Hero Motors Ltd Directors Report

BOARDS REPORT

Dear Members,

Your Directors take pleasure in presenting the 27th Annual Report on the business and operations of your Company along with the audited standalone and consolidated financial statements for the year ended March 31, 2026. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. FINANCIAL SUMMARY /PERFORMANCE OF THE COMPANY (STANDALONE & CONSOLIDATED)

The Companys financial results are as under:

								(Rs. in Lakhs)
		Standalone				Consolidated
Particulars		For the financial year ended				For the financial year ended
		March 31, 2026		March 31, 2025		March 31, 2026		March 31, 2025
Revenue from Operations		1,00,775.21		89,787.05		1,18,835.06		1,08,959.39
Other Income		2,678.41		1,913.15		2,839.16		2,163.99
Total Income		1,03,453.65		91,700.20		1,21,674.22		1,11,123.38
Profit/Loss Before Depreciation, Finance Costs, Exceptional items and Tax Expenses		14,320.27		8,213.86		14,974.54		11,400.62
Less: Depreciation & Amortisation Expenses		2,246.14		1,893.59		4,594.01		3,794.42
Profit/Loss Before Finance Costs, Exceptional items and Tax Expenses		12,074.14		6,320.27		10,380.53		7,606.20
Less: Financial Costs		3,099.06		3,013.03		4,083.72		3,698.40
Profit/Loss Before Exceptional items and Tax Expenses		8,975.07		3,307.24		6,296.81		3,907.80
Add/(less): Exceptional items		(195.88)		NIL		(195.87)		NIL
Share of profit/(loss) of associate		NIL		NIL		NIL		NIL
Profit Before Tax (PBT)		8,779.19		3,307.24		6,100.94		3,907.80
Less: Taxes (Current & Deferred)		2,217.63		946.20		1,983.54		628.02
Profit after Tax (PAT)	6,561.56		2,361.04		4,117.40		3,279.78
Other Comprehensive Income/Loss	164.57		-22.78		721.51		950.82
Total Comprehensive Income/Loss	6,726.13		2,338.26		4,838.91		4,230.61
Earnings Per Equity SI	iare (Rs.)
Basic	1.73		0.63		1.15		0.67
Diluted	1.71		0.62		1.14		0.66

2. DIVIDEND

The Board of Directors has declared an Interim Dividend of Rs. 0.32 (Thirty-Two paisa only) for the financial year 2025-26.

3. DIVIDEND DISTRIBUTION POLICY

The Board of Directors of your Company had approved and adopted the Dividend Distribution Policy containing all the necessary details as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations") at Board meeting held on August 12, 2024. The said policy forms part of Board Report and is also available on the website at www.heromotors.com.

4. TRANSFER TO RESERVES

The provision of the Companies Act, 2013 does not mandate any transfer of profits to General Reserve. Your Company has transferred the amount of Rs. 6726.13 lakhs to general reserve out of the profits of the year.

5. SHARE CAPITAL STRUCTURE

During the period under review, the Authorised and Paid up share capital of the Company are as follows:

Authorised Capital

The Authorized share capital of the Company is Rs. 6,79,50,00,000/- (Rupees Six Hundred Seventy Nine Crore and Fifty Lakh Only) divided into 58,00,00,000 (Fifty Eight Crore) equity shares of Rs. 10/- (Rupees Ten Only) each and 9,95,00,000 (Nine Crore and Ninety Five Lakh) preference shares of Rs.10/- (Rupees Ten Only) each.

Paid up share capital

The Paid share capital of the Company is Rs. 379,30,79,600/- (Rupees Three Hundred Seventy Nine Crore Thirty Lakh Seventy Nine Thousand Six hundred Only) divided into 35,83,36,019 (Thirty Five Crore Eighty Three Lakh Thirty Six Thousand Nineteen) equity shares of Rs. 10/- (Rupees Ten Only) each and 2,09,71,941 (Two Crore Nine Lakh Seventy One Thousand Nine Hundred and Forty One) preference shares of Rs.10/- (Rupees Ten Only) each.

After the closure of Financial Year i.e. March 31, 2026, the Company has made the following allotment:

By way of exercise of 9,51,528 stock options by Mr. Amit Gupta, Managing Director & CEO of the Company and allotment of equity shares in relation thereof, the paid up share capital has increased to

Rs. 380,25,94,880 (Rupees Three Hundred Eighty Crore Twenty Five Lakh Ninety Four Thousand and Eight hundred and Eighty) divided into 38,02,59,488 (Thirty Eight Crore Two Lakh Fifty Nine Thousand Four hundred and Eighty Eight) equity shares of Rs. 10/- (Rupees Ten) each.

