
Schedule - 10 For the For the
year ended year ended
March 31, 2009 March 31, 2008
Amount in Rs. Amount in Rs.
Administrative and other expences

1) Payments to & provision for employees
Salaries 170,430,734 13,348,328
Managerial Remuneration 851,905 -
Staff welfare & Employee benefit expenses 4,781,287 345,223
Contribution to Employee benefit funds & other related expenses 13,030,487 164,895
(Refer note on Managerial Remuneration)
Sub Total 189,094,413 13,858,446
2) Other expences
Rent 33,870,246 2,728,939
Rates & Taxes 79,247 3,550
Legal & Professional Fees 7,688,987 900,000
Travelling & Conveyence 4,609,646 413,137
Telephone 7,010,200 73,557
Printing & Stationary 2,599,656 13,177
Postage & Courier Charges 733,908 510
Equipment Hire Charges 4,887,063 887,279
Recruitment Expenses 3,533,312 26,021
Computer Expenses 23,614,856 3,933
Lease Car Rental & Petrol Expenses 1,881,797 160,371
Power & Fuel 5,436,842 -
Office Expenses 4,814,416 386,852
Repairs & Maintainance 1,653,441 -
Sales Promotion Expense 1,607,959 -
Stamp Duty 1,150,455 -
Credit Report Charges 7,831,434 -
Audit Fees 350,000 112,360
Insurance 93,792 -
Commision & Brokerage 2,834,035 146,600
Sub Total 116,281,292 5,856,286
Total (1+2) 305,375,705 19,714,732
18
Schedule - 11
Notes on Accounts
1. Overview:
HDB Financial Services Ltd. (“the company”), incorporated in Ahmedabad, India is a non deposit taking NBFC
engaged in the business of financing. The company is governed by the Companies Act, 1956 (“the Act”).
2. Basis of preparation:
The financial statements have been prepared in accordance with statutory requirements and to comply with
the accounting standards notified by Companies Accounting Standards Rules, 2006 and relevant provisions of
Act. The accounting and reporting policies of HDB Financial Services Ltd used in the preparation of these
financial statements conform to Generally Accepted Accounting Principles in India (“Indian GAAP”), the guidelines
issued by Reserve Bank of India (“RBI”) from time to time and practices generally prevalent in the industry in
India. The company follows the accrual method of accounting, except where otherwise stated and the historical
cost convention.
3. Use of Estimates:
The preparation of financial statements requires the Management to make estimates and assumptions considered
in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial
statements and the reported income and expense for the reporting period. Management believes that the
estimates used in the preparation of the financial statements are prudent and reasonable. Future results could
differ from these estimates.
4. Significant Accounting Policies:
i. Advances
Advances are classified as performing and non-performing based on the Reserve Bank of India guidelines.
Interest on non-performing advances is transferred to an interest in suspense account and not recognized
in the profit and loss account until received. Advances are net of provision on debts and interest in
suspense.
ii. Fixed Assets and Depreciation
Fixed assets are stated at cost less accumulated depreciation. Cost includes cost of purchase and all
expenditure like site preparation, installation costs and professional fees incurred on the asset before it
is ready to use. Subsequent expenditure incurred on assets put to use is capitalized only when it
increases the future benefit/ functioning capability from/of such assets.
Depreciation is charged over the estimated useful life of the fixed asset on a straight-line basis. The
rates of depreciation for certain key fixed assets used in arriving at the charge for the year are:
• Improvements to lease hold premises are charged off over the primary period of lease.
• Office equipment at 16.21% per annum.
• Computers at 16.21% per annum.
• Software and System development expenditure at 20.00% per annum.
• Items costing less than Rs 5,000/- are fully depreciated in the year of purchase.
• All other assets are depreciated as per the rates specified in Schedule XIV of the Companies Act,
1956.
For assets purchased and sold during the year, depreciation is being provided on pro rata basis by the
Company.
iii. Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may
be impaired. Impairment loss, if any, is provided in the profit and loss account to the extent the carrying
amount of assets exceeds their estimated recoverable amount.
19
iv. Investments
Investments which are long term in nature are stated at cost. Provisions are made only in case of
permanent diminution in the value of Investment.
Current investments are valued at lower of cost and Net Realisable Value.
v. Employee Benefits
a) Gratuity
The Company provides for gratuity to all employees. The benefit is in the form of lump sum
payments to vested employees on resignation, retirement, on death while in employment or on
termination of employment of an amount equivalent to 15 days basic salary payable for each
completed year of service. Vesting occurs upon completion of five years of service. The Company
makes annual contributions to funds administered by trustees and managed by insurance
companies for amounts notified by the said insurance companies. The Company accounts for
