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Hero MotoCorp Ltd
Industry :  Automobiles - Motorcycles / Mopeds
BSE Code
ISIN Demat
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As on: Jun 10, 2023 02:38 AM

Dear Members,

Your Directors are pleased to present the thirty ninth annual report, together with the Company?s audited financial statements for the financial year ended MarcRs 31, 2022.


The standalone and consolidated financial highlights of your Company are as follows:

(Rs in crore)

Standalone Consolidated
Particulars Year ended Year ended
MarcRs 31, 2022 MarcRs 31, 2021 MarcRs 31, 2022 MarcRs 31, 2021
Total Income 29,802.38 31,380.47 30,106.29 31,517.09
Profit before Finance cost and Depreciation 3,925.68 4,599.09 3,999.78 4,657.41
Finance cost 25.80 21.84 53.10 46.41
Depreciation and amortisation expenses 649.75 676.87 689.52 715.12
Profit from ordinary activities before share of Profit / (Loss) of associates 3,250.13 3,900.38 3,257.16 3,895.88
Profit/(Loss) of associates
Share in net profit/(loss) of associates - - (199.05) (46.56)
Profit from ordinary activities before tax 3,250.13 3,900.38 3,058.11 3,849.32
Tax expense
Current tax 797.91 924.92 805.44 931.38
Deferred tax (20.80) 11.26 (76.38) (18.11)
777.11 936.18 729.06 913.27
Net Profit from ordinary activities after tax 2,473.02 2,964.20 2,329.05 2,936.05
Other comprehensive income/(expense) (net of tax) (5.44) (21.06) (0.60) (25.87)
Total comprehensive income for the year 2,467.58 2,943.14 2,328.45 2,910.18
Net Profit/(loss) attributable to
a) Owners of the Company 2,473.02 2,964.20 2,316.88 2,917.75
b) Non-controlling interest - - 12.17 18.30
Other comprehensive income attributable to
a) Owners of the Company (5.44) (21.06) (2.44) (24.01)
b) Non-controlling interest - - 1.84 (1.86)
Total comprehensive income attributable to
a) Owners of the Company 2,467.58 2,943.14 2,314.44 2,893.74
b) Non-controlling interest - - 14.01 16.44
Balance of profit brought forward 12,462.15 11,416.82 12,648.70 11,652.06
- Interim – 2021-22 1,198.87 1,398.46 1,198.87 1,398.46
- Final – 2020-21 699.26 499.35 699.26 499.35
Corporate Dividend Tax - - 1.12 2.49
Other comprehensive income arising from re-measurement of defined benefit obligation (net of income tax) - - (6.28) (20.81)
Balance carried to Balance Sheet 13,031.60 12,462.15 13,060.05 12,648.70
Earnings per equity share on Net Profit from ordinary activities after tax (face value Rs 2/- each) (In Rupees)
- Basic 123.78 148.39 115.96 146.07
- Diluted 123.74 148.37 115.93 146.04


During FY 2021-22, your Company clocked sales of 49.44 lakh units over 58.00 lakh units in the previous FY. Revenue from operations was Rs 29,245.47 crore as compared to Rs 30,800.62 crore in FY 2020-21, registering a decrease of_5.05%.

Profit before tax (PBT) in FY 2021-22 was Rs 3,250.13 crore as compared to Rs 3,900.38 crore in FY 2020-21, reflecting a decrease of 16.67%. Profit after tax (PAT) was Rs 2,473.02 crore as against Rs 2,964.20 crore in FY 2020-21, a decrease of 16.57 % from the previous year.

Earnings before Interest, Depreciation and Taxes (EBIDTA) stood at 11.52% in FY 2021-22, as compared to 13.05% in FY 2020-21.


In accordance with provisions of the Companies Act, 2013 (‘the Act?) and Indian Accounting Standards (Ind AS)-110 on Consolidated Financial Statements, read with Ind AS-28 on Investments in Associates and Joint Ventures, the Audited Consolidated Financial Statements for the year ended March_31, 2022 are provided in this annual report.



During the year, the auto industry witnessed disruptions triggered by Coronavirus pandemic, restricting movement of logistics and dampening customer sentiments. Despite such challenges, your Company remained resilient, positive and continued to grow. Your Company took several steps to protect the employees and the operations, while also initiating relief measures to aid the efforts initiated by your organization, and various governments and institutions. Strategic initiatives such as a strict discipline on expenses and prioritization of projects, aided in substantially reducing general overhead costs and capex.

The Company remains optimistic about growth in the next financial year as pandemic restrictions are witnessing a gradual withdrawal due to a steady decline in Covid-19 cases and reopening of all the sectors of economy.

Vida – Brand for Emerging Mobility Solutions

With a focus on sustainability and keeping up with the relentless pursuit towards its vision – Be the Future of Mobility, your Company unveiled Vida, powered by Hero, a brand-new identity for its emerging mobility solutions, including upcoming Electric Vehicles (EV).

Vida means life and the brand?s sole purpose is to create a positive impact on the world with the vision of a flourishing, meaningful world for future generations.

Income Tax matter

The Income Tax Department ("the Department") conducted a Search activity ("the Search") under Section 132 of the Income Tax Act on the Company in MarcRs 2022. Subsequently, the Company has provided all support, cooperation and the necessary documents to the Department. The Company is examining and reviewing the details of the matter and will take appropriate actions, including addressing regulatory actions, if and when they occur.

While the uncertainty exists regarding the outcome of the proceedings by the Department, the Company after considering all available information and facts as of date, has not identified the need for any adjustments to the current or prior period financial results.

