Equity Analysis

Dear Members,

Your Directors are pleased to present the forty first annual report, together with the Company's audited financial statements for the financial year ended March 31, 2024.

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

(I in crore)

During FY 2023-24, your Company clocked sales of 56.21 lakh units over 53.29 lakh units in the previous FY. Revenue from operations was I 37,455.72 crore as compared to I 33,805.65 crore in FY 2022-23, registering an increase of 10.80%. Profit before tax (PBT) in FY 2023-24 was I 5,258.36 crore as compared to I 3,874.56 crore in FY 2022-23, reflecting an increase of 35.72 %. Profit after tax (PAT) in FY 2023-24 was I 3,967.96 crore as against I 2,910.58 crore in FY 2022-23, an increase of 36.33% from the previous year.

Earnings before Interest, Depreciation and Taxes (EBITDA) stood at 14.03% in FY 2023-24, as compared to 11.79% in FY 2022-23.

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 financial year ended March 31, 2024 along with Auditor's Report are provided in this annual report.

The IT Department had conducted a search under Section 132 of the Income Tax Act, 1961 on the Company. Consequently, re-assessment orders for AY 2013-14 to 2017-18 & AY 2019-20 were passed with a total rectified demand of I177.96 Crore. The Company has filed an appeal before CIT(A) against the order.

During the year, the Ministry of Corporate Affairs initiated an investigation and sought information w.r.t. the Company's beneficial ownership in a former vendor(s). The Company has provided the requested information, and there have been no further proceedings in this matter. According to the Company, neither the Company nor any of its directors have any beneficial interest in the former vendor(s).

During the year, officials of Enforcement Directorate had visited premises of the Company in relation to an alleged violations of Customs Act 1962. Certain information was sought from the Company which has been submitted. The aforementioned matter has been stayed by honourable Delhi High Court and is pending legal outcome.

The above matters have been referred in the "Emphasis of Matter" in the Audit Report and has also been mentioned in the note no 34 (b) of the standalone financial statements. The audit report (standalone and consolidated) remain unmodified.

During the year under review, 82,023 equity shares of I 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 March 31, 2024 was I 39,98,43,482 divided into 19,99,21,741 equity shares of I 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 I 2/- each, ranking pari-passu.

Your Directors are pleased to recommend for your approval a final dividend of I 40/- per equity share (2,000%) of face value of I 2/- each in addition to an overall Interim Dividend of I 100/- per share (5,000%), which includes a special dividend of I 25/- per share (1250%) to commemorate the centennial year of Chairman Emeritus Dr. Brijmohan Lall Munjal, aggregating a total dividend payout of I 140/- per equity share (7000%) for FY 2023-24. In the previous year, total dividend payout of I 100/- per equity share (5,000%) of face value of I 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/content/dam/hero-aem-website/investor-assets/disclosure-documents/ DividendDistributionPolicy.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 2023-24, there was no change in the nature of Company's business.

The FY24 was a fascinating year during which, your Company directed its resources on capitalising opportunities, strategic investments and working towards business resilience with focus on growth and further strengthening the product portfolio.

Due diligence on economic factors and commodity headwinds facilitated us to further evaluate our manufacturing capacity and resource optimisation with a broader lens to optimise capacity utilisation.

As a proactive corporate, your Company released its sixth 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.

During the period under review, the Board of Directors at its meeting held on February 09, 2024 has approved an investment of upto I 600 crore (approx.), for setting up a Global Parts Center (GPC) 2.0 with a storage capacity of upto 36,700 Stock Keeping Units(SKUs), at Tirupati, Andhra Pradesh.

In the FY24, your Company has showcased remarkable strategic agility and resilience in navigating the intricate dynamics of global markets. This resilience was evident in FY24, where the Company has achieved higher export figures, recording 2,00,923 units, marking a robust growth of 16.3% over the previous fiscal year. This impressive growth can be attributed to the Company's astute market-fit product portfolio and unwavering commitment to customer-centricity. The pivotal initiatives that propelled this growth are as follows:

1. Focused Market Approach: Despite facing challenging economic conditions, your Company maintained and augmented its market share in key markets such as Mexico, Turkey, Bolivia, and Tanzania. The major gainer was Turkey with 3.3% (MS 9.6%) market share gain in FY24 as against FY 23 (MS 6.3%). This focused approach ensured sustained growth amidst adversities.

2. Product Portfolio Enhancement: Your Company has bolstered its product portfolio with the launch of 4 new products, including three premium offerings (XMR 210, Hunk 160R 4V, Xpulse 200 4V), Xoom 110 Scooter along with the introduction of 8 refreshes (Hunk 150, Xpulse 200 Euro5, Xpulse 200T, Ignitor 125 Xtec, Pleasure 100, Hunk 160R 2V, Splendor+ Sports, Super Splendor ). This strategy aimed at meeting diverse consumer preferences and further solidifying its market presence.

3. Hero 2.0 NextGen Visual Identity: Undertaking a visual identity changeover to Hero 2.0 NextGen ensured an enhanced and cohesive customer experience across various channels. This strategic move reinforced the Company's brand identity and resonance with consumers. A total of 150+ channels had undergone the Hero 2.0 changeover in FY24.

