Dear Members,
 
 We, the Directors of HeroMotoCorp Ltd., are delighted to present the
 28th Annual Report for the financial year 2010-11. The report is being
 presented along with the Audited Statement of Accounts for the
 financial year ended March 31,2011.
 
 FINANCIAL RESULTS
 
                                                       (Rs. in crores)
 
 Particulars                                For the year ended
 
                                     March 31, 2011       March 31,2010
 
 Gross Sales                              20,662.39           16,780.62
 
 Net Sales and other Income               19,669.90           16,098.79
 
 Profit before Interest and 
 Depreciation                              2,805.29            3,002.58
 
 Less: Interest (Net)                        (1.85)             (20.62)
 
 -Depreciation                               402.38              191.47
 
 Profit before tax (PBT)                   2,404.76            2,831.73 
 
 Less: Provision for tax
 
 -Current                                    475.76              591.58
 
 - Deferred 94.02 8.32
 
 -Minimum Alternate Tax Credit              (92.92)                -
 
 Profit after tax (PAT)                    1,927.90            2,231.83
 
 Add: Balance of profit brought forward    2,146.55            2,707.28
 
 Balance available for appropriation       4,074.45            4,939.11 
 
 Appropriations
 
 Dividend
 
 - Interim                                 1,397.81           1,597.50
 
 - Proposed Final                            698.91             599.06 
 
 Corporate Dividend Tax                      340.14             371.00
 
 Transfer to General Reserve                 192.79             225.00 
 
 Balance carried to Balance Sheet          1,444.80           2,146.55 
 
 Dividend (%)                                 5,250              5,500 
 
 Basic and Diluted
 Earnings Per Share (EPS) (Rs.)
 
 - Before exceptional items                  100.53             111.77
 
 - After exceptional items                    96.54             111.77
 
 BUSINESS PERFORMANCE
 
 During the yearyour Company notched 17.44% growth in sales, with
 volumes of 54,02,444 units compared to 46,00,130 units in 2009-10. In
 value terms total sales (net of excise duty) increased by 22.13% to Rs.
 19,245.03 crores in 2010-11 from Rs. 15,758.18 crores in 2009-10.
 
 Your Company continued to lead the domestic motor cycle market with
 54.6% market share. The Company successfully launched six new models
 including variants during the year under review.
 
 Total income of the Company grew by 22.18%, from Rs. 16,098.79 crores
 to Rs. 19,669.90 crores in 2010-11. The Company''s Profit After Tax
 (PAT) declined by 13.62% to Rs. 1,927.90 crores from Rs. 2,231.83
 crores in the previous fiscal.
 
 The Company''s Earnings Before Interest Depreciation and Taxes (EBITDA)
 margins decreased from 17.45% in 2009-10 to 13.49% in 2010-11.
 Operating profit (PBT before other income) decreased from Rs. 2,575.48
 crores in 2009-10 to Rs. 2,214.61 crores in 2010-11. The margin fell
 despite a healthy growth in the sales volume on account of higher
 prices of raw materials & components.
 
 During the year, the Company also retained, for the tenth year in a
 row, its position as the World''s No. 1 Two Wheeler Company.
 
 A detailed discussion on the business performance and future outlook
 has been given in the Management Discussion & Analysis.
 
 DIVIDEND
 
 Given the strong financial position, your Company declared and paid an
 Interim Dividend of 3500% i.e. Rs. 70 per Equity Share of the face
 value of Rs. 2 each, totaling Rs. 1,397.81 crores (exclusive of tax on
 Dividend).
 
 Your Directors are pleased to recommend a Final Dividend of 1750% i.e.
 Rs. 35 per Equity Share of the face value of Rs. 2 per share,
 aggregating to Rs. 698.91 crores (exclusive of tax on Dividend), for
 the financial year ended March 31, 2011 for your approval. The final
 dividend, if approved will be paid to the eligible members well within
 the stipulated period.
 
 TRANSFER TO GENERAL RESERVE
 
 Reaffirming the financial strength of the Company, a sum of Rs. 192.79
 crores has been transferred to the General Reserve of the Company for
 the financial year 2010-11.
 
 MATERIAL CHANGES AND COMMITMENTS
 
 No material changes and commitments affecting the financial position of
 the Company have occurred between April 1, 2011 and the date on which
 this Report has been signed.
 
