1.  We have audited the accompanying financial statements of Indiabulls
 Real Estate Limited (the Company) which comprise the Balance Sheet as
 at March 31, 2012 and the Statement of Profit and Loss and the Cash
 Flow Statement for the year ended on that date. These financial
 statements are the responsibility of the Company''s management.  Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  We conducted our audit in accordance with the Standards on Auditing
 generally accepted in India.  These Standards require that we plan and
 perform the audit to obtain reasonable assurance whether the financial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of sub- section (4A)
 of Section 227 of The Companies Act, 1956''of India (the ''Act''), we
 enclose in the Annexure, a statement on the matters specified in
 paragraph 4 and 5 of the said order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 ii) In our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement, dealt with by this report are in agreement with the books of
 account;
 
 iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement, dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Act;
 
 v) On the basis of written representations received from the directors,
 as at March 31, 2012 and taken on record by the Board of Directors, we
 report that none of the directors are disqualified as at March 31, 2012
 from being appointed as a director in terms of Section 274 (1) (g) of
 the Act;
 
 vi) In our opinion and according to the information and explanations
 given to us, they said financial statements read with the notes thereon
 give the information required by the Act, in the manner so required and
 give a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (a) In the case of Balance Sheet, of the state of affairs of the
 Company as at March 31,2012;
 
 (b) In the case of Statement of Profit and Loss, of the profit of the
 Company for the year ended on that date; and
 
 (c) In the case of Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
 REPORT OF EVEN DATE
 
 Based on the Audit Procedures performed for the purpose of reporting a
 true and fair view on the financial statements of the company and
 taking into the consideration the information and explanation given to
 us and the books of accounts and other records examined by us in the
 normal course of audit, we report that:
 
 i) In respect of Fixed Assets of the Company and in our opinion:
 
 a.  The Company has maintained proper records, showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  The Company has a programmer of physical verification of its fixed
 assets by which they are verified annually. In accordance with this
 programmer, fixed assets were verified during the year and no
 discrepancies were noticed on such verification. In our opinion, the
 frequency of the physical verification is reasonable having regards to
 the size of the company and nature of fixed assets.
 
 c.  The Company has not disposed off substantial part of any fixed
 assets during the year.  Therefore the going concern assumption is not
 affected.
 
 ii) In respect of Inventories of the Company and in our opinion:
 
 a.  Inventories have been physically verified by management during the
 year and the frequency of verification is reasonable.
 
 b.  The procedures for physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 c.  The Company is maintaining proper records of inventory. No material
 discrepancies were noticed on physical verification of inventory.
 
 iii) In respect of loans, secured or unsecured, granted to or taken
 from companies, firms or other parties covered in the register
 maintained under Section 301 of the Companies Act, in our opinion:
 
 a. The Company has granted unsecured loans to seven parties covered in
 the register maintained under Section 301 of the Companies Act, 1956.
 The maximum amount outstanding at any time during the year respectively
 for each of the parties at any time during the year aggregated to Rs.
 17,432,429,369/- and the balance outstanding at year end is Rs.
 14,567,423,673/-.
 
 
 b.  In our opinion rate of interest, where ever stipulated and other
 terms and conditions of such loans are, in our opinion, prima facie not
 prejudicial to the interest of the Company.
 
 c.  The payments of principal amount and interest where ever stipulated
 in respect of such loans have been regular.
 
 d.  There is no overdue amount with regard to principal amount and
 interest where ever stipulated.
 
 e.  The Company has taken loan from one party covered in the register
 maintained under Section 301 of the Companies Act, 1956.The maximum
 amount outstanding at any time during the year aggregated to Rs.
 401,472,880/- and the balance outstanding at year end is Rs.
 377,112,880/-.
 
 f.  In our opinion rate of interest, where ever stipulated and other
 terms and conditions of such loans are, prima facie not prejudicial to
 the interest of the Company.
 
 g.  The payments of principal amount and interest where ever stipulated
 in respect of such loans have been regular.
 
