Auditor Report of Eastern Treads Ltd.

Mar 31, 2024

We have audited the accompanying financial statements of Eastern Treads Limited (''the Company''), which comprise the
Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including other comprehensive income), the
Statement of Changes in Equity and the Statement of Cash flows for the year then ended and the notes to the financial
statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred
to as “the financial statements”).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial
statements give the information required by the Companies Act 2013 (“the Act”) in the manner so required and give a true
and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards ) Rules, 2015,as amended, (“IND AS”) and other accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31, 2024, and its loss, total comprehensive income,
its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standard of Auditing (SAs) specified under section 143(10) of the Act.
Our responsibility under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the Rules made thereunder and we have fulfilled our ethical
responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

In our opinion, the financial statements give a true and fair view of the state of affairs of the Company as at March 31,
2024 and of its financial performance and cash flows for the year then ended in accordance with IND AS. Our audit did
not identify any matters that required an “Emphasis of Matter” paragraph, indicating that there were no issues requiring
special emphasis or disclosure beyond what is already included in the financial statements.

Key Audit Matters

Key audit matter is a matter that, in our professional judgement, were of most significance in our audit of the financial
statements of the current year. These matters were addressed in the context of our audit of financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined
the matters described below to be key audit matter to be communicated in our report.

Key Audit Matter

Auditor''s Response

1. Valuation of Inventory The net carrying value of inventory held by the Company as on 31 March 2024 amounts to '' 714.72 lakhs as disclosed in note 2.7 to accompanying standalone financial statements, which is 20.21% of total assets of the company as on that date. Further, refer to note 1.15 for accounting policies relating to valuation of inventory adopted by the management in accordance with Ind AS 2, Inventories (''Ind AS 2''). Inventories are valued at the lower of cost and net realisable value item wise. Cost includes costs incurred in bringing the inventory to its present location and condition as further detailed below: i) Raw Materials Cost includes cost of purchase net of duties and taxes that are recoverable from the government and other costs incurred in bringing the inventories to their present location and condition. Cost is determined basis using first-in, first- out (''FIFO'') method of computation. ii) Finished goods and work in progress: Cost includes cost of direct materials and labour and a proportion of manufacturing overheads determined based on the normal operating capacity. Cost is determined using weighted average method of computation Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The management also identifies slow-moving, obsolete and damaged inventory on a periodical basis and makes an appropriate provision for obsolescence for such items as at reporting date. The aforesaid inventory valuation and estimation of provision for obsolescence is manually performed by the management on the reporting date and involve significant estimates and judgements. Considering the size, the assumptions used in the valuation and the complexities involved significant auditor attention is required to test accuracy of inventory valuation, and thus, we have identified valuation of inventory as a key audit matter in the current year audit.

Our audit procedures in relation to valuation of inventory included, but were not limited to, the following: 1) Evaluated the design and implementation, and tested the operating effectiveness of key internal controls over measurement of inventory balances as at year end. 2) Assessed the appropriateness of the principles used in the valuation of inventory in accordance with the requirements of Ind AS 2. 3) Tested, on a sample basis, the accuracy of cost computed for raw material inventory by verifying the actual costs of latest purchase of raw materials applying the principle of FIFO method, by inspection of supporting documents. 4) Tested, on a sample basis, the accuracy of cost computed for work-in-progress and finished goods inventory by recomputing the weighted average cost computation. Further, in the process, tested the cost of direct materials used as per bills-ofmaterial (BOM), and allocation of labour and manufacturing overheads to such finished goods; 5) Obtained management working of valuation of inventory and reconciled the quantities with the stock verification reports to ensure completeness of the underlying data on which valuation is performed by the management and tested the mathematical accuracy of such workings. Recomputed the overall allocation computation of overheads on inventory and ensured consistency of assumptions used therein by the management with prior periods. Tested, on sample basis, the inventory aging report and net realisable value of inventories basis the latest market prices of the products. Evaluated the process followed by the management for identification of slow-moving, obsolete and damaged inventory items and accordingly assessed reasonableness of provision for obsolescence estimated by the Company. Evaluated the appropriateness and adequacy of disclosures presented by the management relating to inventory balances in the financial statements in accordance with applicable financial reporting framework.

