1.  We have audited the attached Balance Sheet of IVRCL Assets &
 Holdings Limited (''the Company'') as at March 31,2011 and also the
 Profit and Loss account and the cash flow statement for the year ended
 on that date annexed thereto. These financial statements are the
 responsibility of the Company''s management. Our responsibility is to
 express am opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with 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 misstatement.  An audit
 includes examining, oh a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the amounting principles used and significant estimates made
 by 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) issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
 in the Annexure a statement on the matters specified in paragraphs 4
 and 5 of the said Order.
 
 4.  As more fully discussed in note 14 to the schedule 20 of the
 financial statements, the Company hat invested Rs.12,521,655,107
 (including loam given aggregating to Rs. 1,757,852,357) at at March
 31,2011 in three of its subsidiaries engaged in Road Built, Operate,
 Transfer (''BOV) Projects. These subsidiaries had been acquired through
 amalgamation at fair values, determined bated on the future projected
 cash flows of toll collections Toll collection of the subsidiaries of
 the current year are substantially lower than the above projected cash
 flows. Management believes that the reduction in toll collection it
 temporary and accordingly no provision in respect of diminution in the
 value of investments it necessary. However, having regard to the
 uncertainty in achieving future cash flows, we are unable to comment on
 the carrying value of the aforesaid investments and consequential
 effects, if any, on the accompanying financial statements.
 
 5.  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 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 appears from our examination of
 those books;
 
 iii. The balance sheet, profit 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, profit and loss account and cash
 flow statement dealt with by this report comply with the accounting
 standards referred to in sub-section (30) of section 211 of the
 Companies Act, 1956 except for our comments in para 4 above;
 
 v. On the basis of the written representations received from the
 directors, as on March 31, 2011, and 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 clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956; and
 
 vi. Subject to the our comments in para 4 above, the impact of the
 which is presently not ascertainable, 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 loss for the year
 ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date
 Re: IVRCl Assets & Holdings Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management during
 the year and no material discrepancies were identified on such
 verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) The procedures of 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.
 
 (4) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.  Accordingly, the
 provisions of clause 4(iii)(a) to (d) of the Order are not applicable
 to the Company and hence not commented upon.
 
 (e) The Company had taken loan from one party covered in the register
 maintained under section 301 of the Companies Act, 1956. The maximum
 amount involved during the year was Rs. 3,894,533,787 and the year-end
 balance of loan taken from such party was Rs. 3,874,533,787.
 
 (f) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loan is not prima facie prejudicial to the interest of the
 Company.
 
 (g) In respect of the loan taken, repayment of the principal amount is
 as stipulated and payment of interest has been regular.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanation that some of the
 contracts entered are of special nature and suitable alternative
 sources are not readily available for obtaining comparable quotations,
 there is generally an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases of inventory and fixed assets and the sale of goods and
 services. Read with above, during the course of our audit, we have not
 observed any major weakness or continuing failure to correct any major
 weakness in the internal control system of the company in respect of
 these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In respect of transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs for purchase and sale
 of construction contracts and services entered into during the
 financial year, because of the unique and specialized nature of the
 items involved and absence of any comparable prices, we are unable to
 comment whether the transactions were made at prevailing market prices
 at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for
 the products of the Company.
 
 (ix) (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, employees'' state insurance, customs
 duty, excise duty and other material statutory dues have generally been
 regularly deposited with the appropriate authorities except for income
 tax, wealth tax, professional tax, service tax and works contract tax
 where there have been slight delays in few cases.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act, 1956, 
 we are not in a position to comment upon the regularity or otherwise 
 of the company in depositing the same.
 
 (b) 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,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other material statutory dues were outstanding, at the year end, for a
 period of more than six months from the date they became payable.
 
 (c) According to the information and explanation given to us, there are
 no dues of income tax, sales-tax, wealth tax, service tax, customs
 duty, excise duty and cess which have not been deposited on account of
 amy dispute.
 
 (x) Without considering the impact of our observations in, paragraph 4
 of the audit report, which is presently not ascertainable, the Company
 has no accumulated losses at the end of the financial year. The Company
 has incurred cash losses in the current and immediately preceding
 financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank or debenture holders.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced 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.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditor''s Report) Order, 2003 (as amended) are not
 applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 (xviii) 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) The Company has created security charge in the year in respect of
 the1500debenturesofRs. 1,000,000each issued during the previous year.
 The Company has issued unsecured debentures during the year, on which
 no security or charge is required to be created.
 
 (xx) The Company has not raised any money by public issue during the
 year ended March 31,2011.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 
 For S.R. BATLIBOI & ASSOCIATES             For CHATORVEDI & PARTNERS
 Firm registration number: 101049W  Firm registration number: 307068E
 Chartered Accountants                          Chartered Accountants
 
 per Vikas Kumar Pansari                           per R N Chaturvedi
 Partner                                                      Partner
 Membership No.: 93649                          Membership No.: 92087
 Place: Hyderabad                                    Place: Hyderabad
 Date: May 28, 2011                                Date: May 28, 2011