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Hero MotoCorp Ltd.

BSE: 500182 Sector: Auto
NSE: HEROMOTOCO ISIN Code: INE158A01026
BSE LIVE 15:59 | 21 Sep 3888.85 30.75
(0.80%)
OPEN

3904.70

HIGH

3904.70

LOW

3818.40

NSE 15:40 | 21 Sep 3896.40 40.35
(1.05%)
OPEN

3856.10

HIGH

3901.55

LOW

3811.70

OPEN 3904.70
PREVIOUS CLOSE 3858.10
VOLUME 13733
52-Week high 4200.00
52-Week low 2844.40
P/E 22.79
Mkt Cap.(Rs cr) 77,660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3904.70
CLOSE 3858.10
VOLUME 13733
52-Week high 4200.00
52-Week low 2844.40
P/E 22.79
Mkt Cap.(Rs cr) 77,660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hero MotoCorp Ltd. (HEROMOTOCO) - Auditors Report

Company auditors report

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 HeroMotoCorp Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind

AS financial statements. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thestandalone Ind AS financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2017 and its profit total comprehensive income its cash flowsand 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 theextent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2017 from being appointed as a director in terms of Section 164(2) ofthe Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements- Refer note 34 of the standaloneInd

AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. The Company has provided requisite disclosures in the standalone Ind AS financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry ofFinance during the period from 8th November 2016 to 30th December2016. Based on audit procedures performed and the representations provided to us by themanagement we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management – Refer note 43 ofthe 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 "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Jaideep Bhargava
Partner
GURUGRAM May 10 2017 (Membership No. 090295)

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HEROMOTOCORP LIMITED ("the Company") as of March 31 2017 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the "Guidance Note on Audit of Internal Financial Controls Over FinancialReporting" issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe 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 givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the "Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting" issued by the Institute of CharteredAccountants of India.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Jaideep Bhargava
Partner
GURUGRAM May 10 2017 (Membership No. 090295)

(i) In respect of its Property plant and equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the Property plant and equipment.

(b) The Company has a programme of verification of Property plant and equipment tocover all the items in a phased manner over a period of three years which in our opinionis 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 theManagement during the year. According to the information and explanations given to usdiscrepancies noticed on such verification were not material and have been properly dealtin the books of account.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed and transfer deed providedto us we report that the title deeds of immovable properties of land and buildingsincluded under the head "Property plant and equipment" are held in the name ofthe Company as at the balance sheet date.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals other than for inventories lying with third partiesat the end of the year for which confirmations have been obtained in most of the cases andno material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013.

(iv) According to the information and explanations given to us the Company hascomplied with the provisions of section 186 of the Companies Act 2013 in respect ofmaking investments during the year. The Company has not granted any loans or providedguarantees and securities during the year.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits during the year. Therefore the provisions of theclause (v) of the Order are not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 in respect of certain products manufactured bythe Company. We have broadly reviewed the cost records maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government of India under sub-section (1) of Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident fund Employees' State Insurance Income-tax Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax cess and other material statutory dues applicable toit with the appropriate authorities. There were no undisputed amounts payable in respectof Provident fund Employees' State Insurance Income-tax Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax cess and other material statutory dues in arrears asat 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 2017which have not been deposited on account of dispute. The following are the particulars ofExcise Duty Service Tax and Income-tax dues which have not been deposited / depositedunder protest as on March 31 2017 by the Company on account of disputes:

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 2014- 15 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 theorder and excludes disputed dues fully paid.

The following matters have been decided in favour of the Company but the department haspreferred appeals at higher levels:

Name of Statute Nature of Dues Amount (Rs. 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 1219.02 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

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans/ borrowings to banks. The Company hasnot taken any loans or borrowings from financial institutions and government and has notissued any debentures during the year.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with

Section 177 and 188 of the Companies Act 2013 where applicable for all transactionswith the related parties and the details of related party transactions have been disclosedin the financial statements as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its subsidiary or associate company or persons connected withhim 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 ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Jaideep Bhargava
Partner
GURUGRAM May 10 2017 (Membership No. 090295)