FUTURE HERO Directors Report

Dear Members,

The Directors are pleased to present the Thirty Fourth Annual Report, together with the Company''''s audited financial statements for the financial year ended March 31, 2017.


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

(Rs, crores)




Year ended

Year ended

March 31, 2017

March 31, 2016

March 31, 2017

March 31, 2016

Net Sales and Other Income





Profit before Finance costs and Depreciation






Finance cost





Depreciation and amortisation expenses





Profit from ordinary activities before share of Profit / (Loss) of associates





Profit/ (loss) from associates

Share in net profit / (loss) of associates





Gain on dilution of interest in an associate





Profit from ordinary activities before tax





Tax expense

Current tax





Deferred tax









Net Profit from ordinary activities after tax





Other comprehensive income /(expense) (net of tax)





Total comprehensive income for the period





Net Profit / (loss) attributable to

a) Owners of the Company





b) Non controlling interest





Other comprehensive income attributable to

a) Owners of the Company





b) Non controlling interest





Total comprehensive income attributable to

a) Owners of the Company





b) Non controlling interest





Balance of profit brought forward






- Interim





- Proposed Final





Corporate Dividend Tax





Transfer to General Reserve





Transfer to Foreign Currency Translation Reserve





Balance carried to Balance Sheet





Basic & diluted earning per equity share on Net profit from ordinary activities after tax (face value Rs, 2/- each) (In Rupees)






During the Financial Year (FY) 2016-17 under review, your Company clocked sales of 6,664,240 units over 6,632,322 units in the previous FY.

During FY 2016-17, revenue from operations was '''' 30,846.12 crores as compared to Rs, 30,700.88 crores in FY 2015-16, registering an increase of 0.47%.

Profit before tax (PBT) was Rs, 4,658.46 crores as compared to Rs, 4,434.87 crores in FY 2015-16, reflecting an increase of 5.04%. Profit after Tax (PAT) was Rs, 3,377.12 crores as against Rs, 3160.19 crores in FY 2015-16, an increase of 6.86% over the previous year.

Earnings before Interest, Depreciation and Taxes (EBIDTA) stood at 15.03% in FY 2016-17, as compared to 14.51% in FY 2015-16.


In accordance with the provisions of the Companies Act 2013 (''''the Act'''') and Indian Accounting Standard (AS)-110 on Consolidated Financial Statements, read with IND AS-28 Investments in Associates and Joint Ventures the Audited Consolidated Financial Statement for the FY ended March 31, 2017 is provided in this Annual Report.


During the financial year under review, 6,750 equity shares of Rs, 2 each were allotted on exercise of employee stock options by the employees of the Company. Consequently, the issued and paid up capital of the Company as on March 31, 2017 was Rs, 399,393,676 divided into 199,696,838 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.


Further improving on the dividend pay-out, your Directors are pleased to recommend for your approval a final dividend of Rs, 30 per equity share (1500%) of face value of Rs, 2 each, in addition to an interim dividend of Rs, 55 per equity share (2750%) declared in the month of March 2017, aggregating a total final dividend payout of Rs, 1,697.42 crores (excluding tax on dividend) during FY ended March 31, 2017. In the previous FY, total final dividend payout of Rs, 72 per Equity Share of the 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. During FY 2016-17, the Board of Directors has approved a Dividend Distribution Policy as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''''Listing Regulations'''') which is available at the following link: http://www.heromotocorp. com/en-in/about-us/key-policies/dividend-distribution-policy.html


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 financial year under review.


During FY 2016-17, there was no change in the nature of Company''''s business.


During FY 2016-17, the fifth plant of your Company at Halol, Gujarat started commercial production during the 3rd quarter. Your Company signed a sale deed with the Andhra Pradesh Industrial Infrastructure Corporation Limited for setting up its sixth manufacturing facility at Sricity in Chittoor District in the state of Andhra Pradesh.

The construction of the second overseas plant of your Company at Jessore in Bangladesh, with an annual installed capacity of 1.5 lakh units, is in full swing and is slated to be operational in the first half of FY 2017-18.


