Industrial Report

on
Hero MotoCorp Ltd.

SUBMITTED BY:
Name- Mahima Anandbhai Thaker
Class- SY B
Roll No.- 115
Enrolment No.- 202000123010355
Batch- 2020-23

SUBMITTED TO:
Faculty of Business Administration,
GLS University
 ACKNOWLEDEGMENT

I express my deep sense of gratitude for hands, people extended to me during my work.
Through this report aware about how various activities related to marketing, financing and
human resources are carried out. It has widened our vision and opened newer avenues. Behind
every success there are lot many efforts, but efforts are fruitful due to hands making the passage
smoother.
I would like to thank to my guide Dr. Shreeda Shah who has provided us the necessary
knowledge and guidance for enabling our project work successfully at regular interval. I would
like to thank our director Dr. Shefali Dani for giving the opportunity of making this project.

MAHIMA THAKER
 TABLE OF CONTENTS

Acknowledgement (i)
Certificate (ii)
Table of Contents (iii)
Figures (iv)
Company Profile 1
• History
• Mission
• Vision
• Values
• Products
• Form of Organisation and Organisational Structure
• Awards and Achievements

Production Management 7
• Introduction
• Scope of Production Management
• Manufacturing Facilities
• Plant Layout
• Making the product
• Raw material and its Procurement
• Inventory Management
• Waste Management
• Environmental Protection and Pollution Control
• Quality Control

Marketing Management 11
• Introduction
• 4 Ps of Marketing
• Understanding the Market and Competition
• Promotional Expense or Budget

Human Resource Management 15

• Introduction
• HRM at Hero
• Number of Employees
• Remuneration Policy
• Health and Well Being
• Job Opportunities
Financial Management 19
• Introduction
• Investments
• Interpretation and Analysis of P&L Account
• Interpretation and Analysis of Balance Sheet
• Interpretation and Analysis of Cash Flow Statement
• Ratio Analysis

Corporate Social Responsibility 27

SWOT Analysis 29
Future of the Company 31
Conclusion 32
Sources and References 32
 FIGURES

Figure- 1 Logo of Hero Honda

Figure- 2 Logo of Hero MotoCorp Ltd.
Figure- 3 Market Shares of other companies in FY19
Figure- 4 Graph of standalone P&L A/c
Figure- 5 Graph of Consolidated P&L A/C
Figure- 6 Graph of standalone B/S
Figure- 7 Graph of Consolidated B/S
Figure- 8 Graph of Standalone Cashflow Statement
Figure- 9 Graph of Consolidated Cashflow Statement
Figure- 10 CSR Policy of the company
 COMPANY PROFILE

NAME: Hero MotoCorp Limited

REGISTERED ADDRESS: The Grand Plaza,

Plot no.- 2, Nelson Mandela Road,
Vasant Kunj- Phase- ii,
New Delhi- 110 070, India

HISTORY:
The company was initially incorporated as Hero Honda as a joint venture between Hero Cycles
of India and Honda of Japan. This company was established as Hero Honda Motor Limited in
1984 at Dehradun, India. "Hero" is the brand name used by the Munjal brothers for their
flagship company, Hero Cycles Ltd. Munjal family and Honda group both owned 26% stake
in the Company.
During the 1980s, the company introduced motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it –
Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a
double-digit pace since inception. In 2001, the company became the second largest two-
wheeler manufacturing company in India and globally.
In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its parent
Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split
from Hero Honda.

Fig. 1- Logo of Hero Honda

The history of this company has two major phases. They are:
1. TERMINATION OF HONDA JOINT VENTURE AND THE RENAMING:
Under the joint venture Hero Group could not export to international markets and the
termination would mean that Hero Group could now export. From the beginning, the Hero
Group relied on their Japanese partner Honda for the technology in their bikes. So, by
December 2010, the board of directors of the Hero Honda Group had decided to terminate
the joint venture between Hero Group of India and Honda of Japan in a phased manner.
The Japanese automaker exited the joint venture through a series of off-market transactions
by giving the Munjal family. Honda, wanting to focus only on its independent fully owned
two-wheeler subsidiary- Honda Motorcycle and Scooter India (HMSI), exited Hero Honda.
The rising differences between the two partners gradually emerged as an irritant.
Differences had been brewing for a few years before the split over a variety of issues,
ranging from Honda's reluctance to fully and freely share technology with Hero as well as
Indian partner's uneasiness over high royalty pay-outs to the Japanese company. Another
major irritant for Honda was the refusal of Hero Honda to merge the company's spare parts
business with Honda's new fully owned subsidiary, HMSI.
2. FORMATION OF NEW COMPANY:
The name of the company was changed from Hero Honda Motors Limited to Hero
MotoCorp Limited on 29 July 2011. The new brand identity and logo of Hero MotoCorp.
The logo was revealed on 9 August 2011 in London.
On 21 April 2014, Hero MotoCorp announced its plan on a ₹254 crore joint venture with
Bangladesh's Nitol-Niloy Group in the next five years to set up a manufacturing plant in
Bangladesh. The plant started production in 2017 under the name "HMCL Niloy
Bangladesh Limited". Hero MotoCorp owns the 55% of the manufacturing company and
rest 45% is owned by Niloy Motors (A subsidiary of Nitol-Niloy Group).

Fig.2- Logo of Hero MotoCorp Ltd.

MISSION: The mission is divided as:
1.) CREATE:
• Re-define mobility through the creation of a mobility roadmap.
• Set best practice and benchmarks for the industry.

2.) COLLABRATE:
• Leverage partnerships and exhibit Teamwork.
• Co-create solutions that benefit the community, while caring for both the internal and
external environmental ecosystems and support sustainability.

3.) INSPIRE:
• Move forward with purpose.
• Inspire our colleagues, customers and communities.
• Thrive on the local and global stage.

VISSION: The vision of the company is, “Be the future of Mobility.”

