Finaical Analysis of Hero Honda Ltd.

Declaration
I do hereby declare that this report entitled “Hero

Honda: A Financial Approach with Case Study” is
prepared by me under the guidance of Ms. Pragyan
Paramita Roy, Internal guide, Prof(Dr.) P.K.Jena, Principal
and Mr. R.S. Agarwal , Industrial Engineering & Training-my
Company Guide. I do also declare that this report is neither
copied nor published anywhere and true to the best of my
knowledge.
(Seshasirsha
Acharya)
Regd. No.-:0806205020
BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

ACKNOWLEDGEMENT
I do express my deep sense of gratitude to our

institute, Bhadrak Institute of Engineering and Technology
(BIET), for arranging my SIP training in Visa steel Steel Ltd.
I would like to convey my best regards with lot of

thanks to my Faculty Guide , Ms. P.P. Roy , ,company guide
Miss Pragyan Parimita Roy, for their kind cooperation;
cordiality and guidance for making this project a success
one. I am also indebted to my beloved parents for providing
me support and moral courage in this effort.
Seshasirsha Acharya

Hero Honda: A Financial Approach with Case
Study
Introduction
Hero Honda Motors Limited, based in Delhi, India is a joint

venture between the Hero Group of India and Honda of Japan. It
has been referred to as the world's biggest manufacturer of
2-wheeled motorized vehicles since 2001, when it produced
1.3 million motorbikes in a single year. During the fiscal year
2008-09, the company has sold 3.28 million bikes and the
net profit of the company stood at Rs.1281.7 crore, up 32%
from the previous fiscal year.
The company's most popular model is the Hero Honda's

Splendor, which is the world's largest-selling motorcycle,
selling more than one million units per year.[3]
Company profile
Hero Honda Motors Ltd.
Type Public company BSE:HEROHONDA M
Founded January 19, 1984 in Gurgaon, Haryana, India
Headquarter
New Delhi, India
s
Brijmohan Lal Munjal (chair and founder)

Key people Toshiaki Nakagawa (joint managing director)
Pawan Munjal (Managing Director & CEO)[1]
Industry Automotive
Products Motorcycles, Scooters
Revenue U$ 2.8 billion
Website www.herohonda.com
“Hero” is the brand name used by the Munjal brothers for

their flagship company Hero Cycles Ltd. A joint venture
between the Hero Group and Honda Motor Company was
established in 1984 as the Hero Honda 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.
Hero Honda has three manufacturing facilities based at

Dharuhera and Gurgaon in Haryana and at Haridwar in
Uttarakhand. These plants together are capable of churning
out 3.9 million bikes per year. Hero Honda's has a large sales
and service network with over 3,000 dealerships and service
points across India. Hero Honda's customer loyalty program,
the Hero Honda Passport Program, claims to be one of the
largest programs of its kind in the world with over 3 million
members.
The 2006 Forbes 200 Most Respected companies list has

Hero Honda Motors ranked at 108.
History
India became the second largest two wheeler manufacturer

in the world starting in the 1950s with the Automobile
Products of India (API) that manufactured the Lambrettas
and Bajaj Auto Ltd. with its association with Piaggio of Italy
(manufacturer of Vespa scooters) as the largest
manufacturers within the country.

The license raj that existed between the 1940s to 1980s in India
did not allow foreign companies to enter the market and
imports were tightly controlled. This regulatory maze, before
the economic liberalization, made business easier for local
players to have a seller’s market. Customers in India were
forced to wait up to 12 years to buy a scooter from Bajaj.
The CEO of Bajaj commented that he did not need a
marketing department, only a dispatch department. By the
year 1990, Bajaj had a waiting list that was twenty-six times
its annual output for scooters.
The motorcycle segment had the same long wait times with
three manufacturers: Royal Enfield, Ideal Jawa, and Escorts.
Royal Enfield made a 350cc Bullet with the only four-stroke
engine at that time and took the higher end of the market
but there was little competition for their customers. Ideal
Jawa and Escorts took the middle and lower end of the
market respectively.
In the mid-1980s, the Indian government regulations

changed and permitted foreign companies to enter the
Indian market through minority joint ventures. The two-
wheeler market changed with four Indo-Japanese joint
ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic
Motor Company (Kinetic Honda). The entry of these foreign
companies changed the Indian market dynamics from the
supply side to the demand side. With a larger selection of

two-wheelers on the Indian market, consumers started to
gain influence over the products they bought and raised
higher customer expectations. The industry produced more
models, styling options, prices, and different fuel efficiencies.
The foreign companies new technologies helped make the
products more reliable and with better quality. Indian
companies had to change to keep up with their global
counterparts.
Labor relations
In Hero Group there is no organized labor union and family

members of employees find ready employment within Hero.
The philosophy with regard to labor management is "Hero is
growing, grow with Hero." Hero workers receive a uniform
allowance, as well as House Rent Allowance (HRA) and Leave
Travel Allowance (LTA). Extra benefits include medical check-
ups not just for workers, but also for the immediate family
members. For the majority of the production workers, who
are hired through contractors, these benefits are out of
reach. This and other problems lead to a strike and factory
occupation by 4,000 temp workers in the Gurgaon plant in
spring 2006.
Diversification
The Group Chairman, Mr. Lall has actively looked at

diversification. A considerable level of vertical integration in

its manufacturing activities has been present in the Group's
growth and led to the establishment of the Hero Cycles Cold
Rolling Division, Munjal and Sunbeam Castings, Munjal Auto
Components and Munjal Showa Limited amongst other
component-manufacturing units.
Expansion into the automotive segment started with the

setting up of Majestic Auto Limited, where the first moped
designed entirely in India, Hero Majestic, went into
commercial production in 1978. Hero Motors, in collaboration
with Steyr Daimler Puch of Austria introduced the which
introduced another moped, the Hero Puch, in 1980. Hero
Honda Motors was established in 1984 to manufacture
100 cc motorcycles.
The Hero Group also plans to expand into into other

segments like exports, financial services, information
technology, insurance and telecommunication.
List of models
• Achiever
• Ambition 133, Ambition 135
• CBZ, CBZ Star, CBZ Xtreme
• CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe
(Self Start)

