Mar 31, 2023
To The Members of Hero MotoCorp Limited
Report on the Audit of the StandaloneFinancial Statements
We have audited the accompanying standalone financial statements of Hero MotoCorp Limited (âthe Company"), which comprise the Balance Sheet as at 31st March 2023, and the Statement of Profit and Loss (including Other Comprehensive Loss), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statements").
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 Companies Act, 2013 (âthe Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s
Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Attention is invited to note 34 (c) of the standalone financial statements, relating to the search carried out by the Income Tax Authorities during the month of March 2022. Since the proceedings are currently in progress, there is an uncertainty of the outcome of the proceedings, and consequently, the impact, if any, cannot be ascertained at present.
Our opinion is not modified in respect of the above matter.
Sr. No. Key Audit Matter |
Auditor''s Response |
1 Government Grants |
Our principal audit procedures performed, among other procedures, included the |
The Company obtains grants from Government |
following: |
authorities in connection with the manufacturing |
We assessed the appropriateness of the accounting policy for government grants |
and sales of two-wheelers. There are certain specific |
as per the relevant accounting standard. |
conditions and approval requirements attached to these grants. |
We evaluated the design and implementation of the relevant controls and carried out testing of the operating effectiveness of management''s controls around |
At the end of each reporting period, the management |
recognition and recoverability of government grants. |
evaluates whether the Company has complied with the relevant conditions attached to each grant and whether there is a reasonable assurance that the grants will be received, in order to determine the |
We inspected the underlying documents relating to the grants given by the Government authorities for identification of the specific conditions and approval requirements attached to the respective grants; |
timing and value of grants to be recognised in the |
We evaluated whether the conditions have been met for recognition of grants |
standalone financial statements. |
and assessed management''s judgement around reasonable assurance of its |
The recognition of Government grants has been considered to be a key audit matter because of the significance of amounts involved, conditions attached towards recognition of respective grants and |
recovery. This included examining, on a sample basis, the terms and conditions of the government scheme, underlying documentation, communication with / by the government authorities and evidence supporting manufacturing of two wheelers and corresponding sales made in respect of such grant. |
assessment of its recoverability. |
We also assessed the adequacy and appropriateness of the classification and |
(Refer Note 11 of the standalone financial statements) |
disclosures made by the management in the standalone financial statements. |
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor''s Report Thereon
H The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Board''s report, Managements discussion and Analysis, and Corporate governance report, but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.
H Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
H In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
H If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive loss, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
The Company''s Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
H Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
H Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
H Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
H Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
H Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The Comparative standalone financial statements of the Company for the year ended March 31, 2022 prepared in accordance with Ind AS included in these standalone financial statements have been audited by the predecessor auditor. The report of the predecessor auditor on the comparative standalone financial statements expressed an unmodified opinion.
Our report is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 standalone Balance sheet, standalone statement of Profit and Loss including Other comprehensive loss, the standalone statement of Cash flows and standalone statements of Changes in equity dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone financial statements.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended,
I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and 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 financial position in its standalone financial statements. Refer Note 34 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Refer Note 41.3 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. Refer Note 23 to the standalone financial statements;
iv. (a) The Management has represented that,
to the best of it''s knowledge and belief, other than as disclosed in the note 45(vi) to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of it''s knowledge and belief, other than as disclosed in the note 45(vii) to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. As stated in the note 19 to the standalone financial statements,
a. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
b. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance with Section 123 of the Act.
c. The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
2. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants (Firm''s Registration No. 117366W/W-100018)
Vijay Agarwal
Partner
(Membership No. 094468) UDIN: 23094468BGYIOC9977
Place: Tirupati
Date: May 04, 2023
Mar 31, 2022
To the Members of Hero MotoCorp Limited BASIS FOR OPINION
REPORT ON THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTSOPINION
We have audited the standalone financial statements of Hero MotoCorp Limited (âthe Company"), which comprise the standalone balance sheet as at March 31, 2022, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (together referred to as âstandalone financial statements").
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 Companies Act, 2013 (âAct") 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, 2022, and profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.
EMPHASIS OF MATTER
Attention is invited to note 34(c) of the standalone financial statements, relating to the search carried out by the Income Tax Department in March 2022 concerning the Company. Since
the investigation and related proceedings are pending, there is uncertainty as regards impact, if any, of the outcome of the proceedings, which cannot be ascertained at this point of time.
Our opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
S. The key audit matter No. |
How the matter was addressed in our audit |
1. Government Grants |
In view of the significance of the matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: |
(Refer note 3.5 and 4 (f) to the standalone financial statements) |
⢠assessed the appropriateness of the accounting policy for government |
grants as per the relevant accounting standard; |
|
The Company obtains various grants from Government authorities in connection with manufacture and sales of |
⢠evaluated the design and implementation of the Company''s key internal |
two wheelers. There are certain specific conditions and |
financial controls over recognition of government grants and tested the |
approval requirement attached to the grants. |
operating effectiveness of such controls on selected transactions; |
Management evaluates, at the end of each reporting period, whether the Company has complied with the relevant conditions attached to each grant and whether there is a reasonable assurance that the grants will be received, in order to determine the timing and amounts |
⢠inspected/evaluated, on a sample basis, documents relating to the grants given by the various government authorities and identifying the specific conditions and approval requirements attached to the respective grants; ⢠evaluated the basis of management''s judgement regarding fulfilment of |
of grants to be recognized in the financial statements. |
conditions attached to the grants and reasonable assurance that grants will be received. This included examining, on a sample basis, the terms of the |
We identified the recognition of government grants as a key audit matter because of the significance of the amount of grants and due to significant management judgement involved in assessing whether the conditions |
underlying documentation, correspondence with the government authorities and whether corresponding sales were made in respect of such grants; ⢠assessed the adequacy and appropriateness of the disclosures made in |
attached to grants have been met and whether there is reasonable assurance that grants will be received. |
accordance with the relevant accounting standard. |
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS'' REPORT THEREON
The Company''s management and Board of Directors are
responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
MANAGEMENT''S AND BOARD OF DIRECTORS'' RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s Management and Board of Directors are
responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial
controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial
statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor''s report to the related
disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'' Report) Order, 2020 (âthe Order") issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the âAnnexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we
report that:
a) We have sought and obtained all the
information and explanations which to the best of our knowledge and belief were necessary for the 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure B".
(B) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at March 31, 2022 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements;
b. According to the information and explanation
given to us, the Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses;
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company, and
d. (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever (âUltimate Beneficiaries") by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever (âUltimate Beneficiaries") by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material mis-statement.
Refer Note 46 (vi) and 46 (vii) to the standalone financial statements;
e. The interim dividend declared and paid by the Company during the year and until the
date of this audit report is in accordance with section 123 of the Companies Act 2013. The final dividend paid by the Company during the
year in respect of the same declared for the previous year is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. As stated in note 19 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
(C) With respect to the matter to be included in the Auditor''s Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year
is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants ICAI Firm Registration No.: 101248W/W-100022
Vikram Advani
Partner
Place: Gurugram Membership No.: 091765
Date: May 03, 2022 UDIN: 22091765AIIFJM7228
Mar 31, 2021
Report on the Audit of the Standalone
Financial Statements
We have audited the standalone financial statements of Hero MotoCorp Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (together referred to as "standalone financial statement").