VALUES: Following are the values of Hero MotoCorp Ltd.:

1.) Passion
2.) Integrity
3.) Respect
4.) Courage
5.) Responsible

PRODUCTS:
Hero MotoCorp Ltd. is an Indian multinational motorcycle and scooter manufacturer. The product line
of company is divided in two major categories. They are:

1.) HERO SCOOTERS:

Here are some of the best models manufactured by Hero:
• Hero Pleasure
• Hero Duet
• Hero Optima HX
• Hero Splendor iSmart
• Hero Xtreme160R
• Hero XPulse 200
 • Hero Maestro Edge 125
• Hero Glamour
2.) HERO CYCLES:

• MTB Mountain Bikes:

These are some of the mountain bicycles:
❖ Attitude 24T 21S FS DD
❖ Compass 27.5T 21SPD
❖ Count 26T SS FD
❖ Dominator 26T DD

• City Bikes:
Here are some of the famous City Bikes manufactured by Hero:
❖ Black Pearl 26T
❖ City Rider 26T
❖ Gunner 24T
❖ MIG CS 24T

• Women Bicycles:
Presenting some women bicycles from Hero:
❖ MIG Women 26T
❖ Miss India Gold 26T
❖ Neon Lady 26T
❖ Tomboy 26 FS

• Kids Bicycle:
Following is some of the kid’s bicycle:
❖ Ace Wing 16T
❖ Canon 14T
❖ Attacker 20T
❖ Blazer 16T
FORM OF ORGANISATION:

There are several types of company like public limited company, private company, one person
company and many more. Public limited company is a company where the company raises the
fund by issuing shares.
Talking about Hero MotoCorp, it is a public limited company. As on 31 December 2013, the
promoters Munjal Family held around 40% equity shares in Hero MotoCorp. Over 61,000
individual shareholders hold approx. 7.44% of its shares. Foreign Institutional Investors hold
approx. 30% shares in the company.
Hero MotoCorp is a listed company with market share of about 37.1% in the two-wheeler
industry. The equity shares of Hero MotoCorp are listed on the Bombay Stock Exchange, and
the National Stock Exchange of India, where it is a constituent of the NIFTY 50.

ORGANISATIONAL STRUCTURE:

Fig. 4- Organisational Structure

 AWARDS AND ACHIEVEMENTS:

YEAR AWARD ACHIEVED

2020 Motorcycle of the year- Exhibit Auto Tech Awards 2020,
Tourer Bike of the Year (up to 250cc) - Flywheel Auto Awards 2020,
Business Leader of the Year Awards and many more
2018 Best launch -Two-wheeler at the CNB Auto Expo Awards for Excellence 2018,
Highest Ranked Executive Motorcycle in Initial Quality -Hero Super Splendor -JD Power India,
Bikesport award of the year - Times Auto Awards
2017 Indian MNC of the Year by All India Management Association (AIMA)
Manufacturer of the year - NDTV Car and Bike awards 2017 and many more
2016 Overdrive - Scooter of the Year - Hero Maestro Edge
TIME India Awards - Manufacturing Innovator of the Year Award
Best Executive Motorcycle - Hero Super Splendor by J.D. Power India and many more
2014 Motorbeam - Bike Manufacturer of the year
Zigwheels - Entry-Level Bike of the year: Hero Splendor iSmart
2013 Green Pioneer Award – 2013
CFO of the year Award (Conferred on Mr. Ravi Sud)
Business Leader of the Year- AIMA Managing India Awards and many more
2012 ET Now Talent & HR Leadership Award
Business Technology Excellence Awards 2012 and many more
2011 Two-wheeler Manufacturer of the Year award by Bike India magazine.
‘Innovator of the Year' NDTV Profit Business Leadership Awards and many more
2010 Two-wheeler Manufacturer of the Year
NDTV Profit Car & Bike Awards 2010 and many more
2009 Won Gold in the Reader's Digest Trusted Brand 2009 in the 'Motorcycles' category
NDTV Profit Business Leadership Awards 2009 - two-wheeler category
2008 TopGear Design Awards 2008 - Hunk wins Bike of the Year
NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year and many more
2007 "Bike of the Year" - CBZ X-treme (up to 150 cc category)
"Most Trusted Company", by TNS Voice of the Customer Awards 2006 and many more
2006 No. 1 in automobile industry by TNS Corporate Social Responsibility Award.
Splendor & Passion - Top two models in two-wheeler category by ET Brand Equity Survey 2006
and many more
2005 10th Motilal Oswal Wealth Creator Award for as the most consistent wealth creator for the period
1991-2005.
Bike Maker of the Year Award by Overdrive Magazine and many more
2004 ICSI National Award for Excellence in Corporate Governance 2004 by The Institute of Company
Secretaries of India.
Corporate Excellence Award 2004 by Indian Institute of Materials Management and many more
 PRODUCTION MANAGEMENT

INTRODUCTION:

Production management means planning, organising, directing and controlling of production

activities. Production management deals with converting raw materials into finished goods or
products. It brings together the 6M's i.e., men, money, machines, materials, methods and
markets to satisfy the wants of the people.
Talking about Hero, Hero MotoCorp's manufacturing facilities are based on the core principle
of sustainable development, as the company remains committed to maintaining the highest
ecological standards.

SCOPE OF PRODUCTION MANAGEMENT:

Talking about Hero, they are one of the leading producers in the market of two wheelers. Also,
they are the "world no.1 two-wheeler company” in terms of unit sales in a calendar year and
the company continues to maintain this position to date.
Hero MotoCorp currently has an annual combined production capacity of around 9 million
units of two-wheelers and annual sales of 5.8 million units and is also expanding in
international markets by associating with ace golfer Tiger Woods.

MANUFACTURING FACILITIES:

Hero MotoCorp has eight globally benchmarked manufacturing facilities, including six in India
and one each in Colombia and Bangladesh.
In India, the facilities are located at Dharuhera and Gurugram in the northern Indian state of
Haryana; at Chittoor in Andhra Pradesh; at Haridwar in the hill state of Uttarakhand; at
Neemrana in the northern state of Rajasthan, and at Halol in the coastal state of Gujarat in
western India.
The Company’s manufacturing facilities at Neemrana and Halol have been aptly called the
‘Garden Factories’, for their various measures, which have redefined green manufacturing. The
new manufacturing facility of Hero MotoCorp is coming up at Chittoor, in the southern Indian
state of Andhra Pradesh.
The facility in Colombia is located at Villa Rica in Cauca province and at Jessore in
Bangladesh, situated in the southwestern region of the country.
PLANT LAYOUT:

At Hero MotoCorp they believe in sound and sustainable environmental practices. Since
inception they have cared for the environment by launching four stroke motorcycles in the era
when two stroke two wheelers were popular. Hero MotoCorp has introduced Green initiatives
in the organisation in Product Development, Manufacturing, Supply Chain and all the
functions. They have also taken several initiatives to reduce Carbon, Water & Waste footprint.
Hero MotoCorp has five manufacturing facilities based at Dharuhera, Gurugram, Neemrana,
Haridwar, and Halol. These plants together have a production capacity of over 76 lakh (7.6
million) 2-wheelers per year. Hero MotoCorp has a sales and service network with over 6,000
dealerships and service points across India. It has a customer loyalty program since 2000, called
the Hero Honda Passport Program which is now known as Hero GoodLife Program.

