Hero MotoCorp Ltd
Chairman Speech
CELEBRATING A GLORIOUS JOURNEY
Dear Shareholders,
I hope you and all your loved ones are keeping well and staying safe.
The year under review has been about change, resilience, about
resetting priorities and the drive towards the achievement of our dreams. This is true not
just for Hero MotoCorp; this is also the story for most of humankind since the Coronavirus
pandemic manifested itself in 2020.
Navigating a difficult environment and the unforeseeable circumstances
during the more intense second wave of the pandemic, Hero MotoCorp proved its resilience
with prudent leadership and the tremendous hard work of our colleagues through FY 2021-22.
As I sit down to write my annual message, a lot is going through my
mind. The foremost being – is there a global debt crisis looming on the horizon? The
global markets seem to be in a free fall. Asian markets have lost upwards of $2 trillion
in the past four months, primarily as a consequence of rolling lockdowns in various parts
of the world. The Indian rupee has hit an all-time low against the US dollar. With no sign
of an early end to the war in Ukraine, it is quite likely that the conflict will tip the
already fragile global economy into a slump.
While Hero MotoCorp also faced multiple headwinds during this trying
year, the Company maintained its global leadership position. With the customer?s
needs at the centre of our mission, Hero MotoCorp continued to offer the best products and
services. In line with the Company?s Mission Statement to ‘Create, Collaborate
and Inspire?, we are leading the world into a sustainable future! The best ideas
often come to fruition when different partners collaborate and work together.
Collaboration is what defines Brand Hero. As the Japanese author, Ryunosuke Satoro wrote,
"Individually, we are one drop. Together, we are an ocean."
Adapting to the constantly changing conditions, transforming our
methods as well as processes and working together relentlessly have resulted in our
success and continuous growth during this period. This hard work and tenacity has enabled
Hero MotoCorp to continue to retain its coveted position as the world?s no. 1
two-wheeler company for more than two decades.
Hero MotoCorp is not only a proud contributor to India?s great
economy, but also the harbinger of the nation?s ingenuity and manufacturing prowess
and a major contributor towards its position in the global economic and geopolitical
space. During the past decade of our Corporate journey, we have expanded our global
footprint to 40+ countries; doubled our manufacturing base to eight plants, including one
each in Colombia and Bangladesh; scaled up our in-house research and development
capabilities with a world-class R&D ecosystem in India and Germany and, above all, we
have built an organisation on the pillars of diversity and inclusion (D&I). With women
workers comprising almost 10% of our workforce and associates from over a dozen countries
around the world, we are spearheading the industry in inculcating D&I in the
organisational culture.
An Electrifying Future
Mobility is undergoing one of the most transformational shifts of the
century, with far-reaching implications such as shifting consumer demands, ownership, and
breakthrough technologies. With a move towards electric drive-trains and Government
regulation, mobility of the next decade will look dramatically different than it does
today.
We believe that this transformational shift will be marked by rapid
strides in intelligent mobility that will be governed by big data, machine learning and
artificial intelligence (AI). The vehicles of tomorrow will not just take you from Point A
to Point B in a sustainable manner; they will also be smart, intuitive and intelligent.
Hero MotoCorp will be right at the forefront of this transformation, fully in keeping with
our Vision – Be the Future of Mobility.
This year will see Hero MotoCorp claim its position in the exciting
clean mobility space in a bold avatar. Hero MotoCorp will transform its leadership in the
internal combustion engine (ICE) market into the electric vehicle space – globally!
In keeping with our vision to lead the migration to this new future of
mobility, we have unveiled Vida - Powered by Hero – as our new brand identity for
emerging mobility solutions. Through Vida, which means ‘life?, we will not only
revolutionise the electric mobility space, but will also ensure a cleaner, greener and
better future for generations to come.
At Hero MotoCorp, we continue to leverage our partnerships to
strengthen our capabilities. With our partnership with Gogoro Inc. of Taiwan, we will
bring the largest battery-swapping network to India. We are also in discussions with
Bharat Petroleum Corporation Limited to set up battery charging infrastructure for EVs
across the country. With the investment in Ather Energy, starting from 2016, Hero MotoCorp
is also accelerating its electric journey and bringing sustainable mobility solutions that
deliver value to our stakeholders.
Riding into New Markets
In keeping with our strategy of strengthening our core business and
amid the transformation of the automotive industry, we aim to capitalise on all the
opportunities presented by the global automotive and emerging markets.
