Hira Automobiles Limited

Report on the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Hira Automobiles Limited(“the Company”), which comprise the balance sheet as at 31st March 2025, and the statement of Profit and Loss, statement of changes in equity and statement of cash flows for the year then ended, and notes to the Ind As financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the 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, as amended ( “the act”)in the manner so required and give a true and fair view in conformity with ( Indian Accounting Standards prescribed under section 133 of the Act read with Companies ( Indian Accounting Standards) Rule 2015, as amended ( “Ind AS”) and otheraccounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2025, and profit/loss, changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the 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 financial statements under the provisions of the Companies Act, 2013 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.

Responsibility of Management 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, changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India, including the IndAS and other accounting policies generally accepted in India. 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 implementation and maintenance of 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, which have been used for the purpose of preparation of this Consolidated Financial Results by the Directors of the Company, as aforesaid.

In preparing the financial statements, management and Board of Directors 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 and 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 are also responsible for overseeing the Company's financial reporting process.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

a) The Company has certain ongoing legal proceedings for various complex matters with the Government of India and other parties, continuing from earlier years. In that regard our audit procedure includes and were not limited to the followings: -

• Discussed with the management on the development in these litigations during the year ended March 31,2025

• Rolled out of enquiry letters to the Company's management and noted the responses received and assessed the same

• Reviewed the disclosures made by the Company in the financial statements in this regard.

• Obtained representation letter from the management on the assessment of these matters

b) “The Company is covered under Secretarial Audit and compliances under Companies Act, 2013. Our opinion on financial statement of the company is subject to qualification / non compliances (if any) reported/ covered under Secretarial Audit and Compliance report by the practicing company secretary.”

c) We identified IT systems and controls over financial reporting as a key audit matter for the Holding Company because its financial accounting and reporting systems are fundamentally reliant on IT systems and IT controls to process significant transaction volumes, specifically with respect to revenue and raw material consumption. Also, due to such large transaction volumes and the increasing challenge to protect the integrity of the Group's systems and data, cyber security has become more significant. Our procedures included and were not limited to the following:

• Assessed the design and evaluation of the operating effectiveness of IT general controls over program development and changes, access to programs and data and IT operations by engaging IT specialists.

• Performed inquiry procedures with the head of cyber security at the Holding Company in respect of the overall security architecture and any key threats addressed by the Company in the current year.

• Assessed the design and evaluation of the operating effectiveness of IT application controls in the key processes impacting financial reporting of the Company by engaging IT specialists.

Assessed the operating effectiveness of controls relating to data transmission through the different IT systems to the financial reporting systems by engaging IT specialists.

d) As disclosed in Notes No. 31 to the financial statements, during the year the Company has initiated the closure of one of its key dealership of Muktsar Cluster and will finalized in the coming year. This cluster has historically contributed approximately 20% of the Company's total turnover/revenue. The closure is expected to significantly impact the Company's future operating performance and has implications on working capital management, particularly inventory realization, receivables collection, and vendor arrangements.

This matter is considered a key audit matter due to the material contribution of the cluster to the Company's historical performance, and the significant management judgment involved in assessing the financial impact of the closure. The evaluation includes impairment of assets, provisioning for closure-related expenses, and the impact on future revenue forecasts and liquidity. The matter also requires careful consideration of compliance with the relevant requirements of Ind AS.

Our audit procedures included and were not limited to the following:

• Obtaining and reviewing the Board resolution and management's rationale for the branch closure;

• Evaluating management's assessment of the financial and operational impact of the closure, including the effect on revenue forecasts and cash flows;

• Assessing the recognition and measurement of any closure-related provisions or expenses (e.g., employee severance, lease termination costs), and testing their compliance with Ind AS 37 -Provisions, Contingent Liabilities and Contingent Assets;

• Evaluating indicators of impairment for assets related to the branch and, where applicable, reviewing the impairment testing performed by management under Ind AS 36 - Impairment of Assets;

• Reviewing the Company's working capital assessments and sensitivity analysis prepared by management in light of the branch closure;

• Assessing the adequacy and appropriateness of the related disclosures in the financial statements as per Ind AS 1 - Presentation of Financial Statements, and Ind AS 10 - Events After the Reporting Period (if applicable).

e) As disclosed in Notes no 32 and 33 to the financial statements, as at the reporting date, the Company held inventories comprising new vehicles, pre-owned vehicles under the “True Value” segment, spares, and accessories, amounting to Rs.43.60crores. This represents a significant component of the Company's total assets.

