Investors Capital 10K 2012 Annual report

INVESTORS CAPITAL HOLDINGS, LTD – Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED

MARCH 31, 2012

COMMISSION FILE NO. 333-43664

INVESTORS CAPITAL HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of

incorporation or organization)

04-3284631

(I.R.S.Employer

Identification No.)

230 Broadway East

Lynnfield, Massachusetts 01940

(781) 593-8565

(Address, including zip code, and telephone number, including area code,

of Registrant's principal executive offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class Name of Each Exchange on Which Registered

Common Stock, $0.01 par value NYSE-Amex

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes oNo x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes xNo ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

INVESTORS CAPITAL HOLDINGS, LTD – Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Indicate by check mark whether the registrant is an accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act).

Large accelerated filer ¨ Accelerated filer ¨

Non-accelerated filer ¨ Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the shares of the registrant's common equity held by non-affiliates, computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant's most recently completed second fiscal quarter, was $30,729,205.

As of June 12, 2012, there were outstanding 6,685,124 shares of the $0.01 par value per share Common Stock of the registrant.

Document incorporated by reference: Portions of the Registrant’s Proxy Statement for its 2012 Annual Meeting of stockholders are incorporated by reference into Part III of this Form 10-K.

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The Company

Investors Capital Holdings, Ltd. and its wholly-owned subsidiaries are often referred to in this report, both individually and collectively, as the "Company" or with terms such as "we", "us", "our" and the like. When being referred to individually without reference to the other components of the Company, Investors Capital Holdings, Ltd. and its wholly-owned subsidiaries, Investors Capital Corporation, ICC Insurance Agency, Inc. and Investors Capital Holdings Securities Corporation, are often referred to in this report as "ICH", "ICC", “ICC Insurance” and “ICH Securities”, respectively.

Forward-Looking Statements

The statements, analyses, and other information contained herein relating to trends in our operations and financial results, the markets for our products, the future development of our business, and the contingencies and uncertainties to which we may be subject, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other similar expressions, are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management's current expectations and beliefs concerning future events and their effects on the Company. Our actual results may differ materially from the results anticipated in these forward-looking statements.

These forward-looking statements are subject to risks and uncertainties including, but not limited to, those described and discussed in this report and other documents filed by the Company with the United States Securities and Exchange Commission (the “SEC”). We specifically disclaim any obligation to update or revise any forward-looking information, whether as a result of new information, future developments, or otherwise.

PART I

ITEM 1. Business

Overview

Incorporated in 1995, ICH is a financial services holding company that operates primarily through its wholly-owned broker-dealer and registered investment advisor subsidiary, Investors Capital Corporation (“ICC”). ICC provides to investors:

Broker-dealer services primarily in support of trading and investment in securities such as corporate stocks and bonds, U.S. Government securities, municipal bonds, mutual funds, variable annuities, alternative investments and variable life insurance, including provision of market information, internet trading and portfolio tracking facilities and records management, and

·	Investment advisory services, including asset management, conducting business as Investors Capital Advisory Services (“ICA”).

Financial information pertaining to the Company for the fiscal years ended March 31, 2012 and 2011 is included in Part II of this document including, without limitation, financial statements and supplementary data in Item 8 thereof. See Part II, Item 8, Footnote 14 – “Segment Information” for information concerning each of the segments of the Company’s business with respect to the fiscal years ended March 31, 2012 and 2011, including revenues from external customers, a measure of profit or loss, and total assets.

Broker-Dealer Services

Investors Capital Corporation

ICC is registered as a securities broker-dealer with the Financial Industry Regulatory Authority ("FINRA"), the SEC, the Municipal Securities Rule Making Board ("MSRB") and the Securities Investor Protection Corporation

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

("SIPC"). Headquartered in Lynnfield, Massachusetts, the wholly-owned subsidiary of ICH also is duly registered and doing business as a broker-dealer in all 50 states, the Commonwealth of Puerto Rico and the District of Columbia. ICC makes available multiple investment products and provides support, technology and back-office services to a network of producing (non-staff) independent registered representatives, of which there were 455 at March 31, 2012. Broker-dealer commissions and investment advisory fees generated by ICC's registered representatives represented the bulk of the Company's total revenues for the fiscal year ended March 31, 2012.

Broker-Dealer Representatives

Our independent representatives are duly registered under federal and state law to offer and provide broker-dealer services to investors through ICC. Depending upon their activities, they also may be required to qualify and register as investment advisor representatives (see “INVESTMENT ADVISORY SERVICES”, below). Our training programs for representatives emphasize the long-range aspects of financial planning and investment. We believe that the continuing education and support we provide to our registered representatives enable them to better inform and serve their clients.

Attracting and retaining experienced, productive registered representatives is an integral part of our growth strategy. Once recruited, we focus on enhancing our representatives' professional knowledge, skills and value to their clients.

We offer prospective representatives an attractive commission payout and the independence of owning and operating their own offices. Our representatives generally pay the costs associated with their offices and operations, while we concentrate on providing technical, regulatory, supervisory, compliance and other support services to our independent investment professionals. This allows expansion of our operations with relatively minimal capital outlay.

Compensation to Representatives

Commission payouts to our registered representatives are negotiated and generally represent a percentage of the gross dealer concession generated by them. Representatives grant to us the right to offset against commissions certain losses we may sustain as a result of their actions, errors or omissions. Our agreements with our representatives are terminable by either party with or without cause.

Support to Representatives

We provide a variety of services and products to our representatives to enhance their professionalism and productivity.

Technology Resources. Our technology offerings, including a client and enterprise website, enable our representatives and/or their clients to perform many tasks on-line, including:

·	Opening of new accounts

·	Monitoring of existing accounts

·	Updating of client accounts

·	Initiating and executing trading activities

·	Viewing and downloading commission data

·	Locating and exploring financial products

·	Downloading client data

·	e-Delivery of statements and confirmations

·	Researching reports or inquiries on companies, securities and other financial topics

Approved Investment Products. Our representatives offer a wide variety of ICC-approved investment products to their clients that are sponsored by well-respected, financially sound companies. We follow a selective process in determining approved products to be offered to clients by our representatives, and we periodically review the product list for continued maintenance or removal of approved status.

Marketing. We provide advertising and public relations assistance to our representatives to enhance their profile, public awareness and professional stature in the public's eye, including FINRA-approved marketing materials, corporate and product brochures, client letters and website assistance.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Supervision/Compliance. We maintain comprehensive broker-dealer and investment advisor compliance programs. Our home office licensing, compliance and risk management staffs include three dedicated attorneys. We also retain experienced supervisors in FINRA-recognized Offices of Supervisory Jurisdiction at our home office and in the field offices across the country that are charged with compliance responsibilities for defined groups of registered representatives including, in particular, newly-affiliated representatives.

In this period of rapid regulatory change, we closely supervise and monitor the activities of our representatives to manage risk and enhance compliance with applicable laws, rules and regulations including anti-money laundering and other programs required by the USA Patriot Act. Our compliance efforts are increasingly assisted by computer systems, programs and reports, including routine internal auditing of trading and investment activity.

Our representatives seek and value assistance in the area of compliance. Keeping in step with the latest industry regulations, our compliance department provides to our representatives, among other things:

·	Advertising and sales literature review

·	Field inspections, followed up with written findings and remediation programs

·	In-house publications, conference calls, webinars, workshops, seminars and other communications on compliance topics

·	Assistance with customer complaints and regulatory inquiries

·	Training at regional and national meetings

·	IT tools designed to enhance compliance review and communication

·	Interpretation of rules and regulations and general compliance training

Clearing. We utilize the services of Pershing LLC, a subsidiary of Bank of New York Mellon, on a fee-for-service basis to provide orderly processing and clearing of most of our brokerage securities transactions. Services provided by Pershing include billing and credit extension, as well as control, receipt, custody and delivery of customer securities and funds.

Investment Advisory Services

Investors Capital Advisory Services

The Company’s investment advisory business is conducted through our broker-dealer subsidiary, ICC, doing business as Investors Capital Advisory Services (“ICA”).

Investment Advisor Representatives

Each of our investment advisor representatives must satisfy licensing requirements of the states in which they operate prior to providing investment advisory services. As of March 31, 2012, 337 independent investment advisor representatives registered with the various state securities departments were affiliated with ICA, which is consistent with the year earlier.

Asset Allocation Strategy

Our investment advisor representatives often provide advisory services through our representative-directed program where the asset allocation is performed directly by the independent representative. Our asset allocation strategy is based on the principle that, by investing in a combination of asset classes, risk may be reduced while seeking enhanced returns. Combining asset classes that typically do not fluctuate in tandem may lower the volatility of the customer's investment portfolio while providing the potential for long-term returns. In implementing a personalized asset allocation strategy for each customer:

The customer's risk tolerance, investment goals, age, time horizon, investment experience and financial and personal circumstances are determined using detailed questionnaires that are completed during personal interviews. Based upon these data, an overall investment allocation among stocks, bonds, cash and/or other investment products is fashioned.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

·	Specific investment vehicles believed to be appropriate for the particular customer and investment allocation are selected from a universe of Company-approved mutual funds, variable annuities, individual securities and other investment products.

·	Following investment in the selected securities, portfolio performance is monitored and periodically communicated to the client, and changes to the portfolio are made from time to time based upon performance, the customer's financial situation, goals and risk tolerance and other relevant factors.

Fee-Based Compensation Structure

In conformity with the requirements of the Investment Advisors Act of 1940 (the “Advisors Act”), compensation for our investment advisory services consists of an annual fee, assessed and earned quarterly, as a percentage of assets under management rather than a transaction-based commission or performance fee.

Insurance Operations

In certain states a licensed insurance entity is required for ICC representatives to sell life insurance and annuity products to their clients. Accordingly, the Company operates ICC Insurance Agency, Inc., a wholly-owned subsidiary of ICH that is duly licensed for such purposes in states in which such licensing is required. All revenue realized by this entity flows through as revenue to ICC.

ICH Securities

ICH Securities was established to hold cash for Company for income tax benefit purposes at the Massachusetts state level.

Our Strategy

Key elements of our strategy to achieve our corporate objectives include:

Recruit and retain high quality registered representatives. Our business model stresses recruitment and retention of capable, experienced independent representatives possessing the professional qualifications, knowledge and judgment to render superior broker-dealer and investment advisory services to their customers.

Increase brand awareness; expand business presence. We strive to increase our brand recognition to attract new clients and representatives by building market awareness, educating the investing public and maintaining customer loyalty through direct marketing, advertising through our marketing department, use of our web site, various public relations programs, web and live seminars, and/or advertising media such as print, radio and television.

Provide value-added services to our clients. We provide our clients with access to a pool of well-trained representatives, access to up-to-date market and other financial information, and direct access to our trade desk that is online with various stock exchanges and institutional buyers and sellers. We also provide trading before and after traditional market hours to our clients.

Grow recurring revenues. We recognize the trend toward increased investment advisory business and are focused on building our fee based investment advisory business when it serves the interests of our clients. While advisory accounts generate substantially lower first year revenue than most commission products, the recurring nature of advisory fees provides a foundation for accelerating future revenue growth.

Create technologically innovative solutions to satisfy client needs. We continue to pursue additional technologies to service the rapidly evolving financial services industry. We continually seek to enhance our web site to augment our clients’ ability to trade equity securities efficiently via the Internet, to monitor on-line the history and current status of their accounts at any time, and to access financial and other pertinent information. Also, we assist our representatives in developing personalized Internet web sites to provide their clients with a

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

secure and private interface directly to our proprietary client web site. This allows clients to perform market research, buy and sell securities on-line, monitor their accounts and utilize financial calculators.

Provide technological solutions to our representatives. We believe that it is imperative that we provide state-of-the-art technology to our employees and independent registered representatives to effectively facilitate, measure and record business activity in a timely, accurate and efficient manner. We seek to achieve economies of scale and optimize the experience of our representatives by providing them with increasingly capable technology platforms.

Expand our product and service offering through strategic relationships. We continue to pursue business alliances to increase trading volume, capitalize on cross-selling opportunities, create additional markets for our asset management programs and mutual fund sales, take advantage of emerging market trends, create operational efficiencies and further enhance our name recognition.

Competition

Our competitors vary in size, resources and breadth of services offered. We encounter direct and indirect competition from numerous established financial services companies, including firms that offer full-commission and discount brokerage, investment advisory, and financial planning services, increasingly based on the independent representative model. Many of our competitors are owned by insurance companies, banks and other large financial institutions.

Many competitors, alone or in conjunction with their parent corporations, have greater financial, technical, marketing and other resources, offer a wider range of services and financial products, and have greater name recognition and more extensive client bases.

We seek to compete through the quality of our registered representatives, a premier level of service to our representatives, and the breadth and depth of brokerage and advisory products and services we offer. We believe that our ability to compete depends upon many factors both within and outside our control, including:

·	Our ability to attract and retain a network of experienced investment professionals

·	The effectiveness, ease of use, performance and features of our technology and services

·	The price and quality of our services and overall client satisfaction

·	The volatility and performance of financial markets and the world economy

·	Our ability to service our clients effectively and efficiently

·	Our reputation in the financial services industry

·	Our ability to foster compliance with applicable laws and regulations by employees and independent representatives

How We Are Regulated

Broker-Dealer Regulation

The securities industry is subject to extensive regulation under both federal and state law. The SEC is the federal agency responsible for administering the federal securities laws that apply to broker-dealers. ICC is a broker-dealer registered with the SEC. In addition to complying with the voluminous and complex rules set out in applicable statutes, including the Securities Act of 1933 and Securities Exchange Act of 1934 (as amended, the “Securities Act” and “Exchange Act”, respectively), The Dodd- Frank Act of 2010 and rules regulations promulgated thereunder, every registered broker-dealer that conducts business with the public is required to be a member of and subject to the jurisdiction and rules of FINRA.

