Hero Motors Ltd 2006

8/4/2019 Hero Motors Ltd 2006

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MOTORS

8thANNUAL REPORT2005-2006

HERO MOTORS LIMITED

w w w . r e p o r t j u n c t i o n . c
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Annual Report 20

ChairmanManaging Director

BOARD OF DIRECTORSSh . OP. MunjalSh . Pankaj MunjalSh. G.P. SoodSh. Sandeep DinodiaSh . Yogesh MunjalSh . Ashok MunjalSh. Sunil Kant MunjalFINANCIAL ADVISORSh . A.K. DewanVICE PRESIDENT (FINANCE)Sh. Rajesh GulatiASST. GENERAL MANAGER (FINANCE &ACCOUNTS)Sh. Amit GuptaCOMPANY SECRETARYSh . Ajay Pratap SinghAUDIT COMMITTEESh. Sandeep DinodiaSh . G.P. SoodSh. Pankaj MunjalREMUNERATION COMMITTEESh. G.P.SoodSh Sandeep DinodiaSh . Yogesh MunjalSHAREHOLDERS / INVESTORSGRIEVANCES COMMITTEESh. G.P. SoodSh. Sandeep DinodiaSh. Pankaj MunjalINVESTMENT COMMITTEESh. G.P.SoodSh . Yogesh MunjalSh. Pankaj Munjal

AUDITORSM/s B.D. Bansal & Co.Chartered AccountantsAmritsar.COST AUDITORSM/s. Ramnath Iyer & Co.Cost AccountantsDelhi.BANKERSPunjab National BankCanara BankCitibankN.A.ABN Amro BankREGISTERED OFFICE601, International Trade TowerNehru Place,New Delhi - 110019W O R K S10km Stone, P.O.DujanaDadri, Dist GautambudhNagar, Ghaziabad. U.P.-203207Plot No. 192,Sector-IV,Phase II, IMT Manesar,Gurgaon, Haryana -122001SHARE TRANSFER AGENTM/s. Alankit Assignments Ltd.2E/21, Alankit House,Jhandelwalan Extn.New Delhi

CONTENTSNoticeDirectors' ReportAuditors' ReportAnnexure to Auditors' ReportBalance SheetProfit & Loss AccountSchedulesInformation pursuant to Part IV of Schedule VI to thCompanies Act, 1956Cash Flow StatementProxy Form & Attendance Slip

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Annual Report 2005-2006

HERO MOTORS LIMITED601, International Trade Tow er, Nehru Place, New Delhi -110019

N O T I C ENotice is hereby given that the 8th Annual General Meeting of the members of HERO MOTORS LIMITED will be heFriday, the 22nd day of December, 2006 at 9.30 A.M . at Tivoli Garden R esort, Chattarpur Mandir Road, New D elhi -11to transact the following business:ORDINARY BUSINESS1. To receive, consider and adopt the Aud ited Balance S heet of the Company as at September 30,2006 and the PrLoss account for the period ended on that date together w ith the reports of the Directors and Au ditors thereon.2. To appoint a director in place of Shri Pankaj Munjal, who retires by rotation and being eligible offers himself fappointment.3. To appoint a director in place of Shri G.P. Sood, who retires by rotation and being eligible offers himself f

appointment.4. To appoint Aud itors and to fix their remuneration.M/s. B.D.Bansal & Co., Chartered Accountants, the retiring auditors are eligible for appointment.

