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Apple Credit Corporation Ltd.

BSE: 511339 Sector: Financials
NSE: APPLECREDT ISIN Code: INE212A01013
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Apple Credit Corporation Ltd. (APPLECREDT) - Auditors Report

Company auditors report

To

The Members of Abhayam Trading Limited

(Formerly Apple Credit Corporation Limited)

Report on the Financial Statements

We have audited the accompanying financial statements of Abhayam Trading Limited(Formerly Apple Credit Corporation Limited) ("the Company") which comprise theBalance Sheet as at 31st March 2017 and the Statement of Profit and Loss for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinci ples generally accepted in India including the Accounting Standards specifiedunder 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 accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act and other applicable authoritative pronouncements issued bythe Institute of Chartered Accountants of India. Those Standards and pronouncementsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Basis for Qualified Opinion

Attention is invited to Note No: 19 to the financial statements regarding preparationof the financial statements on "Going Concern" basis while the networth beingcompletelyeroded and registration to carry on the princi pal business as a Non - BankingFinance Company being cancelled by the regulators and the management ha s i nd ica ted that it is curr ent ly pu rsu in g t he realization of dues to the company and settlementof existing lenders. Other than this the company has not been carrying on businessactivity notwithstanding this the financial statements have been prepa red as that of ag oing concern and consequently the terminal values of various assets and liabilities havenot been determined and we are there fore unable to express our opinion whether thepreparation of the financial statements on a g oi ng con ce rn a ss um pt ion is a pp ropria te or not and the impact of which is unascertained.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion Paragraph the financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinci ples generally accepted in India:

a. In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2017; and

b. In the case of the Statement of Profit and Loss of the Loss for the year ended onthat date.

c. In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Emphasis of Matters

Attention is drawn to

a. As referred to Note no: 23 in respect of dues to company from various partiesagainst whom the company has initiated legal proceedings and are pending at variousstages however pending the outcome of these ongoing proceedings the company adjusted theoutstanding receivables against the provision already created in the earlier yearsamounting to Rs.371760987/- resulting in an amount of Rs.98313493/- being left inprovisions unattached to any ascertained obligation or receivable.

b. 1). As referred to in schedule 18 to financial statements the company adjustedcertain balances in party account based on legal opinion that the claims are barred bylimitation amounting to Rs.

68173289/- since the adjustment made does not have the consent of party we areunable to comment whether such adjustment would absolve the company from its paymentobligation and claims for receivables.

2). As referred to in schedule 18 to financial statements the company wrote backvarious credit balances appearing in different parties account as the same were beingcarried from earlier years without any claim. Since the write back by company representingthe unclaimed credits amounting to Rs.388930306/- other than amount mentioned in clauseb.1 above is an unilateral act hence any potential claim against such write back infuture is unascertainable.

Our Opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Sub section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 of the order.

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

i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

ii. Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books.

iii. The Balance Sheet the Statement of Profit and Loss and the cash flow statementdealt with by this report are in agreement with the books of account.

iv. Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph in our opinion the Balance Sheet and Statement of Profit and Losscomply with the accounting standards specified under section 133 of the Companies Act2013 read with rule 7 of the Companies (Accounts) Rules 2014.

v. On the basis of written representations received from the directors as on 31st March2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2017 from being appointed as a director in terms of sub-section (2) ofsection 164 of the Companies Act 2013.

vi. With respect to the adequacy of the Internal financial controls over financialreporting of the company and operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

vii. With respect to the other matters to be included Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014in our opinion and to thebest of our information and according to the explanations given to us:

i. The Company does not have any pending litigations the impact of which are requiredto be disclosed in the financial statements.

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There are no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The company did not have any holdings or dealings in Specified Bank Notes duringthe period from 08th November 2016 to 30th December 2016.

Hence the disclosure requirement as envisaged in Notification G.S.R 308(E) dated 30thMarch 2017 is not applicable to the company. Refer Note No: 31 to the FinancialStatements.

Place: Chennai For Brahmayya & Co.
Date : 24th April 2017 Chartered Accountants
Firm Regn. No.000511S
N. Sri Krishna
Partner
Membershi p No.26575

Annexure - A to the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31st March 2017 we report that:

i. a.The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. According to the information and explanations given to us fixed assets have beenphysically verified by the management at reasonable intervals.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company The title deeds of the Immovable propertiesowned by the company are held in the name of the company.

ii. According to the information & explanations given to us the company does nothave inventory.

iii. According to the Information and explanations provided to us the company has notgranted any loans secured or unsecured to companies Firms LLPs or other parties coveredin the register maintained under section 189 of the Companies Act 2013. Therefore theprovisions of clause (iii) iii(a) iii(b) & iii(c) of Paragraph 3 of the Order arenot applicable.

iv. In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities granted in respect of which theprovisions of section 185 and 186 of the Act are applicable.

v. According to the information and explanations given to us the company has notaccepted any deposits from the public during the year.

vi. According to the information and explanations given to us the maintenance of costrecords has not been prescribed under subsection (1) of section 148 of the Act.Accordingly this clause is not applicable to the company.

vii. a. According to the records of the company the company is regular in depositingwith appropriate authorities undisputed statutory dues including Income-Tax Sales TaxService Tax Duty of Customs Duty of Excise Cess and any other statutory dues to theappropriate authorities. There are no outstanding statutory dues as at 31st March 2017 fora period of more than six months from the date they became payable.

b. According to the information and explanations given to us there are no dues ofdisputed Income Tax VAT Service Tax and Cess that have not been deposited with theappropriate authorities.

viii. The Company does not have Loans or borrowing from any financial institutionbanks government or debenture holders. Therefore the provisions of clause (viii) to theparagraph 3 of the Order are not applicable to the Company.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year.

Therefore the provisions of clause (ix) of Paragraph

3 of the Order are not applicable.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. The company do not have the managerial person appointed according to section197.Therefore managerial remuneration paid/provided for in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule v to the companiesact is not applicable.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Therefore the provisions of Clause (xii) of Paragraph 3of the Order are not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Therefore the provisions ofClause (xv) of Paragraph 3 of the Order are not applicable.

xvi. The company registration with Reserve Bank of India as Non – Banking FinanceCompany has been cancelled by Reserve Bank of India in December 2003.

Place: Chennai For Brahmayya & Co.
Date : 24th April 2017 Chartered Accountants
Firm Regn. No.000511S
N. Sri Krishna
Partner
Membershi p No.26575

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AbhayamTrading Limited (Formerly Apple Credit Corporation Limited) ("the Company") asof 31st March 2017 in conjunction with our audit of the financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls.

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting princi ples. A company's internal financial control over financialreporting includes those policies and procedures that (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting princi ples and that recei pts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion on adequacy and operating effectiveness of Internal FinancialControls over Financial Reporting

According to the information and explanations given to us and based on our audit inthe absence of any business operations carried on by the company the question ofcommencing on the existence of appropriate internal financial controls for authorisationand approval for the operations of the company does not arise.

The company neither has any standard operating procedures nor documentation in regardto operations of the company which are framed and adopted by the company.

Since the company has not been carrying on any business activities read with the factthat the company neither has any internal control systems nor documentation in regard tooperations of the company we are unable to comment on the impact arising on account oflack of above internal control systems on the financial statements as on 31st March 2017.

Place: Chennai For Brahmayya & Co.
Date : 24th April 2017 Chartered Accountants
Firm Regn. No.000511S
N. Sri Krishna
Partner
Membershi p No.26575