the liability for future gratuity benefits based on an independent external actuarial valuation carried
out annually as at the balance sheet date.
b) Provident fund
In accordance with law, all employees of the Company are entitled to receive benefits under the
provident fund. The Company contributes an amount, on a monthly basis, at a determined rate
(currently 12% of employee’s basic salary). Of this, the Company contributes an amount
(employee’s basic salary upto a maximum level of Rs 6,500/- per month) to the Pension Scheme
administered by the Regional Provident Fund Commissioner (RPFC) and the Company has no
liability for future provident fund benefits other than its annual contribution.
c) Compensated Absences
The Company does not have a policy of encashing unavailed leave for its employees. The Company
provides for compensated absences in accordance with AS 15 (revised 2005) Employee Benefits.
The provision is based on an independent external actuarial valuation at the balance sheet date.
vi. Lease accounting
Lease payments for assets taken on operating lease are recognized in the profit and loss account over
the lease term in accordance with the (AS) 19, Leases, issued by the Institute of Chartered Accountants
of India.
vii. Income Recognition
• Interest income is recognized in the profit or loss account on an accrual basis. Income including
interest / discount or any other charges on Non-Performing Assets (NPA) is recognized only
when it is realized. Any such income recognized before the asset became non-performing and
remaining unrealized is reversed.
• Fee based income and other financial charges are recognized on an accrual basis.
viii. Income tax
Income tax comprises the current tax provision, the net change in the deferred tax asset or liability in
the year and fringe benefit tax. Deferred tax assets and liabilities are recognised for the future tax
consequences of timing differences between the carrying values of assets and liabilities and their
respective tax bases, and operating loss carry forwards. Deferred tax assets are recognized only to the
extent that there is reasonable / virtual certainty that sufficient future taxable income will be available
against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which the timing differences
are expected to be received, settled or reversed. The effect on deferred tax assets and liabilities of a
change in tax rates is recognised in the income statement in the period of enactment of the change.
20
ix. Earnings per share
The Company reports basic and diluted earnings per equity share in accordance with (AS) 20, Earnings
Per Share issued, by the Institute of Chartered Accountants of India. Basic earnings per equity share
have been computed by dividing net Profit/Loss by the weighted average number of equity shares
outstanding during the year. Diluted earnings per equity share have been computed using the weighted
average number of equity shares and dilutive potential equity shares outstanding during the period
except where the results are anti dilutive.
x. Accounting for Provisions, Contingent Liabilities and Contingent Assets
As per (AS) 29, Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of
Chartered Accountants of India, the Company recognises provisions only when it has a present obligation
as a result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and when a reliable estimate of the amount of the obligation can be
made.
No provision is recognized for –
a) Any possible obligation that arises from past events and the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company; or
b) Any present obligation that arises from past events but is not recognised because –
1 It is not probable that an outflow of resources embodying economic benefits will be required
to settle the obligation; or
2 A reliable estimate of the amount of obligation cannot be made.
Such obligations are recorded as Contingent Liabilities Provisions are determined based on management
estimate required to settle the obligation at the balance sheet date, supplemented by experience of
similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current
management estimates. In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure
is made in the financial statements.
Contingent Assets are not recognized in the financial statements since this may result in the recognition
of income that may never be realized.
xi. Preliminary Expenses/Share issue expenses:
Expenses incurred in connection with Company incorporation are classified as Preliminary Expenses
and are charged off in the year in which it is incurred. Share issue expenses are also grouped under this
head.
xii. Interest on borrowings:
Interest on borrowings is recognized in profit and loss account on an accrual basis.
5. Capital Adequacy Ratio
The Company’s capital adequacy ratio, calculated in accordance with the Reserve Bank of India guidelines is
as follows:
CRAR% 57.68% NA
CRAR -Tier I Capital % 57.68% NA
CRAR-Tier II Capital % Nil NA
21
6. Exposure to Real Estate Sector (Rs. In lakhs)
Categories 2008-09 2007-08