FINRA has established numerous rules applicable to broker-dealers, including conduct rules for securities transactions among broker-dealers and private investors, trading rules for the over-the-counter markets and operational rules for its member firms. FINRA conducts examinations of member firms, investigates possible violations of the federal securities laws and its own rules and conducts disciplinary proceedings involving member firms and associated individuals. FINRA administers qualification testing for all securities principals and registered representatives for its own account and on behalf of the state securities authorities. We are also subject to regulation under state law. We are currently registered as a broker-dealer in all 50 states, Puerto Rico and the District of Columbia.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The SEC and other regulatory bodies in the United States have rules with respect to net capital requirements that affect our broker-dealer subsidiary. These rules are designed to ensure that broker-dealers maintain adequate capital in relation to their liabilities, depending upon the types of securities business conducted and the size of their customer business. These rules have the effect of requiring that a substantial portion of a broker-dealer's assets be kept in cash or highly liquid investments. Failure to maintain the required net capital may subject a firm to suspension or revocation of its registration with the SEC and suspension and expulsion by the FINRA and other regulatory bodies, and ultimately may require its liquidation. Additional legislation, changes in rules promulgated by the SEC and by self-regulatory bodies and changes in the interpretation or enforcement of existing laws and rules often directly affects the method of operation and profitability of broker-dealers. The SEC and the self-regulatory bodies may conduct administrative proceedings which can result in censure, fine, suspension or expulsion of a broker-dealer, its officers, employees or registered representatives.

Registered Investment Advisor Regulation

The Advisors Act, and the rules promulgated thereunder, regulates the registration and compensation of investment advisors. Investment advisors are deemed to be fiduciaries for their clients and, as such, are held to a high standard of conduct. Investment advisors are subject to regulation and oversight by the SEC and the various states. Investment advisors are required to register with the SEC and/or appropriate state regulatory agencies, are required to periodically file reports, and are subject to periodic or special examinations. Rules promulgated under the Advisors Act govern many aspects of the investment advisory business, such as advertisements by investment advisors and the custody or possession of funds or securities of a client. Most states require registration by investment advisors, unless an exemption is available, and impose annual registration fees. Some states also impose minimum capital requirements. There can be no assurance that compliance with existing and future requirements and legislation will not be costly and time consuming or otherwise adversely impact our business in this area.

Regulations Applicable to the Use of the Internet

Due to the established popularity and use of the Internet and other online services, various regulatory authorities have adopted or are considering laws and/or regulations with respect to the internet or other online services covering issues such as user privacy, pricing, content copyrights and quality of services. In addition, the growth and development of the market for online commerce may prompt more stringent consumer protection laws that may impose additional burdens on those companies conducting business online.

The recent increase in the number of complaints by online traders could lead to more stringent regulations of online trading firms and their practices by the SEC, FINRA and other regulatory bodies. The applicability to the Internet and other online services of existing laws in various jurisdictions governing issues such as property ownership, sales and other taxes and personal privacy is also uncertain and may take years to resolve. Finally, as our services are available over the Internet in multiple states, and as we have numerous clients residing in these states, these jurisdictions may claim that we are required to qualify to conduct business as a foreign corporation in each such state. While ICC currently is registered as a broker-dealer in all 50 states, Puerto Rico and the District of Columbia, we are qualified to conduct business as a foreign corporation in only a few states. Failure by our company to qualify as a broker-dealer in other jurisdictions or as an out-of-state or "foreign" corporation in a jurisdiction where it is required to do so could subject us to taxes and penalties for the failure to qualify. Our business could be harmed by any new legislation or regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business or the applications of existing laws and regulations to the Internet and other online services.

Employees

As of March 31, 2012, we had 57 full-time employees, the majority of whom are located at our principal office in Lynnfield, Massachusetts. No employee is covered by a collective bargaining agreement or is represented by a labor union. We consider our employee relations to be excellent. We also enter into independent contractor arrangements on an as-needed basis to assist with various aspects of our business.

Available information

The Company is subject to the informational requirements of the Securities Exchange Act and, in accordance therewith, files reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

filed with the SEC by the Company can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov.

Our website address is http://www.investorscapital.com. We make available free of charge on or through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information found on our website is not part of this or any other report we file with or furnish to the SEC. All such documents are also available in print at no charge to any shareholder who requests them in writing to Robert Foney, Manager Corporate Communications, 230 Broadway East, Lynnfield, MA 01940.

Executive Officers Of The COMPANY

The following sets forth, as of June 27, 2012, certain information with respect to each of the executive officers of ICH:

Timothy B. Murphy, age 47, has served as a director of the Company since July 1995. A founder of the Company, Mr. Murphy has served as President and Chief Executive Officer since August 2009. He served as Executive Vice President and Chief Financial Officer of the Company from its inception until August and December 2009, respectively, and as President of ICC since its inception. He entered the securities industry in 1991 as an operations manager in the Boston regional office of Clayton Securities. By 1994, he was serving as compliance officer of BayBanks Brokerage and a vice president of G.R. Stuart & Company, another brokerage firm. Mr. Murphy holds various securities licenses including series 4, 7, 24, 27, 53, 63 and 65.

Kathleen L. Donnelly, age 40, was promoted to Chief Financial Officer of the Company effective January 1, 2009 and serves as its principal financial officer. Prior to this appointment, Ms. Donnelly was employed by ICC as Corporate Accountant where she managed the Company’s Sarbanes-Oxley compliance readiness program and provided internal budgeting and financial analysis services. From January through April 2007, Ms. Donnelly was employed as an auditor at Nardella & Taylor, LLC, a public accounting firm. From 1997 through 2006, she was a practicing Certified Public Accountant as an Audit Manager with UHY LLP (formerly Brown & Brown, LLP), the Company’s independent public accountants prior to the appointment of Marcum, LLP.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None

ITEM 2. Properties.

Our principal executive offices, comprised of several office condominiums, are located within a 11,737 square foot facility at 230 Broadway, Lynnfield, MA. During the year ended March 31, 2012, the Company also maintained an office in a 2,132 square foot facility at 218 Boston Street, Topsfield, MA. Both of these properties were leased from entities owned and controlled by the Company’s former Chairman for a combined annual rent of $291,200. The Company is currently attempting to resolve a dispute with the lessor, specific to the tenancy at 230 Broadway Lynnfield, MA as a result of property damages that are preventing occupancy and use of all leased space.

The Lynnfield, MA lease was renewed and modified in October 2009 and will expire on March 31, 2015, and the Topsfield, MA lease expired on March 31, 2012. Additionally, the Company had leased 1,357 square feet of office space in Miami, FL under a lease which expired in November 2011. The rent expense for the Miami office during the fiscal year ended March 31, 2012 was $35,333.

ITEM 3. Legal Proceedings.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The Company operates in a highly litigious and regulated business, and the Company often is made a defendant in arbitrations and other legal proceedings that are incidental to our securities business. The Company typically vigorously contests the allegations of the complaints and believes that there are meritorious defenses in these matters. From time to time the Company also is the subject of regulatory investigations and proceedings. Counsel often is unable to confidently predict the likelihood of an outcome, whether favorable or unfavorable, in such matters because of routine and inherent uncertainties. For the majority of pending claims, the Company's current errors and omissions (E&O) policy limits the Company’s maximum exposure in any one case to $100,000 or $100,000/$250,000 ($250,000 is effective January 2012 for alternative investment product only related settlements) in any one case, subject to policy limitations and exclusions.The Company also maintains a fidelity bond to protect itself from potential damages and/or legal costs related to fraudulent activities pursuant to which the Company’s exposure is usually limited to $350,000, subject to policy limitations and exclusions.

ITEM 4. [REMOVED AND RESERVED]

PART II

ITEM 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

ICH's common stock has been trading on NYSE AMEX / Alternext US (“Amex”) (formerly, The American Stock Exchange) under the symbol "ICH" since February 8, 2001. Prior to such date, there was no established public trading market for the common stock. As of June 12, 2012, there were 6,685,124 shares outstanding and 221 registered holders thereof.

The following table presents the high and low closing prices for the common stock of ICH on the Amex for the periods indicated:


	High	Low
Fiscal Year Ended March 31, 2012:
January 1, 2012 through March 31, 2012	$4.25	$3.57
October 1, 2011 through December 31, 2011	$5.05	$3.80
July 1, 2011 through September 30, 2011	$6.39	$4.78
April 1, 2011 through June 30, 2011	$6.48	$5.09

Fiscal Year Ended March 31, 2011:
January 1, 2011 through March 31, 2011	$6.45	$4.03
October 1, 2010 through December 31, 2010	$4.55	$3.75
July 1, 2010 through September 30, 2010	$4.30	$2.35
April 1, 2010 through June 30, 2010	$2.40	$1.50

Cash Dividends

The Company did not pay any dividends on its common stock during the fiscal years ended March 31, 2012 and 2011.

We have no current intentions of paying dividends on shares of our common stock for the foreseeable future. In addition, the terms of our bank loan agreement with Commerce Bank & Trust Company restrict our ability to pay dividends. Future dividend decisions will be based on, and affected by, a number of factors, including the operating results and financial requirements of the Company and the impact of regulatory restrictions. For further information regarding restrictions on our ability to transfer funds to our stockholders, see Part I, Item 1. “Business – How We Are Regulated” and Part II, Item 7. “Management's Discussion and Analysis – Liquidity and Capital Resources” in this Form 10-K.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Securities Authorized for Issuance Under Compensation Plans

The following table presents information as of March 31, 2012 with respect to compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance.


Equity Compensation Plan Information

			Number of securities
	Number of securities		remaining available for
	to be issued	Weighted-average	future issuance under
	upon exercise of	exercise price of	equity compensation plans
	outstanding options,	outstanding options,	(excluding securities
Plan category	warrants and rights	warrants and rights	reflected in column (a))
	(a)	(b)	(c)
Equity compensation
plans not approved
by security holders	150,000	$1.00	none

Total	150,000	$1.00	none

See “Footnote 18 – Benefit Plans” to the Company’s Financial Statements, contained in Part II, Item 8 of this Form 10-K, for a description of the material features of each compensation plan under which equity securities of the Company’s are authorized for issuance that was adopted without the approval of security holders.

recent sales of unregistered securities

None.

ITEM 6. selected financial data.

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management's discussion and analysis reviews our consolidated financial condition as of March 31, 2012 and 2011, the consolidated results of operations for the years ended March 31, 2012 and 2011 and, where appropriate, factors that may affect future financial performance. The discussion should be read in conjunction with the accompanying consolidated financial statements and related notes. Unless context requires otherwise, as used in this Management's Discussion and Analysis
(i) the "current period" means the fiscal year ended March 31, 2012, (ii) the "prior period" means the fiscal year ended March 31, 2011, (iii) an increase or decrease compares the current period to the prior period, and (iv) all non-comparative amounts refer to the current period.

Forward-Looking Statements

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

which we may be subject, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other similar expressions, are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management's current expectations and beliefs concerning future events and their effects on the Company. Our actual results may differ materially from the results anticipated in these forward-looking statements.

Overview

We are a financial services holding company that, through our subsidiaries, provides brokerage, investment advisory, insurance and related services. We operate in a highly regulated and competitive industry that is influenced by numerous external factors such as economic conditions, marketplace liquidity and volatility, monetary policy, global and national political events, regulatory developments, competition and investor preferences. Our revenues and net earnings may be either enhanced or diminished from period to period by these and other external factors.

OUR BUSINESS

We operate primarily through our subsidiary, ICC, as a broker-dealer and, doing business as ICA, as a registered investment advisor, with a national network of independent financial representatives.

Broker-Dealer Services

We provide broker-dealer services in support of trading and investment by our representatives’ customers in securities, including corporate equity and debt securities, U.S. Government securities, municipal securities, mutual funds, limited partnerships and other alternative investments, variable annuities and variable life insurance. We also provide related services such as market information, Internet brokerage, portfolio tracking facilities and records management.

Investment Advisory Services

We provide investment advisory services, including asset allocation and portfolio rebalancing, for our representative’s customers through ICA.

Recruitment and Support of Representatives

A key component of our business strategy is to recruit well-established, productive representatives who provide superior service to their clients. Additionally, we assist our representatives in developing and expanding their business by providing a variety of support services and a diversified range of investment products for their clients. We focus on providing substantial added value to our representatives’ practices, enabling them to be more productive.

Support provided to assist representatives in pursuing consistent, profitable sales growth takes many forms, including automated trading systems and other technology solutions, targeted financial assistance and a network of communication links with investment product companies. Regional and national conventions provide forums for interaction to improve product knowledge, sales and client satisfaction. In addition, we provide our representatives with programs and tools to grow their businesses both through new client acquisition and advancement of existing client relationships. These programs enhance our ability to attract and retain productive representatives.

