hmcl niloy bangladesh limited - hero motocorp

HMCL Niloy Bangladesh Limited

Audrtors'report and financial statements as at

and for the year ended 31 March 2019

Rahman Rahman HuqChartered Accountants9&5Mohakhali C/ADhaka 1212Bangladesh

Telephone +880 (2) 988 645G2Fax +880 (2) 988 6449Email [email protected] wwrru.kpmg.com/bd

lndependent auditors' report

To the Shareholders of HMCL Niloy Bangladesh Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of HMCL Niloy Bangladesh Limited (the Company), which comprisethe statement of financial position as at 31 March 2019, and the statement of profit or loss and othercomprehensive income, statement of changes in equity and statement of cash flows for the year then ended,and notes to the financial statements, including a summary of significant accounting policies.

ln our opinion, the accompanying financial statements give a true and fair view of the financial position of theCompany as at 31 March 2019, and its financial performance and its cash flows for the year then ended inaccordance with lnternational Financial Reporting Standards (lFRSs).

Basis for Opinion

We conducted our audit in accordance with lnternational Standards on Auditing (lSAs). Our responsibilitiesunder those standards are further described in the Auditors' Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled ourother ethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in

accordance with lFRSs, and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.

ln preparing the financial statements, management is responsible for assessing the Company's ability tocontinue 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.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the 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 auditors' 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 lSAs will always detect a material misstatement when it exrsts. 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.

IRahman Rahman Huq, a partne6hip firm registered in Bangladesh

and a memberllm of the KPI\,IG network of independent member

lims af,iliated with KPMG lnternational c@perative ('KPMG

lntemational'), a Swiss entily.

Chattogram78 Agrabad I

Chattogram,

off@ address :

c/A (13h Fl@r), Bangladesh

Tel +880 (31) 710704,710996Fax +880 (31) 2520795E-mail chittagong@kpmg.@mlntemet wW.kpgm.@m/bd

RR//

WAb Rahman Rahman HuqChartorod Accountants

As part of an audit in accordance with lSAs, we exercise professional judgment and maintain professional

skepticism throughout the audit. We also:

ldentify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement 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.

Evaluate the appropriateness of accounting policies used and lhe reasonableness of accounting estimatesand related disclosures made by management.

Conclude on the appropraateness of management's use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions thatmay cast significant doubt on the Company's ability to continue as a going concern. lf we conclude that amaterial uncertainty exists, we are required to draw aftention in our auditors' report to the related disclosuresin the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of our auditors' report. However, future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that gives a true and fair view.

We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.

Report on Other Legal and Regulatory Requirements

ln accordance with the Companies Act 1994, we also report the following

a) we have obtained all the information and explanation which to the best of our knowledge and belief werenecessary for the purpose of our audit and made due verification thereof;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as itappeared from our examination of those books; and

c) the statement of financial position and statement of profit or loss and other comprehensive income dealt with

by the report are in agreement with the books of account.

Rahman Rahman HuqDhaka, '16 April 2019

RR/I

?t/rrrpar'Q/**-t'l'7

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effecliveness ofthe Company's internal control.

2

HMCL Niloy Bangladesh LimitedStatement of financial position

lrote31 March

20't93l March

2018

AssetsProperty, plant and equipmentlntanqible assets

67

2,017,610,255248,129

1,794,204,325431,356

Non-current assets 2,017,858,384 1,794,635,681lnventoriesAdvances, deposits and prepaymentsCurrenl tax assetslnvestmentsTrade and other receivablesCash and cash equivalents

do

1011

12

1 ,653,323,47489,513,438

170,064,06040,505,494

238,784,830743,370,8281,396,652 ,631

Current assets 9223. .099,545 2.935.562.124Total assets s,939,9s7 ,929 4,730.197,805

Eq u ityShare capitalRetained earninqs

14 981,296,000 981,296,000919,091 ,91 11,394,966 ,021

Total equity 2.376.262,021 1,900.387.911LiabilitiesLoans and borrowingsShare money depositEmployee benefitsDeferred tax liabilities

1516

1718

4217,302,368

18,0't4,905

130,454,1202,567 ,2217,151,978

16,335,555Non-current liabilities 25,3't7 ,694 156,508,874Bank overdraftLoans and borrowingsTrade and other payablesAdvance from customer

13

1519)n

r,402,698,4752,091,119,592

44,560,147

18,999,194684.424,506

1,969,877,320

Current liabilities 3,538,378,214 2,673,301,020Total liabilities 3,563,695,908 2,829,809,894Total equity and liabilities 5,939,957,929 4,730,'197,805

The notes on pages 7 to 47 are an integral pad of these financial statements

Director

Dhaka, 16 April 2019

Director Com ny retary

As per our report of same date

@ Auditor u

37?//

ln Taka

1,594,978,548199,482,206150,851,696491,108,524

89,015,940

4.fl /.1,*l J.At

Rahman Rahman HuqChaater€d AccountentgKPMG ln Brngladesh

HMCL Niloy Bangladesh LimitedStatement of profit or loss and other comprehensive income

ln Taka Note

For the year ended 31 March

2019 20'18

Revenue

Cost of sales

21

228,765,937,876

(7,149,446,846)

6,837,808,220

(4,889,757,735)

Gross profitOther income

General and administrative expenses

Selling and distribution expenses

24

25

1,616,491,030

(146,167,696)

(300,s00,788)

1,948,050,485

4,701,616

(125,184,829)

(596,162,231)

Finance cost

Finance income

(124,806,339)

67,788,38926 (57,017,950) (108,461,052)

Profiu(loss) before WPPF & taxContribution to workers' profit participation fund

1,112,804,596(55,640,230)

1,122,943,989(56,147,199)

Profiv(loss) before taxlncome tax (expense)/income a7

1,057,'t64,366(90,642,256)

1 ,066,796,790(87,837,434)

Other comprehensive incomeTotal comprehensive income 966,522,r 10 978,959,356

The notes on pages 7 to 47 are an integral pafi of these financial statements

Director Director

&l/any retary

As per our report of same date

@6Lr",r",

Dhaka, 16 April 2019

Auditor

Rahman Rahman HuqChartered AccountantsKPilIG ln Bengladesh

4

Kk/l

Operating profiu(loss) 1,169,522,96 1,231,405,041(139,803,139)

31,U2,087Net finance income/(cost)

Profiu(loss) forthe vear 966,522,110 978,959,356

ft .Yl il^-l

HMCL Niloy Bangladesh LimitedStatement of changes in equity

ln Taka

For the year ended 3'l March 2018

Attributable to the owners of the CompanyShare

capitalRetainedearnings

Totalequity

Balance at I Aptil2017 979,200,000 (59,867,445) 9'r9.332,555Total comprehensive income for the yearProfiu(loss) for the yearOther comprehensive income for the year

978,959,356 978,959,356

Total comprehensive income for the year 978,959,356 978,959,356

Transactions with owners of the CompanyContributions and distributionslssue of ordinary sharesDividends

2,096,000

Total contributions and distributions 2 096 000 2,096 000Total transactions with owners of the Companv 2,096,000 2,096,000Balance at 31 March 2018 981,296,000 919,091 ,91 1 1 ,900,387,91 1

For the year ended 31 March 2019

Atfibutable to the or ners of the CompanyShare

capitalRetainedearninqs

TotalequiW

Balance at I April 2018 981.296,000 919,091,911 1,900,387,9fiTotal comprehensive incomeProfiu(loss) for the yearOther comprehensive income

966,522,fi0 966,522,fi0

Total comprehensive income 966,522,fi0 966,522,1 10

Transactions with owners of the CompanyContributions and distributionslssue of ordinary sharesDividends (490,648,000) (490,648,000)Total contributions and distributions (490,648,000) (490,648,000)Total transactions with owne6 of the ComDanv (490,648,000) (490.648.000)Balance at 31 March 2019 98'1,296,000 1,394.966,021 2.376.262.021

The notes on pages 7 to 47 are an integral paft of the6e financial statements.

oI

C

5

- 2,096,000

I

HMCL Niloy Bangladesh LimitedStatement of cash flows

ln Taka /VoteFor the year ended 31 March

2019 2018

Cash flows from operating activitiesProfiv(Loss) for the yearAdjustments for:- Depreciation- Amortisation- Employee benefits- Loss on sale of property, plant and equipment- Finance income- Tax (income)/expense

966,522,110 978,959,3s6

67

2627

1',tz,760,957183,226150,390

(67,788,389)

84,054,285158,405

7 ,151 ,978390,630

(31,342,087)

87 ,837 ,43490.642 ,2561,102,470,550 1,127,210,001

Changes in:- Advance, deposits and prepayments- lnventories- Trade and other receivables- Trade and other payables- Advance from customer

I8

1219

20

(94,872,4,t,t|58,344,926

152,608,830(167,269,978)

41 ,010,534(1,577,400,849)

(23s,574,571)1,791,590,466

44,560,'t47Cash generated from operating activitieslncome taxes paid 10 (69.760,542)

r,095,842,032 1,146,835,580(213i84,541)

Net cash f.om / (used in) operating activities 1,026,08't ,490 933,651,039

Cash flows from investing activitieslnterest receivedCash dividend receivedGain on share tradeAcquisition of property, plant and equipmentProceeds from sale of property, plant and equipmentAcquisition of intangible assetDevelopment expenditurelnvestments

262626

o

57,593,2621,075,0376,280,150

(332,607,36't)

11 (450,603.030)

29,00't ,414

(463,040,720)310,000

(s29,205)(12 ,95s ,627)(40,505,494)

7

Net cash used in investing activities (7'.tB,261,9421 (487,719,632)

Cash flows from financing activitiesProceeds from issue of share capitalShare money depositProceeds from loans and borrowingsDividend paid

14

1615

(2,566,800)s87,819,849

(220.791.600)

2,096,000(2,096,000)

( 141 ,486,218)

Net cash from / (used in)financing activities 364,461 ,449 (141 ,486,218)Net increase / (decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of year

672,280,997724,37',t,634

304,445,190419,926,444

Cash and cash equivalents at the end of year 13 1,396,652,631 724,371.634

The notes on pages 7 to 47 are an integral pai of these financial statements

ffio

d6

Notes to the financial statements

1. Reporting entity

HMCL Niloy Bangladesh Limited (hereinafter referred to as "HNBL" or'the Company") is a private

limited company incorporated in Bangladesh on 24 June 2014 under the Companies Act, 1994. ltsshareholders are HMCL Netherlands B.V. and Niloy Motors Limited and the shareholding are 55o/o

and 45o/o respectively. lts registered office is at Nitol Niloy Tower, Plot-69, Nikunja-o2, Khilkhet,ohaka-1 229, Bangladesh.

The Company manufactures and sells motorcycles within Bangladesh through the distributionchannel of Niloy Motors Limited. The Company has started commercial operation on 1 June 2017 andhas completed setting up a manufacturing plant at Padmabilla, Shakharigati, Kotowali, Jashore.

The financial statements have been prepared in accordance with lnternational Financial ReportingStandards (lFRSs). The financial statements were authorised for issue by the Company's Board ofDirectors on 16 April 2019.

Details of the Company's accounting policies are included in note 36

The financial statements are presented in Bangladesh Taka (Taka/Tk), which is the Company'sfunctional currency. All amounts have been rounded to the nearest integer, unless otherwiseindicated.

4. Use of estimates and iudgments

ln preparing these financial statements, management has made judgements, estimates andassumptions that affect the application of accounting policies and the repo(ed amounts of assets,liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates arerecognised prospectively.