MAKING OF THE PRODUCT:

"Gradually we will develop our own full-scale R&D facility to make products for global market
on our own. The multiple technology and engineering would leapfrog to the next level even as
we internally enhance our R&D to make products for trans-continental markets," says Mr.
Munjal.
Hero MotoCorp is also looking beyond the conventional. The company is "seriously working
on commercialising' the concept hybrid scooter "Leap", which it showcased at the Auto Expo
in Delhi in January.
Following is the basic process done by Hero:
• Hero-MotoCorp manufactures only Fuel Tanks,
• Do the Paint job,
• Prepare the Chassis
• Assembly of engine
• Engine & other parts are collected in basket Parts are installed on the chassis in the
assembly line
RAW MATERIALS AND ITS PROCUREMENT:

Hero MotoCorp reported a surprise drop in first-quarter net profit a higher raw material costs
hurt the margins of India's largest two-wheeler maker. Hero, the erstwhile partner of Japan's
Honda motor, said profit in the quarter ended in June stood at 9.09 billion rupees [$132
million]. Net sales rose more than 10% to 88.10 billion rupees. The company sold about 2.11
million motorcycles and scooters during the period, compared with 1.85 million units a year
earlier.
Analysts had expected Hero to post a profit of 10.10 billion rupees, according to Bloomberg
poll. The industry has been adversely affected by the volatility in commodity price4s, Pawan
Munjal, Hero chairman and managing director, said in a statement.
Earlier this month, the company said it was raising the prices of its scooters and motorcycles
to partly offset the input cost.
Hero's weak results came even as the Indian two-wheeler market is witnessing a healthy growth
thanks to a pick-up rule demand. According to brokerage Motilal Oswal, the domestic two-
wheeler industry is expected to grow at an average rate of 10% until fiscal year 2022. Hero
MotoCorp receives half its sales volume from rural India.
"Despite these challenges, the industry will maintain the growth momentum during the rest of
the fiscal, with consumption expected to remain high on the back of the normal monsoon and
the upcoming festive season." Munjal said.

INVENTORY MANAGEMENT:

For the inventory control, the Hero MotoCorp company still uses the ERP systems integrate
with vendor management in order to maximize use of inventory in order to produce the
maximum profit from the small amount of inventory investment.
The company's excellent long-term relationship has been responsible for trouble-free
production and sustained expansion for capacity, increasing localization, efficient outsourcing,
cost and inventory control. In terms of efficiency, the company is able to access 70% of the
materials by value at zero-inventory. All this is done by integrating the ERP software.
Functional Strategies/ Objectives of inventory management at Hero MotoCorp:
• Evolve and implement a scientific inventory control system to achieve optimization of
inventory levels.
• Standardize and improve equipment design.
• Create and sustain computer culture.
• Bring more common items under centralized procurement system to get better control.
• Preservation of materials to avoid damages/ deterioration during storage.
• Improvement in purchase procedure for reduction in procurement lead time.
WASTE MANAGEMENT:

Since inception, Hero have cared for the environment by launching four stroke motorcycles in
the era when two stroke two wheelers were popular. In the endeavour we have always been
blessed and guided by our chairman Emeritus Dr. Brij Mohan Lal that "We must give back to
the society from whom we generate our wealth."
As leaders in the automotive industry, they fully realized their responsibility to the fast-
changing industrial environment and understand our role in sustainable development of the
Nation. Hero MotoCorp has introduced green in the organization in product development,
manufacturing supply chain and all the functions. At Hero they have taken several initiatives
to reduce carbon, water and waste footprint.

ENVIRONMENTAL CONTROL AND POLLUTION CONTROL:

Hero MotoCorp are continuously striving for synergy between technology and human
resources, to provide production services, to meet the aspiration of valued customers that too,
demonstrating their 'WE CARE' philosophy. While doing so, to maintain the highest standards
of ethics and social responsibilities, constantly innovate the products and processes and work
in partnership with supply vendors to take the organization to the new excellences. They
believe that vendors and dealers are key stakeholders and partners to work towards to the goal
of sustainable development.
Green vendor development program [GVDP] is the program used by them which encourages
a collaborative effort between Hero MotoCorp and its suppliers to achieve Hero MotoCorp's
overall corporate environmental goal GVDP calls for partner companies to demonstrate their
commitment towards improved environmental performance and striving for continual
improvement.

QUALITY CONTROL:

Excellence in quality is the core value of Hero MotoCorp philosophy.

At Hero, they are committed at all levels to achieve high quality in whatever they do,
particularly in their products and services which will meet and exceed customer's growing
aspirations through:
• Innovation in products, processes and services.
• Continuous improvement in our total quality management systems.
• Teamwork and responsibility.
 MARKETING MANAGEMNET

INTRODUCTION:

The principal task of marketing management is to fulfil the aspirations of the consumers. It
is thus imperative to understand what the consumers want; how they make the various
choice decisions; or what are their sources of information and influence process etc. In the
process, an organisation can identify new opportunities in the market; evaluate and monitor
marketing actions; and in general, evolve better marketing programme to serve the interests
of the consumer. Thus, marketing research acts as the link between the consumer and the
marketer.
Hero, which has annual sales of 5.8 million units, is already one of the top marketing
spenders in India with influential brand ambassadors. However, Hero is also expanding in
international markets by associating with ace Golfer Tiger Woods. It is thus evident over
the years that Hero invests heavily in its marketing and branding, by engaging in
partnerships with high-profile celebrities and spending on other marketing channels as well.