6. EMPLOYEE STOCK OPTION PLAN

Our Company, pursuant to the resolutions passed by the Board on December 1, 2022 and the Shareholders on December 2, 2022 has adopted the "Hero Motors Employees Stock Option Plan 2022" ("ESOP 2022"). The ESOP 2022 was last amended pursuant to the resolutions passed by the Board on July 16, 2024 and the Shareholders on August 13, 2024.

The objective of ESOP 2022 is (i) to reward the eligible employees of the Company and its subsidiary company(ies) in India and abroad for their performance and motivate them to contribute to the growth and profitability of the Company; (ii) to attract and retain talents in the organization; and (iii) to enable employees to get a share in the value they create for the Company in the future. The ESOP 2022 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

As on the date, under ESOP 2022, an aggregate of 21,230,763 options have been granted, of which 534,509 options have either lapsed, been forfeited or cancelled, 15,938,615 options are outstanding, 4,903,855 options have been vested and 4,757,639 options have been exercised.

Particulars	Fisca l 2022	Fiscal 2023	Fiscal 2024	From April 1, 2024 to December 31, 2024	From January 1, 2025 till June 30,2025
Options granted		19,567,794	734,775	806,358	121,836
Options vested (excluding options that have been exercised)		NIL	3,568,179	1,036,991	298,685
Options exercised		NIL	NIL	3,806,111	951,528
Exercise price of options		NIL	NIL	Rs. 10	Rs. 10
Options forfeited/lapsed/cancelled		NIL	232,045	137,847	164,617
Total number of Equity Shares that would arise as a result of full exercise of options granted (net of cancelled options)	NIL	19,567,794	200,70,524	1,69,32,924	1,5938,615
Variation of terms of options		None	None	None	None
Money realized by exercise of options during the year/period		NIL	NIL	38,061,110	95,15,280
Total number of options in force		19,567,794	20,070,524	1,69,32,924	1,59,38,615

Employee wise details of options granted to

	Details
Particulars	Fiscal 2022	Fiscal 2023		Fiscal 2024	For the period ended December 31,2024		From January 1, 2025 till June 30, 2025
Key Manageria l Personnel (KMPs) of the Company	Nil	Name of employee	Total no. of options granted 14,458,7 89	Nil	Name of employee	Total no. of options granted 23,346	Name of employ ee	Total no. of options granted
		Amit Gupta			Esha Gupta		Utkarsh Sanghi	41,655

Senior Management Personnel (SMPs) of the Company

Name of employ	Total no. of options granted	Name of employee	Total no. of options granted	Name of employee	Total no. of options granted	Name of employ ee	Total no. of option s grante
ee Ajay Sood	98,302			Ajay Sood	50,000
Anil Rathi Chandra Mittal	276,535	Holger	20,0 11	Anil Rathi	50,000	Raghu Nandan Chawla	38,183
	189,739	. ens Jries Agnes Germai ne Madele ne Ragond et	20,136	Chandra Shekhar Mittal	50,000
Gopinat h Mayavu	31,179			Sanjay Singh Suryavan shi	50,000
Kalyana Muhunt han				Ashish Narukull a	50,000
Sanjay Singh Suryava	115,294			Andrew Theo Marinus	50,000
nshi				Morley
Amardi p Kumar	33,351			Gopinath Mayavu	50,000
Ashish Narukul	100,443			Kalyana Muhunth
la				an
Andrew Theo Marinus Morley	105,611

Employee wise details of options granted to

			Details
Particula rs	Fisc al 2022	Fiscal 2023	Fiscal 2024	For the period ended December 31,2024		From January 1, 2025 till June 30, 2025
Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year	Nil	Nil	Nil	Name of employee	Total no. of option s granted	Name of emplo yee	Total no. of optio ns grant ed
				Anuj Kumar Singh	50,000	Anuj Thakur Prem Naraya n Chauh an	16,120
				Mark Ingraha m	50,000		25,183
Identified employees who were granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstandin g warrants and conversion s) of our Company at the time of grant	Nil	Name of employee	Total no. of options granted	Nil	Nil	Nil
		Amit Gupta Kesha v Misra	14,458,78 9
			3,954,809

 