Assumptions and estimation uncertainties

lnformation about assumptions and estimation uncertainties that have a significant risk of resulting in

a material adjustment in the year ending 31 March 2019 is included in the following notes:

Note 6Note 7Note 18Note 10

Note 28

Wt t

2. Basis of accounting

The title and format of these financial statements follow the requirements of IFRS which is slightlyditferent from the requirement of the Companies Act 1994; however, such differences are not materialand in the view of management, IFRS format as mentioned in IAS 1 gives a better presentation to theshareholders.

3. Functional and presentation currency

DepreciationAmortisationDeferred tax assets/liabilitiesCurrent tax assets/liabilitiesContingencies and commitments

7

fl

Notes to the financial statements (continued)

i. Measurement of fair values

A number of the Company's accounting policies and disclosures require the measurement of fairvalues, for both financial and non-financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values.Management has overall responsibility for overseeing all significant fair value measurements, includingLevel 3 fair values.

Management regularly reviews significant unobservable inputs and valuation adjustments. lf third partyinformation, such as broker quotes or pricing services, is used to measure fair values, thenmanagement assesses the evidence obtained from the third parties to support the conclusion thatthese valuations meet the requirements of IFRS, including the level in the fair value hierarchy in whichthe valuations should be classified.

When measuring the fair value of an asset or a liability, the Company uses observable market data asfar as possible. Fair values are categorised into different levels in a fair value hierarchy based on theinputs used in the valuation techniques as follows.

- Level 1: quoted prices (unadjusted) an active markets for identical assets or liabilities

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset orliability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservableinputs).

lf the inputs used to measure the fair value of an asset or a liability fall into different levels of the fatrvalue hierarchy, then the fair value measurement is categorised in its entirety in the same level of thefair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reportingperiod during which the change has occurred.

EM**

8

/


5. Chanqes in significant accounting policies

The company has initially applied IFRS '15 (see A) and IFRS I (see B) from '1 April 2018. A number of amended standardsand interpretations are also effective from 1 January 2018 but they do not have a material effect on the ,inancialstatements.

Due to the cumulative effect method chosen for transition by the Company in applying these standards, comparativeinformation throughout these financial statements has not been restated to refled lhe requirements of the new standards.

The effect of initially applying these standards is mainly attributed to the following

Change in revenue recognition method due to impact of consideration payable to customer in the form o, periodicdealer incentive and promotional expense (discount sharing with customer) which shall be shown as a reduction ofthe transaction price.

A. IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. ltreplaced IAS '18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue rs

recognised when a customer obtains control of the goods or services. Determining the timing of transfer of control - at apoint in time or over time - requires judgement.

The Company has adopted IFRS 15 using the cumulative effect method, with the effect of initially applying this standardrecognised at the date of initial application (i.e. '1 April 2018). Accordingly the information presented for 31 March 2018 hasnot been restated i.e. it is presented, as previously reported, under BAS 18 and related interpretations. Additionally thedisclosures requirement of IFRS 15 have not generally been applied to comparative information.

Periodic dealer incentive and promotional expense (discount sharing with customer): Under BAS 18, these itemswere not net off against revenue but rather classified as selling and distribution expenses. Under IFRS 15.70, both of theseitems are treated as consideration payable to a customer which includes cash amounts that the Company pays, or expectsto pay, to the customer (or to other parties that purchase the Company's goods from the customer). The Company shallconsider their effects while determining the transaction price and shall account for consideration payable to a customer as areduction of the transaction price and, iherefore revenue.

For additional information about the Company's accounting policies relating to revenue recognition, see Note 36(A)

B. IFRS 9 Financial lnstrumenB

IFRS 9 sets out the requirements for recognising and measuring financial assets, flnancial liabilities and some contract tobuy and sell non-financial items. This standard replaces IAS 39 Finarcial lnstruments: Recognition and Measurement

As a result of adoption of IFRS 9, the Company has adopted consequential amendments to IFRS 7 Financial lnstruments:Dlsc/osures that are applied to disclosures about the current year but have not been generally applied to comparativeinformation.

i- Classificalion and measurement oflinancial asseb and linancial liabilities

IFRS I contains three principal classification categories for financial assets: measured at amortised cost, FVOCI andFWPL. The classification of financial assets under IFRS 9 is generally based on the business model in which a financialassets is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39 categories of held tomaturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a

financial asset in the scope of the standard are never separated. lnstead hybrid financial instrument as a whole is assessed

for classification.

IFRS 9 largely retains the existing requirements of IAS 39 for classification and measurement of flnancial liabilities

9

#

Notes to the flnancial statements (continued)

The following table and the accompanying notes below explain the original measurement categories under BAS 39 and thenew measurement categories under IFRS 9 for each class of the Company's financial assets and financial liabilities as at 1

April 2018.

Financialassets

Original classificationunder BAS 39

New classificationunder IFRS 9

Originalcarryingamount

under IAS 39

NewCarryingamount

under IFRS 9Trade and other

receivablesCash and cash

equivalentsAdvances, deposits and

prepayments

lnvestments

Loans and

receivablesLoans and

receivableSLoans and

receivables

Loans and

receivables

238,784,830

743,370,824

89,513,438

40,505,494

Total financial assets '1,'t12,174,590 1 ,112,17 4,590

Financial liabilities

ln TakaOriginal classification

under BAS 39New classification

under IFRS I

OriginalCarryingamount

under IAS 39

NewCarryingamount

under IFRS 9Bank overdraft

Loans and borrowings

Employee beneflts

Trade and other payables

Other financialliabilities




Other fi nancial liabilities

Other fi nancial liabilities

Other financial liabilities

Other financial liabilities

18,999,194

814,878,626

7,151,978

't,969,877,320

18,999,194

8 t4,878,626

7,151,978

't,969,877,320

Total fi nancial liabilities 2,810,907,r18 2,810,907,1t8

Additional disclosures about how the Company measures the ailowance for impairment is described in Note 36 (H).

ffi )-o

10

ln TakaAmortised cost

Amortised cost

Amortised cost

Amortised cost

238,784,830

743,370,A2A

89,513,438

40,505,494

fl

Notes to the financial statem ents continued

6. Property, Plant and equiPment

See accounting policy in note 36(F)

Reconciliation of ca in amount

ln Taka

Factory Furniture andbuilding fixtures

Computerequipment

Officeequipment

Plant andmachineries Total

CostBalance at 1 AP(il2017Additions/Transfers

- 930,149 1202,395 1,213,421760,848,761 3,432,576 1,712,450 8,077,867

3,123,032637,150,281

12,956,3141,200,250

1,423,740,44a(973,364,749)

1.443.165.759439,057,436

Di 832 832 432Balance at 3'l March 2018

lance at 1 April 2018Additions/Transfers

761 4 362 725 2 845 99147 29'l 288760,448,761 4,362,725 2,914,845 9,29'1,2a8221,315,564 't,866,671 28,780,523 33,27',t,759

639639,440,881268,215,337

114 ,| 56414,156,564

329,480

450 375 699 'l 88r 39 7631,881,390,763

336,166,887450,375,699

(217,612,448\Dis sals

Accumulated dePreciationBalance al 1 APtil2Ol7DepreciationDisposals

24,O82,984151,128169,414

396,142803,582

220,376't,140,947

227.81755,758,874

(131,802)

2,268,4922,098,48s

3,263,95584,O54,285

(131,802)

Balance at 3l March 2018 082 984 320 ,1 199 724 1 361 323 55,854,889 4,366,977 87,186,438Balance at 1 Apri t 2018 24,082,984 320,542 1,199,724 1,361,323

28,000,095 1,279,875 4,725,576 5,182,32755,854,889 4,366,977

2,2s9,35987,186,438

'l't2,760,957Depreciation 71,313,72sDisposalsBalance at 3l March 2019 079 1 600 417 552 083 300 6 ,650 127,168,6'14 6,625,336 199,947,39s

Ca amountsAt 31 Ma 2018 736 765 777 4 o42 183 1 715 121 7 929 965 s83 585 992 9 789 587

At March 20 ,246 4,628,979 25,770,068 35,019,397 780,487,604 7,859,708450 699 1 794 204 325232,763,251 2,O17,6'tO,255

Allocation of dePreciationFor the year ended 31 March

2019 2014Cost of salesGeneral and administrative expenses

107,122,909 79,851 ,5714,202,7145,63 048

{Total depreciation 112,760,957 84,O54,285

11

Motor Under constructionvehicle Note - 6.1

Elliice aiSl March 2019 982,164,325 6,229,396 31,695,358 42,563,047 907,656,218 14,486,044 232,763,251 2,217,557,650


6.'t Under construction

ln Taka ,Vote Common costs Factory buildingPlant and

machineries TotalBalance at 'l April 2017

Additions

Transfers (allocation of common costs)

Transfers (to respective asset class)

713,250,504170,998,619

46,529,380(760,848,761)

636,350,861

243,640,070

35,611,003(637,1s0,281)

6.1.1

6.1.1

74,139,083

9,995,605(82,140,383)

1.423,740,448

424,634.293

(1,397,999,042)

Balance at 31 March 2018 1,994,305 169,929,742 274,4s1,6s3 4s0,375,699

Balance at 1 April 20'18

Additions

Transfers

Transte6 (to respective asset class) 6.1.1 (1,994,305)

'r69,929,742104,122,954(7,632,610)

(200,814,967)

278,451,653't96,994,3't9

7,632,610(315,920,453)

450,375,700

301 ,1',t7,277

\518,7 29 ,7 25)Balance at 3'l March 2019 65,605,123 t67,158,129 232,763,252

6.1.1 Common costs

ln Taka

For the year ended 31 March 2019Openinq Additions Closinq

Bank interest on loan for capital machinery

Erection and commission materials546,340

1,447,965

546,340

1,447,965

Total common costs before allocation 1,994,305Allocation of common costsFactory building

Plant and machineries (r,994,305)

Allocated common costsTotal common costs after allocation (wi ll be distributed later)

ln Taka

For the year ended 31 March 2018Opening Additions Closing

Bank interest on loan for capital machinery

Erection and commission materials

Loan facility fee from HSBC

lnsurance for erection all risk

Electrical materials

Rental expense - Hydra crane

Erection Material- Parts and components

Dieselfor generator

Electricity bill

Unloading expense

48,223,247

5,905,923

5,777,880

5,554,500

2,442,984

3.184,429

1 ,318,1761,003,845

531 ,627196,472

6,090,339

542,384

54,313,586

6,448,307

5,777,880

5,554,500

3,692,948

3,477,1832,170,831'1,791,905

690,275

217,272

1,249,964

292,754

852,655

788,060

158,648

20,800

Total common costs before allocation 74 083 9,995,604 84,134,687139

(46,529,380)

(35,611,003)

Allocated common costsll bed late 't,994,304

L2

1,994,305

1,994,30s

(r,994,305)

Allocation of common costsFactory building

Plant and machineries(82,140,383)