Company''''s aggressive global expansion plans are in top gear. HMCL added five new markets in FY 2017 to take its global presence to 35 countries with a commitment to expand to 50 countries by 2020. The Company has commenced its operations in Argentina, the 35th market to its rapidly growing global footprint. During FY under review, your Company launched the brand “Hero" and its range of products in Myanmar, Ghana, Guinea, Liberia and Argentina.

Over the years, your Company has set global benchmarks in creating world class manufacturing and operational facilities to ensure best in class products on design, technology and quality. In the coming years, your Company plans to strengthen its operations across South Asia, Africa & Middle East and Latin America with the introduction of new products.


The Company has 6 subsidiaries including step down subsidiaries and 3 associate companies. The Company regularly monitors the performance of these companies.

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


HMCL Netherlands B.V. (HNBV)

HNBV, a wholly owned subsidiary of your Company was 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 2016-17, HNBV has invested in operating companies in Colombia and Bangladesh and has reported a net loss of Rs, 0.83 crores.

HMCL Colombia S.A.S. ( HMCLC )

HMCLC was incorporated in Colombia as a joint venture between HNMV and Woven Holdings LLC as a simplified stock corporation company. HNBV currently holds 51% equity in HMCLC and 49% equity shares are held by Woven Holdings LLC. The main business of HMCLC is to manufacture and sell two wheelers in Colombia and is having a manufacturing facility with a production capacity of 60,000 per annum. During the year ended March 31, 2017, the Company has reported a net loss of Rs, 65.30 crores.

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 shares are held by Nitol Niloy Group, Bangladesh. The main business of HNBL is to manufacture and sell two-wheelers. HNBL is in the process of setting up a manufacturing facility with a production capacity of 1.50 lakh two-wheelers per annum. During FY 2016-17, HNBL reported a net loss of Rs, 4.83 crores.

HMCL (NA) Inc.

HMCL (NA) Inc., a wholly owned subsidiary of your Company was incorporated as a Corporation pursuant to the General Corporation Law of the State of Delaware, United States of America. HMCL (NA) Inc., has invested in Erik Buell Racing, Inc. (''''EBR''''), a Delaware corporation by subscribing to 49.2% of its equity share capital. During the period ended March 31, 2017, HMCL (NA) Inc. has incurred a loss of Rs, 0.01 crores.

HMCL Americas Inc. (''''HMCLA'''')

HMCLA a wholly owned subsidiary of your Company was 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 March 31, 2017, HMCLA has incurred a loss of Rs, 0.52 crores.

HMC MM Auto Limited (''''HMCMMA'''')

Your Company has a joint venture with Magneti Marelli S.p.A Italy, namely HMC MM Auto Limited in India, 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 2016-17, HMCMMA has incurred a loss of Rs, 9.49 crores.

Associate Companies Hero FinCorp Ltd. (''''HFCL'''')

HFCL, an associate of your Company was incorporated in the year 1991. Your Company holds 41.03% 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 2016-17, HFCL recorded an income from operations of Rs, 1,317.14 crores and a profit of Rs, 249.39 crores.

Ather Energy Private Ltd. (''''AEL'''')

AEL is a private limited company, focused on developing designing and selling premium electric two wheeler. During the year, your company has acquired 30.1% stake in AEL, which reported a loss of Rs, 1.27 crores.

Erik Buell Racing, Inc. (''''EBR'''')

Your Company through its subsidiary, HMCL (NA) Inc., has invested in Erik Buell Racing, Inc. (''''EBR''''), a Delaware corporation by subscribing to 49.2% of its equity share capital. EBR has ceased its operations and entered into Assignment for the Benefit of Creditors under Chapter 128 of the Wisconsin Statutes (''''Chapter 128 Process'''').

A statement containing salient features of financial statement of subsidiaries 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: http://www.heromotocorp. com/en-in/about-us/key-policies/policy-on-material.html


During FY 2016-17, Mr. Sunil Kant Munjal, stepped down from the Board of Directors on completion of his tenure as Joint Managing Director on August 16, 2016. The Board is grateful for his contributions during his tenure and wishes him success in all his future endeavors.