 iv) In our opinion, there is an adequate internal control system
 commensurate with the size of the Company and nature of its business
 with regard to purchase of inventory, fixed assets and the sale of
 goods & services. We have not observed any major weakness in the
 internal control system during the course of the audit.
 
 v) In our opinion, the Company has not entered into any contracts or
 arrangements referred to in Section 301 of the Companies Act, 1956, the
 particulars of which are required to be entered in the register,
 maintained section 301.
 
 vi) In our opinion, the Company has not accepted any deposits from the
 public within the meaning of section 58A and section 58AA or any other
 relevant provisions of the Act and the Companies (Acceptance of
 Deposits) Rules, 1975 with regard to the deposits accepted from the
 public. No order has been passed by the Company Law Board or National
 Company Law Tribunal or Reserve Bank of India or any Court or any other
 Tribunal.
 
 vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 viii) The maintenance of cost records prescribed under section 209(1
 )(d) of the Companies Act,1956, is not applicable to the company.
 
 ix) In respect of disputed and undisputed Statutory Dues of the Company
 and according to information and explanations given to us and on the
 basis of our examination of the records of the Company
 
 a.  Amounts deducted / accrued in the books of accounts in respect of
 Provident Fund, Investor Education and Protection Fund, Employees''
 State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty and any other material Statutory Dues have
 generally been regularly deposited during the year by the Company with
 the appropriate authorities, to the extent applicable. There were no
 dues on account of Cess under Section 441A of the Companies Act, 1956
 since the aforesaid section has not yet been made effective by the
 Central Government.  According to the information and explanations
 given to us, no undisputed amounts payable in respect aforesaid dues
 were in arrears, as at March 31, 2012 for a period of more than six
 months from the date they became payable, wherever applicable.
 
 b.  According to the information and explanations given to us, the
 demand of Rs. 1,46,26,094 for the Assessment Year 2009-10 has not been
 deposited on account of dispute on account of disallowances under
 Section 14A of Income Tax Act, 1961 .The appeal for the same is pending
 in front of Commissioner of Income Tax Appeals, New Delhi.
 
 x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current year and
 immediately preceding financial year as well.
 
 xi) Based on our audit procedures and in our opinion, the Company has
 not defaulted in repayment of dues to financial institutions or banks
 or debenture holders.
 
 xii) The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Accordingly, the provisions of paragraph 4 clause (xii) of the Order
 are not applicable.
 
 xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
 fund/society. Accordingly, the provisions of paragraph 4 clause (xiii)
 of the Order are not applicable.
 
 xiv) In our opinion the company is not dealing or trading in shares,
 debentures, securities and other investments. Accordingly, the
 provisions of paragraph 4 clause (xiv) of the Order are not applicable.
 The investments in shares of subsidiary and other companies are held by
 the Company in its own name except to the extent exemption granted
 under section 49 of the Companies Act, 1956.
 
 xv) In our opinion, the terms and conditions of guarantees given by the
 Company for loans taken by others from banks and financial
 institutions, are not prima facie .prejudicial to the interests of the
 Company.
 
 xvi) In our opinion and to the best of our knowledge and belief,
 proceeds of term loans taken were, prima facie, applied for the purpose
 it was obtained and no fresh term loan was obtained during the year.
 
 xvii) In our opinion and on an overall examination of the balance sheet
 of the Company, no funds have been raised on short-term basis.
 
 xviii) In our opinion, the Company has not made any preferential
 allotment of shares to parties or companies covered in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 xix) In our opinion and the records examined by us, the Company has
 created securities/charges in respect of debentures issued.
 
 xx) The Company has not raised any monies by way of public issue during
 the year. Accordingly, the provisions of paragraph 4 clause (xx) of the
 Order are not applicable.
 
 xxi) In our opinion, no material fraud on or by the Company has been
 noticed or reported during the period covered by our audit.
 
 
 
                                            For Sharma Goel & Co.
 
                                           Chartered Accountants
 
                                                FRN No: 000643 N
 
                                                     Amar Mittal
 
                                                         Partner
 
                                           Membership No. 017755
 
 Place: Mumbai
 
 Date: April 25, 2012