You are here » Home » Companies ยป Company Overview » Hero MotoCorp Ltd

Hero MotoCorp Ltd.

BSE: 500182 Sector: Auto
NSE: HEROMOTOCO ISIN Code: INE158A01026
BSE 00:00 | 24 Apr 2020 Hero MotoCorp Ltd
NSE 05:30 | 01 Jan 1970 Hero MotoCorp Ltd

Notice: Undefined property: stdClass::$market_capital_for_nse in /usr2/unibs/application/modules/live-market/views/scripts/company/bs-new-bse-nse-block.php on line 17
OPEN 1850.00
PREVIOUS CLOSE 1864.20
VOLUME 54111
52-Week high 3021.15
52-Week low 1475.00
P/E 11.49
Mkt Cap.(Rs cr) 37,915
Buy Price 1890.00
Buy Qty 9.00
Sell Price 1894.00
Sell Qty 1.00
OPEN 1850.00
CLOSE 1864.20
VOLUME 54111
52-Week high 3021.15
52-Week low 1475.00
P/E 11.49
Mkt Cap.(Rs cr) 37,915
Buy Price 1890.00
Buy Qty 9.00
Sell Price 1894.00
Sell Qty 1.00

Hero MotoCorp Ltd. (HEROMOTOCO) - Auditors Report


Notice: Undefined variable: pattern in /usr2/unibs/application/modules/live-market/views/scripts/company/annual-report.php on line 72

Company auditors report

To The Members of Hero MotoCorp Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Hero MotoCorp Limited (the Company) which comprise the standalone balance sheet as at 31 March 2019 and the standalone statement of profit and loss (including other comprehensive income) the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended and the standalone financial statements including a summary of significant accounting policies and other explanatory information (together referred to as 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 (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 31 March 2019 and its profitand other comprehensive income changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone 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 standalone financial statements under the provisions of the Act and the Rules notesto 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 we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Key Audit MattersAuditor's Response
1. Government GrantsAudit procedures
The Company obtains various grants from Government authorities in connection with manufacturing and sales of two wheelers. There are certain specific conditions attached to the grants which are subject to formal approval process.In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Management evaluates on a periodic basis whether the Company has complied with the relevant conditions attached to each grant and whether there is a reasonable assurance that the grants will be received in order to determine the timing and amounts of grants to be recognized in the financial statements. inspecting on a sample basis documentation relating to the grants given by the various Government authorities and identifying the specific conditions attached to the respective grants and respective application and approval procedures;
We identified the recognition of Government grants as a key audit matter because the amount of grants recorded is material to the financial statements and due to existence of significant judgement applied in assessing whether the conditions attached to grants have been met and whether there is reasonable assurance that Grants will be received.  evaluated the basis of management's judgement about whether the conditions attached to the grants have been met and whether reasonable assurance has been obtained that grants will be received and evaluating management's judgement by examining the terms of the underlying documentation and the information used by them to form such judgements;
 assessing the appropriate classification of grants with management reference to the terms of the underlying documentation;
 in respect of grants related to income recorded during the current year sales actually incurred for which the grants are to receive in the relevant documents and correspondence from the government authorities to assess whether the criteria for recognition of the grants had been met.
2. Intangible assets under developmentAudit procedures
The Company incurs significant costs in respect of the development of new models and technology of two wheelers.In view of the significance of the matter we applied the internal and external following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
The accounting for these costs as either intangible assets or expense items recorded in the statement of profit and loss involves judgment and is dependent on the nature of the related development. evaluated the design of internal controls relating to identification and classification of expenditure related development of new models and technology
We identified the intangible asset under development as a key audit matter due to risk of inappropriate recognition of costs either as an expenditure or capital item. for selected samples tested the operating effectiveness of the internal control identification and classification of expenditure related to the development of new models and technology.
 tested on a sample basis costs incurred on such development and agreed these to underlying documentation.

Information Other than the Standalone Financial Statements and Auditors Report Thereon '

The Company's management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report but does not include the financial statements and our auditors' 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 thereon.

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 in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs profit/loss and other equity and cash flows of the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified 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 of 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 financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors are 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 either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor' s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 income changes in Companyinaccordancewiththe 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 standalone financial statements.

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

 Identify and assess the risks of material misstatement of the standalone 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. Under section 143(3) (i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements 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 standalone 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 standalone financial statements including the disclosures and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 (the Order) issued by the Central Government in terms of section 143 (11) of the Act 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) 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 standalone balance sheet the standalone statement of profit and loss (including other comprehensive income) the standalone statement of changes in equity and the standalone statement of cash flowsdealt with by this Report are in agreement with the books of account.