2. Trade Receivables	Our audit procedures in relation to valuation of ECL
The total balance of trade receivable for the year ended	included, but were not limited to, the following:
31 March 2024 is '' 1209.44 lakhs net of provision of
'' 284.5 lakhs as disclosed in note No 2.3, to	1) Evaluated the design and implementation, and tested
accompanying standalone financial statements, which is	the operating effectiveness of key internal controls over
34.19% of total assets of the company as on that date.	measurement of ECL and Trade receivables balances as
Further, refer to note 1.17(d) for accounting policies relating	at year end.
to valuation of trade receivables adopted by the
management in accordance with Ind AS 109, Financial	2) Assessed the appropriateness of the principles used
Instruments (''Ind AS 109'').	in the valuation of ECL in accordance with the
	requirements of Ind AS 109 and Ind AS 37.
For recognition of impairment loss on other financial assets	3) Sought external confirmations from a selected sample
and risk exposure, the Company determines that whether	of debtors.
there has been a significant increase in the credit risk since
initial recognition. If credit risk has not increased	4) Obtained management working of ECL and reconciled
significantly, 12-month ECL is used to provide for	the inputs used with the ageing reports to ensure
impairment loss. However, if credit risk has increased	completeness of the underlying data on which valuation
significantly, lifetime ECL is used. If, in a subsequent period,	is performed by the management and tested the
credit quality of the instrument improves such that there is	mathematical accuracy of such workings.
no longer a significant increase in credit risk since initial
recognition, the Company reverts to recognising
impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from
all possible default events over the expected life of a
financial instrument. The 12-month ECL is a portion of the
lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
The Company''s financial statements include a significant
amount of financial assets subject to ECL measurement.
ECL involves complex models and significant judgement
in determining the credit risk parameters and the calculation
of future cash flows. Given the complexity and the high
degree of estimation uncertainty, we considered ECL to
be a key audit matter.

• The Company''s management and Board of Directors are responsible for the other information. The other information
comprises the information included in the Company''s annual report, but does not include the financial statements and
our auditor''s report thereon. The annual report is expected to be made available to us after the date of this auditor''s
report.

• Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.

• In connection with our audit of the financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially
misstated.

• When we read the management report, if we conclude that there is a material misstatement therein, we are required
to communicate the matters to those charged with governance as required under SA 720 ''The Auditor''s responsibilities
Relating to Other Information''.

Management''s responsibility for the financial statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013
(“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive income, and cash flows and changes in equity of the
Company in accordance with the IND AS and other accounting principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding
of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, 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.

In preparing the financial statements, the management is responsible for assessing the Company''s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor''s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the company to express an
opinion on the financial statements.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced.
We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work; and (ii) to evaluate
the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of

the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of utmost
significance in the audit of financial statements of the current year and are therefore the key audit matter.We describe
these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in Annexure “A” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

B. As required by Section 143 (3) of the Act, based on our audit we report that:

1. We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.

2. In our opinion, proper books of account as required by law have been kept by the company so far as it appears
from our examination of those books.

3. The company does not have any branches and so the provisions of section 143(8) are not applicable to the
company.

4. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of
Changes in Equity and the Statement of Cash flows dealt with by this Report are in agreement with the books
of account.

5. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.

6. On the basis of the written representations received from the directors as on 31st March, 2024 taken on record
by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 from being appointed as
a director in terms of Section 164 (2) of the Act.

7. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the
operating effectiveness of such controls, refer to our separate Report in ''Annexure B''. Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls
over financial reporting.

8 With respect to the matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies
(Audit and Auditors)Rules, 2014, in our opinion and to the best of our information and according to the explanation
given to us:

i. The Company, as detailed in note 2.30 to the standalone financial statements, has disclosed the impact of
pending litigations on its financial position as at 31 March 2024

ii. The Company did not have any long-term contracts including derivative contracts for which there were
anymaterial foreseeable losses as at 31 March 2024;

iii. We are given to understand that the company is in the process of transferring the unpaid dividend amounting
to Rs.1,81,862 pertaining to the year ended March 31, 2017 to the Investor Education and Protection Fund
(IEPF) as of 31 March 2024.

iv.