4 P’s OF MARKETING:

The four Ps of marketing are the key factors that are involved in the marketing of a good
or service. Often referred to as the marketing mix, the four Ps are constrained by internal
and external factors in the overall business environment, and they interact significantly with
one another. Following are the 4 P’s:

1.) PRODUCT:
The key focus of Hero MotoCorp has been on introducing robust and
steady products with the use of high technology and vivid and visionary imagination.
The foresight to realize the aspirations of the customers and to anticipate the megatrends
is a remarkable experience.
Although Hero Honda group has been associated with many scooters and motorcycles
like the Karizma, Splendor Pro, Hunk, Glamour, Passion Pro and Glamour F1, the
company under its name Hero MotoCorp launched its first bike called Hero Impulse in
November 2011. The next year saw some very new products that had better mileage
and drive ability along with improved power.
2.) PROMOTION:
Hero MotoCorp brand has a new and trendy identity that is vibrant. The colours black
and red in the logo gives out a strong message of solidity, passion, energy and
confidence. Tag Line – “Hum Mein Hai Hero” is apt and befitting showing that every
person has a hero inside him. All the advertisements related to Hero MotoCorp have
catchy tunes displaying a strong message.
These ads are shown at regular intervals on television, radio, newspapers, magazines
and even billboards. Hero MotoCorp has always been associated with sports for most
of its promotional activities. Previously the company was related to the Indian Open
Golf Tournament and Hockey. Hero MotoCorp under its own brand name sponsored
the tournament FIH Road to London in the year 2012.

3.) PLACE:
In order to maintain its hold in the two-wheeler category the company has set up a very
efficient distribution network. They have set up a network for sales and services with a
minimum of 6000 dealerships at most of the service points in all the parts of the country.
It also has dealer-appointed retail outlets at all important and strategic places.
Hero MotoCorp has the intrinsic ability to reach the far and wide nook and corners of
any place. Earlier Hero MotoCorp set up a chain of service workshops and made
provisions so that its spare parts could be easily available from the dealers and stockiest.
The bikes are available through all the dealers who in return are responsible for
workshops, proper infrastructure and trained employees.

4.) PRODUCT:
Hero MotoCorp follows the policy of competitive pricing as in today’s market
conditions it is very difficult to follow the strategy involving skimming pricing. The
company has decided to implement the value-added pricing policies under which the
customers are provided with the value for their money.
Hero MotoCorp is proud to announce that they are one of the very few companies who
believe in passing the benefit of any cost advantage to its customers. Although the
company has emphasized on qualitative products but still it has kept the prices
reasonable and affordable. Hero MotoCorp has two wheelers of varying price ranges to
suit the needs of different sections of society.
UNDERSTANDING MARKET AND COMPETITION:

The motorcycle segment is very fast-growing, accounting for about three quarters or the two-
wheeler market in India. this naturally induces competition with big players trying to capture a
larger customer basis. The current increase in demand has only escalated this further.
The major competitors of Hero are:
• Maruti Suzuki
• Bajaj Auto
• Honda
• TVS
• Yamaha
• Royal Enfield
• Ather Energy
Bajaj Auto is the top competitor of Hero. Bajaj Auto is a public company that was founded in
Pune, Maharashtra in 1945. Bajaj has 678 fewer employees vs. Hero MotoCorp.
TVS is also seen as one of the Hero MotoCorp's toughest rivals. TVS was founded in Chennai,
Tamil Nadu in 1978. Compared to Hero, TVS generates SI.6B less in revenues.
Ather energy is an upcoming threat to Hero. Ather energy was founded in 2013 and is
headquartered in Bengaluru, Karnataka. Ather energy competes in the application software
field. The company generates S3.7B less in revenues vs. Hero MotoCorp.
Hero is undoubtedly the market leader and of course calls for consistent growth and
performance in order to defend its cove dent position.

Fig. 3- Market Shares of other companies in FY19

PROMOTIONAL EXPENSES OR BUDGET:

The Hero organization makes use of so many gears for the promotion of their brands. They
might awareness in clients throw advertising They use television, radio, newspaper, posters,
and internet as a medium for advertising People without difficulty understand the features and
advantages of the product from these modes of advertisement, they receive the brand identity
and geared up to buy the product. There Pleasure targeted on product incentive promotion
tactics.
In challenging times, sales growth alone is inadequate to sustain profits. December quarter (Q3
FY19) results of India’s largest two-wheeler maker Hero MotoCorp Ltd reflected the same.
costs took a toll on the company’s profits. Foremost were raw material costs that rose by 140
basis points as a percentage of sales when compared to the year-ago period. Other expenses
were higher too, while employee costs rose a bit, the management said in its media release.
 HUMAN RESOURCE MANAGEMENT

INTRODUCTION:

Human resource management is the strategic approach to the effective and efficient
management of people in a company or organization such that they Human resource
management is the strategic approach to the effective and help their business gain a competitive
advantage. It is designed to maximize employee performance in service of an employer's
strategic objectives.
Human Resources is one important function at Hero as it provides the competitive advantage
and acts as a clear differentiator for the business. The HR function at Hero MotoCorp plays a
crucial role in working with the business and quickly responding to the evolving needs around
the talent pool. Hero is a market leader and as part of its Vision 2020, Hero aspires to expand
its presence to 50 countries, with 20 manufacturing operations.

HRM OF HERO MOTOCORP:

The company's commitment and progressive attitude to retain its gender diversity is visible
through the increasing representation of women in a workforce. The number of women in the
workforce increased to 1500 during the current year, a 50% rise over the previous year. Going
ahead, the company is committed to further improve the ratio
In alignment with its DAI vision, Hero MotoCorp is a signatory of UN women and UN global
compact's initiative-women's empowerment principles (WEP). It offers guidance for
promoting gender equality and women empowerment at workplaces, Association with the
United Nations and further strengthened its employee valse proposition (EVP) as a truly
inclusive entity.