 PROMOTER GROUP REALIGNMENT AND IMPLICATIONS
 
 During the year, the Indian Promoter Group of the Company, which
 comprised of Hero Investments Private Limited (HIPL), Bahadur Chand
 Investment Private Limited (BCIPL) and Hero Cycles Limited (Hero
 Cycles), re-aligned the shareholding in the Company, following a
 family agreement. As a result. Hero Cycles transferred its shareholding
 in the Company to HIPL on May 28,2010.
 
 As a result of these transactions, the Indian Promoter Group of the
 Company now comprises of HIPL and BCIPL owned and controlled entirely
 by the Munjal Family headed by Mr. Brijmohan Lall Munjal, Chairman of
 the Company.
 
 Also, during the year, the Indian Promoter Group and Honda Motor Co.
 Ltd., Japan (Honda) entered into a Share Transfer Agreement (the
 Agreement) on January 22, 2011. As per the terms of the Agreement,
 Honda had agreed to transfer its entire shareholding of 26% in the
 Company to the Indian Promoter Group, bringing an end to the joint
 venture between the two promoter groups of the Company. The acquisition
 was completed on March 22, 2011 and the shares held by Honda were
 transferred to the Indian Joint Venture partner.
 
 In addition to the Agreement, the Indian Promoter Group and Honda also
 entered into a License Agreement on January 1,2011.  As per this
 Agreement, Honda has given to the Company, the right and license to
 manufacture, assemble, sell and distribute certain products and their
 service parts under their Intellectual Property Rights.
 
 The amount to be paid by the Company for licenses involve: Rs. 1,928.37
 crores for manufacture, assembly, selling and distribution and Rs.
 550.96 crores for exports. The amounts have been capitalised as
 Intangible Assets (along with applicable cess and duty), based on the
 probability that the future economic benefits attributable to these
 assets will flow to the Company.  This is because w.e.f. January 1,
 2011 the Company''s liability to pay ongoing royalty for all
 existing/modified products/parts would cease.
 
 These Intangible Assets have been amortised over a period of 42 months
 up to June 30,2014. Accordingly, liability payable up to March 31, 2011
 has been included under current liabilities and the balance has been
 disclosed as Defer payment credits.
 
 CHANGE OF NAME
 
 During the current financial year, in view of the separation of the
 joint venture partners, your Company had started the process of change
 of name of the Company from Hero Honda Motors Limited to Hero
 MotoCorp Limited. The new name was approved by the members of the
 Company in their Extra-ordinary General Meeting held on June 17, 2011
 and subsequently fresh certificate of incorporation consequent to
 change of name dated July 28, 2011 has been received by the Company.
 Also, the new Corporate Identity (new Corporate Logo) was adopted by
 the Board of Directors of the Company on August 17,2011 for all future
 practical purposes.
 
 BOARD OF DIRECTORS
 
 Appointment/re-appointment
 
 During the year under review, Mr. Toshiaki Nakagawa was re-appointed as
 the Jt. Managing Director w.e.f. February 1, 2011 for a further period
 of 6 (six) months.
 
 Also, Mr. Paul Edgerley was appointed as Non-Executive Director of the
 Company w.e.f. May 4, 2011. The Board extends its warm welcome to Mr.
 Edgerley on the Board and wishes him a successful tenure with the
 Company.
 
 In terms of the provisions of the Companies Act, 1956 & the Articles of
 Association of the Company, Mr. Pradeep Dinodia, Gen. (Retd.) V.P.
 Malik, Mr. Brijmohan Lall Munjal and Mr. Sunil Kant Munjal will retire
 by rotation at the ensuing Annual General Meeting and being
 eligible.offerthemselvesfor re-appointment.
 
 The present term of appointment of Mr. Brijmohan Lall Munjal, Chairman
 and Director in the Whole-time employment of the Company has expired on
 August 2, 2011. Further the term of the appointment of Mr. Pawan
 Munjal, Managing Director & CEO will come to an end on September 30,
 2011. The Board has, on the recommendation of Remuneration Committee
 and subject to your approval in the general meeting and such other
 
 approvals, if any, has re-appointed them for a further period of 5
 (five) years respectively.
 
 The Board has also appointed Mr. Sunil Kant Munjal as the Jt. Managing
 Director of the Company for a term of 5 (five) years effective August
 17,2011.
 
 Brief resume/details of the Directors, who are to be appointed/
 re-appointed as mentioned herein above have been furnished alongwith
 the Explanatory Statement to the Notice of the ensuing Annual General
 Meeting.
 