Other Particulars	Details
Difference between employee compensation cost calculated using the intrinsic value of stock options and the employee compensation cost that shall have been recognized if our Company had used fair value of options and impact of this difference on profits and EPS of our Company for the last three fiscals	Not applicable, since the fair value using Black Scholes model has been used for calculating employee compensation cost.
Description of the pricing formula and the method and significant assumptions used during the year to estimate the fair values of options, including weighted-average information, namely, risk-free interest rate, expected life, expected volatility, expected dividends and the price of the underlying share in market at the time of grant of the option	The fair value of option granted is estimated using the Black Scholes Option Pricing model.
Impact on profits and EPS of the last three years if our Company had followed the accounting policies specified in Regulation 15 of the ESOP Regulations in respect of options granted in the last three years	Company has complied with the accounting standard issued by the Institute of Chartered Accountants of India which is in line with the SEBI SBEB & SE Regulations.
Intention of key managerial personnel, senior management and whole-time directors who are holders of Equity Shares allotted on exercise of options to sell their shares within three months after the listing of Equity Shares pursuant to the Offer	None
Intention to sell Equity Shares arising out of the ESOP scheme or allotted under an ESOP scheme within three months after the listing of Equity Shares by directors, key managerial personnel, senior management and employees having Equity Shares arising out of the ESOP scheme, amounting to more than 1% of the issued capital (excluding outstanding warrants and conversions)	None

7. CONVERSION OF COMPULSORILY CONVERTIBLE PREFERENCE SHARES

During the year under review, your Company has not converted compulsorily convertible preference share into equity shares.

Also, during the period under review, your Company has not bought back any of its securities / has not issued any sweat equity shares / has not issued any bonus shares, except as stated above has not provided any Stock Option Scheme to its employees, and has not issued any equity shares with differential rights.

8. INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, your Company was not required to transfer any funds to Investor Education and Protection Funds (IEPF).

9. DEPOSITS

During the year under review, your Company has not accepted any deposits from the public under Section 73 and 76 of the Companies Act, 2013 ("Act") and rules made thereunder and no amount of principal or interest was outstanding as at the end of Financial Year 2025-26. There were no unclaimed or unpaid deposits lying with your Company. Hence, reporting of any non- compliance with the requirement of Chapter-V of Act "Acceptance of Deposits by Companies" is not applicable on your Company.

10. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business carried on by your Company or its subsidiaries during the year under review.

11. CONSOLIDATION OF FINANCIALS

In compliance with provisions of Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company has prepared Consolidated Financial Statements in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. Further, a statement containing salient features of the financial statements of the subsidiary Company is disclosed separately and forms part of this Board Report.

12. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

As on date of this report, your Company has following Subsidiaries:

a) HEL

Hewland Engineering Ltd. ("HEL") is a 51% Subsidiary of your Company.

HEL is engaged in the business of designing and manufacturing of high-performance transmission and drivetrain components for performance automotive, motorsport, EV and aerospace industries. It also provides custom engineering solutions and invests in research and development to enhance its product offerings.

HEL reported a net loss of GBP 429,403 in F.Y. 2025-26 (previous year net profit: GBP 1,264,790).

b) HMTL

Hero Motors Thai Ltd. ("HMTL") is a 100% Subsidiary of your Company.

HMTL is engaged in the business of manufacturing, trading, and exporting vehicle parts, engine system parts, gearbox, transmission parts including parts or spare parts related to such products for motorcycles and vehicles.

HMTL reported a no net profit/Loss in F.Y. 2025-26 (previous year net profit- 27.11 THB).

c) Hero EDU

Hero Edu Systems Private Limited ("Hero EDU") is a 100% Subsidiary of your Company.

Hero EDU is engaged in the business of procuring, manufacturing, assembling, integrating, producing, buying, selling, distributing, trading, importing, exporting, repairing, refurbishing, dealing in all types of electric and allied components, sub- components, including electronic drive systems, e-bikes, other similar e-vehicles, and related products such as motors, batteries, controllers, sensors, displays, chargers, throttles, wire harness, diagnostic / EOL tools, software applications, components and spare parts thereof, PCBs, cell, etc, whether made from ferrous and/or non-ferrous materials or any other materials used in the industry, including substitutes and replacements for such products. Furthermore, to design, develop, prototype, test, integrate, validate e-components and e-systems for, electric vehicles (e- bikes, E 2 wheelers, E 3 wheelers etc), and similar vehicles; to provide comprehensive after-sales services including customer support, maintenance, repair, and refurbishment services; and to offer technical assistance, troubleshooting, and upgrades for such products and systems.

Hero EDU reported a net loss of Rs. 474.25 lakhs in F.Y. 2025-26 (previous year net loss: Rs. 83.12 lakhs).

d) STPL

Spur Technologies Private Limited ("STPL") is a 100% Subsidiary of your Company.

STPL is engaged in the business of manufacturing, assembly, buying, selling distributing, importing and exporting of cycles, tricycles and carriages of all kinds and of all articles and things used for the manufacture, maintenance and working thereof, to buy, repair, alter and deal in apparatus, machinery materials and articles of all kinds which shall be capable of being used for the purpose of any business herein mentioned or likely to be required by customers of any such business, as authorized under the objects clause of its memorandum of association. Further, it is also engaged in carrying on the business of manufacturing, assembling, producing, buying, selling, distributing, importing, exporting, research and development of auto components whether made from ferrous and/or non-ferrous materials or any other materials as may be used in the industry for the purpose of business of STPL.