OUR PROCESS

Online Brokerage

Registered representatives have direct market access to submit security transactions for their clients through the use of an online brokerage platform for trade execution serviced by Pershing LLC acting as our clearing firm.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Check and Application

Check and application revenue is obtained through a process where a check and a product application is delivered to us for processing that includes principal review and submission to the variable annuity, mutual fund, direct participation or other investment product company. Investments in technology are facilitating our migration over time from a paper intensive to a more paperless process. This shortens the transaction cycle, reduces errors and creates greater efficiencies.

Bond Brokerage

Our fixed-income brokerage desk uses a network of regional and primary dealers to execute trades across a broad array of fixed income asset classes. The desk also utilizes dealer-only electronic services that allow the desk to offer inventory and to execute trades. Our fixed income traders work with our representatives to develop portfolios for clients.

Asset Allocation

Asset allocation services are made available through ICA. Our services include the design, selection and rebalancing of investment portfolios on behalf of our representatives' clients. We also provide tools, services and guidance that enable our representatives to provide these investment services directly to their clients. These services, for the most part, are conducted through our online brokerage platform. Other allocation services are performed directly by fund companies.

Critical Accounting Policies

In General

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Company believes that of its significant accounting policies (detailed in Footnote 2 – Summary of Significant Accounts Policies to the Company’s Consolidated Financial Statements contained herein), those dealing with valuation of securities and other assets, revenue recognition and allowance for doubtful accounts receivable involve a particularly high degree of judgment and complexity. Our accounting policies require estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the consolidated financial statements. Due to their nature, estimates involve judgment based upon available information. Actual results or amounts can and do differ from estimates and the difference can have a material effect on the consolidated financial statements. Therefore, understanding these policies is important to understanding the reported results of operations and the financial position of the Company.

Off–Balance Sheet Risk

We execute securities transactions on behalf of our customers. If either the customer or counter-party fails to perform, we, by agreement with our clearing broker, may be required to discharge the obligations of the non-performing party. In such circumstances, we may sustain a loss if the market value of the security is different from the contract value of the transaction. We seek to control off-balance sheet risk by monitoring the market value of securities held or given as collateral in compliance with regulatory and internal guidelines. Pursuant to such guidelines, our clearing firm requires that we reduce positions when necessary. We also complete credit evaluations where there is thought to be credit risk.

Reserves

We record reserves related to legal proceedings in "accrued expenses" in the consolidated balance sheet. The determination of these reserve amounts requires significant judgment on the part of management. We consider many factors including, but not limited to: the amount of the claim; the amount of the loss in the client's account; the basis and validity of the claim; the possibility of wrongdoing on the part of one of our employees or representatives; previous results in similar cases; and legal precedents. Each legal proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the consolidated financial statements and is recognized as a charge or credit to earnings in that period. The assumptions made by management in determining the estimates of reserves may be incorrect and the actual costs upon disposition of a legal proceeding may be greater or less than the reserved amount.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Risk Management

Risk is an inherent part of our business and activities. Risk management is critical to our financial strength and profitability and requires robust auditing, constant communications, sound judgment and knowledge of financial regulations, trends and the economy as a whole. We take a holistic approach to governance, risk management and compliance.

Management and staff, at all levels, take a proactive role in the risk management process. The principal risks involved in our business activities include market, operational, regulatory and legal risks.

Market Risk

Market risk is the risk attributable to common macroeconomic factors such as gross domestic product, employment, inflation, interest rates, budget deficits and consumer sentiment. Consumer and producer sentiment is critical to our business. The level of consumer confidence determines their willingness to spend, especially in the financial markets. It is the willingness to spend in the financial markets that is key to our business. A shift in spending in this area, often caused by market volatility, could negatively impact us. In addition, declines in market values negatively impact investment advisory revenues that are based upon the value of assets under management. We constantly monitor these economic trends in order to enhance and broaden our product line to mitigate potential negative impact of such trends.

Operational Risk

Operational risk refers to the risk of loss resulting from our operations, including, but not limited to, improper or unauthorized execution of transactions, deficiencies in our technology or financial operating systems and inadequacies or breaches in our control processes. Managing these risks is critical, especially in a rapidly changing environment with increasing transaction volume. Failure to manage these risks could result in material financial loss to the Company. To mitigate these risks, the Company has developed policies and procedures designed to identify and manage operational risk. These policies and procedures are reviewed and updated on a continuing basis by a broad-based Risk Committee that meets weekly to ensure that risk is minimized.

Regulatory and Legal Risk

Regulatory and legal risk includes non-compliance with applicable legal and regulatory requirements and the risk of customer claims that could result in adverse judgments against us. We are subject to extensive regulation in the various jurisdictions in which we operate. We maintain a panoply of procedures to address issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer information and funds, the granting of credit, collection activities, money-laundering and record keeping. However, compliance procedures, no matter how stringent and comprehensive, can only limit, but not completely prevent, the institution of regulatory and legal proceedings, the institution, outcomes and consequences of which often cannot be reasonably foreseen or quantified in advance.

In the normal course of business, we continue to be the subject of numerous civil actions and arbitrations arising out of customer complaints concerning our activities as a broker-dealer, investment advisor, employer or otherwise. As experienced generally in the industry today, the volume of such complaints has generally trended upward over time, particularly in conjunction with market losses incurred by customers during the most recent financial downturn.

Effects of Inflation

Our assets primarily are liquid in nature and not significantly affected by inflation. Management believes that the replacement cost of property and equipment will not materially affect operating results. However, the rate of inflation can affect our expenses, including, without limitation, employee compensation and benefits, communications and occupancy, which may not be readily recoverable through charges for services provided.

KEY INDICATORS OF FINANCIAL PERFORMANCE

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

We periodically review and analyze our financial performance across a number of measurable factors considered to be particularly useful in understanding and managing our business. Key metrics in this process include productivity and practice diversification of representatives, top line commission and advisory services revenues, operating expenses, legal costs, taxes, earnings per share and adjusted EBITDA (as defined below).

PRODUCTIVITY AND PRACTICE DIVERSIFICATION OF REPRESENTATIVES

Management believes that continual improvement in the overall quality of our independent representatives is a key to achieving growth in revenues and earnings. We believe that upgrading the business practices of our representatives not only grows revenue, but assists in limiting the cost of overhead functions and representative noncompliance. We strive to continually improve the overall quality of our force of representatives by:

·	assisting representatives to improve their skills and practices,

·	recruiting established, high-quality representatives, and

·	terminating low-quality representatives.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Productivity

A key metric that we use to assess the average quality of our producing (non-staff) representatives is per capita rep-generated revenue based on a 12-month period. Data for the 12-month periods ended March 31, 2012 and 2011 are presented below:


		Year Ended				Change
		March 31, 2012		March 31, 2011		Dollar	Percentage
Rep-generated revenue:
Commission	$	63,444,938	$	68,111,786	$	(4,666,848)	-6.9%
Advisory		15,958,497		14,977,601		980,896	6.5%
Other fee income		620,595		802,752		(182,157)	-22.7%
	$	80,024,030	$	83,892,139	$	(3,868,109)	-4.6%

Number of representatives		455		519		(64)	-12.3%

Average revenue per representative	$	175,877	$	161,642	$	14,235	8.8%

We believe that the 8.8% increase in per capita rep-generated revenue reflects recruitment and retention of higher producing representatives, as well as culling of part-time lower producing representatives. The Company is focused on driving revenue growth through recruitment and organic growth from existing representatives.

Practice Diversification

We encourage diversification in the investments products and services recommended or selected by our independent representatives for their clients through recruitment, education and training. This enables our representatives to more fully serve the investment and security needs of their clients, particularly in volatile markets. We believe that representatives who offer diversified investment products and sophisticated services to their clients will generate transaction and fee-based business and recurring revenues that will help us weather volatile and down markets.

Comparison of Fiscal Years Ended March 31, 2012 and 2011

The following discussion provides an assessment of our results of operations, capital resources and liquidity and should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this report.

RESULTS OF OPERATIONS



	Year Ended March 31,		Change
	2012	2011	Dollar	Percentage
Revenues:
Commission	$ 63,444,938	$ 68,111,786	$ (4,666,848)	-6.9%
Advisory fees	15,958,497	14,977,601	980,896	6.5%
Other fee income	620,595	802,752	(182,157)	-22.7%
Other income	1,016,732	1,361,826	(345,094)	-25.3%
Total revenue	81,040,762	85,253,965	(4,213,203)	-4.9%

Expenses:
Commissions and advisory fees expense	64,775,584	67,125,324	(2,349,740)	-3.5%
Compensation and benefits	8,744,917	8,471,493	273,424	3.2%
Regulatory, legal and professional	3,979,808	3,983,401	(3,593)	-0.1%
Brokerage, clearing and exchange fees	1,790,263	2,046,543	(256,280)	-12.5%
Technology and communications	1,335,373	1,225,670	109,703	9.0%
Marketing and promotion	956,234	1,383,453	(427,219)	-30.9%
Occupancy and equipment	864,431	914,952	(50,521)	-5.5%
Other administrative	1,219,856	1,101,691	118,165	10.7%
Interest	37,361	23,698	13,663	57.7%
Total expenses	83,703,827	86,276,225	(2,572,398)	-3.0%

Operating loss	(2,663,065)	(1,022,260)	(1,640,805)	160.5%
Benefit for income taxes	(331,236)	(112,130)	(219,106)	195.4%

Net loss	$ (2,331,829)	$ (910,130)	(1,421,699)	156.2%

Adjusted EBITDA:	$ (776,780)	$ (242,218)	$ (534,562)	220.7%

Adjustments to conform adjusted EBITDA to GAAP Net loss:
Income tax benefit	331,236	112,130	219,106	195.4%
Interest expense	(37,361)	(23,698)	(13,663)	57.7%
Depreciation and amortization	(380,139)	(420,409)	40,270	-9.6%
Non-cash compensation	(147,040)	(183,743)	36,703	-20.0%
Non-cash compensation for transfer of beneficial interest to former chairman	(568,095)	-	(568,095)	NA
Non-recurring professional fees	(753,650)	(152,192)	(601,458)	395.2%

Net loss	$ (2,331,829)	$ (910,130)	$ (1,421,699)	156.2%

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Adjusted EBITDA

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), as adjusted by eliminating other non-cash expense such as stock-related compensation, gains or losses on sales of assets, and various non-recurring items such as material expenses incurred in connection with a secondary stock offering that closed on August 2, 2011 (“adjusted EBITDA”), is a key metric we use in evaluating our financial performance. We consider adjusted EBITDA important in monitoring and evaluating our financial performance on a consistent basis across multiple time periods. We also use adjusted EBITDA as an important measure, among others, to analyze and evaluate financial and strategic planning decisions.

Adjusted EBITDA is considered a non-US GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act. Adjusted EBITDA should be considered in conjunction with, rather than as a substitute for, important US GAAP financial measures including pre-tax income, net income and cash flows from operating activities.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Items excluded from adjusted EBITDA are significant and necessary components to the operations of our business; therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance.

Our EBITDA, as adjusted, decreased by $0.54 million in 2012 compared to 2011 as a result of an increase in net loss in 2012 as compared to 2011.

Revenues

A 4.9 % decrease in revenues principally reflects a $4.7 million decline in commissions offset by a $1.0 million growth in advisory fees driven by market growth and increased activity of our representatives.

The decrease in commission revenue primarily resulted from a decline in total transactions processed through our trade desk. This decline in brokerage activity was mostly attributed to a stock market that has been trading flat with no consistency in volume and price increases. Trading has slowed due to prolonged economic uncertainty, the ongoing debt crisis in Europe, and the recession.

There was also a decline in revenues from variable annuities and direct participation programs as new contributions from investors decreased.


Commission Revenue:	Fiscal Year Ended
	March 31,		Dollar	Percentage
	2012	2011	Change	change
Commission Revenue:
Variable Annuities	$ 27,391,570	$ 28,668,847	$ (1,277,277)	-4.5%
Brokerage(1)	25,448,132	28,180,449	(2,732,317)	-9.7%
Direct Mutual Funds Sales	6,199,413	5,565,475	633,938	11.4%
Direct Participation Programs	4,349,839	5,605,362	(1,255,523)	-22.4%
Other	55,984	91,653	(35,669)	-38.9%

Total Commission Revenue	$ 63,444,938	$ 68,111,786	$ (4,666,848)	-6.9%

1. Revenue designated as Brokerage includes revenue from mutual funds sold through our trading platform.

Revenues from advisory fees increased due to asset values growth complimented by an increase in investment contributions. Our advisor-directed managed assets program, A-MAP, where investment advisory services are provided directly by our independent representatives, continues to be the largest portion of our advisory services revenue.

Other fee income, primarily comprised of licensing and annual administrative fees, as well as financial planning fees, decreased due to a significant decrease in our net proceeds collected from our representatives for errors and omissions insurance.

The decrease in other revenue, which consists of net marketing revenues and interest income , resulted primarily from the decline in marketing allowances earned from product sponsor programs. The decline was the result of reduced sales volumes of alternative investment products.

Expenses

Total expenses decreased by $2.6 million, or 3.0%, mostly as a result of decreases in commissions and advisory fees paid to our representatives, marketing and promotion, and regulatory, legal and professional fees. Offsetting these decreases was an increase in compensation and benefits.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Commissions and advisory fees paid to our representatives typically are calculated as percentages of revenue generated by them; accordingly, much of the $2.4 million decrease in commissions and advisor fees reflects a corresponding decrease in commission and advisory fee revenue.