(a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any
other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest

in other persons or entities identified in any manner whatsoever by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been received by the Company from any person
or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing
or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(c) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations
under the sub-clause (a) and (b) contain any material misstatement.

v. Since the Company has not declared or paid any dividend during the year, the question of commenting

on whether dividend declared or paid is in accordance with Section 123 of the Companies Act, 2013
does not arise.

C. Based on our examination which included test checks, the Company has used an accounting software for
maintaining its books of account for the financial year ended 31 March 2024 which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded
in the software. Further, during the course of our audit we did not come across any instance of the audit trail
feature being tampered with.

For G Joseph & Associates
Chartered Accountants

Firm Reg. No. 006310S

Place: Kochi Allen Joseph

Date : 29-05-2024 Partner

M No. 228498

UDIN: 24228498BKDGLN7200

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Mar 31, 2017

The Members of Eastern Treads Limited Kochi

Report on the Financial Statements

We have audited the accompanying financial statements of Eastern Treads Limited, which comprise the Balance Sheet as at March 31, 2017, 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

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, 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 on the standalone financial statements.

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, 2017;

b) In the case of the Statement of Profit and Loss, 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, 2016 issued by the Central Government of India in terms of sub-Section (11) of Section 143 of The Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

a. We have sought and 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 it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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 and with the returns received from branches not visited by us.

d. In our opinion, the aforesaid financial statements comply with Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2)of the Act.

With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of th e Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) the Company has the following pending litigations which would impact its financial position:

Name of the Statute	Nature of Dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending	Amount paid under Protest (Rs.)
The Kerala General Sales Tax Act, 1963	KGST Assessment	24,98,936	1996-2002 (7 years)	The Honourable Supreme Court of India	24,98,936
The Central Sales Tax Act, 1956	CST Assessment	19,04,578	1996-2002 (7 years)	The Honourable Supreme Court of India	19,04,578
The Central Sales Tax Act, 1956	CST Assessment	1,80,898	2002-2003	Deputy Commissioner (Appeals), Ernakulam	1,80,898

The Central Sales Tax Act, 1956	CST Assessment	1,75,940	2004-2005	Deputy Commissioner (Appeals), Ernakulam	1,75,940
The Kerala General Sales Tax Act 1963	KGST Assessment	3,450	2008-2009	Deputy Commissioner (Appeals), Ernakulam	3,450
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	47,275	2008-2009	Deputy Commissioner (Appeals), Ernakulam	47,275
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	14,400	2009-2010	Deputy Commissioner (Appeals), Ernakulam	14,400
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	3,570	2011-2012	Deputy Commissioner (Appeals), Ernakulam	3,570
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	15,985	2010-2011	Intelligence Squad, Thodupuzha	15,985
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	28,703	2015-2016	Intelligence Squad, Thodupuzha	28,703
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	8,137	2009-2010	Deputy Commissioner (Appeals), Ernakulam	8,137
The Kerala General Sales Tax Act, 1963	KGST Assessment	1,50,133	2010-2011	Assistant Commissioner Special Circle Perumbavoor	1,50,133
The Kerala General Sales Tax Act, 1963	KGST Assessment	6,37,992	2011-2012	Assistant Commissioner Special Circle Perumbavoor	1,27,600
The Kerala General Sales Tax Act, 1963	Demand on Vehicle Interception	37,700	2016-2017	Intelligence Squad, Edapally	37,700

b) The Company does not have any long-term contracts requiring a provision for material foreseeable losses.

c) The Company does not have any amounts required to be transferred to the Investor Education and Protection Fund.

d) The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8^th November, 2016 to 30^th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF EASTERN TREADS LIMITED Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013

We have audited the internal financial controls over financial reporting of Eastern Treads Limited as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annexure referred to in paragraph 1 of our Report of even date to the members of Eastern Treads Limited on the accounts of the Company for the period ended 31^st March, 2017.

In terms of Companies (Auditor''s Report) Order 2016, issued by Central Government of India, in terms of Section 143(11) of The Companies Act, 2013, we further report, on the matters specified in paragraph 3 and 4 of the said Order, that:-

1. (i) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(ii). Fixed assets have not been physically verified by the management at regular intervals.

(iii). The title deeds of immovable properties shown in the financial statements are held in the name of the Company.

2. Physical verification of inventory has been conducted at reasonable intervals by management. The discrepancies notices were properly dealt with in the books of account of the Company.