STPL reported a loss of Rs. 170.94 lakhs in F.Y. 2025-26 (previous year net loss: of Rs. 124.23 lakhs).

e) HYM Drive

HYM Drive Systems Private Limited ("HYM") is a 90% Subsidiary of your Company.

HYM is engaged in the business of manufacturing, procuring and selling high-quality hub motors for e-bikes (where e-bikes mean two or three-wheeled vehicles having a rear drive wheel solely human-powered or a two or three-wheeled vehicle with fully operable pedals, seat and electric motor) targeting the Indian and global e-bike market.

Your Company entered into a joint venture agreement dated October 27, 2021 with Yamaha Motor Co. Ltd. to establish HYM.

HYM reported a loss of Rs. 491.08 lakhs in F.Y. 2025-26 (previous year net loss: Rs. 649.42 lakhs).

f) MSIPL

Munjal STP Industries Private Limited ("MSIPL") is a 51 % subsidiary of your Company

HML has entered into a joint venture agreement dated March 07, 2025 with Vermogensverwaltung Plettenberg GmbH & Co. KG ("STP Group") to establish MSIPL.

MSIPL reported a loss of Rs. 15.29 lakhs in F.Y. 2025-26.

Other than MSIPL, which became a Subsidiary of your Company during the year under review, no company became or ceased to be a Subsidiary, joint venture or associate company of your Company during the year.

A statement containing the salient features of the Financial Statement of the Subsidiary in the prescribed Form AOC-1 is annexed to this Boards Report as Annexure-VI.

None of the above named Subsidiary company declared any Dividend during the Financial Year 2025-26.

The Companys Policy for determining Material Subsidiaries is available on the website of the Company and can be accessed at www.heromotors.com.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186

Particulars of loans, guarantees given and investments made during the year in accordance with Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements. All the loans, guarantees & securities are given, and investments are made for the Business purpose.

14. PARTICULARS OF CONTRACTS & ARRANGEMENTS WITH RELATED PARTIES (RELATED PARTY TRANSACTION)

All related party transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for transactions which are foreseen and repetitive in nature. Further, any related party transactions which are in ordinary course and at arms length are also placed before the Board for approval.

All the related party transactions were in the ordinary course of business and are on arms length basis.

For details on Related Party Transactions, you may refer Notes to financial statements forming part of the Financial Statements.

15. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Except as disclosed in the Board Report, in the opinion of the Board, there have been no material changes and commitments, affecting the financial position of your Company which have occurred between the end of the financial year of your Company to which the financial statements relate and the date of the report.

Your Company is planning to go for the initial public offer and accordingly filed necessary documents with Securities and Exchange Board of India, the BSE Limited and National Stock Exchange of India Limited.

16. CORPORATE GOVERNANCE REPORT

Your Company strives to ensure that best corporate governance practices are identified, adopted and consistently followed. Your Company believes that good governance is the basis for sustainable growth of the business and for enhancement of stakeholder value. A detailed report on corporate governance forms an integral part of Board Report and is set out as separate section therein.

17. BOARD OF DIRECTORS, ITS COMMITTEES AND MEETINGS THEREOF

Your Company has a professional Board with right mix of knowledge, skills and expertise with an optimum combination of executive, non-executive and Independent Directors including two women Directors. The details of Board of Directors are provided later in the Report. The Board provides strategic guidance and direction to your Company in achieving its business objectives and protecting the interest of the stakeholders. Your Board is also supported by Statutory Committees viz. Audit

Committee, Nomination & Remuneration Committee, Risk Management Committee, CSR Committee and Stakeholders Relationship Committee of Board of Directors.

At least one meeting of the Board of Directors is held in each quarter. Additional meetings of the Board/ Committees are convened as may be necessary for proper management of the business operations of your Company.

The Agenda and Notice for the Meetings is prepared and circulated in advance to the Directors. The Board of Directors of your Company met 6 (six) times during the Financial Year 2025-26 on the dates as mentioned in "Corporate Governance Report" annexed hereto.