Hero MotoCorp?s new strategy for its Global Business (GB), called
‘R4? which was launched in 2021, has been transformative and has delivered great
results. The R4 mission was to Recalibrate, Revitalise, Revolutionise and Revive our
Global Business. This programme has been a strong success and our Global Business
delivered 300,624 two-wheelers in 43 markets during the year under review. This was a
remarkable growth of 57% compared to total units sold in the previous year.
During FY 2021-22, we significantly expanded our presence in the
Central and South American markets through strategic partnerships. Having already
commenced retail sales in Mexico, in partnership with Grupo Salinas, we aim to become a
key player in that market. We have partnered with Gilera Motors in Argentina, which is one
of the leading automotive companies in the country. Our new partnerships in Central
America with Grupo Casa Pellas in Nicaragua and Movesa S.S. in Honduras are also extremely
promising and should deliver results.
We further expanded our presence in El Salvador and reinvigorated our
strategy in Nigeria, with a goal to attain market leadership in the African markets. Our
new dealership in Dubai will help us tap into the growing market in the Gulf region. Our
aim is to reach out to the youth, 2021 was a transformative year for the Company under its
R4 strategy. We are clearly on our way to Recalibrate, Revitalise, Revolutionise, Revive
our Global Business.
cater to their aspirations and provide our customers an enhanced riding
experience through our flagship stores and experience centres. The goal is to garner 15%
of our total volumes from global markets by 2025.
Sustained Growth Despite Continued Headwinds
During the year under review, the two-wheeler industry faced multiple
headwinds, owing to weak demand and continuous challenges in the supply chain. The rural
markets, which account for over half the annual sales of motorcycles and scooters in
India, remained under economic stress. Higher material costs, shortages of products and
services and soaring fuel prices increased the cost of ownership, further dampening
consumer sentiment and their ability to buy.
All of these events impacted two-wheeler sales in India. To offset the
adverse impact, we focused on expanding our exports, optimising costs, prioritising
projects, improving internal processes and re-evaluating options. While the rising costs
for freight played spoilsport, we navigated through these challenges with grit, endurance
and determination to ensure that our products reached our distributors and customers.
During this challenging year, we continued to focus on the short- and
medium-term growth drivers for the Company. Together, with the move towards premiumisation
of our product portfolio and the focus on growing our Parts Accessories and Merchandise
(PAM) business, we achieved both growth and profitability. The PAM business recorded a
growth of 15% YoY, and revenue creation of over Rs1,000 crore per quarter. The PAM
segment?s contribution has been noteworthy and it continues to grow at a healthy
rate.
Another key enabler for this fiscal year was Hero FinCorp, our finance
arm, which has been growing at a phenomenal pace since 2012. It has helped serve seven
million customers through its 2,000 locations spread across the country. Hero FinCorp
recently raised Rs2,000 crore in growth capital, which will help it expand its reach and
offering and drive two-wheeler sales. Hero FinCorp plans to evolve into a full-service
finance company in the near future.
Digital platforms and cybernetic assistants are increasingly becoming
an essential part of our work and daily lives. Our investments in the rapid modernisation
and digitalisation of processes shows that we are precisely on the right track. The launch
of our virtual showroom, providing our customers with an immersive buying experience, is
among one of the several digital initiatives that have helped us drive process
optimisation.
Hero MotoCorp has also launched a sales and aftersales services
platform on WhatsApp. Going forward, we expect 30% of our sales to be generated from
digital channels. Additionally, we have launched 7 new ‘PHYGITAL Hero 2.0?
stores across the country.
These new stores offer a warm and inviting environment for our
consumers, with a High Digital Engagement Infrastructure. I dare say, these stores are a
beacon of reference for the entire two-wheeler industry. In the year ahead, we plan to
re-energise our dealership network across the country by opening a large number of these
stores.
Diversity & Inclusion – The Ethos of Our Organisation
Hero MotoCorp sees diversity and inclusion (D&I) as its strength. A
diverse workforce brings with it different perspectives, experiences and competencies
– and thus makes us more innovative, inclusive and competitive. For this reason, we
encourage a work environment that actively incorporates different ideas, perspectives and
leadership styles.
We embrace diversity in all its facets and team Hero MotoCorp is
constantly striving to increase the number of women in the organisation, across the entire
spectrum — from the shop floor to the Board room. I am personally driving the D&I
agenda, with a stated mandate to all the leaders to replicate this concept in all of their
respective functions.