 The Board recommends their re-appointment/appointment at the ensuing
 Annual General Meeting.
 
 Resignations
 
 Mr. Om Prakash Munjal resigned from the Board w.e.f July 29, 2010 and
 Mr. Toshiaki Nakagawa and Mr. Sumihisa Fukuda resigned from the Company
 w.e.f. March 22,2011 in view of the abovestated changes in the promoter
 group.
 
 Further, Mr. Yuji Shiga and Ms. Shobhana Bhartia resigned from the
 Board of the Company w.e.f. April 13,2011. Thereafter Mr. Toshiyuki
 Inuma, who was appointed as a Non-Executive Director of the Company
 w.e.f. April 13, 2011 and Mr. Takashi Nagai resigned from the Board of
 the Company w.e.f.  August 8,2011.
 
 The Board appreciates and expresses gratitude for the valuable
 contribution made by all the outgoing Directors during their fruitful
 tenure as the Directors of the Company.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 To the best of our knowledge and belief and according to the
 information and explanations obtained by us, your Directors make the
 following statement in terms of Section 217(2AA) of the Companies Act,
 1956:
 
 1.  that in the preparation of the annual accounts for the year ended
 March 31,2011, the applicable accounting standards have been followed;
 
 2.  that appropriate accounting policies have been selected and applied
 consistently and judgements and estimates that are reasonable and
 prudent have been made so as to give a true and fair view of the state
 of affairs as at March 31, 2011 and of the profit of the Company for
 the financial year ended March 31,2011;
 
 3.  that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 4.  that the annual accounts for the year ended March 31,2011 have been
 prepared on a going concern basis.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 A detailed chapter on, ''Management Discussion and Analysis'' (MDA),
 pursuant to Clause 49 of the Listing Agreement is annexed and forms
 part of this Annual Report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Corporate Social Responsibility (CSR) is an integral part of the
 Company ethos. The Company supports the Raman Kant Munjal Foundation,
 which in turn runs a school and a hospital.  The Foundation also
 conducts various outreach programs in the villages around the Company''s
 factories. These programs are conducted in partnership with leading
 NGOs, and over the years, there have been significant spinoffs.
 
 CORPORATE GOVERNANCE
 
 At Hero MotoCorp, it is our firm belief that the essence of Corporate
 Governance lies in the phrase ''Your Company''. It is ''Your'' Company
 because it belongs to you - the shareholders.  The Chairman and
 Directors are ''Your'' fiduciaries and trustees.  Their objective is to
 take the business forward in such a way that it maximises ''Your''
 long-term value.
 
 Your Company is committed to benchmarking itself with global standards
 for providing good Corporate Governance.  It has put in place an
 effective Corporate Governance System which ensures that the provisions
 of Clause 49 of the Listing Agreement are duly complied with.
 
 The Board has also evolved and adopted a Code of Conduct based on the
 principles of Good Corporate Governance and best management practices
 being followed globally.  The Code is available on the website of the
 Company www.heromotocorp.com. A Report on Corporate Governance along
 with the Auditors'' Certificate on its compliance is annexed hereto as
 Annexure-1.
 
 INTERNAL CONTROL SYSTEMS
 
 The Company has a proper and adequate system of internal controls. This
 ensures that all assets are safeguarded and protected against loss from
 unauthorised use or disposition and those transactions are authorised,
 recorded and reported correctly.
 
 An extensive programme of internal audits and management reviews
 supplements the process of internal control. Properly documented
 policies, guidelines and procedures are laid down forthis purpose.The
 internal control system has been designed to ensure that the financial
 and other records are reliable for preparing financial and other
 statements and for maintaining accountability of assets.
 
 The Company also has an Audit Committee, comprising four Non-Executive
 & Independent and professionally qualified Directors, who interact with
 the Statutory Auditors, Internal Auditors, Cost Auditors and Auditees
 in dealing with matters within its terms of reference. The Committee
 mainly deals with accounting matters, financial reporting and internal
 controls. During the year under review, the Committee met 4 (four)
 times.
 
 AUDIT COMMITTEE RECOMMENDATION
 
 During the year there was no such recommendation of the Audit Committee
 which was not accepted by the Board. Hence, there is no need forthe
 disclosure of the same in this Report.
 
 RISK MANAGEMENT SYSTEM
 
 Your Company follows a comprehensive system of Risk Management. Your
 Company has adopted a procedure for risk assessment and its
 minimisation. It ensures that all the Risks are timely defined and
 mitigated in accordance with the well structured Risk Management
 Process. The Audit Committee and Board reviews periodically the Risk
 Management Process.
 