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 Companies Act, 2013 ("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 31 March 2021, and of its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
S. No. |
The key audit matter |
How the matter was addressed in our audit |
1. |
Government Grants |
In view of the significance of the matter, we applied the following |
(Refer note 3.5 and 4 (f) to the standalone financial statements) |
audit procedures in this area, among others to obtain sufficient appropriate audit evidence: |
|
The Company obtains various grants from Government authorities in connection with manufacturing and sales of two wheelers. There are certain specific conditions and approval |
⢠assessed the appropriateness of the accounting policy for government grants as per the relevant accounting standard; |
|
requirement attached to the grants. |
⢠evaluated the design and implementation of the Company''s |
|
Management evaluates, at the end of each reporting period, whether the Company has complied with the relevant conditions attached to each grant and whether there is a |
key internal financial controls over recognition of government grants and tested the operating effectiveness of such controls on selected transactions; |
|
reasonable assurance that the grants will be received, in |
⢠inspected, on a sample basis, documents relating to the grants |
|
order to determine the timing and amounts of grants to be |
given by the various government authorities and identifying the |
|
recognized in the financial statements. |
specific conditions and approval requirements attached to the |
|
We identified the recognition of government grants as a key |
respective grants; |
|
audit matter because of the significance of the amount of |
⢠evaluated the basis of management''s judgement regarding |
|
grants and due to significant management judgement involved |
fulfilment of conditions attached to the grants and reasonable |
|
in assessing whether the conditions attached to grants have |
assurance that grants will be received. This included examining, |
|
been met and whether there is reasonable assurance that |
on a sample basis, the terms of the underlying documentation, |
|
grants will be received. |
correspondence with the government authorities and whether corresponding sales were made in respect of such grants; |
|
⢠assessed the adequacy and appropriateness of the disclosures |
||
made in accordance with the relevant accounting standard. |
Information Other than the Standalone Financial Statements and Auditors'' Report Thereon
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s and Board of Directors'' Responsibility for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements;
ii. According to the information and explanations given to us, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.; and
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors'' Report under section 197(16):
In our opinion and according to the information and explanations
given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants ICAI Firm registration No.: 101248W/W-100022
Manish Gupta
Partner
Place: New Delhi Membership No.: 095037
Date: 06 May 2021 UDIN : 21095037AAAABJ2949
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of Hero MotoCorp Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (together referred to as âstandalone financial statementsâ).
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 Companies Act, 2013 (âActâ) 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 31 March 2019, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. |
Intangible assets under development |
Audit procedures |
The Company incurs significant internal and external |
In view of the significance of the matter we applied the |
|
costs in respect of the development of new models |
following audit procedures in this area, among others to obtain |
|
and technology of two wheelers. |
sufficient appropriate audit evidence: |
|
The accounting for these costs as either intangible |
- evaluated the design of internal controls relating to |
|
assets or expense items recorded in the statement of |
identification and classification of expenditure related to the |
|
profit and loss involves judgment and is dependent on the nature of the related development. |
development of new models and technology - for selected samples, tested the operating effectiveness |
|
We identified the intangible asset under development |
of the internal control identification and classification of |
|
as a key audit matter due to risk of inappropriate |
expenditure related to the development of new models and |
|
recognition of costs either as an expenditure or |
technology. |
|
capital item. |
- tested on a sample basis, costs incurred on such development, and agreed these to underlying documentation. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
B) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements;
ii) According to the information and explanation given to us, the Company did not have any longterm contracts including derivative contracts for which there were any material foreseeable losses;
iii) According to the information and explanation given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv) The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2019.
C With respect to the matter to be included in the Auditorsâ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all the items are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were physically verified during the year. As informed to us, no material discrepancies were noted on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed and transfer deed provided to us, we report that, the title deeds of immovable properties of land and buildings included under the head âProperty, plant and equipmentâ, are held in the name of the Company as at the balance sheet date.
(ii) Inventories, except for goods-in-transit and stocks lying with third parties have been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained. According to the information and explanations given to us, the procedures for physical verification of inventories followed by the management during the year are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly adjusted in the books of account.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3 (iii) of the Order is not applicable to the Company.
(iv) According to the information and explanations given to us, the Company has not given any loans, or provided any guarantee or security as specified under section 185 and 186 of the Companies Act, 2013. Moreover, in respect of the investments made by the Company, requirements of section 186 of the Companies Act, 2013 have been complied with.
(v) According to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of certain products manufactured by the Company. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government of India under sub-section (1) of Section 148 of the Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, goods and service tax, income-tax, duty of customs, cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of duty of excise, sales tax, service tax and value added taxes.
According to the information and explanation given to us, there are no undisputed amounts payable in respect of provident fund, employees state insurance, goods and service tax, income-tax, duty of customs, cess and any other material statutory dues that were in arrear as on 31 March 2019 for a 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 in respect of income-tax, sales-tax, goods and service tax, value added tax, service tax, duty of customs and duty of excise which have not been deposited with the appropriate authorities on account of any dispute as at 31 March 2019, other than those mentioned as follows:
Name of Statute |
Nature of Dues |
Amount* |
Amount paid |
Financial year to which |
Forum where Dispute |
(Rs.in crores) |
(Rs. in crores) |
the Amount Relates |
is Pending |
||
Central Excise Law |
Excise duty |
691.57 |
321.18 |
2008-09 to 2013-14 |
Supreme Court |
2.35 |
0.10 |
2014-15 to 2017-18 |
Commissioner Appeal |
||
863.10 |
415.30 |
2002-03 to 2017-18 |
(âCustoms Excise, Service Tax Appellate Tribunalâ) CESTAT |
||
Finance Act, 1994 |
Service Tax |
0.89 |
0.45 |
2004-05 to 2005-06 |
Supreme Court |
233.11 |
24.99 |
2004-05 to 2011-12 |
CESTAT |
||
Income-tax |
Income-tax |
3163.55s |
- |
2008-09 |
Income Tax Appellant Tribunal |
Act, 1961 |
(âITATâ) |
||||
2343.27# |
280.00 |
2004-05 and 2010-11 |
Commissioner of Income Tax (Appeals) |
* Amount as per demand orders including interest and penalty wherever indicated in the order
# Balance demand of 2010-11 has been stayed by assessing officer till the disposal of first appeal. s Interim stay granted by ITAT.
The following matters have been decided in favour of the Company but the department has preferred appeals at higher levels
Name of Statute |
Nature of Dues |
Amount (Rs. in crores) |
Amount paid as per stay order/ mandatory deposit |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Central Excise Law |
Excise duty |
8.78 |
- |
2002-03 to 2008-09 |
Supreme Court |
85.66 |
21.82 |
2009-10 to 2010-11, 2013-14 |
CESTAT |
||
Income-tax Act, 1961 |
Income-tax |
4.10 |
- |
2005-06 |
Supreme Court |
7,358.07 |
1987-88, 1992-93, 199596, 1996-97, 1997-98, 1998-99, 2000-01, 200607, 2009-10, 2010-11, 2011-12 and 2012-13 |
High Court |
|||
71.71 |
- |
2003-04, 2004-05, 200506 and 2007-08 |
Income Tax Appellate Tribunal |
(viii) According to the information and explanation given to us, the Company has not taken any loans or borrowings from banks, financial institutions and government and there were no debentures issued during the year or outstanding as at 31 March 2019. Accordingly, paragraph 3 (viii) of the Order is not applicable to the Company.