The decline in marketing and promotion expenses can be attributed to a decrease in advertising in brokerage industry periodicals.

Regulatory, legal and professional expenses were relatively flat comparatively, however there was a decrease in regulatory fines that had impacted the Company in the prior year. The Company incurred material legal and professional fees of $0.8 million specifically related to the S-3 registration for the sale of shares held by our former Chairman and majority stockholder.

We will continue to incur legal fees and settlement costs as we operate in a litigious, regulated industry. In addition, from time to time regulatory agencies and self-regulatory organizations institute investigations into industry or firm practices that also may result in the imposition of financial or other sanctions. We invest significant resources to mitigate litigation and regulatory exposure by promoting sound operational procedures, on-going surveillance processes and obtaining comprehensive insurance coverage.

The increase in compensation and benefits was due primarily to $0.57 million in non-cash compensation provided to our former Chairman resulting from a transfer of a life insurance policy in connection with his retirement upon closing of the secondary offering. Offsetting this increase was a decrease in compensation and benefits related to a reduction in workforce during the fourth quarter.

OPERATING AND NET LOSS

Results of operations were jointly impacted by both the associated costs of our S-3 registration for our secondary offering, as well as the market-driven decline in commissionable revenues. The decrease in commissionable revenue attributed to investor’s lack of participation in the financial markets due to uncertainty and the prolonged volatility of the financial markets since the downturn began in 2008. In turn, these decisions to delay investment and related transactions have negatively affected our business results.

With the speculation that a full economic recovery is delayed, investors remain uncertain; therefore there are fewer transactions and fewer new investments. This continued uncertainty in the economy, along with the political and regulatory trends hindered new investments. As a result, the Company has experienced a decrease in investment volume and resulting revenues.

The Company reported a $2.7 million operating loss as compared to $1.0 million of operating loss for the prior period. The Company’s net loss totaled $2.3 million, or $0.36 per basic and diluted net loss per share, compared to a net loss of $0.9 million, or $0.14 basic and diluted net income per share, for the prior period.

The Company’s net loss of $2.3 million reflects a partial valuation allowance of $0.49 million against its deferred tax assets. The Company assessed the realizability of its deferred tax assets to determine whether or not a valuation allowance was required for some or all of its deferred tax assets. The Company considered negative evidence, including its current cumulative loss position for financial reporting purposes over the past three years, and positive evidence, including its recent history of taxable income in three of the past five years and its projections of taxable income in the future. The Company also considered that its recent GAAP losses included certain significant non-deductible and other expenses which management believes to be non-recurring.

These non-recurring expenses include costs incurred in 2012 related to the retirement of the former Chairman and the sale of his shares of the Company in a secondary offering and regulatory fines incurred in prior periods. Based on the foregoing, management has concluded that it is more likely than not that the Company will realize a significant portion of its deferred tax assets, including approximately $0.3 million that will be realized in Fiscal 2013 based on a carry-back against taxable income in prior periods and approximately $1.7 million that management believes to be more likely than not to be realized as result of projected taxable income in future periods.

Management, in a transitional period, feels confident it will achieve profitability and future taxable income; however, it

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

has concluded that the sustained uncertainty in the global economy and its impact on the U.S. financial markets along with the ongoing legal risks and related defense costs inherent in the industry necessitate a valuation allowance in the amount of approximately $0.5 million. If future operations exceed current projections, management may conclude such valuation allowance is no longer needed. Conversely, if future operating results do not meet current projections, it is possible that an additional valuation allowance may be needed in future periods.

The Company has implemented specific expense reduction initiatives during the fourth quarter of this year to lessen exposure to operating losses while applying resources to sustain our recruiting and technology initiatives, all the while addressing growing compliance requirements. The Company is focused on growing revenues organically, therefore is supporting its representatives in growing their business through our internally developed ICC’s CapitalCONNECT technology and related practice management programs.

Liquidity and Capital Resources

Our primary source of liquidity remains cash flows from operations, primarily from our broker-dealer and investment advisory business. Decisions on the allocation of capital include projected profitability and available cash flows, risk management and regulatory capital requirements. A key to this approach is ensuring that industry-standard controls are effective to support our operations and those of our representatives while ensuring sufficient liquidity.

As of March 31, 2012, cash and cash equivalents totaled $4.54 million as compared to $4.59 million as of March 31, 2011. Working capital as of March 31, 2012 was $4.16 million as compared to $5.61 million as of March 31, 2011. The ratio of current assets to current liabilities was 1.61 to 1 as of March 31, 2012 as compared to 1.70 to 1 as of March 31, 2011.

Operations provided $1.74 million in cash for the year ended March 31, 2012 as compared to $0.71 million of cash provided for the year ended March 31, 2011.

In comparing cash flow from operating activities for fiscal year ended March 31, 2012 to fiscal year ended March 31, 2011, cash flows increased by $1.03 million largely due to the significant change in accounts receivable related to accounts held at our clearing firm. Offsetting this increase in cash flows from the change in accounts receivable was a decrease in cash flows from payments on accrued legal settlements and regulatory fines along with a net loss increase of $1.42 million.

Cash flows from investing activities during the current period primarily consisted of the collection on a note that was owed to the firm which provided an increase to cash flows of $0.60 million.

Also, during the current, period cash used in financing activities consisted mostly of principal payments on a short-term note obligation to finance insurance premiums. Cash used for this purpose in both the current and prior periods was $2.23 million and $1.76 million, respectively, for the years ended March 31, 2012 and 2011.The Company had a line of credit covenant with its operating financial institution, but the Company did not achieve the required operating results to utilize the credit line as defined in the covenant’s key metrics.

The Company’s ability to generate positive cash flows will depend on its future results of operations. The Company is in a transition time, continuously striving to mitigate operational and legal risks in a stringent regulatory environment along with aiming to increase its market share. The non-recurring expenses the Company incurred this year related to the S-3 registration and other costs in facilitating the retirement of the former Chairman of the Board has negatively impacted the Company’s ability to generate positive cash flow in this year; however, management believes that the Company will achieve GAAP and taxable income in the future and generate the capital resources needed from its core operations.

REGULATORY NET CAPITAL

ICC is subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires our broker-dealer subsidiary to maintain minimum net capital. As of March 31, 2012, ICC computes net capital requirements under the alternative method, which requires firms to maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances. Repayment or prepayment of subordinated debt, if any, and withdrawal of equity from retiring partners or officers is subject to net capital not falling below 5% of aggregate debits or 120% of minimum net capital requirement.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Prior to March 31, 2011, ICC was subject to minimum net capital of $100,000 and a ratio of aggregate indebtedness to net capital (a “net capital ratio”) not to exceed 15 to 1. Under the rule, indebtedness generally includes all money owed by ICC, and net capital includes ICC cash and assets that are easily converted into cash. SEC rules also prohibit "equity capital" (which, under the net capital rule, includes subordinated loans) from being withdrawn, cash dividends from being paid and other specified actions of similar effect from being taken, if, among other specified contingencies, ICC’s net capital ratio would exceed 10 to 1 or if ICC would have less than 120% of its minimum required net capital.

As of March 31, 2012, ICC had net capital of $1.43 million (i.e., an excess of $1.18 million) as compared to net capital of approximately $2.84 million (i.e., an excess of $2.59 million) as of March 31, 2011. The decrease in net capital primarily was due to legal fees and settlement costs in addition to professional fees incurred for the S-3 registration.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

ITEM 8. Financial Statements And Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Investors Capital Holdings, Ltd. and Subsidiaries

Lynnfield, MA

We have audited the accompanying consolidated balance sheets of Investors Capital Holdings, Ltd. and subsidiaries (the “Company”) as of March 31, 2012 and 2011, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Investors Capital Holdings, Ltd. and subsidiaries, at March 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Marcum LLP

Boston, Massachusetts

June 27, 2012

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012


INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	March 31, 2012	March 31, 2011

Assets
Current Assets
Cash and cash equivalents	$ 4,537,713	$ 4,587,195
Deposit with clearing organization, restricted	175,000	175,000
Accounts receivable	4,525,157	6,798,638
Note receivable (current)	-	108,169
Loans receivable from registered representatives (current), net of allowance	654,560	721,664
Prepaid income taxes	137,658	157,880
Securities owned at fair value	235,454	17,384
Investment	-	50,000
Prepaid expenses	674,780	1,073,969
	10,940,322	13,689,899

Property and equipment, net	340,007	597,735

Long Term Investments
Loans receivable from registered representatives	1,002,621	616,583
Note receivable	-	495,000
Investments	-	214,555
Non-qualified deferred compensation investment	1,327,806	1,089,572
Cash surrender value life insurance policies	157,991	680,429
	2,488,418	3,096,139
Other Assets
Deferred tax asset, net	1,550,010	1,218,773
Capitalized software, net	172,240	132,131
Other assets	-	15,808
	1,722,250	1,366,712

TOTAL ASSETS	$ 15,490,997	$ 18,750,485

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$ 820,540	$ 1,109,400
Accrued expenses	1,408,324	2,078,705
Commissions payable	2,787,467	3,246,898
Notes payable	1,605,688	1,527,969
Unearned revenues	146,198	113,486
Securities sold, not yet purchased, at fair value	8,186	-
	6,776,403	8,076,458
Long-Term Liabilities
Non-qualified deferred compensation plan	1,458,169	1,176,096
	1,458,169	1,176,096

Total liabilities	8,234,572	9,252,554

Commitments and contingencies (Note 15)

Stockholders' Equity:
Common stock, $.01 par value, 10,000,000 shares authorized;
6,689,009 issued and 6,685,124 outstanding at March 31, 2012
6,618,259 issued and 6,614,374 outstanding at March 31, 2011	66,890	66,183
Additional paid-in capital	12,425,713	12,279,380
Accumulated deficit	(5,206,043)	(2,874,214)
Less: Treasury stock, 3,885 shares at cost	(30,135)	(30,135)
Accumulated other comprehensive income	-	56,717
Total stockholders' equity	7,256,425	9,497,931

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 15,490,997	$ 18,750,485

The accompanying notes are an integral part of these consolidated financial statements.

Page 21

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012


INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
		YEARS ENDED
		March 31,

		2012		2011
Revenue:
Commissions	$	63,444,938	$	68,111,786
Advisory fees		15,958,497		14,977,601
Other fee income		620,595		802,752
Other revenue		1,016,732		1,361,826
Total revenue		81,040,762		85,253,965

Expenses:
Commissions and advisory fees		64,775,584		67,125,324
Compensation and benefits		8,744,917		8,471,493
Regulatory, legal and professional services		3,979,808		3,983,401
Brokerage, clearing and exchange fees		1,790,263		2,046,543
Technology and communications		1,335,373		1,225,670
Marketing and promotion		956,234		1,383,453
Occupancy and equipment		864,431		914,952
Other administrative		1,219,856		1,101,691
Interest		37,361		23,698
Total operating expenses		83,703,827		86,276,225

Operating loss		(2,663,065)		(1,022,260)

Benefit for income taxes		(331,236)		(112,130)

Net loss		(2,331,829)		(910,130)


Basic and diluted net loss per share	$	(0.36)	$	(0.14)

Basic and diluted dividends per common share	$	-	$	-

Shares used in basic and diluted per share calculations		6,520,025		6,527,315

The accompanying notes are an integral part of these consolidated financial statements.

Page 22

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Years Ended March 31, 2012 and 2011




	COMMON STOCK $.01 PAR VALUE
	Number of Shares	Carrying Amount	Additional Paid-In Capital	Comprehensive Income	Retained Earnings (Deficit)	Treasury Stock	Accumulated Other Comprehensive	Total Stockholders' Equity

Balance at March 31, 2010	6,595,804	$ 65,958	$ 12,095,862	$ -	$ (1,964,084)	$ (30,135)	$ 29,833	$ 10,197,434
Stock-based compensation:
Amortization of deferred compensation			183,743					183,743

Issuance of common stock under plans	30,000	300	(300)

Cancelled restricted shares	(7,545)	(75)	75

Comprehensive income:
Net loss				(910,130)	(910,130)

Other Comprehensive Income:
Unrealized gain on securities:
Unrealized holding gains arising during
the period				26,884

No reclassification adjustment required				-

Other comprehensive income				26,884			26,884

Comprehensive income				$ (883,246)				$ (883,246)
Balance at March 31, 2011	6,618,259	$ 66,183	$ 12,279,380	-	$ (2,874,214)	$ (30,135)	$ 56,717	$ 9,497,931
Stock-based compensation:
Amortization of deferred compensation			147,040					147,040

Issuance of common stock under plans	74,401	744	(744)

Cancelled restricted shares	(3,651)	(37)	37

Comprehensive income:
Net loss				(2,331,829)	(2,331,829)

Other Comprehensive Income:
Unrealized gain on securities:
Unrealized holding loss arising during
the period				(3,824)

Reclassification adjustment				(52,893)

Other comprehensive income				(56,717)			(56,717)

Comprehensive income				$ (2,388,546)				$ (2,388,546)
Balance at March 31, 2012	6,689,009	$ 66,890	$ 12,425,713	$ -	$ (5,206,043)	$ (30,135)	$ -	$ 7,256,425

Page 23

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The accompanying notes are an integral part of these consolidated financial statements.