NUMBER OF EMPLOYEES:

As on March 31 2021 total number of employees on the records of your Company were 8793
as against 8599 in the previous year.
During the lockdown, the company strengthened its people management processes,
maintaining frequent and open communication with in employees and their extended families.
The plant operations also played a pivotal role in instilling trust and confidence in workmen as
well as their families, enabling the company to resume operations as soon as the restrictions
were lifted by utilising various communication platforms, the organization kept in touch with
all employees, whether on site or working from home, for multiple purposes ranging from
salary disbursement attendance management. This gave confidence to the line managers as they
successfully coordinated with big teams seamlessly
REMUNARATION POLICY:

Pursuant to provisions of the Act, the nomination and remuneration committee of their board
has formulated a remuneration and Board diversity policy for the piment and determination of
remuneration of the directors (KMP), senior management and other employees of their
company and to ensure diversity at the board level. The NRC has also developed the criteria
for determining the qualifications, paying 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 ESPOS, RSUS etc. Further, the compensation package of the directors, KMP, senior
management and ither employees is designed based on the set of principles enumerated in a
particular said policy.
The salient features of the remuneration and Board diversity policy are as under:
• To determine remuneration of directors, KMP, other senior management personnel and
other employees, keeping in mind all relevant factors including industry wends and
practices. At the board meeting, only the non-executive and independent directors shall
participate in approving the remuneration paid to the Executive directors.

• The remuneration structure for the executive directors would include basic salary,
commission, perquisites and 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 prescribed under the Act.

• The non-executive and independent directors will also be entitled to remuneration by

way of commission aggregating up to 1% of net profits of the company pursuant in the
provisions of sections 197 and 198 of the Act, in addition to sing fees.

• Performance goals of senior management personnel shall be quantifiable and use if

individual performance to be done accordingly. A significant part of senior
management compensation will be variable and based upon company performance.

• To ensure adequate diversity a board level, all appointments to be made on the basis
merits and the due agreed shall be given to other diversity attributes too. The NRC shall
recommend the appointment of continuation of members to achieve optimum
combination at the band and periodically assess the specific requirement is relation to
the board diversity.
HEALTH AND WELL BEING:

Employer health and well-being has always been the topmost priority of Here MotoCorp. The
company has created and implemented efficient programs and policies for their standard health
and wellbeing of its employees.
The occupational health and strategy policy is an integral part of its business strategy. Along
with it, the cross-functional total productive maintenance contains maintain a healthy work
force and increased productivity levels. It provides employees resources the help to maintain
pool physical and mental and psychological work environment and opportunity to be involved
in community services.
The employees get to work only in general shifts. Late sitting & early working is not allowed
for any employee. Employees get enhanced maternity leave of 144 days. Health Care &
Insurance, Life Insurance, Disability Insurance, Vision Insurance are also granted
additionally by Hero MotoCorp to its employees. Hero MotoCorp had also announced a
voluntary retirement scheme (VRS) for the employees aging above 40 years who have
worked for a minimum of 5 continuous years, this VRS was brought up in order to improve
the productivity and efficiency of the company’s working and also for reducing the pressure
on the employees.
After covid-19 was declared as a pandemic by WHO, Hero MotoCorp was the first automobile
company to suspend its operations considering the health and well-being of employees as a
priority. The key focus of an organization was to engage, motivate and support employees and
their families during the lockdown and to prepare them for the new normal.

JOB OPPORTUNITIES:

Owing to the covid-19 pandemic, there has been a paradigm shift in hiring and onboarding
strategies. The company has adopted virtual interviewing techniques to hire candidates. The
company's traditional onboarding practices and induction program have been met the
requirements of a virtual setup. In addition, to keep new joiners engaged throughout the
induction journey, it has incorporated gamified activities and virtual tours of its manufacturing
facilities.
• Acquiring diverse talent
• Sensitization workshop for interviewers
• Campus outreach
At HERO, they define the culture as caring and performance oriented. They are passionate
about cresting enthusiastic customers and building a better future, but they are committed to
doing so with their team members best interests in mind- providing a family-oriented, open and
collaborate environment where all can succeed.
Hero MotoCorp is proud to be an equal employment opportunity employer who is and will
always be committed towards creating a truly inclusive workplace with a culture that values,
respects and encourages diversity. Hero provides equal opportunity to all of its workforce
irrespective of race, colour, creed, sex, religion, sexual orientation, national origin, disability,
genetic information, pregnancy, or any protected characteristic as outlined by federal, state or
local laws. They strictly abide by the principle of meritocracy when it comes to all the
employment practices within the organization.
Here are some of the featured job opportunities:
• Finance jobs [global]
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• Resource jobs human
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Coaching and Mentoring:

During the lockdown, they maintained open communication with their employees and their
families. This could have only been possible, with a well-knit and support from the union and
workers alike. Using digital communication, they were always connected to their employees,
whether on site or working from home, be it for the purpose of salary disbursement, attendance
management, or operations management.
They focused on integrating and consolidating their efforts in capability building under the
umbrella of Hero Talent Academy. All of the classroom learning sessions were converted into
online capsules to empower employees with skills. These initiatives helped them to achieve
benchmarked targets. Employees were also provided access to online medical consultations
and professional counselling services to ensure physical and mental well-being during the
pandemic
They also followed a 5-C approach, where the 5 Cs represented Care, Connect, Capability,
Collective Conscience and Community Services. They were successful in creating an in-house
ventilator prototype. A separate team utilized resources and machinery at R&D facility to
produce sanitizers and marks, which were utilized internally and also donated to several health
centres and other organizations as part of CSR initiatives.
At Hero MotoCorp, they strive to create equality and inclusion for everyone within the
organization. During the year, they augmented the leadership team with senior lateral recruits
and also promoted their internal talent. The team now shapes every aspect of operations and
strategy to further galvanize their priorities.
 FINANCIAL MANAGEMENT

INTRODUCTION

Financial management refers to the strategic planning, organising, directing, and controlling
of financial undertakings in an organisation or an institute. It also includes applying
management principles to the financial assets of an organisation, while also playing an
important part in fiscal management. The main duty of a financial manager is to measure
organisational efficiency through proper allocation, acquisition and management. It provides
guidance in financial planning. It helps business firm to take financial decisions.
Talking about the company, the management of the company and BOD has the responsibility
of maintenance of adequate accounting records in accordance with the provisions for the Act
for safeguarding of the assets of the company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgements
and estimates that are reasonable and prudent; and design, implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring accuracy and
completeness of the accounting records, relevant to the preparation and presentation of the
standalone financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