The above matter has been disclosed as an ‘Emphasis of Matter? in the Audit Report and has also been mentioned in note no. 34(c) of the standalone financial statements. The Audit Report on the audited financial results of the Company (standalone & consolidated) remains unmodified.


During the year under review, 31,724 equity shares of Rs 2/- each were allotted on exercise of Employee stock options and Restricted Stock Units (RSUs) by the employees of the Company. Consequently, the issued and paid-up share capital of the Company as on MarcRs 31, 2022 was Rs 39,96,23,882 divided into 19,98,11,941 equity shares of Rs 2/- each.

The Company has not issued any equity shares with differential rights, sweat equity shares or bonus shares. The Company has only one class of equity shares with face value of Rs 2/- each, ranking pari passu.


Your Directors are pleased to recommend for your approval a final dividend of Rs 35/- per equity share (1,750%) of face value of Rs 2/- each in addition to an interim dividend of Rs 60/- per equity share (3000%) declared in the month of February 2022, aggregating a total dividend payout of Rs 95/- per equity share (4,750%) for FY 2021-22. In the previous year, total dividend payout of Rs 105/- per equity share (5,250%) of face value of Rs 2/- each was made. Final dividend, if approved at the ensuing annual general meeting, shall be paid to the eligible members within the stipulated time period.

Dividend Distribution Policy of the Company as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations?) is available at the following link: https://www.heromotocorp.com/en-in/uploads/code_ policy/20191126105519-code-policy-149.pdf.


The management discussion and analysis report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company?s business in India and abroad, risk management systems and other material developments during the year under review.


During FY 2021-22, there was no change in the nature of Company?s business.


The fiscal 2022 was a fascinating year during which your Company directed its resources on capitalizing opportunities, healthy investments and working towards business resilience with focus on growth and further strengthening the product portfolio. Due – Diligence on economic factors, commodity headwinds facilitated us to further evaluate our manufacturing capacity to view cross plant resource optimization with a broader lens to optimize capacity utilization.

The complete value chain eco-system quickly re-energized itself and the turnaround post business re-opening of COVID-19 pandemic was phenomenal considering the changed paradigm and facilitated your Company to revert on growth trajectory with stable sales volume and positive customer sentiment.

Your Company has the overall capacity of 9.3 million for all plants. The overseas plants of your Company in Bangladesh and Colombia have continuously augmented their respective capacities and with significant momentum in market share.

As a proactive corporate, your Company released its fourth annual Sustainability Report encompassing ESG (Environment, Social and Governance) aspects. Long-term strategy has been formulated with the objective of making your Company one of the leaders in ESG and target to establish a resilient business eco-system.

Agreement with Harley-Davidson – As part of its growth strategy, Hero MotoCorp is focused on growing market share in the rapidly expanding Premium motorcycle segment. In October 2020, the Company signed a distribution agreement with Harley-Davidson (H-D), under which the Company will sell and service H-D motorcycles, and sell parts and accessories and general merchandise riding gear and apparel in India. The Company has inducted 11 dealers of Harley-Davidson into its own distribution network. Starting January 1, 2021, Hero MotoCorp Ltd. has become the distributor for Harley-Davidson in India.

Hero MotoCorp Ltd. and Harley-Davidson also signed a Licensing agreement under which the Company will develop and sell a range of premium motorcycles under the H-D brand name.

Partnership with Gogoro? Inc. - Your Company recently entered into a strategic partnership with Gogoro? Inc. to accelerate the shift from fuel based mobility to sustainable electric mobility in India. This partnership would bring together the Company and Gogoro? Inc., the global leader in urban battery swapping and smart mobility innovation and this joint venture is aimed to bring Gogoro?s industry leading battery swapping platform to India. The Companies would also collaborate on electric vehicle development to bring Hero branded, powered by Gogoro Network vehicles to market


Your Company continues to strengthen its presence in global markets. During FY 2022, your Company?s footprint increased to 43 markets outside India. The focus was on increasing the presence in the premium segment through new product launches in the key markets of Bangladesh, Nepal and Latin America. As a result, the premium segment sales grew by 63% in FY 2022 over previous year.

Despite the tough Covid restrictions & unstable economy in some markets, your Company managed to gain market share in 6 out of 7 focus markets.

Your Company also relaunched the Hero brand in markets like Argentina, Kenya, Honduras and Nicaragua.


In the last few years, there has been a strong focus to foster innovation inside the Company and we have seen a huge wave of cultural shift cutting across the functions organisation-wide. Multiple cross-functional/within-function initiatives were taken to find solutions collaboratively. Our Idea platform: HeroIC in its 3rd_year engaged users significantly and hosted campaigns tapping the latent opportunities harnessing internally residing diverse unique talents. It is appealing to confirm that thousands of unique ideas were registered in the last 3 years.

We started HeroHatch (Internal Incubator programme) sometime back which was supplemented by Vision Labs ideas with the potential to become stand-alone projects._ Internal startups have emerged as a strong pillar by solving the end problems of our customers, developing potential revenue streams, and inculcating a fast-paced and startup-like culture within the organisation. The three projects which were launched under Hero Hatch continue to grow impressively.

We are now starting to expand our base from Innovation inside to ecosystem support. This involves the scouting of startups, and mobility partners externally to explore opportunities in "Future of Mobility". This year, we will tap into the global innovation enablers to help us acquire multiple opportunities_to co-create and collaborate, the_first one of which is a partnership with Plug and Play (P&P). This ecosystem partnership will enable Hero to have access from the P&P team regarding the introduction of hand-picked start-ups in the emerging mobility & tech space within private deal flows, which are meant to solve a specific technological use case or aspirations of Hero?s Internal business unit.


