INDEPENDENT AUDITORST REPORT
To the Members of Apple Finance Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Apple Finance Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2013, the
Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary
of the significant accounting policies and other explanatory information.
Management`s Responsibility for the Financial Statements
The Company`s 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
Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with
the accounting principles generally accepted in India. This responsibility includes the
design, implementation and maintenance of internal controls relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free
from material misstatements, 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 misstatements.
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 controls 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, but not for the purpose of expressing an opinion on the effectiveness of
the Company`s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by the
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.
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 Act
in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India, subject to:
a) Point No. l1 of Note `19` regarding `going concern` assumption of the Company.
b) Point No.11 of Note `19` regarding non-consideration of Deferred Tax Assets (Net)
amounting to f 194,230,222
(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 Statement of Profit and Loss, of the loss for the year ended on
that date, and
(c) In the case of the Cash Flow Statement, of the cash flows of the Company 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 ("the Order")
issued by the Central Government in terms of Section 227(4A) of theAct, 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 purposes 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.
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
d. in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the
e. On the basis of the written representations received from the Directors as on March
31, 2013, 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 Section 274( 1 )(g)
of the Act.
||For Mahendra Kumbhat and Associates
||Amar Chand Bagrecha
|Date: May 30, 2013
Annexure to the Independent Auditorst Report
(Referred to in paragraph 1 under `Report on Other Regulatory Requirementst section of
our report of even date)
Matters required as per Paragraphs 4 and 5 of the Companies (Auditor`s Report) Order,
1. (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) The Management has verified all the assets during the year. We have been informed
that no material discrepancies have been noticed on the assets physically verified by the
(c) The Company has not disposed of substantial part of fixed assets during the year.
2. (a) The inventory has been physically verified during the year by the Management. In
our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the Management
are reasonable and adequate in relation to the size of the Company and the nature of its
(c) The Company is maintaining proper records of inventory. We have been informed that
no material discrepancies between the physical stocks and the book records were noticed on
3. (a) The Company has not taken loans from companies, firms and other parties listed
in the Register maintained under Section 301 of the Act.
(b) The Company has granted loan to one party required to be listed in the Register to
be maintained under Section 301 of the Act, the maximum amount outstanding at any time
during the year for this loan is Rs 47,90,500 and the year end balance isRs 47,90,500
which is interest free.
(c) In our opinion, the terms and conditions, wherever applicable, on which loan is
granted are not prima facie prejudicial to the interest of the Company,
except interest free loan granted.
(d) Loan granted by the Company is without stipulation of repayment term and hence, we
are unable to comment upon regularity of repayment or otherwise and overdue amount.
4. In our opinion and according to the information and explanations given to us, there
are in general adequate internal control procedures commensurate with the size of the
Company and the nature of its business, with regard to purchase of fixed assets, and for
sale of services and we have not observed any major weaknesses in internal control.
5. According to the information and explanations given to us, the Company has not
entered into the transactions requiring to be entered in the Register maintained under
Section 301 of the Act.
6. The Company has not accepted deposits from public during the year and hence, the
provisions of Sections 58A and 58AA of the Act and the rules thereunder are not
7. The Company does not have an Internal Audit system.
8. We have been informed that the Central Government has not prescribed the maintenance
of Cost records under Section 209(1 )(d) of the Act.
9. a) We have been informed that during the year under review, the Company has
regularly deposited all undisputed statutory dues including the Provident Fund, Investor
Education and Protection Fund, Employeest State Insurance Scheme, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues,
wherever applicable. There were no arrears as at 31 st March, 2013 for a period of more
than six months from the date they became payable.
b) According to the information and explanations given to us, disputed statutory dues
not deposited are nil.
10. The Company`s accumulated losses at the end of the financial year are more than
fifty per cent of its net worth and the Company has made cash profit in the current
financial year and also in the previous financial year.
11. The Company has not defaulted in respect of payment of dues to banks, financial
institutions and debenture-holders.
12. The Company has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. As informed to us, the Company is not a chit fund or a nidhil mutual
benefit fund/society and hence, clause (xiii) of paragraph 4 of the Order is not
14. In our opinion, the Company has maintained proper records of the transactions and
contracts in respect of investments in shares, securities, debentures and other
investments and timely entries have been made therein. Except shares of Spectrum Alkyd
Resins Limited, all the investments are held by the Company in its own name.
15. The Company has not given any guarantees for loans taken by other companies and
hence, clause (xv) of paragraph 4 of the Order is not applicable to the Company.
16. The Company has not obtained term loans during the year and hence, clause (xvi) of
paragraph 4 of the Order is not applicable to the Company.
17. The Company has not raised fund on short term basis during the ,year; and hence the
question of same being used for any long term investments does not arise.
18. During the year, no preferential allotment of shares has been made to the parties
and companies covered in the Register maintained under Section 301 of the Act.
19. According to the information and explanation given to us, during the period covered
by our Audit Report, the Company has not issued any debentures, and hence the question of
creation of security does not arise.
20. Since the Company has not come out with public issue during the year, clause (xx)
of paragraph 4 of the Order is not applicable.
21. According to the information and explanation given to us, no fraud on or by the
Company has been noticed or reported during the year.
||For Mahendra Kumbhat and Associates
||Firm Regn. No.W5770W
||Amar Chand Bagrecha
|Date: Mav 30, 2013
||Membership No. 56605