INVESTMENTS:

In the financial year 2021, Hero MotoCorp was the leading two-wheeler manufacturer in India,
with a market share of 37.04 percent. The volume of two-wheelers sold across India during the
same period reached 15.12 million units.
“Continuing to build on its series of new initiatives, Hero MotoCorp has announced a further
investment of ₹84 crore ($11 million) in Ather Energy, taking up its shareholding in the
company” to 34.6%, Hero MotoCorp said in a statement. Prior to the investment, its
shareholding in Ather was 31.3%. Hero MotoCorp on Friday announced an additional
investment of ₹84 crore in electric scooter maker Ather Energy.
With an objective to create the next generation of mobility solutions, the country's largest
two-wheeler maker Hero MotoCorp’s Chairman, Pawan Munjal said, “Over the next 5-7
years, we are aiming to create the next generation of mobility solutions that are relevant to
customers across the world. To this end, we have earmarked an investment of Rs 10,000
crore along with our ecosystem, which will be utilised towards research and development of
alternative mobility solutions, modern, state-of-the-art, sustainable manufacturing facilities,
network expansion, and brand building across the globe.”

Hero MotoCorp has lined up an investment of Rs 10,000 crore in the next five-seven years
towards product development, new manufacturing facilities and network expansion, as part of
efforts to hold on to its market leadership position while strengthening its presence overseas.
INTERPRETATION AND ANALYSIS OF PROFIT AND LOSS A/C

STANDLONE P&L A/C

PARTICULARS MARCH 2021 MARCH 2020 CHANGE

(In crores) (In crores) (In crores)
Total Income 31,380.47 29,614.43 1,766.04
Total Expenses 27,480.09 25,718.11 1,761.98
Profit Before Tax 3,900.38 4,573.69 (673.31)
Net Profit after Tax 2,964.20 3,633.26 (669.06)

Fig. 1- Graph representing P&L A/C

Talking about the profit and loss only of Hero MotoCorp, the profit before tax of the company
has reduced in FY 2021-20 by 673.31 crores as compared to FY 2019-20. On the other hand,
an increase is observed in the expenses in FY 2021-20 by 1,761.98 crores in comparison with
FY 2019-20. Also, there is an increase total income i.e., the total sales. And hence, the net
profit of FY 2021-20 has observed a decrease by 669.06 crores when compared with FY 2019-
20.
CONSOLIDATED P&L A/C

PARTICULARS MARCH 2021 MARCH 2020 CHANGES

(In crores) (In crores) (In crores)
Total Income 31,517.09 29,985.88 1,531.21
Total Expenses 27,621.21 26,086.80 1,534.41
Profit Before Tax 3,849.32 4,611.08 (761.76)
Net Profit after Tax 2,936.05 3,659.41 (723.36)

Fig. 2- Graph of Consolidated P&L A/C

Talking about the profit and loss including the subsidiaries of Hero MotoCorp, the profit before
tax of the company has reduced in FY 2021-20 by 761.76 crores as compared to FY 2019-20.
On the other hand, an increase is observed in the expenses in FY 2021-20 by 1,534.41 crores
in comparison with FY 2019-20. Also, there is an increase total income i.e., the total sales. And
hence, the net profit of FY 2021-20 has observed a decrease by 723.36 crores when compared
with FY 2019-20.
 INTREPRETATION AND ANALYSIS OF BALANCESHEET

STANDELONE BALANCESHEET
PARTICULARS MARCH 2021 MARCH 2020 CHANGES
(In crores) (In crores) (In crores)
Total Equity 15,198.43 14,136.40 1,062.03
Total Current Liabilities 6,110.22 3,976.06 2,134.16
Total Non-Current Liabilities 852.40 636.87 215.53
TOTAL EQUITY AND LIABILITIES 22,161.05 18,749.33 3,411.72

Total Current Assets 10,952.79 8,288.56 2,664.23

Total Non-Current Assets 11,208.26 10,460.77 747.46
TOTAL ASSETS 22,161.05 18,749.33 3,411.72

Fig. 2- Graph of Standalone B/S

Taking a look over the individual balance sheet of the company, the current liabilities of the
company has almost increased by 2 times i.e., it has risen from 3,976.06 crores to 6,110.22 crores
in the FY 2021-20 from FY 2019-20. On the other hand, the current assets have also increased by
2,664.23 crores in FY 2021-20 as compared to FY 2019-20 which can be considered a good sign for
the company. Similarly, an increase of 215.53 crores in the non-current liabilities is also recorded. Also,
the non-current assets are increased by 747.46 crores in the FY 2021-20.
 CONSOLIDATED BALANCE SHEET

PARTICULARS MARCH 2021 MARCH 2020 CHANGES

(In crores) (In crores) (In crores)
Total Equity 15,559.61 14,546.88 1,012.73
Total Current Liabilities 6,504.53 4,279.07 2,225.46
Total Non-Current Liabilities 1,031.95 848.12 183.83
TOTAL EQUITY AND LIABILITIES 23,096.09 19,674.07 3,422.02

Total Current Assets 11,370.48 8,649.20 2,721.28

Total Non-Current Assets 11,725.61 11,024.87 700.74
TOTAL ASSETS 23,096.09 19,674.07 3,422.02

Fig. 5- Graph of Consolidated B/S

Taking a look over the consolidated balance sheet of the company, the current liabilities of the
company has almost increased by 2 times i.e., it has risen from 4,279.07 crores to 6,504.53 crores
in the FY 2021-20 from FY 2019-20. On the other hand, the current assets have also increased by
2,721.28 crores in FY 2021-20 as compared to FY 2019-20 which can be considered a good sign for
the company. Similarly, an increase of 183.83 crores in the non-current liabilities is also recorded. Also,
the non-current assets are increased by 700.74 crores in the FY 2021-20.
 INTERPRETATION OF CASH FLOW STATEMENT:

STANDALONE CASHFLOW STATEMENT

PARTICULARS MARCH 2021 MARCH 2020 CHANGES

(In crores) (In crores) (In crores)
Total Cashflow from Operating Activities 4,172.70 5,410.10 (1,237.4)
Total Cashflow from Investing Activities (2,209.90) (2,883.10) 673.2
Total Cashflow from Financing Activities (1,941.49) (2,419.77) 478.28
Increase in Cash and Cash Equivalents 21.31 107.23 (85.92)
Cash and cash equivalents at the beginning of the year 147.91 40.68 107.23
Cash and cash equivalents at the end of the year 169.22 147.91 21.31

Fig. 8- Graph of Standalone Cashflow Statement

The cashflow statement shows the movement of cash in the business. The cashflow from the
operating activity has observed a decrease of 1,237.4 crores as compared to FY 2019-20.
Similarly, the cashflow from the investing activity has also observed a decrease of 673.2
crores in the FY 2021-20 as compared to the FY 2019-20. The cashflow of financial activity
has also observed a decrease but, the overall cashflow has marked an increase of 21.31 crores
in the FY 2021-20 due to changes in cash and cash equivalents.
 CONSOLIDATED CASHFLOW SATEMENT:

PARTICULARS MARCH 2021 MARCH 2020 CHANGES

(In crores) (In crores) (In crores)
Total Cashflow from Operating Activities 4,110.45 5,518.13 (1,407.68)
Total Cashflow from Investing Activities (2,289.32) (2,819.14) 529.82
Total Cashflow from Financing Activities (1,851.82) (2,601.80) 749.98
Increase in Cash and Cash Equivalents (30.69) 97.19 66.5
Cash and cash equivalents at the beginning of the year 305.31 208.12 97.19
Cash and cash equivalents at the end of the year 274.62 305.31 (30.69)

Fig. 9- Graph of Consolidated Cashflow Statement

The cashflow statement shows the movement of cash in the business. The cashflow from the
operating activity has observed a decrease of 1,407.68 crores as compared to FY 2019-20.
Similarly, the cashflow from the investing activity has also observed a decrease of 529.82
crores in the FY 2021-20 as compared to the FY 2019-20. The cashflow of financial activity
has also observed a decrease but, the overall cashflow has marked an decrease of 30.69 crores
in the FY 2021-20 due to changes in cash and cash equivalents
RATIO ANALYSIS:

In general terms, Ratio Analysis is done to analyze the company’s financial position and
trend of the company's results over a period of years. Ratio analysis is a quantitative
procedure of obtaining a look into a firm’s functional efficiency, liquidity, revenues, and
profitability by analyzing its financial records and statements. They can provide the basis for
inter-firm comparisons allowing managers to benchmark the performance and efficiency of
the firm against its competitors. Trends can then be examined and analyzed. Stakeholders
may use ratios to support their decision making.
They are divided into 4 different ratios which are:

(a) Profitability Ratios:

The profitability ratios show company’s ability to earn profit from is operation or sales, balance
sheet assets or shareholder’s equity. They indicate how efficiently a company generates profit
and value for shareholders. This ratio is measured in percentage (%). Following are the types
of profitability ratios:

Gross Profit Ratio= Gross Profit x 100

Net Sales

Net Profit Ratio= Net Profit x 100

Net Sales

Operating Ratio= Operating Cost x 100

Net Sales
Operating Profit Ratio = Operating Profit x 100
Net Sales

(b) Liquidity Ratios:

The liquidity ratio which shows the company’s ability to pay the short-term debt obligations.
It helps an investor to determine whether the company can pay the short-term debt using the
currents assets or not. This ratio is measured in times. Following are the liquidity ratios:

Current Ratio = Current Assets .

Current Liabilities

Liquid Ratio = Current Assets – Stock – Prepaid Expenses

Current Liabilities
(c) Solvency Ratios:

Solvency Ratio measures how well a company’s cash flow can cover the long-term liabilities.
This ratio is mostly used by the lenders at the time of lending money to the firm. It is also
known as Leverage Ratios. Following are the types of Solvency Ratios:

Debt to Equity Ratio = Debt .

Equity
Total Assets to Debt Ratio = Total Assets
Debt
Proprietary Ratio = Shareholder’s Fund (Equity)
Total Assets
Interest Coverage Ratio = Profit before Tax .
Interest paid on long term loans

d) Efficiency Ratios:

The last is efficiency ratio is another type of financial ratio which measures the ability of the
company to use its assets to generate income. This ratio is mostly used to judge the management
of the business. It is represented by rupees. Here are the types of efficiency ratios:

Stock Turnover Ratio = Turnover (COGS)

Average Stock
Working Capital Turnover Ratio = Net Sales .
Working Capital
Debtors Turnover Ratio = Credit Sales .
Average Trade Receivables
Creditors Turnover Ratio = Credit Purchase .
Average Trade Payables

Here are some of the above-mentioned ratios:

RATIOS FY 2021 FY 2020 FY 2019
Current Ratio (x) 0.77 0.95 0.86
Quick/Liquid Ratio (x) 1.55 1.81 1.71
Interest Coverage Ratio 179.59 172.15 583.64
Debt to Equity Ratio 0.01 0.01 0.0
Asset Turnover Ratio 2.19 2.26 2.96
Debtors Turnover Ratio 15.29 13.03 15.50
Gross Profit Ratio (%) 10.85 10.88 12.86
Net Profit Ratio (%) 9.62 12.59 10.05
Operating Profit Ratio (%) 13.04 13.72 14.65
 CORPORATE SOCIAL RESPONSIBILITY

Talking about the CSR policy, the chairman Dr. Brijmohan Lall Munjal says,
“We must give back to the society from whose resources we generate wealth.”

The vision statement of CSR policy reads,

“To have a Greener, Safer and Equitable World.

1.) Greener:
Environment and sustainability focused programmes aimed at creating cleaner and greener
world.

• Tree plantation drives

• Energy Conservation
• Water Conservation
• Solar power promotion
• Environmental awareness

2.) Safer:
Road safety programmes that aim to make Indian roads safe

• Two-Wheeler Safe Riding Program

• Road Safety awareness program
• Support enforcement agencies
• Public awareness campaigns

3.) Equitable:

Programmes focused at creating an equitable world through socio-economic development and

inclusion

• Education
• Skill development
• Women empowerment & Girl Child Development
Fig. 10- CSR Policy of the company
 SWOT ANALYSIS

STRENGTHS:

1. Brand Recognition:
Brand and brand trust plays a huge part when purchase decisions are made by consumers. Hero
MotoCorp is a strong brand which is synonymous with reliability and fuel efficient two
wheelers.