The Company has 6 subsidiaries including step down subsidiaries and 2 associate companies and regularly monitors the performance of these companies.

The annual accounts of subsidiary companies are available on the website of the Company viz. www.heromotocorp.com and shall also be kept open for inspection at the registered office of the Company. The Company shall also make available the annual accounts of these companies to any member of the Company who may be interested in obtaining the same. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies.

Subsidiary Companies

Hero Tech Center Germany GmbH (‘HTCG?)

HTCG is a wholly owned subsidiary of your Company, incorporated in Germany to undertake research and development and such other ancillary activities for the manufacture, testing, validating etc. of two-wheelers and components/parts thereof. It also undertakes, coordinates and facilitates two-wheeler rally participation and development activities. During FY 2021-22, HTCG has reported unadjusted revenue of Rs 114.1 crore and a net profit of Rs 5.8 crore.

HMCL Netherlands B.V. (‘HNBV?)

HNBV is a wholly owned subsidiary of your Company, incorporated in Amsterdam as a private company with limited liability under the laws of The Netherlands with the primary objective of promoting overseas investments. During FY 2021-22, it has reported unadjusted revenue of Rs 10.08 crore and a net profit of Rs 8.8 crore.

HMCL Colombia S.A.S. (‘HMCLC?)

HMCLC was incorporated in Colombia as a joint venture between HNBV and Woven Holdings LLC as a simplified stock corporation company. HNBV currently holds 68% equity in HMCLC and 32% equity is held by Woven Holdings LLC. The main business of HMCLC is to manufacture and sell two-wheelers in Colombia. It has a manufacturing facility with a production capacity of 80,000 units per annum. During the year ended MarcRs 31, 2022, the Company has reported unadjusted revenue of Rs 378.8 crore and a net loss of Rs 1.8 crore.

HMCL Niloy Bangladesh Limited (‘HNBL?)

HNBL was incorporated in Bangladesh as a joint venture between HNBV and Niloy Motors Limited, Bangladesh as a limited liability company. HNBV currently holds 55% equity in HNBL and 45% equity is held by Nitol Niloy Group, Bangladesh. The main business of HNBL is to manufacture and sell two-wheelers. It has a manufacturing facility with a production capacity of 1,50,000 per annum. During FY 2021-22, HNBL reported unadjusted revenue of Rs 659.2 crore and a net profit of Rs 38.3 crore.

HMCL Americas Inc. (‘HMCLA?)

HMCLA is a wholly owned subsidiary of your Company, incorporated as a Corporation pursuant to the General Corporation Law of the State of Delaware, United States of America with the primary objective to pursue various global businesses. During the year ended MarcRs 31, 2022, HMCLA has reported unadjusted revenue of Rs 0.01 crore and a net loss of Rs 0.06 crore.

HMC MM Auto Limited (‘HMCMMA?)

Your Company has a joint venture with Marelli Europe S.p.A, Italy, namely HMC MM Auto Limited in India, which is set up for the purpose of carrying out manufacturing, assembly, sale and distribution of two-wheeler fuel injection systems and parts. Your Company holds 60% of the equity share capital in HMCMMA. During FY 2021-22, HMCMMA has reported unadjusted revenue of Rs 228.4 crore and a net loss of Rs 11.3 crore.

Associate Companies

Hero FinCorp Limited (‘HFCL?)

HFCL is an associate of your Company, incorporated in the year 1991. Your Company holds 41.19% in the equity share capital of HFCL. HFCL is a non-banking finance company engaged in providing financial services, including two-wheeler financing and providing credit to Company?s vendors and suppliers. Over the years, it has added several new products and customers in its portfolio, like SME and commercial loans, loan against property etc.

During FY 2021-22, HFCL?s loss attributable to the Company is Rs 63.1 crore.

Ather Energy Private Limited (‘AEL?)

AEL is a private limited company, focused on developing, designing and selling premium electric two-wheelers. The shareholding of your Company in AEL is 37.65% which is equivalent to 34.04% on a fully diluted basis. During FY 2021-22, AEL?s loss attributable to the Company is Rs 94.5 crore.

A statement containing salient features of financial statements of subsidiary and associate companies forms part of the financials.

Material Subsidiaries

The Board of Directors of your Company (‘the Board?) has approved a policy for determining material subsidiaries. At present, your Company does not have a material subsidiary. The Policy on material subsidiaries can be viewed on the Company?s website, www.heromotocorp.com at the following link: https://www.heromotocorp.com/en-in/uploads/code_ policy/20191126105356-code-policy-400.pdf.


Dr. Pawan Munjal was re-appointed as the Chairman, Whole-time Director and CEO of the Company, designated as ‘Chairman & CEO?, for a term of five (5) years with effect from October_1, 2021.

During the year under review, your Company has appointed Ms. Camille Tang and Mr. Rajnish Kumar as Non-Executive and Independent Directors for a term of 3 years w.e.f November 19, 2021 and November 25, 2021, respectively. Ms. Vasudha Dinodia was appointed as Non-Executive & Non Independent Director of the Company effective November 25, 2021.