4. Expansion in Key Markets: Your Company's strategic initiatives to start operations in Philippines with commencing dispatches in Q4 FY24, restarting Nigeria with Tolaram Group and revitalising operations in Nepal through the partnership with CG Group underscored its commitment to effective market penetration. These endeavors signifies the Company's proactive approach to leverage local expertise and networks for market expansion.

5. Implementation of Exchange Platform: The implementation of the Company's own Exchange platform in Bangladesh, with plans for secre wider regional implementation, laid a robust foundation for sustained growth. This platform not only facilitates seamless exchange transactions but also enhances customer engagement and loyalty.

6. Digitisation Initiatives: The Company's Digitisation efforts, including website revamp, Lead Management System (LMS) setup and Dealer Management System (DMS) implementation, streamlined processes and enhanced operational efficiency. These digital initiatives have facilitated smoother interactions with customers and stakeholders, fostering a more agile and responsive organisational culture.

In South Asia, despite a 24% decline in dispatches to Bangladesh due to economic slowdown and forex shortfalls, your Company has made significant strides in parts retail and successfully resumed dispatches to Nepal in Q4. These efforts underscore the Company's resilience and adaptability in navigating evolving market landscapes.

In Africa, the Company has witnessed a remarkable surge of 71% in dispatches over FY23, with Turkey, the Democratic Republic of the Congo (DRC), and the Gulf Cooperation Council (GCC) emerging as major growth drivers. Despite industry downturns in Nigeria, your Company has made timely market entry in Q4 with 2005 units, which exemplified its agility in capitalising on emerging opportunities.

The exponential growth in Turkey by 357% and strong growth in DRC by 107% is testimony to the Company's effective market penetration strategies and robust brand presence in these regions.

In Latin America, the Company's exports registered commendable growth of 41% over FY23, fueled by exceptional performance in Mexico with a staggering 290% increase in dispatch in FY24 over previous year and a modest dispatch growth of 4.3% in Bolivia.

Furthermore, the Company's strategic brand association with Diego Simeone for Latin American markets has significantly bolstered its brand equity and visibility, further strengthening its competitive advantage in the region.

The Company's unwavering emphasis on the premium segment, coupled with its customer-centric innovation, has solidified its position as a frontrunner in the global market. Looking ahead, the strategic focus is on key growth levers, including the expansion in premium segment portfolio, Hero 2.0 NextGen Visual Identity, Digitisation initiatives, and the Company's own exchange platform, thereby setting a formidable foundation for sustained growth and success in the global marketplace.

The stellar performance in FY24 underscores its unwavering commitment to innovation, and with strategic agility has positioned the Company as a truly global brand.

The Hero Innovation Cell (HIC) stands as a testament to the Company's commitment and focus on nurturing and amplifying a culture of innovation within the organisation and its global network.

Established to break traditional boundaries and set new industry benchmarks, HIC plays a crucial role in aligning with India's vision for fostering innovation. HIC develops innovative ideas into scalable solutions, thriving on collaboration and co-creation with diverse partners including your Company's associates, dealers, suppliers, customers, global start-ups, academia, and the broader community.

In the past fiscal year, the HIC has driven impactful programs such as the Idea Contest, now in its ninth season, which is a cornerstone of our innovation framework. This platform has consistently sourced ground-breaking ideas from our associates, leading to innovations like the automatic headlight dipping system, smart safe ride solution and the hero smart hybrid series. These initiatives not only improve our product offerings but also contribute to safer and more sustainable mobility solutions. The RAPID POC program, executed in collaboration with Plug and Play in Germany, is another key initiative. This prototype validation program partners with global innovators to co-create and test solutions tailored to our specific business challenges. Last year, we achieved three successful proofs of concept, enhancing our operational efficiencies and product capabilities.

The Company's engagement with the Smart India Hackathon (SIH) further underscores its commitment to innovation. As the world's largest open innovation model, organised by the Ministry of Education, Government of India, SIH 2023 witnessed an unprecedented surge in participation. Over 2,60,000 students collaborated on solving critical challenges across sectors like healthcare, agriculture, and cybersecurity. The Company's involvement not only supported the hackathon's goals but also enabled to mentor young talent, facilitating connections that extend beyond the event.

The Hero Campus Challenge (HCC) is another significant endeavor that invites students from global technical and business institutions to solve real-life business challenges. The ninth season, launched in March 2024, saw fierce competition with teams from institutions such as the National Institute of Technology - Raipur, Indian Institute of Management

- Bangalore, and JBIMS Mumbai leading the way. These interactions provide students with a platform to demonstrate their innovative capabilities while potentially securing future roles within the Company.

As we look towards FY 25, the HIC is set to continue its vital role in propelling the Company as a leader in innovation, both in India and on the global stage. Our commitment to develop a sustainable innovation ecosystem not only advances our strategic goals but also has a profound impact on the broader community, ensuring that the Company remains at the forefront of the automotive industry.

As businesses continue to leverage digital technology to enhance operations, the risk of being exploited by cyber threat actors also increases. However, your Company is proactively addressing this challenge by maintaining a mature cyber security posture that focuses on prevention, detection, response and recovery framework and methodology.

Led by the designated Chief Information Security Officer (CISO), dedicated team of cyber security professionals diligently oversee various cyber security solutions, operations and preventive measures.

Secure by design methodology is adopted and every application/solution undergoes through an architecture review and evaluation and complete vulnerability assessments before being launched.

