We have audited the accompanying financial statements of EASTERN TREADS
LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the
Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2013;
b. In the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
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 Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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
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
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
The Annexure referred to in paragraph 1 of the Our Report of even date
to the members of Eastern Treads Limited on the accounts of the Company
for the year ended 31st March, 2013.
In terms of Companies (Auditor''s Report) Order 2003, issued by the
Government of India, in terms of section 227 (4A) of The Companies Act,
1956, we further report, on the matters specified in paragraph 4 and 5
of the said Order, to the extent applicable to the Company, that:-
1. (i) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets, which requires to be updated.
(ii) The fixed assets have been physically verified by the management
during the year. We are informed that no serious discrepancies have
been noticed by the management on such verification as compared to the
aforesaid records of fixed assets.
(iii) During the year, there was no major disposal of fixed assets.
2. (i) The management has carried out physical verification of stocks
at reasonable intervals during the year.
(ii) In our opinion, the procedure of verification of stocks followed
by the Company are reasonable and adequate having regard to the size of
the Company and the nature of its business.
(iii) On the basis of our examination of the records of inventory, we
are of the opinion that the Company has a proper system of maintaining
records of inventory. We are informed that the discrepancies between
the stock records and the physical stocks are not material.
3. (i) The Company has not granted loans to any party covered in the
register maintained under Section 301 of The Companies Act, 1956.
(ii) The following are the particulars of loans taken by the Company
from companies, firms and other parties covered in the register
maintained under Section 301 of The Companies Act, 1956.
Sl. Name of
the Party Relationship Loan repaid
No. accepted Balance
1 Mr. M. E.
Meeran Chairman 0.00 62,43,583.00 0.00
2 Mr. Navas
M. Meeran Chairman 0.00 24,41,000.00 0.00
The terms and conditions of the above loans are not prima facie
prejudicial to the interests of the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to the purchases of inventory and fixed assets and for the sale of
goods and services. There is no continuing failure to correct
weaknesses in internal controls.
(i) The particulars of contracts or arrangements referred to Section
301 of the Act have been entered in the register required to be
maintained under that Section.
(ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act and exceeding the value of five lakhs rupees in respect of any
party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted any deposit from the public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of the 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 made and maintained.
9. (i) According to the records of the Company, the Company has been
generally regular in depositing undisputed statutory dues with the
(ii) According to the information and explanations given to us, there
are no undisputed statutory dues which are outstanding as on 31st
March, 2013, for a period of more than six months from the date they
(iii) According to the records of the Company, there are no statutory
dues which have not been deposited on account of any dispute, except
the following disputed amounts.
of the Nature of Amount (Rs) which the Forum where
Statute Dues amount is pending
CST CST 3,80,200.00 2008-2009 Commissioner
VAT Vehicle 14,400.00 2009-2010 Commercial
10. The accumulated loss of the Company is not more than fifty percent
of its net worth. The Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
11. The Company has not defaulted in repayment of dues to Financial
12. The Company has not granted any loans on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit
14. The Company is not dealing or trading in shares, securities,
debentures and other investments.
15. The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
16. The Company has not taken any term loans during the year.
17. On the basis of an overall examination of the Balance Sheet of the
Company, no funds raised on a short term basis, have been used for long
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the Register maintained under Section 301 of
The Companies Act, 1956
19. The Company has not issued any debentures during the year.
20. The Company has not raised money by public issues during the year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
For JVR & ASSOCIATES
(F. R. No. 011121S)
JOMON K. GEORGE Kochi-16