• Glamour, Glamour F.I
• Hunk
• Joy
• Karizma, Karizma R
• Passion, Passion+, Passion Pro
• Pleasure
• Street
• Splendor, Splendor+, Splendor+ (Limited Edition),
Super Splendor, Splendor NXG
BOARD OF DIRECTORS

No Name of the Directors Designation
.
1 Mr. Brijmohan Lall Munjal Chairman & Whole-time
Director
2 Mr. Pawan Munjal Managing Director & CEO
3 Mr. Toshiaki Nakagawa Joint Managing Director
4 Mr. Sumihisa Fukuda Technical Director
5 Mr. Om Prakash Munjal Non-executive Director
6 Mr. Sunil Kant Munjal Non-executive Director
7 Mr. Masahiro Takedagawa Non-executive Director
8 Mr. Satoshi Matsuzawa Non-executive Director
(Alternate Director to Mr.
Takashi Nagai)
9 Mr. Pradeep Dinodia Non-executive &
Independent Director
10 Gen.(Retd.) Ved Prakash Non-executive &
Malik Independent Director
11 Mr. Analjit Singh Non-executive &
12 Dr. Pritam Singh Non-executive &
13 Ms. Shobhana Bhartia Non-executive &
14. Mr. Meleveetil Damodaran Non-executive &
15. Mr. Arun Nath Maira Non-executive &

BRIEF PROFILE OF DIRECTORS
MR. BRIJMOHAN LALL MUNJAL
Mr. Brijmohan Lall Munjal is the founder Director and
Chairman of the Company and the $ 2.8 billion Hero Group.
He is the Past President of Confederation of Indian Industry
(CII), Society of Indian Automobile Manufacturers (SIAM) and
was a Member of the Board of the Country's Central Bank
(Reserve Bank of India ). In recognition of his contribution to
industry, Mr. Lall was conferred the Padma Bhushan Award
by the Union Government.
Mr. Brijmohan Lall Munjal is currently on the board of the

following companies:
No Name of Company Nature of Office

.
1 Hero Honda Motors Chairman and Whole-time
Limited Director
2 Hero Cycles Limited Chairman and Director
3 Hero Honda Finlease Chairman and Director
Limited
4 Munjal Showa Limited Chairman and Director
5 Sunbeam Auto Limited Chairman and Director
6 Easy Bill Limited Director

7 Hero Financial Services Director
Limited
8 Munjal Auto Industries Director
Limited
9 Shivam Autotech Limited Director
MR. PAWAN MUNJAL

Mr. Pawan Munjal is the Managing Director and CEO of the
Company. He is responsible for growth and strategic
planning for the entire Group. A graduate in mechanical
engineering, Mr. Munjal has been instrumental in bringing
about technological and managerial excellence in the
Company's operations. He has been the Chairman of several
Committees of CII.
He is also on the board of Indian Institute of Management,

Lucknow . An avid golfer, Mr. Munjal is Past Chairman of the
Asian PGA Tour Board of Directors and the Past President of
Professional Golfers Association of India (PGAI). Under his
guidance, Hero Honda launched the Hero Indian Sports
Academy (HISA) in collaboration with Laureus Foundation to
provide equal opportunities in sports to various communities
and to reward talent in the country.
Mr. Pawan Munjal is currently on the Board of the following

companies:
.

1 Hero Honda Motors Limited Managing Director
2 Hero Honda Finlease Limited Director
MR. TOSHIAKI NAKAGAWA
Mr. Toshiaki Nakagawa joined the Company as Joint
Managing Director on February 1, 2006.
He joined Honda Motor Co., Ltd, Japan in April 1973 and later
on took various assignments at Senior Positions in world wide
Honda net work, such as staff member of UK, Hongkong and
President of Honda Czech Republic, Honda France and
General Manager of Honda Beijing Office.
Before joining the Company, he held the position as General

Manager of Operating Office of China, ASEAN succeeding by
Operating Office No.1 (North America, South America and
Europe) at Honda Head Office, Japan.
His specialization is “Overseas Sales of Automobiles and

Motorcycles.”
Mr. Nakagawa is currently on the Board of the following

companies:

.
1 Hero Honda Motors Limited Joint Managing Director
MR. SUMIHISA FUKUDA
Mr. Sumihisa Fukuda was appointed as an Additional and
Technical Director in the Whole-time employment of the

Company by way of passing a resolution by Circulation on
May 13, 2008 . Mr. Fukuda was born on December 12, 1955
at Nagasaki , Japan and after completing a course in
Mechanical Engineering, he joined Honda Motor Co., Ltd.,
Japan as an Engineer & has completed various assignments
in Honda. In recent past, he was working as Manager – Asian
Autoparts Co. Ltd., Thailand . He brings with him rich
experience of more than 30 years.
Mr. Fukuda is currently on the Board of the following

companies:
.
1 Hero Honda Motors Limited Whole-time Director
MR. OM PRAKASH MUNJAL
Mr. Om Prakash Munjal is also founder Director of the
Company. He is the Co-Chairman and CEO of Hero Cycles
Limited, the largest producer of bicycles and bicycle
components in the world. Under his leadership, Hero Cycles
has found its way into the Guinness Book of World Records.
In 1990, Mr. Munjal was awarded the "Indira Gandhi National
Unity Award" by the President of India.
Mr. Om Prakash Munjal is currently on the Board of the


.