A. Direct Exposure
i. Residential Mortgages -(Lending fully secured by mortgages on 3513 -
residential property that is or will be occupied by the borrower or that
is rented; (Individual housing loans up to Rs.15 lakh may be shown
separately)
ii. Commercial Real Estate –(Lending secured by mortgages on 2643 -
commercial real estates (office buildings, retail space, multipurpose
commercial premises, multi-family residential buildings,
multi-tenanted commercial premises, industrial or warehouse space,
hotels, land acquisition, development and construction, etc.).
Exposure would also include non-fund based (NFB) limits)
iii. Investments in Mortgage Backed Securities (MBS) and other - -
securitised exposures –
a) Residential
b) Commercial Real Estate
B. Indirect Exposure
(Fund based and non-fund based exposures on National Housing
Bank (NHB) and Housing Finance Companies (HFCs). - -
7. Maturity pattern of certain items of assets and liabilities (Rs. In Lakhs)

1 day Over Over 2 Over 3 Over 6 Over Over Over Total
to 30/31 one months months months 1 3 5
days month to upto to to year to years to years
one month 2 months 3 months 6 months 1 year 3 years 5 years
Assets
Loans and Advances 182 213 217 677 1469 6689 1521 3262 14230
Liabilities
Borrowings 333 416 750 - 1501 6000 - - 9000
8. Segment Reporting
Summary of opening segments of the Company is given below: (Rs. In lakhs)
i. Segment Revenue
Lending business 995.67 -
Fee Based Income 857.49 -
Unallocated 501.19 48.23
Total 2354.35 48.23
Less: Inter Segment Revenue - -
Income from Operations 2354.35 48.23
ii. Segment Results
Lending business (942.67) -
Fee Based Income 133.48 -
Unallocated (109.83) (359.34)
Total profit before tax (919.02) (359.34)
Income Tax expenses (9.25) (0.33)
Net Profit (928.27) (359.67)
22
iii. Capital Employed
Segment assets
Fee based Income 877.09 -
Total Assets 19587.60 10095.98
Segment Liabilities
Total Liabilities 10374.84 246.42
Net Segment assets / (liabilities)
Unallocated (6343.44) 9849.56
iv. Capital Expenditure (including net CWIP)
Lending business 304.30 287.69
Unallocated 9.13 -
Total 722.28 287.69
v. Depreciation
Total 139.97 2.72
9. AS – 15 Disclosure
The Company contributes to the group gratuity fund based on the actuarial valuation determined as at the
year-end through the HDFC Standard Life Insurance Company (“HDFC Standard Life”) Limited. HDFC Standard
Life has certified the Projected Benefit Obligation for all the Companies covered in the Group. However, since
HDFC Standard Life has certified the Fair Value of the Plan Assets for the Group only, the Fair Value of the
Plan Assets for the Company has been estimated by the Management and relied upon by the Auditors.
Details of Actuarial Valuation as at March 31, 2009
Benefit Obligation as at April 1, 2008 47,574.00 -
Service Cost 888,546.00 -
Interest Cost 3,806.00 -
Actuarial Losses/ (Gains) 384,832.00 -
Benefits Paid - -
23
Benefit Obligation as at March 31, 2009 1324,758.00 -
Fair Value of Plan Assets as at April 1, 2008 - -
Expected Returns on Plan Assets 27,333.00 -
Employer’s Contribution 647,574.00 -
Benefits Paid - -
Actuarial Gains/ (Losses) 8,418.00 -
Fair Value of Plan Assets as at March 31, 2009 683,325.00 -
Balance sheet recognition
Present value of obligation 1324,758.00 -
Fair value of planned asset (683,325.00) -
Liability (Asset) 641,433.00 -
Unrecognised past service cost - -
Liability (Asset) recognized in the Balance sheet 641,433.00 -
Profit and Loss (Expenses)
Current Service Cost 888,546.00 -
Past Service cost - -
Interest on Obligation 3,806.00 -
Expected Return on Plan Assets (27,333.00) -
Net Actuarial Losses/ (Gains) Recognised in the Year 376,414.00 -
Expenses recognised in the Profit and Loss Account 1,241,433.00 -
Actual return on planned assets
Expected return on planned assets 27,333.00 -
Actuarial gain (Loss) Plan Assets 8,418.00 -
Actual Return On Plan Assets 35,751.00 -
Movement in the net Liability recognised in the Balance Sheet
Opening net Liability 1,241,433.00 -
Expenses (600,000.00) -
Contribution 641,433.00 -
Closing Net Liability
Assumptions
Discount Rate 8% p.a. N.A.
Future Salary Increase (%)
• General Staff 10% N.A.
• Others 2% N.A.
Expected Rate of Return on Plan Assets 8% p.a. N.A.
Notes:
i. The Company has adopted the Accounting Standard (AS-15) revised with effect from April 1, 2008 and
hence, the corresponding figures for the previous year have not been furnished.
ii. The expected return on plan assets is as furnished by HDFC Standard Life.
24
10. Related Party Disclosures
Name of the related Party and Nature of Relationship
Holding Company: HDFC Bank Limited