(ix) According to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and on the basis of examination of the records of the Company, the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, and the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
(xiv) According to information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.
Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 Opinion
We have audited the internal financial controls with reference to financial statements of Hero MotoCorp Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).
Managementâs Responsibility for Internal Financial Controls
The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as âthe Actâ).
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls with reference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial controls with Reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
For B S R & Co. LLP
Chartered Accountants
ICAI Firmâs registration No.: 101248W/W-100022
Jiten Chopra
Place: New Delhi Partner
Date: 26 April 2019 Membership No.: 092894
Mar 31, 2018
INDEPENDENT AUDITOR''S REPORT
To The Members of Hero MotoCorp Limited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Hero MotoCorp Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (together referred to as "Ind AS financial statementsâ).
Management''s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, the management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 31 March 2018, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Other Matters
The comparative financial statements of the Company for the year ended 31 March 2017 were audited by another auditor who expressed an unmodified opinion on those statements on 10 May 2017.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act;
e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements-Refer note 34 of the standalone Ind AS financial statements;
ii. According to the information and explanation given to us, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. According to the information and explanation given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018. However amounts as appearing in the audited Standalone Ind AS financial statements for the period ended 31 March 2017 have been disclosed.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its Property, plant and equipment by which all the items are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain property, plant and equipment were physically verified during the year. As informed to us, no material discrepancies were noted on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed and transfer deed provided to us, we report that, the title deeds of immovable properties of land and buildings included under the head "Property, plant and equipmentâ, are held in the name of the Company as at the balance sheet date.
(ii) Inventories, except for goods-in-transit and stocks lying with third parties have been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained. According to the information and explanations given to us, the procedures for physical verification of inventories followed by the management during the year are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly adjusted in the books of account.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.
(iv) According to the information and explanations given to us, the Company has not given any loans, or provided any guarantee or security as specified under section 185 and 186 of the Companies Act, 2013. Moreover, in respect of the investments made by the Company, requirements of section 186 of the Companies Act, 2013 have been complied with.
(v) According to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of certain products manufactured by the Company. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government of India under sub-section (1) of Section 148 of the Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to
us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, sales-tax, goods and service tax, income-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanation given to us, there are no undisputed amounts payable in respect of provident fund, employees state insurance, sales-tax, goods and service tax, income-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues that were in arrear as on 31 March 2018 for a 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 in respect of income-tax, sales-tax, goods and service tax, value added tax, service tax, duty of customs and duty of excise which have not been deposited with the appropriate authorities on account of any dispute as at 31 March 2018, other than those mentioned as follows:
(viii) According to the information and explanation given to us, the Company has not taken any loans or borrowings from banks, financial institutions and government and there were no debentures issued during the year or outstanding as at 31 March 2018.
Name of Statute |
Nature of Dues |
Amount* |
Amount paid |
Period to which the |
Forum where Dispute is |
(Rs, in crores) |
(Rs, in crores) |
Amount Relates |
Pending |
||
Central Excise Law |
Excise duty |
691.57 |
320.88 |
2008-09 to 2013-14 |
Supreme Court |
1.61 |
0.01 |
2014-15 to 2015-16 |
Commissioner Appeal |
||
870.47 |
415.58 |
2002-03 to 2017-18 |
CESTAT |
||
Finance Act, 1994 |
Service Tax |
0.89 |
0.45 |
2004-05 to 2005-06 |
Supreme Court |
234.43 |
24.99 |
2004-05 to 2011-12 |
CESTAT |
||
Income-tax Act, 1961 |
Income-tax |
7,342.99 |
528.44 |
2008-09, 2011-12 to 2012-13 |
Income Tax Appellant Tribunal |
715.59 |
- |
2004-05, 2009-10, 2013-14 |
Commissioner of Income Tax (Appeals) |
* Amount as per demand orders including interest and penalty wherever indicated in the order
The following matters have been decided in favour of the Company but the department has preferred appeals at higher levels
Name of Statute |
Nature of |
Amount |
Amount paid as |
Period to which the |
Forum where Dispute is |
Dues |
(Rs, in crores) |
per stay order/ mandatory deposit |
Amount Relates |
Pending |
|
Central Excise Law |
Excise duty |
8.17 |
- |
2002-03 to 2004-05 |
Supreme Court |
85.66 |
41.44 |
2009-10 to 2010-11, 2013-14 |
CESTAT |
||
Income-tax Act, 1961 |
Income-tax |
4,947.77 |
1987-88, 1989-90, 1992-93, 1993-94, 1995-96, 1996-97, 1997-98, 1998-99, 2000-01, 2006-07, 2009-10 and 2010-11 |
High Court |
|
72.00 |
- |
2001-02, 2003-04, 2004-05, 2005-06 and 2007-08 |
Income Tax Appellate Tribunal |
(ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.
(x) During the course of our examination of the books and records of the Company and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us and on the basis of examination of the records of the Company, the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, and the details of the related party transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or directors of its subsidiaries or associate companies or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls with reference to financial statements of Hero MotoCorp Limited ("the Companyâ) as of 31 March 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("the Guidance Noteâ) issued by the Institute of Chartered Accountants of India ("ICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgments, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company''s internal financial control with reference to financial statements reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control with reference to financial statements reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2018, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the ICAI.
For B S R & Co. LLP
Chartered Accountants
Firm registration No.: 101248W/W-100022
Jiten Chopra
Place: New Delhi Partner
Date: 2 May 2018 Membership No.: 092894
Mar 31, 2017
TO THE MEMBERS OF HERO MOTOCORP LIMITED
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of Hero MotoCorp Limited (âthe Company"), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind
AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section 143(3) of the Act, based on our audit, we report, to the extent applicable that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and 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 financial position in its standalone Ind AS financial statements- Refer note 34 of the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management - Refer note 43 of the standalone Ind AS financial statements.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Act")
We have audited the internal financial controls over financial reporting of HERO MOTOCORP LIMITED (âthe Company") as of March 31,
2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the âGuidance Note on Audit of Internal Financial Controls Over Financial Reporting" issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone Ind AS financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the âGuidance Note on Audit of Internal Financial Controls Over Financial Reporting" issued by the Institute of Chartered Accountants of India.
(i) In respect of its Property, plant and equipment:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the Property, plant and equipment.
(b) The Company has a programme of verification of Property, plant and equipment to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, Property, plant and equipment were physically verified by the Management during the year. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been properly dealt in the books of account.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed and transfer deed provided to us, we report that, the title deeds of immovable properties of land and buildings included under the head âProperty, plant and equipment", are held in the name of the Company as at the balance sheet date.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals other than for inventories lying with third parties at the end of the year for which confirmations have been obtained in most of the cases and no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) According to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of making investments during the year. The Company has not granted any loans or provided guarantees and securities during the year.