Total common costs after allocation

#


7 lntangible assets

See accounting policy in note 36(G)

ln Taka

Accountingsoftware - Tally

CostBalance at 'l April 2016

Additions

Disposals

Balance at 31 March 2017 100,926

Balanc€ at 1 April 2017

Additions

Disposals

100,926

529,205

Balance at 3'l March 2018 630,13'tBalance at 1 April 2018

AdditionsDisposals

630,131

Balance at 31 March 2019 630,131

Accumulated amortisationBalanc€ at '1 April 2016

Amortisation for the year

Disposals

8,410

31,960

40,370Balance at I April 2017


Disposals

40,370

158,405

Balance at 3'l March 2018 198,775Balance at 'l April 2018


Disposals

194,775

't83,227

Balance at 31 March 2019 382 002

Carrying amountsAt 1 April 2016 92,516

At 31 lrarch 2017 60,556

At 31 March 2018 431,356

At 3t March 20'19 248,129

For the year ended 31 March

Allocation of amortisation 2019 2018

Cost of salesGeneral and administrative expenses

174,0659,16'l

150,485

7,920

Total depreciation 183,226 158,405

ffi Co*

.BAH

13

100,926

Balance at 31 March 2017

Notes to the financial statements (continued

8 lnventories

ln Taka 2019 20'18Goods-inlransitRaw materials and consumablesFinished goods

1,057,815,054417,723,330119,140,154

1,012,795,979562,603,58777,923,908

r,594 ,978,548 1.653,323,474

9 Advances, deposits and prepayments

ln Taka 20't9 20't8AdvancesVAT Current Ay'C

Build AsiaARRA Technologies Ltd.Structural Design Associates Ltd.Siemens Bangladesh LimitedAdvance to employeesDhrupadi Techno Consortium LimitedBashundhara LP Gas Limitedlnternational Convention City BashundharaPrime lnsurance Company Ltd.Vrap lnternationalRahimafrooz Renewable Energy Ltd.Receivable from HSBCSIMA Labs Pvt. Ltd.Bangladesh Steel Re-Rolling Mills Ltd.AC World Electronics LimitedArnob EnterpriseAvery Bangladesh LimitedUtopian AssociatesAlMadina Glass HouseKyto Engineering & Automation Ltd.Amber lT Limited

90,342,54110,352,022

't,827,046't,270,227

849,642705,170450,000293,815175,000,t t8,33376,07460,00025,323,4,560

685

28,139,632'1,730,168

1 ,827 ,086

2,848,935553,404225,OOO

89,052

60,00013,597,814

14,560

20,025,0003,303,8252,565,000

624,112168,125

12.8575,000

106,560,478 75,789,570

DepositsOeposit against shipping guaranteeBO account deposit (IDLC Securities Ltd. and LankaBangla Securities Ltd. account)Jessore Palli Bidyut Samity - 1

Elite Secuity Services LimitedLinde Bangladesh LimitedHouse rentMS MunshiBank guarantee marginPrem VarietiesUC Margin

9,084,000389,500336,000240,000200,000

15,000778,487

92 648 273 11 042 987

PrepaymentsHouse rentConsumables (Carbon dioxide gas)lnsurance premium (Employee group insurance)

270,0003,455

90,000102,350

2,488,53'1273,455 2,680,881

ffiD

I

HA(

199 206 89 513,438

L4

'-r

63,424,86818,a24,2349,084,000

389,500336,000240,000200,000134,67115,000


10. Currenttax agsets

See accounting policy in note 36(D)

ln Taka 2019 2018Advance income taxLess: Provision for income tax

10.110.2

287,140,436(136,578,740)

217,679,894(47,615,834)

150,861,696 170,064,060

10.1 Advance income tax

ln Taka irole 20't9 20't8Balance at beginning of the yearAdd: Paid durinq the vear

217,679,89459,760,542

4,495,353213,184.541

760 542 213 184 541287 ,440 ,436- 217,679,894

Less ustment for com letion of assessmentClosino balance 14.1.1 287,440,436 217 679.894

'10.1.'t Closing balance

ln Taka 20't9 2018Accounting year 2015-20'16Accounting year 20'16-2017Accounting year 2017-2018Accounting year 2018-2019

2,263,267 2,263,2672,232,086 2,232,086

213,181,541 213,1U,54169,760,542 -

287,440,436 217,679,894

iroleBalance at beginning of the yearAddr Provision made durinQ the year

47,6'15,83488.962.906

'190,700

47.425,13488 962 906 47,425.134

47 .615.834Less: Adiustment on completion of tax returnClosing balance 10.2.1 136,578,740 47,615,834

10.2.1 Closing balance

ln Taka 2019 20'18

Accounting year 2015-20'16Accounting year 2016-201 7

Accounting year 2017-2018Accountinq year 2018-20'19

61,953128,7 47

47,425,13488,962,906

61,953128,747

47,425,134

136 578 740 47,615,834

11 lnvestments

ln Taka iro,e 2019 2018

Trust Bank Limited- long term fixed depositsBRAC Bank Limited- long term fixed depositsCommercial Bank of Ceylon PLC- long term fixed depositNRB Global Bank- long term fixed depositsThe City Bank Limited- long term fixed deposit

176,832,851132,317,73350,000,000s0,000,000

81,957,930

10,505,494

30,000,00011.1Listed nres

49'l 108 524 40,505 494

ffiru o

RA

Note

10.2 Provision lor income tax

ln Taka 2019 2018

136,578,740

15

/.

Notes to the financial statements continued)

11.'l lnvestment in shares ol lkted companies - fair value

ln Taka31 March

20,t931 March

20't8Square Pharmaceuticals Ltd 16,703,403

16,096.42513,200,0007,767,0007,568,6005,3i10,0001,528,0023,829,5002.964,0001,325,0001,220,000

782,000348,000

United Power Generation & Distribution Company LtdActive Fine Chemicals LimitedIFAD Autos LimitedNahee Aluminium Composrte Panel Ltd.The City Bank LimitedBSRM Steels LimitedOrion Pharma Ltd.Mercantile Bank LimitedShahjalal lslami Bank Ltd.Baraka Power LimitedGlobal Heavy Chemicals LimitedWestern Marine Shipyard LimitedOne Bank Limated 286 000

8l 957 930

The company invested BDT 106,983,932 in the stock market up to 30 June 2018. The value of current shares held by theCompany measured at fair value as at 31 March 2019 as per IFRS I was BDT 81,957,930 for which the cost was BDT94,745,8'19 as detailed in Note 11.1.1.

11.1,1 lnvestment in shares ot listed companies. cost

ln Taka3l March

201931 March

2018Square Pharmaceuticals LtdUnited Power Generation & Diskibution Company LtdActive Fine Chemicals LimitedIFAD Autos LimatedNahee Aluminium Composite Panel Ltd.The City Bank LimitedBSRM Steels LimitedOrion Pharma Ltd.Mercantile Bank LimitedShahjalal lslami Bank Ltd.Baraka Power LimitedGlobal Heavy Chemicals LimitedWestern Marine Shipyard LimitedOne Bank Limited

't6,960,899r6,106,s98't7,854,98010,037,116

9,189,2046,702,1105,056,5784,962,2283,597,5961,442,0261,249,738

842,520433,296310 930

94 745 819

12. Trade and other receivables

ln Taka ,VoteTrade receivables due from related partiesOther receivables due from related partiesOther receivables

12.112.2 68,626,643

20,389,297

235,478,U7

3.306,28489.0t5.940 238,784,830

12.'.| Trade receivables due from related parties

ln Taka 20't 9 2018

Niloy lvlotors Limited 235,478,547235.478 ,547

ffir I

oD

I

ti A(

2019 2014


12.2 Other receivables due from relaled parlies

ln Taka 20't9 2018Hero Motocorp Ltd 68,626,543

68.626,643

't2.3 Other receivables

ln Taka 2019 2018lnsurance claim receivabieAccrued interestFatema EnterpriseDividend income receivable

15,462,7522,492,4922,086,60s

347,448

2,340.673965,610

20,389,297 3,306,284

13. Cash and cash equivalents

See accounting policy in note 36(H)

ln Taka ,Vofe 2019 2018Cash at bankShort term fixed deposits

13.1

13.21,038,713,456

357,939,175334,463,920408,906,909

Cash and cash equivalents in the statement of financial position 1,396,652,63'l 743,370,828Bank overdrafts used for cash man nt u

Cash and cash equivalents in statement of cash flows18,999 194

1.396.652.63't 724.371.634

13.1 Cash at bank

ln Taka 2019 20'18The City Bank LimitedStandard Chartered BankHongkong and Shanghai Banking Corporation LimitedTrust Bank Limited

518,400,241394,359,267

95,517,959

224,605,35934.784.9447 4.212.295

43s 989 861't.038.713.456 334,463.920

13.2 Short term fixed deposits

ln Taka 2019 2018Standard Bank LimitedTrust Bank LimitedBRAC Bank Limited

357,939,175 220,562,434158,344,47 5

30 000 000

357 939 175 408 906 909

13.3 Bank overdrafts uaed for cash management purposea

ln Taka 2019 2018Honqkonq and Shanqhai Bankinq CorDoration Limited 18,999,194

18,999 194

14. Share capital

See accounting policy in note 36(l)

ln Taka 2019 20't8Authorised15,000,000 Ordinarv Shares ofTaka 100 each 1.500.000.000 1,s00,000,000

ln Taka Nofe 2015 2018lssued, subscribed and paid-up9,792,000 Ordinary Shares of Taka '100 each9,8'12,960 Ordinary Shares of Taka 100 each 981,296,000 981,296,000

17

14.114.1

981 0 981 000

)( mt

c


14,'l Particularsofshareholding:

shareholdi no

olo of No. ofshares

Face value persham

Value (Taka)

HMCL Netherlands B.VNiloy Motors Ltd.

s5%4s%

5,397,1284,415,832

100100

539,7'12,800441,583,200

100% 9,812,960 98'1,296,000

Name of the shareholders

As at 31 March 2018

% ol No. ot Face value per Value (Taka)ghareholdinq shares share

HirCL Netherlands B.VNiloy Motors Ltd.

550/0

45%5,397,1284,415,832

100'100

539,712,800441,583,200

'100% 9,812,950 98'1,296,000

15. Loana and borrowinga

See accountang policy in note 36(H)

ln Taka 2019 2018Non-current liabilitiesLoan from HSBC (Taka denominated) 130,454.120

130 454 120rrent liabilities

UPAS loan from HSBC (USD denominated)UPAS loan from SCB (USD denominated)Loan from HSBC (Taka denominated)

865,554,407537,134,068

464,532,968'187,278,008

32,6'13,5301,402,698,475 684,424,506

16. Share money deposit

ln Taka 2018HircL Netherlands B.VNiloy Motors Ltd.