Enterprise under common control of Holding company: HDFC Securities Limited.
Key Management Person: Vinod Yennemadi
Note: Related party relationships are as identified by the Management and relied upon by the Auditors.
Details of Related Party Transactions for the Year:
Transaction Related Party 2008-09 2007-08

Interest Paid HDFC Bank Ltd 314,383 -
Interest received on Fixed Deposits HDFC Bank Ltd 44,509,471 4,761,605
Expenses Reimbursed HDFC Bank Ltd 596,928 -
Rent paid HDFC Bank Ltd 18,468,611 2,728,939
Collection Fees Received HDFC Bank Ltd 85,749,785 -
Term Loan availed and repaid HDFC Bank Ltd 150,000,000 -
Fixed Deposits HDFC Bank Ltd 350,000,000 941,594,847
Professional fees Vinod Yennemadi 1,200,000 900,000
11. Earnings per Share

Net Profit/Loss (92,827,361) (35,67,136)
Weighted Average Number of Equity Shares Basic and Diluted 104,987,767 5,605,000
Earnings per Share Basic and Diluted (Rs) (0.88) (6.42)
Face Value Per Share (Rs) 10/- 10/-

12. Operating lease
i. Future Lease Rental payments
Not later than one year 48,560,013
Later than one year, but less than three years 88,550,827
More than three years, but less than five years 66,831,069
ii. Lease payments recognized in the Profit and Loss Account Rs.37,429,950 (Previous year Rs. 3,715,491).
iii. General description of leasing arrangement
a) Leased Assets: Premises, Computers and Cars.
b) Future lease rentals are determined on the basis of agreed terms.
c) At the expiry of the lease term, the Company has an option either to return the asset or extend
the term by giving notice in writing.
25
13. Managerial Remuneration and Computation of Net Profits under Section 198/349 of the Act.
i. Manager’s Remuneration
Salaries and Allowances 697,410 -
Contribution to Provident and other fund 25,212 -
Other benefits 129,283 -
Note:
In computing the Manager Remuneration, perquisites have been valued in terms of actual expenditure incurred
by the Company in providing the benefits except that in case of certain expenses where the actual amount of
expenditure cannot be ascertained with reasonable accuracy, notional amount as per Income Tax Rules has
been added. Actuarial valuation based contribution/ provision with respect to gratuity and provision for leave
encashment has not been included as these are for the Company as a whole.
ii. Computation of Net Profits under Section 198/349 of the Companies Act, 1956

Profit before Tax as per Profit and Loss Account (91,902,361) (35,934,136)
Add: Depreciation as per Books 13,996,854 271,798
Provision for NPA 70,564 -
Manager’s Remuneration 851,905 -
Less:Depreciation as per Sec 350 of the Act 13,996,854 271,798
Profit on Sale of Investments (Net) 1,505,117 -
Adjusted Profit (92,485,009) (35,934,136)
The Company depreciates its fixed assets based on estimated useful lives which are lower or equal to
the implicit estimated useful lives prescribed by schedule XIV of the Act. Thus, the depreciation charged
in the books is higher than that prescribed as the minimum by the Act. Hence, this higher value has
been considered as a deduction for the computation of managerial remuneration above.
iii. The total remuneration as stated in 13(i) above are within the maximum permissible limits under the
Act.
14. Auditors’ Remuneration
Statutory Audit 300,000 84270
Tax Audit 50,000 28090
Total 350,000 112,360
15. Accounting for Employee Share based Payments
The shareholders of the Company approved stock option schemes (viz. ESOS – 1 and ESOS–2) in
April, 2008. Under the term of the schemes, the Company may issue stock options to employees and directors
of the Company, each of which is convertible into one equity share.
Schemes ESOS – 1 and ESOS – 2 provide for the issuance of options at the recommendation of the
Compensation Committee of the Board (the “Compensation Committee”) at a price of Rs. 10/- per share, being
the face value of the share.
Such options vest at a definitive date, save for specific incidents, prescribed in the scheme as framed/approved
by the Compensation Committee. Such options are exercisable for a period following vesting at the discretion
of the Compensation Committee, subject to a maximum of two years from the date of vesting.
26
Method used for accounting for shared based payment plan.
The Company has elected to use intrinsic value to account for the compensation cost of stock options to
employees of the Company.
Activity in the options outstanding under the Employees Stock Options Plan as at March 31, 2009
Options Weighted average
exercise price (Rs.)
Options outstanding, beginning of year - -
Granted during the year 265,000 10.00
Exercised during the year - -
Forfeited / lapsed during the year - -
Options outstanding, end of year 265,000 10.00
Options Exercisable - -
Following summarises the information about stock options outstanding as at March 31, 2009
Plan Range of Number of Weighted Weighted