Name of Statute |
Nature of 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 Law |
Excise duty |
457.33 |
228.97 |
2008-09 to 2012-13 |
High Court |
650.70 |
345.12 |
2000-2001 and 2002-2015 |
CESTAT |
||
0.98 |
0.04 |
2009-10 |
Commissioner Appeals |
||
Finance Act, 1994 |
Service Tax |
0.89 |
0.45 |
2004-05 and 2005-06 |
Supreme Court |
235.08 |
23.32 |
2004-05 to 2012-13, 201415 |
CESTAT |
||
Income-tax Act, 1961 |
Income-tax |
3300.38 |
528.44 |
2011-12 |
Income Tax Appellant Tribunal |
0.06 |
- |
2004-05 |
Commissioner of Income Tax (Appeals) |
* Amount as per demand orders including interest and penalty wherever indicated in the order and excludes disputed dues fully paid.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits during the year. Therefore, the provisions of the clause (v) of the Order are not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of certain products manufactured by the Company. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government of India under sub-section (1) of Section 148 of the Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of Provident fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.
(b) There are no disputed dues in respect of Customs Duty and cess as at March 31, 2017 which have not been deposited on account of dispute. The following are the particulars of Excise Duty, Service Tax and Income-tax dues which have not been deposited / deposited under protest as on March 31, 2017 by the Company on account of disputes:
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans/ borrowings to banks. The Company has not taken any loans or borrowings from financial institutions and government and has not issued any debentures during the year.
The following matters have been decided in favour of the Company but the department has preferred appeals at higher levels:
Name of Statute |
Nature of Dues |
Amount ('' in crores) |
Period to which the Amount Relates |
Forum where Dispute is Pending |
Central Excise Law |
Excise duty |
1.19 |
2004-05 to 2010-11 |
CESTAT |
Income-tax Act, 1961 |
Income-tax |
1,219.02 |
1987-88, 1989-90, 1992-93, 1993-94, 1995-96, 1996-97, 1997-98, 1998-99, 2000-01, 2005-06 and 2006-07 |
High Court |
14.28 |
2001-02, 2003-04, 2005-06 and 2007-08 |
Income Tax Appellate Tribunal |
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with
Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause
(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or directors of its subsidiary or associate company or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For and on behalf of the Board
Pawan Munjal
Chairman
Date: May 10, 2017 DIN: 00004223
Place: New Delhi
Mar 31, 2016
We have audited the accompanying standalone financial statements of
HERO MOTOCORP LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of Profit and Loss and the 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 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
prescribed under section 133 of the Act, as applicable.
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.
Auditor''s 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, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company''s
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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, 2016, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
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 aforesaid standalone financial statements comply
with the Accounting Standards prescribed under section 133 of the Act,
as applicable.
e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in Annexure "A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting.
g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and
Auditor''s) Rules, 2014, in our opinion and 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
financial position in its financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in Annexure "B" a statement on the matters specified
in paragraphs 3 and 4 of the Order.
ANNEXURE "B" TO THE AUDITORS'' REPORT
(Referred to in paragraph 2 under ''Report on Legal and Regulatory
Requirements'' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The Company has a programme of verification of fixed assets to
cover all the items in a phased manner over a period of three years
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets.
Pursuant to the programme, fixed assets were physically verified by the
Management during the year. According to the information and
explanations given to us, discrepancies noticed on such verification
were not material and have been properly dealt in the books of account.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deed and transfer deed provided to us, we report that, the title
deeds, comprising all the immovable properties of land and buildings
which are freehold, are held in the name of the Company as at the
balance sheet date. In respect of immovable properties of land that
have been taken on lease and disclosed as fixed asset in the financial
statements, the lease agreements are in the name of the Company where
the Company is the lessee in the agreement, except the following:
Amount as at March
31, 2016
Particulars of the
land (Rs. in crores) Remarks
Gross block Net block
Leasehold land at
Jaipur 78.36 73.80 Pending Registration
in the name of the
Company
Leasehold land at
Halol, Gujarat 83.29 81.28 Pending Registration
in the name of the
Company
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals other than
for inventories lying with third parties at the end of the year for
which confirmations have been obtained in most of the cases and no
material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
186 of the Companies Act, 2013 in respect of making investments during
the year. The Company has not granted any loans or provided guarantees
and securities during the year.
(v) According to the information and explanations given to us, the
Company has neither accepted any deposit during the year nor has any
unclaimed deposits within the meaning of Section 73 to 76 or any other
relevant provisions of the Companies Act, 2013.
(vi) The maintenance of cost records has been specified by the Central
Government under section 148(1) of the Companies Act, 2013 in respect
of certain products manufactured by the Company. We have broadly
reviewed the cost records maintained by the Company pursuant to the
Companies (Cost Records and Audit) Rules, 2014, as amended and
prescribed by the Central Government of India under sub- section (1) of
Section 148 of the Act and are of the opinion that, prima facie, the
prescribed cost records have been made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident fund, Employees'' State Insurance, Income-tax,
Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax,
cess and other material statutory dues applicable to it with the
appropriate authorities. There were no undisputed amounts payable in
respect of Provident fund, Employees'' State Insurance, Income-tax,
Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax,
cess and other material statutory dues in arrears as at March 31, 2016
for a period of more than six months from the date they became payable.
(b) There are no disputed dues in respect of Customs Duty and cess as
at March 31, 2016 which have not been deposited on account of dispute.
The following are the particulars of Excise Duty, Service Tax, Sales
Tax and Income-tax dues which have not been deposited / deposited under
protest as on March 31, 2016 by the Company on account of disputes:
Amount paid
Amount* (Rs. in
Name of Statute Nature of Dues under protest
crores) (Rs. in crores)
1,001.73 480.83
Excise duty 2.82 0.09
Central Excise Law 0.89 0.45
Service Tax 255.08 22.04
1.90 1.90
Sales Tax Sales Tax 5.22 -
3120.09 -
Income Tax Act, 1961 Income-tax 3081.28 201.16
14.25 7.13
Name of Statute Period to which Forum where
the Amount Dispute is
Relates Pending
2000-2001 and CESTAT
2002-2015
2009-10, 2013-
Central Excise Law Commissioner
14, 2014-15, Appeals
2015-16
2004-05 and Supreme Court
2005-06
2004-05 to CESTAT
2011-12
1998-99, Haryana Tax
1999-2000 Tribunal
Sales Tax Commissioner
2011-12 Appeals (Dehradun)
Income Tax
2010-11 Appellant Tribunal
Income Tax Act, 1961 Income Tax
2009-10 Appellant Tribunal
Commissioner
2011-2012 to Appeal,
2013-2014 Dehradun
*Amount as per demand orders including interest and penalty wherever
indicated in the order and excludes disputed dues fully paid.