Details of attendance of Directors at Board Meetings of your Company held during the year under review are as follows:

Name of the Director	Category	No. of meetings attended
Mr. Pankaj Munjal	Chairman, Non-Executive and Non-Independent Director	3 out of 6
Mr. Abhishek Munjal	Whole-time Director	4 out of 6
Mr. Amit Gupta	Managing Director and Chief Executive Officer	6 out of 6
Mr. Keshav Misra	Non-Executive and NonIndependent Director	6 out of 6
Mr. Sridhar Narayan	Nominee Non-Executive Director	5 out of 6
Ms. Pratibha Goyal	Non-Executive and Independent Director	5 out of 6
Mr. Kulbir Singh Mr. Ashok Kumar Taneja	Non-Executive and Independent Director Non-Executive and Independent Director	6 out of 6 6 out of 6
Dr. Andrew Charles Palmer	Non-Executive and Independent Director	2 out of 6
Ms. Jyoti Arora	Non-Executive and Independent Director	5 out of 6

The necessary quorum was present in all the meetings. The intervening gap between any two meetings was not more than one hundred and twenty days as prescribed by the Companies Act, 2013.

An update on the Board & its Committees, composition thereof, number of meetings held during Financial Year 2025-26 and attendance of the Directors at such meeting is provided in the Report on Corporate Governance.

Further, during the year under review, no Director was appointed or ceased to hold office.

18. APPOINTMENT AND DECLARATION OF INDEPENDENT DIRECTOR OF THE COMPANY UNDER SECTION 149(6)

As on date of this report, the Board of your Company comprises of 10 (Ten) Directors, out of which 8 (eight) Directors are Non-Executive Directors and 5 (Five) out of 8 (eight) Non-Executive Directors are Independent Directors. All the Independent Directors are appointed on the Board of your Company in compliance with the applicable provisions of the Companies Act, 2013. Your Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence under sub-section (6) of section 149 of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and their continued registration in the databank as maintained by the Indian Institute of Corporate Affairs ("IICA") in line with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

Also, the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Act and have confirmed that they are in compliance with the Code of Conduct for Directors and Senior Management personnel formulated by the Company.

In the opinion of the Board, there has been no change in the circumstances, which may affect their status as Independent Director of the Company and the Board is satisfied with the integrity, expertise, experience including proficiency of all the Independent Directors on the Board.

Separate Meeting of Independent Directors

Pursuant to Schedule IV to the Act and SEBI Listing Regulations 1 (one) meeting of Independent Directors dated March 10, 2026 was held during the year, without the attendance of non- independent Directors and members of Management.

Directors Liable to Retire by Rotation

In accordance with the provisions of the Act, not less than 2/3rd (Two-third) of the total number of Directors (other than Independent Directors) shall be Directors liable to retire by rotation except Independent Directors. Accordingly, pursuant to the Act read with the Articles of Association of your Company, one-third of such Directors retire by rotation at every Annual General Meeting.

Further, Mr. Keshav Misra, Director of the Company, has been the longest in office.

Pursuant to Section 152 of the Companies Act, 2013, Mr. Keshav Misra will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

19. COMMITTEES OF THE BOARD

a) AUDIT COMMITTEE

Your Company has a duly constituted Audit Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

As on March 31, 2026 and as on date of this report, the Committee comprised of 3 (Three) NonExecutive Directors viz. Mr. Kulbir Singh (Chairperson), Mr. Sridhar Narayan (Member) and Ms. Pratibha Goyal (Member).

The Audit Committee met 5 (five) times during the Financial Year 2025-26 on the dates as mentioned in "Corporate Governance Report" annexed hereto.

The Committee comprises of the following three Directors as on the date of this report:

Name of Director	Position in the Committee	Designation
Mr. Kulbir Singh	Chairperson	Non-Executive and Independent Director
Mr. Sridhar Narayan	Member	Non-Executive and Nominee Director
Ms. Pratibha Goyal	Member	Non-Executive and Independent Director

All members of Audit Committee are financially literate and two members have financial management expertise.

During the year under review, the Board has accepted all recommendation made by the Audit Committee of the Company.

The terms of reference of Audit Committee are enumerated under the "Corporate Governance Report" annexed hereto.

b) NOMINATION AND REMUNERATION COMMITTEE

Your Company has a duly constituted Nomination and Remuneration Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. During the year under review, the Nomination and Remuneration Committee was re-constituted on December 10, 2025 with Mr. Keshav Misra appointed as Member.

As on March 31, 2026 and as on date of this report, the Committee comprised of 4 (Four) Non-Executive Directors viz. Ms. Pratibha Goyal (Chairperson), Mr. Sridhar Narayan (Member) and Mr. Kulbir Singh (Member) and Mr. Keshav Misra (Member).

The Nomination and Remuneration Committee met 3 (three) times during the Financial Year 2025-26 on the dates as mentioned in "Corporate Governance Report" annexed hereto.

The Committee comprises of the following four Directors as on the date of this report:

Name of Director	Position in the Committee	Designation
Ms. Pratibha Goyal	Chairperson	Non-Executive and Independent Director
Mr. Sridhar Narayan	Member	Non-Executive and Nominee Director
Mr. Kulbir Singh	Member	Non-Executive and Independent Director
Mr. Keshav Misra	Member	Non-Executive and NonIndependent Director

During the year under review, the Board has accepted all recommendation made by the Nomination and Remuneration Committee of the Company.