SPECIAL BUSINESSTo consider and, f thought fit,to pass, with or without m odification(s), the following reso lution:As Special Resolution:5. ALTERATION OF ARTICLES OF ASSOCIATION"RESO LVED THAT pursuant to Section 31 and other applicable provisions, if any, of the Companies A ct, 1956, Articlethe Articles of Association of the company be and is hereby amended. Consequently, Articles 90 of Articles of Assocshall be read as under:90. Subject to the provisions of section 198, 309,310 and 311 of the A ct, the remuneration payab le to the directors Company may be as here inafter provided. The remuneration of each director for attending the m eetings of the BoCommittee thereof shall be such sum as may, from time to time, be fixed by the Board for each meeting of theor Committee thereof attended by him, subject to the limit spec ified in the companies (Central Government's) GRules and Forms, from time to time. Subject to the provisions of the Act, the directors shall be paid such furemuneration (if any)as the Company in General Meeting shall, from time to time, determine and such addiremuneration shall be divided among the d irectors in such proportion and manner as the Board may from, time todetermine and in default of such determination, shall be divided among the directors equally."RESOLVED FURTHER THA T Shri Pankaj Munjal, M anaging D irector and Shri Ajay Pratap, Com pany Secretary, be anhereby authorized s everally to take all the necessary actions in this regard".

By order of the BFor HERO M OTORS LIM

New Delhi, 20th November, 2006 O.P. MURegistered Office: CHAIR601, International Trade Tower,Nehru Place, New Delhi-110019w w w . r e p o r t j u n c t i o n . c
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Annual Report 2005-2006 [~~2~~

A Mem ber entitled to attend and vote a t the meeting is entitled to appoint any other person as his/her proxto attend a nd vote (in case of poll) instead of himse lf/herself at the meeting. A proxy need not be a member othe Company.A proxy form is sent herewith. The proxy form duly completed m ust be received at the registered office othe Company no t less than forty eight hours be fore the meeting.The Register of Members and Share Transfer Books of the company will remain closed from 18 th December, 200621st D ecember, 2006 (both days inclusive).The explanatory statement setting out the material facts concerning Special Business at item No. 5 of the accompanyinnotice as required by section 173(2) of the Companies Act,1956 is annexed hereto.All documents referred to in the accompanying notice are open for inspection at the registered office of the companduring office hours upto the date of the Annual General Meeting.

the provisions of section 109A of the Companies Act, 1956, every shareholders or joint holders manominate, in the prescribed m anner, a person to whom all the rights in the shares shall vest in the event of death of thsole holder or all the joint holders.The financial year 2005-2006 of the company consists of a period 12 months i.e. the Financial Year from 01 -10-200530-09-2006.Members are requested to notify immediately any change of address to their depos itory participant in respect of theelectronic share account and in respect of physical shares, to the Company's Registrar M/s.Alankit Assignments Lt2E /21, Alankit House, Jhandewalan Extension, New Delhi -110055 , quoting their folio number.Shareholders holding shares in electronic form are advised to update particulars of their Bank Account details to thedepository Participants. Further, instructions, if any,already given by them in respect of shares held in physical forwill not be automatically applicable to shares held in electronic form.The shares of the company are not listed on any stock exchange.The members are reques ted to bring the copy of Annual R eport and A ttendance Slip duly filled in to the Annual GenerMeeting.

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Annual Report 2005-2006STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.

e company proposes to enhance the sitting fees payable to the directors for attending the meetings of the Board anthere of to be determined by the Board of Directors of the company, from time to t ime, subject to the limthe companies (Central Governme nt's) General R ules and Forms , from time to time. This w ill require amendmeArticle 90 of the Articles of Association of the company. Alteration of Articles of Association of the comp any w ill require thshareholders of the company in General Meeting. Th erefore, the said res olution is proposed for the approvalshareholders inGeneral Meeting.the directors of the com pany is interested in passing of the said resolution excep t to the extent of sitting fees payabthem for the attending the meetings of the Board or Comm ittees thereof.

e Board of Directors of your company recommends the passing of the aforesaid Special Resolution.

By order of the BoaFor Hero Motors Limite

O.P. MUNJACHAIRMA



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Annual Report 2005-2006

DIRECTORS' REPORTDear members,Your Directors have pleasure in presenting the 8th Annual Report together with the Audited Statement of Accounts foyear ended 30th September, 2006.1. FINANCIAL RESULTS

The salient features of the Company's financial results for the year under review are as follows:

Sales and other incomeGross Profit/(Loss)DepreciationProfit/(Loss) before taxProvision fo r taxesProfit/(loss) after ta xPrior period itemPrior year tax adjustmentsSurplus brought forwardProfit/(Loss) carried to Balance Sheet