421 4212,566,800

421 2,567,221

17 Employee benefits

ln Taka ,Vote 2019 20't8Gratuity fund 17.1 7,302,368 7,151,978

7 302 368 7,151,978

'17.'l Gratuity fund

ln Taka 20'19 2018Balance at beginning of the yearAdd: Provision for qratuity made during the year

.18 Deferred tax assets/(liabilities)


ln Taka Note 20't9 2018

Opening balanceDefe.red tax (expenses)/income

(16,335,555)11.679.3s0t

24.076.7 45(40,412.300)

W' o0 ts

I

Closin balance

18

18.1 18 14 905 16,335,555

Name of the shareholders

As at 3t March 2019

20't9

7,151,9786.885.085 7.15',1,978

14,037,063 7,151,978

/

l8.l Deferredtax(expenses)/income

Nole

Carryingamount on

reporting date

(Taxable)/deductibletemporary

d ifferencesProperty, plant and equipment excluding CWIPlntangible assetsProvision for warranty

67

19.3

1,744,413,179 1,357,497,664 (426,915,515)248,129 6,308 (24'1,8211

(66,859,228) - 66,8s9,228

Tax rate(360,298,108)

5.00%Deferred tax liabilities as at 3l March 2019 (18,014,905)

18.2 Delerredtax(expenses)/income

,Vote

Carryingamount on

reporting date Tax base

(Taxable)/deductibletemporary

differencea

Property, plant and equipment excluding CWIPlntangible assetsProvision for warrantyProvision for gratuityCarry Iorward of tax lossesUnabsorbed depreciation

67

19.317

18.2.118.2.2

1,343,828,626431,356

(27,759,s14),(7,151,978)

982,138,380498,993

(361,690,246)

27/5g,5147,151.978

Tax rate(326,711,117)-

5.00%Deferred tax liabilities as at 31 March 2018 (16,335,555)

ln TakaFor the year ended 3l March

2016 2017 2018 Totalunabsorbed depreciation b/fAdjustment for accounting year 2016-20'17Absorbed up to 31 March 2018

3,425,933 62,25't,104(9,144,118)

65,677,037(9,144,118)

(56,532,919)(56,532,919)Unabsorbed depreciation c/f 3.425.933 53.106,986 (56,532,919)

18.2.2 Unabsorbed depreciation

ln TakaFor the year ended 31 March

2016 2017 201A TotalUnabsorbed depreciation b/fAdjustment for accounting year 2016-2017Absorbed up to 31 March 2018

2,066,027 3,195,31125,232

5,261,33825,232

(5,286,570)(s,286,570)Unabsorbed depreciation c/I 2,066,027 3,220,543 (s,286,570)

,t9. Trade and oth€r payables

See accounting policy in note 36(H)

ln Taka 2019Trade payables due to related partiesOther trade payables

19.1

19.2935,084,i146

18,515,7411,383,442,147

38,261,609Trade payables 953,600,187 1,421,703,756Accrued expensesOther payables due to related parties

Other payables19.4

628,s95,082406,612,s65102,311,7s8

496,838,9276.957

5'1,327,680Other payables r.137.519.405 548.173.564

2.091,119.592'1,969.877,320

19.1 Trade payables due to related parties

ln Taka IVo,e 2019 2018

Hero Motocorp Ltd.NitolMachineries Ltd

19.1.1 928,747,580'1,362,839,0426 336 866 20 603 105

935,084,445 1.383,442.147

19.1.,1 USD 1 '1 ,063,104.00 is payable to Hero Motocorp Ltd. for inventories. The conversion rate used is Taka 83.95/ USD

m Co19


Tax base

18.2,1 Business loss

/Vote 20't8

fl


19.2 Other trade payables

ln Taka 2019Auto Fit Pvt. Ltd.M/s. Shamsur RahmanCovesko lndia Pvt. Ltd.Berger Paints Bangladesh LimitedBerger Paints lndia LimitedOmera Petroleum LimitedRun lndustriesShamia Car PaintBengal Gases CorporationSumon Hardware StoreBiswas Hardware StoreLinde Bangladesh LimitedZhejiang Wanfeng MotorcyclesZeal EnterpriseDelcot LimitedExpress lnsurance Ltd.Biswas Hardware Store

3,626,2145,67 4,703

133,0762,248.817

6,778,629234,075322,36839,760

52,77319,037,318

89,20319,2603,3082 106

't8,5't5,74't 38,261,609

'19.3

,Vote 20't9 2018Periodic dealer incentiveRoyaltyAdvertisement expensesProvision for warranty and corrective costsWorkers' Profit Participation FundSalary and allowanceslnterest on upas loanConsultancy, professional and legal feeElectricity and gas billAudit feeContribution to PFSecurity guard expenseCanteen expenseUnloading chargeGroup reporting feeSupport staff expenseDrive/s allowancesRepair and maintenanceConsumable itemsFuel, tolland parkingOffice expenseOtfice suppliesTelephone, mobile and internetFactory ExpenseLocalconveyancel\riscellaneous factory indirect expensesPaper, books and periodicalsPrinting and stationerylT supplies and maintenancePromotional expense (discount sharing with customer)lnterest on Taka term loanStaff lvelfare expenseVehicle rentTours and travel localOthers

19.3.1

198,695,950181,208,75877,413,77066,859,22855,640,23030,789,919I,144,6042,264,907r,600,0001,177,312

694,778676,030664,148604,640345,000322,000117,500

90,82066,22265,65541,49226,03323,25420,235'13,376

11,6258,9167,1401,500

148,050,738136,756,'16576,442,72527,759,51456,147,19927.134.064

2,290,7361,500,000

741,750389,426680,000734,554284,536345,000

3,211,95989,68333,82332,38686,65030,92520,84129,908

60,952

36,538'1,200

't0,071,784

3,737,50760,83740,000

2,175

#

20

628 082 496.838 927

20185,907,0683,621,'t083,209,1992,581,073t,397,,t06

738,602375,171359,r11233,600

62,31424,852t":

Accrued expenses

ln Taka


19.3.1 Salary and allowances

ln Taka 20't9Target variable payEarned leaveHouse rent and car allowanceGross salary

14,827,5448,573,3534,149,2583,239,760

14,686,3865,592,7433,810,4143,OM,521

30 789 919 27 134 064

19.4 Other payables due to related partiesSee accounting policy in note 36(H)

ln Taka 2019 20't 8Nitol lnsurance Company Ltd.HIrCL Netherlands B.V. (dividend payable)Hero l\rotooorp Ltd. (royalty payable)

6,957269,856,400136,756,165406,612,565 6,957

't9.5 Other payables

ln Taka 20't9 2018Withholding tax payableWorkers Participatory FundWorkers Welfare Foundation FundCollection of taxARRA Technologies LimitedWithholding VAT payableWo*ers Welfare FundMohona TradersM/S. Faiz Steel HouseAC World Electronics LimitedSensotec Automation & ControlLubricants Asia LimitedRockwell BangladeshLegalMindsMilon TradersPEB Steel Buildings Co. Ltd.Hussain EnterpriseMarks Automation LimitedSeba ProductsSIMA LabsTurbotic lnternationalAkhtar Furnishers LimitedPower Tech ElectricMis. Babar Ali Filling StationLighting BDAffection Printing & PackagingDiamond lnternationalBio-Access Tech Co.MD. Abu Syem RashelR R PapersRenasha Stationery & LibraryActive Computer & TechnologyRainbow EnterpriseEsquire Electronics LimitedHossain Denting & Painting WorkshopKarim Printing WorksCity Plaza lnternationalAmber lT Limited

46,182,13115,107,3225,614,7203,124,0643,373,7171,634,4661,332,634

429,811381,r88359,049214,286130,002129,757127,778126,803,125,525

109,84382,28'l74,92258,24042,85737,88136,00035,60029,82828,90021,10719,50013,0't8't1,549't1,52910,836

8,2'.14

7,7007,3353,1002,470

505

84,384

731,2373,361,884

66,962

319,444'14,859

1 ,277,952

35,600

6,965

3,'100

rffiQir-n(

Co

27

2018

#


ln Taka ,Vo,e 2019 2018Monita lndustrial Corporationlngersoll-Rand Tech. and Service Ltd.Auto Fit Pvt. Ltd.Precision ARC Robotic SystemsFairdeal Agencies (Prop. Goyal)Transcom Electronics LimitedKhusboo Scientific Pvt. Ltd.Mayesha ApparelsPersons (BD) Ltd.Bangla TechHoque Bhattacharjee Das & Co.GaziTanksStar Tech & Engineering Ltd.Care lnternationalRona Electric & ElectronicsSabbir AutoRetention monev aoainst contractor bill 19.5.1 22,964,890

3,808,8962,522,9122,437,5232,021,1781,297,9201,2U,932

832,000273,880244,091237,764172,50059,78635,10032,18014,5683,953

30,166,107'l02 311 758 51,327,680

19.5.'l Retention money against contractor bill

ln Taka 20't9 2018Build AsiaSiemens Ltd.PatilAutomation Pvt.Srinivasa ToolsA.P. Precision AutoArnob EnterpriseJSR EngineersUtopian Associates

11,021,6774,752,7934,593,265't,247,254

877,731472,170

24,878,7593,753,146

856,640677,563

22,964,890 30,'166,107

ln Taka ,Vote3l March

201931 March

2018Advance from related parlies 20 1 44.560,147Advance from customer 44,560,147

20.1 Advance from related parties

ln Taka31 March

20193'l March

2018Niloy l\4otors Ltd 44,560,147

2'l Revenue

See accounting policy in note 36(A)

ln Taka lvote 2019 2018Revenue from motorcycle sales 21.1 8.765,937,876 6,837,808,220

8.765.937.876 6,837,808,220

[ffiH

ooHA(

)

22

20. Advance from customer

,14,560,'147

V


2'1.1 Revenue from motorcycle sales

ln Taka cc 20,t9 2018Splendor PlusHF DeluxeGlamourlgnitorHunk SDHunkSplendor I SmartHunk SD MattHunk DD MattHF Deluxe KickPleasureSplendor I Smart PlusAchieverPassion Xpro

1001001251251501501'10

1501501001001 10150110

r,938.964,9921,447,313,0291,535,007,6301,353,632,624

810,807,695607,977,978253,022,343145,528,089'136,705,770122,065,163r r6,989,088105,057,16645,383,71641,942,720

1,636,075,9051,222,129,3802,397,530,160

215,625,000884,467 ,545359,362,190

122,618,040

9.060,438,003 6,837.808,220Lessr Periodic dealer incentive (187,849,912)

22. Cost of sales

ln Taka ,Vote 20't9 2018Opening finished goods at 1 April 77,923,908Cost of goods manufactured 22.1 7,1q0-963,092 4,967,681,643Cost of finished qoods available lor sale 7,268,887,000 4,967,681,643

Closing finished goods at 31 March (119,440,,r54) (77,923,908)7,149,446,846 4,889,757,735

22.1 Cost of goods manutactured

ln Taka ,Voae 20'19 2018Raw and packing materials consumed 22.1.1 6,955,239,491 4,801,653,667

6,955,239,491 4,801,653,667

Manutacturing overhead:DepreciationSalary and allowancesElectricity and gas billEmployee benefitsRepairs and maintenanceunloading chargeLand rental expenselnsurance expenseConsumablesEmployee uniformOvertime expensesAmortisationToolsMedicalexpensesDenting and re-workGenerator rental expenseRoad test expense

,107 ,122,909

70,449,15119,241,46312,326,378,10,938,227

4,483,4363,510,0103,288,4511,857,5471,390,314

685,635'174,065

115,204101,454

39,357

79,851,57150,747,803

5,434,8129,025,7914,925,8163,273,8382,700,0003,100,3001 ,241 4911,357,304

772,049150,485227,899113,724

12,3432,628,101

64,648

24.2

7

235,723,601 166,027,976

lm.RA/J

oDHAK

7 19 963 924 967 68'1 643

23

624.1

#


22.1.,1 Raw and packing malerials consumed

ln Taka ,Vofe 2019 2018Opening balancePurchase during the year

- lmported- Local purchase

6,4,17,678,623414,105,957

5,854,424,080446.706,524

1,575,399,566 75,922.62522.1.1.1

6.861 ,784,580 6,301.'130,608

Closing balanceScrap sales

8,437,184,146(1,475,538,394)

(6,406.26't)

6,377,053,233(1,57s,399,566)

6.955,239,491 4,801,653,667

22,1.1.'l Purchase during the year

ln TakaFor the year ended 31 March 2019

Parts componentsWheelSeatPaints & chemicalsUC related costsDieselConsumable itemsLP GaS

CO,MigwireRework-paintBarcode

orted6,1 18,488,642

155,883,08035,583,5i1833,283,46359,420,804

Local

310,47'l,'11357,888,304'12,070,683

2,377,O0010,854,560r0,674,361

3,372,2382,877,1203,258,603

Total6,118,488,642

466,354,19293,471,85345,354,14659,420,8042,377,000

10,854,56010,674,361

3,372,2342,877,1203,2s8,603

261 5 26,1 9756,402,659,538 414,105,957 6,816,765,495

Less: opening goods-in{ransitAdd: closing goods-in-transit

(r,012,795,979)1,057,815,064

(1,012,795,979)'t,057,8't5,064

6,447,678,623 414,105,957 6,861,784,580

22.1.1.2 Purchase during the year

ln TakaFor the year ended 3'l ltlarch 2018

lmported Local TotalParts & componentsWheelSeatPaints & chemicalsUC related costsDieselConsumable itemsLP GasCO,MigwireRework-paintBarcode