The terms of reference of Nomination and Remuneration Committee is enumerated under the "Corporate Governance Report" annexed hereto.

c) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Company has a duly constituted Corporate Social Responsibility Committee ("CSR") as per with the provisions of the Companies Act, 2013.

The Board of Directors have adopted a CSR policy which is in line with the provisions of the Act. The CSR Policy of your Company lays down the philosophy and approach of your Company towards its CSR commitment.

As on March 31, 2026 and as on date of this report, the Committee comprised of 2 (Two) Non-Executive Directors viz. Ms. Pratibha Goyal (Member) and Mr. Keshav Misra (Member) and 2 (Two) Executive Directors viz. Mr. Amit Gupta (Member) and Mr. Abhishek Munjal (Member). This Committee looks after the functions as enumerated u/s 135 of the Companies Act, 2013.

As on date of this report, this Committee comprises of the following Directors:

Name of Director	Position in the Committee	Designation
Mr. Amit Gupta	Member	Managing Director & CEO
Mr. Abhishek Munjal	Member	Whole time Director
Ms. Pratibha Goyal	Member	Non-Executive and Independent Director
Mr. Keshav Misra	Member	Non-Executive, NonIndependent Director

The CSR Committee met 1 (one) time during the Financial Year 2025-26 on the date as mentioned in "Corporate Governance Report" annexed hereto.

d) STAKEHOLDER RELATIONSHIP COMMITTEE

Your Company has a duly constituted Stakeholder Relationship Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. During the year under review, the Stakeholder Relationship Committee was re-constituted on December 10, 2025 with Mr. Ashok Taneja appointed as Member.

As on March 31, 2026 and as on date of this report, the Committee comprised of 3 (Three) NonExecutive Directors viz. Ms. Pratibha Goyal (Chairperson), Mr. Keshav Misra (Member) and Mr. Ashok Kumar Taneja (Member) and 2 (Two) Executive Directors viz. Mr. Amit Gupta (Member) and Mr. Abhishek Munjal (Member).

As on date of this report, this Committee comprises of the following Directors:

Name of Director	Position in the Committee	Designation
Ms. Pratibha Goyal	Chairperson	Non-Executive and Independent Director
Mr. Ashok Kumar Taneja Mr. Amit Gupta	Member Member	Non-Executive and Independent Director Managing Director & CEO
Mr. Abhishek Munjal	Member	Whole time Director
Mr. Keshav Misra	Member	Non-Executive, NonIndependent Director

The Stakeholder Relationship Committee looks into the redressal of the shareholders complaints in respect of any matter including transfer of shares, non -receipt of annual report, non -receipt of declared dividend etc.

Till the date of this report, no meeting of the Stakeholder Relationship Committee was held.

The terms of reference of said Committee is enumerated under the "Corporate Governance Report" annexed hereto.

e) RISK MANAGEMENT COMMITTEE

Your Company has a duly constituted Risk Management Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations.

As on March 31, 2026 and as on date of this report, the Committee comprised of 1 (One) Executive Director viz. Mr. Amit Gupta (Chairperson) and 3 (Three) Non-Executive Directors viz. Ms. Pratibha Goyal (Member), Mr. Keshav Misra (Member) and Mr. Sridhar Narayan (Member).

As on date of this report, the Committee comprises of the following members:

Name of Director	Position in the Committee	Designation
Mr. Amit Gupta	Chairperson	Managing Director & CEO
Ms. Pratibha Goyal	Member	Non-Executive and Independent Director
Mr. Keshav Misra	Member	Non-Executive, NonIndependent Director
Mr. Sridhar Narayan	Member	Nominee Non-Executive Director

The Risk Management Committee is responsible for inter-alia, identification of internal and external risks, mitigation plans, business continuity plans etc.

Till the date of this report, no meeting of the Risk Management Committee was held.

The terms of reference of said Committee is enumerated under the "Corporate Governance Report" annexed hereto.

20. KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 203 of the Companies Act, 2013, as on date of this report, the KMPs of the Company are Mr. Abhishek Munjal (Whole-time Director), Mr. Amit Gupta (Managing Director & CEO), Mr. Utkarsh Sanghi (Chief Financial Officer) and Ms. Sakshi Dureja (Company Secretary and Compliance Officer) and there were following changes during the financial year under review and upto date of this report:

Name of the KMP	Designation	Date of Appointment/ Cessation	Nature of change (Appointment/ / Cessation)
Ms. Esha Gupta	Company Secretary and Compliance Officer	February 28, 2026	Cessation
Ms. Sakshi Dureja	Company Secretary and Compliance Officer	July 29, 2026	Appointment

21. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

Your Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas.