At the previous Annual General Meeting of the Company, the shareholders had approved the appointments of Mr. Pawan Munjal as Chairman, Managing Director & CEO for a period of 5 years and Mr. Vikram S. Kasbekar as Whole-time Director for a period of 3 years. Mr. Paul Bradford Edgerley was also appointed as Non Executive & Independent Director for 5 years.

In terms of the applicable provisions of the Act and the Articles of Association of the Company, Mr. Vikram S. 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. Vikram S. Kasbekar, who is proposed to be re-appointed as a Director of your Company have been furnished, along with the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

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 fulfill the conditions specified in the Act, Rules made there under and Listing Regulations and are independent of the management.

Key Managerial Personnel (KMP)

Mr. Pawan Munjal, Chairman, Managing Director & CEO, Mr. Niranjan Gupta, Chief Financial Officer and Ms. Neerja Sharma, Company Secretary are the KMPs of your Company in accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

On March 31, 2017, Mr. Ravi Sud superannuated and ceased to be the Chief Financial Officer of the Company. W.e.f. April 1, 2017, Mr. Niranjan Gupta was appointed as the Chief Financial Officer of the Company. He has a rich and international experience of over two decades in finance leadership roles.


During FY 2016-17, five meetings of the Board of Directors were held. For details of these Board meetings, please refer to the Corporate Governance section 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 2016-17. Led by the Nomination & Remuneration Committee (''''NRC''''), 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.

As part of the evaluation process, the performance of no 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 no independent Directors was done by the Board excluding the Director being evaluated.


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, 2017, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

2. t hat appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs as at March 31, 2017 and of the profit and loss of your Company for the financial year ended March 31, 2017;

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, 2017 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 NR Committee of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors, Key Managerial Personnel, Senior Management and other employees of your Company. 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 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 FY under review are provided as Annexure I.

The Remuneration Policy of your Company can be viewed on the following link- http://www.heromotocorp.com/en-in/about-us/key-policies/remuneration-policy.html and is also provided as Annexure II.


In terms of the SEBI (Share Based Employee Benefits) Regulations, 2014, 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 plans framed there under.

Further, the NRC has, at its meeting held on August 22, 2016 granted 49,950 stock options under ESOP Plan 2016 to the eligible employees at an exercise option price of '''' 2,469/- per option. In addition, the NRC also approved grant of 11,194 Restricted Stock Units under RSU Plan, 2016 to the eligible employees at the face value of '''' 2/- per unit.

Applicable disclosures as stipulated under the SEBI Regulations with regard to the Employees'''' Stock Option Scheme are provided as Annexure III to this Report and is available on the Company''''s website, www.heromotocorp.com and can be viewed on the following link: http://www.heromotocorp.com/en-in/esop.php

Your Company has received a certificate from M/s Deloitte Haskins & Sells, Gurgaon, Haryana, Statutory Auditors (Firm Registration No. 015125N) 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 in their general meeting. The certificate would be placed at the ensuing Annual General Meeting for inspection by the members.


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

The Board has also evolved and adopted a Code of Conduct based on the principles of good Corporate Governance and best management practices that are followed globally. The Code is available on your Company''''s website, www.heromotocorp.com and can be viewed on the following link: http://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 Mr. Sanjay Grover, Managing Partner (CP No. 3850), M/s Sanjay Grover & Associates, Company Secretaries, New Delhi, confirming compliance of the conditions of corporate governance is annexed hereto and forms part of this Annual Report as Annexure IV.


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


During the FY under review, your Company has transferred unpaid/ unclaimed dividend, amounting to Rs, 2.37 crores for FY 2008-09 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.


No material change and/or commitment affecting the financial position of your Company have occurred between April 1, 2017 and the date of signing of this Report.


During FY 2016-17, 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:

Principal Amount (Shares)

Principal Amount (Bonds/Debentures)






Addition *




Reduction 1




Closing Balance




* HMCL MM Auto Limited Rs, 6.60 crores, HMCL(NA) Rs, Nil, HMCL Netherlands BV Rs, 50.79 crores, HMCL Americas Inc. Rs, Nil, Hero FinCorp Limited Rs, 36.40 crores, Ather Energy Private Limited Rs, 180.52 crores including mark to market adjustment of Bonds Rs, 0.69 crores.