Year ended30.09.2006

13916.02460.60(988.28)(527.68)

577.2049.52(11.79)

18.15NIL

19.58

(Rs. in lacs)Year ended30.09.2005

10393.29(2130.14)(1305.68)(3435.82)(10.19)

(3446.02)1.160.25

(6815.74)(10260.35)

2. OPERATIONSThe Company achieved a turnoverof Rs. 13916.02 lacs during the year under review comprising of sale of vehicles, componspares etc. as compared to Previous Year turnover of Rs. 10393.29 lacs.3. SHARE CAPITALPursuant to the Reduction of share capital approved by the shareholders of the company in their Annual General Meetingon 27th December, 2005 and confirmed by the Hon'ble High Court of Delhi vide order dated May 12 , 2006, the issued andup share capital of the company has been reduced to Rs. 7,33,66,488. The order of the Hon'ble High Court hasregistered with the Registrar of Companies, New Delhi on 26th July 2006.4. DIVIDENDIn view of the insufficiency of profit during the year under review, your directors are unable to recommend any dividen5. FUTURE PROSPECTSThe Company has diversified into "Integrated Engineering Solution Provider" in four distinct verticals: Engines and transmissSheet Metal, Ferrous Casting and Vehicle Assembly.The Company, through support from BRP Rotax in the last two years, has enhanced its capabilities and establishedshop f loor practices and balance score card systems.

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Annual Report 2005-2006gear box for 81 0 cc All Terrain Vehicle and engine components for 400 cc All Terrain Vehicle are being supp lieSupplies to Hero Honda Motors have sign ificant grow th over the last year. The company is also regularly supplblocks to LG. In addition the company is also work ing closely as a strategic supplier with some of the overs

e company has established state-of-the art Ferrous Casting Plant with an initial capacity of 18,000 tons. The trial producs been started from October 2006. The Company is under discussion with an International major who would prohow for our Ferrous Casting Plant facilitating us to have competitive edge in the market place.sizeable improvement in quality production systems, the confidence of domestic and international clients has band in addition to BRP Rotax and Hero Honda, various other customers are being added, both f

DIRECTORSa. Shri Pankaj Munjal and Shri G.P. Sood retire by rotation at the ensuing A nnual General Meeting and are eligfor re-appointment. The Board recommends their re-appointment.b. None of the directors is disqualified as per the provisions of Sec. 274(1 )(g) of the Companies A ct, 1956.

DIRECTORS RESPONSIBILITY STATEMENTIn compliance of Section 217(2A A) of the Companies Act,1956, the Directors confirm:1. that in the preparation of the annual accounts for the year ended September 30,2006, the applicable accounstandards have been followed ;2. that appropriate accounting policies have been selected and applied consistently and judgm ents and estimathat are reasonable and prudent have been made so as to give a true and fair view of the state of affairs atend of the financial year and of the profit of the company for the financial year ended September 30 , 20063. that proper and sufficien t care has been taken for the maintenance of adequate accounting records in accordawith the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preveand detecting fraud and other irregularities;4. that the annual accounts for the year ended 30th September, 2006 have been prepared on going conc ern ba

AUDITORS& Co., Chartered Accountants, existing Auditors of the comp any w ill retire at the conclusion of the forthcoMeeting and being eligible offer themselves for re-appointment. The company has received confirmation fe retiring auditors expressing their intention for re-appointment at the forthcoming Annual General Meeting. The Bo

their reapp ointment.FIXED DEPOSITS

the year under review the company has not invited or accepted any deposit under Section 58A.of the Companies read with Companies (Acc eptance of Deposits) Rules, 1975.