In order to foster a strong cyber security culture within the organisation and empower employees to be the first line of defense, various activities such as awareness trainings, monthly newsletters, email communications, and quizzes are utilised to educate employees on best cyber security practices. Compliance with industry regulations is a top priority for your Company's cyber security team, and they work diligently to ensure that your organisation remains ISO 27001 compliant. By maintaining a proactive and comprehensive approach to cyber security, we are committed to safeguard organisation's assets and maintain the trust of our customers, employees & stakeholders.

Pledged to ethical and responsible conduct, Hero MotoCorp believes in acting in the best interest of the customers, public, employees, business partners and all other stakeholders. Successful business and reputation is built on prioritising the interest of stakeholders and establishing a strong foundation of trust. Your Company follows rigorous product safety and quality standards to fulfill its fundamental responsibility to build faith of the customers in the quality of products. Supplier selection and purchases are based on need, quality, service, price and other terms and conditions. Supplier relationships are conducted by way of appropriate written contracts and are based on high standards of ethical business behaviour. Duty to the Company requires its employees, to avoid and disclose actual and apparent conflicts of interest. No employee shall appropriate corporate business opportunities for themselves and use the Company information or position for personal gains. Your Company is committed to transparency in disclosures and public communications except where the need of business security dictates otherwise. Hero MotoCorp is committed to make full, fair, accurate, timely and understandable disclosure on all material aspects of its business including periodic financial reports that are filed with or submitted to regulatory authorities.

Our enterprise-wide quality philosophy is designed to uphold our undying commitment to excellence by ensuring robust quality management practices across our entire value chain. We have achieved this through rigorous design verification, validation and meticulous product development practices, and by creating world-class manufacturing infrastructure, processes, and systems across our suppliers and manufacturing locations. Our state-of-the-art testing infrastructure and NABL accredited quality labs are a testament to our world-class testing and validation standards. Additionally, we have continued with our digital transformation projects, utilising AI, IoT, and other technologies to empower our teams, promote transparency, swift decision making, and faster response times.

We have strengthened our design quality frameworks through strategically designed initiatives. A comprehensive lessons learnt repository, robust DFMEA & PFMEA encompassing all previous design inputs/concerns and key stakeholders across the value chain have been deployed to ensure proactive management of potential concerns and continuous improvement. This helps in enhancing efficiency and reduction in the new model ECN.

We are continuously supporting our supply chain partners in upgrading their quality systems by sharing technical know-how. Our supply chain partner quality manual lays down guidelines for effective functioning and establishes stringent checkpoints along the different stages of product development and mass production. For this, our Vendor Quality Rating (VQR) framework is a comprehensive metric that encapsulates all the critical quality parameters of our supply chain partners. This metric helps us critically monitor and analyse their performance on quality parameters, thereby serving as the source of various strategic initiatives for supply chain excellence, ensuring zero defects, zero delays and zero waste.

Our teams have continued the initiatives from previous years to further improve the quality management capabilities of our supply chain partners. We have conducted various activities, including sustenance audits for process improvements, Digitisation for automated monitoring of Critical to Quality parameters, 4M restoration projects, traceability to reduce risks associated with product recalls, and sensitisation workshops for our Tier 2 supply chain partners in collaboration with our Tier 1 suppliers. These efforts have helped us enhance our supply chain management and ensure better quality products for our customers.

In addition to this, we regularly monitor customer feedback and concerns, having more than 20 different sources for capturing the voice of customers. Each feedback/concern is critically evaluated by a team of internal subject matter experts and a swift response is delivered to the customer to ensure highest level of satisfaction. These inputs are also captured in our internal databases for consideration while new product and process development.

We complement our objective to foster a culture of quality across the value chain by engaging all stakeholders in our pursuit of excellence. Our efforts include ongoing training and awareness sessions, dedicated sensitisation drives, and monthly quality town halls ("Q Colloquium") that cover critical topics. These focus on developing the right mindset among all stakeholders, while providing opportunities for young talent to showcase innovative ideas and critical thinking to a wider organisational audience. By building on last year's momentum with these initiatives and practices, we aim to strengthen our pursuit of fostering enterprise-wide quality across Hero's value chain.

At Hero MotoCorp we have always care about the safety of all our stakeholders i.e. employees, visitors, vendors, contract employees, logistic drivers, and other persons who may be affected by its operations. The Company has put in the best efforts to provide a safe and conducive working environment and is committed to ensuring highest standards of safety in the workplace. We believe that safe work practices lead to better performance, motivated work force and higher productivity. The Company has updated its Occupational Health & Safety Policy with a focus to prevent any work related injury and ill health of employees, permanent & non-permanent workers, contractors, community and all interested parties by eliminating hazards and reducing risks. These policies and programmes have been designed to prevent physical (including occupational), mental, and psychosocial health issues and to improve employees' overall well-being. We have developed our programmes and initiatives, which comply with legal and statutory requirements and international standard ISO-45001, bodies including ILO and WHO so that we can implement best practices to promote wellness and safety at our workplace. We have set targets for establishing a zero-incident culture, which includes zero fatalities and zero LTIFR and LTIR rates. We are continuously working to improve our OHS management system through regular evaluation via internal and third-party audits and developing targeted action plans and resolutions against findings.

At Hero MotoCorp, we believe that employees are the most important pillar for organisational success. Talent development plays a pivotal role and is one of the top-most priorities in this changing landscape.

