Company Overview:
 
 The Company, Sadbhav Engineering Limited is engaged in the business of
 development of infrastructure facilities in the line of canals,
 irrigations projects, roads, bridge, dams which includes civil,
 electrical and mechanical contractor, designer and engineers,
 structural contractor, earthwork contractor for repairing,
 reconstruction, renovation, demolitions and construction of canals,
 irrigations projects, roads, bridge, dams. Company also establishes
 maintain, operate, lease or transfer the above infrastructure
 facilities on BOT, BOLT and BOTT basis. Company is also engaged in
 mining activities on contract basis.
 
 1) All amounts in the financial statements are presented in Rupees Lacs
 except per share data and as otherwise stated. Figures in brackets
 represent corresponding previous year figures in respect of Profit &
 Loss items and in respect of Balance Sheet items as on the Balance
 Sheet date of the previous year. Figures for the previous year have
 been regrouped/rearranged wherever considered necessary to confrm to
 the figures presented in the current year.
 
 2) As the Company is engaged in Construction business, the provision of
 Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956
 regarding quantitative details, license capacity and installation
 capacity are not applicable.
 
 3) In the opinion of the Board, the current assets, loans and advances
 are approximately of the value stated if realized in ordinary course of
 business. Provision for known liabilities are adequate and not in
 excess of the amount reasonably necessary.
 
 4) Details of Securities given in respect of Secured Loans
 
 1.  Redeemable Non Convertible Debentures
 
 The debentures are secured by the frst legal Registered Mortgage and
 charge on the specific movable fixed assets of the Company and specific
 immovable properties i.e. Bunglow (Manorama Retreat) and Flat
 (Abhimanyu) belonging to the Company.
 
 2.  Term Loans From Banks & Financial Institutions
 
 Secured by way of hypothecation of specific machineries and equipments
 purchased.
 
 3.  Working Capital From Banks
 
 a.  Secured by hypothecation of stock of construction materials lying
 at sites, books debts and other receivables
 
 b.  First charge by way of mortgage of immovable property (Sadbhav
 House) and immovable property situated at Village Ognaj alongwith
 furnitures, fixtures etc. owned by company and second charge on
 machineries owned by the company.
 
 c.  Freehold land admeasuring 1,15,556 Sq. mts. of Group company
 Sadbhav Quarry Works Pvt. Ltd. situated at Tulsigam, Tal. Savli, Dist.
 Baroda.
 
 d.  Corporate Guarantee of Group Company Sadbhav Quarry Works Pvt. Ltd.
 
 e.  All the limits are also secured by Personal Guarantee and certain
 properties of Promoter Directors.
 
 6) Contingent Liability:
 
 a) The Company has given counter guarantee to the Bank for Rs.
 127024.82 Lacs (Rs. 85427.56 Lacs) against the guarantee given by the
 Bank.
 
 b) Outstanding Balance of Letter of Credit is Rs. 477.67 Lacs (Rs.
 Nil).
 
 c) Demand under Orissa Sales Tax Act Rs. 4.55 Lacs (Rs. 4.55 Lacs)
 
 d) Demand under Orissa Sales Tax Act for Entry Tax Rs. 0.75 Lacs (Rs.
 0.75 Lacs)
 
 e) Demand of Custom duty towards import of Machineries Rs.104.95 Lacs
 (Rs.104.95 Lacs)
 
 f) Demand under Income Tax Act,1961 Rs. 192.72 Lacs (Rs. 157.02 Lacs)
 
 g) Demand under Service Tax Act,1994 Rs. 67.29 Lacs (Rs. 67.29 Lacs)
 
 h) Company has given corporate guarantee to banks for Rs. 212 crores
 (Rs. 171 Crores) against the finance facility given by the banks to our
 subsidiary companies.
 
