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 (“the 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 (“the 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 “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 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 (“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.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act")
We have audited the internal financial controls over financial reporting of HERO MOTOCORP LIMITED (“the 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 “Guidance 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 “Guidance 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 “Guidance 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 “Property, 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
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
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