Page 24

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012


INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
		Years Ended
		March 31,
		2012		2011
Cash flows from operating activities:
Net loss	$	(2,331,829)	$	(910,130)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization		380,139		420,409
Change in valuation allowance on deferred tax asset		443,700		20,988
Deferred taxes		(774,936)		(400,988)
Stock-based compensation		147,040		183,743
Non-cash compensation for transfer of beneficial interest in life insurance to former chairman		568,095		-
Unrealized loss (gain) in marketable securities		(13,412)		2,047
Non-qualified deferred compensation investment		36,159		44,559
Loss on disposal of equipment		14,542		-
Market adjustment cash surrender value life insurance policy		(9,214)		(20,145)
Charge to commission expense (forgivable loans)		291,874		304,205
Allowance for bad debt expense		100,228		20,733
Loss on write down on permanent decline of investment		50,000		-
Change in operating assets and liabilities:
Accounts receivable		2,273,481		(756,452)
Prepaid expenses and other		422,676		30,444
Loans receivable from registered representatives		(711,036)		(601,038)
Income taxes		20,222		401,127
Accounts payable		2,020,645		2,448,494
Securities, net		(36,062)		32,809
Accrued expenses		(670,381)		(279,981)
Commissions payable		(459,431)		(241,517)
Unearned revenues		32,712		11,555
Net cash provided by operating activities		1,795,212		710,862

Cash flows from investing activities:
Acquisition of property and equipment		(71,952)		(196,946)
Cash surrender value life insurance policies		(36,443)		(108,885)
Payments on note receivable		603,169		132,429
Purchase of investments		(2,572)		(3,351)
Capitalized software		(105,110)		-
Net cash provided by (used in) investing activities		387,092		(176,753)

Cash flows from financing activities:
Payments on note payable		(2,231,786)		(1,759,809)
Net cash used in financing activities		(2,231,786)		(1,759,809)

Net increase (decrease) in cash and cash equivalents		(49,482)		(1,225,670)
Cash and cash equivalents, beginning of year		4,587,195		5,812,865

Cash and cash equivalents, end of year	$	4,537,713	$	4,587,195

Supplemental disclosures of cash flow information:
Interest paid	$	27,468	$	23,698
Income taxes paid	$	-	$	37,000

Non-cash investing activity:
Reclassification of investment from available for sale to trading	$	212,553	$	-
	$	212,553	$	-
Non-cash financing activity:
Insurance premiums	$	2,309,505	$	2,156,855

Page 25

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The accompanying notes are an integral part of these consolidated financial statements.

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended March 31, 2012 and 2011

NOTE 1 - NATURE OF OPERATIONS

Incorporated in 1995 under Massachusetts law and redomesticated under Delaware law in 2007, Investors Capital Holdings, Ltd. ("ICH") is a holding company whose wholly-owned subsidiaries assist a nationwide network of independent registered representatives ("representatives") in providing a diversified line of financial services to the public including securities brokerage, investment advice, asset management, financial planning and insurance. Our subsidiaries include the following:

Investors Capital Corporation ("ICC") is duly registered under the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and applicable state law to provide broker-dealer and investment advisory services nationwide. ICC’s national network of independent financial representatives is licensed to provide these services through ICC under the regulatory purview of the Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority (“FINRA”) and state securities regulators. ICC executes and clears its public customer accounts on a fully disclosed basis through Pershing, LLC (“Pershing”). ICC, doing business as Investors Capital Advisors (“ICA”), also provides investment advisory services.

·	ICC Insurance Agency, Inc. facilitates the sale of insurance and annuities by our representatives.

·	Investors Capital Holdings Securities Corporation ("ICH Securities") holds cash, cash equivalents, interest income and dividend income for ICH.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of the Company are summarized below to assist the reader to better understand the consolidated financial statements and other data contained herein.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, ICC, ICC Insurance Agency, Inc., and ICH Securities. All significant inter-company items and transactions have been eliminated in the consolidation.

Use of Estimates and Assumptions

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, if any, at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Those estimates deal with the valuation of securities and other assets revenue recognition, legal reserves and allowance for doubtful accounts receivable and involve a particularly high degree of judgment and complexity. Actual results could differ from those estimates.

Revenue Recognition

The Company’s revenue recognition policies are summarized below.

Page 26

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Mutual Funds/Variable Annuities. Revenue from the sale of mutual funds and variable annuities is recognized as of the date the check and application is accepted by the investment company.

Brokerage. The Company earns commissions through stock purchase and sale transactions, mutual fund purchases, government and corporate bonds transactions, fee-based managed accounts and ticket charges. The Company also earns revenue in the form of 12b-1 fees and interest on account balances. The earnings process is substantially complete at trade date in accordance with the rules of FINRA and the SEC.

The Company also receives credit for clearing charge adjustments that are netted against any clearing charges the Company may incur for the period. These adjustments are recognized as income in the period received unless otherwise noted by the clearing Company.

Unrealized gains and losses are recorded at the time that the Company reconciles its trading positions with the market value. The unrealized gains or losses are adjusted to market until the position is settled or the trade is cancelled.

Advisory Fees. Our managed accounts advisory fees are based on the amount of assets managed per agreement negotiated between our independent representatives and their clients. These revenues are recorded quarterly as and when billed based on the fair market value of assets managed throughout the quarter. Any portion remaining uncollected due to account adjustments after account rebalancing is charged against earnings at quarter end.

Administration Fees. Administration fees for services rendered to the Company’s representatives respecting annual FINRA license renewals and Error and Omissions (“E&O”) insurance are recognized as revenue upon registration of the representative with FINRA and listing of the registered representative with the E&O insurance carrier. The funds received from the registered representative are initially recorded as unearned revenue. The amounts collected in excess of the E & O insurance premium and/or fees due FINRA, if any, are recognized as revenue. Fees collected to maintain books and records are deferred and recognized ratably throughout the year.

Other Revenue. Revenue from marketing associated with product sales is recognized quarterly based on production levels. Marketing event revenues are recognized at the commencement of each event offset by its costs. Revenue from ICC’s technology platform, Capital Connect, is recognized monthly based on a representative’s selected package, which provides them access to a portal, in addition to receiving IT support. The service terminates immediately if a representative is no longer with the firm or it is temporarily suspended, in either case, there will be no additional fees to be recognized as income.

Cash and Cash Equivalents

For purposes of reporting cash flow, cash and cash equivalents includes cash in checking and savings accounts, cash at its clearing firm and short-term investments with original maturities of 90 days or less.

Customer Accounts

The Company's customer accounts are reported by the various custodians on a fully disclosed basis.

Financial Instruments

The Company’s financial assets and liabilities are reported in the statements of financial condition at readily ascertainable fair value or at carrying amounts that approximate fair value as these financial instruments generally have short maturity periods. The fair value of securities owned and trading securities sold, not yet purchased are equal to the carrying value. Changes in the fair value of these securities are reflected in the results of operations.

Marketable Securities

The Company classifies their short-term investments as trading, available for sale, or held to maturity. The Company's marketable securities consist of fixed income instruments and mutual funds and have been classified by management as

Page 27

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

trading. Accordingly, realized and unrealized gains and losses at year-end are included in the earnings of the Company. The fair market values of these securities are determined based on quoted market prices.

The Company conducts its principal trading through two designated trading accounts. One of these accounts is used to facilitate fixed income trading on a same day buy-sell basis. The second account is used to facilitate fixed income trading for representatives and may carry positions overnight. These securities are normally held in the account for no longer than 30 days and are recorded at fair market value.

Advertising

The Company expenses all promotional costs as incurred.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the related assets, over a period of three to seven years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease. Routine repairs and maintenance are expensed as incurred.

The Company reviews the carrying value on its property and equipment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from its use and eventual disposition. In cases where an asset is not in use and subsequently disposed of, the Company recognizes a loss on disposal that is equal to the carrying value at the time of disposal offset against any proceeds received. The Company also considers obsolescence in determining whether or not an asset is no longer in use. The Company reported a loss on its disposal of property and equipment of $14,542 and $0 respectively, for the years ended March 31, 2012 and 2011.

Income Taxes

The Company uses the asset and liability method to account for income taxes, which requires recognition of deferred tax assets, subject to valuation allowances, and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or loss in the period that includes the enactment date.

The Company, in preparing its income tax provision, bases the calculation on its annual projection of income or loss from operations. The annual projection is reconciled on a quarterly basis to changes in estimates, and at year end the calculation is based on the reported results of operations. Certain expenses are not deductible for tax purposes, creating permanent differences that increase or decrease the income tax provision and effective income tax rate.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Management considered whether or not the total deferred tax asset would be realized. The Company in weighing both positive and negative evidence as required by U.S. GAAP, has recorded a valuation allowance for a portion of the deferred tax asset as described in - NOTE 13.

The Company reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. Reserves related to uncertain tax positions are based on a determination of whether and how much of a tax benefit taken in our tax filings or positions is more likely than not to be realized, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. We believe appropriate provisions for outstanding issues have been made.

Earnings Per Share

The Company reports net income (loss) per share. Diluted earnings per share do not include the effect of stock options as it has an anti-dilutive effect on earnings per share (See Note 19). Basic and diluted net income per common share are determined by dividing net income by the weighted average number of common shares outstanding during the period.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Segment Reporting

The Company makes disclosures about products and services, and major customers. See “Note 14, Segment Information”.

Accounts Receivable – Allowance for Doubtful Accounts

The Company’s policies for determining whether a receivable is considered uncollectible are as follows:

Trade Receivables. As prescribed by the SEC, trade receivables usually settle within three days. If a trade error occurs, the Company pursues remedies to collect on the trade error. The Company does not record a receivable resulting from a trade error that is in litigation or whose outcome is otherwise not reasonably determinable. In such a case, the Company applies any proceeds from settlements or insurance against any trade losses incurred.

Loans to representatives. Management performs periodic evaluations and provides an allowance based on the assessment of specifically identified unsecured receivables and other factors, including the representative's payment history and production levels. Once it is determined that it is both probable that a loan has been impaired, typically due to the termination of the relationship, and the amount of loss can reasonably be estimated, the portion of the loan balance estimated to be uncollectible is so classified. Loans charged to commission expense, upon the representative meeting his or her respective forgiveness target totaled $291,874 and $304,205 for the fiscal years ended March 31, 2012 and 2011. See “Note 3, Loans to Registered Representatives”.

Valuation of Securities and Other Assets

Substantially all financial instruments are reflected in the consolidated financial statements at fair value or amounts that approximate fair value. These include cash; cash equivalents; securities purchased under agreements to resell; deposits with clearing organizations; securities owned; and securities sold but not yet purchased. Certain financial instruments are classified as trading, available for sale, and held to maturity. The realized gains and losses are recorded in the income statement in the period in which the transactions occurred. The related unrealized gains and losses are reflected in other comprehensive income depending on the underlying purpose of the instrument. The Company records its private equity holdings at cost as the Company does not exercise significant influence over these equity investments.

As of March 31, 2011, the Company had an available for sale investment for which it records unrealized gains or losses as accumulated other comprehensive income on the balance sheet. The Company had an unrealized gain of $26,884 for the fiscal year ended March 31, 2011 and accumulated other comprehensive income of $56,717 as of March 31, 2011. On December 31, 2011 the Company reclassified this investment from an available for sale investment to a trading security. The Company has reported an unrealized gain as a result of the reclassification of the investment in the amount of $52,893 which is presented as other revenue in its statement of operations. The Company had reported an unrealized loss of $3,824 as other comprehensive income for this investment prior to its reclassification.

Where available, the Company uses prices from independent sources such as listed market prices, or broker or dealer price quotations. Fair values for certain derivative contracts are derived from pricing models that consider current market and contractual prices for the underlying financial instruments or commodities, as well as time value and yield curve or volatility factors underlying the positions. In addition, even where the value of a security is derived from an independent market price or broker or dealer quote, certain assumptions may be required to determine the fair value. For instance, the Company generally assumes that the size of positions in securities that the Company holds would not be large enough to affect the quoted price of the securities if the Company were to sell them, and that any such sale would happen in an orderly manner. However, the actual value realized upon disposition could be different from the current carrying value.

Internal Use of Software

The costs of internally developed software that qualify for capitalization are capitalized as fixed assets and subsequently amortized over the estimated useful life of the software, which is generally three years. The costs of internally developed software are included in fixed assets at the point at which the conceptual formulation, design and testing of possible software project alternatives are complete and

Page 29

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

management authorizes and commits to funding the project. The Company does not capitalize projects where it believes that the future economic benefits are less than probable.

Reclassifications

Certain amounts in 2011 were reclassified to provide comparison with 2012 classifications. There was no impact to previously reported Net income (loss) or Net income (loss) per share.

Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were available to be filed. There were no material subsequent events requiring adjustment to or disclosure in these financial statements.

Recent Accounting Pronouncements

Fair Value Measurement. In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820). This updated accounting guidance establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). This guidance includes amendments that clarify the intent about the application of existing fair value measurements and disclosures, while other amendments change a principle or requirement for fair value measurements or disclosures. This guidance is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations.

Comprehensive Income. In June 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. Instead, the new rule will require an entity to present net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate but consecutive statements. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years beginning after December 15, 2011 and for interim periods within those years The Company has adopted this rule as of April 01, 2012. While the adoption of this new guidance will change the presentation of comprehensive income, it will not have a material impact on the Company’s results of operations or financial position.