3. The Company has not granted any loans, secured or unsecured to companies, firms, LLPs, or other parties covered in register maintained under Section 189 of The Companies Act, 2013.

4. The Company has not given any loans or guarantees/made any investments within the meaning of Section 185 & 186 of The Companies Act, 2013.

5. The Company has not accepted any deposits.

6. We have broadly reviewed the cost records maintained by the Company as specified in sub-Section (1) of Section 148 of The Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7. (i) The Company is regular in depositing undisputed statutory dues with appropriate authorities.

(ii) According to records of Company, there are no statutory dues which have not been deposited on account of any dispute, except the following:

Name of the Statute	Nature of Dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending	Amount paid under Protest (Rs.)
The Kerala General Sales Tax Act, 1963	KGST Assessment	6,37,992	2011-2012	Assistant Commissioner Special Circle Perumbavoor	5,10,392

8. The Company has not defaulted in any repayment of dues to any financial institution or bank or debenture holders.

9. The term loans has been utilized for the purposes for which they were obtained.

10. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers/employees have been noticed or reported during the course of our audit.

11. The Company is not paying any managerial remuneration other than sitting fees.

12. The transactions entered into with related parties are in compliance with Section 177 & 188 of The Companies Act 2013 and the details have been disclosed in the financial statements etc. as required by the applicable accounting standards.

13. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

14. The Company has not entered into any non-cash transactions with directors or persons connected with him, during the year.

15. The Company is not required to be registered under Section 45-IA of The Reserve Bank of India Act, 1934.

For JVR & Associates

Chartered Accountants

(F. R. No. 011121S)

Kochi-16 Jomon K George

04/05/2017 Partner

M.No.202144

---

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of EASTERN TREADS LIMITED, which comprise the Balance Sheet as at March 31, 2015 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

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the standalone financial statements.

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, 2015;

b) In the case of the Statement of Profit and Loss, 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.

Emphasis of Matter

We draw attention to ''Short Term Loans & Advances'' (Note no.20), which includes an amount of RS. 57.65 lakhs receivable from a party, the recoverability of which is not fully certain in the absence of conclusive evidence for the same. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 issued by the Central Government of India in terms of Sub-Section (11) of Section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

a. We have sought and 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 it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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 and with the returns received from branches not visited by us.

d. In our opinion, the aforesaid financial statements comply with Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) the Company has the following pending litigations which would impact its financial position:

Name of the Nature of Dues Amount in RS. Period to Which Statute the amount relates

The Central CST 3,80,200.00 2008-2009 Sales Tax Assessment Act, 1956

The Central CST 5,05,616.00 2009-2010 Sales Tax Assessment Act, 1956

The Kerala KGST 24,98,936.00 1996-2002 General Assessment (7 years) Sales Tax Act, 1963

The Central CST 19,04,578.00 1996-2002 Sales Tax Assessment (7 years) Act, 1956

The Central CST 1,80,898.00 2002-2003 Sales Tax Assessment Act, 1956

The Central CST 1,75,940.00 2004-2005 Sales Tax Assessment Act, 1956

Name of the Forum where dispute is Amount paid under Statute pending Protest

The Central Deputy 0.00 Sales Tax Commissioner(Appeals), Act, 1956 Ernakulam

The Central Deputy Sales Tax Commissioner(Appeals), 1,51,685.00 Act, 1956 Ernakulam

The Kerala The Honourable 19,04,578.00 General Supreme Court of India Sales Tax Act, 1963

The Central The Honourable 24,98,936.00 Sales Tax Supreme Court of India Act, 1956

The Central Deputy Sales Tax Commissioner(Appeals), 1,80,898.00 Act, 1956 Ernakulam

The Central Deputy 1,75,940.00 Sales Tax Commissioner(Appeals), Act, 1956 Ernakulam

ii) the Company does not have any long-term contracts requiring a provision for material foreseeable losses.

iii) the Company does not have any amounts required to be transferred to the Investor Education and Protection Fund.

The Annexure referred to in paragraph 1 of our Report of even date to the members of Eastern Treads Limited on the accounts of the Company for the period ended 31st March, 2015.