Our prime focus is to enhance the opportunities and build capabilities for future ready workforce. We continued to invest in our employees to help them realise their full potential. All our talent development initiatives are comprehensive and tailored made, customised as per the business and individual need. We keep focusing on enhancing the leadership and managerial skills at all levels within Hero MotoCorp with our tiered leadership approach. This ensures in developing a strong talent pipeline and future successors. Our program combines educational modules, hands-on experience, and practical application to equip aspiring leaders with essential leadership qualities. In line with this is our capability development framework which has programs like NexGen leaders, Transcend Leaders Program, LeadNext and Hero ACE. We have partnered with top institutes, giving a strong platform to our employees to grow personally and professionally by sponsoring them for higher education like Hero MBA with BML Munjal University and BITS Pilani. To boost confidence of women employees and encourage more women in leadership roles, your Company conducts a ‘Women in Leadership' course in collaboration with BML Munjal University. The Women in Leadership program was started with the vision to diversify our leadership pipeline. It is a nine-month leadership journey and is designed keeping in mind the unique challenges faced by women in their path to leadership and professional lives. These leaders will enable the creation of a leadership pipeline, inclusive in nature, for the organisation. The program develops individuals on three levels: self, team, and organisational leadership.

By investing in people, our most critical resources, we aim to empower our workforce to reach their full potential and drive sustained innovation and performance across the organisation. We are committed to staying at the forefront of industry trends, fostering a culture of continuous learning and development, and positioning ourselves for sustained success and impact in the year ahead.

At Hero MotoCorp, Diversity, Equity and Inclusion is a way of life. Our vision, Be the Future of Mobility is built on these principles. The Company remains committed to promoting gender diversity, be it in the workforce or designing and developing products specifically for women customers. Our goal is to ensure 30% women in the workforce. We are doing this by strengthening our efforts towards building a workplace that has all the right opportunities and support that women colleagues can tap into to grow in their careers. We have made significant strides towards our goal in this FY24. Our recruitment efforts have focused on sourcing talent from diverse backgrounds, associating the top academic institutions, and partnering with organisations that specialise in diversity recruitment.

• 45% increase in the total number of women in workforce

• 56% increase in women representation on shopfloor

• 85% returning mothers continue to work with us

• 43% increase in Senior Management women

• 41% increase of Women in Science, Technology, Engineering & Mathematics To steadfast our commitment to build an inclusive culture, we have implemented varied initiatives and programs:

• HERoes Network, one of its kind women network platforms, was launched across 8 locations along with an Open House session with CHRO and CIDO. This network enables and supports women to share experiences, mentor and nurture each other. Within HERoes Network we are hosting a series of mentoring conversations with leaders. We introduced the concept of Lean in Circles where groups of 12-13 women choose a topic that is relevant to their workplace experience and are assigned a mentor from the leadership team to work and learn from these experiences.

• Building an inclusive workplace: Our manufacturing facility supports women employees "Ergonomically" to reach specific heights of the conveyor belts by automated pulley, planks and other Kaizen techniques to provide equal opportunities.

• We rolled out Equity-First Policies following focused group discussions and feedback from women employees. These policies are the cornerstone of the inclusive and supportive environment we strive for – One where every woman at Hero MotoCorp can grow and thrive.

• Safe company-sponsored transportation for women employees including contractual employees.

• Gender-neutral parental leave policies and work-from-home policies post maternity leave.

• Mandatory vacations - this applies to every employee within Hero MotoCorp - we want to promote a culture of planned and compulsory downtimes to recharge and rejuvenate.

• Support for returning mothers whether it be creche facilities, a buddy-system that eases their return to work and helps them settle in; a policy to have a child and an attendant during business travel for 6 months after returning to work.

• We cover medical costs to avail IVF.

• Better infrastructure (like additional washrooms) for women employees.

Looking ahead, we are committed to building on our progress and implementing new strategies to further advance diversity, equity, and inclusion within our organisation for FY 25. A new DE&I framework was announced on International Women's Day, March 08, 2024 which will strengthen our commitment. The focus remains to continue and build:

• Building the core by hiring, retention and development initiatives.

• Strengthen the ecosystem by providing inclusive trainings on gender sensitisation, unconscious bias, etc.

• Continuous engagement of leadership team in DEI efforts, ensuring that diversity and inclusion are embedded into our organisational values and strategic priorities.

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. In compliance with the provision of Section 129(3) of the Act, a separate statement containing the salient features of financial statements of subsidiaries and joint ventures of the Company in the prescribed Form AOC-1 is annexed to consolidated financial statement.

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 2023-24, HTCG has reported unadjusted revenue of I 125.94 crore and a net profit of I 5.89 crore.

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 2023- 24, HNBV has reported turnover of I 3.68 crore and a net profit of I 1.97 crore.

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 FY 2023- 24, the Company has reported unadjusted revenue of I 413.34 crore and a net loss of I 34.25 crore.

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 2023-24, HNBL reported unadjusted revenue of I435.84 crore and a net profit of I 14.35 crore.

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 FY 2023-24, HMCLA has reported unadjusted revenue of 1.02 crore and a net profit of I 0.87 crore.

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 66% of the equity share capital in HMCMMA. During FY 2023-24, HMCMMA has reported unadjusted revenue of I 377.78 crore and a net profit of I 3.33 crore.

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 2023-24, HFCL's Profit attributable to the Company is I 257.71 crore.

