1.  We have audited the attached Balance Sheet of SADBHAV ENGINEERING
 LIMITED, as at 31st March, 2011 and also the Profit and Loss Account
 and also the Cash Flow Statement for the year ended on that date
 annexed thereto. These financial statements are the responsibility of
 the management of the company. Our responsibility is to express an
 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 mis-statement.  An audit
 includes examining, on a test basis, of evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting 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 issued
 by the Central Government of India it 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 paragraph 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) 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;
 
 (b) In our opinion, proper books of accounts, as required by law, have
 been kept by the Company, so far as appears from our examination of the
 books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of accounts;
 
 (d) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub section (3C) of section 211 of
 the Companies Act,1956;
 
 (e) On the basis of written representation received from the Directors
 as on 20th April, 2011 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st
 March,2011 from being appointed as a director in terms of clause (g) of
 Sub-section(1) of section 274 of the companies Act, 1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 Significant Accounting Policies and Notes thereon give the information
 as 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (ii) in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash fows for the
 year ended on that date.
 
 Annexure to the Auditors'' Report
 (Referred to in paragraph 3 of our report of even date)
 
 1.  In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets on the
 basis of available information.
 
 b) As explained to us all the fixed assets have been physically verified
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable, having regard to the size of the Company
 and nature of its assets.  No material discrepancies were noticed on
 such physical verification.
 
 c) In our opinion, the Company has not disposed off substantial part of
 fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  In respect of its inventories:
 
 a) As explained to us, inventories have been physically verified by the
 management at regular intervals during the year. In our opinion, the
 frequency of verification is reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 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 has maintained proper records of inventory. As explained
 to us, there was no material discrepancies noticed on physical
 verification of inventory as compared to the book records.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 Company to/from companies, frms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956:
 
 a) The Company has given loans to its five subsidiaries. In respect of
 the said loans, the maximum amount outstanding at any time during the
 year is Rs. 25517.99 lacs and the year-end balance is Rs. 389.35 lacs.
 
 b) In our opinion and according to the information and explanations
 given to us, interest has been charged on loans except in case of two
 subsidiaries and other terms and conditions, are not prima facie
 prejudicial to the interest of the company.
 
 c) The principal amounts, are repayable on demand and there is no
 repayment schedule.
 
 d) In respect of the said loans, the same are repayable on demand and
 therefore the question of overdue amounts does not arise.
 
 e) During the year Company has taken loan from two companies covered in
 the Register maintained under section 301 of the Companies Act, 1956.
 The maximum amount involved was Rs. 456.90 Lacs and the balance at the
 year end was Rs. Nil.
 
 f) The rate of interest and other terms and conditions of loan taken by
 the Company, secured or unsecured, are not prima facie prejudicial to
 the interest of the Company.
 
 g) The principal amounts, are repayable on demand and there is no
 repayment schedule.
 
 4.  In respect of Internal Control:
 
 In our opinion and according to the information and explanations given
 to us, there is formal internal control system commensurate with the
 size of the company and the nature of its business for the purchase of
 inventory and fixed assets. As the company is Construction Company the
 question of internal control over sale of goods does not arise. During
 the course of our audit, we have not observed any major weaknesses in
 absence of formal internal control system.
 
 5.  In respect of transactions need to be entered into the register
 maintained under section 301 of the companies Act, 1956:
 
 a) In our opinion and according to the information and explanations
 given to us, the Particulars of contracts or arrangements that need to
 be entered in to the register in pursuance of Section 301 of the
 Companies Act, 1956 have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, having regard to the fact that the transactions of works
 contract made in pursuance of contracts or arrangements entered in to
 the register in pursuance of Section 301 of the Companies Act, 1956 and
 exceeding the value of Rupees Five Lacs in respect of any party during
 the year, have been made at prices which are reasonable having regard
 to the prevailing market prices for such works contract at the relevant
 time or the prices at which the transactions for similar works contract
 have been made with other parties.
 
 6.  In respect of deposits from public:
 
 The Company has not accepted any deposits during the year from the
 public within the meaning of Section 58A and 58AA and other relevant
 provisions of the Act and rules framed thereunder.
 
 7.  In respect of internal audit system:
 
 In our opinion, the internal audit system of the Company is
 commensurate with its size and nature of its business.
 
 8.  In respect of maintenance of cost records:
 
 We have been informed that the central government has not prescribed
 maintenance of cost records under section 209 (1)(d) of the Companies
 Act, 1956 in respect of company''s activities.
 