The following matters have been decided in favour of the Company but
the department has preferred appeals at higher levels:
Amount*
(Rs. in Period to which the
Name of Statute Nature of Dues crores) Amount Relates
Excise duty 2.19 2004-05 to 2010-11
Central Excise Law
Service Tax 0.20 2004-05 and 2005-06
1987-88,1989-90,
1992-93, 1993-94,
1995-96, 1996-97,
1219.02 1997-98, 1998-99,
2000-01,
Income Tax
Act, 1961 Income-tax 2005-06 and 2006-07
2001-02, 2003-04,
2005-06
73.94 and 2009-10
Name of Statute Forum where Dispute is Pending
CESTAT
Central Excise Law
High Court
High Court
Income Tax Act, 1961
Income Tax Appellate Tribunal
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of loans/
borrowings to banks. The Company has not taken any loans or borrowings
from financial institutions (other than scheduled banks) and government
and has not issued any debentures during the year.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments) or term loans and
hence reporting under clause (ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company by its Officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid/ provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements as required by the
applicable accounting standards.
(xiv) During the year, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of the Order is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or directors of its subsidiary
or associate company or persons connected with them and hence
provisions of section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 015125N)
Jaideep Bhargava
Partner
(Membership No. 90295)
Gurgaon, May 5, 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
HERO MOTOCORP LIMITED (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 then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("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.
Auditor's 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, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 1 43(1 0) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government in terms of Section 143(11) 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 sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(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 aforesaid financial statements comply with the
Accounting Standards 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 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.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements;
ii) The Company did not have any material foreseeable losses on
long-term contracts including derivative contracts;
iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors' Report
(Referred to in paragraph 1 under 'Report on Other Legal and Regulacory
Requirements' section of our report of even date)
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets to
cover all the items in a phased manner over a period of three years
which, in our opinion, is reasonable having regard 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 than for assets lying with third parties, for which
confirmations have been obtained in most of the cases by the Company.
According to the information and explanations given to us discrepancies
noticed on such verification were not material and have been properly
dealt in the books of account.
2. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals other than for
inventories lying with third parties at the end of the year for which
confirmations have been obtained in most of the cases.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on such verification 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 granted loans, secured or unsecured, to companies, firms or
other parties covered in the Register maintained 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 the year-end.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
5. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits. Therefore, the
provisions of the clause 3 (v) of the Order are not applicable to the
Company.
6. According to the information and explanations given to us, the
Central Government has not prescribed the maintenance of cost records
under sub-section (1) of Section 148 of the Companies Act, 2013, for
the business activity of the Company.
7. According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including provident fund, employees' state insurance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty, value
added tax, cess and other material statutory dues 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, customs duty, excise duty, value added tax, cess and other
material statutory dues in arrears as at 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 the Company examined by us, there are no disputed dues in
respect of wealth tax, customs duty and 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 the Company on account of disputes:
Name of the Statute Nature of Amount* Amount paid under
the Dues (Rs. in crores) protest
(Rs. in crores)
Central Excise Laws Excise Duty 890.83 395.70
Service Tax 0.89 0.45
255.08 22.04**
Sales Tax Sales Tax 1.90 1.90
Income tax Act, 1961 Income tax 0.84 -
2,568.59 50.00**
0.30 -
3.77 -
2.47 -
1.19 -
13.61 -
Name of the Statute Period to which the Forum where
amount relates dispute is pending
Central Excise Laws 2000-01 and 2002-2014 CESTAT
2004-05 to 2005-06 Supreme Court
2004-05 to 2011-12 CESTAT
Sales Tax 1998-99 to 2000-2001 Haryana Tax Tribunal
Income tax Act, 1961 2002-03 Income Tax Appellate
2009-10 Tribunal
2001-02 Commissioner (Appeals)
2006-07
2007-08
2014-15
2011-12 to 2013-14
* Amount as per demand orders including interest and penalty wherever
indicated in the order 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 has preferred appeals at higher levels:
Nature of Amount
Name of the Statute the Dues (Rs. in crores)
2.57
Excise duty
Central Excise Laws 2.82
Service Tax 0.20
Income-tax Act, 1961 Income-Tax
22.36
Period to which the amount Forum where
Name of the Statute relates dispute is pending
1986-87 to 1990-91 Supreme Court
Central Excise Laws 2004-05 to 2010-11 CESTAT
2005 High Court
1987-88, 1989-90, 1992-93,
1993-94, 1995-96, 1996-97,
Income-tax Act, 1961 1997-98, 1998-99, 2000-01,
2005-06, 2006-07
2003-04 Income Tax
Appellate
Tribunal
(d) The Company has been regular in transferring amounts to the
Investor Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made
thereunder within time.
8. The Company does not have accumulated losses. The Company has not
incurred cash losses during the financial year covered by our audit and
in the immediately preceding financial year.
9. In our opinion and according to information and explanations given
to us, the Company has not defaulted in repayment of dues to banks
during the year. The Company has not taken any loans from financial
institutions and has not issued debentures during the year.
10. According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks or financial institutions.
11. In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
12. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud by the Company and
no material fraud on the Company other than fraudulent withdrawal of
money against fixed deposits held with a bank by the Company (Refer
note 17 of the standalone financial statements), has been noticed or
reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 015125N)
JAIDEEP BHARGAVA
Partner
(Membership No. 090295)
New Delhi, May 7, 2015
Mar 31, 2014
To the Members of Hero MotoCorp Limited
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of HERO MOTOCORP
LIMITED ("the Company"), which comprise the Balance Sheet as at 31 st
March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FORTHE 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") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs) 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 misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of materia I 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 the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 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 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 the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Having regard to the nature of the Company''s business/activities/
result, clause 4(xiii) of Companies (Auditor''s Report) Order, 2003
(hereinafter referred to as the Order /CARO) are not applicable.
(i) I n respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets to
cover all the items in a phased manner over a period of three years
which, in our opinion, is reasonable having regard 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 than for assets lying with third parties, for which
confirmations have been obtained by the Company. According to the
information and explanations given to us discrepancies noticed on such
verification were not material and have been properly dealt in the
books of account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals other than for
inventories lying with third parties at the end of the year for which
confirmations have been obtained in most of the cases.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on such verification were not
material and have been properly dealt in the books of account.
(iii) In respect of loans, secured or unsecured, granted by the Company
to companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act 1956, according to the
information and explanations given to us:
(a) The Company has granted loans aggregating Rs. 605 crores to a party
during the year. At the year-end, the outstanding balances of such
loans granted aggregated Rs. 220 crores and the maximum amount involved
during the year was Rs. 240 crores.
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interest of the
Company.
(c) The receipts of principal amounts and interest have been regular.
(d) There are no overdue amounts in respect of the loans granted as
referred to in paragraph (iii)(a) above and interest thereon.
The Company has, during the year, not taken any loans, secured or
unsecured from companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraph 4(iii) (f) and (g) of CARO are not applicable
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory, fixed assets and the sale of goods and services. During the
course of our audit, we have not observed any major weakness in such
internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained underthe said
Section have been so entered.
(b) Where each of such transaction (excluding loans reported under
paragraph (iii) above) is in excess of Rs. 5 lakhs in respect of any
party, having regard to our comments in paragraph (iv) above the
transactions have been made at prices which are prima facie reasonable
having regard to the prevailing market prices at the relevant time,
other than certain purchases which are of a special nature for which
comparable quotations are not available.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the period
within the meaning of section 58Aand 58AA of the Companies Act, 1956
and the rules framed thereunder. Accordingly, paragraph 4(vi) of the
Order is not applicable.