NOTE 3 – Loans to Registered Representatives

ICC has granted loans to certain registered representatives with the stipulation that the loans will be forgiven if the representatives remain licensed with the Company for an agreed upon period of time, generally one to five years, and/or meet specified performance goals. Upon forgiveness, the loans are charged to commission expense for financial reporting purposes. Loans charged to commission expense totaled $291,874 and $304,205 for the fiscal years ended March 31, 2012 and 2011, respectively.

Some loans to registered representatives are not subject to a forgiveness contingency. These loans, as well as loans that have failed the forgiveness contingency, are repaid to the Company by deducting a portion of the representatives’ commission payouts throughout the commission cycle until the loans are repaid.

Interest charged on these loans to representatives range from 3% to 9.00% annually. Loans to registered representatives included in receivables from employees and registered representatives are as follows at March 31:



	2012	2011
Other loans	$ 757,018	$ 712,590
Forgivable loans	1,057,497	682,762
Less: allowance	(157,334)	(57,105)
Total loans	$ 1,657,181	$ 1,338,247

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Included in other loans is a loan receivable from a registered representative in connection with a regulatory matter settled with the Massachusetts Securities Division on October 27, 2010. This representative has agreed to reimburse the Company for certain amounts paid by the Company with respect to this regulatory matter. The amount due on this receivable at March 31, 2012 and 2011 was $391,560 and $450,000, respectively.

NOTE 4 - NOTE RECEIVABLE

On October 24, 2005, the Company entered into an agreement (the “Transition Agreement”) with Dividend Growth Advisors, LLC (“DGA”). The Company agreed to terminate its Investment Advisory Agreement with Eastern Point Advisors Funds Trust (the “Trust”) effective October 18, 2005 and to permit the appointment by the Trust of DGA to succeed the Company as the Trust’s investment advisor. Under the terms of the Transition Agreement and an associated promissory note (the “Note”), the receivable owed by the Trust to the Company was assigned to DGA and DGA agreed to pay the Company an amount equal to the total of all fees that the Company had waived or remitted to a fund in the Trust through October 18, 2005.

On February 28, 2012, the Company received $499,475 in principal and accrued interest in full satisfaction and repayment of the Note. The Note had provided for a principal amount of $747,617, quarterly payments of interest accruing thereon at 5.5% and a full payment on or before October 31, 2010. The terms of this note were modified, effective March 3, 2010 to extend maturity by four years to October 31, 2014 and require annual principal payments of $100,000. The total outstanding as of March 31, 2011 was $603,169. The interest accrued on this note was $8,169 at March 31, 2011.

NOTE 5 - SECURITIES OWNED AND SECURITIES SOLD, NOT YET PURCHASED AT FAIR VALUE

Trading and investment securities owned consist of both marketable securities and not readily marketable securities and are recorded at fair value. Securities sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations.

As of March 31, 2012 and 2011, the Company’s proprietary trading and investment accounts consisted of the following securities:

Page 31

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012


	March 31, 2012
		Sold, Not Yet
	Owned	Purchased
Corporate equity	$ 4,796	$ 7,900
Mortgage-backed security	2,672	-
Mutual funds	227,986	286
	$ 235,454	$ 8,186

	March 31, 2011
		Sold, Not Yet
	Owned	Purchased
Corporate equity	$ 14,790	$ -
Mortgage-backed security	2,594	-
	$ 17,384	$ -

Included in the category mutual funds is an investment called the Goldman Sachs Rising Dividend Fund, formerly The Rising Dividend Growth Fund.

On December 31, 2011 the Company reclassified this investment as an investment held for trading. As of March 31, 2012 the Company’s intent is to still trade this investment that has a fair value of $227,986. This investment, which previously was deemed as an available for sale investment, had a fair value of $214,555 as of March 31, 2011.

NOTE 6 - INVESTMENTS

As of March 31, 2011, the Company owned investments with a face value of $50,000, classified as held to maturity through December 31, 2011. The Company recognized a $50,000 loss for the year ended March 31, 2012 due to a permanent decline in the market value of this investment. The inability of the issuer to pay on its debenture led to this permanent decline.

NOTE 7 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK

The Company is engaged in various trading and brokerage activities whose counterparties primarily include the general public. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. Securities sold, but not yet purchased, represent obligations of the Company to purchase the security in the market at the prevailing prices to the extent that the Company does not already have the securities in possession. Accordingly, these transactions result in off-balance sheet risk when the Company's satisfaction of the obligations exceeds the amount recognized in the balance sheet. The risk of default depends on the creditworthiness of the counterparty of the issuer of the instrument. It is the Company's policy to review, as necessary, the credit standings of each counterparty with which it conducts business.

Commission’s receivables from one source were 10% and 38% of total receivables for the years ended March 31, 2012 and 2011, respectively.

Page 32

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

At March 31, 2012, the bank statement balance of the Company's cash and cash equivalents was $4,716,350. Of the bank statement balance, $250,000 was covered by federal depository insurance. The Company's cash and cash equivalents as of March 31, 2012 also include $702,751 at its clearing broker-dealer of which $500,000 was fully insured by the Securities Investor Protection Corporation (“SIPC”).

At March 31, 2011, the bank statement balance of the Company's cash and cash equivalents was $4,775,081. Of the bank statement balance, $250,000 was covered by federal depository insurance and $1,720,431 was covered by the Depositors Insurance Fund of Massachusetts. The Company's cash and cash equivalents as of March 31, 2011 also include $702,788 at its clearing broker-dealer of which $500,000 was fully insured by the Securities Investor Protection Corporation (“SIPC”).

NOTE 8 – FAIR VALUE MEASUREMENTS

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

·	Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities the Company has the ability to access.

·	Level 2 - Inputs are inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly.

Level 3 - Inputs include unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company’s own data.)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following table presents the Company's fair value hierarchy for those financial assets and liabilities measured at fair value as of March 31, 2012:



Fair Value Measurements on Recurring Basis
	Total	Level 1	Level 2	Level 3
Assets:
Securities owned at fair value
Mutual funds	$ 227,987	$ 227,987	$ -	$ -
Equities	4,796	4,796	-	-
Asset backed securities	2,671	-	2,671	-
Total assets	$ 235,454	$ 232,783	$ 2,671	$ 0

Liabilities:
Securities sold, not yet purchased at fair value
Mutual funds	$ 286	$ 286	$ -	$ -
Equities	7,900	7,900	-	-
Total liabilities	$ 8,186	$ 8,186	$ 0	$ 0

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value as of March 31, 2011:


Fair Value Measurements on Recurring Basis
	Total	Level 1	Level 2	Level 3

Assets:
Investments
Mutual funds	$ 214,555	$ 214,555	$ 0	$ 0
Corporate Bonds	50,000	50,000

Securities owned at fair value
Equities	14,790	14,790	0	0
Asset backed securities	2,594	2,594	0	0

Mutual funds(1)	10,823	10,823	0	0

Total assets	$ 292,762	$ 292,762	$ 0	$ 0

₁ Amount labeled as Mutual funds are included in Non-qualified Deferred compensation investment on the Consolidated Balance Sheet.

Valuation of Marketable Trading and Investment Securities Owned

The fair value of marketable trading and investment securities owned is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated as the last quoted bid price.

Valuation of Trading Securities Sold, Not Yet Purchased

As a broker-dealer, the Company is engaged in various securities trading and brokerage activities as principal. In the normal course of business, the Company sometimes sells securities they do not currently own and will therefore be obligated to purchase such securities at a future date. This obligation is recorded on the balance sheet at fair value based on quoted market prices of the related securities and will result in a trading loss if the fair value increases and a trading gain if the fair value decreases between the balance sheet and date of purchase.

Valuation of Mutual Funds

The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter market and listed securities for which no sale was reported on that date are stated as the last quoted bid price.

NOTE 9 – RELATED-PARTY TRANSACTIONS

From time to time the Company may enter into transactions with related parties which occur in the normal course of business and are deemed to be transacted at “arm’s length” by management or that the Company deems immaterial.

Page 34

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The Company leases office space from a related party, the owner of which was the principal stockholder of ICH and Chairman of the Board of Directors. Rent expense, including condo fees, for these leases amounted to $343,697 and $335,064 for the years ending ended March 31, 2012 and 2011, respectively, and is included in occupancy costs on the consolidated statements of operations.

The Company engages in transactions with a related party, whose owner is the spouse of the Company’s former principal stockholder, in connection with the promotion and servicing of fixed insurance products produced by the Company’s independent representatives. Payments made by the Company to IMS Insurance, when combined with payments received by the Company from IMS Insurance were immaterial for the years ended March 31, 2012 and 2011.

The Company bills a broker dealer, whose owner is the spouse of the Company’s former principal stockholder and Chairman of the Board of Directors, ticket charges for executing its trades and being the introducing broker. Amounts billed for the years ended March 31, 2012 and 2011 were immaterial. Also, for the year ended March 31, 2012, the Company earned referral fees for the transfer of representatives to this broker dealer. The fees earned were immaterial.

On August 2, 2011, the Company completed its secondary stock offering at a price of $4.25 per share of 3,608,820 shares of its common stock owned by its former Chairman of the Board and principal stockholder, Theodore E. Charles, members of his family, family trusts and a controlled charitable foundation (the “selling stockholders”). Upon the closing of the offering, (i) Mr. Charles retired as an officer and director of the Company, (ii) his employment agreement with the Company was terminated due to retirement, (iii) his consultant agreement with the Company was amended to shorten the term to one year and reduce certain employment benefits and (iv) The Company awarded Mr. Charles, the former Chairman, non-cash compensation of a $0.57 million cash surrender value on title to an existing life insurance policy.

NOTE 10- PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following at March 31:



	2012	2011
Equipment	$ 1,945,271	$ 1,919,795
Leasehold improvements	624,368	673,312
Furniture and fixtures	377,662	397,444
	2,947,301	2,990,551
Accumulated depreciation and amortization	(2,607,294)	(2,392,816)
Property and equipment, net	$ 340,007	$ 597,735

Depreciation expense was $315,138 and $373,393 for the year’s ended March 31, 2012 and 2011, respectively.

NOTE 11 - NOTES PAYABLE

At March 31, 2012 and 2011, notes payable consisted of debt to finance insurance premiums. These notes are referenced in the table below:


March 31,	Lender	Premium		Principal	Interest Rate	Maturity Date
2012	AFCO	Directors and Officers, Liability, Fidelity Bond	$	306,465	2.10%	February 17, 2013
	Premium Financing	Errors and Omissions		1,248,203	1.95%	October 1, 2012
	FINRA	Regulatory Fine		51,020	6.25%	July 19,2012
			$	1,605,688

2011	AFCO	Directors and Officers, Liability, Fidelity Bond	$	379,688	2.18%	February 17, 2012
	Flat Iron Funding	Errors and Omissions		1,148,281	1.99%	November 30, 2011
			$	1,527,969

Page 35

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

For the years ended March 31, 2012 and 2011 there was no long-term debt outstanding.

NOTE 12 – LINE OF CREDIT

The Company has a line of credit (“Line”) with maximum borrowings of $1,000,000 at the Bank’s base lending rate (5.00% per year as of March 31, 2012). The Line became effective on November 22, 2011, and is subject to annual renewal and contains a customary minimum debt service covenant. There is no outstanding balance at March 31, 2012.

NOTE 13 - INCOME TAXES

The (benefit) provision for income taxes is as follows for the fiscal years ended March 31:


	2012	2011
Current:
Federal	$ -	$ 177,923
State	-	89,947
	$ -	$ 267,870

Deferred:
Federal	$ (584,570)	$ (328,919)
State	(190,367)	(51,081)
	$ (774,937)	$ (380,000)

Increase in valuation allowance	443,701	-

Benefit for income taxes	$ (331,236)	$ (112,130)

Deferred income taxes are the result of timing differences between book and taxable income and consist primarily of deferred compensation, legal accruals, differences between depreciation expenses, and a net operating loss for financial statement purposes versus tax return purposes.

Net deferred tax assets (liabilities) within each tax jurisdiction consisted of the following at:


	March 31, 2012
	Asset	Liability	Valuation Allowance	Net deferred tax asset

Federal	$ 1,713,460	$ (151,771)	$ -	$ 1,561,689
State	534,389	(57,371)	-	477,018
Valuation allowance	-	-	(488,697)	(488,697)
Total	$ 2,247,849	$ (209,142)	$ (488,697)	$ 1,550,010

	March 31, 2011
	Asset	Liability	Valuation Allowance	Net deferred tax asset

Federal	$ 991,312	$ (39,081)	$ -	$ 952,231
State	319,873	(8,335)	-	311,538
Valuation allowance	-	-	(44,996)	(44,996)
Total	$ 1,311,185	$ (47,416)	$ (44,996)	$ 1,218,773

Page 36

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The following is a summary of the significant components of the Company's deferred tax assets and liabilities:


	Years Ended March 31,
	2012	2011
Deferred tax assets (liabilities):
Accrued legal and settlements	$ 501,088	$ 525,934
Deferred compensation	692,833	573,984
Net operating losses and other	844,546	84,216
Depreciation	96,686	127,051
Valuation allowance	(488,697)	(44,996)
Liabilities	(96,446)	(47,416)
Total deferred tax assets	$ 1,550,010	$ 1,218,773

The total income tax provision (benefit) differs from the income tax at the statutory federal income tax rate due to the following:


	Years Ended March 31,
	2012	2011

Tax at U.S. statutory rate	$ (905,437)	$ (339,075)
State taxes, net of federal benefit	(121,993)	6,476
Unallowable expenses	211,259	191,842
Change in valuation allowance	443,701	20,988
Other adjustments	41,234	7,639
(Benefit) provision for income taxes	$ (331,236)	$ (112,130)

Page 37

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

allowance was required for some or all of its deferred tax assets. The Company considered negative evidence, including its current cumulative loss position for financial reporting purposes over the past three years, and positive evidence, including its recent history of taxable income in three of the past five years and its projections of taxable income in the future. The Company also considered that its recent GAAP losses included certain significant non-deductible and other expenses which management believes to be non-recurring.