1 Hero Cycles Limited Co-Chairman and Managing
Director
2 Majestic Auto Limited Chairman & Director
3 Hero Financial Services Chairman & Director
Limited
4 Hero Motors Limited Director
5 Munjal Auto Industries Director
Limited
6 Shivam Autotech Limited Director
7 Highway Industries Director
Limited
8 Hero Global Design Director
Limited
10 Hero Honda Motors Director
Limited
11 Hero Honda Finlease Director
Limited
MR. SUNIL KANT MUNJAL
Mr. Sunil Kant Munjal born on December 14, 1957 , at
Ludhiana is aged 49 years. After his graduation he
underwent training in the field of Mechanical Engineering.
Presently he is Managing Director of Hero Cycles Ltd. (C.R.
Division) and Hero Corporate Services Limited.
In 2004-05, Mr. Munjal became the President of

Confederation of Indian Industry (CII), India 's premier
business association. He is also on the Board of Indian School

of Business, Hyderabad and is visiting faculty at various
Business Schools and Corporate. His specialization is in
Business Studies and Holistic Management Practices. Apart
from the above he is a member of Prime Minister's Council on
Trade and Industry, Consultative Group on Industry, Planning
Commission, Government of India and SEBI Committee on
Disclosures. He has made significant contributions to some of
the National-level Economic and Labour reforms in India
either by chairing some of the reforms Committee or as a
member.
Mr. Sunil Kant Munjal is currently on the board of the

.
1 Hero Management Service Chairman & Managing
Limited Director
2 Hero Corporate Service Limited Chairman
3 Shivam Autotech Limited Chairman
4 Hero Cycles Limited Managing Director
5 DCM Shriram Consolidated Director
Limited
7 Hero Honda Motors Limited Director
8 Hero Motors Limited Director
9 Satyam Auto Components Director
Limited
10 Flourish Manufacturing & Director
Automotive Ltd.
11 Abhayuday Manufacturing & Director
Automotive Ltd
12 Arrow Infrastructure Limited Director
13 Hero Mindmine Institute Limited Director
14 Hero Ergo Life Insurance Director
Company Limited
MR. MASAHIRO TAKEDAGAWA
Mr. Masahiro Takedagawa was appointed as an Additional
Director on the Board of the Company w.e.f. May 30, 2006 .
He joined Honda Motors Co., Ltd, Japan as an Area Manager
in the Car Retail Operations. He was thereafter deputed in
the Sales & Marketing Division of Honda Motors at USA , Italy
& Thailand . Before joining Honda Siel Cars India Limited as
President & CEO in April 2005, he was stationed at the
Product Planning & Marketing office at Tokyo.
Mr. Takedagawa holds the directorship and membership of

the Committee(s) of the Board of the following companies:
.
1 Honda Siel Cars India President & CEO
Limited
2 Honda Siel Power Products Director Member-Audit
Limited Committee
MR. TAKASHI NAGAI

Mr. Takashi Nagai has been appointed as an Additional
Director on the Board of the Company w.e.f May 11, 2007.
After completing his graduation from Keio University, Japan
in the year 1982, he joined Honda Motors Co., Ltd, Japan.
Presently, he is working as Executive Vice President, Asian
Honda Motor, Thailand . Mr. Nagai brings with him vast
experience in Automobile Industry.
Mr. Nagai is on the board of the following companies.:

.
MR. SATOSHI MATSUZAWA
Mr. Satoshi Matsuzawa aged 48 years has been appointed as
an Alternate Director to Mr. Takashi Nagai w.e.f. April 24,
2008 . He was born on March 2, 1960 at Tokyo , Japan . After
completing his graduation in Science and Engineering from
Waseda University , Japan in the year 1982, he joined Honda
Motors Co., Ltd, Japan . Currently, he holds the position of
General Manager, Overseas Operations.
Mr. Matsuzawa is on the board of the following companies.:

.
1 Hero Honda Motors Limited Alternate Director

MR. PRADEEP DINODIA
Mr. Pradeep Dinodia was appointed as an Additional Director
on the Board of the Company on March 31, 2001 . Mr.
Dinodia is a fellow member of The Institute of Chartered
Accountants of India and a senior partner in the Delhi-based
Chartered Accountancy firm M/s. S.R. Dinodia & Company.
He has considerable experience in corporate affairs and
allied legal and taxation matters.
Mr. Dinodia holds the directorship and membership of the

Committee(s) of the Board of the following companies:
.
1 DCM Shriram Director and Chairman -
Consolidated Limited Shareholders & Investors
Grievance Committee
Member- Audit Committee
2 DFM Foods Limited Director
Chairman - Audit Committee
3 Hero Corporate Director
Services Limited Chairman - Audit Committee
4 Hero Honda Motors Director and Chairman - Audit
Limited Committee
Member - Shareholder &
Investors Grievance Committee
5 Micromatic Grinding Director
Technologies Limited
6 Ultima Finvest Limited Director

