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Hero MotoCorp Ltd.

BSE: 500182 Sector: Auto
NSE: HEROMOTOCO ISIN Code: INE158A01026
BSE 00:00 | 21 Nov 2920.05 -38.30
(-1.29%)
OPEN

2968.80

HIGH

2968.80

LOW

2896.80

NSE 00:00 | 21 Nov 2912.05 -48.05
(-1.62%)
OPEN

2952.60

HIGH

2961.50

LOW

2892.20

OPEN 2968.80
PREVIOUS CLOSE 2958.35
VOLUME 15090
52-Week high 3862.00
52-Week low 2648.70
P/E 15.94
Mkt Cap.(Rs cr) 58,313
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2968.80
CLOSE 2958.35
VOLUME 15090
52-Week high 3862.00
52-Week low 2648.70
P/E 15.94
Mkt Cap.(Rs cr) 58,313
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 Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statementsof Hero MotoCorp Limited ("the Company") which comprise the Balance Sheet as at31 March 2018 the Statement of Profit and Loss the Statement of Changes in Equity andthe Statement of Cash Flows for the year then ended and summary of the significantaccounting policies and other explanatory information (together referred to as "IndAS financial statements").

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs Profit/ loss and other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements the management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements inaccordance 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 theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the entity's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in the auditor's report to the related disclosures in the financialstatements or if such disclosures are inadequate to modify the opinion. Our conclusionsare based on the audit evidence obtained up to the date of the auditor's report.However future events or conditions may cause an entity to cease to continue as a goingconcern.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2018 its Profit and other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Other Matters

The comparative financial statements of the Company for the year ended31 March 2017 were audited by another auditor who expressed an unmodified opinion on thosestatements on 10 May 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof 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 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act;

f ) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B";

g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 itsfinancial position in its standalone Ind AS financial statements-Refer note 34 of thestandalone Ind AS financial statements;

ii. According to the information and explanation given to us theCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses;

iii. According to the information and explanation given to us therehas been no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company; iv. The disclosures in the financialstatements regarding holdings as well as dealings in specified bank notes during theperiod from 8 November 2016 to 30 December 2016 have not been made since they do notpertain to the financial year ended 31 March 2018. However amounts as appearing in theaudited Standalone Ind AS financial statements for the period ended 31 March 2017 havebeen disclosed.

For B S R & Co. LLP
Chartered Accountants
Firm registration No.: 101248W/W-100022
Jiten Chopra
Place: New Delhi Partner
Date: 2 May 2018 Membership No.: 092894

ANNEXURE A REFERRED TOIN THE INDEPENDENT AUDITOR'S REPORT

to the Members of Hero MotoCorp Limited on the standalone Ind ASfinancial statements for the year ended 31 March 2018

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of itsProperty plant and equipment by which all the items are verified in a phased manner overa period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with this programme certain property plant and equipment were physicallyverified during the year. As informed to us no material discrepancies were noted on suchverification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed andtransfer deed provided to us we report that the title deeds of immovable properties ofland and buildings included under the head "Property plant and equipment" areheld in the name of the Company as at the balance sheet date.

(ii) Inventories except for goods-in-transit and stocks lying withthird parties have been physically verified by the management during the year atreasonable intervals. In our opinion the frequency of such verification is reasonable.For stocks lying with third parties at the year-end written confirmations have beenobtained. According to the information and explanations given to us the procedures forphysical verification of inventories followed by the management during the year arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been properly adjusted in the books of account.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act.

(iv) According to the information and explanations given to us theCompany has not given any loans or provided any guarantee or security as specified undersection 185 and 186 of the Companies Act 2013. Moreover in respect of the investmentsmade by the Company requirements of section 186 of the Companies Act 2013 have beencomplied with.

(v) According to the information and explanations given to us theCompany has not accepted any deposits as mentioned in the directives issued by the ReserveBank of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under. Accordingly paragraph 3(v) of the Order is notapplicable.

(vi) The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013 in respect of certain productsmanufactured by the Company. We have broadly reviewed the cost records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amended andprescribed by the Central Government of India under sub-section (1) of Section 148 of theAct and are of the opinion that prima facie the prescribed cost records have been madeand maintained. We have however not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted/accrued inthe books of account in respect of undisputed statutory dues including provident fundemployees state insurance sales-tax goods and service tax income-tax service tax dutyof customs duty of excise value added tax cess and any other material statutory dueshave been regularly deposited during the year by the Company with the appropriateauthorities.

According to the information and explanation given to us there are noundisputed amounts payable in respect of provident fund employees state insurancesales-tax goods and service tax income-tax service tax duty of customs duty ofexcise value added tax cess and any other material statutory dues that were in arrear ason 31 March 2018 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us thereare no dues in respect of income-tax sales-tax goods and service tax value added taxservice tax duty of customs and duty of excise which have not been deposited with theappropriate authorities on account of any dispute as at 31 March 2018 other than thosementioned as follows:

Name of Statute Nature of Dues Amount* ( Rs in crores) Amount paid ( Rs in crores) Period to which the Amount Relates Forum where Dispute is Pending
Central Excise Law Excise duty 691.57 320.88 2008-09 to 2013-14 Supreme Court
1.61 0.01 2014-15 to 2015-16 Commissioner Appeal
870.47 415.58 2002-03 to 2017-18 CESTAT
Finance Act 1994 Service Tax 0.89 0.45 2004-05 to 2005-06 Supreme Court
234.43 24.99 2004-05 to 2011-12 CESTAT
Income-tax Act 1961 Income-tax 7342.99 528.44 2008-09 2011-12 to 2012-13 Income Tax Appellant Tribunal
715.59 - 2004-05 2009-10 2013-14 Commissioner of Income Tax
(Appeals)

* Amount as per demand orders including interest and penalty whereverindicated in the order

The following matters have been decided in favour of the Company butthe department has preferred appeals at higher levels

Name of Statute Nature of Dues Amount ( Rs in crores) Amount paid as per stay order/ mandatory deposit Period to which the Amount Relates Forum where Dispute is Pending
Central Excise Law Excise duty 8.17 - 2002-03 to 2004-05 Supreme Court
85.66 41.44 2009-10 to 2010-11 2013-14 CESTAT
Income-tax Act 1961 Income-tax 4947.77 - 1987-88 1989-90 1992-93 1993-94 1995-96 1996-97 1997-98 1998-99 2000-01 2006-07 2009-10 and 2010-11 High Court
72.00 - 2001-02 2003-04 2004-05 Income Tax Appellate Tribunal
2005-06 and 2007-08

(viii) According to the information and explanation given to us the Company has nottaken any loans or borrowings from banks financial institutions and government and therewere no debentures issued during the year or outstanding as at 31 March 2018.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable.

(x) During the course of our examination of the books and records of the Company andaccording to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe 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) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us andon the basis of examination of the records of the Company the transactions with relatedparties are in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable and the details of the related party transactions have been disclosed in theInd AS financial statements as required by the applicable accounting standards.

(xiv) According to information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly paragraph 3(xiv) of the Orderis not applicable.

(xv) According to the information and explanations given to us duringthe year the Company has not entered into any non-cash transactions with its directors ordirectors of its subsidiaries or associate companies or persons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under Section 45-1A of the Reserve Bank of IndiaAct 1934.

For B S R & Co. LLP
Chartered Accountants
Firm registration No.: 101248W/W-100022
Jiten Chopra
Place: New Delhi Partner
Date: 2 May 2018 Membership No.: 092894