Mr. Vikram Sitaram Kasbekar was re-appointed as Whole-time Director, designated as Executive Director - Operations (Plants) for a term of three years w.e.f August 8, 2019. His term will end on August 7, 2022. Now, the Board at its meeting held on May 3, 2022 has recommended the re-appointment of Mr. Kasbekar as Whole-time Director designated as Executive Director – Operations (Plants) for another term of two (2) years effective August 8, 2022. Further, in terms of applicable provisions of the Act and the Articles of Association of the Company, Mr. Vikram Sitaram Kasbekar, Director of the Company, retires by rotation at the ensuing annual general meeting and being eligible, has offered himself for re-appointment. Brief resume and other details of Mr. Kasbekar have been furnished in the explanatory statement to the notice of the ensuing annual general meeting.

The appointment of new directors is recommended by the Nomination and Remuneration Committee (‘NRC?) on the basis of requisite skills, proficiency, experience and competencies as identified and finalized by the Board considering the industry and sector in which the Company operates. The Board, on the recommendation of the NRC, independently evaluates and if found suitable, confirms an appointment to the Board. The appointments are based on the merits of the candidate and due regard is given to diversity including factors like gender, age, cultural, educational & geographical background, ethnicity, etc.

In the opinion of the Board, the Independent Directors appointed during the year are persons of high repute, integrity and possesses the relevant expertise and experience in the respective fields.

The Company has a robust succession planning process which is overseen by the Nomination and Remuneration Committee.

The tenure of Mr. M. Damodaran on the Board of Hero MotoCorp Ltd. is until the end of day of May 3, 2022.

None of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of the Company by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any other statutory authority.

Key Managerial Personnel

Ms. Neerja Sharma resigned and ceased to be the Company Secretary and Chief Compliance Officer of the Company with effect from January 31, 2022. Mr. Dhiraj Kapoor has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f. February 1, 2022. He has a rich experience of over 20 years in corporate laws and compliance.

Dr. Pawan Munjal, Chairman, Whole-time Director & CEO, Mr. Niranjan Gupta, Chief Financial Officer and Mr. Dhiraj Kapoor, Company Secretary and Compliance Officer are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Declarations from Independent Directors

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed in the Act and the Listing Regulations.

In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.


During FY 2021-22, nine meetings of the Board of Directors were held. For details of these Board meetings, please refer to the section on Corporate Governance of this annual report.


During FY 2021-22, various committee meetings were conducted by the Company. For details of these Committee meetings, please refer to the section on Corporate Governance of this annual report.


A formal evaluation of the performance of the Board, it?s Committees, the Chairman and the individual Directors was carried out for FY 2021-22. Led by the Nomination and Remuneration Committee, the evaluation was carried out using individual questionnaires covering, amongst others, composition of Board, conduct as per company values & beliefs, contribution towards development of the strategy & business plan, risk management, receipt of regular inputs and information, codes & policies for strengthening governance, functioning, performance & structure of Board Committees, skill set, knowledge & expertise of Directors, preparation & contribution at Board meetings, leadership, etc.

Further, the Committees were evaluated in terms of receipt of appropriate material for agenda topics in advance with right information and insights to enable them to perform their duties effectively, review of committee charter, updation to the Board on key developments, major recommendations & action plans, stakeholder engagement, devoting sufficient time & attention on its key focus areas with open, impartial & meaningful participation and adequate deliberations before approving important transactions & decisions.

As part of the evaluation process, the performance of Non-Independent Directors, the Chairman and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the Director being evaluated.

The actions emerging from the Board evaluation process were collated and presented before the Nomination and Remuneration Committee as well as the Board. Suggestions/ feedback concerning strategic, governance and operational matters were actioned upon by the team.


Your Directors make the following statement in terms of Section 134 of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:

1. that in the preparation of the annual accounts for the financial year ended MarcRs 31, 2022, the applicable accounting standards were followed, along with proper explanation relating to material departures;

2. that appropriate accounting policies were selected and applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs As at March31, 2022 and of the profit and loss of your Company for the financial year ended MarcRs 31, 2022;

3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

4. that the annual accounts for the financial year ended MarcRs 31, 2022 have been prepared on a going concern basis;

5. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

6. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


Pursuant to provisions of the Act, the Nomination and Remuneration Committee of your Board has formulated a Remuneration and Board Diversity Policy for the appointment and determination of remuneration of the Directors, Key Managerial Personnel, senior management and other employees of your Company and to ensure diversity at the Board level. The NRC has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors of the Company.

The Nomination & Remuneration Committee (NRC) takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans, such as ESOPs, RSUs etc. Further, the compensation package of the Directors, Key Managerial Personnel, senior management and other employees is designed based on the set of principles enumerated in the said policy.

Your Directors affirm that the remuneration paid to the Directors, Key Managerial Personnel, senior management and other employees is as per the Remuneration Policy of your Company.

The remuneration details of the Directors, Chief Financial Officer and Company Secretary, along with details of ratio of remuneration of each Director to the median remuneration of employees of the Company for the year under review are provided as Annexure - I.

There has been no change in the Remuneration and Board Diversity Policy of the Company during the year. The Remuneration and Board Diversity Policy of your Company can be viewed at the following link: https://www.heromotocorp. com/en-in/uploads/code_policy/20191126105210-code-policy-421.pdf

The salient features of the Remuneration and Board Diversity Policy are as under:

1. To determine remuneration of Directors, KMP, other senior management personnel and other employees, keeping in view all relevant factors including industry trends and practices.

2. At the Board meeting, only the Non-Executive and Independent Directors shall participate in approving the remuneration paid to the Executive Directors.

3. The remuneration structure for the Executive Directors would include basic salary, commission, perquisites & allowances, contribution to Provident Fund and other funds. If the Company has no profits or its profits are inadequate, they shall be entitled to minimum remuneration as prescribed under the Act.