AEL is a private limited company, focused on developing, designing and selling premium electric two-wheelers. The shareholding of your Company in AEL is 43.94% which is equivalent to 40.89% on a fully diluted basis. During FY 2023-24, AEL's loss attributable to the Company is I 389.77 crore.

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

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/content/ dam/hero-aem-website/investor-assets/disclosure-documents/20191126105356-code-policy-400.pdf

During the year under review, Prof. Jagmohan Singh Raju was re-appointed as an Independent Director w.e.f November 15, 2023 for a term of five years. His term will end on November 14, 2028.

The Board upon the recommendation of the Nomination and Remuneration Committee has appointed Mr. Niranjan Gupta as CEO of the Company w.e.f. May 1, 2023, thereby separating the role of the Chairman and CEO. Consequent to the above, Dr. Pawan Munjal continued to be the Executive Chairman & Whole-time Director on the Board.

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting the status of Independent Directors of the Company.

Further, the Independent Directors have confirmed that they are not aware of the any circumstances or situations, which exist or may be anticipated that could impair or impact their ability to discharge their duties with an objective of independent judgment and without any external influence and they are independent to the management.

In the opinion of the Board, the Independent Directors of the Company are persons of high repute, integrity and possesses the relevant expertise and experience in the respective fields. They fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.

In compliance with Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the details of all the Independent Directors have been registered with the databank maintained by the Indian Institute of Corporate Affairs (IICA). Further, all the Independent Directors have passed the online proficiency self-assessment test conducted by IICA except those who have been exempted in compliance with the provisions of this Act.

The Company has a robust succession planning process which is overseen by the Nomination and Remuneration Committee. Further, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on June 25, 2024, subject to the approval of the members by way of special resolution, has approved the reappointment of:

1. Mr. Vikram Sitaram Kasbekar as Whole-time Director (designated as Executive Director- Operations) for another period of 3 years commencing from August 8, 2024 upto August 7, 2027.

2. Ms. Tina Trikha as Non-Executive Independent Director, for a second term of 5 years, with effect from October 23, 2024 upto October 22, 2029.

3. Ms. Camille Miki Tang as Non-Executive Independent Director, for a second term of 3 years, with effect from November 19, 2024 upto November 18, 2027.

4. Mr. Rajnish Kumar as Non-Executive Independent Director, for a second term of 3 years, with effect from November 25, 2024 upto November 24, 2027.

In terms of the applicable provisions of the Act and the Articles of Association of the Company, Mr. Pradeep Dinodia, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment.

Brief resume and other details of the above said Directors have been furnished in the Annexure A of the notice of Annual General Meeting.

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

During the year under review, the Board has appointed Mr. Vivek Anand as Chief Financial Officer of the Company with effect from March 1, 2024. Consequent to the above, Mr. Niranjan Gupta ceased to be the Cheif Financial Officer of the Company w.e.f. March 1, 2024. He continues to hold the position of CEO.

Dr. Pawan Munjal, Executive Chairman & Whole-time Director, Mr. Niranjan Gupta, Chief Executive Officer, Mr. Vivek Anand, 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.

During FY 2023-24, six 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 2023-24, 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 2023-24. Led by the Nomination and Remuneration Committee, the evaluation was carried out using structured 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. The Directors were satisfied with the Board's engagement, experience, diversity and expertise. The Board committees have also been functioning well and contributing effectively. The performance of individual directors was found satisfactory. 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 March 31, 2024, 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 judgments 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 March 31, 2024 and of the profit and loss of your Company for the financial year ended March 31, 2024; 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 March 31, 2024 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 (NRC) 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 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 Employees Stock Options (ESOPs), Restricted Stock Units (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 Executive Officer, 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.

The Remuneration and Board Diversity Policy of your Company can be viewed at the following link: https://www. heromotocorp.com/content/dam/hero-aem-website/in/ en-in/company-section/reports-and-polices/policies/pdfs/ Renumeration.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 upto 1% of net profits of the Company pursuant to the provisions of Section 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/PRSUs 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 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. For appointment of an Independent Director, the NRC shall evaluate the balance of skills, knowledge and experience on the Board and prepare a description of role and capabilities required of an Independent Director. The person recommended to the Board for appointment as an Independent Director shall have capabilities identified in such description.

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.

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/download-reports/ annual-report.html. Further, there is no change in the scheme and the scheme is in compliance with the SEBI Regulations. Your Company has received a certificate from M/s SGS Associates LLP, Company Secretaries (Firm Registration No. L2021DE011600), the Secretarial Auditors' of the Company 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 through postal ballot. The certificate would be placed/ available at the ensuing annual general meeting for inspection by the members.

In keeping with the objective of building a robust organisation in a rapidly evolving dynamic environment while retaining employee welfare at its core, Company launched a voluntary retirement scheme (VRS) for its staff in April 2023. The VRS offered a generous package that included – among other benefits - a one-time lump-sum amount, variable pay, medical coverage, retention of company car, relocation assistance, career support, etc. The VRS was designed in line with the vision to make the organisation agile and ‘future-ready'. During the year under review, your Company has provided I 159.99 crore for employees who have accepted to be part of VRS.

The statement of disclosure of Remuneration under Section 197(12) 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) & 5(3) of the Rules forms part of this report. However, the report and 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.

