1.  We have audited the attached Balance Sheet of Indiabulls Real
 Estate Limited (the Company) as at March 31, 2010 and the annexed
 Proft and Loss Account and the Cash Flow Statement for the year ended
 March 31, 2010. These fnancial statements are the responsibility of the
 Companys management. Our responsibility is to express an opinion on
 these fnancial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 fnancial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the fnancial statements.  An audit also includes
 assessing the accounting principles used and signifcant estimates made
 by the management, as well as evaluating the overall fnancial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 
 3.  As required by the Companies (Auditorcs Report) Order, 2003, as
 amended by the Companies (Auditors 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 specifed 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 appears from our examination of
 those books;
 
 (iii) the Balance Sheet, Proft and Loss Account and Cash Flow
 Statement, dealt with by this report are in agreement with the books of
 account;
 
 (iv) in our opinion, the Balance Sheet, Proft and Loss Account and Cash
 Flow Statement, dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (v) on the basis of written representations received from the
 directors, as at March 31, 2010 and taken on record by the Board of
 Directors, we report that none of the directors is disqualifed as on
 March 31, 2010 from being appointed as a director in terms of Section
 274 (1) (g) of the Act;
 
 (vi) in our opinion and to the best of our information and according to
 the explanations given to us, the said fnancial 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, 2010;
 
 (b) in the case of Proft and Loss Account, of the proft of the Company
 for the year ended on that date; and
 
 (c) in the case of Cash Flow Statement, of the cash fows of the Company
 for the year ended on that date.
 
 Annexure referred to in paragraph 3 of the Auditors Report of even
 date to the Members of Indiabulls Real Estate Limited on the fnancial
 statements for the year ended March 31, 2010
 
 1.  In our opinion and according to the information and explanations
 given to us, the nature of the Companys business / activities for the
 year ended March 31, 2010, is such that paragraphs 4(viii), 4(x),
 4(xiii) and 4(xix) of Order are not applicable to the Company.
 
 2.  (a) The Company has maintained proper records, showing full
 particulars, including quantitative details and situation of fxed
 assets.
 
 (b) The Company has a regular programme of physical verifcation of its
 fxed assets by which fxed assets are verifed annually. In accordance
 with this programme, fxed assets were verifed during the year and no
 discrepancies were noticed on such verifcation. In our opinion, the
 frequency of physical verifcation is reasonable having regard to the
 size of the Company and the nature of its assets.
 
 (c) The Company has not disposed off a substantial part of its fxed
 assets during the year, so as to affect its going concern status.
 
 3.  (a) According to the information and explanations given to us,
 inventory has been physically verifed by management during the year. In
 our opinion, the frequency of verifcation is reasonable.  However,
 there was no inventory at the end of the year.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures for physical verifcation 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) In our opinion and according to the information and explanations
 given to us, the Company is maintaining proper records of inventory and
 no material discrepancies were noticed on such physical verifcation.
 
 4.  In respect of loans, secured or unsecured, granted to or taken from
 companies, frms or other parties covered in the register maintained
 under Section 301 of the Companies Act, according to the information
 and explanations given to us:
 
 (a) The Company has granted unsecured loans to four subsidiary
 companies covered in the register maintained under Section 301 of the
 Companies Act, 1956. The maximum amount involved in the transactions
 during the year aggregated to Rs. 1,563,459,872/- and the balance
 outstanding at year end is Rs. 42,266,422/-.
 
 (b) According to the information and explanation given to us, 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 as regard to principal amount and
 interest where ever stipulated.
 
 (e) The Company has taken unsecured loan from a subsidiary company
 covered in the register maintained under Section 301 of the Companies
 Act, 1956. The maximum amount involved in the transactions during the
 year aggregated to Rs. 137,258,000/- and the balance outstanding at
 year end is nil.
 
 (f) According to the information and explanation given to us, rate of
 interest, where ever stipulated and other terms & conditions of such
 loan are, in our opinion, 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 loan have been regular.
 
 5.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and nature of its business with regard to
 purchase of fxed assets, inventory and sale of goods & services. We
 have not observed any major weakness in the internal control system
 during the course of the audit.
 
 6.  In our opinion and according to the information and explanations
 given to us, 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
 required to be maintained under that section.
 
 7.  In our opinion and according to the information and explanations
 given to us, 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 Companies Act, 1956 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.
 
 8.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 9.  (a) According to the information and explanations given to us and
 on the basis of our examination of the records of the Company, 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 of Provident Fund, Investor
 Education and Protection Fund, Employees State Insurance, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and
 other material statutory dues were in arrears, as at March 31, 2010 for
 a period of more than six months from the date they became payable.
 
 (b) According to the information and explanations given to us and,
 there are no dues of Income tax, Wealth tax, Sales tax, Service tax,
 Customs duty and Excise duty which have not been deposited on account
 of any dispute.
 
 10.  Based on our audit procedures and as per the information and
 explanations given by the management, the Company has not defaulted in
 repayment of dues to fnancial institutions or banks or debenture
 holders.
 
 11.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 12.  The Company has maintained proper records of the transactions and
 contracts in respect of dealing in shares, securities, debentures and
 other investment and timely entries have been made therein. All shares,
 securities, debentures and other investments have been held by the
 Company in its own name, except to the extent of the exemption granted
 under Section 49 of the Companies Act 1956.
 
 13.  According to the information and explanations given to us, the
 terms and conditions of guarantees given by the Company for loans taken
 by others from banks and fnancial institutions, are not prima facie
 prejudicial to the interests of the Company.
 
 14.  To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 were, prima facie, applied for the purposes for which such loans were
 obtained.
 
 15.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, funds
 raised on short-term basis, prima facie, have not been used for the
 long-term investment by the Company.
 
 16.  According to the information and explanations given to us, 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.
 
 17.  The Company has not raised any monies by way of public issue
 during the year.
 
 18.  According to the information and explanation given to us, no
 material fraud on or by the Company has been noticed or reported during
 the year.
 
                                                  For Sharma Goel & Co.
 
                                                  Chartered Accountants
 
                                                        FRN No:-000643N
 
                                                            Amar Mittal
 
                                                                Partner
 
                                                  Membership No. 017755
 
                                                 Mumbai, April 29, 2010