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

e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31 March 2019 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 with reference to standalone financial statements of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements;

ii) According to the information and explanation given to us the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii) According to the information and explanation given to us there has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company;

iv) The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2019.

C With respect to the matter to be included in the Auditors' Report under section 197(16):

In our opinion and according to the information and explanations given to us the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

ANNExURE A REFERRED TO IN THE INDEPENDENT AUDITORS 'R EPORT

to the Members of Hero MotoCorp Limited on the standalone financial statements for the year ended 31 March 2019

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all the items are verified in a phased manner over a period of three years. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme certain fixed assets were physically verified during the year. As informed to us no material discrepancies were noted on such verification.

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

(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 Act. Accordingly paragraph 3 (iii) of the Order is not applicable to the Company.

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

(v) According to the information and explanations given to us the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly paragraph 3(v) of the Order is 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) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund employees state insurance goods and service tax income-tax duty of customs cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us the Company did not have any dues on account of duty of excise sales tax service tax and value added taxes.

According to the information and explanation given to us there are no undisputed amounts payable in respect of provident fund employees state insurance goods and service tax income-tax duty of customs cess and any other material statutory dues that were in arrear as on 31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues in respect of income-tax sales-tax goods and service tax value added tax service tax duty of customs and duty of excise which have not been deposited with the appropriate authorities on account of any dispute as at 31 March 2019 other than those mentioned as follows:

Name of StatuteNature of DuesAmount* (Rs. in crores)Amount paid Rs. ( in crores)Financial year to which the Amount RelatesForum where Dispute is Pending
Central Excise LawExcise duty691.57321.182008-09 to 2013-14Supreme Court
2.350.102014-15 to 2017-18Commissioner Appeal
863.10415.302002-03 to 2017-18 ( Customs Excise Service Tax Appellate Tribunal) CESTAT
Finance Act 1994Service Tax0.890.452004-05 to 2005-06Supreme Court
233.1124.992004-05 to 2011-12CESTAT
Income-tax Act 1961Income-tax3163.55$-2008-09Income Tax Appellant Tribunal (ITAT)
2343.27#280.002004-05 and 2010-11Commissioner of Income Tax (Appeals)

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

# Balance demand of 2010-11 has been stayed by assessing officer till the disposal of first appeal.

$ Interim stay granted by ITAT.

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

Name of StatuteNature of DuesAmount (Rs. in crores)Amount paid as per stay order/ mandatory depositPeriod to which the Amount RelatesForum where Dispute is Pending
Central Excise LawExcise duty8.78-2002-03 to 2008-09Supreme Court
85.6621.822009-10 to 2010-11 2013-14CESTAT
Income-taxIncome-tax4.10-2005-06Supreme Court
Act 1961
7358.07-1987-88 1992-93 1995- 96 1996-97 1997-98 1998-99 2000-01 2006- 07 2009-10 2010-11 2011-12 and 2012-13High Court
71.71-2003-04 2004-05 2005- 06 and 2007-08Income Tax Appellate Tribunal

(viii) According to the information and explanation given to us the Company has not taken any loans or borrowings from banks financial institutions and government and there were no debentures issued during the year or outstanding as at 31 March 2019. Accordingly paragraph 3 (viii) of the Order is not applicable to the Company.

(ix) According to the information and explanations given to us the Company 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 to the Company.

(x) According to the information and explanations given to us no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examination of the records 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) According to the information and explanations given to us the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and on the basis of examination of the records of the Company the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act 2013 where applicable and the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

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

(xv) According to information and explanations given to us the Company has not entered into any non-cash transactions with directors 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 the Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

ANNExURE B TO THE INDEPENDENT AUDITORS' REPORT

on the standalone financial statements of Hero MotoCorp Limited for the year ended 31 March 2019

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013 Opinion

We have audited the internal financial controls with reference to financial statements of Hero MotoCorp Limited (the Company) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019 based on the internal financial controls with reference to financial statements 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 (the Guidance Note).

Management' s Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as the Act).

Auditors' Responsibility

Our responsibility is to express an opinion on the Company' s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls with reference to financial statements. 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 with reference to financial statements were established and maintained and whether 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls 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 judgement including the assessment of the risks of material misstatement of the standalone 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 with reference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company' s internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that in reasonabledetailaccuratelyandfairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the company' s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
ICAI Firm's registration No.: 101248W/W-100022Chartered Accountants
Jiten Chopra
Place: New DelhiPartner
Date: 26 April 2019Membership No.: 092894

   


Notice: Undefined variable: mediaAbsUrl in /usr2/unibs/application/modules/live-market/controllers/CompanyController.php on line 6061