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/content/dam/hero-aem-website/in/ company-section/code-of-conduct/code-of-conduct-final. pdf In terms of Listing Regulations, a report on Corporate Governance along with the certificate from M/s SGS Associates & LLP, Company Secretaries (Firm Registration No. L2021DE011600) 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. Further, the certificate on Non-disqualification of Directors and compliance certificate is enclosed as Annexure – IV and Annexure – V, 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 I 8.24 crore for the FY 2015-16 (Interim & Final Dividend) and 31,440 shares to the Investor Education and Protection Fund (IEPF) Authority of the Government of India. The dividend pertaining to the shares transferred to demat account of the IEPF Authority amounting to I10.67 crore (after deduction of tax) was also transferred to the IEPF Authority. Accordingly, the total amount of dividend transferred by the Company to IEPF Authority during the FY24 was I 18.91 crore. Further, the cumulative amount of unpaid dividend lying in various unpaid dividend account(s) of the Company, as on March 31, 2024, is I 25.69 crore.

No material change and/or commitment affecting the financial position of your Company has occurred between the end of financial year and the date of this report.

During FY 2023-24, 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:

( I in crore)

* Reinstate on conversion of debt to equity.

Your Company has neither accepted nor renewed any deposits during FY 2023-24 in terms of Chapter V of the Act.

During FY 2023-24, all contracts/arrangements/transactions entered into by your Company were in compliance with the applicable provisions of the Act and the Listing Regulations. Further, during FY 2023-24, there were no materially significant related party transactions entered into by your Company with the Promoters/Promoter Group, 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 and are approved only by independent non-conflicted members. The approval of the Board for related party transactions has also been taken in accordance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations, wherever required. During FY under review, your Company has obtained prior omnibus approval of the Audit Committee for related party transactions which were repetitive in nature and are in ordinary course of business and at arm's length. All related party transactions entered during the year were in ordinary course of business and at arm's length basis. During FY 2023-24, your Company has not entered into any contract/arrangement/transaction with related parties which could be considered ‘material' in accordance with the provisions of Listing Regulations and the Company's Policy on

Materiality of Related Party Transactions. Thus, there are no transactions required to be reported in Form AOC-2.

Related party transactions were disclosed to the Audit Committee and the Board on regular basis as per the Act, Listing Regulation & 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/ content/dam/hero-aem-website/in/en-in/company-section/ reports-and-polices/policies/pdfs/Related%20Party.pdf

The Company's comprehensive risk management framework operates under the guidance of the Management Team at Hero MotoCorp which reports into the Risk Management Committee (RMC), a Committee of the Board of Directors. The Company's risk management procedures take into consideration external as well as internal threats to devise strategies to mitigate a diverse set of strategic, operational, regulatory, technology, IT and cyber-security related risks. Risk identification, analysis, mitigation and monitoring is undertaken periodically by the Management Team and is overseen by the Risk Management Committee (RMC). Several management and leadership team members are actively involved to ensure maintenance of comprehensive and consistency of the overall process, especially for their relevant domain/functions, as is appropriate. Post the assessment, a detailed calendar for the mitigation of the identification of risks is prepared and updated to the RMC. Thereafter, on a periodic/quarterly basis the RMC is updated as per plan; and with regards relevant new updates/developments.

The Chief Risk Officer works with the Risk Steering Committee (SteerCo) who, on behalf of the Management Team, are responsible to update the RMC regarding the status of the risks and also updates the organisational risk register as per changes in the external and internal environment that impact the organisation.

Your Company has also worked on and tested a robust Business Continuity Plan (BCP) to deal with unforeseen and un-anticipated scenarios. The continuation of operations during COVID are a classic example of how the BCP at Hero MotoCorp continued to operate seamlessly. We have also worked on BCP scenarios based on various unknowns, to prepare business operations continuity and carried out scenario-analysis together with an independent consultant to test and improve our preparedness.

Some of the key risks your Company focused on and developed mitigation plans were as follows:

Geopolitical uncertainties in key global markets: The business sentiment continued to remain challenging with many global economies impacted especially in the Middle East and in the Eurasian region. There is also the possibility of the extension of the risk of conflict in Asia. The logistics and supply chain industry took a hit.

However, your Company managed these demand side risks by concentrating on volumes from countries which were relatively unaffected. On the supply chain risks, your Company has built a strong local base which made sure that its operations were not impacted.

Shifting consumer preferences towards electric mobility: The 2W industry, especially in scooters has continued to grow in EV adoption partly promoted by subsidies, and partly by lower prices offered by various competitors. Both helped in greater adoption of electric mobility and shift in consumer preferences. Your Company has plans to gain from this segmental shift as scooters are expected to be the first in EV adoption for 2W. The first in-house 2W EV product was launched in FY23 and we have expanded our dealer touch-points where EVs have been made available. As your Company ramps up to launch a more affordable EV 2W, it should address the business shift more meaningfully. The Company also has investments in other EV brands such as Ather Energy and is developing EV motorcycles with Zero Motorcycles, USA.

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 through savings from the LEAP and LEAD programs, which are programs to structurally reduce costs in manufacturing and supply chain.

Cybersecurity and its impact on business operations: Expanded usage of computing, automation et al and unparalleled connectivity with our vendors and customers including our dealers and end-customers is leading to cyber-security gaining significance as a risk. This is a matter we take in full earnest. The Digital Information & Technology team has a dedicated, empowered Cybersecurity team led by in-house experts who are supported by consultants with expertise in the field.

