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Auditor Report of Apple Finance Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Apple Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Profit and Loss Statement, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone 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 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act and Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards, pronouncements 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over the financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 aforesaid standalone 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, of the state of affairs of the Company as at March 31, 2015 and its profit and cash flows for the year ended on that date, subject to:

a) Point No.1 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 Rs. 168,451,676.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of sub-section (11) of Section 143 of the Act, 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 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 notified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the 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.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Regulatory Requirements' section of our report of even date)

Matters required as per Paragraphs 3 and 4 of the Companies (Auditor's Report) Order, 2015

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 Management.

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 business.

(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 such verification.

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the 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 in general adequate internal control procedures, commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets, and for sale of goods and services and we have not observed any major weaknesses in internal control.

5. The Company has not accepted deposits from public during the year and hence, the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder are not applicable.

6. We have been informed that the Central Government has not prescribed the maintenance of Cost records under Section 148(1) of the Companies Act, 2013.

7. (a) We have been informed that during the year under review, the Company has regularly deposited all undisputed statutory dues including the Provident Fund, Employees' State Insurance Scheme, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, wherever applicable. There were no arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and based on the records of the Company examined by us, there are no dues of Income Tax or Wealth Tax or Service Tax or Sales Tax or Customs Duty or Excise Duty or Cess which have not been deposited on account of any disputes.

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

8. 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.

9. The Company has not defaulted in respect of payment of dues to banks, financial institutions and debenture- holders.

10. The Company has not given any guarantees for loans taken by others from bank or financial institutions and hence, Clause (x) of paragraph 3 of the Order is not applicable to the Company.

11. The Company has not obtained term loans and hence, Clause (xi) of paragraph 3 of the Order is not applicable to the Company.

During the course of our examination of the books and records of the Company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For Mahendra Kumbhat and Associates Chartered Accountants Firm Regn. No.105770W

Amar Chand Bagrecha Partner Membership No.56605

Place: Mumbai Date: May 29, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Apple Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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 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 notified under the Companies Act,1956 ("the Act") read with the General Circular No.15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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.

Auditors'' 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 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 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, 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 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 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.1 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 ''188,449,777.

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit of the Company 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 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 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 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 Accounting Standards notified under the Act read with the General Circular No.15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of the written representations received from the Directors as on March 31, 2014, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Regulatory Requirements'' section of our report of even date)

Matters required as per Paragraphs 4 and 5 of the Companies (Auditor''s Report) Order, 2003

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 Management.

(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 business.

(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 such verification.

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 is Rs.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 applicable.

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

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, Employees'' 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 31st March, 2014 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 nidhi/mutual benefit fund/society and hence, Clause (xiii) of paragraph 4 of the Order is not applicable.

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 & Associates Chartered Accountants Firm Regn. No.105770W

Amar Chand Bagrecha Partner Membership No.56605

Place: Mumbai Date: May 14, 2014


Mar 31, 2013

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.

Auditors'' 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 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.

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.1 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 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 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 Act.

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.

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ‘Report on Other Regulatory Requirements'' section of our report of even date)

Matters required as per Paragraphs 4 and 5 of the Companies (Auditor''s Report) Order, 2003:

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 Management.

(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 business.

(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 such verification.

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 is Rs. 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 applicable.

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, Employees'' 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 31st 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 nidhi/ mutual benefit fund/society and hence, clause (xiii) of paragraph 4 of the Order is not applicable.

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

Chartered Accountants

Firm Regn. No.105770W

Amar Chand Bagrecha

Partner

Membership No.56605

Place: Mumbai

Date: May 30, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Apple Finance limited ("the Company") as at 31st March 2012 and the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto ("the financial statements"). 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 the 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 the test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 ("the Act"), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order to the extent applicable.

Further to our comments in the Annexure referred to above, we report that

(i) 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.