(vii) In our opinion, the internal audit functions carried out during
the year by firms of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed cost records have been made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(ix) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues applicable to
it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees''State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues, in arrears
as at March 31, 2014 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 the Company examined by us, there are no disputed dues in
respect of wealth tax, customs duty and 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 the Company on account of disputes:
(x) The Company does not have accumulated losses at the end of the
financial year and the Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(xi) In our opinion and according to information and explanations given
to us, the Company has not defaulted in repayment of dues to banks
during the year. The Company has not taken any loans from financial
institutions and has not issued debentures during the year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances during
the year on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
(xiv) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks or financial institutions.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
(xvi) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long-term investment.
(xvii) During the year the Company has not made any preferential
allotment of shares to the parties and companies covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(xviii)The Company has not issued any debentures during the year.
(xix) The Company has not raised any money by way of public issue
during the year.
(xx) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 015125N)
Vijay Agarwal
New Delhi Partner
May 28,2014 (Membership No. 094468)
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of HERO MOTOCORP
LIMITED ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and the 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 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 misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements; whether due to fraud or error. In making those risk
assessments, the auditor considers internal 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 the 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:
(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 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 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 Legal and Regulatory
Requirements'' section of our report of even date)
Having regard to the nature of the Company''s business/
activities/result, clauses 4(x) and (xiii) of Companies (Auditor''s
Report) Order, 2003 (hereinafter referred to as the Order / CARO) are
not applicable.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of verification of fixed assets to
cover all the items in a phased manner over a period of three years
which, in our opinion, is reasonable having regard 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 than for assets lying with third parties, for which
confirmations have been obtained by the Company. According to the
information and explanations given to us discrepancies noticed on such
verification were not material and have been properly dealt in the
books of account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals other than for
inventories lying with third parties at the end of the year for which
confirmations have been obtained in most of the cases.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and discrepancies noticed on such verification were not
material and have been properly dealt in the books of account.
(iii) In respect of loans, secured or unsecured, granted by the Company
to companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act 1956, according to the
information and explanations given to us:
(a) The Company has granted loans aggregating Rs. 385 crores to a party
during the year. At the year-end, the outstanding balances of such
loans granted aggregated Rs. 240 crores and the maximum amount involved
during the year was Rs. 240 crores.
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interest of the
Company.
(c) The receipts of principal amounts and interest have been regular.
(d) There are no overdue amounts in respect of the loans granted as
referred to in paragraph 4(iii)(a) above and interest thereon.
The Company has, during the year, not taken any loans, secured or
unsecured from companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraph 4(iii) (f) and (g) of the CARO are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory, fixed assets and the sale of goods and services. During the
course of our audit, we have not observed any major weakness in such
internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time, other than certain purchases which are of
a special nature for which comparable quotations are not available.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vii) In our opinion, the internal audit functions carried out during
the year by firms of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other material
statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other material statutory dues, in arrears
as at 31st March, 2013 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 the Company examined by us, there are no disputed dues in
respect of wealth tax, customs duty and 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 the Company on account of disputes:
Name of the Nature of the Dues Amount* Amount paid under
Statute (Rs.in
crores) protest
(Rs. in crores)
Central Excise Excise Duty 663.85 177.06
Laws
0.19 0.04
Service Tax 23.22 0.45**
Sales Tax Sales Tax 1.90 1.90
Income tax Act, Income tax 1,823.84 120**
1961
1.11 -
81.60 29.90**
Name of the Statute Period to which the Forum where
amount relates dispute is pending
Central Excise Laws 2000-01 and CESTAT
2002-2013
2006-2013 Commissioner (Appeals)
2004-05 to 2005-06, CESTAT
2008-09 to 2010-11
Sales Tax 1998-99 to 2000-2001 Haryana Tax Tribunal
Income tax Act 1961 2006-07 Income Tax Appellate
2005-06 Tribunal
2004-05 Commissioner (Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the order.
** Balance of unpaid amount has been stayed as the said cases have been
decided in favour of the Company in previous assessment years on the
similar matters.
The following matters have been decided in favour of the Company but
the department has preferred appeals at higher levels:
Name of the
Statute Nature of the
Dues Amount Period to
which the Forum where dispute
(Rs. in
crores) amount
relates is pending
Central
Excise Laws Excise duty 2.57 1986-87 to
1990-91 Supreme Court
16.03 2006-07 to
2009-10 CESTAT
Service Tax 0.17 2005 High Court
Income-tax
Act, 1961 Income-Tax 16.31 1987-88,
1989-90, High Court
1992-94,
1995-96 to
2002-03
16.96 2002-03,
2003-04 Income Tax Appellate
Tribunal
(x) According to the records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances during
the year on the basis of security by way of pledge of shares,
debentures and other securities.
(xii) In our opinion, the Company and according to the information and
explanations given to us, the Company is not dealing or trading in
shares, securities, debentures and other investments.
(xiii) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks or financial institutions.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
(xv) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long- term investment.
(xvi) The Company has not made any preferential allotment of shares
during the year.
(xvii) The Company has not issued any debentures during the year.
(xviii) The Company has not raised any money by way of public issue
during the year.
(xix) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 015125N)
Vijay Agarwal
New Delhi (Partner)
April 26, 2013 (Membership No. 094468)
Mar 31, 2012
1. We have audited the attached Balance Sheet of HERO MOTOCORP LIMITED
("the Company") as at March 31, 2012, the Statement of Profit and Loss
and the Cash Flow Statement of the Company for the year ended on that
date, both annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. 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 a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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.
3. As required by the Companies (Auditor's Report) Order, 2003
(CARO) issued by the Central Government in terms of Section 227(4A) of
the Companies Act, 1956, we enclose in the Annexure, a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on March 31, 2012 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2012
from being appointed as a director in terms of Section 274(1)(g) of the
Companies Act, 1956.
Having regard to the nature of the Company's business/
activities/result, clauses 4(x) and (xiii) of Companies (Auditor's
Report) Order, 2003 (hereinafter referred to as the Order) are not
applicable.
(i) (a) The Company has maintained proper records showing
full particulars, including quantitative details and situation of the
fixed assets.
(b) During the year, certain fixed assets were physically verified by
the Management in accordance with a regular programme of verification
except for assets lying with third parties for which confirmations have
been obtained. In our opinion, the frequency of physical verification
is reasonable having regard to the size of the Company and nature of
its fixed assets. According to the information and explanations given
to us, discrepancies noticed on such verification were not material and
have been properly dealt with in the books of account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) (a) During the year, inventories have been physically
verified by the management except for inventories lying with third
parties at the end of the year for which confirmations have been
obtained in most of the cases. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of the records of inventories, we
are of the opinion that the Company has maintained proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given
to us, the Company has, during the year, not granted any loan, secured
or unsecured to companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956, other
than unsecured loans aggregating Rs. 455 crores granted to a Company
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount due during the year was Rs. 135 crores and
the yearend balance of loans granted was Rs. 120 crores.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans granted by the Company, as referred to in paragraph 4(iii)(a)
above, are, prima-facie, not prejudicial to the interest of the
Company.