4. The Non-Executive and/or Independent Directors will also be entitled to remuneration by way of commission aggregating up to 1% of net profits of the Company pursuant to the provisions of Sections 197 and 198 of the Act, in addition to sitting fees.

5. The compensation for Key Managerial Personnel, senior management and other employees is based on the external competitiveness and internal parity through periodic benchmarking surveys. It includes basic salary, allowances, perquisites, loans and/or advances as per relevant HR policies, retirement benefits, performance linked pay out, benefits under welfare schemes, etc. besides long-term incentives/ ESOPs/ RSUs/ Performance shares or such other means as may be decided by the NRC.

6. Performance goals of senior management personnel shall be quantifiable and assessment of individual performance to be done accordingly. A significant part of senior management compensation will be variable and based upon Company?s performance.

7. To ensure adequate diversity at Board level, all appointments to be made on the basis of merit and due regard shall be given to other diversity attributes also. The NRC shall recommend the appointment or continuation of members to achieve optimum combination at the Board and periodically assess the specific requirements in relation to Board diversity.


In terms of the erstwhile SEBI (Share Based Employee Benefits) Regulations, 2014, and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time (‘SEBI Regulations?), the NRC of your Board, inter-alia, administers and monitors the Employees? Incentive Scheme, 2014 of your Company and the Employees? Stock Option / Restricted Stock Units plans framed thereunder.

Further, the NRC has, at its meeting held on August 11, 2021 approved grant of 39,210 Restricted Stock Units (RSUs) at face value of Rs 2/- per unit vesting in three years in the ratio of 33.33%:33.33%:33.33% as per RSU Plan, 2021 and 34,895

Performance Restricted Stock Units (PRSUs) at face value of Rs 2/- per unit vesting after completion of three years as per PRSU Plan, 2021 to certain eligible employees of the Company.

Applicable disclosures as stipulated under the SEBI Regulations with regard to the Employees? Stock Option Scheme are available on the Company?s website, www.heromotocorp.com and can be viewed at the following link: https://www.heromotocorp. com/en-in/investors/annual-reports.html. Further, there is no material change in the scheme and the scheme is in compliance with the applicable regulations.

Your Company has received a certificate from M/s Sanjay Grover & Associates, Secretarial Auditors (Firm Registration No. P2001DE052900) that the Employees? Incentive Scheme, 2014 for grant of stock options has been implemented in accordance with the SEBI Regulations and the resolution passed by the members of the Company. The certificate would be placed/ available at the ensuing annual general meeting for inspection by the members.


Your Company is committed to benchmarking itself with global standards of Corporate Governance. It has put in place an effective Corporate Governance system which ensures that provisions of the Act and Listing Regulations are duly complied with, not only in form but also in substance.

The Board has also evolved and adopted a Code of Conduct based on the principles of good Corporate Governance and best management practices that are followed globally. The Code is available on your Company?s website, www.heromotocorp. com and can be viewed at the following link: https://www. heromotocorp.com/en-in/about-us/code-of-conduct.html.

In terms of Listing Regulations, a report on Corporate Governance along with the certificate from M/s. Sanjay Grover & Associates, Company Secretaries (Firm Registration No. P2001DE052900) confirming compliance of the conditions of Corporate Governance is annexed hereto and forms part of this annual report as Annexure – II and Annexure – III respectively.


During the year under review, no amount has been transferred to General Reserve of the Company.


During the year under review, your Company has transferred unpaid/unclaimed dividend, amounting to Rs 10.45 crore for FY 2013-14 (Final Dividend) & FY 2014-15 (Interim Dividend) and 20,829 shares to the Investor Education and Protection Fund (IEPF) Authority of the Central Government of India. Further, dividend pertaining to the shares transferred to demat account of the IEPF Authority amounting to Rs 7.55 crore (after deduction of tax) was also transferred to the IEPF Authority.


No material change and/or commitment affecting the financial position of your Company has occurred between April 1, 2022 and the date of signing of this report.


During FY 2021-22, your Company has not given any loan or guarantee pursuant to provisions of Section 186 of the Act. Details of investments made in terms of Section 186 of the Act are as under:

(Rs in crore)

Principal Amount (Shares) Principal Amount (Bonds/ Debentures) Total
Opening 2,365.53 652.78 3,018.31
Addition* - 554.28# 554.28
Reduction** - (49.13) (49.13)
Closing Balance 2,365.53 1,157.93 3,523.46

*HMC MM Auto Limited - Nil, HMCL Netherlands BV - Nil, HMCL Americas Inc. - Nil, Hero Tech Center Germany GmbH - Nil, Hero FinCorp Limited – Nil #Includes investment in Compulsorily Convertible Debentures of Ather Energy Private Limited – Rs 150 crore **Maturity of bonds and debentures


Your Company has neither accepted nor renewed any deposits during FY 2021-22 in terms of Chapter V of the Act.


During FY 2021-22, all contracts/ arrangements/ transactions entered into by your Company with related parties under Section 188(1) of the Act were in the ordinary course of business and on an arm?s length basis. During FY 2021-22, your Company has not entered into any contract/ arrangement/ transaction with related parties which could be considered ‘material? in accordance with its Policy on Materiality of Related Party Transactions. Thus, there are no transactions required to be reported in Form AOC-2.