The Board of your Company administered the CSR operations during the Financial Year 2025-26.

Your Company has a duly constituted CSR Committee, which is responsible for fulfilling the CSR objectives of your Company. The composition of CSR committee is as stated elsewhere in this report.

CSR POLICY

The Board of Directors has adopted a CSR policy in line with the provisions of the Companies Act, 2013. The CSR Policy of your Company lays down the philosophy and approach of your Company towards its CSR commitment. The CSR policy, inter-alia, deals with the objectives of the Companys CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.:

Annual Report on Corporate Social Responsibility Activities of the Company forms a part of this report.

22. VIGIL MECHANISM POLICY

The Company has a Vigil Mechanism Policy which provides a vigil mechanism for dealing with instances of fraud and mismanagement. The Vigil Mechanism Policy has also been uploaded on the website of the Company at www.heromotors.com.

23. NOMINATION AND REMUNERATION POLICY

The Board of Directors has a policy which lays down a framework in relation to remuneration to Directors, Key Managerial Personnel and senior management of the Company. The policy lays down the criteria for determining qualifications, positive attributes and independence of Board members, Key Managerial Personnel and employees. The objective of this policy is to attract and retain talent and to strike the right balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the goals of the Company. The Nomination and Remuneration Policy is available on Companys website at www.heromotors.com.

24. BOARD AND DIRECTORS ANNUAL EVALUATION

Pursuant to the provisions of the Act, Annual evaluation of the Board, its Committees and individual directors has been carried out. To facilitate the evaluation process, Board and its Committees selfevaluation questionnaires were circulated to the Board members and respective Committee members and an online link was also provided to the Board members and respective Committee members wherein an option was provided to the Board and committee members to fill in the said questionnaires online. The results of the Board Evaluation for the Financial year 2025-26 was discussed by the Independent Directors and the Board at their respective meetings.

25. RISK MANAGEMENT

While the business risk associated with operating environment, ownership structure, Management, System & Policy, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. Your company recognizes these risks and makes best effort to mitigate them in time and ensure that the Company accepts risks based on the risk appetite of the organisation. Risk Management is also an integral part of your Companys business strategy.

Your Companys management monitors and manages key financial risk relating to operations by analysing exposures by degree and magnitude of risk. The risks include credit risk, liquidity risk, interest rate risk and inflation risk. Your Board of Directors has overall responsibility for the establishment and oversight of our risk management framework.

26. CREDIT RATING

Your Company has received a long-term rating of CRISIL A+/ Stable and the short-term rating of CRISIL A1 from CRISIL Limited.

27. ADEQUACY OF INTERNAL CONTROLS SYSTEMS AND COMPLIANCE WITH LAWS

Your Company has an adequate system of internal controls commensurate with the nature of its business and the size and complexity of its operations. These controls have been designed to provide a reasonable assurance over effectiveness and efficiency of operations, prevention and detection of frauds and errors, safeguarding assets from unauthorised use or losses, compliance with applicable laws and regulations, accuracy and completeness of the accounting records, timely preparation of reliable financial information. Your Company has an independent internal audit function supported by dedicated outsourced teams. In order to supplement the Internal Control process, your Company has engaged the services of M/s Grant Thornton Bharat LLP, Chartered Accountants, to function as Internal Auditors.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There has been no significant and material order passed by any regulator, courts or tribunals impacting the going concern status and operations of your Company in future.

29. ANNUAL RETURN

The Annual Return of your Company for the FY 2025-26 shall be placed on the website at www.heromotors.com and the Annual Return for the FY 2024-25 is available on the website at https://www.heromotors.com/cpage.aspxRs.mpgid=30&pgidtrail=32.

30. AUDITORS & AUDITORS REPORT

a) Statutory Auditors

M/s Deloitte Haskins and Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W- 100018) were appointed as Statutory Auditors of your Company at the Annual General Meeting ("AGM") held on September 30, 2023, for a term of 5 (five) consecutive years. Accordingly, M/s Deloitte Haskins and Sells LLP, Chartered Accountants, will hold office till the conclusion of the AGM to be held in the year 2028.

b) Statutory Auditors Report

Auditors observations are self-explanatory, which do not call for any further clarifications. There has been no qualification, reservation or adverse remarks made by the Auditor in their report for the financial year ended March 31, 2026. The Auditors Report is unmodified i.e. it does not contain any qualification.

c) Internal Auditors

Pursuant to the provision of Section 138 of the Companies Act, 2013, your Company is required to appoint Internal Auditor in the Company. Accordingly, M/s Grant Thornton Bharat LLP, Chartered Accountants, were appointed as Internal Auditors of the Company for the Financial Year 2025-26.

d) Cost Audit & Cost Auditors

In terms ofthe Section 148 ofthe Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost accounting records and get them audited every year. Accordingly, such cost records are made, maintained and audited.