These non-recurring expenses include costs incurred in 2012 related to the retirement of the former Chairman and the sale of his shares of the Company in a secondary offering and regulatory fines incurred in prior periods. Based on the foregoing, management has concluded that it is more likely than not that the Company will realize a significant portion of its deferred tax assets, including approximately $0.3 million that will be realized in Fiscal 2013 based on a carry-back of net operating losses against taxable income in prior periods and approximately $1.7 million that management believes to be more likely than not to be realized as result of projected taxable income in future periods.

Management, in a transitional period, feels confident it will achieve profitability and future taxable income; however, it has concluded that the sustained uncertainty in the global economy and its impact on the U.S. financial markets along with the ongoing legal risks and related defense costs inherent in the industry necessitate a valuation allowance in the amount of approximately $0.5 million. If future operations exceed current projections, management may conclude such valuation allowance is no longer needed. Conversely, if future operating results do not meet current projections, it is possible that an additional valuation allowance may be needed in future periods.

The Company recognizes and measures its unrecognized tax benefit or expense. The Company assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. The measurement of unrecognized tax expense or benefit is adjusted when new information is available or when an event occurs that requires a change. The Company recognizes the accrual of any interest and penalties related to unrecognized tax expense in income tax expense. No interest or penalties were recognized in 2012 and 2011. The Company does not have any tax positions as of March 31, 2012 for which it is reasonably possible that the total amounts of unrecognized tax benefit or expense will significantly increase or decrease within twelve months of the reporting date.

NOTE 14 - SEGMENT INFORMATION

Operating segments are defined as components of a business about which separate financial information is available that is regularly evaluated by management in deciding how to allocate resources and in assessing performance. The Company evaluates performance based on profit and loss from operations before income taxes not including nonrecurring gains and losses.

The Company's reportable operating segments are (i) broker/dealer and related services offered through ICC and (ii) asset management (investment advisory) services offered through ICC, doing business as ICA. The segments are strategic business units that are managed separately. They operate under different regulatory systems, provide different services and require distinct marketing strategies and varied technological and operational support. They also have differing revenue models; ICC earns transactional commissions and various fees in connection with the brokerage of securities for its customers, whereas ICA generates recurring revenue from fees that are based on the value of assets under management.

The Company accounts for inter-segment services and transfers as if the services or transfers were to third parties, that is, at current market prices. In presenting segment data, all corporate overhead items are allocated to the segments, and inter-segment revenue, expense, receivables and payables are eliminated. Currently it is impractical to report segment information using geographical concentration.

Assets are allocated among ICH and its subsidiaries based upon legal ownership and the services provided. Total period-end assets are presented on a stand-alone basis, i.e., without inter-company eliminations. The Company does not allocate income taxes or unusual items to segments. Corporate items and eliminations are presented in the following table for the purpose of reconciling the stand-alone asset amounts to total consolidated assets.

Page 38

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Management allocates all expenses separately to the parent and ICC, including allocation of costs associated with shared personnel, based upon time studies and a determination of which entities are the beneficiaries of the services rendered by the personnel. Within ICC, expenses are further allocated between the two segments, ICC and ICA, as follows: overhead expenses pro rata to revenue, direct full-time and time-shared employee costs based on the segments being served, and other personnel-related expenses pro rata to head count.

In addition, ICC reimburses ICH in the form of a management fee for ICH-incurred overhead expenses that are necessary for ICC to effectively conduct its operations. This overhead primarily is in the nature of salaries and professional and legal fees incurred to obtain such services as audit engagements, legal advice, and industry expertise.

The Company periodically reviews the effect that these agreements described above may have on the firm’s net capital.


	March 31, 2012
	Commissions	Advisory	ICH		ICH Securities		Totals

Non-interest revenue	$ 64,449,550	$ 16,216,702	$ 16,782		$ -		$ 80,683,034
Revenue from transaction with
other operating segments:	1,328,250	-		-		-		$ 1,328,250
Interest and dividend income, net	354,944	-	2,744		40		$ 357,728
Depreciation and amortization	378,972	1,167	-		-		$ 380,139
Income (loss) from operations	(2,940,143)	1,838,183	(1,561,145)		40		$ ( 2,663,065 )
Year end total assets	14,034,601	360,196	2,319,824		10,330		$ 16,724,951
Corporate items and eliminations	-	-	(1,233,954)		-		$ ( 1,233,954 )

	March 31, 2011
	Commissions	Advisory	ICH		ICH Securities		Totals

Non-interest revenue	$ 69,774,623	$ 15,176,985	$ ( 44,558 )		$ -		$ 84,907,050
Revenue from transaction with
other operating segments:	1,443,691	-	-		-		$ 1,443,691
Interest and dividend income, net	343,280	-	3,584		51		$ 346,915
Depreciation and amortization	419,242	1,167	-		-		$ 420,409
Income (loss) from operations	(1,146,249)	700,688	(576,750)		51		$ ( 1,022,260 )
Year end total assets	15,347,151	1,154,385	2,601,588		10,290		$ 19,113,414
Corporate items and eliminations	-	-	(362,929)		-		$ ( 362,929 )

Page 39

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

NOTE 15 - COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its primary office space in Lynnfield, Massachusetts from a former related party (see Note 9). In October 2009, this lease term was extended to March 31, 2015. The Company continued to lease office space for offices located in Topsfield, Massachusetts from a related party (see Note 9) and Coral Gables, Florida. These leases expired in March 2012 and November 2011, respectively. The Company has entered into various operating leases for office equipment and furniture.

The total minimum rental due in future periods under these existing agreements as of March 31, 2012 are as follows:


		2013	$ 282,250
		2014	276,354
		2015	282,214
		2016	24,000
		2017	24,000

			$ 888,818

Rent expense under the operating leases was $386,525 and $393,269 for the years ended March 31, 2012 and 2011, respectively, and is included in occupancy costs in the statement of income.

The Company offers loans and transition assistance to its representatives mainly for recruiting or retention purposes. These commitments are contingent upon certain events occurring, including, but not limited to, the representatives joining the Company and meeting certain production requirements. As of March 31, 2012 and 2011, there were no such outstanding commitments.

NOTE 16 - LITIGATION AND REGULATORY MATTERS

In the ordinary course of business, the Company and its subsidiaries are routinely defendants in or parties to pending and threatened arbitrations and other legal actions and proceedings brought on behalf of various claimants, some of which seek material and/or indeterminable amounts. Certain of these actions and proceedings are based on alleged violations of securities, consumer protection, labor and other laws and may involve claims for substantial monetary damages asserted against the Company and its subsidiaries. Also, the Company and its subsidiaries are subject to regulatory examinations, information gathering requests, inquiries, investigations and formal administrative proceedings that may result in fines or other negative impact on the Company. ICC, as a duly registered broker/dealer and investment advisor, is subject to regulation by the SEC, FINRA, NYSE-Amex, state securities regulators and other state securities regulators.

The Company maintains Errors and Omissions (“E&O”) insurance to protect itself from potential damages and/or legal costs associated with certain litigation and arbitration proceedings and, as a result, in the majority of cases, the Company’s exposure is limited to $100,000 or $250,000 (effective January 2012 for only alternative investment product related settlements) in any one case, subject to policy limitations and exclusions.

The Company also maintains a fidelity bond to protect itself from potential damages and/or legal costs related to fraudulent activities pursuant to which the Company’s exposure is usually limited to a $350,000 deductible per case, subject to policy limitations and exclusions.

The Company recognizes a legal liability when management believes it is probable that a liability has been incurred and the amount can be reasonably estimated. Conclusions on the likelihood that a liability has been incurred and estimates as to the amount of the liability are based on consultations with the Company’s General Counsel who, when situations warrant, may engage and consult external counsel to assist with the evaluation and handle certain matters. Legal fees for

Page 40

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

defense costs are expensed as incurred and classified as professional services within the consolidated statements of income.

As of March 31, 2012 and March 31, 2011, the Company had accrued expenses of approximately $1,217,300 and $1,651,000, respectively, in legal fees and estimated probable settlement costs relating to the Company’s defense in various legal matters. It is possible that some of the matters could require the Company to pay damages or make other payments or establish accruals in amounts that could not be estimated and/or could exceed those accrued as of March 31, 2012. Key components of the accrual included (i) claims arising from alleged poor performance of certain real estate investments trusts (“REITs”) and oil and gas limited partnerships that have experienced bankruptcy or other financial difficulties during or in connection with the recent global credit crisis and (ii) costs incurred in the settlement of state regulatory matters concerning sales practices respecting certain other investment products.

NOTE 17- NET CAPITAL REQUIREMENTS

ICC is subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires that our broker-dealer subsidiary maintain minimum net capital. As of March 31, 2012, ICC computes net capital requirements under the alternative method, which requires firms to maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances. Repayment or prepayment of subordinated debt and withdrawal of equity from retiring partners or officers is subject to net capital not falling below 5% of aggregate debits or 120% of minimum net capital requirement

As of March 31, 2012, ICC had net capital of $1.43 million (i.e., an excess of $1.18 million) as compared to net capital of approximately $2.84 million (i.e., an excess of $2.59 million) as of March 31, 2011. The decrease in net capital primarily was due to legal fees and settlement costs in addition to regulatory fines that have impacted this year’s results and cash flow from operations.

NOTE 18 - BENEFIT PLANS

The 1994 Stock Option Plan

As of September 1, 1994, the Company adopted a stock option plan (the "1994 Plan") that provided for the granting of options to Timothy Murphy, the Company’s CEO, to purchase shares of the common stock of the Company for $1.00 per share. Following a three for two stock split in 1997, a maximum of 150,000 shares of common stock were issuable and granted under the 1994 Plan. The number of options and grant date were determined at the discretion of the Company's Board of Directors (the "Board"). Options outstanding under the 1994 Plan are fully exercisable and have no stated expiration.

The 1996 Incentive Stock Plan

As of October 1, 1997, the Board adopted the 1996 Incentive Stock Plan (the "1996 Plan"). Key employees, directors and the Company's registered representatives are eligible to receive stock options and stock grants, and the aggregate number of shares to be delivered under the 1996 Plan cannot exceed 300,000. As of March 31, 2012 and 2011, there were no options outstanding. As of March 31, 2012, the Company had granted a total of 218,750 shares of stock under the 1996 Plan.

The 2001 Equity Incentive Plan

Page 41

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

As of March 12, 2001, the Board adopted the 2001 Equity Incentive Plan (the "2001 Plan"). Key employees, directors and the Company's registered representatives are eligible to receive stock grants and/or stock options to purchase shares of the common stock of the Company. The aggregate number of shares issuable under the 2001 Plan cannot exceed 250,000. The numbers of shares subject to each stock grant or stock option and any vesting requirements are determined by the Board. As of March 31, 2012, no shares of stock have been granted under the 2001 Plan.

The 2005 Equity Incentive Plan

The Investors Capital Holdings, Ltd. 2005 Equity Incentive Plan (the “2005 Plan”) was adopted by the Board on May 17, 2005, and was approved by vote of the Company’s stockholders at a September 21, 2005 meeting. The purpose of the 2005 Plan is (i) to attract and retain employees, directors, officers, representatives and other individuals upon whom the responsibilities of the successful administration, management, planning and/or organization of the Company may rest, and whose present and potential contributions to the welfare of the Company, a parent corporation or a subsidiary are of importance (“Key Contributors”), and (ii) to motivate Key Contributors with a view toward enhancing profitable growth of the Company over the long term. Under the 2005 Plan, the Company is authorized to award options to purchase common stock, and shares of common stock, to employees, independent representatives and others who have contributed to or are expected to contribute to the Company, its businesses and prospects. Stock options and restricted stock customarily are granted by the Company in connection with initial employment or under various retention plans. Options may, but need not, be designated as incentive stock options (“ISOs”) within the meaning of Section 422 of the Internal Revenue Code of 1986. As of March 31, 2012 and 2011, the Company had not granted any options under the plan and had no current plans to do so.

Restricted shares of stock granted under the 2005 Plan (“Amended Plan”) as of March 31, 2012 have been either fully vested at date of grant or subject to vesting over time periods varying from one to five years after the date of grant, unvested shares being subject to forfeiture in the event of termination of the grantee’s relationship with the Company, other than for death or disability. The compensation cost associated with restricted stock grants is recognized over the vesting period of the shares and is calculated as the market value of the shares on the date of grant. Restricted shares have been recorded as deferred compensation, which is a component of paid-in capital within stockholders’ equity on the Company’s Consolidated Balance Sheets.

