MANUFACTURING HAPPINESS ANNUAL REPORT 2014-15

Annexure I

Hero
About
Detail pertaining to remuneration as required under Section 197(12) of the Companies Act 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rule, 2014:

Happiness
Manufacturing
(i) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the Financial Year;

Remuneration Ratio of the

% increase in
of Director/KMP remuneration Comparison of the Remuneration
Sl. Name of Directors/ KMP and Remuneration
for Financial to the median of KMP against the performance
No. Designation in Financial
Year 2014-15 employee’s of the Company

Reports
Governance
year 2014-15
(` crores) remuneration
Executive Directors
1 Mr. Brijmohan Lall Munjal 44.19 19.31 625.09 Company's overall volume
Chairman and turnover was up by 6% &
2 Mr. Pawan Munjal 9% respectively. Profit before
Vice Chairman, CEO and Managing 44.62 16.71 631.11 exceptional item was up by
Director 21.51%, Profit after exceptional

Statements
Financial
3 Mr. Sunil Kant Munjal items was up by 16.11% and profit
42.46 17.56 600.62
Joint Managing Director after tax was up by 13.11%
Non-Executive Directors*
4 Mr. Paul Edgerley --  -
5 Mr. Suman Kant Munjal 0.06 210 0.88
Non-Executive and Independent
Directors*
6 Dr Anand C. Burman 0.07 125 0.95
7 Mr. M. Damodaran 0.36 231 5.14
8 Mr. Pradeep Dinodia 0.65 133 9.21
9 Dr. Pritam Singh 0.40 125 5.72 77
10 Mr. Ravi Nath 0.23 652 3.19
11 Ms. Shobana Kamineni** - - -
12 Gen.(Retd) Ved Prakash Malik 0.53 233 7.53
Employees & KPM
13 Mr. Ravi Sud 3.82 35 Not Applicable Company's overall volume
Sr. Vice President - Finance & CFO and turnover was up by 6% &
14 Mr. Ilam C Kamboj 1.45 39 Not Applicable 9% respectively. Profit before
Asso. V.P. - Legal and Company Secretary exceptional item was up by
21.51%, Profit after exceptional
items was up by 16.11% and
profit after tax was up by 13.11%.
The compensation for the KMP
being officials of the Company
also guided by the external
competitiveness and internal parity
through annual benchmarking
surveys.
* Includes Sitting fees and Commission
** joined w.e.f. from March 27, 2015

(ii) 
The median remuneration of
employees of the Company during the
financial year was ` 7.07 lacs
31, 2015 was 7,331 nos. (previous year by 21.51%, Profit after exceptional
6,789 nos.), including workers defined items was up by 16.11% and Profit
under the Factory Act, 1948. After Tax was up by 13.11% in
Annexures to Board’s Report

financial year 2014-15 in comparison

(iii) Median salary of employees in current
year has increased by 10.31% in
comparison to the previous year.
(iv) The number of permanent employees
on the rolls of company as on March
(v) 
The relationship between average
increase in remuneration and
company performance:- Company
had recorded 6% growth in two
wheelers and 9% growth in turnover.
Profit before exceptional item was up
to previous year. Overall median
increase in salary of employees is
reasonable and in line with Company
performance, considering the market
inflation also.
 Hero MotoCorp Ltd.
(vi) Comparison of the remuneration of
the Key Managerial Personnel against
the performance of the Company: - Key
Managerial Personnel remuneration is
partly fixed and partly variable linked
with market conditions comprising
market trend. Variable salary element
is linked with individual and company
performance in the relevant Financial
Year.
(vii) (a) 
Variations in the market
capitalisation of the Company:
The Market capitalisation as on
March 31, 2015 was ` 52,714
crores (March 31, 2014 ` 45,425
crores)
(b) Price Earnings Ratio of the
Company was 22.10 (times) as
at March 31, 2015 and 21.54
(times) as at March 31, 2014.
(c) 
Percentage increase over
decrease in the market
78
quotations of the shares of the
Company in comparison to
the rate at which the Company
came out with the last public
offer:- The Company came out
with Initial Public Offer (IPO) in
November 1984, rights issue
in 1986-87 and subsequently
given Bonus in 1994-95 and
1998-99. On initial investment
of ` 1,000/- worth is of ` 16.45
lacs as on March 31, 2015.
(viii) Average percentage increase made in
the salary of employees other than the
managerial personnel in last Financial
Year i.e. 2014-15 was 12.03%.

The compensation for the Key
Managerial Personnels, Senior
Management and Employees (Staff)
of the Company is guided by the
external competitiveness and internal
parity through annual benchmarking
surveys.
Internally, performance ratings of all
employees (staff) are always spread
across a normal distribution curve.
The rating obtained by an employee
is used as an input to determine his
variable and merit pay increases.
Variable and Merit pay increases are
calculated using a combination of
individual performance and Company
performance.
There are no exceptional
circumstances for increase
in managerial remuneration.
Compensation is determined based on
identified skill sets critical to success
of the Company. It is determined as
per management’s review of market
demand and supply.

Workmen were paid wages in
accordance to the settlement with the
union of the workers. Where there is
no union, workmen wages was paid in
line with the best industry practice and
applicable law.
(ix) The key parameters for any variable
component of remuneration availed
by the Directors are considered by
the Board of Directors based on the
recommendations of Nomination &
Remuneration committee as per the
Remuneration policy for Directors,
Key Managerial Personnels, Senior
Management Team and other
Employees.
(x) The Ratio of the remuneration of
the highest paid Director to that of
the employees who are not directors
but receive remuneration in excess
of the highest paid Director during
the Financial Year:- No Employee of
the Company has been paid salary in
excess of any Managing/ Whole-Time
Director of the Company.
(xi) It is hereby affirmed that Remuneration
to Key Managerial Personnel and
Employees of the Company are in line
with the Remuneration Policy of the
Company.