exercise price shares arising average life of average
out of options unvested options Exercise
(in years) Price (Rs.)
ESOS – 1 Rs. 10.00 125,000 3.50 10.00
ESOS – 2 Rs. 10.00 140,000 4.01 10.00
Fair Value methodology

The fair value of options used to compute pro forma net income and earnings per equity share have been
estimated on the dates of each grant using the Black-Scholes model. The shares of Company are not listed on
any stock exchange. Accordingly, the Company has considered the volatility of the Company’s stock price as
zero, since historical volatility of similar listed enterprise was not available. The various assumptions considered
in the pricing model for the stock options granted by the Company during the year ended March 31, 2009 are:
As at March 31, 2009
Amount in (Rs.)
Dividend yield Nil
Expected volatility Nil
Risk- free interest rate 7.66% to 7.69%
Expected life of the option 1-5 years
Impact of fair value method on net profit and EPS
Had compensation cost for the Company’s stock option plans outstanding 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:
Amount in (Rs.)
Net Profit/(Loss) (as reported) (92,827,361)
Stock based compensation expense determined under fair value based
method:(pro forma) (200,153)
Net Profit/(Loss) (pro forma) (93,027,514)
27
Amount in (Rs.)
Basic earnings per share (as reported) (0.88)
Basic earnings per share (pro forma) (0.89)
Diluted earnings per share (as reported) (0.88)
Diluted earnings per share (pro forma) (0.89)
16. Micro Small and Medium Enterprises
The Company has received intimation from a supplier regarding their status under the Micro Small and Medium
Enterprises Development Act, 2006 and amounts unpaid as at March 31, 2009 are Rs. 3,573,959/-.
17. Deferred Tax Asset
The net deferred tax asset of Rs. 50.41 lacs as at March 31, 2009 has arisen on account of the following:

Deferred Tax Asset
Depreciation as per books 13,996,854 271,798

Preliminary Expenses - 16,616,466
Compensated Absence 2,774,842 329,574

Business Loss & Unabsorbed Depreciation 27,226,735 -
Deferred Tax Liability
Depreciation as per Income Tax Act 25,011,404 8,557,953

Unamortised Miscellaneous Expenditure 4,154,116 -
Net Deferred Tax Asset 5,041,366 2,943,495
However, in absence of virtual / reasonable certainty of sufficient future taxable income, the company has not
recognized deferred tax asset.
18. Capital commitments as at Balance Sheet date is Rs.7,912,241/- (Previous Year Rs.26,006,424)
19. Previous year’s figures have been regrouped/ rearranged, where necessary.
For and on behalf of the Board

Vinod Yennemadi
Chairman
Pralay Mondal
Director
Haren Parekh
Finance Controller
Place: Mumbai
Date: April 15, 2009
28
Cash Flow Statement
For the For the
Year ended Period ended
March 31, 2009 March 31, 2008
Cash flows from operating activities
Net profit before income tax (91,902,361) (35,934,136)

Adjustments for:
Depreciation 13,996,854 271,798
(Profit)/Loss on Revaluation of Investments - -

Amortisation of premia on investments - -
Loan Loss provisions - -

Provision against standard assets 70,564 -
Provision for wealth tax - -
Contingency provision - -
Preliminary Expenses - -
Loss/(Profit) on sale of fixed assets - -
Adjustments for :
(Increase) in Investments -
Increase in Receivables under financing activity (1,491,373,771) -
(Increase) in Advances 11,153,060 (23,682,549)
(Decrease) in Borrowings 979,589,148 -
Increase in Deposits -
(Increase) in Other assets (11,381,879) (6,000,000)