7 Shriram Pistons & Director
Rings Limited Chairman - Audit Committee
Member - Remuneration
Committee
8 JK Lakshmi Cement Director
Limited
9 SPR International Auto Director
Exports Limited
GEN. (RETD.) VED PRAKASH MALIK
Gen. (Retd.) Ved Prakash Malik was appointed as an
Additional Director on the Board of the Company on May 4,
2001 . Gen. Malik retired as Chief of the Indian Army in
September, 2000. During his distinguished military career,
he received number of awards including the Ati Vishista Seva
Medal (AVSM) and the Param Vishishta Seva Medal (PVSM) -
the highest National award for distinguished services.
He holds the directorship and membership of the

Committee(s) of the Board of the following companies:
.
Member- Audit
Committee
2 Reliance Infrastructure Director
Limited Member- Audit
Committee
3 BSES Rajdhani Power Limited Director

Member- Audit
Committee
4 BSES Yamuna Power Limited Director
Member- Audit
Committee
MR. ANALJIT SINGH
Mr. Analjit Singh was appointed as an Additional Director on
the Board of the Company on September 28, 2004 . He is
currently Chairman of Max India Limited, New Delhi.
Mr. Singh brings with him rich and varied experience in
businesses like Pharmaceuticals, telecom services,
packaging, specialty plastic products and electronic
components.
Mr. Singh is currently on the board of the following

companies:
.
1 Max India Limited Chairman and Mg.
Director
2 Max New York Life Insurance Chairman
Company Limited
3 Max Healthcare Institute Limited Chairman
4 IDBI Limited Director
5 Max Neeman Medical International Chairman
Limited
6 Max Bupa Health Insurance Chairman
Limited

7 Grow Talent Company Limited Director
8 Malsi Holdings Limited Chairman
9 Malsi Estates Limited Chairman
10 Malsi Hotels Limited Director
11 Vodafone Essar Limited Director
12 Tata Tea Limited Director
13 Dabur India Limited Director
DR. PRITAM SINGH
Dr. Pritam Singh was appointed as an Additional Director on
the Board of the Company on September 28, 2004 . He is
author of seven academically reputed books and over 50
research papers. Dr. Pritam Singh is one of the pioneers of
Management Education in India who has devoted his life to
the development of Management Education in India and
abroad. Dr. Singh received the "Padam Shri" award in 2003
for his contributions in this field. He is also on the Board of
the following companies and their committees:
.
1 Hero Honda Motors Limited Director and Member -
Audit Committee
Member - Shareholder's
Grievance Committee
2 Parsvnath Developers Director
Limited
3 Dish TV India Limited Director
4 Indian Medicines Director

Pharmaceuticals Corporation
Ltd.
5 Delhi Stock Exchange Limited Director
6 Godrej Properties Limited Director
MRS. SHOBHANA BHARTIA
Mrs. Shobhana Bhartia was appointed as an Additional
Director on the Board of the Company on March 24, 2005 .
She belongs to the distinguished Birla family and has married
into another major industrial family, the Bhartia Group.
Currently, she is the Vice Chairperson and Editorial Director
of HT Media Limited. She has been conferred the "Padam
Shri" by the Union Government for her contribution to the
media. Mrs. Bhartia is also the Chairperson of International
Press Institute (India Chapter).
Mrs. Bhartia is director on the Board of the following

companies and their committee(s):
.
2 Air Travel Bureau Limited Director
3 Britex (India) Limited Director
4 Goldmerry Investment & Director
Trading Co. Limited
5 HT Media Limited Chairperson & Editorial
Director
6 HTL Investment & Trading Co. Director
Limited

7 Nilgiri Plantation Limited Director
8 Ronson Traders Limited Director
9 Shradhanjali Investment Director
& Trading Co. Limited
10 The Hindustan Times Limited Chairperson and
Chairperson – Audit
Committee
11 H.T. Music and Entertainment Director and
Limited Chairperson - Audit
Committee
12 Udit (India) Limited Director
13 Usha Flowell Limited Director
14 Yashovardhan Investment Director
& Trading Co. Limited
15 Firefly e-ventures Limited Director
MR. MELEVEETIL DAMODARAN

Mr. Meleveetil Damodaran has been appointed as an
Additional Director w.e.f. June 16, 2008 in the category of
Non-Executive and Independent Director. Mr. Damodaran,
aged 61 years was born on May 4, 1947 and belongs to the
Indian Administrative Service, Manipur-Tripura Cadre. He had
held various coveted positions in Government / Public Sector
and Regulatory Bodies.
In the past he held the position of Joint Secretary (Banking

Division) in the Ministry of Finance, Chairman Unit Trust of
India. He headed the IDBI bank before being appointed as
the Chairman of the Securities and Exchange Board of India
(SEBI), the country's financial market watchdog. He was also
appointed as officer on special duty with the Reserve Bank of
India dealing primarily with the restructuring of three
identified weak public sector banks.
Mr. Damodaran is currently on the board of the following

companies:
.
1 Hero Honda Motors Director and Member -
Limited Shareholder's Grievance
Committee
2 Tech Mahindra Limited Director
3 Sahaj e-village Limited Director
4 ING Vysya Bank Limited Director
5 ING Investment Director
Management (India) Pvt.
Limited
MR. ARUN NATH MAIRA