In terms of Companies (Auditor''s Report) Order 2015, issued by Central Government of India, in terms of Section 143(11) of The Companies Act, 2013, we further report, on the matters specified in paragraph 3 and 4 of the said Order, that:

1) (i) The company is maintaining proper records showing full particulars, including quantitative details and

situation of fixed assets, which however requires to be updated.

(ii) Fixed assets have not been physically verified by the management at regular intervals.

2) (i) Physical verification of inventory has been conducted at reasonable intervals by management.

i. Procedures of physical verification of inventory followed by management are reasonable and adequate in relation to size of company and nature of its business.

ii. The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in register maintained under Section 189 of The Companies Act, 2013.

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.

5) The company has not accepted any deposits.

6) We have broadly reviewed the cost records maintained by the company as specified in subsection (1) of Section 148 of The Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7) i. The company is regular in depositing undisputed statutory dues with appropriate authorities.

ii. According to records of company, there are no statutory dues which have not been deposited on account of any dispute, except the following:

Name of the Nature of Dues Amount in RS. Period to Which Statute the amount relates

The Central CST 3,80,200.00 2008-2009 Sales Tax Assessment Act, 1956

The Central CST 5,05,616.00 2009-2010 Sales Tax Assessment Act, 1956

The Kerala KGST 24,98,936.00 1996-2002 General Assessment (7 years) Sales Tax Act, 1963

The Central CST 19,04,578.00 1996-2002 Sales Tax Assessment (7 years) Act, 1956

The Central CST 1,80,898.00 2002-2003 Sales Tax Assessment Act, 1956

The Central CST 1,75,940.00 2004-2005 Sales Tax Assessment Act, 1956

Name of the Forum where dispute is Amount paid under Statute pending Protest

The Central Deputy 0.00 Sales Tax Commissioner(Appeals), Act, 1956 Ernakulam

The Central Deputy Sales Tax Commissioner(Appeals), 1,51,685.00 Act, 1956 Ernakulam

The Kerala The Honourable 19,04,578.00 General Supreme Court of India Sales Tax Act, 1963

The Central The Honourable 24,98,936.00 Sales Tax Supreme Court of India Act, 1956

The Central Deputy Sales Tax Commissioner(Appeals), 1,80,898.00 Act, 1956 Ernakulam

The Central Deputy 1,75,940.00 Sales Tax Commissioner(Appeals), Act, 1956 Ernakulam

iii. The Company does not have any amounts which are required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of The Companies Act, 1956 and rules made thereunder.

8) 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.

9) The Company has not defaulted in any repayment of dues to any financial institution or bank or debenture holders.

10) The Company has not given any guarantee for loans taken by others from any bank or financial institution.

11) The term loans has been utilised for the purposes for which they were obtained.

12) 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 29/04/2015 M.No.202144

---

Mar 31, 2013

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

---

Mar 31, 2012

We have audited the attached Balance Sheet of M/s. EASTERNTREADS LIMITED as at 31st March, 2012 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that date and annexed thereto. 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. 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 misstatements.

An audit includes examining, on test basis evidence supporting the amounts and disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as under:

1. 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.

2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books.

3. The Balance Sheet, Profit & Loss Account and the Cash Flow Statement, dealt with by this report are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit & Loss Account and 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.

5. On the basis of written representations received from directors as on 31 st March 2012 and taken on record by the Board, 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.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, 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 Balance Sheet, of the Company's state of affairs as at 31st March, 2012;

ii) in the case of Profit and Loss Account, of the Profit for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

7. 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:-

7.1 The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

7.2 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.

7.3 During the year, there was no major disposal of fixed assets.

7.4 The management has carried out physical verification of stocks at reasonable intervals during the year.

7.5 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.

7.6 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.

7.7 The Company has not granted loans to any party covered in the register maintained under Section 301 of The Companies Act, 1956.

7.8 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.

SI No Name of the Party Relationship Loan accepted Loan repaid Closing balance

1 Mr. M.E. Meeran Chairman 0.00 0.00 62,43,583.00

2 Mr. Navas M. Meerar Chairman 55,00,000.00 1,30,59,000.00 24,41,000.00

The terms and conditions of the above loans are not prima facie prejudicial to the interests of the Company.

7.9 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.

7.10 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.

7.11 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.

7.12 The Company has not accepted any deposit from the public.

7.13 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

7.14 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.

7.15 According to the records of the Company, the Company has deposited the statutory dues applicable to it with some delays.