 i) The Regional Transport Officer, Surat (RTO) issued a notice for
 payment of road tax and penalty under the Bombay Motor Vehicles Act,
 1958 on forty (40) dumpers used by the Company at the excavation of
 mining sites around Surat. The Company fled a Special Civil application
 in the Gujarat High Court against the Commissioner of Transport and the
 RTO.  The Gujarat High Court directed Company to deposit the road tax
 (without penalty). The Company has complied with the order and has
 deposited Rs. 49.20 Lacs. The hearing of the matter has not yet
 commenced before authority. The Company has not made provision for
 penalty in its Books of Accounts.
 
 j) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys
 Limited) has fled a suit for recovery of Rs. 46.42 Lacs against the
 company and its directors and Officers holding them jointly and
 severally liable. The Company purchased steel and TMT bar from Sarda
 Energy and Minerals Limited, for which the latter claimed Rs. 46.42
 Lacs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The
 company has challenged the jurisdiction of the court. The matter is
 pending before the Civil Court, Nagpur. Company has not made any
 provision for the said liability in its Books of Accounts.
 
 7) Company is purchasing its bulk construction material like steel,
 cement, diesel and bitumen etc. from big government undertaking
 companies and private sector companies and hence there are no Micro,
 Small and Medium Enterprises, as defined in the Micro, Small and Medium
 Enterprises Development Act, 2006 to whom the company owes any dues on
 account of principal amount together with interest and accordingly no
 additional disclosures have been made.
 
 The above information regarding Micro, Small and Medium Enterprises has
 been determined to the extent such parties have been identifed on the
 basis of information available with the company. This has been relied
 upon by the auditors.
 
 8) With regards to insertion of explanations with retrospective effect
 from 01-04-2000 in section 80-IA (4) of the Income Tax Act, 1961 read
 with sub section (13), the Company has received Notice under section
 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for
 re-opening of assessment from Assessment Year 2003-04 to 2007-08,
 against which Company has fled a Special Civil Applications in the High
 Court of Gujarat. High Court of Gujarat has quashed the Notice issued
 under section 148 for the Assessment Year 2003-04 & 2004-05 and for
 remaining assessment years it has directed the department of Income Tax
 to complete the assessments without serving the notice of demand on the
 company. Accordingly Income Tax Department has completed the
 assessments from A.Y. 2005-06 to 2007-08 and intimated to the company
 without serving notice of demand. Further, the company has fled writ
 petition with High Court of Gujarat for challenging constitutional
 validity for insertion of explanations with retrospective effect and
 writ has been admitted. At present the matter is sub judies, hence
 quantification of liability cannot be ascertained.
 
 9) As per the Accounting Standard 11, The effect of Change in Foreign
 Exchange Rates, the required disclosure are given below:
 
 The company uses Currency Option and interest rate swap to hedge the
 interest and currency related risks on its capital account. Such
 transactions are governed by the strategy approved by the board of
 directors which provide principles on the use of these instruments,
 consistent with the Company''s Risk Management Policy. The company does
 not use these contracts for speculative purposes. Outstanding Currency
 Option and Interest Swap to hedge against foreign currency exchange
 rates and fuctuations in interest rate changes:
 
 (b) Defined Beneft Plan:
 
 The company made annual contributions to the employee''s Group Gratuity
 cash accumulation Scheme of the Life Insurance Corporation of India, a
 funded beneft plan for qualifying employees.
 
 The present value of the defined beneft obligation and the related
 current service cost were measured using the projected unit credit
 method as per actuarial valuation carried out at balance sheet date.
 
 The following tables sets out the funded status of the gratuity plan
 and the amount recognised by the company''s financial statements as at
 March 31, 2011.
 
 11) As per Accounting Standard-17, Segment Reporting, Company who is
 dealing in multiple products/service and operates in different
 geographical areas are required to report under this Accounting
 Standard, hence no disclosure is required as the company operates in a
 single primary business segment namely Engineering, Construction &
 Infrastructure development activities and at single geographical area
 namely India.
 
 12) As per Accounting Standard 18, Related Party Disclosure, the
 disclosures of transactions with the Related Parties as defined in the
 Accounting Standard are given below:
 
 I.  List of Related Parties
 
 Associate Companies/Entities:
 
 Sadbhav Finstock Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Sadbhav
 Public Charitable Trust, Santokba Trust, Mumbai Nasik Expressway Ltd.,
 Dhule Palesner Tollway Ltd.
 