(ii) In our opinion, the Company has kept proper books of account as required by law so far as it appears from our examination of those books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account

(iv) In our opinion, the Balance Sheet, Profit and 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; except for the Accounting Standard 22 "Accounting for Taxes on Income".

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is 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 Act

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to

a.) Point No. 1 of Note '20'regarding going concern assumption of the Company,

b) Point No. 11 of Note '20' regarding non- consideration of Deferred Tax Assets (Net) amounting to f200,576,804 and read with the other notes thereon 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 the Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

c) In the case of the Cash Flow Statement, of cash flows for the year ended on that date.

Annexure to the Auditors' Report

(Referred to in our Report of even date)

Matters required as per paragraphs 4 and 5 of die Companies (Auditor's Report) Order, 2003

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The management has not 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 management

(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 business.

(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 such verification.

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 Companies Act, 1956, the maximum amount outstanding at any time during the year for this loan is X 47,45,500 and the year end balance is Rs. 47,45,500 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 applicable.

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, Employees' 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 31st March, 2012 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 nidhi / mutual benefit fund/society and hence, clause (xiii) of paragraph 4 of the Order is not applicable.

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 die 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 & Associates

Chartered Accountants

Firm Regn. No.l05770W

Amar Chand Bagrecha

Partner

Membership No.56605

Place : Mumbai

Date : May 30, 2012


Mar 31, 2010

We have audited the attached Balance Sheet of Apple Finance Limited ("the Company") as at 31st March 2010 and the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto ("the Financial Statements"). 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 the 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 the test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 ("the Order") issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 ("the Act"), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order to the extent applicable.

Further to our comments in the Annexure referred to above, we report that:

(i) 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.

(ii) in our opinion, the Company has kept proper books of account as required by law so far as it appears from our examination of those books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in subjection (3C) of Section 211 of the Companies Act, 1956; except for Accounting Standard 22 "Accounting for Taxes on Income".

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to

a) Note No. 1 of Schedule P regarding going concern assumption of the Company.

b) Note No. 9 of Schedule P regarding non-consideration of Deferred Tax Assets (Net) amounting to Rs. 312,235,474

and read with the other notes thereon 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 31 March 2010.

b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

c) In the case of the Cash Flow Statement, of cash flows for the year ended on that date.

Annexure to the Auditors Report (Referred to in our Report of even date) Matters required as per paragraphs 4 and 5 of the Companies (Auditors Report) Order, 2003

1.(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The management has not 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 management.

(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 business.

(c) The Company is maintaining proper records of inventory. We have been informed that no material discrepancies between physical stocks and the book records were noticed on such verification.

3. The Company has not taken loans from / to companies, firms and other parties listed in the register maintained under Section 301 of the. Act. The Company has given loan of Rs.21,25,500 to its wholly owned subsidiary, terms and conditions of loan are prima facie not prejudicial to the interest of the Company.

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 arid explanations given to us, the Company has not entered into the transactions requiring to be entered in the Register maintained in pursuance of the Section 301 of the Act.

6. The Company has not accepted deposits from public during the year, hence the provisions of Sections 58A and 58AAof the Act and the rules framed thereunder are not applicable.

7. The Company does not have Internal Audit systems.

8. We have been informed that the Central Government has not prescribed the maintenance of Cost records under Section 209 (I )(d) of the Act.

9. a) We have been informed that during the year under review,

the Company has regularly deposited all the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees 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 3 lsl March, 2010 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 Companys 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 incurred cash loss 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 nid/ii I mutual benefit fund / society, hence clause (xiii) of paragraph 4 of the Order is not applicable.

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 for some cases, 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 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; hence clause (xvi) of paragraph 4 of the Order is not applicable to the Company.

.17. The Company has raised fund on short term basis during the > year; same is not used for any long term investments.

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, 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 & Associates

Chartered Accountants

- Firm Regit. No. 105770W

Amar Chand Bagrecha

Partner

Membership No. : 56605

Place: Mumbai

Date : May 31, 2010