We have audited the attached Balance Sheet of SHIVAGRICO IMPLEMENTS LTD
 as at 31st March, 2012 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 an opinion on those
 financial statements based on our audit.
 
 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, on a 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.
 
 (1) As required by the Companies (Auditor''s Report) Order, 2003 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.
 
 (2) Further to our comments in the Annexure referred to in paragraph
 (1) above:
 
 (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 account as required by law have
 been kept by the company so far as appears from our examination of
 those books;
 
 (c) the said Balance Sheet, Profit and loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (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 representations received from directors, as
 on 31st March 2012, and taken on record by the Board of Directors, we
 report that none of the directors are disqualified as on 31st March
 2012, from being appointed as a director in terms of clause(g) of
 sub-section (1) of section 274 of the Companies Act,1956;
 
 (g) 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
 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 the affairs of
 the Company as at 31st March, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the Profit of
 the Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement of the Cash Flow of the
 Company for the year ended on that date.
 
 (i) (a) The company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (B) All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification which,
 in our opinion the frequency of verification, is reasonable having
 regard to the size of the company and the nature of its assets. No
 material discrepancies were noticed in respect of the assets physically
 verified.
 
 (c) As per the information and explanations given to us, during the
 year, the company has not disposed off any substantial part of fixed
 assets.
 
 (ii) (a) As explained to us, the management has physically verified the
 inventories as at the end of the financial 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) In our opinion and according to the information and explanations
 given to us, the company is maintaining proper records of inventory.
 The discrepancies noticed on verification between the physical stocks
 and the book records were not material.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has neither granted nor taken any loans, secured or
 unsecured to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (b) Since the Company has neither granted nor taken any loans, secured
 or unsecured to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956,
 accordingly, sub-clauses (b), (c), (d), (e), (f) 8 (g) of clause (iii)
 of the Order are not applicable to the Company.
 
 (iv) in our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the company and the nature of its business with regard
 to purchases of inventory, fixed assets and with regard to the sale of
 goods. Further, on the basis of our examination and according to the
 information and explanations given to us, we have neither come across
 nor have we been informed of any instance of major weaknesses in the
 aforesaid internal control system.
 
 (v) According to the information and explanations given to us, we are
 of the opinion that the Company has not entered into any contracts or
 arrangements referred to in section 301 of the Companies Act, 1956,
 accordingly, sub-clause (b) of clause (v) of the Order is not
 applicable to the Company.
 
 (vi) The company has not accepted deposits from public and hence
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A, 58AA or any other relevant provisions of the Companies
 Act,1956 and the Companies (Acceptance of Deposits) Rules,1975 are not
 applicable for the year under audit.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size of the Company and the nature of its
 business.
 
 (viii) We have broadly reviewed the books of accounts maintained by the
 company pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956 and are of the opinion that prima facie the prescribed
 accounts and records have been maintained. We have not, however made a
 detailed examination of the records with a view to determine whether
 they are accurate of complete.
 
 (ix) (a) According to the information and explanations given to us, the
 company is generally regular in depositing with appropriate authorities
 undisputed statutory dues including provident fund, investor education
 protection fund, employees'' state insurance, income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess, service tax
 and other material statutory dues.
 
 (b) As at 31.03.2012 according to the records of the company, the
 following are the particulars of disputed dues on account of sales tax,
 income tax, custom duty, wealth tax, excise duty and other statutory
 dues that have not been deposited.
 
 
 Nature of      Amount    Forum where dispute is pending
 Statute        (Rs)
                in Lacs
 
 Excise duty    60.50     Rajasthan High Court
 
 Excise duty    11.62     Joint Commissioner of Central Excise, 
                          Jaipur - II
 
 Excise duty    2.92      CESTAT, New Delhi
 
 Service Tax    0.82      CESTAT, New Delhi
 
 (x) The Company does not have accumulated losses at the end of the
 financial year. The Company has not incurred cash losses during the
 financial year covered by the audit and in the immediately preceding
 financial year
 
 (xi) The company has not defaulted in repayment of dues to any
 financial institution or bank or debenture holders
 
 (xii) The company has not granted any 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
 paragraph 4 of the Companies (Auditor''s Report) Order, 2003 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 (xiv) of paragraph 4 of the Companies (Auditor''s
 Report) Order, 2003 are not applicable to the company.
 
 (xv) As informed to us, the company has not given any guarantees for
 loans taken by others from banks or financial institutions.
 
 (xvi) In our opinion and according to the information and explanations
 given to us and on an overall examination, the term loans have been
 applied for the purpose for which they were raised.
 
 (xvii) In our opinion and 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)According to the information and explanations given to us, the
 company has not made any allotment of shares during the period covered
 by our report. Accordingly, the provisions of clause (xviii) of
 paragraph 4 of the Companies (Auditors Report) Order 2003, is not
 applicable to the company.
 
 
 (xix) In our opinion and according to the information and explanations
 given to us, the company has not issued any secured debentures during
 the period covered by our report. Accordingly, the provisions of clause
 (xix) of paragraph 4 of the Companies (Auditor''s Report) Older, 2003 is
 not applicable to the company.
 
 (xx) During the period covered by our audit report, the company has not
 raised any money by public issue.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                         For SANGHVI SANGHVI & SANGHVI
 
                                        Firm Registration No.: 109138W
 
                                                 Chartered Accountants
 
 
 Place : Mumbai                                             V.PRAJEETH
 
 DATED :30th May, 2012                                         Partner
 
                                               Membership No. : 138286