7.16 According to the information and explanations given to us, there are no undisputed statutory dues which are outstanding as on 31st March, 2012, for a period of more than six months from the date they became payable.

7.17 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.

Name of the Nature of Amount (Rs) Period to Forum where dispute is Statute Dues which the pending amount relates

CST CST 3,80,200.00 2008-2009 Deputy Commissioner (Appeals), Ernakulam

VAT Vehicle 14,400.00 2009-2010 Commercial Tax Officer, Interception Kattappana

7.18 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.

7.19 The Company has not defaulted in repayment of dues to Financial Institutions/Banks.

7.20 The Company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities.

7.21 The Company has not given any guarantee for loans taken by others from banks or financial institutions.

7.22 The Company has not taken any term loans during the year.

7.23 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.

7.24 The Company has not issued any debentures during the year.

7.25 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)

Kochi-16 JOMONK. GEORGE

29.05.2012 Partner

M.No. 202144

---

Mar 31, 2010

We have audited the attached Balance Sheet of M/s. EASTERN TREADS LIMITED as at 31st March, 2010 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that date and annexed thereto. These financial statements are the responsibility of the Companys Management.

Our responsibility is to express an opinion on these 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 misstatements.

An audit includes examining, on test basis evidence supporting the amounts and disclosure 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as under:

1. 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.

2. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.

3. The Balance Sheet, Profit & Loss Account and the Cash Flow Statement, dealt with by this report are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit & Loss Account and 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.

5. On the basis of written representations received from directors as on 31st March 2010 and taken on record by the Board, we report that none of the directors are disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of Sub-Section (1) of Section 274 of The Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, 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 Balance Sheet, of the companys state of affairs as at 31st March, 2010;

ii) in the case of Profit and Loss Account, of the Profit for the year ended on that date; and iii) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

7. In terms of Companies (Auditors 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:- 7.1 Though the company has maintained records relating to fixed assets, the Company may need to

comprehensively combine/complete the fixed asset register with particulars including quantitative details

and situation of its fixed assets.

7.2 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.

7.3 During the year, there was no major disposal of fixed assets.

7.4 The management has carried out physical verification of stocks at reasonable intervals during the year.

7.5 In our opinion, the procedure of verification of stocks followed by the company requires to be improved considering the size of theCompany and the nature of its business.

7.6 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.

7.7 The company has not granted loans to any party covered in the register maintained under Section 301 of The Companies Act, 1956.

7.8 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 No. Name of the Party Relationship Loan repaid Closing Balance

1 Mr. M. E. Meeran Chairman 3,174,815.00 7,819,410.00

2 Mr. Navas M. Meeran Director 1,825,185.00 0.00

The terms and conditions of the above loans are not prima facie prejudicial to the interest of the Company.

7.9 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.

7.10 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.

7.11 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.

7.12 The Company has not accepted any deposit from the public.

7.13 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

7.14 To the best of our knowledge, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of The Companies Act,1956 for the products of the Company.

7.15 According to the records of the Company, the Company has deposited the statutory dues applicable to it with some delays.

7.16 According to the information and explanations given to us, there are no undisputed statutory dues which are outstanding as on 31st March, 2010, for a period of more than six months from the date they became payable.

7.17 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, which have been deposited on account of dispute.

Period to which Name of the Nature of Amount (Rs) the amount Statute Dues relates

KGST KGST 1,532,618.00 1996-2002

CST CST 1,904,578.00 1996-2002

Purchase Tax KGST 966,318.00 1996-2002 Interest

CST Interest 180,898.00 2002-2003

CST Annual Dues 175,940.00 2004-2005

Total amount deposited 4,760,352.00



Name of the Statute Forum where dispute is pending

KGST Hon. High Court, Kerala

CST Hon. High Court, Kerala

KG ST Deputy Commissioner (Appeals),Commercial Taxes Department, Ernakulam

CST -do-

CST -do-

7.18 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.

7.19 The Company has not defaulted in repayment of dues to Financial institutions/Banks.

7.20 The Company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities.

7.21 The Company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

7.22 The Company has not taken any term loans during the year.

7.23 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.

7.25 The Company has not issued any debentures during the year.

7.26 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

PARTNER

M.No.202144

Kochi -

16 11.08.2010