Mr. Arun Nath Maira has been appointed as an Additional
Director w.e.f. December 20, 2008 in the category of Non-
Executive and Independent Director. Mr. Maira, aged 65
years got his Master’s Degree in Physics from St. Stephen's
College, Delhi. Mr. Maira has a work span of over 35 years in
creating and transforming organizations all across the globe.
After receiving his degrees, he joined Tata Administrative
Service and served the Tata group for 25 years.
Subsequently, Mr. Maira worked with Arthur D Little (ADL)
USA, for 10 years as the Leader of ADL's Global Organisation
Practice and as a Managing Director of Innovation
Associates - ADL's subsidiary.
Mr. Maira has been a member of The Confederation of Indian

Industry’s (CII) National Council for many years, as well as
Chairman of several of CII’s National Councils, including the
National Council for Corporate Governance, and Chairman of
CII’s Leadership Summit.
He is also on the Board of the following companies:

.
1 Hero Honda Motors Director and Member – Audit
Limited Committee
2 Mahindra Ugine Steel Director
Company Limited
3 Aditya Birla Nuvo Limited Director
4 Patni Computer Systems Director and Member -
Limited Shareholder's Grievance
Committee

5 Tata Chemicals Limited Director
6 Godrej Industries Limited Director
Changes during 2005-06 Committee

of Directors
Senior Management Code of
Conduct
KEY MILESTONES OF HERO HONDA

Yea Event
r
198 Joint Collaboration Agreement with Honda Motor Co.
3 Ltd. Japan signed
Shareholders Agreement signed
198 Hero Honda Motors Ltd. Incorporated
4
198 First motorcycle "CD 100" rolled out
5
198 100,000th motorcycle produced
7
198 New motorcycle model - "Sleek" introduced
9
199 New motorcycle model - "CD 100 SS" introduced
1
500,000th motorcycle produced
199 Raman Munjal Vidya Mandir inaugurated - A School in

2 the memory of founder Managing Director, Mr. Raman
Kant Munjal
199 New motorcycle model - "Splendor" introduced
4
1,000,000th motorcycle produced
199 New motorcycle model - "Street" introduced
7
Hero Honda's 2nd manufacturing plant at Gurgaon
inaugurated
199 2,000,000th motorcycle produced
8
199 New motorcycle model - "CBZ" introduced
9
Environment Management System of Dharuhera Plant
certified with ISO-14001 by DNV Holland
Raman Munjal Memorial Hospital inaugurated - A

Hospital in the memory of founder Managing Director,
Mr. Raman Kant Munjal
200 4,000,000th motorcycle produced
0
Environment Management System of Gurgaon Plant
certified ISO-14001 by DNV Holland
Splendor declared 'World No. 1' - largest selling single

two-wheeler model

"Hero Honda Passport Programme" - CRM Programme
launched
200 New motorcycle model - "Passion" introduced
1
One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced

200 New motorcycle model - "Dawn" introduced
2
New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj

Singh, Harbhajan Singh and Zaheer Khan as Brand
Ambassadors
200 Becomes the first Indian Company to cross the
3 cumulative 7 million sales mark
Splendor has emerged as the World's largest selling

model for the third calendar year in a row (2000, 2001,
2002)
New motorcycle model - "CD Dawn" introduced
New motorcycle model - "Splendor +" introduced

New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced

200 New motorcycle model - "Ambition 135" introduced
4
Hero Honda became the World No. 1 Company for the
third consecutive year.
Crossed sales of over 2 million units in a single year, a

global record.
Splendor - World's largest selling motorcycle crossed

the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed
Total sales crossed a record of 10 million motorcycles

200 Hero Honda is the World No. 1 for the 4th year in a row
5
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced

New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure"

introduced
200 Hero Honda is the World No. 1 for the 5th year in a row
6
DIRECTORS' REPORT
We, the Directors of Hero Honda Motors Limited are

delighted to present the 26th Annual Report for the Silver
Jubilee Year. The Report is being presented along with the

Audited Statement of Accounts for the financial year ended
March 31, 2009.
BUSINESS PERFORMANCE
During the year under review your Company, despite a

slowdown in the two wheeler industry, achieved the 11.53
per cent growth in annual sales by clocking the sales volume
of 3,722,000 units compared to 3,337,142 units in 2007-08.
In value terms total sales (net of excise duty) increased by
19.2 per cent to Rs. 12,319 crores from Rs. 10,332 crores in
2007-08. Your Company consolidated its leadership position
in domestic motor cycle market with 57 percent market
share. The Company successfully launched eight new models
including variants during the year under review.
On the financial front, total income of the Company

grew by 19.2 per cent from Rs. 10,517 crores in previous
year to Rs. 12,540 crores during 2008-09. The Company
posted a Profit after tax (PAT) of Rs. 1,282 crores, compared
to Rs. 968 crores in the previous fiscal, a growth of 32 per
cent. The Company's earnings before interest depreciation
and taxes (EBITDA) margins increased from 13.33 per cent in
2007-08 to 14.16 per cent in 2008-09. The improvements on
the margins was accomplished through better sales
realizations, effective cost rationalisation measures which
included better control over material cost, marketing cost

and overheads, apart from sharp focus on operational
efficiencies.
During the year Hero Honda also retained for the eighth year
in a row, its position as the World's Number One Two
Wheeler Company.
A detailed discussion on the business performance and

future outlook has been given in the chapter on
Management Discussions Analysis.
DIVIDEND
Very few manufacturing companies in the Indian

corporate sector have a better dividend payout record than
Hero Honda. We are pleased to recommend a Dividend of
1000 per cent i.e. Rs. 20 per equity share of Rs. 2
aggregating to Rs. 399.38 crores (exclusive of corporate
dividend tax) for your approval for the financial year ended
March 31, 2009. The dividend, if approved, will be paid to
the eligible members well within the stipulated period.
Our dividend policy is in line with our strong and

consistent belief that if funds are not re-invested for capital
investments, they should be optimally distributed to
shareholders.
TRANSFER TO GENERAL RESERVE