Sustained Focus on ESG
Our ‘people first? strategy is inseparable from our future
plans which are tied to our focus on sustainability, responsible manufacturing and doing
business the right way. Through the five pillars of People, Product Stewardship, Inclusive
Growth, Eco-efficiency and Responsible Value Chain, we are evaluating every decision
through the ESG lens. Our consistent efforts in stewarding sustainability have also been
recognised by the Emerging Markets Dow Jones Sustainability Index for two consecutive
years.
As a worldwide sustainability leader, we have initiated a major step
during the year with the institution of a $100 million Global Sustainability Fund. The
fund will be used to nurture 10,000+ entrepreneurs on ESG solutions that will in turn,
create a positive impact on the planet.
Riding Towards New Horizons
Hero MotoCorp is geared up for the next decade and the next horizon. As
we have our eyes on the production of the next 100 million by the end of 2030, we are
taking strides towards sustainability and electrification with a single-minded
determination to Be the Future of Mobility.
All I can promise is that, while the first 100 million was achieved
with the production of motorcycles and scooters, the next 100 would certainly be an
all-new, innovative and greener body form.
I am confident that our leadership team and the entire Hero family,
with their courage, confidence and dedication, will write the next chapter of the
Company?s unique success story.
Together, we will make a difference in the future.
On behalf of team Hero MotoCorp, I thank our valued shareholders,
dealers, distributors, supply chain partners, associates, our entire workforce, our
customers in India and across the world, for their unstinted support and faith in our
Company, our people, as well as our products.
I wish everyone a healthy, safe and prosperous FY 2022-23.
| Dr. Pawan Munjal |
| Chairman & CEO, Hero MotoCorp |
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Hero MotoCorp Ltd
Directors Reports
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.
FINANCIAL RESULTS – STANDALONE & CONSOLIDATED
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 |
| Expenses |
|
|
|
|
| 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 |
| Dividend |
|
|
|
|
| - 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 |
FINANCIAL HIGHLIGHTS
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.
CONSOLIDATED FINANCIAL STATEMENTS
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.
UPDATE ON PANDEMIC AND OTHER MATTERS
COVID-19
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.
CHANGES IN CAPITAL STRUCTURE
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.
DIVIDEND
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.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
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.
CHANGE IN NATURE OF BUSINESS
During FY 2021-22, there was no change in the nature of Company?s
business.
CAPACITY EXPANSION, NEW PROJECTS & STRATEGIC ALLIANCES
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
GLOBAL FORAYS
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.
INNOVATION
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.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
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.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
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.
BOARD MEETINGS
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.
COMMITTEE MEETINGS
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.
ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
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.
DIRECTORS? RESPONSIBILITY STATEMENT
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.
REMUNERATION AND BOARD DIVERSITY POLICY
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.
EMPLOYEES? INCENTIVE SCHEME
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.
CORPORATE GOVERNANCE
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.
TRANSFER TO GENERAL RESERVE
During the year under review, no amount has been transferred to General
Reserve of the Company.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
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.
MATERIAL CHANGES AND COMMITMENTS
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.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
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
DEPOSITS
Your Company has neither accepted nor renewed any deposits during FY
2021-22 in terms of Chapter V of the Act.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
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.
RISK MANAGEMENT FRAMEWORK
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.
VIGIL MECHANISM/ WHISTLE-BLOWER POLICY/ CODE OF CONDUCT
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
SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY
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.
Policy
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.
AUDIT COMMITTEE
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.
AUDITORS AND AUDITORS? REPORT
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.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
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.
CODE FOR PREVENTION OF INSIDER TRADING
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.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
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.
LISTING
The equity shares of your Company are presently listed on the BSE
Limited (‘BSE?) and the National Stock Exchange of India Limited
(‘NSE?).
PERSONNEL
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.
PARTICULARS OF EMPLOYEES
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.
ANNUAL RETURN
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.
COMPLIANCE WITH SECRETARIAL STANDARDS
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.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under Section 134(3)(m) of the Act read with Rules
made thereunder is annexed to this report as
Annexure – IX.
STATUTORY DISCLOSURES
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.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
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
DISCLOSURE UNDER THE HUMAN IMMUNODEFICIENCY VIRUS AND ACQUIRED IMMUNE
DEFICIENCY SYNDROME (PREVENTION AND CONTROL) ACT, 2017
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.
AWARDS AND RECOGNITION
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
ACKNOWLEDGEMENTS
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 |
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