Your Company has neither accepted nor renewed any deposits during FY 2016-17 in terms of Chapter V of the Act.


During FY 2016-17, 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 2016-17, your Company has not entered into any contracts/arrangements/transactions 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 2016-17, there were no materially significant related party transactions made 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 matter 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 on the following link: http://www.heromotocorp.com/en-in/about-us/key-policies/related-party-transactions.html


Your Company follows a comprehensive system of Risk Management. It has adopted a policy and procedure for rapid identification, definition of risk mitigation plans and execution. Actions include adjustments in prices, dispatch plan for specific durations across models, inventory build-up, aligning product line-up as per regulatory mandates and active participation in regulatory mechanisms. Many of these risks can be foreseen through systematic tracking. Major risks can be categorized across following:

1. Changes in regulations

2. Market contraction due to macro-economic factors

3. Socio-economic-political disruptions

Your Company has constituted a Risk Management Committee to oversee the risk management efforts under the Chairmanship of Mr. M. Damodaran, Independent Director. The details of the Committee along with its charter are set out in the Corporate Governance Report, forming part of this report. The Board periodically reviews the Risk Management framework of the Company.


Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower Policy which provides a robust framework for dealing with genuine concerns & 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, victimization, any other unfair practice being adopted against them or any instances of fraud by or against your Company. During FY under review, three complaints were received and processed. Out of these, two complaints have been investigated & acted upon and remaining one is under investigation.

During FY 2016-17, 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 on the following link: http://www.heromotocorp. com/en-in/about-us/key-policies/vigil-mechanism-policy.html


Your Company has constituted a Corporate Social Responsibility (CSR) Committee which functions under direct supervision of Mr. Pawan Munjal, Chairman, Managing Director & CEO of your Company, who is also the Chairman of the CSR Committee. Other members of the Committee are Gen. (Retd.) V. P. Malik and Mr. Pradeep Dinodia, who are Non-Executive and Independent Directors of your Company.

Your Company has implemented the CSR Policy, duly formulated and recommended by the CSR Committee to the Board. The CSR policy lays down CSR activities to be undertaken by your Company. The CSR activities undertaken by your Company are based on the approved CSR policy, which is available on the Company''''s website, www.heromotocorp.com and can be viewed on the following link: http://www.heromotocorp.com/en-in/about-us/key-policies/ corporate-social-responsibility.html

The CSR Policy of your Company, as adopted by the Board, broadly covers the following focus areas:

a) To direct HMCL''''s CSR Programmes, inter alia, towards achieving one or more of the following - enhancing environmental and natural capital; supporting rural development; promoting education including skill development; providing preventive healthcare, providing sanitation and drinking water; creating livelihoods for people, especially those from disadvantaged sections of society, in rural and urban India and preserving and promoting sports.;

b) To develop the required capability and self-reliance of beneficiaries at the grass roots, in the belief that these are prerequisites for social and economic development;

c) To engage in affirmative action/interventions such as skill building and vocational training, to enhance employability and generate livelihoods for persons including from disadvantaged sections of society;

d) To pursue CSR Programmes primarily in areas that fall within the economic vicinity of the Company''''s operations to enable close supervision and ensure maximum development impact;

e) To carry out CSR Programmes in relevant local areas to fulfill commitments arising from requests by government/regulatory authorities and to earmark amounts of monies and to spend such monies through such administrative bodies of the government and/or directly by way of developmental works in the local areas around which the Company operates;

f) To carry out activities at the time of natural calamity or engage in Disaster Management system;

g) To contribute to the Prime Minister''''s National Relief Fund or any other fund set up by the Central Government for socioeconomic development and relief and welfare of the Scheduled Caste, the Scheduled Tribes, other backward classes, minorities and women;

h) To contribute or provide funds to technology incubators located within academic institutions which are approved by the Central Government;

i) To contribute to any fund setup by the Central Government or State Government(s) including Chief Minister''''s Relief Fund, which may be recognized as CSR activity;

j) To promote sustainability in partnership with industry associations, like the Confederation of Indian Industry (CII), PHD, FICCI, etc. in order to have a multiplier impact.