A sum of Rs. 129 crores have been transferred to the
General Reserve of the Company. This reaffirms the inherent
financial strength of the Company.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the

financial position of the Company have occurred between
April 1, 2009 and the date on which this Report has been
signed.
BOARD OF DIRECTORS
During the period under review, Mr. Satoshi Matsuzawa

was appointed as an alternate Director to Mr. Takashi Nagai
w.e.f. April 24, 2008. Mr. Yutaka Kudo, Whole-time Director
of the Company resigned from both the offices i.e. Director &
Whole-time Director w.e.f. May 31, 2008. Mr. Sumihisa
Fukuda was appointed as an Additional and Technical
Director in the Whole-time employment of the Company in
his stead on June 1, 2008. Mr. Meleveetil Damodaran was
appointed as an Additional Director in the Non-Executive and
Independent Category w.e.f. June 16,2008 and Mr. N.N.Vohra
resigned from the Board w.e.f. June 24,2008 on his being
appointed as Governor of the state of Jammu & Kashmir. Mr.
Arun Nath Maira was appointed as an Additional Director
w.e.f. December 20, 2008. Since he has been appointed as
member of Planning Commission, he resigned from the

Board of the Directors on July 23, 2009. The members while
congratulating Mr. Maira, has accepted his resignation in the
Meeting of Board of Directors held on July 29, 2009. Mr. Sunil
Bharti Mittal resigned from the Directorship on April 21,
2009.
The Board places on record its sincere appreciation and

gratitude for the guidance and work put in by the out going
members, and wishes them a rewarding and satisfying
career ahead. The Directors also welcome the new members
on the Board and wishes them a successful and fruitful
tenure with the Company.
At the ensuing Annual General Meeting, Gen. (Retd.)

V.P. Malik, Mr. Brijmohan Lall Munjal, Mr. Sunil Kant Munjal
and Mr. Takashi Nagai will retire by rotation and being
eligible, offer themselves for re-appointment in terms of
provisions of Articles of Association of the Company. The
brief resume/details of the Directors, who are to be re-
appointed has been furnished after the notes to the Notice of
the ensuing Annual General Meeting.
Your Directors recommend their re-appointment at the

ensuing Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according
to the information and explanations obtained by them, 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, 2009, the applicable accounting
standards have been followed;
2. that appropriate accounting policies have been selected

and applied consistently and judgments and estimates
that are reasonable and prudent have been made so as
to give a true and fair view of the State of Affairs as at
March 31,2009 and of the Profit of the Company for the
financial year ended March 31,2009;
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;
4. that the annual accounts for the year ended March 31,
2009 have been prepared on a going concern basis.
MANAGEMENT DISCUSSION & ANALYSIS

A detailed chapter on, 'Management Discussion and
Analysis' (MDA), pursuant to Clause 49 of the Listing
Agreement is annexed and forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
At Hero Honda, Corporate Social Responsibility (CSR)

encompasses much more than social outreach programs and
is an integral part of the way the Company conducts its
business. Detailed information on the initiatives of the
Company towards CSR activities is provided in the Social
Responsibility section of the MDA.
CORPORATE GOVERNANCE
At Hero Honda, 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 benchmark itself with

global standards for providing good Corporate Governance
and 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.herohonda.com. A report on Corporate
Governance along with the Auditors' Certificate on its
compliance is annexed hereto as Annexure -1.
INTERNAL CONTROL SYSTEMS
Hero Honda 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 supplement the process of internal
control. Properly documented policies, guidelines and
procedures are laid down for this 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

three Independent, Non-Executive 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 seven 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 for the 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 minimization. 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.
The rating agency CRISIL, during the year under review

assigned the bank loan ratings of" AAA/Stable" and P1 + to
the Cash Credit Limit & Letter of Credit Limit facility
respectively to your 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(1B) 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 2009-10 and necessary application for
obtaining the requisite approval has been filed with the
Government. The Cost Auditors' Report for 2008-09 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 per 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). The delisting application, was in-
principle approved by the Committee of the Calcutta Stock
Exchange Association Limited, the formal approval is
awaited and is expected to be received in due course of
time.
PERSONNEL
As on March 31, 2009 the total number of employees on the

records of the Company was 4513.
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 and

Environment" of MDA, 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.
Financial Analysis
Profit and Loss Statement

(Rs.in Millions)
Mar 200 Mar 200 Mar 200 Mar 200Mar 20
Particulars
9 8 7 6 05
No of
12 12 12 12 12
Months
+Gross Sales 13543 120385 11542 10086 85968.