 Subsidiary:
 
 Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way
 Limited, Sadbhav Mining Limitada Mozambique.
 
 Subsidiaries of Subsidiary:
 
 Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way
 Limited, Rohtak-Panipat Tollway Pvt. Ltd, Bijapur- Hungund Tollway Pvt.
 Ltd, Hydrabad-Yadgiri Toll Way Pvt. Ltd. and Maharashtra Border Check
 Post Network Ltd.
 
 Joint Ventures:
 
 Sadbhav-Prakash JV and SEL-GKC JV
 
 Key Management Personnel:
 
 Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitin R. Patel,
 Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel
 
 Relatives of Key Management Personnel and Enterprises over which
 Relatives of Key Managerial Persons having significant infuence:
 
 Smt. Shantaben V. Patel, Montecarlo Construction Ltd., V. M. Patel
 (HUF), Sarjan Infracon Pvt. Ltd., Shri Vikram R. Patel, Shri Vasistha
 C. Patel, Veer Trans, Veer Procon Ltd.
 
 13) Disclosures as per Clause 32 of the Listing Agreements with the
 stock exchanges
 
 b) Company has not given any loans and advances to any associates and
 frms/companies in which directors are interested.
 
 c) None of the loanees have made investments in shares of the Company.
 
 14) During the year, pursuant to the shareholders agreement and share
 subscription agreement dated 18th August, 2010, private equity
 investor''s have acquired 36,21,004 equity shares on fully diluted basis
 & acquired 22,50,774 - 0.01% Compulsory Convertible Cumulative
 Preference Shares (CCCPS) by investing Rs. 400/- crores in Sadbhav
 Infrastructure Project Limited, a Company''s subsidiary.
 
 15) Investment:
 
 i.  During the year, as a part of group restructuring investment made
 in following project specific SPVs have been transferred to a company''s
 subsidiary Sadbhav Infrastructure Project Limited.
 
 Against aforesaid pending transfer of shares, amount received from
 Sadbhav Infrastructure Project Limited have been shown as Advance
 Received from subsidiary against sale of shares in other subsidiaries
 in Schedule–12 under Current Liabilities.
 
 ii.  96,00,000 Shares have been pledged out of 2,44,79,940 shares held
 in Nagpur-Seoni Express way Ltd. with their lenders
 
 iii.  Entire 1,04,00,000 shares held in Mumbai Nasik Expressway Ltd.,
 are pledged with lenders of Mumbai Nasik Expressway Ltd.
 
 iv.  68,850 Shares have been pledged out of 64,61,000 shares held in
 Dhule Palesner Tollway Ltd. with lenders.
 
 17) Details of share of % holding in the Joint Venture Entities are as
 under.
 
 (a) The audited/ provisional financial statements of the above entities
 are not available at time of finalisation of accounts, hence share in
 Assets, Liabilities, Income and expenditure of the Company in its Joint
 Venture Entity has not been given.
 
 (b) In case of MNEL, commercial operations are started during the year.
 And in case of DTPL , the project is under construction and commercial
 activities are not started.
 
 19) There was no impairment Loss on fixed assets on the basis of review
 carried out by the management in accordance with Accounting Standard-28
 Impairment of Assets
 
 24) Borrowing Cost:
 
 During reported year, company has capitalized borrowing cost Rs.
 19,16,720 (NIL) according to AS-16 Borrowing Cost.
 
 25) Right Issue Expenses :
 
 During the current year, company has allotted 62,50,000 Right Shares
 having face value of Re 1 each at Premium of Rs. 71.50 per shares and
 alloted 1,86,25,800 equity shares of Re 1 each at a premium of Rs.
 41.50 per shares against the conversion of 1,86,25,800 warrants. The
 company has written off Right issue expenses aggregating Rs. 144.37
 Lacs in Securities Premium Account.
 
 26) Remuneration to Managing Director is paid on monthly basis and
 therefore statement showing computation of net Profit U/s 349 of the
 Companies Act, 1956 is not given.