Preliminary Expenses - -
Increase in other Liabilities & Provisions 32,328,041 24,609,285
(Increase)/Decrease in Deposit Placements - -

(557,520,344) (40,735,601)
Direct taxes paid (net of refunds) (734,839) (27,000)

Net cash flow from/(used in) operating activities (558,255,183) (40,762,602)
Cash flows from investing activities
Purchase of fixed assets (72,227,692) (28,768,860)
Proceeds from sale of fixed assets -
Long term investments - -

Net cash used in investing activities (72,227,692) (28,768,860)
29
Cash Flow Statement
Cash flows from financing activities
Money received on exercise of stock options by employees - -
Proceeds from issue of Upper Tier II capital, Lower Tier II capital and
Innovative Perpetual Debt Instruments - -
Redemption of subordinated debt - -
Issue of equity shares 650,000 1,049,420,000
Dividend during the year - -
Tax on Dividend - -
Net cash generated from financing activities 650,000 1,049,420,000
Net increase in cash and cash equivalents (629,832,875) 979,888,539
Cash and cash equivalents as at 31 March, 2008 979,888,538 -
Cash and cash equivalents as at 31 March, 2009 350,055,663 979,888,538
(629,832,875) 979,888,538
As per our report of even date For and on behalf of the Board.
For Haribhakti & Co. Vinod Yennemadi
Chartered Accountants Chairman
Pralay Mondal
Manoj Daga Director
Partner
Membership No.48523 Haren Parekh
Finance Controller
Place: Mumbai
April 15, 2009
30
RBI Disclosure
Disclosure Pursuant to Reserve Bank of India Notification DNBS.193DG (VL) - 2007 dated February 22, 2007:
(Rs. In Lakhs)
Sr.No Particulars 2008-09 2007-08
Liabilities side:
1 Loans and Advances availed by the NBFC inclusive of interest
accrued thereon but not paid:
(a) Debentures
- Secured - -
- Unsecured (other than falling within the meaning - -
of public deposits)
(b) Deferred Credits - -
(c) Term Loans 9000.00 -
(d) Inter-Corporate Loans and Borrowings - -
(e) Other Loans - -
(Represents Working Capital Demand Loans and Cash Credit from Banks)
Assets side:
2 Break-up of Loans and Advances including Bills Receivables
[other than those included in (4) below]:
(a) Secured 6223.95 -
(b) Unsecured 8514.07 271.76
3 Break up of Leased Assets and Stock on Hire and
Other Assets counting towards AFC activities
(i) Lease Assets including Lease Rentals Accrued and Due:
(a) Financial Lease - -
(b) Operating Lease - -
(ii) Stock on Hire including Hire Charges under Sundry Debtors:
(a) Assets on Hire - -
(b) Repossessed Assets - -
(iii) Other Loans counting towards AFC Activities
(a) Loans where Assets have been Repossessed - -
(b) Loans other than (a) above - -
4 Break-up of Investments (net of provision for diminution in value):
Current Investments:
I. Quoted:
i. Shares: - -
a) Equity - -
b) Preference - -
ii. Debentures and Bonds - -
iii. Units of Mutual Funds - -
iv. Government Securities - -
v. Others (please specify) - -
II. Unquoted:
i. Shares: - -
a) Equity - -
b) Preference - -
31
RBI Disclosure
v. Others (Please specify) - -
Long Term Investments:
I. Quoted:
i. Shares: - -
a) Equity - -
b) Preference - -
v. Others (please specify) - -
II. Unquoted:
i. Shares: - -
a) Equity - -
b) Preference - -
v. Others (Please specify) - -
5 Borrower Group-wise Classification of Assets Financed
as in (2) and (3) above:
1. Related Parties
(a) Subsidiaries - -
(b) Companies in the same Group - -
(c) Other Related Parties - -
2. Other than Related Parties 14738.02 271.76
6 Investor Group-wise Classification of all Investments
(Current and Long Term) in Shares and Securities
(both Quoted and Unquoted)
1. Related Parties
(a) Subsidiaries - -
(b) Companies in the Same Group - -
(c) Other Related Parties - -
2. Other than Related Parties - -
7 Other Information
(i) Gross Non-Performing Assets
(a). Related party - .-
(b) Other than related party - -
(ii) Net Non-Performing Assets
(a) Related party - -
(b) Other than related party - -
(iii) Assets Acquired in Satisfaction of Debt - -
32
Balance Sheet Abstract and Companies
General Business Profile
(Submitted in terms of Part IV of schedule VI to the Companies Act, 1956)
I Registration Details
Registration No. : 051028 State Code: : 04
Balance Sheet Date : 31/03/2009
II Capital Raised during the period (Amount in Rs.thousand)
Public Issue : NIL Rights Issue : NIL
Bonus Issue : NIL Private Placement : 650,000
III Position of Mobilisation and Deployment of Funds (Amount in Rs.thousand)
Total Liabilities : 2,087,554 Total Assets : 2,087,554
Sources of Funds (Amount in Rs.thousand)
Paid-up Capital : 1,050,070 Reserves & Surplus : NIL
Secured Loans : 900,000 Unsecured Loans : NIL
Application of Funds (Amount in Rs.thousand)
Loans : 30,547 Net Fixed Assets : 85,282
Capital work in Progress : NIL Deferred Tax Asset : 5,041
Investments : NIL Net Current Assets : 1,734,547
Accumulated losses : 128,794 Miscellaneous Expenditure : NIL
IV Performance of Company (Amount in Rs.thousand)
Total Income : 235,435 Total Expenditure : 327,337
Profit Before Tax : (91,902) Profit After Tax : (92,827)
Earning Per Share in Rs. : (0.88) Dividend % : NIL
V Generic Names of Three Principal Services of the Company (as per monetary terms)
Item Code No. (ITC Code) : -
Product Description : Financial Services
33
Notes