During the FY under review, your Company spent Rs, 85.14 crores on its CSR activities, which amounts to 2.41% of the average net profits of previous three financial years. CSR initiatives undertaken by your Company, along with other details form part of the Annual Report on CSR activities for FY 2016-17, which is annexed and forms part of this Report as Annexure V.


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

1. Mr. Pradeep Dinodia - Chairman

2. Mr. M. Damodaran - Member

3. Gen. (Retd.) V. P. Malik - Member

4. Dr. Pritam Singh - Member

Further 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 IV.

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


M/s Deloitte Haskins & Sells, Chartered Accountants, Gurgaon, (FR No. 015125N), Statutory Auditors of the Company were appointed until the conclusion of the 34th Annual General Meeting of the Company in calendar year 2017. They have audited the financial statements of the Company for the FY 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. 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 of Directors in its meeting held on May 10, 2017 have approved the appointment of M/s BSR & Co. LLP (FR No. 101248W/ W-100022) as the Statutory Auditors of the Company for a period of 5 years. Your Company has received an eligibility letter from the Auditors for their appointment in accordance with Sections 139 and 141 of the Act. Their appointment is being placed before the shareholders for approval in the ensuing Annual General Meeting of the Company.

Cost Auditors

M/s Ramanath Iyer & Co., Cost Accountants, New Delhi (FR No. 000019) were appointed as the Cost Auditors of the Company for FY 2016-17 to audit the cost accounts of the Company. They have been re-appointed as Cost Auditors for FY 2017-18.

Secretarial Auditors

Mr. Arvind Kohli, Proprietor (CP No. 2818), M/s Arvind Kohli & Associates, Company Secretaries, Gurgaon, Haryana, was appointed to conduct Secretarial Audit of your Company during FY 2016-17.

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


Your Company has a robust and well embedded system of internal controls. This ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and all financial transactions are authorized, recorded and reported correctly.

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 also aligned to the business objectives of the Company. 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.


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 had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which advise insiders 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 noncompliance’s. During FY 2016-17, your Company has strengthened the Code to ensure its effective implementation and meaningful application of the Listing Regulations.

Your Company has further put in place a Code of practices and procedures of fair disclosures of unpublished price sensitive information. Both the aforesaid Codes are in line with the PIT Regulations.


The Business Responsibility Report (''''BRR'''') has been prepared and forms part of the Annual Report as Annexure VII. The Report provides a detailed overview of initiatives taken by your Company from environmental, social and governance perspectives.


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


As on March 31 2017, total number of employees on the records of your Company were 8,069 as against 7,592 in the previous financial 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.

A detailed note on ''''People at Hero'''' forms part of Management Discussion and Analysis.


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, as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.


In terms of Sections 92(2) and 134(3)(a) of the Act and rules made there under, extracts of Annual Return in Form MGT 9 is annexed to this report as Annexure VIII.


Information required under Section 134(3)(m) of the Act, read with rules made there under is annexed to this report as Annexure IX.


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

1. Deposit 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. Neither the Managing Director nor the Whole-time Director of your Company 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.


Your Company has in place a policy on 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 are covered under this Policy.

As per the said Policy, an Internal Complaints Committee is also in place to redress complaints received regarding sexual harassment. Following is the summary of complaints received and disposed of during FY under review:

No. of complaints received: Nil No. of complaints disposed of: NA


During the FY under review, we have received multiple awards and recognition. Some of them are listed below:

1. Your Company has been adjudged as “Indian MNC of the year" by the All India Management Association (AIMA)

2. NDTV Manufacturer of the year

3. International Fire and Security Exhibition and Conference (IFSEC) Award for Excellence in Manufacturing Security.

4. Golden Peacock Award for HR Excellence in Automobile Sector, organized by Institute of Directors.


The Board of Directors would like to express their sincere thanks to the Shareholders & Investors of the Company for the trust reposed on us 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. We would like to reiterate our commitment to continue to build our organization into a truly world class enterprise in all respects.

For and on behalf of the Board

Pawan Munjal


Date: May 10, 2017 DIN: 00004223

Place: New Delhi

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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