4,7 44 ,977 ,37178,837,69619,305,4429,938,982

64,491,235

278,409,73267 ,934,27956,700,457

16,244,73613,639,3547,896,0342,103,871

1,854,0001,739,008

'185,057

4,744,977,371357,247,428

a7 ,239,72266,639,44064,491,235't6,244,73613,639,3547,896,0342,103,871

1,854,000'1,739,008

185,0574 917 550 726 446 706 528 5 364 257 254

Less: opening goods-in-transitAdd: closing goods-in-transit

(7 5,922,625)1,012,795,979

17 5,922 ,625J1,012,795,979

5,854,424,080 446 706 528 6 301 130 608

23 Other income

ln Taka 20184 701 616

ffi co*

sales

24

20'19

4 701 6'16

#-,

Notes to the financial statemen ts(continued)

24. Generalandadministrativeexpenses

ln Taka Nole 2019 2018Salary and allowances

80,446,93515,025,9575,371,7661,640,1424,202,714

42,807,28720,267,573

7,800,8415,998,3955,638,0483,688,3052,622,1322,505,5952,382,679r,954,9661,20Aj251,202,5881,182,200't,159,196

922,431878,335866,523797,459545,957505,522476,727't90,940143,156136,05698,3't86't,05535,82634,14027,300

9,.t 61

7,8702,980

24.1Consultancy, professional and legal feeSecurity guard expenseBank chargesDepreciation expenseVAT cunent account adjustmentForeign travel expensesEmployee benefitslriscellaneous f actory indirect expensesLocal travel expensesRepair and maintenanceOffice expenseAudit feeTelephone, mobile and internetMeeting expensesRegistration and renewal expensesPrinting and stationeryFuel, toll and parkinglT supplies and maintenanceOffice suppliesElectricalgoodsLocalconveyanceVehicle insuranceVehicle rentDish line billPostage and courierConsumable itemsPaper, books and periodicalsRecruitment expenseAmortisationComputer accessoriesNon judicial stamp expenseLoss on disposal of assetsGroup reporting teeEntertainment expenseTransport expense

6

24.22,034,1214,508,679

128,8901,008,522

750,1981,919,806

741,7501,084,844

627,4061,456,722

581,2061,022,318

200,910390,958161,572217,207201,23675,026

7

99,200300,073

46,43137,0987,920

15,65031.711

390,630345,000

62,14550,085

146,'167,695 125.184.829

24.1 Salaries and allowanceg

ln Taka 2019 2018Gross salarySupport staff expenseTarget variable pay

GratuityHouse rent and car allowanceBonusGuest house rentEarned leaveDrive/s allowancesRelocation allowance

79,0fi,99735,lod,27612,628,4426,885,0856,312,9204,491,U23,600,6823,570,944r,350,250

68,806,76s23,547,50613,296,0867,'t51,9786,873,3033,392,0233,616,3513,413,0681,078,158

19 500Total salaries and allowances 153,256,438 131,194,738

Allocation of salaries and allowances 2019 2018Cost of salesGeneral and administrative expenses

70,449,15182,807,287

50,747,80380,446,935

Total salaries and allowances

25

153 256 '131 194.738

Notes to the financial state ments (conti nued)

24.2 Employee benefits

ln Taka2019 2018Staff canteen

Provident fundHealth insuranceStaff welfare

8,212,5684,117,5152,184,043

6,638 7963 499,1113.298,226

98,33717 84714.831 ,973 13,534.470

Allocation of employee benefits 20't9 2018Cost of salesGeneral and administrative expenses

12,326,378 I,025.7914,508,6792.505,595

14 831 973 '13 470

25. Selling and distribution expenses

ln Taka 2019 2018Royalty expenseAdvertisement expensesWarranty and corrective costsPeriodic dealer incentivePromotional expense (discount sharinq with customer)

181,208,75880,'t92,31639,099,714

136,756,165135,946,68127,759,514

148,050,738147,649.133

300,500,788 596,162,231

Net finance income/(cost)

See accounting policy in note 36(B)

ln Taka ,Voae 2019 2018lnterest income oni- Unimpaired held-to-maturity investments 26.1 50,085,754 31 ,342,087Total interest income arising for financial assets not measured at FVTPLCash dividend receivedDividend income receivableGain/(loss) on share trade

60,085,7541,075,037

347,4486,280,r50

31 .342.087

Finance income 57,788,389 31,342,087Financial liabilities measured at amortised cost - interest expenseNet foreign exchange lossFinancial assets at FVTPL- net change in tair value

26.2 (91,181,707)(20,836,743)fi2,787.889)

(73,077,013)(66,726,125)

Finance costs {124.806,339) (139,803,139)

Net finance income/(cost) recognised in profit or loss (57,017,950) (108,461,052)

26.'l Unimpaired held-to.maturity investments

ln Taka 2019 2018

lnterest receipt from FDRlnterest receipt from SND accountAccrued interest

38,933,41318,659,8502,192,49'l

28,744,242257,172

2,340,67360,085,754 31,342,087

ln Taka 2019 2018

lnterest on UPAS loan

CIL loan interestlnterest on term loan - local currencylnterest on overdraft account

55,069,69029,362,9,19

5,500,181248,887

10,243,7471,260,414

34.564,650502,751

26,505,05'1

ffi*tc

lnterest on term loan - forei rrency

26

91 't8t 707 73,077 013

26.

26.2 Financial liabilities measured at amorlised cost - interest expense


27 lncome tax (expenseyincome


ln Taka,Vote 2019 20,18

(88,962,906) (47,42s,134)

urrent tax expenseCurrent yearPrior year adjustment

(88,952,906) (47,425.134Oeterred tax liabilitiesDeferred tax (expenses )/income 18 679 350) /40.412 ,300)

679.350t t40.41 2,300)(90.642.2s6) (87 ,837,434)

See accounting policies in note 36(M)

Contingencies

During the current period, the Company received tax demand notices from Deputy Commissioner of Taxes (DCT) oncompletion of DCT assessment for income years 2015-2016 and 2017-2018. The amount of income tax demanded by DCTfor income years 20'15-2016 and 2017-2018 were BDT 5,087,075 and BDT 250,033,663 respectivety forwhich the Company iscurrently maintaining provisions of BDT 61,953 and BOT 47,425,134 respectively. The Company has appealed to theCommissioner of Taxes (CT) for both of the above mentioned income years.

28.1.2 Siemens Bangladesh Limited has claimed a total of BDT 6,200,683 to HMCL Niloy Bangladesh Limited (the Company) against2 invoices (BDT 5,798,773 and BDT 401,910) in respect of work performed by them at the Company's factory premises forsetting up temperature control system. The claim has been regarded as a disputed claim by the Company on the grounds thatSiemens Bangladesh Limited could not present any work order and job completion certillcate in respect of the amount invoicedfor the work performed by them.

28.1

2A.1.1

28.2

24.2.1

Commitments

Letters of credit

The following letters of credit were outstanding as at 31 March 2019 against which the Company is committed to purchaseproducts from different companies.

UC no. UC issue date Bank Currency UC value Outstanding

DC DAK900858411010953839-L4't1010951895-L4110'10953820-L4'1 '1010960000-L

USDUSDUSDUSDUSD

22 January 20192'1 March 20'19'13 March 20'19

21 iilarch 20'19

28 March 2019

HSBCscBSCB

SCB

280,00027,60317,05514,43918,697

278,50027,603

41214,43918,697

$339,652

28.2.2 Rental lease agreement

The Company is obligated under one cancellable lease for residential space that is renewable at the option of both the lessorand lessee. The Company is committed to pay one month rental amounting BDT 120,000 as minimum charge in case ofdiscontinuing or vacating the flat within 12 months from the start date of the contract.

28.2,3 Bank guarantee

The City Bank Limited issued an unconditional and continuation bank guarantee (BDT 1,34,671) on behalf ol HMCL Niloy

Bangladesh Limited against cash margin held.

The Honkong and Shanghai Banking Corporation issued 4 shipping guarantee (BDT 6,34,24,868) on behalf oI HMCL Niloy

Bangladesh Limited, against cash margin held.

27

28, Contingencies and commitments

/


28.2.4

28.2.4.1

Facility from Standard Chartered Bank

Facilities grantedln Taka

Term Loanslmport LCs - Secured

50,000,000690,000,000

Total Iacilities qranted 740,000,000

28.2.4.2 Security i Collateral

- Demand Promissory Note and Letter of Continuation for Taka 740,000,000 each.

- Registered hypothecation (general charge) over stock and book debts of HMCL Niloy Bangladesh Limited on pari passubasis with HSBC where Standard Cha(ered Bank's share would be Taka 740,000,000.

- Registered hypothecation charge over plant and machinery of HMCL Niloy Bangladesh Limited on pari passu basis withHSBC where Standard Chartered Bank's share would be Taka 740,000,000.

28.2.5

28.2.5.1

Faciliv from Hongkong & Shanghai Banking Corporation

Facilities granted

In Taka

Raw materials importClean import loanShipping guaranteeWorking capital (limited to BDT 600,000,000)Guarantee (limited to BDT 80,000,000)Overdraft (limited to BDT 400,000,000)Capital expenditure (import) (limited to BDT 23,225,054.49\Term loan ocal urchase limited to BDT 121 173 534.37

2,944,398,589

2,800,000,000

144,398,589

Total facilities qranted

28.2.5.2 Security / Collateral

- Demand Promissory Note for Taka 3,144,398,588.86 with Letter of Continuity and Revival.

- Corporate Guarantee executed by Niloy lvlotors Ltd. for Taka 1 ,414,979,364.99 with supporting Board Resolution.

- First charge over the Company's stocks of raw materials, work-in-progress and finished goods & Book Debts and

Receivables with the Office of the Registrar of Joinl Stock Companies and Farms (RJSC) on Pari Passu basis with otherlende(s) where HSBC's share is to be minamum of Taka 3,000,000,000.

28

- First charge over the Borrowe/s Plant & Machinery with the RJSC for Taka 144,398,588.86.

- Power olAttorney on Hypothecated Goods.

- Trade Financing GeneralAgreement for Trade tacility.

- Blanket counter indemnity for Guarantee facility.

- Letter of Comfort for USD 20,838,887 from HMCL Netherlands B.V to support the credit facilities extended to HNBL.

