TO THE MEMBERS OF
HERO MOTOCORP LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of HERO MOTOCORPLIMITED (the Company), which comprise the Balance Sheet as at March 31,2015 and the Statement of Profit and Loss and the Cash Flow Statement for the year thenended, and a summary of the significant accounting policies and other explanatoryinformation.
Managements Responsibility for the Financial Statements
The Companys 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 standalone financial statements that give a true and fair view of the financialposition, financial performance and cash flows of the Company accordance with theaccounting principles generally accepted in India, including the Accounting Standardsspecified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)Rules, 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design, implementation and maintenance of adequate internalfinancial controls, that were operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
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 thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Companys Directors, aswell as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us, the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India, of the state of affairs of the Companyas at March 31, 2015, anditsprofitand its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2015 (theOrder) issued by the Central Government in terms of Section 143(11) of the Act, wegive in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the AccountingStandards specified 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 March31, 2015, taken on record by the Board of Directors, none of the Directors is disqualifiedas on March 31, 2015 from being appointed as a Director in terms of Section 164 (2) of theAct.
(f) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinionand to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;
ii) The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts;
iii) There has been no delay in transferring amounts, required to be transferred, tothe Investor Education and Protection Fund by the Company.
| ||For DELOITTE HASKINS & SELLS |
| ||Chartered Accountants |
| ||(Firm Registration No. 015125N) |
| ||JAIDEEP BHARGAVA |
| ||Partner |
|New Delhi, May 7, 2015 ||(Membership No. 90295) |
Annexure to the Independent Auditors Report
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements section of our report of even date)
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets cover all the items ina phased manner over a period of three years which, in our opinion, is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programme,certain fixed assets were physically verified by the Management during the year other thanfor assets lying with third parties, for which confirmations have been obtained in most ofthe cases by the Company. According to the information and explanations given to usdiscrepancies noticed on such verification were not material and have been properly dealtin the books of account.
2. In respect of its inventories:
(a) Asexplainedtous,theinventories were physically verified during the year by theManagement at reasonable intervals other than for inventories lying with third parties atthe end of the year for which confirmations have been to obtained in most of the cases.
(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and discrepancies noticed on suchverification were not material and have been properly dealt in the books of account.
3. According to the information and explanations given to us, the Company has grantedloans, secured or unsecured, to companies, firms or other parties covered in the Registermaintained under Section 189 of the Companies Act, 2013. In respect of such loans:
(a) The receipts of principal amounts and interest have been regular.
(b) There is no overdue amount in excess of Rs 1 lakh remaining outstanding as at theyear-end.
4. In our opinion and according to the information and explanations given to us, havingregard to the explanations that some of the items purchased are of special nature andsuitable alternative sources are not readily available for obtaining comparablequotations, there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixedassets and the sale of goods and services. During the course of our audit, we have notobserved any major weakness in such internal control system.
5. In our opinion and according to the information and explanations given to us, theCompany has not accepted deposits. Therefore, the provisions of the clause 3 (v) of theOrder are not applicable to the Company.
6. According to the information and explanations given to us, the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of Section 148 ofthe Companies Act, 2013, for the business activity of the Company.
7. According to the information and explanations given to us, in respect of statutorydues:
(a) The Company has been regular in depositing undisputed statutory dues, includingprovident fund, employees state insurance, income tax, sales tax, wealth tax,service tax, customs duty, excise duty, value added tax, cess and other material statutorydues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident fund,employees state insurance, income tax, sales tax, wealth tax, service tax, customsduty, excise duty, value added tax, cess and other material statutory dues in arrears asat March 31, 2015 for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us and the records of theCompany examined by us, there are no disputed dues in respect of wealth tax, customs dutyand cess which have not been deposited. The following are the particulars of excise duty,service tax, sales tax and income tax dues not deposited/deposited under protest by theCompany on account of disputes:
|Name of the Statute ||Nature of the Dues ||Amount* ( Rs in crores) ||Amount paid under protest ( Rs in crores) ||Period to which the amount relates ||Forum where dispute is pending |
|Central Excise Laws ||Excise Duty ||890.83 ||395.70 ||2000-01 and 2002-2014 ||CESTAT |
| ||Service Tax ||0.89 ||0.45 ||2004-05 to 2005-06 ||Supreme Court |
| || ||255.08 ||22.04** ||2004-05 to 2011-12 ||CESTAT |
|Sales Tax ||Sales Tax ||1.90 ||1.90 ||1998-99 to 2000-2001 ||Haryana Tax Tribunal |
|Income tax Act, 1961 ||Income tax ||0.84 ||- ||2002-03 ||Income Tax Appellate |
| || ||2,568.59 ||50.00** ||2009-10 ||Tribunal |
| || ||0.30 ||- ||2001-02 ||Commissioner (Appeals) |
| || ||3.77 ||- ||2006-07 || |
| || ||2.47 ||- ||2007-08 || |
| || ||1.19 ||- ||2014-15 || |
| || ||13.61 ||- ||2011-12 to 2013-14 || |
* Amount as per demand orders including interest and penalty wherever indicated in theorder and excludes disputed dues fully paid.
** Appeal along with stay application has been filed.
The following matters have been decided in favour of the Company but the department haspreferred appeals at higher levels:
|Name of the Statute ||Nature of the Dues ||Amount ( Rs in crores) ||Period to which the amount relates ||Forum where dispute is pending |
| ||Excise duty ||2.57 ||1986-87 to 1990-91 ||Supreme Court |
|Central Excise Laws || ||2.82 ||2004-05 to 2010-11 ||CESTAT |
| ||Service Tax ||0.20 ||2005 ||High Court |
|Income-tax Act, 1961 ||Income-Tax ||1219.02 ||1987-88, 1989-90, 1992-93, 1993-94, 1995-96, 1996-97, 1997-98, 1998-99, 2000-01, 2005-06, 2006-07 ||High Court |
| || ||22.36 ||2003-04 ||Income Tax Appellate Tribunal |
(d) The Company has been regular in transferring amounts to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1of 1956) and Rules made thereunder within time.
8. The Company does not have accumulated losses. The Company has not incurred cashlosses during the financial year covered by our audit and in the immediately precedingfinancialyear.
9. In our opinion and according to information and explanations given to us, theCompany has not defaulted in repayment of dues to banks during the year. The Company hasnot taken any loans from financial institutions and has not issued debentures during theyear.
10. According to the information and explanations given to us, the Company has notgiven any guarantees during the year for loans taken by others from banks or financialinstitutions.
11. In our opinion and according to the information and explanations given to us, theCompany has not taken any term loans during the year.
12. To the best of our knowledge and belief and according to the information andexplanations given to us, no fraud by the Company and no material fraud on the Companyother than fraudulent withdrawal of money against fixed deposits held with a bank by theCompany (Refer note 17 of the standalone financial statements), has been noticed orreported during the year.
| ||For DELOITTE HASKINS & SELLS |
| ||Chartered Accountants |
| ||(Firm Registration No. 015125N) |
| ||JAIDEEP BHARGAVA |
| ||Partner |
|New Delhi, May 7, 2015 ||(Membership No. 090295) |