The total number of restricted stock grants awarded under the 2005 and 2008 Plans during the last two fiscal years, to registered representatives and directors, was 74,401 and 30,000, respectively. Stock compensation for the years ended March 31, 2012 and 2011 for restricted shares issued under all Plans was $147,040 and $183,743, respectively.

The following activity under the 2005 Plan occurred during the fiscal year ended March 31, 2012:


		Weighted Ave	Weighted Average
	Shares	Stock Price	Vested Life	Fair Value $
Non-vested at 4/1/2011	35,891	$3.72	1.99 years	$ 133,515

Granted	74,401	$4.52		$ 332,333
Less: vested	(29,239)	$3.87		$ 113,155
Less: canceled	(3,651)	$4.02		$ 14,677

Non-vested at 3/31/2012	77,402	$4.41	2.54	$ 341,343

The following activity under the 2005 Plan occurred during the fiscal year ended March 31, 2011:


		Weighted Ave	Weighted Average
	Shares	Stock Price	Vested Life	Fair Value $
Non-vested at 4/1/2010	62,863	$3.50	1.91 years	$ 220,021

Granted	30,000	$4.13		$ 123,900
Less: vested	(49,427)	$3.72		$ (183,868)
Less: canceled	(7,545)	$3.54		$ 26,709

Non-vested at 3/31/2011	35,891	$3.72	1.99 years	$ 133,515

Page 42

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

The Company's results for the fiscal year ended March 31, 2012 and 2011, respectively includes $26,463 and $106,821 of compensation costs related to vesting of restricted stock grants to employees and $120,577 and $76,922 of restricted stock grants to directors, consultants and independent representatives, under the 2005 Plan.

As of March 31, 2012 there was $341,343 of unrecognized compensation cost related to grants under the 2005 Plan, and $133,515 of unrecognized compensation as of March 31,2011 under the same plan.

Stock Option Grants

A summary of the status of the Company's employee, representative and Directors' fixed stock options as of March 31, 2012 and 2011, and changes during the fiscal years ended on those dates, is presented below:


Employee	2012		2011
Fixed Options		Weighted-Average		Weighted-Average
	Shares	Exercise Price	Shares	Exercise Price
Outstanding at beginning of year	150,000	$ 1.00	150,000	$ 1.00
Granted	-		-
Forfeited	-		-
Exercised	-		-
Outstanding at year end	150,000	$ 1.00	150,000	$ 1.00

Options exercisable at year-end	150,000		150,000

Weighted-average fair value of
options granted during the year	-		-

The intrinsic value of the above stock options was $598,500 at March 31, 2012.

Retirement Plan: The Company has a 401(k) retirement plan that allows participation by all employees with at least three months of service. The Company did not make any discretionary contribution for the years ended March 31, 2012 and 2011.

Non-Qualified Deferred Compensation Plan: Effective December 2007, the Company established the Investors Capital Holdings, Ltd. Deferred Compensation Plan (the “NQ Plan”) as well as a Rabbi Trust Agreement for this Plan, for which ICC is the NQ Plan’s sponsor. The unfunded NQ Plan enables eligible ICC’s Representatives to elect to defer a portion of earned commissions, as defined by the NQ Plan. The total amount of deferred compensation was $390,137 and $308,698 for the years ended March 31, 2012 and 2011, respectively.

NOTE 19 - EARNINGS PER COMMON SHARE

Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of all stock options and other items outstanding during the period that could potentially result in the issuance of common stock, as well as any adjustment to income that would result from the assumed issuance. As of March 31, 2012, there were 150,000 stock options and 97,929 shares of unvested restricted stock outstanding which were excluded from the diluted loss per share

Page 43

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

calculation since they were anti-dilutive. As of March 31, 2011, there were 150,000 stock options and 79,169 shares of unvested restricted stock outstanding which were excluded from the diluted loss per share calculation since they were anti-dilutive.

NOTE 20-UNAUDITED QUARTERLY RESULTS


The unaudited quarterly amounts may differ due to the reclassifications.
Refer to Note 2 -- Summary of Significant Accounting Policies

	June 30, 2011	September 30, 2011	December 31, 2011	March 31, 2012
Revenues	$ 21,442,726	$ 20,169,913	$ 19,035,697	$ 20,392,426
Expenses	22,258,888	21,560,282	19,047,371	20,837,286
Operating income (loss)	(816,162)	(1,390,369)	(11,674)	(444,860)
Net income (loss)	(1,255,709)	(877,362)	428,486	(627,244)
Basic earnings (loss) per share	$ (0.19)	$ (0.13)	$ 0.07	$ (0.11)
Diluted earnings (loss) per share	NA	NA	$ 0.06	NA

	June 30, 2010	September 30, 2010	December 31, 2010	March 31, 2011
Revenues	$ 20,941,973	$ 20,430,564	$ 21,426,257	$ 22,455,171
Expenses	20,978,974	21,050,651	21,111,184	23,135,416
Operating income (loss)	(37,001)	(620,087)	315,073	(680,243)
Net income (loss)	(10,790)	(643,681)	345,674	(601,329)
Basic earnings (loss) per share	$ -	$ (0.10)	$ 0.05	$ (0.09)
Diluted earnings (loss) per share	NA	NA	$ 0.05	NA

Page 44

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

ITEM 9. Changes In And Disagreements With Accountant On Accounting And Financial Disclosure.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Report of Management on Internal Control Over Financial Reporting

The Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of March 31, 2012.

Remediation of Material Weaknesses in Internal Control

Not applicable.

No Attestation Report by Public Accounting Firm

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to a permanent exemption from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

Page 45

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

Changes in Internal Controls Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

Incorporation by Reference

Item 10 – “Directors, Executive Officers and Corporate Governance”, Item 11 – "Executive Compensation", Item 12 – "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters", Item 13 – "Certain Relationships and Related Transactions, and Director Independence" and Item 14 – “Principal Accountant Fees and Services” are incorporated herein by this reference to the Company's definitive proxy statement for its 2012 annual meeting of stockholders, which definitive proxy statement is expected to be filed with the Commission not later than 120 days after the end of the fiscal year to which this report relates. Information concerning our executive officers is included above at the end of Part I, Item I.

PART IV

Item 15. Exhibits And Financial Statement Schedules.

Documents Filed as a Part of this Report:

Page

1. Financial Statements:

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . .. . . . . . . . . . ………... . . . . . 20

Consolidated Balance Sheets as of March 31, 2012 and 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Consolidated Statements of Operations for the years ended March 31, 2012 and 2011 . . . . . . . . . . . . . 22

Consolidated Statements of Changes in Stockholders' Equity for the years ended March 31,

2012 and 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Consolidated Statements of Cash Flows for the years ended March 31, 2012 and 2011 . . . . . . . . . . . . . 24

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25-31

2. Financial Statement Schedules:

No financial schedules are listed since they are not applicable or are not required, or because the required information is included in the consolidated financial statements or notes thereto.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

3. Exhibits:


Exhibit Number	Description	Location
3.1	Certificate of Incorporation	(2)(Exh. 3.1)
3.2	By-Laws	(2)(Exh. 3.2)
4.1	Form of Stock Certificate	(2)(Exh. 4.1)
10.1	Employment Agreement with Theodore E. Charles (3)	(9)(Exh. 10.2)
10.2	Employment Agreement with Timothy B. Murphy (3)	(9)(Exh. 10.1)
10.3	The 1994 Stock Option Plan (3)	(4)(Exh. 10.3)
10.4	The 1996 Stock Incentive Plan (3)	(2)(Exh. 10.3)
10.5	The 2001 Equity Incentive Plan (3)	(5)(Exh. 4.4)
10.6	The 2005 Equity Incentive Plan (3)	(6)(Exh. 4.5)
10.7	Form of June 2006 Stock Grant Agreement (3)	(7)(Exh. 10.8)
10.8	Form of February 2009 Stock Grant Agreement (3)	.(7)(Exh. 10.9)
10.9	Consulting Agreement with Theodore E. Charles (3)	(9)(Exh. 10.3)
10.10	Registration Agreement with Theodore E. Charles et. al	(10)(Exh. 10.1)
10.12	October 26, 2011 Stock Grant Agreement with Timothy B. Murphy	(1)
10.13	October 26, 2011 Stock Grant Agreement with Kathleen L. Donnelly	(1)
10.14	November 22, 2011 Cancellation of October 26, 2011 Stock Grants	(1)
31.1	Certification of Timothy B. Murphy pursuant to Rule 13a-14(a)	(1)
31.2	Certification of Kathleen L. Donnelly pursuant to Rule 13a-14(a)	.(1)
32.1	Certification of Timothy B. Murphy pursuant to 18 U.S.C. Section 1350	.(1)
32.2	Certification of Kathleen L. Donnelly pursuant to 18 U.S.C. Section 1350	.(1)
101.INS	XBRL Instance Document	(1)
101.SCH	XBRL Schema Document	.(1)
101.CAL	XBRL Calculation Linkbase Document	(1)
101.LAB	XBRL Labels Linkbase Document	.(1)
101.PRE	XBRL Presentation Linkbase Document	.(1)
14.1	Code of Business Conduct and Ethics	(8)(Exh. 5.05)
21.1	Subsidiaries of Investors Capital Holdings, Ltd. as of March 31, 2011	(1)
23.1	Consent of MARCUM LLP	(1)
31.1	Certification of Timothy B. Murphy pursuant to Rule 13a-14(a)	(1)
31.2	Certification of Kathleen L. Donnelly pursuant to Rule 13a-14(a)	.(1)
32.1	Certification of Timothy B. Murphy pursuant to 18 U.S.C. Section 1350	.(1)
32.2	Certification of Kathleen L. Donnelly pursuant to 18 U.S.C. Section 1350	.(1)

(1) Filed herewith.

(2) Incorporated by reference to the indicated exhibit to the Registrant's Quarterly Report on Form 10-Q filed November 14, 2007.

(3) A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report.

(4) Incorporated by reference to the indicated exhibit to the Registrant’s Annual Report on Form 10-K filed June 30, 2005.

(5) Incorporated by reference to the indicated exhibit to the Registrant’s Registration Statement on Form S-8 (File No. 333-117807) filed July 30, 2004.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

(6) Incorporated by reference to the indicated exhibit to the Registrant’s Registration Statement on Form S-8 (File No. 333-134885) filed June 9, 2006.

(7) Incorporated by reference to the indicated exhibit to the Registrant’s Annual Report on Form 10-K filed June 30, 2008.

(8) Incorporated by reference to the indicated exhibit to the Registrant’s Report on Form 8-K filed September 26, 2007.

(9) Incorporated by reference to the indicated exhibit to the Registrant’s Report on Form 8-K filed April 21, 2010.

(10) Incorporation by reference to the indicated exhibit of the Registrant’s Current Report on Form 8-K filed March 7, 2011.

(11) Incorporated by reference to the indicated exhibit to the Registrant’s Current Report on Form 8-K file July 5, 2011.

(12) Incorporated by reference to the indicated exhibit to the Registrant’s Current Report on Form 8-K filed November 29, 2011.

(13) Incorporated by reference to the indicated exhibit to the Registrant’s Current Report on Form 8-K filed May 24, 2012.

Any exhibit not included with this Form 10-K when furnished to any shareholder of record will be furnished to such shareholder upon written request and payment of up to $0.25 per page plus postage. Such requests should be directed to Rebecca Hice, Assistant Corporate Secretary, Investors Capital Holdings, Ltd., 230 Broadway East, Lynnfield, MA 01940-2320.

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Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INVESTORS CAPITAL HOLDINGS, LTD.

By: /s/ Timothy B. Murphy

Chief Executive Officer

Date: June 27, 2012

Pursuant to the requirements of the Securities Act of 1933, this Annual Report on Form 10-K has been signed by the following persons in the capacities and as of the dates indicated.

Signature Capacity(ies) Date

/s/ Timothy B. MurphyPrincipal Executive Officer June 27, 2012

Timothy B. Murphy

/s/ Kathleen L. DonnellyPrincipal Financial and Accounting Officer June 27, 2012

Kathleen L. Donnelly

/s/ William AthertonChairman June 27, 2012

William Atherton

/s/ Robert Martin Director June 27, 2012

Robert Martin

/s/ Robert MazzarellaDirector June 27, 2012

Robert Mazzarella

/s/ Donnie E. IngramDirector June 27, 2012

Donnie E. Ingram

/s/ Blaise AguireeDirector June 27, 2012

Blaise Aguiree

/s/ James CrossonDirector June 27, 2012

James Crosson

Page 49

Investors Capital Holdings, Ltd. Annual Report on Form 10-K Fiscal Year Ended March 31, 2012

EXHIBIT INDEX

(Exhibits being initially filed with this Form 10-K)

21.1 Subsidiaries of Investors Capital Holdings, Ltd. as of March 31, 2012

23.1 Consent of MARCUM LLP

31.1 Certification of Timothy B. Murphy pursuant to Rule 13a-14(a)

31.2 Certification of Kathleen L. Donnelly pursuant to Rule 13a-14(a)

32.1 Certification of Timothy B. Murphy pursuant to 18 U.S.C. Section 1350

3.2	Certification of Kathleen L. Donnelly pursuant to 18 U.S.C. Section 1350

Page 50

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Investors Capital Inactive 10-K2012 FY Annual report

Content analysis