#


29. Capacityutilisation

For the year ended 31 March 2019Units

ProductionMeasurement

unitAnnual installed

capacity

Utilisationduring the

periodOver/(under)

utilisation[,Iotor bikes Number 150,000 't03,162 (46,838)

For the year ended 3l March 20'18

UnitsUtilisation

Measurcment Annual installed during the Over/(under)

30. Particulars of employees

During the year ended 31 March 2019 there were 136 employees (2018: 1 19) \rvho received salary of Taka 36,000 or above

3't Subsoquent events

No material events had occurred after the reporting date to the date of issue of these financial statements, which could affectthe values stated in the financial statements

co0HAK

29

Production unit capacitv period utilisationMotor bikes Number 150.000 75,.t15 (74,885)

*

Notes to the flnancial statements continued

32 Financial :nstruments - FairYalue3 and rl3k management

A. Accounting classltlcation6 and falrvalu€s

measured al fairvalue ifthe carving amounl is a reasonable approximation offair value.

c31 March 2019

Falrvalue -

hedging Mandalorily alIvore instruments FWPLOthers

FinancialassetsFVOCldebt FVOCI-equity atamortisedinstruments instruments cost

Otherllnanclalllablllties Tolal Level 1 Level 2 Level 3 Total

Financial assets measurcd at fair valuelnvestmenl in shares of listed 11.1 8l 957 930 81 930 81,957,930 81,957,930

Financlal assets not measuled atfalrvalueAdvances, deposits and prepaym€nts

lnveslments (excluding investmenl in sharesof lisled companaes)Trade and other rcceivablesCash and cash equivalenls

199,482,206

409.150.594

199,442,206,rc9.150.594

89.015.9/r01,396,652,631

89.015.9401,396,652,631

371

liabilities lair

1./r02.598.4757.302.358

2,091,119,592

1.:l02.698.4757.302.36A

2,091,119,592

13

1719

3,545.680.582 3.545.580.582

Ca Fahvalua3'l March 2018

Held-for- Oe3lgnated at hedgingtrading Iair value instrument3

Held-to-maturity

Loans and Avallable-for- Othertlnanclalsale liabilities Total Level 1 Level 2 Level 3

Financialas36ts not m6asured attair valueAdvances, deposits and prepayments

lnvestment in shares of lisled companiesTrade and other receivables

1111_1

1213

40.505.49489,513,438

238 784.830

89,513,43840.505,494

238.784.830743,370,428Cash and cash 743,370,a2A

7A 322 32 268 112 174 590

ilities

Financial liabilitles not maasured at tairvalueBank overdraftLoans and borowingsEmployee benelitsTrade and othor payables

30 v81 907 118 2,810,907 118

't8.999.194814,87E,626

7,151,9741,969,877,320

18.999.194814,878,626

7,151,978

1,969,877,320

2

ffiH

o* 0H

9

1213

Flnancialllabllltles not meaaunad at fair valueBank overdrattLoans and bonowinosEmolovee benefilsTrade and other payables

Total

1315

17

19


32. Financial instruments - Fair values and sk managsment (continued)

B. Financial risk management

The management has overall responsibility for the establishment and oversight of the Company'srisk management framework. The Company's risk management policies are established to identifyand analyse the risks faced by it, to set appropriate risk limits and controls, and to monitor risks andadherence to limits. Risk management policies, procedures and systems are reviewed regularly toreflect changes in market conditions and the Company's activities. The Company has exposure tothe following risks from its use of financial instruments:

. credit risk

.liquidity risk

. market risk

32.1 Credit risk

(a) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximumexposure to credit risk at the reporting date was:

ln Taka irote 2019 2018Trade and other receivables 12 89,015,940 238,784,830

89,015,940 238,784,830

b) lmpairment losses

There were no impairment losses to be recognised for such instrument for the period

32.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligationsassociated with its financial liabilities that are settled by delivering cash or another financial asset.The Company's approach to managing liquidity is to ensure, as far as possible, that it will have

sufficient liquidity to meet its liabilities when they are due, under both normal and stressedcondilions, without incurring una losses or risking damage to the Company's reputation

fl

31

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financialinstrument fails to meet its contractual obligations, and arises principally from the Company'sreceivables from customers and investment securities. Credit risk is mainly attributable to trade andother receivables. Management has a credit policy in place and the exposure to credit risk ismonitored on an ongoing basis.

Notes to the financial statements continued

Exposure to liquidity risk

The fo owing are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and includeestimated interest payments and exclude the impact of nefting agreements.

Contractual cash flowsCarryingamount

2 monthsor less

2-12months

More thanln TakaShare money depositLoans and borrowings

42',1

1,402,698,47 52 091,'t 19,592

Tota I

42',1

'1,402,698,47 52,091,119,592

853,698,9822,091,'t',tg,592

548,999,493

1-2 rs42',1

2-5 rs 5 ars

Trade and other payables3 ,818,488 3,493,818,488 2,944,818,574 548,999,493 42'.1

31 March 2018

ln TakaCarryingamount Total

2 monthsor less

2-12months 1-2 years 2-5 years

More than5 vears

Share money depositLoans and borrowingsTrade and other payaOleq

2,567,221814,878,626

1,969,877,320

2,567,221814,878,626

1,969,877,320

2,567,221684,424,506

'l 0,91 0130,454,120

1,969,866,4102,787,323,167 2 787 323.167 1 866,410 687,002,637969 130,454,120

32.3 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the Company's income or the valueof its holdings of financial instruments. The objective of the Company's management is to manage and control market risk exposures within acceptableparameters, while optimising the return

[m*tc

fl

31 March 2019

Contractual cash flows


a) Curr6ncy risk

Exposurc lo cutency isk

The summary quantitative data about the Company's exposure lo currency risk as reported to the management of the Companybased is as follows:

31 March 2019 31 Ma.ch 2018uso uso

Loans and borrowings- UPAS loanPayable - Hero Motocorp Ltd.Payable - HMCL Nelherlands B.V.Payable - Autolit Pvt. Ltd.Payable - PatilAutomation Pvt.Payable - Coveslro lndia Pvt. Ltd.Payable - Berger Paints lndia LimitedPayable - Srinivasa ToolsPayable - A.P. Precision AutoPayable - PEB Steel Buildings Co. Ltd.Payable - SIMA Labs Pvt. Ltd.Payable - Zheijiang Wanfeng MotorcyclesPayable - Fairdeal Agencies (Prop. coyal)Payable - Monila lndustrial CorporationPayable - Precision ARC Robotic SystemsPayable - JSR EngineersAdvance - Receivable from HSBCUPAS loan from SCBUPAS loan from HSBCAdvance - SllVlA Labs Pvt. Ltd.Receivable - Hero [.4otocorp Ltd.

(9.794,214\(19,174,657)

(72,881),

117,029),

175845.9s0

(700)

1210,842),(15,600)(45,780)

12,429)(10,296)132,674

(2,025,594)(5,584,74S)

175

Net gxposure {31.705.948) 136 821 ,922)

The following significant exchange rates have been applied

2019Year end spot rate

2018US Dollar

Sensitivity analysis

In Taka

83.95

Equlty, n6t of tax

83.20

A reasonably possible strengthening / (weakening) of Ioreign currency against Taka at 3't frarch would have effected themeasurement of financial instruments denominated in a foreign currency and increased (decreased) equity and profit or loss by theamounts shown below. This analysis is based on foreign currency exchange rate variances lhat the Company considered to bereasonably possible at the end of the reporting period. The analysis assumes that all other vadables, in particular interest rates,remain constant and ignores any impact of forecast sales and purchases.

Protit or lossStr6ngth6nlng W6akenlng Slrongthoning Weakening

31 March 2019USD o/o move

(79.851.430) 79,85r,430 {79,851,430} 79,851,43085'l

3l March 2018USD (3% movement) (91,907.516) 91,907,516 (91,S07,516) 91,907,516

(91,907.516) 91,907,516 (91,907,s16) 91,907,516

b) lntsrost rate rlsk

lnterest rate risk is the risk that arises due lo changes in interest rates on borrowings and interest rates on fixed deposit receipt(FDR). The Company is not significantly exposed to fluctuation in interesl rates as it has neither floating interest rate bearing

financial liabilities nor has any type ofderivative instrument in order to hedge interest rate risk as at the reporting date.

At the reporting date, the interest rate profile ofthe Company's interest bearing financial instruments was:

Nominalamountlh Taka 20 't9 2018

Fixed rale instrumentsFinancial assetslnvestment in FDR

Financlal liabilitiesLoans and bonowings

449,412,403

814,878,626

ffi c

A(o

Variable rate instrumentsCash al bank

33 fl038 334 463 920

(16,/r58,123)

l12,672,OOOI(3,214,4901

(70,36ir1

{5,1,714)(38,228)(16,642){1,r,857)(10,455)

(1,500)(700)

767,089,769

1,iro2,698,475


Salary and allowancesBonus and incentiveProvident fundOther benefits

39,843,7431,495,6962,466,941

15,952,341

31,772,56411,370,7't'l1,958,9604,688,737

59,758,72'1 49,790,972

(c) Other related party transactions

Sale of goodsNiloy Motors LimitedNitol Motors Ltd.

Purchase of goods and servicesHero Molocorp Ltd.Nitol lvlachineries Ltd.Nitol Tours & TravelsNitol Motors LtdNreach-Net (Pvt) Ltd.Nitol ElectronicsNitol lnsurance Company Ltd.NITS Services (Pvl) Ltd.

OthersNiloy lvlotors LimitedNitol l\4otors Ltd.Hero l\4otocorp Ltd.Hero Motocorp Ltd.HMCL Netherlands B.V

9,744,491,2136,412,500

5,619,038,98'l332,470,268

463,4113,220,445

't2,178,10424,000

323,079,022541,303,82270,977,243

136,756,165269,856,400

4,960,692,35'l320,171 ,190

1 ,1 10,001

6,1M,01533,251

(928,747,580)(20,603,r 05)

68,626,643(136,756,165)(269,856,400)

1,362,839,04220,603,105

6,957

7,628,000,906 (/14,560,147) 235.478.547

9,817,66'l

34- Basis of measurement

35. Going concern

The Company has adequate resources to continue in operation for the foreseeable future. For this reason,

the directors continue to adopt going concern basis in preparing the financial statements. The currentent fund to meet the present requirements of its existing business

[ffi ooH

resources of the Company provide s

34

33. Related party transactions

(a) Parent and ultimate controlling party

HMCL Niloy Bangladesh Limited is a subsidiary of HMCL Netherlands 8.V., which is a wholly ownedsubsidiary of Hero Motocorp Limited. Therefore, HMCL Netherlands B.V. is the parent of the Company andHero Motocorp Limited is the ultimate controlling party.

(b) Transaction with key management personnel

Key management personnel compensation comprised the following:

ln Taka 2019 2018

ln Taka

Transaction values for the year Balance outstanding as atended 3'l March 31 March

2019 2018 2019 2018

201,296,3012,873,436

The flnancial statements have been prepared on the hlstorical cost basis except inventories which ismeasured at lower of cost and net realisable value on each reporting date.

/


36. Significantaccounting policies

The Company has consistently applied the following accounting policies to all periods presented in thesefinancial statements.

Set out below is an index of the significant accounting policies, the details of which are available on the pagesthat follow:

A. RevenueB. Finance income and finance costsC. Foreign currencyD. lncome taxE. lnventoriesF. Property, plant and equipmentG. lntangible assetsH. Financialinslrumentsl. Share capitalJ. lmpairmentK. ProvisionsL. LeasesM. ContingenciesN. Employee benefitsO. Workers' profit participation fundP. Statement of cash flowsQ. Reporting period

35

36JO

373839434344454546464646

A. Revenue

Revenue recognition under IFRS 15 (applicable from 1 April 2018)

Revenue is presented net of periodic dealer incentive and promotional expense (discount sharing withcustomer). Revenue is recognised when control of the goods is transferred to the customer at an amount thatreflects the consideration to which the Company expects to be entitled in exchange for those goods. NiloyMotors Limited is the only and exclusive distributor for HlilcL Niloy Bangladesh Limited according to the JointVenture agreement of the Company. As a result revenue will be recognised when the product is transferred orsold to Niloy Motors Limited.