(c) According to the information and explanations given to us, the
party to whom the loans have been granted by the Company, as referred
to in paragraph 4(iii)(a) above, has been regular in repayment of
principal amount as stipulated and has been regular in payment of
interest.
(d) According to the information and explanations given to us, there
are no overdue amounts in respect of the loans granted as referred to
in paragraph 4(iii)(a) above and interest thereon.
(e) According to the information and explanations given to us, the
Company has, during the year, not taken any loans, secured or unsecured
from companies, firms and other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
paragraph 4(iii)(f) and (g) of the Order are not applicable.
(iv) In our opinion and according to information and explanations given
to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternatives sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to the purchases of
inventories and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any major weakness
in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that need to be entered in the Register maintained under the said
Section have been so entered
(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time except for some of the items purchased are of special
nature and suitable alternatives sources are not readily available for
obtaining comparable quotations.
(vi) As the Company has not accepted any deposits from the public,
paragraph 4(vi) of the Order is not applicable.
(vii) In our opinion, the internal audit function carried out during
the year by firms of Chartered Accountants appointed by the Management,
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income-tax, sales tax, wealth tax, customs duty, excise duty, cess,
value added tax, Haryana local area development tax and other material
statutory dues applicable to it with the appropriate authorities other
than certain delays in deposit of service tax and tax deducted at
source. We are informed that there are no undisputed statutory dues as
at the yearend outstanding 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 the
records of the Company examined by us, there are no disputed dues in
respect of wealth tax, customs duty and 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 the Company on account of disputes:
Name of the Nature of
the Dues Amount* Amount paid Period to
which the Forum where
Statute (Rs. crores)under pro
test amount
relates dispute is
pending
(Rs. crores)
Central
Excise Excise
Duty 280.64 3.62 2000-01 and CESTAT
Laws 2002 - 2011
78.06 38.55 2006-2011 Commis
sioner
(Appeals)
Service
Tax 23.22 0.45** 2004-05 to
2005- CESTAT
06, 2008-09
to 2010-11
Sales
Tax Sales Tax 1.90 1.90 1998-99 to
2000- Haryana Tax
2001 Tribunal
Income
tax Act, Income tax 1,823.84 - 2006-07 Income Tax
1961 Appellate
Tribunal
83.65 -** 2005-06
81.60 29.90** 2004-05 Commis
sioner
(Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the order and excludes disputed fully paid.
** Balance of unpaid amount has been stayed as the said cases have been
decided in favor of the Company in previous assessment years on the
same matters.
The following matters have been decided in favor of the Company but
the department has preferred appeals at higher levels:
Name of
the Statute Nature of
the Dues Amount Period to
which the Forum where
dispute is
(Rs. crores) amount
relates pending
Central
Excise
Laws Excise
duty 2.57 1986-87 to
1990-91 Supreme Court
0.23 2006-07 to
2009-10 CESTAT
Service
Tax 0.03 2005 High Court
0.14 2005 CESTAT
Income-
tax Act,
1961 Income-
Tax 20.41 1987-88,
1989-90, High Court
1992-93,
1993-94,
1995-96 to
2001-02
16.96 2001-02,
2002-03 Income Tax Appellate
Tribunal
(x) According to the records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances during
the year on the basis of security by way of pledge of shares,
debentures and other securities.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
(xiii) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks or financial institutions.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
(xv) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that, short term funds have not been used to finance long term
investments.
(xvi) The Company has not made any preferential allotment of shares
during the year.
(xvii) The Company has not issued any debentures during the year.
(xviii) The Company has not raised any money by way of public issue
during the year.
(xix) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A. F. FERGUSON & CO.
Chartered Accountants
(Registration No. 112066W)
Manjula Banerji
New Delhi Partner
May 2, 2012 (Membership No. 86423)
Mar 31, 2011
1. We have audited the attached Balance Sheet of HERO HONDA MOTORS
LIMITED ("the Company") as at March 31, 2011, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. 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 a test basis, evidence supporting the amounts and
the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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.
3. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in ouropinion.the Balance Sheet,the Profitand Loss Account and the
Cash Flow Statement dealt with by this report are in compliance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2011;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on March 31,2011 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31,2011
from being appointed as a director in terms of Section 274(1)(g) of the
Companies Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
Having regard to the nature of the Company's business/
activities/result, clauses 4(x) and (xiii) of Companies (Auditor's
Report) Order, 2003 (hereinafter referred to as the Order) are
notapplicable.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fixed
assets.
(b) As explained to us, the Company has a programme of physically
verifying all of its fixed assets over a period of three years and in
accordance therewith, physical verification of certain fixed assets of
the Company was carried out during the year. In our opinion, the
frequency of physical verification is reasonable having regard to the
size of the Company and nature of its fixed assets. The discrepancies
noticed on such verification were not material and have been properly
dealt with in the books of account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) (a) During the year, the inventories have been physically verified
by the management except for inventories lying with third parties at
the end of the year for which confirmations have been obtained in most
of the cases. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of the records of inventories, we
are of the opinion that the Company has maintained proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has, during the year, not granted any loan, secured or
unsecured to companies, firms and other parties covered in the register
maintained under Section 301 of the Companies Act, 1956,
other than unsecured loans aggregating Rs. 465 crores granted to a
Company covered in the register maintained under Section 301 of the
Companies Act, 1956. The maximum amount due during the year was Rs. 155
crores and the year end balance of loans granted was Rs. 20 crores.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans granted by the Company, as referred to in paragraph 4(iii) (a)
above, are, prima-facie, not prejudicial to the interest of the
Company.
(c) According to the information and explanations given to us, the
party to whom the loans have been granted by the Company, as referred
to in paragraph 4(iii)(a) above, has been regular in repayment of
principal amount as stipulated and has been regular in payment of
interest.
(d) According to the information and explanations given to us, there
are no overdue amounts in respect of the loans granted as referred to
in paragraph 4(iii) (a) above and interest thereon.
(e) According to the information and explanations given to us, the
Company has during the year not taken any loans, secured or unsecured
from companies, firms and other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
paragraph 4(iii)(f) and (g) of the Order are not applicable.
(iv) In our opinion and according to information and explanations given
to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternatives sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to the purchases of
inventories and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any major weakness
in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that need to be entered in
the Register maintained underthesaid Section have been so entered.
(b) Where each of such transaction is in excess of Rs. 5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time except in respect of certain purchases for
which comparable quotations are not available and in respect of which
we are unable to comment.
(vi) The Company has not accepted any deposits from the public,
paragraph 4(vi) of the Order is not applicable.