Further, during FY 2021-22, there were no materially significant related party transactions entered into by your Company with the Promoters, Directors, Key Managerial Personnel or other designated persons, which might have potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee for its approval. There was no related party transaction requiring approval of the Board. During FY under review, the Audit Committee has approved transactions through the omnibus mode in accordance with the provisions of the Act and Listing Regulations. Related party transactions were disclosed to the Board on regular basis as per Ind AS-24. Details of related party transactions as per Ind AS-24 may be referred to in Note 36 of the Standalone Financial Statements.

The policy on related party transactions is available on the Company?s website, www.heromotocorp.com and can be viewed at the following link: https://www.heromotocorp. com/en-in/uploads/code_policy/20191126104550-code-policy-434.pdf.


The Risk Management Committee of the Board continues to guide the Management Team in operating a comprehensive risk management framework.

The Company?s risk management procedures take into consideration external as well as internal threats to devise efficient strategies for mitigating a diverse set of risks. Risk identification, analysis, mitigation and monitoring is undertaken periodically by the_Management Team and is overseen by the Risk Management Committee. Several management and leadership team members are_ actively involved to ensure consistency in the overall process. Post assessment, mitigation plans are developed and a report is submitted periodically to the Risk Management Committee of the Board.

COVID continued to impact lives and livelihood. However, your company was well prepared for managing the impact. A special task force used to frequently meet to assess the situation as it evolved across manufacturing plants, sales network, supply chain partners and offices and identify additional initiatives to ensure business continuity.

In addition to developing a robust Business Continuity Plan to manage the COVID related disruptions, your company focused on some of the other key risk areas as well and developed mitigation plans. Some of those risks were –

Semiconductor shortage – Semiconductor shortage affected almost every automobile OEM. There was an increase in lead-time and many orders remained pending. However, your company made sure that the shortage did not significantly affect the supply chain and manufacturing. Your Company reached out to identify alternate sources for critical components and started tracking inventories at a child part level. As we plan to enter the electric vehicle segment, the shortage of semiconductors could pose a credible threat and your company is already developing plans to manage the risk well.

Shifting consumer preferences towards electric mobility_ – The 2W industry has shown an unprecedented growth in EV adoption this year. Your Company is prepared to gain from this segmental shift. The first in house 2W EV product will be launched under the new brand VIDA that means Life.

Risk due to climate change – Rising global temperatures are making it mandatory for manufacturers to contribute towards emission reduction initiatives. While investing in electric mobility is definitely a step towards addressing this challenge, your company is also exploring ways in which shared mobility can be promoted. A risk mitigation plan to this effect is already developed.

Geopolitical uncertainties in key global markets – The business sentiment continued to remain challenging with many global economies losing steam. The logistics and supply chain industry too was hit hard. However, your company was able to manage these risks by realising volumes from countries that soon returned to pre pandemic growth and output levels. Also, on the supply chain, your Company has built a strong local base and that made sure that your Company?s operations were not impacted.

Cost pressures in material sourcing – As cost pressures continued to affect margins, your company evaluated options to develop alternate and innovative strategies for part manufacturing. A significant amount of cost increase could be offset because of the savings from the LEAP and LEAD programmes.

Your Company remains committed to protecting the interests of its customers, investors, shareholders, employees and each person or entity with whom it is associated.

The details of the Committee along with its charter are set out in the Corporate Governance Report forming part of this report.


Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated the Vigil Mechanism/Whistle-_Blower Policy which provides a robust framework for dealing with genuine concerns and grievances. Your Company has an ethics hotline managed by a third party which can be used by employees, Directors, vendors, suppliers, dealers etc. to report any violations to the Code of Conduct. Specifically, employees can raise concerns regarding any discrimination, harassment, victimisation, any other unfair practice being adopted against them or any instances of fraud by or against your Company.

During the year, your Company?s Compliance programme was further strengthened by conducting an assessment of the existing policies and procedures from an Anti-Bribery and Anti-Corruption perspective. Based on the assessment, your Company further made revisions to its key policies and procedures and instituted in place an Anti-Bribery and Anti-Corruption ("ABAC") policy in line with the leading industry practices and applicable laws such as The Prevention of Corruption Act, 1988, The Foreign Corrupt Practices Act (US), 1977 and the UK Bribery Act, 2010. Subsequent to the institutionalisation of the ABAC policy, your Company plans to conduct entity-wide trainings educating the employees about the applicability of laws, importance of its abidance and guidance in place to safeguard your Company from the associated risks.

In continuation to the Code of Conduct which was refreshed during the last financial year, all employees of your Company underwent a mandatory Code of Conduct training which covered the eight (8) pillars of your Company?s Code of Conduct and included guidance on all governing principles such as Anti-bribery & Anti-corruption, conflict of interest, fair business practices, transparency and emphasis on equal opportunities while embracing a diverse and inclusive culture.

During the year under review, 24 complaints were received through various reporting channels and 8 complaints were carried forward from the previous year. Out of these, 28 complaints have been investigated, 3 complaints were reviewed and handed over for closure to the procurement team and remaining 1 complaint is under investigation.

During FY 2021-22, no individual was denied access to the Audit Committee for reporting concerns, if any.

The Vigil Mechanism/Whistle-Blower Policy of the Company is available on the Company?s website, www. heromotocorp.com and can be viewed at the following link: https://www.heromotocorp.com/en-in/uploads/code_ policy/20200903060455-code-policy-95.pdf


Hero MotoCorp, as a responsible corporate citizen, has been consciously fulfilling its obligations, commitments and overall corporate responsibility within its local and global environments. The Company has been responsibly managing not only its business performance but also its environmental and social impact. While the Company?s sustainability strategy revolves around five pillars – inclusive growth, eco-efficiency, people, responsible value chain, and product stewardship, the Corporate Social Responsibility (CSR) vision of the Company is to ‘have a greener, safer and equitable world?. Within this mandate, the Company recognises the role of biodiversity in achieving sustainable economic growth and has therefore expanded and strengthened its initiatives for biodiversity protection and resource conservation. This also aligns with the Company?s commitment to the Sustainable Development Goals (SDGs).