Finance income and finance cosE

The Company's finance income and finance costs include:

. interest income from fixed deposit receipt (FDR)

. interest expense from long term loans

e cost of the asset

B

ffiH

tDH

construction period are included in

Revenue recognition under BAS't8 (applicable before 1 April 20'18)

Revenue is recognised when products are despatched to customers, i.e., when the significant risk andrewards of ownership have been transferred to distributors. Niloy Motors Limited is the only and exclusivedistributor for HMCL Niloy Bangladesh Limited according to the Joint Venture agreement of the Company. Asa result revenue will be recognised when the product is transferred or sold to Niloy Motors Limited.

lnterest income or cost is recognised using the effective interest method. Finance income rePresents interest

income on fixed deposits and is recognised on an accrual basis. As per IAS-23 the finance costs directly

attributable to the acquisition and construction of the factory and plant and machineries during the

35 N

Notes to the flnancial statements (continued)

C. Foreign currency

F o re i g n c u rre n c y tra ns actio ns

Transactions in foreign currencies are transtated to the respective functional currencies of the Companies atexchange rates at the dates of the transactions.

lvlonetary assets and liabilities denominated in foreign currencies are translated into the functional currency atthe exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in

a foreign currency are translated into the functional currency at the exchange rate when the fair value wasdetermined. Non-monetary items that are measured based on historical cost in a foreign currency aretranslated at the exchange rate at the date of the transaction. Foreign currency differences are recognised inprofit or loss in accordance with IAS 21: The Effects of Changes in Foreign Exchange Rates.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year andany adjustment to the tax payable or receivable in respect of previous years. The amount of current taxpayable or receivable is the best estimate of the tax amount expected to be paid or received that reflectsuncertainty related to income taxes, if any. lt is measured using tax rates enacted or substantively enacted atthe reporting date.

Current tax assets and liabilities are offset only if certain criteria are met

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amount of assets andliabilities for financial reporting purpose and the amounts used for taxation purposes. Deferred tax is notrecognised for:

. temporary differences on the initial recognition of assets or liabilities in a transaction that is not a businesscombination and that affects neither accounting nor taxable prollt or loss;

. temporary differences related to investments in subsidiaries, associates and.ioint arrangements to the extentthat the Company is able to control the timing of the reversal of the temporary differences and it is probablethat they will not reverse in the foreseeable future; and

. taxable temporary differences arising on the initial recognition of goodwill

mBA8

coAK

36

D. lncome tax

lncome tax expense comprises current and deferred tax. lt is recognised in proflt and loss except to the extentthat relates to an item recognised directly in equity or in other comprehensive income (OCl).

As per lncome Tax Ordinance 1984, minimum tax provision for industrial undertakings before commencementof commercial production is 0.6% on gross receipt as per section 82C. The applicable tax rate for theCompany is currently 5olo.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary

differences to the extent that it is probable that future taxable profits will be available against which they can

be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no

longer probable that the related tax benefit will be realised; such reductions are reversed when the probability

of future taxable prollts improves.

N


Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that ithas become probable that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when theyreverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflecls the tax consequences that would follow from the manner in whichthe Company expects, at the reporting date, to recover or seftle the carrying amount of its assets andliabilities.

Deferred tax assets and liabilities are offset only if certain criteria are met

E. lnventories

lnventories are measured at the lower of cost and net realisable value. In the case of manufacturedinventories and work in progress, cost includes an appropriate share of production over heads based onnormal operating capacity. Net realisable value represents the estimated selling price for inventories less allestimated costs of completion and costs necessary to make the sale.

F. Property, plant and equipment

i. Recognition and measurement

lf significant parts of an item of property, plant and equipment have different useful lives, then they areaccounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in proflt or loss

ii. Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated withthe expenditure will flow to the Company. The cost of the day{o-day servicing of property, plant andequipment are recognised in profit or loss as incurred.

iii. Deprec iation

Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimatedresidual values of 5% using the straight-line method over their estimated useful lives, and is generallyrecognised in profit or loss. Leased assets are depreciated over the shorter of the lease term and their usefullives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.Depreciation is charged for the full month in the month of acquisition and no depreciation is charged in the

Items of property, plant and equipment are measured at cost less accumulated depreciation and anyaccumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition ofthe asset and bringing to the location and condition necessary for it to be capable of operating in the intendedmanner. The cost of self constructed asset includes the cost of material, direct labour and any other costdirectly attributable to bringing the assets to a working condition for their intended use.

month of disposal or retirement.

N


The estimated useful lives of property, plant and equipment for current and comparative periods are asfollows:

- Computers and electrical equipment- Furniture and flxtures- Motor Vehicles- Office equipment- Plant and lvlachinery- Factory building

3 years10 years6 years5 years

10 years30 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted ifappropriate.

iv. Retirement and dr:sposa/s

An asset is derecognised on disposal or when no future economic benefits are expected from its use andsubsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined by thedifference between the net disposal proceeds and the carrying amount of the asset and is recognised in prolitor loss.

v. Capital wort in progress

Property, plant and equipment that is in the process of construction/acquisition/import is accounted for ascapital work in progress until construction/acquisition/import is completed and measured at cost. Theexpenditure capitalised under this head is for the construction of factory building along with the acquisition andinstallation of plant and machineries. All expenses including borrowing costs, incurred for the construction ofthe building and the installation of the machineries until it is converted into working condition are recordedunder this head.

G. lntangible assets

i, Recognifion and measurement

i i. Subsequent expenditu re

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in thespecific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill

and brands, is recognised in profit or loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using

the straight-line method over their estimated useful lives, from the month of purchase, and is generally

recognised in profit or loss. Goodwill is not amortised. Amortisation methods, useful lives and residual values

are reviewed at each reporting date and adjusted if appropriate.

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lntangible assets, including software, that are acquired by the Company and have finite useful lives aremeasured at cost less accumulated amortisation and any accumulated impairment losses.

The estlmated useful life of computer software is 3 years.

n

ft


H. Financialinstruments

Policy applicable from 1 April 2018i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All otherfinancial assets and flnancial liabilities are initially recognised when the Company becomes a party to thecontractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liabilityis initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributableto its acquisition or issue. A trade receivable without a significant financing component is initially measured atthe transaction price.

Financial assets - Policy applicable from 1 April 2018

On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment;FVOCI - equity investmenti or FWPL.

Financial assets are not reclassified subsequenl to their initial recognition unless the Company changes itsbusiness model for managing financial assets, in which case all affected financial assets are reclassified onthe first day of the first reporting period following the change in the business model.

A llnancial asset is measured at amortised cost if it meets both of the following conditions and is notdesignated as at FWPL:

- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- its contractual terms give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated asAt FWPL:

- it is held within a business model whose objective is achieved by both collecting contractual cash flows andselling flnancial assets; and- its contractual terms give rise on specifled dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect topresent subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measuredat FWPL. On initial recognition, the Company may irrevocably designate a llnancial asset that otherwisemeets the requirements to be measured at amortised cost or at FVOCI as at FWPL if doing so eliminates orsignifl cantly reduces an accounting mismatch that would otherwise arise

CI

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o

ii. Classification and su bsequent measurement

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Financial assets - Business model assessmentThe Company makes an assessment of the objective of the business model in which a financial asset is heldat a portfolio level because this best reflects the way the business is managed and information is provided tomanagement. The information considered includes:

- the stated policies and objectives for the portfolio and the operation of those policies in practice. Theseinclude whether management's strategy focuses on earning contractual interest income, maintaining aparticular interest rate profile, matching the duration of the financial assets to the duration of any relatedliabilities or expected cash outflows or realising cash flows through the sale of the assets;

- how the performance of the portfolio is evaluated and reported to the Company's management;

- the risks that affect the performance of the business model (and the flnancial assets held within thatbusiness model) and how those risks are managed;

Transfers of financial assets to third parties in transactions that do not qualify for de recognition are notconsidered sales for this purpose, consistent with the Company's continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair valuebasis are measured at FVTPL.

For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initialrecognition. 'lnterest' is dellned as consideration for the time value of money and for the credit risk associatedwith the principal amount outstanding during a particular period of time and for other basic lending risks andcosts (e.9. liquidity risk and administrative costs), as well as a profit margin.

- terms that may adjust the contractual coupon rale, including variable-rate features;

- prepayment and extension features; and

A prepayment feature is consistent with the solely payments of principal and interest criterion if theprepayment amount substantially represents unpaid amounts of principal and interest on the principal amount

outstanding, which may include reasonable additional compensation for early termination of the contract.Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature

that permits or requires prepayment at an amount that substantially represents the contractual par amountplus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for

early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is

ot

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- how managers of the business are compensated - e.g. whether compensation is based on the fair value ofthe assets managed or the contractual cash flows collected; and

Financial assets -Assessment whether contractual cash flows are solely payments of principal andinterest

ln assessing whether the contractual cash flows are solely payments of principal and interest, the Companyconsiders the contractual terms of the instrument. This includes assessing whether the financial assetcontains a contractual term that could change the timing or amount of contractual cash flows such that itwould not meet this condition. ln making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that limit the Company's claim to cash flows from specified assets (e.9. non-recourse features).

insigniflcant at initial recognition.

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Financial liabilities - Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FWPL. A flnancial liability is classilied asat FWPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.Financial liabilities at FWPL are measured at fair value and net gains and losses, including any interestexpense, are recognised in proflt or loss. Other financial liabilities are subsequently measured at amortisedcost using the effective interest method. lnterest expense and foreign exchange gains and losses arerecognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

iii. Derecognition

Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financialasset expire, or it transfers the rights to receive the contractual cash flows in a transaction in whichsubstantially all of the risks and rewards of ownership of the flnancial asset are transferred or in which theCompany neither transfers nor retains substantially all of the risks and rewards of ownership and it does notretain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognised in its statement of financialposition, but retains either all or substantially all of the risks and rewards of the transferred assets. ln thesecases, the transferred assets are not derecognised.

The Company derecognises a tlnancial liability when its contractual obligations are discharged or cancelled, orexpire. The Company also derecognises a financial liability when its terms are modified and the cash flows ofthe modified liability are substantially different, in which case a new financial liability based on the modifiedterms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and theconsideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in prollt orloss.

iv. OffsettingFinancial assets and flnancial liabilities are offset and the net amount presented in the statement of financialposition when, and only when, the Company currently has a legally enforceable right to set off the amountsand it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Financial assets atFVTPL

These assets are subsequently measured at fair value. Net gains and losses,including dividend income, are recognised in profit or loss.

Financial assets atamortised cost

These assets are subsequently measured at amortised cost using the effectiveinterest method. The amortised cost is reduced by impairment losses. lnterestincome, foreign exchange gains and losses and impairment are recognised in profitor loss. Any qain or loss on derecognition is recognised in profit or loss.

ffi CoDHA(

4t

Financial assets - Subsequent measurement and gains and losses

Financial liabilities

/


Policy applicable before 1 April 20'18

The Company classifies non-derivative financial assets into the following categories: financial assets at fairvalue through prolit or loss, held{o-maturity financial assets, loans and receivables and available-for-salefinancial assets.

The Company classifies non-derivative financial liabilities into the other llnancial liabilities category

i. Non-derivative financial assets and tinancial liabilities - Recognition and derecognition

The Company initially recognises loans and receivables and debt securities issued on the date when they areoriginated. All other financial assets and financial liabilities are initially recognised on the trade date when theentity becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial asset when the contractual rights to the cash flows from the assetexpire, or it kansfers the rights to receive the contractual cash flows in a transaction in which substantially allof the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retainssubstantially all of the risks and rewards of ownership and does not retain control over the transferred asset.Any interest in such derecognised tlnancial assets that is created or retained by the Company is recognisedas a separate asset or liability.

The Company derecognises a financial Iiability when its contractual obligations are discharged or cancelled, orexpire.