0.90 .30 0.40 1.60 10
Less :Inter
divisional 0 0 0 0 0
transfers
Less: Sales
0 0 0 0 0
Returns
12239. 17067. 16420.8 13721.8 11751.6
Less: Excise
70 30 0 0 0
123191 103318 98999.6 87139.8 74216.5
Net Sales
.20 .00 0 0 0
EXPENDITU
RE :
Increase/Dec - -
107.00 -
+rease in 182.10 22.40 122.50
149.50
Stock
Raw
88164. 74410. 72161. 60975. 52273.
+Materials
70 50 10 60 90
Consumed
Power &
737.00 565.50 524.50 466.50 328.80
Fuel Cost
Employee 3707.1 3211.6 2990.30 2152.90
2594.70
Cost 0 0
Other
Manufacturi 4316.4 3723.5 3515.30 2332.60
3059.70
ng 0 0
Expenses
General and 3707.1 3137.8 3196.60 2713.20 2492.10
Administrati 0 0
on

Expenses
Selling and
5821.6 5036.2 5071.00 3166.90
Distribution 4044.60
0 0
Expenses
Miscellaneo
us 773.60 124.30 184.40 66.40 101.90
Expenses
Less: Pre-
operative
0 0 0 0 0
Expenses
Capitalised
Total 107045 90316. 87665.6 73798.2 62699.6
Expenditure .40 40 0 0 0
Operating
16145. 13001. 11334.0 13341.6 11516.9
Profit (Excl
80 60 0 0 0
OI)
3500.7 2724.4 2540.9 1956.2 1568.7
+Other Income
0 0 0 0 0
Operating 19646. 15726. 13874.9 15297.8 13085.6
Profit 50 00 0 0 0
Interest 25.30 20.00 16.10 29.20 19.30
19621. 15706. 13858.8 15268.6 13066.3
PBDT
20 00 0 0 0
Depreciatio 1806.6 1603.2 1397.80
1146.20 893.80
n 0 0
Profit
Before
17814. 14102. 12461.0 14122.4 12172.5
Taxation &
60 80 0 0 0
Exceptional
Items
Exceptional
Income / 0 0 0 0 0
Expenses
Profit 17814. 14102. 12461.0 14122.4 12172.5
Before Tax 60 80 0 0 0
Provision for 4997.0 4424.0 3882.1 4409.0 4067.8
+
Tax 0 0 0 0 0
Profits After 12817. 9678.8 8578.90 8104.70
9713.40
Tax 60 0
Appropriation 33035. 25626. 20819. 17794. 13490.
+
s 30 60 40 40 00
Equity 1000.0 1000.00
950.00 850.00 1000.00
Dividend % 0
Earnings
64.18 48.47 42.96 48.64 40.58
Per Share
Book Value 190.32 149.54 123.69 100.62 74.78
Balance Sheet Statement

(Rs.in Millions)
Mar 200 Mar 200 Mar 200 Mar 200
Particulars Mar 2009
8 7 6 5
SOURCES OF
FUNDS
+Share Capital 399.40 399.40 399.40 399.40 399.40
Share
warrants & 0.00 0.00 0.00 0.00 0.00
Outstandings
37608. 29463. 24301. 19693. 14534.4
+Total Reserve
10 00 20 90 0
Shareholder's 38007.5 29862.4 24700.6 20093.30 14933.80

Funds 0 0 0
+Secured Loans 0 0 0 0 0
Unsecured 1320.0 1651.7 1857.8 2017.60
+ 784.90
Loans 0 0 0
1320.00 1651.70
Total Debts 784.90 1857.80 2017.60
Total 38792.4 31182.4 26352.3 21951.10 16951.40

Liabilities 0 0 0
APPLICATION
OF FUNDS :
25162.7 19387.8 18006.3 14719.70 11041.90
Gross Block
0 0 0
Less:
9425.60 7825.20 6351.00
Accumulated 5226.00 4297.10
Depreciation
Less:
Impairment 0 0 0 0 0
of Assets
15737.1 11562.6 11655.3
Net Block 9493.70 6744.80
0 0 0
Lease
Adjustment 0 0 0 0 0
A/c
Capital Work 1205.40 3924.40 1899.20
441.90 408.50
in Progress
Pre-operative
Expenses 0 160.50 0 0 0
pending
Assets in
0 0 0 0 0
transit

33687. 25668. 19738. 20618. 20266.5
+Investments
50 20 70 90 0
Current
Assets, Loans
& Advances
3268.3 3171.0 2755.8 2265.5 2042.60
+Inventories
0 0 0 0
Sundry 1499.4 2974.4 3352.5 1586.6
+ 895.50
Debtors 0 0 0 0
Cash and 2195.70 1310.90
357.80 1587.20 176.00
Bank
Other Current
58.90 56.90 36.00 35.30 35.10
Assets
Loans and 3112.60 1854.60 2630.60
2737.80 2396.10
Advances
Total
10134.9 9367.80 9132.70
Current 8212.40 5545.30
0
Assets
Less :
Current
Liabilities and
Provisions
Current 15258. 13249. 10419. 10728. 10157.6
+
Liabilities 50 80 20 80 0
5269.7 4997.6 4372.4 4899.2 4847.10
+Provisions
0 0 0 0
Total Current 20528.2 18247.4 14791.6 15628.00 15004.70
Liabilities 0 0 0
Net Current - - - -7415.60 -9459.40
Assets 10393.3 8879.60 5658.90
0
Miscellaneous
Expenses not 0 0 0 0 0
written off
Deferred
86.50 52.20 13.80 13.20 6.30
Tax Assets
Deferred 1530.80 1305.90 1295.80
1201.00 1015.30
Tax Liability
Deferred Tax - - -
Assets / 1444.30 1253.70 1282.00 -1187.80 -1009.00
Liabilities
38792.4 31182.4 26352.3 21951.10 16951.40
Total Assets
0 0 0
Contingent
81.70 0 202.40 734.80 799.40
Liabilities