We understand that adopting and implementing sustainable business practices is the Company?s ‘responsibility?, and equally importantly, that sustainability strategy and CSR activities are intertwined and complement as well as supplement each other. Therefore, at Hero MotoCorp, both these aspects are governed together by a common decision-making team that focuses on initiatives with the shared vision of a larger, long-term and sustainable impact.

Sustainability and Corporate Social Responsibility Committee

The Company?s Sustainability and Corporate Social Responsibility (SCSR) Committee functions under the direct supervision of Dr. Pawan Munjal, Chairman & CEO of the Company, and also the Chairman of the CSR Committee. Other members of the Committee are: Mr. Pradeep Dinodia, Non-Executive Director, Prof. Jagmohan Singh Raju, Independent Director, and Ms. Tina Trikha, Independent Director.


The CSR Policy of the Company can be viewed at the following link: https://www.heromotocorp.com/en-in/uploads/code_ policy/20191126104858-code-policy-35.pdf.

The salient features of the updated CSR Policy are as under:

1. The philosophy of the Company is guided by the belief that a company?s performance must be measured by its triple (+one) bottom line contribution to building economic, social and environmental capital, thereby enhancing societal sustainability along with governance.

2. It believes that in the strategic context of business, enterprises possess-beyond mere financial resources-the transformational capacity to create game-changing development models by unleashing their power of entrepreneurial vitality, innovation and creativity. In line with this belief, the Company will continue to craft unique models to generate livelihoods and create a better society.

3. The broad guiding principles for selection of CSR activities include need assessment, if required, and the requirement that programmes identified/adopted should be adaptive and flexible to meet the changing dynamics with focus on long-term sustained impact rather than one-time impact or requiring continuous intervention.

4. The implementation of the identified CSR activities shall be carried out either directly by the Company and/or through an implementing agency. The Company shall clearly define the objectives along with the desired timelines to effectively implement the activities within the given time frame and work towards active engagement of all employees to achieve maximum benefits. The modalities of execution shall be defined with every identified project.

5. There shall be a robust monitoring system to ensure that the identified CSR activities are carried out to reap optimal benefits for the beneficiaries. There shall be a periodic review by the Committee for the projects undertaken. The Committee may suggest modifications in the planned activities considering the existing scenario/circumstances.

6. The Committee will place for the Board?s approval an annual action plan delineating the CSR Programmes to be carried out during the financial year and the succeeding years in the case of Ongoing Projects, along with the specified budgets thereof.

FY 2021-22 update

During the year under review, your Company spent Rs 87.85 crore on its CSR activities which is more than 2% of the average net profits of previous three financial years. The CSR initiatives undertaken by your Company, along with other details, form part of the annual report on CSR activities for FY 2021-22, which is annexed as Annexure – VI.


The Audit Committee of your Company comprises of the following Non-Executive and Independent Directors:

1. Mr. M. Damodaran - Chairman
2. Mr. Pradeep Dinodia - Member
3. Ms. Tina Trikha - Member
4. Air Chief Marshal B.S. Dhanoa (Retd.) - Member

The details on the Audit Committee and its terms of reference etc. have been furnished in Corporate Governance Report which forms part of this report as Annexure - II.

During the year under review, all recommendations of the Audit Committee were accepted by the Board of Directors of the Company.


Statutory Auditors

M/s. BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed in 2017 as the Statutory Auditors of the Company until the conclusion of the 39th annual general meeting of the Company. They have audited the financial statements of the Company for the year under review. The observations of Statutory Auditors in their Report, read with relevant Notes to Accounts are self-explanatory and, therefore, do not require further explanation. The Auditors? Report does not contain any qualification, reservation or adverse remark. The tenure of the Statutory Auditors will end at the ensuing annual general meeting of the Company.

Cost Auditors

The Board, on the recommendation of Audit Committee, has approved the appointment of M/s R J Goel & Co., Cost Accountants, as Cost Auditors for the financial year ending MarcRs 31, 2023. The Cost Auditors will submit their report for the FY 2021-22 on or before the due date.

In accordance with the provisions of Section 148 of the Act read with Companies (Audit & Auditors) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained by the Company. Further, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for approval by members at the ensuing annual general meeting.

Secretarial Auditors

M/s. Sanjay Grover & Associates, Company Secretaries (Firm Registration No. P2001DE052900) were appointed to conduct Secretarial Audit of your Company during FY 2021-22.

The Secretarial Audit Report for the said year is annexed herewith and forms part of this report as Annexure – VII. The Report does not contain any qualification, reservation or adverse remark.

Further, there were no frauds reported by the Statutory Auditors, Secretarial Auditors and Cost Auditors to the Audit Committee or the Board under Section 143(12) of the Act.


Your Company has a robust and well embedded system of internal controls. Comprehensive policies, guidelines and procedures are laid down for all business processes. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.

An extensive risk based programme of internal audits and management reviews provides assurance to the Board regarding the adequacy and efficacy of internal controls. The internal audit plan is dynamic and aligned to the business objectives of the Company and is reviewed by the Audit Committee each quarter. Further, the Audit Committee also monitors the status of management actions emanating from internal audit reviews. Such actions are now being tracked through an automated tool.