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Directors’ Report

Particulars 2008-09 2007-08

Total Income 2354.35 48.22

Total Expenditure 3133.40 404.85

Profit/(Loss) before Depreciation & Tax (779.06) (356.63)

Less: Depreciation 139.97 2.71

Profit before Tax (919.02) (359.34)

Provision for Taxation 9.25 0.33

Profit / (Loss) after Taxation (928.27) (359.67)

Increase in paid up Share Capital

Directors Responsibility Statement

The Board of Directors hereby state that:

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

Employees Stock Option Scheme (ESOS)

Management Discussions and Analysis Report

Industry Structure and Developments

Products and Services

The Company has launched the following products and services:

Internal Control Systems

Sr. Name of Director Position Number of Scope

List of Risk Committee Members

Sr. Name of Director Position Number of Scope

List of Nomination Committee Members

Sr. Name of Director Position Number of Scope

Sr. Name of Director Position Number of Scope

4. General Body Meetings (Since Incorporation)

4. Further to our comments in the Annexure referred to above, we report that:

For Haribhakti & Co.,

For Haribhakti & Co.,

Schedule For the For the For the For the

1,000,000,000 Equity Shares

Issued, Subscribed and Paid up

105,007,000 Equity Shares

(Of the above 100,000,000

Secured Loan (Secured against

Term Loan from Banks 900,000,000 900,000,000 - -

(Repayble during the next year

Fixed Asset (Amount In Rs.)

Particulars Gross Block Depreciation Net Block

As at Adjust- Additions As at As at Adjust- Additions As at As at As at

Furniture & Fixtures - - 20,411,251 20,411,251 - - 3,969,017 3,969,017 16,442,234 -

Administrative and other expences

Categories 2008-09 2007-08

7. Maturity pattern of certain items of assets and liabilities (Rs. In Lakhs)

Name of the related Party and Nature of Relationship

Holding Company: HDFC Bank Limited

Details of Related Party Transactions for the Year:

Transaction Related Party 2008-09 2007-08

Interest Paid HDFC Bank Ltd 314,383 -

Interest received on Fixed Deposits HDFC Bank Ltd 44,509,471 4,761,605

Expenses Reimbursed HDFC Bank Ltd 596,928 -

Rent paid HDFC Bank Ltd 18,468,611 2,728,939

Collection Fees Received HDFC Bank Ltd 85,749,785 -

Term Loan availed and repaid HDFC Bank Ltd 150,000,000 -

Fixed Deposits HDFC Bank Ltd 350,000,000 941,594,847

Professional fees Vinod Yennemadi 1,200,000 900,000

11. Earnings per Share

Particulars 2008-09 2007-08

Net Profit/Loss (92,827,361) (35,67,136)