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, stakeholders 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.

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, 20 complaints were received through various reporting channels and 1 complaint was carried forward from the previous year. Out of these, 20 complaints have been investigated and remaining 1 complaint is under investigation.

During FY 2023-24, no individual was denied access to the Audit Committee for reporting concerns, if any. Further, the Vigil Mechanism/Whistle Blower Policy prescribes adequate safeguard against the victimisation.

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/content/dam/hero-aem-website/investor-assets/disclosure-documents/ VigilMechanismPolicy.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. The implementation and monitoring of the CSR policy is in compliance with the CSR objective & policy of the Company.

The Company's Sustainability and Corporate Social Responsibility (SCSR) Committee functions under the direct supervision of Dr. Pawan Munjal, Executive Chairman & Whole-time Director of the Company, and also the Chairman of the SCSR Committee. The composition of SCSR Committee is Dr. Pawan Munjal (Chairman), Mr. Pradeep Dinodia, Prof. Jagmohan Singh Raju and Ms. Tina Trikha as Members of the SCSR Committee.

During FY 2023-24, no revision was made to the CSR policy of the Company. The CSR policy of the Company can be viewed at the following link: https://www.heromotocorp.com/content/ dam/hero-aem-website/in/en-in/company-section/reports-and-polices/policies/pdfs/csr%20policy.pdf The salient features of the Company's CSR Policy are as under:

1. The philosophy of the Company is guided by the belief that the 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 needs 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.

During the year under review, your Company spent I 73.89 crore on its CSR activities. The implementation and monitoring of the CSR is in compliance with the CSR objective & policy of the Company. The CSR initiatives undertaken by your Company, along with other details, form part of the annual report on CSR activities for FY 2023-24, which is annexed as Annexure – VI. The overview of CSR activities carried out in FY 2023-24 is provided in a separate section in this annual report.

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

1. Ms. Tina Trikha Chairperson

2. Mr. Pradeep Dinodia Member

3. Air Chief Marshal B.S. Dhanoa (Retd.) Member

For the details of the Audit Committee and its terms of reference, etc., please refer to the section on Corporate Governance report of this annual report.

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

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) were appointed in 2022 as the Statutory Auditors of the Company until the conclusion of the 44^th 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 is unmodified and does not contain any qualification, reservation or adverse remark. Further, there were no frauds reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

The Board had appointed M/s R J Goel & Co., Cost Accountants (Firm Registration No. 000026), as Cost Auditors for conducting the audit of cost records of the Company for the Financial Year 2023-24. The Cost Auditors will submit their report for the FY 2023-24 on or before the due date. Further, there were no frauds reported by the Cost Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

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 March 31, 2025.

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.

M/s SGS Associates LLP, Company Secretaries (Firm Registration No. L2021DE011600) were appointed to conduct Secretarial Audit of your Company during FY 2023-24.

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 Secretarial Auditors to the Audit Committee or the Board under Section 143(12) of the Act.

The Board, on the recommendation of Audit Committee, has approved the appointment of M/s SGS Associates LLP, Company Secretaries (Firm Registration No. L2021DE011600) as Secretarial Auditor of your Company for the financial year 2024-25.

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.

Your Company has an extensive IFC Framework in place which includes design and testing of controls and remediation of identified deficiencies. Risk and Control Matrices (RCM) have been defined for all processes based on materiality. Each control has a detailed Control description, associated risk, assignment of control owner, frequency of operation, applicability of Financial Assertions and fraud risk indicator. Test of design and operating effectiveness is conducted every year to assess the adequacy and operating effectiveness of controls.

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

In compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015 (‘PIT Regulations'), your Company has in place the Code of Conduct for regulating, monitoring and reporting of trading by Designated Persons to align it with the industry practices and regulatory changes. The said Code lays down guidelines which provide for the procedure to be followed and disclosures while dealing with shares of the Company and while sharing Unpublished Price Sensitive Information. The Code includes the Company's obligation to maintain the structured digital database (‘SDD'), obligation of designated persons, mechanism for prevention of insider trading and handling of UPSI. Further, the Company has complied with the standardised reporting of violations related to the code of conduct under SEBI (Prohibition of Insider Trading) Regulations, 2015. The Company has also in place its Code of practices and procedures of fair disclosure of unpublished price sensitive information along with policy for determination of legitimate purposes, institutional mechanism for prevention of insider trading and policy for inquiry in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information. The Company has set up a mechanism for weekly tracking of the dealings of equity shares of the Company by the Designated persons and their immediate relatives having access to unpublished price sensitive information. A report covering trading by DPs under the PIT Regulations is placed before the Audit Committee on quarterly basis.

The Company periodically circulates informatory e-mails along with the code and policies on Insider Trading, Do's and Don'ts, etc. to the employees to familiarise them with the provisions of the Code. The officials of the secretarial department conducts an induction program for all the employees joining the organisation and various other workshops/training sessions to educate and sensitise the employees/designated persons. As part of the awareness programme,_an extensive campaign was run across the organisation, in the form of desktop wallpapers and posters on the Company's employee application providing important information on the provisions of the Code. Also, standees and danglers were also placed at all conspicuous places across locations (in India) highlighting the important aspects of the Code of Prevention of Insider Trading and PIT Regulations.