During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed.


In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (‘the PIT Regulations?) on prevention of insider trading, your Company during the year has revised its Code of Conduct for regulating, monitoring and reporting of trading by Designated Persons in line with the relevant amendments in the listing and PIT Regulations. The said Code lays down guidelines, which advise Designated Persons on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.

Your Company also has a Code of practices and procedures of fair disclosures of unpublished price sensitive information including a policy for determination of legitimate purposes along with the Institutional Mechanism for prevention of insider trading and Policy and procedures for inquiry in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information. Further, your Company has put in place adequate and effective system of internal controls and standard processes have been set to ensure compliance with the requirements given in these regulations to prevent insider trading.

To increase awareness on the prevention of insider trading in the organisation and to help the Designated Persons to identify and fulfill their obligations, a comprehensive campaign was run at all locations of Hero MotoCorp Ltd. This included display of relevant and useful content by way of posters on the notice boards & other strategic locations, placement of standees at common areas, key messaging through desktop wallpapers and screensavers, placement of permanent wall posters, orientation sessions as part of regular employee induction, conducting Company-wide workshop for all Designated Persons by a subject matter expert, sending text messages for closure of trading window and submission of periodic disclosures, etc. In addition to the above, a Handbook on Prevention of Insider Trading Code was also prepared and sent to all the designated employees to educate and promote awareness.


Keeping up the commitment to sustainability, your Company has voluntarily prepared the Business Responsibility & Sustainability Report (‘BRSR?) which forms part of the annual report as Annexure – VIII. The Report provides a detailed overview of initiatives taken by your Company from environmental, social and governance perspectives.


The equity shares of your Company are presently listed on the BSE Limited (‘BSE?) and the National Stock Exchange of India Limited (‘NSE?).


As on MarcRs 31, 2022, total number of employees on the records of your Company were 9,173 as against 8,793 in the previous year.

Your Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, co-operation and support have enabled the Company to cross new milestones on a continual basis.


The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules?), is appended as Annexure I to the report. The information as per Rule 5(2) of the Rules forms part of this report. However, in terms of provisions of Section 136 of the Companies Act, 2013, the report and Financial Statements are being sent to the members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the registered office of the Company.


In terms of Sections 92(3) and 134(3)(a) of the Act, annual return is available under the ‘Investors? section of the Company?s website, www.heromotocorp.com and can be viewed at the following link: https://www.heromotocorp.com/en-in/ investor-downloads.html.


The Company is fully compliant with the applicable Secretarial Standards (SS) viz. SS-1 & SS-2 on Meetings of the Board of Directors and General Meetings respectively.


Information required under Section 134(3)(m) of the Act read with Rules made thereunder is annexed to this report as

Annexure – IX.


Your Directors state that there being no transactions with respect to following items during the year under review, no disclosure or reporting is required in respect of the same:

1. Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of your Company under any scheme, save and except ESOS referred to in this report.

4. The Whole-time Directors of your Company didn?t receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company?s operations in future.

6. Buy-back of shares or under Section 67(3).

7. No application was made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

8. No settlements have been done with banks or financial institutions.


Hero MotoCorp has in place a policy towards Prevention of Sexual Harassment at Workplace. This policy is in line with the requirements of ‘The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013?. All employees, whether permanent, contractual, temporary and trainees or belonging to any other category as per the definition of POSH are covered under this Policy.

Our Company aims at providing a safe workplace free from sexual harassment to its employees. It also has a ‘Zero Tolerance? Policy towards POSH. To achieve this objective, effective communication is the key and thus the Company regularly organizes awareness sessions at all locations to sensitise its employees and conducts frequent sessions in a professional manner.

During FY 2021-22, over 36 POSH Webinar Sessions were organised and in addition POSH Sessions were planned through the e-module mode. In all, POSH sessions were attended by 4,257 employees from across the organisation indicating a 95% coverage percentage. All new workmen and women associates,on joining the Company undergo a mandatory session on POSH.

In addition to the above, the Training Module of ‘Unconscious Bias? was undertaken for Senior Managerial Staff covering 83%.

As per the said Policy, an Internal Committee (IC) is also in place towards redressal of complaints received regarding sexual harassment. Following is the summary of complaints received and disposed off during the year under review:

No. of complaints received: 7

No. of complaints disposed off: 7

No. of complaints withdrawn: 0

No. of complaints pending: 0


During the year under review, no complaints were received by the Complaints Officer under the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 2017.


During the year, the Company received multiple awards and recognition. Some of them are listed below:

• ‘Manufacturer of the Year 2021? by Bike India (Magazine)

• ‘Best Workplaces for Women 2021? by the Economic Times to Neemrana Plant

• The Centre of Innovation & Technology was conferred with CII GreenCo Platinum award.

• Energy Efficient Unit Award by CII to the Haridwar Plant

• Gold Award by CII National Safety Practices to the Neemrana Plant

• ‘State Safety Award 2021? by Government of Rajasthan to Global Parts Centre, Neemrana


The Board of Directors would like to express their sincere thanks to the shareholders and investors of the Company for the trust reposed in the Company over the past several years. Your Directors would also like to thank the central government, state governments, financial institutions, banks, customers, employees, dealers, vendors and ancillary undertakings for their co-operation and assistance. The Board would like to reiterate its commitment to continue to build the organisation into a truly world-class enterprise in all aspects.

For and on behalf of the Board
Dr. Pawan Munjal
Place: New Delhi Chairman & CEO
Date: May 3, 2022 DIN: 00004223