The valuation of inventories, particularly the determination of net realizable value (NRV), involves significant management judgment. Estimating NRV for pre-owned vehicles requires consideration of factors such as age, condition, mileage, model popularity, and prevailing market demand. Similarly, the valuation of spares and accessories is impacted by their rate of movement, likelihood of obsolescence, and changes in pricing trends. The management has provided sufficient appropriate audit evidence like physical verification of inventory of vehicles along with its technical description, the basis of valuation, existence, and recoverability of such inventory.

The company may face risks and challenges related to inventory management like Inventory Obsolescence Risk, Liquidity and Cash Flow Impact, Demand and Sale fluctuations etc.

We considered higher quantum of inventory and its valuation to be a key audit matter due to the materiality of the balance, the diversity and nature of inventory held, and the significant estimation involved in applying the principles of Ind AS 2 - Inventories.

Our audit procedures included and were not limited to the following:

• Evaluating the design and implementation of controls over inventory valuation and NRV assessment across categories;

• Assessing the Company's inventory valuation policies and their compliance with the requirements of Ind AS 2;

• Performing sample testing of inventory items, including verification of cost and estimation of NRV for new and pre-owned vehicles, based on recent sale transactions and market pricing;

• Reviewing ageing analysis and evaluating the basis for provisioning against slow-moving or

obsolete spares and accessories;

• Specifically examining the NRV assessment methodology for pre-owned vehicles considering factors such as condition, age, and past sales trends;

• Comparing actual sales realisations post year-end with NRV estimates, where available;

• Assessing the adequacy and appropriateness of the related disclosures in the financial statements.

f) As disclosed in Notesno 34 to the financial statements, as at the reporting date, the Company's trade receivables amounted to Rs.24.57 crores, representing a significant portion of the total assets. A substantial part of these receivables relates to customers with extended credit terms or aged outstanding balances.

Under Ind AS 109 - Financial Instruments, trade receivables are required to be assessed for impairment using the expected credit loss (ECL) model. The application of the ECL model involves significant judgment by the management in evaluating historical payment trends, credit risk characteristics, ageing profiles, and forward-looking information. In certain cases, recoverability assessments also require consideration of legal or commercial disputes and communication with debtors.

We identified this area as a key audit matter due to the materiality of the balances, the degree of estimation involved, and the potential impact on the Company's financial position.

Our audit procedures included and were not limited to the following:

• Assessing the design and operating effectiveness of key controls related to credit risk management and receivables monitoring;

• Reviewing the Company's ECL policy and impairment assessment methodology for compliance with Ind AS 109;

• Performing detailed testing of ageing analysis and evaluating management's assumptions for provisioning;

• Obtaining direct confirmations for selected balances and performing alternative procedures where necessary;

• Evaluating the historical accuracy of bad debt provisioning and post-year-end collections;

• Assessing the adequacy of disclosures made in the financial statements relating to trade receivables and credit risk.

However, the management has provided sufficient appropriate audit evidence and very much sure regarding the recoverability of such receivable.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Annual Report such as Management Discussion and Analysis, Board's Report including Annexure to Board's report, Business Responsibility Report, Corporate Governance and Shareholder's information, Printing of Annual report and financial statements, but does not include the standalone financial statements and our auditor's 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 thereupon.

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.If, based on the work we have performed, we concluded that there is a

material misstatement of their information, we are required to report that fact. We have nothing to report in this regard.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also

• Identify and assess the risks of material misstatement of the 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, but not for the purpose of expressing an opinion on the effectiveness of such controls.

• Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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 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 financial results, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Perform procedure in accordance with the circular issued by the SEBI under regulation 33(8) of the Listing Regulations to the extend applicable.

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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the 'Annexure A' a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us].

c) The Balance Sheet, the Statement of Profit and Loss, Statement of change in and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31st March, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2025 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”.

g) In our 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, 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. Further explained by the management, there no such major/ materialistic litigationsare pending which would impact its financial position.

ii. The Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. The management has informed and explained to us that there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company, hence reporting of the same is not applicable.

iv. (a) The Management has represented that , to the best of its knowledge and belief , no funds( which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other source or any kind of funds ) by the company to or in any other person or entity, including foreign entity (“ Intermediaries”), with the understanding , whether recorded in writing or otherwise , that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of company (“Ultimate 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 its knowledge and belief, no funds ( which are material either individually or in the aggregate) have been received by the company from any person or entity, including foreign entity (“ Funding Parties”), with the understanding, whether recorded in writing or otherwise , that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures 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, as provided above, contain any material misstatement.

v. Based on our examination, which included test checks, the company has used accounting software for maintaining its books of account for the financial year ended March 31,2025 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the companies (Accounts)Rules, 2014 is applicable from April 1,2023, reporting under Rule 11(g) of the companies ( Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2025.

2. As required by Companies ( Auditor's Report) Order, 2020 ( 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 paragraph 3 and 4 of the Order.