 9.  In respect of statutory dues:
 
 a) According to the records of the Company, undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been
 generally regularly deposited with the appropriate authorities.
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st March, 2011 for a period of more than six months
 from the date of becoming payable.
 
 b) The disputed statutory dues aggregating to Rs.370.26 Lacs that have
 not been deposited on account of matters pending before appropriate
 authorities are as under:
 
 Sr. Name of the 
     Statue         Nature of  Period to 
                               which       Forum where Dispute
                                           is pending             Amount
 No.                the Dues   the amount 
                               relates                           (Rs. in
                                                                    Lacs)
 
 01. The Custom 
     Act, 1962      Custom 
                    duty        2001-2002  CESTAT, Mumbai         104.95
 
 02. Orissa Sales 
     Tax            Entry Tax   2000-2001  Commissioner of 
                                           Sales-tax Jajpur         0.75
     Act, 1947
 
 03. Orissa Sales 
     Tax            Sales Tax   1993-1994
                                   to      Sales Tax Tribunal
                                           Bhubaneshwar             4.55
     Act,1947                   1997-1998
 
 04. Service Tax 
     Act, 1994      Service Tax 2005-2006  CESTAT, Ahmedabad       67.29
 
 05. Income Tax 
     Act, 1961      Income Tax   2004-05   ITAT, Ahmedabad 
                                           (Appeal by Dept)       124.21
 
 06. Income Tax 
     Act, 1961      Income Tax   2005-06   ITAT, Ahmedabad 
                                           (Appeal by Dept)        23.81
 
 07. Income Tax 
     Act, 1961      Income Tax   2006-07   ITAT, Ahmedabad 
                                           (Appeal by Dept)         9.00
 
 08. Income Tax 
     Act, 1961      Income Tax   2007-08   CIT(A), Ahmedabad        35.7
 
 TOTAL                                                            370.26
 
 10. In respect of accumulated losses and cash losses:
 
 The Company does not have accumulated losses at the end of the
 Financial Year. The Company has not incurred any cash losses during the
 financial year covered by the audit and in the immediately proceeding
 financial year.
 
 11. In respect of dues to financial institution /banks /debentures:
 
 Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of dues to financial institutions and banks.
 
 12. In respect of loans and advances granted on the basis of security:
 
 In our opinion and according to the information and explanations given
 to us, no loans and advances have been granted by the Company on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 13. In respect of provision applicable to chit fund /nidhi / mutual
 beneft fund / society:
 
 In our opinion, the Company is not a chit fund / nidhi / mutual beneft
 fund/ society. Therefore, the provisions of clause (xiii) of paragraph
 4 of the Order are not applicable to the Company.
 
 14. In respect of dealing or trading in share, securities, debentures
 and other investments:
 
 According to the information and explanations given to us, the Company
 is not dealing or trading in shares, securities, debentures and other
 investments. Therefore, the provisions of clause (xiv) of the paragraph
 4 of the Order are not applicable to the Company.
 
 15. In respect of guarantee given for loans taken by others:
 
 In our opinion, and according to the information and explanations given
 to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year except in
 cases of Subsidiaries of the company.
 
 16. In respect of application of term loans:
 
 In our opinion, and according to the information and explanations given
 to us, the term loans availed by the Company were, prima facie, applied
 for the purposes for which the loans were obtained.
 
 17. In respect of fund used:
 
 According to the information and explanations given to us, and an
 overall examination of the Cash fow statement and Balance Sheet of the
 Company, we are of the opinion that no funds raised on short term basis
 have been used for long term investment.
 
 18. In respect of preferential allotment of shares:
 
 The Company has not made any preferential allotment of shares to
 parties covered in the Register maintained under Section 301 of the
 Act, during the year.
 
 19. In respect of securities created for debentures:
 
 The Company has not issued any debenture during the year.
 
 20. In respect of end use of money raised by public issues:
 
 The Company has not raised any money by way of public issue during the
 year.
 
 21. In respect of fraud:
 
 During the course of our examination of the books and records of the
 Company, carried out in accordance with the generally accepted auditing
 standards in India and according to the information and explanations
 given to us, we have neither come across any instance of fraud on or by
 the Company, noticed or reported during the year, nor have we been
 informed of such case by the management.
 
 
                                      For SHASHIKANT PATEL ASSOCIATES
 
                                                Chartered Accountants
 
                                                Firm Reg. No. 113672W
 
                                                         (S. D. PATEL)
 
 Place : Ahmedabad                                         PROPRIETOR
 
 Date : April 20, 2011                           Membership No. 37671