Financial assets and financial liabilities are offset and the net amount presented in the statement of financialposition when, and only when, the Company has a legal right to offset the amounts and intends either to settlethem on a net basis or to realise the asset and settle the liability simultaneously.

ii. Non-derivative financial assets - Measurement

Financial assets at fair value through profit or loss

Held-to-matu ty financra, assels

These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequentto initial recognition, they are measured at amortised cost using the effective interest method.

Loans and receivables

These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent

to initial recognition, they are measured at amortised cost using the effective interest method.

Casr, and casr, equivalenb

ln the statement of cash flows, cash and cash equivalents includes cash in hand and cash at bank which form

an integrat part of the Company's cash management. Cash and cash equivalent also includes a Fixed Deposit

3 months

oD

C

Receipt (FDR) with a renewal Peri

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>4

A flnancial asset is classifled as at fair value through profit or loss if it is classifled as held-for-trading or isdesignated as such on initial recognition. Directly attributable transaction costs are recognised in prolit or lossas incurred. Financial assets at fair value through proUt or loss are measured at fair value and changestherein, including any interest or dividend income, are recognised in profit or loss.


Ava i I abl e-f o r-s al e ti n a nc i a I asse6

These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequentto initial recognition, they are measured at fair value and changes therein, other than impairment losses andforeign currency differences on debt instruments are recognised in OCI and accumulated in the fair valuereserve. When these assets are derecognised, the gain or loss accumulated in equity is reclassified to profitor loss.

iii. Non-derivative financial liabilities - measurement

Other non-derivative linancial liabilities are initially measured at fair value less any directly attibutabletransaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using theeffective interest method.

lntercompany payableslntercompany payables are comprised of balances that remain outstanding at year end arising fromtransactions with other entities that are sister concern to Nitol Motors Ltd (Shareholder). These are recognisedinitially at fair value.

Trade and other payablesPayables are recognised initially at fair value. Subsequent to initial recognition, trade payables are stated atamortised cost using the effective interest method. Other payables includes any amounts outstanding tosuppliers/contractors of machineries and equipment, professional and legal fees in relation to factoryconstruction and withholding VAT and tax payables.

Long term liabilitieslnterest bearing loans includes long term bank loans. These are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated atamortised cost using the effective interest method.

l. Share capital

Ordinary shares

Ordinary shares are classified as equity. lncremental costs directly attributable to the issue of ordinary sharesare recognised as a deduction from equity. lncome tax relating to transaction costs of an equity transactionare accounted for in accordance with IAS 12.

J. lmpairment

i - Non-derivative ti nancial assels

Financial assets not classified as at fair value through prollt or loss, including an interest in an equityaccounted lnvestee, are assessed at each reporting date to determine whether there is objective evidence ofimpairment.

Objective evidence that financial assets are impaired includes:. default or delinquency by a debtor;. restructuring of an amount due to the Company on terms that the Company would not consider otherwise,. indications that a debtor or issuer will enter bankruptcy;. adverse changes in the payment status of borrowers or issuers;. the disappearance of an active market for a security because of financial difficulties; or

is measurable decrease in expected cash flows from a group of. observable dfinancial assets

ata indicating th

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A financial liability is classified as at fair value through profit or loss if it is classified as held-for{rading or isdesignated as such on initial recognition. Directly attributable transaction costs are recognised in profit or lossas incurred. Financial liabilities at fair value through profit or loss are measured at fair value and changestherein, including any interest expense, are recognised in profit or loss.

N


For an investment in an equity security, objective evidence of impairment includes a significant or prolongeddecline in its fair value below its cost.

The Company considers evidence of impairment for these assets at both an individual asset and a collectivelevel. All individually significant assets are individually assessed for impairment. Those found not to beimpaired are then collectively assessed for any impairment that has been incurred but not yet individuallyidentified. Assets that are not individually significant are collectively assessed for impairment. Collectiveassessment is carried out by grouping together assets with similar risk characteristics.

ln assessing collective impairment, the Company uses historical information on the timing of recoveries andthe amount of loss incurred, and makes an adjustment if current economic and credit conditions are such thatthe actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss is calculated as the difference between an asset's carrying amount and the present valueof the estimated future cash flows discounted at the asset's original effective interest rate. Losses arerecognised in profit or loss and reflected in an allowance account. When the Company considers that thereare no realistic prospects of recovery of the asset, the relevant amounts are written off. lf the amount ofimpairment loss subsequently decreases and the decrease can be related objectively to an event occurringafter the impairment was recognised, then the previously recognised impairment loss is reversed throughprofit or loss.

Ava i I abl e-fo r-s al e f i n an c i al as sets

lmpairment losses on available-for-sale llnancial assets are recognised by reclassifying the lossesaccumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between theacquisition cost (net of any principal repayment and amortisation) and the current fair value, less anyimpairment loss previously recognised in prollt or loss. lf the fair value of an impaired available-for-sale debtsecurity subsequently increases and the increase can be related objectively to an event occurring after theimpairment loss was recognised, then the impairment loss is reversed through proUt or loss. lmpairmentlosses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale arenot reversed through profit or loss.

ll. Non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other thanbiological assets, investment property, inventories and deferred tax assets) to determane whether there is anyindication of impairment. lf any such indication exists, then the asset's recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cashinflows from continuing use that are largely independent of the cash inflows of other assets or CGUS.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to

sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-

tax discount rate that reflects current market assessments of the time value of money and the risks specific to

the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

For other assets, an impairment loss is reversed only to the extent that the asset's carrying amount does not

exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no

impairment loss had been recognised.

K. Provisions

provisions are recognised at the reporting date if, as a result of past events, the Company has a present legal

or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic

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benefits will be required to settle th ation

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Financial assets measured at amodised cost

{


L. Leases

l. Determining whether an arrangement contains a tease

At inception of an arrangement, the Company determines whether the arrangement is or contains a lease

At inception or on reassessment of an arrangement that contains a lease, the Company separates paymentsand other consideration required by the arrangement into those for the lease and those for other elements onthe basis of their relative fair values. lf the Company concludes for a finance lease that it is impracticable toseparate the payments reliably, then an asset and a liability are recognised at an amount equal to the fairvalue of the underlying asset; subsequently, the liability is reduced as payments are made and an imputedfinance cost on the Iiability is recognised using the Company's incremental borrowing rate.

,r. Leased assels

Assets held by the Company under leases that transfer to the Company substantially all of the risks andrewards of ownership are classified as finance leases. The leased assets are measured initially at an amountequal to the lower of their fair value and the present value of the minimum lease payments. Subsequent toinitial recognition, the assets are accounted for in accordance with the accounting policy applicable to thatasset.

Assets held under other leases are classified as operating leases and are not recognised in the Company'sstatement of financial position.

lll. Lease payments

Payments made under operating leases are recognised in profit or loss on a straightline basis over the termof the lease. Lease incentives received are recognised as an integral part of the total lease expense, over theterm of the lease.

Minimum lease payments made under flnance leases are apportioned between the finance expense and thereduction of the outstanding liability. The linance expense is allocated to each period during the lease term soas to produce a constant periodic rate of interest on the remaining balance of the liability.

M. Contingencies

Contingencies arising from claims, litigation assessments, fines, penalties, etc. are recorded when it isprobable that a liability has been incurred and the amount can reasonably be measured.

i. Contingent liability

Contingent liability is a possible obligation that arises from past events and whose existence will be confirmedonly by the occurrence or non-occurrence of one or more uncertain future events not wholly within the controlof the entity.

Contingent liability should not be recognised in the financial statements, but may require disclosure. Aprovision should be recognised in the period in which the recognition criteria of provision have been met.

ii. Contingent asset

Contingent asset is a possible asset that arises from past events and whose existence will be confirmed only

by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of

the entity.

A contingent asset should not be recognised. Only when the realisation of the related economic benefits is

virtually certain should recognition take place provided that it can be measured reliably because, at that point,

45

the asset is no longer contingent.

/

NStes to the flnancial statements (continued)

N. Employee benefits

The Company maintains a defned contribution plan for its eligible permanent employees. The eligibility isdetermined according to the terms and conditions set forth in the respective deeds.

Defined contribution plan (provident fund)

A deflned contribution plan is a post-employment beneflt plan under which an entity pays fixed contributionsand will have no legal or constructive obligation to pay further amounts. Obligations for contribution to definedcontribution plan are expensed as the related service is provided. Prepaid contributions are recognised as anasset to the extent that a cash refund or a reduction in future payments is available.

The Company contributes to a provident fund scheme (defined contribution plan) for employees of theCompany eligible to be members of the fund in accordance with the rules of the provident fund. All permanentemployees contribute 7% of their basic salary to the provident fund and the Company also makes equalcontribution.

Retirement benefit obligation (gratuity)

The Company operates an unfunded gratuity scheme for its permanent employees, under which an employeeis entitled to the benefits depending on the length of services and last drawn basic salary.

Poected Unit Credit method is used to measure the present value of delined benefit obligations and relatedcurrent and past service cost and mutually compatible actuarial assumptions about demographic and financialvariables are used.

Short-term employee benefits

O. Workers' profit participation fund

P. Statement of cash flows

The net cash flow from operating activities is determined by adjusting proliuloss for the year under indirectmethod as per IAS 7.

a, Rsporting period

The financial year of the Company covers one year from 1 April to 31 March and is followed consistentlyThese financial statements cover period from 1 April 2018 to 31 March 2019.

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46

This relates to leave encashment and is measured on an undiscounted basis and expensed as the relatedservice is provided. A liability is recognised for the amount expected to be paid if the company has a presentlegal or constructive obligation to pay this amount as a result of past service provided by the employee andthe obligation can be estimated reliably. Accordingly, necessary provision is made for the amount of annualleave encashment based on the latest basic salary. This benefit is applicable for employees as per servicerules.

The Company provides 5olo of its net proflt as a contribution to workers' profit participation fund before tax andcharging such expense in accordance with The Bangladesh Labour Act 2006 (as amended in 2013).

t


37. Standards issued but not yet effective

ln January 2018, the lnstitute of Chartered Accountants of Bangladesh (ICAB) has adopted lnternationalFinancial Reporting Standards issued by the lnternational Accounting Standards Board as lFRSS. As theICAB previously adopted such standards as Bangladesh Financial Reporting Standards without anymodification, this adoption will not have any impact on the financial statements of the Company going fonvard.

The following table shows standard and amendment to standard effective for annual period beginning on orafter 1 January 2019 and earlier application is permitted. However, the Company has not early applied thefollowing new standard in preparing these financial statements.

Summary of the requirements

IFRS 16 Leases IFRS 16 eliminates the currentoperating/finance lease dual accounting modelfor leases. lnstead, there is a single, on-balance sheet accounting model, similar tocurrent finance lease accounting. lssued in

January 2016, the new IFRS will replace theexisting guidance in IAS 17 Leases.

The standard is etfective for annual periodsbeginning on or after 1 January 2019. Eadyadoption is permitted if IFRS 15 Revenue fromContracts with Customers is also adopted.

The Company has yet to assess thepotential impact of IFRS 16 on itsfinancial statements.

EH4tr c

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38. Comparatives

Comparative information has been disclosed in respect of 2018 for all numerical information in the financial

statements and also the nanative and descriptive information when it is relevant for understanding of the

current year's fi nancial statements.

To facilitate comparison, certain relevant balances pertaining to the previous year have been rearranged/

restated/ reclassilied whenever considered necessary to conform to current period's presentation.

New standardsPossible impact on financial

statements

hmcl niloy bangladesh limited - hero motocorp

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