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Annual Report 2005-200610. AUDIT COMMITTEE OF THE BOARD

The Aud it committee of the Board consists of the following directors:Non Execu tive Directors1. Sh. Sandeep Dinodia Chairman2. Sh. G.P. Sood MemberExecutive DirectorSh. Pankaj Munjal Member

11. SHAREHOLDERS GRIEVANCES COMMITTEEThe Shareholders Grievances Committee of the Board consists of the following directors:Non Executive D irectors1. Sh. G.P. Sood Chairman2. Sh. Sandeep Dinodia MemberExecutive DirectorSh. Pankaj Munjal Member

12. QUALITY CERTIFICATIONThe company has received TS16949 certification from AQ SR and Direct on Line (DOL) certification from Hero Honda Mo13. APPLICABILITY OF PROVISIONS OF SICAPursuant to the reduction of the share capital of the company sanctioned by Hon'ble High Court of Delhi, the accumulosses of the company amounting to Rs. 102,60,34,932 as on 30th September 2005 have been written off. The companow out of the purview of the Sick Industrial Companies (Special Provisions )Ac t, 1985.14. COST RECORDS & COST AUDITORThe Company has maintained Cost Accounts Record s as prescribed under Cost Ac counting Rules 1968.The directors have appointed M/s.Ramnathan Iyer & Co. as Cost Auditors for the year 2006-2007, s ubject to the appof the central government.15. AUDITOR'S REPORTThe observations made in the Aud itor's R eport and in the notes to the accounts are self-explanatory and hence do not caany further comments.16. INSURANCEAll properties and insurable assets of the company including building plant & machinery and stock have b een adequinsured, wherever necessary, and to the extent required.

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Annual Report 2005-200617. PARTICULARS OF EMPLOYEESThe information required unde'r Section 217 (2A) of the Companies Act, 1956 read with Rules framed there under, as amforming the part of this report is given in Annexure-A.18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT AND FOEXCHANGE EARNINGS & OUTGOThe information pursuant to sections 217(1)(e) of the Companies Act, 1956 regarding Conservation of Energy, techabsorption, R &D and foreign exchange earnings & outgo is annexed as A nnexure - B and forms part of the report.19. ACKNOWLEDGEMENTThe Board takes this opportunity to convey its appreciation and gratitude towards Hero Group for the support aoperation extended to the Company.The Board also expresses its appreciation towards the contribution of its employees, govt. depts., Banks etc. for thunder review.

For and on behalf of the Board of DirFor Hero Moto rs L

O.P. MUCHA

New Delhi20 November, 2006



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Annual Report 2005-2006 r~g~- A TO DIRECTOR'S REPORT

of Particulars of Employees pursuant to the provisions of section 217(2A) of the Companies Act, 1956 anCompanies (Particulars of Employees)Rules, 1975 forming part of the Director's Report for the year ende

Employed throughout th e Yearo f t h e Designation Nature Gros s Qualification

o f Duty RemunerationExperience Share Date o f( Y e a r s ) Holding Joining

% (Nos.)A g e Last Employment

held beforeJoining Company

None

Employed fo r Part of the Yearo f t h e

Inform,

Designation Nature Gross Qualification Experience Shareo f Duty Remuneration (Years) Holding

% (Nos.)C h i e f Operating Chief o f operations R s . 1 2 , 1 4 , 145 B.E. 2 5 N I LO f f i c e r Mechanical

ation has been furnished on the basis of employee employed for a part of the yea

Date o f A g e Last EmploymentJoining held before

Joining Company27.02.06 4 5 Chief General Manager

E s c o r t s - A g nMachinery Group

r who was in receipt of remuneratiat a rate which, in the aggregate was not less than Rs. 2,00,000 (Rupees Tw o Lacs) pe r month.There was no persoemployed throughout the financial year, who was in receipt of remuneration for that year which, in trie aggregate, wanot less than Rs. 24,00,0007- (Rupees Twenty Four Lacs). There was no person employed either throught the financyear or part thereof, who was holding either himself or along with the spouse and dependent children 2 % or more of thshares of the company an d drawing in excess of the remuneration drawn by the Managing Director or Manager.Remuneration includes salary, other allowances, payment and expenditure incurred on perquisites and Companycontribution to provident fund, superannuation fund and gratuity fund.A ll appointments are on contractual basis and terminable by notice on either side.Mr. Shailendra Ag arwal is not relative of any director or manager of the company.
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Hero Motors Ltd 2006

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