 RATINGS
 
 The rating agency ICRA Limited, has reviewed and reaffirmed the rating
 assigned to the Company for its Non-convertible Debenture Programme as
 LAAA [pronounced L triple A] indicating the highest credit quality
 and A1  [pronounced A one Plus] for its Non-fund based facilities and
 LAAA [pronounced L triple A] to Fund based facilities indicating the
 highest credit quality rating carrying lowest credit risk.  ICRA also
 has LRAAA [pronounced L R triple A] issuer rating assigned for the
 Company.
 
 The rating agency CRISIL, during the year under review, assigned the
 bank loan ratings of A A A/Stable and P1  to the Cash Credit Limit &
 Letter of Credit Limit Facility respectively to the Company.
 
 FIXED DEPOSITS
 
 During the year under review, the Company has not accepted any deposit
 under Section 58A and 58AA of the Companies Act, 1956 read with the
 Companies (Acceptance of Deposits) Rules, 1975.
 
 AUDITORS
 
 M/s. A. F. Ferguson & Co., Chartered Accountants, New Delhi, Auditors
 of the Company will retire at the conclusion of the ensuing Annual
 General Meeting and being eligible.
 
 offer themselves for re-appointment. The Company has received a
 certificate from the auditors to the effect that their re-appointment,
 if made, would be in accordance with Section 224(1 B) of the Companies
 Act, 1956. The Board recommends their re-appointment.
 
 AUDITORS'' REPORT
 
 The observations of Auditors in their report, read with the relevant
 notes to accounts are self explanatory and therefore do not require
 further explanation.
 
 COST AUDITORS
 
 The Board has re-appointed M/s. Ramanath Iyer & Co., Cost Accountants,
 New Delhi, as the Cost Auditors of the Company under Section 233B of
 the Companies Act, 1956 for the financial year 2011-12 and the
 necessary application for obtaining the requisite approval has been
 filed with the Central Government. The Cost Auditors'' Report for
 2010-11 will be forwarded to the Central Government in pursuance of the
 provisions of the Companies Act, 1956.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information required under Section 217(1)(e) of the Companies Act,
 1956, read with Companies (Disclosure of Particulars in the Report of
 the Board of Directors) Rules, 1988 is given as Annexure- II and forms
 an integral part of this Report.
 
 LISTING
 
 The shares of your Company are presently listed on Bombay Stock
 Exchange Limited (BSE) and National Stock Exchange of India Limited
 (NSE).
 
 PERSONNEL
 
 As on March 31, 2011 the total number of employees on the records of
 the Company were 5,257.
 
 Your Directors place on record their appreciation for the significant
 contribution made by all employees, who through their competence,
 dedication, hard work, co-operation and support have enabled the
 Company to cross new milestones on a continual basis.
 
 A detailed note is given in the chapter People Approach (Human
 Resource Management) of Management Discussion & Analysis, which forms
 part of this Annual Report.
 
 PARTICULARS OF EMPLOYEES
 
 Information of Particulars of Employees as required under Section
 217(2A) of the Companies Act, 1956 read with The Companies (Particulars
 of Employees) Rules, 1975 forms an integral part of this Report. As per
 the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
 Report and Accounts are being sent to the shareholders of the Company
 excluding the statement of Particulars of Employees under Section
 217(2A) of the Companies Act, 1956. Any shareholder interested in
 obtaining a copy of such statement may write to the Sr. G.M. Legal &
 Company Secretary at the Registered Office of the Company.
 
 ACKNOWLEDGEMENT
 
 It is our strong belief that caring for our business constituents has
 ensured our success in the past and will do so in future. Your
 Directors acknowledge with sincere gratitude the co-operation and
 assistance extended by the Central Government, State Government(s),
 Financial Institution(s), Bank(s), Customers, Dealers, Vendors and
 Ancillary Undertakings. The Directors also place on record their
 appreciation for the valuable assistance and guidance extended to the
 Company by the promoter companies and for the encouragement and
 assurance, which our former collaborator has given for the growth and
 development of the Company.
 
 The Board also takes this opportunity to express its deep gratitude for
 the continued co-operation and support received from its valued
 shareholders.
 
                                          For and on behalf of the Board
 
                                                  Brijmohan Lall Munjal
 
                                                               Chairman
 
 New Delhi
 
 August 17, 2011