(vii) In our opinion, the internal audit function carried out during
the year by firms of Chartered Accountants appointed by the Management,
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government, for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that, prima-facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed
examination of records with a view to determining whether they are
accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income-tax, sales tax, wealth tax, customs duty, excise duty, cess,
value added tax, Haryana local area development tax and other material
statutory dues applicable to it with the appropriate authorities other
than delays in deposit of service tax. We are informed that there are
no undisputed statutory dues as at the year end outstanding 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 the
records of the Company examined by us, there are no disputed dues in
respect of sales tax, wealth tax, customs duty, and cess which have not
been deposited. The following are the particulars of excise duty,
service tax and income-tax dues not deposited / deposited under protest
by the Company on account of disputes as at March 31, 2011:
Name of the Nature of the Dues Amount* Amount paid
Statute (Rs. in crores) under protest
(Rs. in crores)
Central Excise Excise Duty 179.70 2.98
Laws
0.14 0.07
Service Tax 1.93 0.45
Income tax Act, Income tax 58.40 - **
1961
32.50 15.00 **
Name of the Statue Period to which Forum where dispute
the amount is pending
relates
Central Excise Laws 2000-01 and CESTAT
2002-2009
2002-03 to Commissioner
2005-2006 (Appeals)
2003-04 to CESTAT
2005-06
Income tax Act, 1961 2005-06 Income Tax Appellate
Tribunal
2004-05 Commissioner
(Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the order. ** Balance of unpaid amount has been stayed.
The following matters have been decided in favour of the Company but
the department has preferred appeals at higher levels:
Name of the
Statute Nature of the
Dues Amount* Period to
which the Forum where
dispute is
(Rs.in crores) amount
relates pending
Central Excise
Laws Excise duty 2.57 1986-87 to
1990-91 Supreme
Court
0.03 2005-06 to
2008-09 CESTAT
Service Tax 0.03 2005 High Court
Income-tax
Act, 1961 Income-Tax 22.98 1987-88,
1989-90,
1992- High Court
93,1993-94,
1995-96 to
1998-99,
2001-02
13.14 1999-00,
2001-02 Income Tax
Appellate
Tribunal
(x) According tothe records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances during
the year on the basis of security by way of pledge of shares,
debentures and other securities.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
(xiii) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks or financial institutions.
(xiv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained.
(xv) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that, short term funds have not been used to finance long term
investments.
(xvi) The Company has not made any preferential allotment of shares
during the year.
(xvii) The Company has not issued any debentures during the year.
(xviii) The Company has not raised any money by way of public issue
during the year.
(xix) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A. F. FERGUSONS CO.
Chartered Accountants
Registration No. 112066W)
Manjula Banerji
Partner
Membership No. 86423)
New Delhi
May 4, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Hero Honda Motors
Limited ("the Company") as at March 31, 2010, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. 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 a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that ouraudit provides a reasonable
basisforouropinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we reportasfollows:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary forthe purposes of
ouraudit;
(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 Profit and Loss Account and the Cash Flow
Statement dealt with bythisreportare in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2010;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company forthe year ended on that date and;
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on March 31,2010 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31,2010
from being appointed as a director in terms of Section 274(1 )(g) of
the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
report of even date]
Having regard to the nature of the Companys business/
activities/result, clauses 4 (x) and (xiii) of Companies (Auditors
Report) Order, 2003 (hereinafter referred to as the Order) are not
applicable.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative detailsand situation of the fixed
assets.
(b) As explained to us, the Company has a programme of physically
verifying all of its fixed assets over a period of three years and in
accordance therewith, physical verification of certain fixed assets of
the Company was carried out during the year. In our opinion, the
frequency of physical verification is reasonable having regard to the
size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) (a) During the year, the inventories have been physically verified
by the management except for inventory lying with third parties at the
end of the year for which confirmations have been obtained in most of
the cases. In our opinion, the frequency of the verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of theCompany and the nature of its business.
(c) On the basis of our examination of the records of inventories, we
are of the opinion that, the Company has maintained proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has, during the year, not granted any loan, secured or
unsecured to companies, firms and other parties covered in the register
maintained under Section 301 of the Companies Act, 1956, other than
unsecured loans aggregating Rs. 100 crores granted to a company covered
in the register maintained under Section 301 of the Companies Act,
1956. The maximum amount due during the year was Rs.35 crores and the
yearend balance of loansgranted was Rs. Nil.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans granted by the Company, as referred to in paragraph 4(iii) (a)
above, are, prima-facie, not prejudicial to the interest of the
Company.
(c) According to the information and explanations given to us, the
party, to whom the loans have been granted by the Company, as referred
to in paragraph 4(iii)(a) above, have been regular in repayment of
principal amount as stipulated and have been regular in payment of
interest.
(d) According to the information and explanations given to us, there
are no overdue amounts in respect of the loans granted as referred to
in paragraph 4(iii)(a)aboveand interest thereon.
(e) According to the information and explanations given to us, the
Company has,duringtheyear, not taken any loans, secured or unsecured,
from companies, firms and other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
paragraph 4(iii) (f) and (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time except in respect of certain purchases for
which comparable quotations are not available and in respect of which
we are unable to comment.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the internal audit function carried out during
the year by firms of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and are of the opinion that, prima-facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess, value added tax, Haryana local area development tax and
other material statutory dues applicable to it with the appropriate
authorities. We are informed that there are no undisputed statutory
dues as at the year end outstanding 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 the
records of the Company examined by us, there are no disputed dues in
respect of sales tax, wealth tax, customs duty and cess, which have not
been deposited. The following are the particulars of excise duty,
service tax and income-tax dues not deposited/ deposited under protest
by the Company on account of disputes as at March 31,2010:-
Name of the statute Nature of the dues Amount* Amount paid
(Rs. in crores) under protest
(Rs. in crores)
Central excise laws Excise duty 14.31 1.05
1.21 --
Service tax 1.93 0.45
Income-tax Act Income tax 36.91 54.40**
Name of the statue Period to which Forum where
amount relates dispute is
pending
Central excise laws 2000-01 and CESTAT
2002 to 2008
2002-03 to 2005-06 Commissioner
(Appeals)
2003-04 to 2005-06 CESTAT
Income-tax Act 2002-03 to 2004-05 Commissioner
(Anneals)
* Amountasperdemand orders including interestand penalty
whereverquantified in the order.
** Balance of unpaid amount has been stayed.
The following matters have been decided in favour of the Company,
although the department has preferred appeals at higher levels:
Name of the
statute Nature of the dues Amount Period to which
(Rs. in crores) amount relates
Central excise
laws Excise duty 2.57 1986-87 to 1990-91
0.03 2005-06 to 2008-09
Service tax 0.03 2005
Income-tax Act Income tax 8.39 1987-88,1989-90,1992-93,
1993-94,1995-96 to 1998-99,
2000-01
12.30 1999-00,2001-02
Name of the Statue Forum where
dispute is
pending
Central excise laws Supreme Court
CESTAT
High Court
Income-tax Act High Court
Income Tax
Appellate Tribunal
(x) According to the records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during theyear.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances during
the year on the basis of security by way of pledge of shares,
debenturesand other securities.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
(xiii) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans taken by
others from banks orfinancial institutions.
(xiv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xv) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that short term funds have not been used to finance long term
investments.
(xvi) The Company has not made any preferential allotment of
sharesduring the year.
(xvii) The Company has not issued any debentures during theyear.
(xviii) The Company has not raised any money by way of public issue
during theyear.
(xix) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A. F. Ferguson & Co.
Chartered Accountants
(Registration No. 112066W)
Manjula Banerji
Partner
(Membership No. 86423)
Place: New Delhi
Date : April 19,2010
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