1.  We have audited the attached Balance Sheet of Indiabulls Securities
 Limited (the Company) as at.  March 31, 2011, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto. These financial statements are the
 responsibility of the Company''s Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India.  Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the 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 (CARO)
 issued by the Central Government of India in terms of Section 227(4A)
 of the Companies Act, 1956, we give in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report as follows:
 
 (i) we have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes 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, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211 (3C) of the
 Companies Act, 1956;
 
 (v) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2011;
 
 (b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of the written representations received from the
 Directors as on March 31, 2011 taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of Section
 274(1 )(g) of the Companies Act, 1956.
 
 Annexure to the Auditors'' Report
 (Referred to in paragraph 3 of our report of even date)
 
 i. Having regard to the nature of the Company''s
 business/activities/results, clauses ii, viii, xiii and xiv of CARO are
 not applicable to the Company.
 
 ii.  In respect of its fixed assets:
 
 a.  The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b.  Some of the fixed assets were physically verified during
 the year by the Management in accordance with a regular programme of
 verification, which, in our opinion, provides for physical verification
 of all the fixed assets at reasonable intervals.  According to the
 information and explanations given to us, no material discrepancies
 were noticed on such verification.
 
 c.  The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 iii. In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register under
 Section 301 of the Companies Act,1956; according to the information and
 explanations given to us;
 
 a.  The Company has granted loans to two companies during the year. At
 the year-end, the outstanding balances of such loans aggregated to Rs.
 Nil and the maximum amount involved during the year was Rs.
 3,207,000,000.
 
 b.  The rate of interest and other terms and conditions of such loans,
 wherever stipulated, are, in our opinion, prima facie not prejudicial
 to the interest of the Company.
 
 c.  The receipts of principal amounts and interest have been regular/as
 per stipulations.
 
 d.  There are no overdue amounts in excess of Rs. 1 lakh in respect of
 loans granted to companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 In respect of loans, secured or unsecured, taken by the Company from
 companies, firms or other parties covered in the Register maintained
 under Section 301 of the Companies Act, 1956, according to the
 information and explanations given to us:
 
 e.  The Company has taken loan from two companies during the year. At
 the year-end, the outstanding balance of such loan aggregated to Rs.
 Nil and the maximum amount involved during the year was Rs.
 780,000,000.
 
 f.  The rate of interest and other terms and conditions of such loans,
 wherever stipulated, are, in our opinion, prima facie not prejudicial
 to the interest of the Company.
 
 g.  The payments of principal amount and interest in respect of such
 loans are regular / as per stipulations.
 
 iv. In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations'', there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to fixed assets and
 the sale of services. There were no transactions in respect of purchase
 of inventory and sale of goods during the year. During the course of
 our audit, we have not observed any major weakness in such internal
 control system.
 
 v. In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 a.  The particulars of contracts or arrangements referred to Section
 301 that needed to be entered into the Register maintained under the
 said Section have been so entered.
 
 b.  Where each of such transactions is in excess of Rs. 5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time, except that in respect of purchase and
 sale of services, for which comparable quotations are not available and
 in respect of which we are unable to comment.
 
 vi. According to the information and explanations given to us, the
 Company has not accepted any deposits from the public during the year
 within the meaning of Section 58A and 58AA or any other relevant
 provisions of the Companies Act, 1956.
 
 vii. In our opinion, the internal audit functions carried out during
 the year by a firm of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 viii.  According to the information and explanations given to us in
 respect of statutory dues:
 
 a.  The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Income- tax, Wealth Tax, Service Tax,
 Cess and any other material statutory dues with the appropriate
 authorities during the year. There were no dues payable in respect of
 Investor Education and Protection Fund, Employees''State Insurance,
 Sales Tax, Custom Duty and Excise Duty.
 
 b.  There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at March 31, 2011 for a period of more than six
 months from the date they became payable.
 
 c.  Details of dues of Income-tax which have not been deposited as on
 March 31,2011 on account of disputes are given below:
 
 Statute   Nature of Dues   Forum where 
                            Dispute is    Period to which 
                                          the                    Amount
                            pending       amount relates   involved (Rs.)
 
 Income 
 Tax       Income Tax 
           demand arising 
           on               Appeal filed 
                            with 
                            Commissioner  Year ended March 31,  818,469
 Act, 1961 assessment u/s 
           143(3) of the    of Income-Tax 
                            (Appeals)-XV,  2008
           Income Tax 
           Act, 1961        New Delhi
 
 There are no disputed dues payable in respect of Sales Tax, Wealth Tax,
 Service Tax, Custom Duty, Excise Duty and Cess which have not been
 deposited as on March 31, 2011.
 
 ix. The Company does not have any accumulated losses. The Company has
 not incurred cash losses during the financial year covered by our audit
 and the immediately preceding financial year.
 
 x. In our opinion and according to the information and explanations
 given to us, the Companv has not defaulted in the repayment of dues to
 banks and unsecured debenture holders. During the year the Company has
 not obtained any borrowings from financial institutions.
 
 xi. In our opinion and according to the information and explanations
 given to us the Company has not granted loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 xii. In our opinion and according to the information and explanations
 given to us, the terms and conditions of the 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.
 
 xiii. In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 xiv. In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have not been used during
 the year for long-term investment.
 
 xv. According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year to parties and companies covered in the Register maintained under
 Section 301 of the Companies Act, 1956.
 
 xvi. According to the information and explanations given to us, during
 the period covered by our audit report, the Company has not issued any
 secured debentures. Accordingly, no security is created on issue of
 unsecured debentures during the year.
 
 xvii. The Company has not raised any money by public issues during the
 year.
 
 xviii. To the best of our knowledge and according to the information
 and explanations given to us, no fraud by the Company and no material
 fraud on the Company has been noticed or reported during the year.
 
 
                                       For Deloitte Haskins & Sells
 
                                              Chartered Accountants
       
                                         (Registration No. 117366W)
 
                                                        K. A. Katki
 
                                                            Partner
 
                                            (Membership No. 038568)
 
 Mumbai, April 25, 2011