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
 explanatory information.
 
 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.
 
 Auditor''s Responsibility
 
 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
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 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
 India:
 
 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
 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 Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account.
 
 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
 appropriate authorities.
 
 (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
 became payable.
 
 (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.
 
                                        Period to 
 Name 
 of the  Nature of    Amount (Rs)       which the      Forum where
                                                       dispute
 Statute  Dues                          amount         is pending
                                        relates
 
                                                       Deputy 
 
 CST     CST         3,80,200.00        2008-2009      Commissioner
                                                      (Appeals),
                                                       Ernakulam
 
 VAT     Vehicle       14,400.00        2009-2010      Commercial 
                                                       Tax Officer,
         Interception
                                                       Kattappana
 
 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
 financial year.
 
 11. The Company has not defaulted in repayment of dues to Financial
 Institutions/Banks.
 
 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
 fund/society.
 
 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
 term investments.
 
 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
 audit.
 
                                   For JVR & ASSOCIATES
  
                                   Chartered Accountants
 
                                  (F. R. No. 011121S)
 
                                   JOMON K. GEORGE Kochi-16
 
                                   Partner
 
 29-04-2013                        M.No.202144