Keeping up the commitment to sustainability, your Company has prepared the Business Responsibility & Sustainability Report (‘BRSR'). The Report provides a detailed overview of initiatives taken by your Company from environmental, social and governance perspectives.

In compliance with the provisions of the SEBI Circular dated July 12, 2023, Bureau Veritas (India) Private Limited has provided a reasonable assurance on the BRSR Core, which consists of the Key Performance Indicators (KPIs) under Environment, Social and Governance (ESG) attributes. The BRSR Core is a subset of BRSR Report. The BRSR Report along with the reasonable assurance statement forms part of the annual report as Annexure – VIII.

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 March 31, 2024, total number of employees on the records of your Company were 9,225 as against 9,215 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.

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/company/investors/shareholder-resources. html?key1=downloads

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. Accordingly, no disclosure or reporting is required in respect of:

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. Receipt of any remuneration or commission by the Whole-time Director of the Company from any of the subsidiary companies.

5. Receipt of any significant or material orders from the Regulators or Courts or Tribunals which may impact the going concern status and Company's operations in future.

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

7. Any application made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

8. Any settlement have been done with the 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. An Internal Complaints Committee (ICC) had been constituted to redress complaints received regarding sexual harassment and the Company has complied with the provisions relating to the constitution of ICC under POSH Act.

Your 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 organises awareness sessions at all locations to sensitise its employees and conducts frequent sessions in a professional manner.

During FY 2023-24, 469 POSH Webinar Sessions were organised and in addition POSH Sessions were planned through the e-module mode. These POSH sessions were well attended by the employees from across the organisation. All new workmen and women associates joining undergo a mandatory session on POSH.

As per the said Policy, an Internal Complaint Committee (ICC) 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: 8 No. of complaints disposed off: 5 No. of complaints withdrawn: 0 No. of complaints pending: 3

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.

Your Company has always endeavored to keep its shareholders informed of all relevant, sufficient and reliable information on a timely and regular basis pertaining to the business, its processes and regulatory affairs to enable them to take informed decision. As a voluntary initiative, the Company emails the quarterly and annual financial results to all the shareholders whose email addresses are registered with the Company/RTA to keep them updated with the financial position and performance of the Company. Further, the Company has issued a Shareholders' Referencer covering rights of shareholders, grievance redressal framework, timelines for various procedures, processes followed by the Company, etc. to empower them through facts and information. The website of the Company has a dedicated section which serves as a knowledge bank for shareholders to keep them sufficiently informed of the statutory changes as well as other pertinent information. All the queries of the shareholders are responded within the prescribed timelines and the Company ensures timely and accurate disclosure on all material matters. Your Company has always encouraged effective shareholder participation in key corporate governance decisions and exercise of voting rights by the shareholders.

The Company has an automated Compliance Framework that monitors and updates all applicable laws and compliance obligations on a regular basis. Automated alerts are sent to compliance owners to ensure that they are complying with regulations within the set timeframe. This proactive measure helps keep everyone on track and avoid any penalties or other legal issues that could arise from non-compliance. The compliance owners certify the compliance status which is reviewed by compliance approvers. A certificate of compliance of all applicable laws and regulations along with exceptions report and mitigation plan, if any, is placed before the Board of Directors on a quarterly basis.

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

1. CII National Award for Excellence in Water Management 2023 to Hero MotoCorp's Gurugram facility.

2. Hero MotoCorp was awarded Fast Runners in Gender Equity at TOI-Ask Insights' The Global Diversity Equity Inclusion Summit & Awards 6.0.

3. CII_National_Award_for Excellence in Energy Management awarded to Hero MotoCorp's Dharuhera plant on September 2023.

4. CII_ National_ Award_ for_ Environmental_ Best Practices awarded to Hero MotoCorp's Gurugram plant in July 2023.

5. CII GreenCo Champion_Award awarded to Hero MotoCorp in July 2023.

6. Haryana Safety Health and Welfare_Award- awarded to Hero MotoCorp's Gurugram plant on January 2024.

7. Car & Bike Awards 2024- Manufacturer of the year.

8. Hero Karizma XMR won the following awards: a) Acko Drive - #TOTM 2024, for the 2024 Best Digital & Social Media Marketing Campaign (Bike) - Rebirth of the legend - (1^st Runner up). b) TopGear Awards 2024- for Two-Wheeler of the year up to 250CC.

9. Hero Xtreme 160R 4V won the following awards: a) TopGear Awards 2024 for the Two-Wheeler of the year up to 160CC. b) Motoring World Awards 2024- for the Commuter of The Year. c) Motor Vikatan Awards 2024- for the Best Facelift 2024.

10. Hero Xoom won the following awards: a) MotorBeam 2024 Awards, for the scooter of the year. b) Acer Faster Awards 2024, for the Scooter of the year. c) ABP Live Auto Awards 2.0 2024 for the Scooter of the year. d) Autocar Awards 2024 for the Scooter of the year. 11. Harley-Davidson X440 won the following awards: a) Car & Bike Awards for the Premium Motorcycle of the Year. b) BBC TopGear Awards for the 2023 Roadster of The Year (Under 500cc). c) Jagran hiTech Awards for the Modern Classic/Retro Bike of The Year. d) Acko Drive - #TOTM for the 2024 Best Digital & Social Marketing Campaign ( Bike) - (_2^nd_Runner_up). e) MotorBeam 2024 Awards for the Bike of the Year.

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.