The Board of Directors appointed M/s Ramanath Iyer & Co., Cost Accountants (Registration No. 000019) as Cost Auditors to audit the cost accounts of your Company at their meeting held on June 25, 2025 for the Financial Year 2025-26. The Cost Audit Report for the Financial Year 2025-26 will be filed by the Company with the Ministry of Corporate Affairs, as per the applicable timelines.

e) Secretarial Auditor & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company at their meeting held on August 12, 2025 had appointed M/s. Neelam Gupta & Associates, a practicing Company Secretary firm (Firm Registration No. S2006UP86800) to conduct the Secretarial Audit of your Company for the financial year 2025-26.

The Company has annexed to this Board Report the Secretarial Audit Report given by the Secretarial Auditor.

The Secretarial Audit report does not contain any qualification, reservation or adverse remark.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as per Section 134(3)(m) forms part of this Board Report .

32. HUMAN RESOURCES

People remain the most valuable asset of your Company. Your Company follows a policy of building strong teams of talented professionals. Your Company continues to build on its capabilities in getting the right talent to support different products and geographies and is taking effective steps to retain the talent. It has built an open, transparent culture to nurture this asset.

Your Company recognizes people as its most valuable asset and your Company has kept a sharp focus on Employee Engagement. Your Companys Human Resources is commensurate with the size, nature and operations of your Company. As on March 31, 2026, your Company had 1,062 permanent employees on its payroll and engaged 1,047 contract labourers.

Your Companys human resource practices are aimed at recruiting talented individuals, ensuring continuous development and addressing their grievances, if any, in a timely manner. Your Company schedules learning and development programs for its employees. Your Company has also recruited engineering trainees through campus and direct recruitment. Your Company trains employees in its manufacturing operations, including machine utilization, operations flow, quality management and work safety. Your Company also focuses on employee engagement. In addition to compensation that includes salary and allowances, our employees receive statutory benefits (including employees provident fund, employees state insurance, pension, retirement and gratuity benefits, workmans compensation, maternity and other benefits, as applicable) and are covered by employee benefit policies like group personal accident and group health (floater) insurance policies for employees and their families.

Companys Industrial Relations continued to be harmonious during the period under review.

33. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 READ WITH RULES

Your Company has always believed in providing a safe and harassment free workplace for every women employee working with Your Company. Your Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Company has in place a policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of women employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. The Company has complied with provisions relating to the constitution of Internal Complaints Committee (the "ICC") under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.

The following is a summary of sexual harassment complaints received by the Committee and disposed of during the year under review:

Number of complaints of sexual harassment received in the year: Nil

Number of complaints disposed of during the year: Nil

Number of cases pending for more than ninety days: Nil

34. COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

Your Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable amendments and rules framed thereunder. Your Company is committed to ensuring a safe, inclusive, and supportive workplace for women employees. All women employees are provided with maternity benefits as prescribed under the Maternity Benefit Act, 1961, including paid maternity leave, nursing breaks, and protection from dismissal during maternity leave.

Your Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR policies are in place to uphold the spirit and letter of the legislation.

35. REPORTING OF FRAUD BY AUDITORS

There have been no instances of fraud reported by the Statutory Auditors or Internal Auditors or Secretarial Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Audit Committee, the Board of Directors or to the Central Government.

36. CHANGES IN MEMORANDUM OF ASSOCIATION

No changes have been made in the Memorandum of Association of your Company during the financial year 2025-26 and till the date of this report.

37. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARD

During the financial year under review, your Company has duly complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

38. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

The Company is not required to make any disclosure or reporting as there were no application made or proceeding pending under Insolvency and Bankruptcy Code, 2016.

39. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the financial year 2025-26, no event has taken place that give rise to reporting of details w.r.t. difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

40. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Act, your directors hereby confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts for the financial year ended 31st March, 2026, on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) 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.

41. ACKNOWLEDGMENT

Your Directors wish to express their sincere appreciation for the support and cooperation, which the Company continues to receive from its clients, Banks, Government Authorities, Financial Institutions and associates and are grateful to the shareholders for their continued support to the Company. Your Directors place on record their appreciation for the contributions made and the efforts put in by the management team and employees of the Company at all levels.

	For and on behalf of the Board of Directors
	For Hero Motors Limited
	Sd/-	Sd/-
Place: Noida	Amit Gupta	Abhishek Munjal
Date: September 01, 2026	DIN: 02990732	DIN: 05355274
	Managing Director & CEO	Whole-time Director