2. Extensive Domestic Network:

Hero MotoCorp has many dealerships and service points across India. The large number of
service points has allowed it to roll out its Express Service scheme, where it strives to service
a customer's vehicle within 60 minutes.

3. Strong Global Presence:

Ever since the termination of the joint venture between Hero Group of India and Honda of
Japan, Hero MotoCorp began to establish its global footprint.

4. Large Product Portfolio:

Not only does Hero MotoCorp provide a large variety of two wheelers, it is moving rapidly
alongside current market trends as well. For example, the XPulse series is catered towards the
international consumer and the Xtreme series is targeted at the growing premium motorcycle
segment.

WEANKNESS:

1.) Poor Gender Diversification:

As of late 2018, Hero MotoCorp had only 256 female employees out of 8266. Although the
figure has tripled from a mere 1% in 2014, much more still can be done to address the gender
inequality and diversification.

2.) Global Exports:

Despite having a gargantuan market share domestically, Hero MotoCorp is still largely focused
on India. In 2017, only 12% of the units sold by all two-wheeler manufacturers in India
contributed to exports. This is greatly eclipsed by China, which had exported more than 46%
of units sold, more than 4 times the amount. As more competitors are looking to jump on the
two-wheeler market in India, it would be unwise for the company to solely focus on its home
ground.
 3.) Declining Service Quality:

In a study conducted by the International Journal of Innovative Research in Science,

Engineering and Technology in 2015, the overall service quality for Hero MotoCorp fell below
expectations of end consumers. According to the study based using SERVQUAL model of
service quality, Bajaj Auto, one of its closest competitors, was deemed to have

OPPORTUNITIES:
1.) Joint Ventures and Acquisitions:
Despite the terminated joint venture with Honda Japan, it is crucial to note that for many years,
technology in its two wheelers came from Honda. By acquiring start-ups or going into joint
ventures will allow the conglomerate to obtain more valuable technology and tap into other
market segments.

2.) Electric Two Wheelers:

The electric bike and scooter market is booming globally and it would be an opportunity for
Hero MotoCorp to leverage on. The e-bike market is expected to reach about 24.3 billion U.S.
dollars by 2025.

THRETS:

1.) Strong Competition

Hero MotoCorp faces strong competition domestically despite its strong foothold in India. The
two-wheeler market in India is very competitive and is dominated by three other major players,
TVS Motors, Honda, and Bajaj Auto. In 2012, Honda launched made-in-China two wheelers
which are priced lower than equivalent cost-efficient models. Honda has been expanding
aggressively since the joint venture was terminated in 2010. Similarly, TVS Motors has
collaborated with BMW to establish its presence in the premium motorcycle market in direct
competition with Hero's Xtreme series.

2.) Betterment of Public Transport

The government of India is striving to improve on its public transport infrastructure. Projects
such as the National Highways Development Project (NHDP) under the ambitious Bharatmala
Pariyojana will add on more than 80,000 km of highways in India. In early 2019, India's Union
Minister Nitin Gadkari announced that India's public transport will be based on the London
model with an MoU with Transport for London (TFL) being signed in the previous year.
Government initiatives will definitely reduce the demand for automobiles if public transport
becomes more reliable.
 FUTURE OF THE COMPANY

Dr. Pawan Munjal, chairman and CEO, Hero MotoCorp revealed that Hero has a huge focus
on electric mobility for the future. He added that Hero MotoCorp is set to be a global leader in
the EV segment and that the Indian two-wheeler brand will use its technology centres in India
and Germany and its partnerships with the likes of Gogoro and Ather Energy to "springboard
into 2030". He also emphasised that the company will focus on sustainability internally and
externally.
Hero MotoCorp is set to reduce dependency on fossil fuels and consider alternatives such as
hydrogen, wind and solar power. About 10 percent of the company will focus on innovation
and it aims to reach 100 percent product recyclability along with carbon-neutral dealerships by
2030.
Hero MotoCorp plans to launch its electric vehicles in 20 global markets and expects 15 percent
of total volumes to come from global sales by 2025. Additionally, the company is expecting a
minimum of 30 percent of its sales to come from digital channels through 2030.
Hero MotoCorp also teased its upcoming electric scooter that's expected to be revealed soon.
This scooter is expected to be based on a fixed charging system, similar to most other electric
two-wheelers on sale in India. However, Hero MotoCorp is working on a project in partnership
with Gogoro that will be based on a battery swapping system. Despite being opposite
approaches, Hero is expecting both systems to work parallelly, allowing them to "play in both
the spaces".
 CONCLUSION

From manufacturing cycle to two wheelers, a characteristic advance was witnessed by the Hero
Group They have been consistently making progress towards cooperative energy between
innovation frameworks and technology to give items and administrations which meet the
quality, execution, and value goals of the clients.
Like each example of overcoming adversity, Hero's adventure contains a component of soul
and venture; of accomplishment through coarseness and assurance, combined with vision and
fastidious arranging.
From this study we can conclude that hero MotoCorp is a well-organized company providing
tremendous facilities to its customers. Hero MotoCorp is one of the leading automobiles in
India it provides low-cost vehicles and they targeted middle class families. In motorcycle &
scooter segment, hero MotoCorp ltd has faced severe competition from its peer resulting in a
loss of market share.

SOURCES AND REFERENCES

In order to complete the report, along with the official website of the company, following are
the sources used to collect the information regarding the company.

https://toughnickel.com/industries/SWOT-Analysis-of-Hero-MotoCorp
https://www.thehindu.com/business/Industry/hero-motocorp-to-invest-more-in-
ather/article32186082.ece
https://economictimes.indiatimes.com/markets/stocks/news/hero-motocorp-to-invest-rs-
10000-crore-over-next-5-7-years-stock-down-
https://wap.business-standard.com/company/hero-motocorp-237/financials-ratios
https://www.moneycontrol.com/financials/heromotocorp/consolidated-balance-sheetVI/hhm