1.  We have audited the attached Balance Sheet of Sulabh Engineers and
 Services Limited as at 31st March,2012, the Statement of Profit & Loss
 and Cash Flow Statement for the year ended on that date annexed there
 to. 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 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 fee from material misstatement. An audit
 includes examining on test basis, 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 and we report that:
 
 3.  As required by the Companies (Auditors'' Report) Order 2003 issued
 by the Central Government of India in terms Sec.227 (4A) of the
 Companies Act 1956 and on the basis of such checks of the books and
 records as we Considered necessary and appropriate and according to the
 information And explanation given to us during the course of audit, the
 statement on the Matters specified in paragraph 4&5 of the said order,
 is enclosed herewith.
 
 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 explanation which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 b) In the our opinion, proper Books of Accounts as required by law have
 been kept by the Company so far as appears from our examination of such
 Books.
 
 c) The Balance Sheet and Profit & Loss A/c referred to in this report,
 are in agreement with the Books of Accounts.
 
 d) In our opinion the Balance Sheet, Cash flow Statement and Profit &
 Loss a/s dealt with by this Report comply, subject to Notes to
 Accounts, with the Mandatory Accounting Standards Accounting Standards
 referred to Sec.211(3C) of the Companies Act, 1956, to the Extent.
 
 e) On the basis of written representations received from the Directors
 as on 31st March,2012 and taken on record by the Board of Directors, we
 report that none of the Director is disqualified as on 31.03.2012 from
 being appointed as Director in terms of Clause (g) of Sub- Sec.(l) of
 Sec. 274 of the Companies Act, 1956.
 
 f) In our opinion and to the best of our information and explanation
 given to us, the said statements of account, read together with
 significant accounting policies and Notes on Accounts there on, give
 the information required by the companies Act, 1956 in the mariner so
 required and give a true 8s fair view in conformity with the accounting
 principles generally accepted in India:
 
 (i) in so far as relates to the Balance Sheet of the state of Affairs
 of the company as at 31st march 2012,
 
 (ii) In so far as relates to the Profit & Loss account of the Profit of
 the company for the year ended on that date and
 
 (iii) In case of the Cash Flow Statement, of the Cash Flow for the year
 ended on that date.
 
 1.  (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets are physically verified by the management at
 reasonable intervals having regard to the size of the company and
 nature of its assets. No materials discrepancies were noticed during
 such verification during the year.
 
 (c) The company has not disposed off any part of fixed assets during
 the year and accordingly going on concern is not affected, except
 Rs.284/- being full amount of net WDV was charged as Depreciation to
 Revenue a/c.
 
 2.  In respect of inventories: There were no inventory, hence this
 clause is not applicable.
 
 3.  In respect of the Loans, secured or unsecured, granted or taken by
 the company to/from companies, firms or other parties covered in the
 register maintained u/s.301 of the Companies Act, 1956:
 
 (a) the company has given loans to various parties and total
 outstanding at the year end was Rs. 12.53 Crores (including Rs.1.50
 Crores interest free loan), maximum outstanding during the year any
 time was Rs.15.43 Crores.
 
 (b) The company has not taken loans, secured or unsecured, from
 Companies, firms or other parties covered in the register maintained
 u/s.301 of the Companies Act, 1956.
 
 (c) In our opinion the rate of interest and other terms and condition
 on which loans given by the company are not prima facie prejudicial to
 the interest of the company. The parties are repaying the principal
 amounts as stipulated and are also irregular in payment of interest,
 wherever applicable .
 
 (d) In respect of aforesaid loans, there is no overdue amount.
 
 4.  In our opinion and according to the information given to us the
 company has adequate internal control procedure, commensurate to the
 size of the company and nature of its Business for the purchase of
 inventories and fixed assets and for sale of goods Further based on our
 examination and according to the information & explanation given to us
 we have neither come across nor have been informed of any major
 weakness in the internal control.
 
 5.  To the best of knowledge and belief and according to the
 information and explanation given to us We are of the opinion that the
 transaction that need entered in the register in pursuance of sec. 301
 of the companies Act 1956 has been so entered.
 
 6.  The company has not accepted any deposit from public to which the
 directive issued By the Reserve Bank of the India and the provision of
 sec.58AA of the Act and the Rules framed there under applicable.
 
 7.  In our opinion the company has internal audit system commensurate
 with the size and nature of its business.
 
 8.  As explained to us the central govt, has not prescribed maintenance
 of cost record u/s 209(1) (d) of the companies Act 1956 for any of the
 company.
 
 9.  In respects of statutory dues:
 
 (a) According to the records of the company and information and
 explanation given to us the company has been regular in depositing
 undisputed statutory dues to the extent applicable, with the
 appropriate authorities during the year. According the information and
 explanation given to us, no undisputed amount payable in respect of the
 above were in arrears as on 31.03.2012 for a period of more than 6
 months from the date on which they become payable. We have been
 explained that status relating to other statutory dues including
 Employees State Insurance, Provident Fund, Sales Tax, Wealth Tax,
 Custom Duty, Investor Education and Protection Fund, Excise Duty and
 Service Tax are not applicable to the Company during the year.
 
 10.  The Company have not accumulated losses at the end of the
 financial year and have not incurred cash losses during the year
 covered by the audit and immediately preceding financial year.
 
 11.  On the basis of information and explanation given to us the
 company has not defaulted in repayment of dues to any Bank or financial
 institution. The company has not obtained any borrowing by way of
 debentures.
 
 12.  Based on our examination of record and the information &
 explanation given to us the company has not granted any loans and
 advances on the basis of security by way of pledge of shares debentures
 and other securities .
 
 13.  In our opinion the company is not a chit fund or and Nidhi/ Mutual
 benefit fund / society therefore the provision of clause (xiii) of this
 order are not applicable.
 
 14.In our opinion the Company has maintained proper records of
 transactions and contracts relating to shares and securities and other
 investments made, entered into during the year and timely entries have
 been made therein.
 
 15.  According to the information and explanation given to us and
 record examined by us the company has not given any guaranty for the
 loan taken by others from Banks or financial institutions.
 
 16.  In our opinion and according to the information & explanation
 given to us the company has not taken term loan during the year and not
 been defaulter in repayment of principal and interest by way of
 installment.
 
 17.  According to the information and explanations given to us and on
 overall examination of the Balance Sheet of the Company, we are of the
 opinion that there are no funds raised on short term basis that have
 been used for long term investment.
 
 18.  The company has made preferential allotment of 70,00,000 Equity
 shares of Rs. 10/- each on premium of Rs.10/- each, out of which
 17,00,000 Equity shares were issued to Promoters and 53,00,000 Equity
 shares were issued to Non-Promoters, covered in Register maintained
 u/s.301 of the Companies Act, 1956.
 
 19.  The company has not raised any money by way of public issue during
 the year, except issue of preferential allotment of 70,00,000 Equity
 shares of Rs. 10/- each on premium Rs.10/- each.
 
 20.  During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing practices in India and according to the information and
 explanation 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 been informed of such case by the management.
 
 21.  The other clauses of the companies (Auditors'' Report) Order 2003
 are not applicable in the case of this company for the current year.
 
 
 For RAKESH SONI & CO.,
 
 Chartered Accountants, 
 
 (CA.R.K.SONI)
 
 Proprietor.
 
 M.N.-047151
 
 FRN-114625W
 
 PLACE: MUMBAI.
 
 DATE:30.05.2012.