Cash Flow
(Rs.in Millions)
Mar 200 Mar 20 Mar 20 Mar 20 Mar 20
Particulars
9 08 07 06 05
Profit 17814 14102 12461. 14122. 12172.
Before Tax .60 .80 00 40 50
- -
- -
+Adjustment 193.0 185.0 -233.20
177.20 159.40
0 0
Changes In -
985.0 2612.1 -
+working 2072. -541.40
0 0 361.80
Capital 00
Cash Flow
after
18606 16537. 10204 13601. 11397.
+changes in
.60 70 .00 20 90
Working
Capital
Cash Flow
from 13590 12117 6250.5 9360.8 7468.3
Operating .30 .80 0 0 0
Activites
Cash Flow
- - - - -
from
+ 8611. 7810.1 2731. 3234.9 5628.5
Investing
90 0 30 0 0
Activities
+Cash Flow - - - - -
from 4999. 4323.3 4934. 4712.3 2035.1
Financing 30 0 60 0 0

Activites
Net Cash -
1413.6
Inflow / -20.90 -15.60 1415.4 -195.30
0
Outflow 0
Opening
Cash & 151.9 166.6 1587.2
176.00 371.20
Cash 0 0 0
Equivalents
Cash &
Cash
Equivalent
on 0 0 0 0 0
Amalgamatio
n / Take over
/ Merger
Cash &
Cash
Equivalent of
0 0 0 0 0
Subsidiaries
under
liquidations
Translation
adjustment
on reserves /
0 0 0 0 0
op cash
balalces frgn
subsidiaries
Effect of 3.50 0.90 -5.20 -2.40 0.10

Foreign
Exchange
Fluctuations
Closing
Cash & Cash 134.50 151.90 166.60 1587.20 176.00
Equivalent
Ratio Analysis
(Rs.in Millions)
Mar 20 Mar 20 Mar 20 Mar 20 Mar 20
Particulars
09 08 07 06 05
Operational &
Financial Ratios
Earnings Per
64.18 48.47 42.96 48.64 40.58
Share (Rs)

CEPS(Rs) 73.23 56.49 49.96 54.38 45.06
DPS(Rs) 20.00 19.00 17.00 20.00 20.00
Book 190.3 149.54 123.69 100.62
74.78
NAV/Share(Rs) 2
Tax Rate(%) 28.05 31.37 31.15 31.22 33.42
Margin Ratios
Core EBITDA
14.51 13.06 12.02 15.17 15.22
Margin(%)
EBIT Margin(%) 13.17 11.73 10.81 14.03 14.18
Pre Tax
13.15 11.71 10.80 14.00 14.16
Margin(%)
PAT Margin (%) 9.46 8.04 7.43 9.63 9.43
Cash Profit
10.80 9.37 8.64 10.77 10.47
Margin (%)
Performance
Ratios
ROA(%) 33.04 31.04 32.55 44.25 47.81
ROE(%) 33.72 32.41 34.73 48.34 54.27
ROCE(%) 45.99 45.29 47.35 64.47 71.92
Asset
0.26 0.24 0.21 0.19 0.17
Turnover(x)
Sales/Fixed
6.08 6.44 7.05 7.83 8.51
Asset(x)
Working
-0.08 -0.07 -0.05 -0.07 -0.11
Capital/Sales(x)
Efficiency
Ratios
Fixed
16.45 15.53 14.18 12.77 11.75
Capital/Sales(x)
Receivable
6.03 9.59 7.81 4.49 2.83
days
Inventory Days 8.68 8.98 7.94 7.80 8.33
Payable days 25.26 26.79 25.24 32.24 37.53

Valuation
Parameters
PER(x) 16.67 14.24 15.95 18.26 13.51
PCE(x) 14.61 12.22 13.71 16.34 12.16
Price/Book(x) 5.62 4.62 5.54 8.83 7.33
Yield(%) 1.87 2.75 2.48 2.25 3.65
EV/Net Sales(x) 1.72 1.33 1.40 2.04 1.50
EV/Core
10.81 8.77 9.95 11.61 8.51
EBITDA(x)
EV/EBIT(x) 11.90 9.76 11.07 12.55 9.13
EV/CE(x) 5.47 4.42 5.24 8.09 6.57
M Cap / Sales 1.73 1.33 1.38 2.04 1.47
Growth Ratio
Net Sales
19.23 4.36 13.61 17.41 27.25
Growth(%)
Core EBITDA
24.93 13.34 -9.30 16.91 14.03
Growth(%)
EBIT Growth(%) 26.32 13.19 -11.83 16.07 13.50
PAT Growth(%) 32.43 12.82 -11.68 19.85 11.28
EPS Growth(%) 32.41 12.83 -11.68 19.85 11.28
Financial
Stability Ratios
Total
0.02 0.04 0.07 0.09 0.14
Debt/Equity(x)
Current Ratio(x) 0.66 0.71 0.88 0.77 0.55
Quick Ratio(x) 0.45 0.47 0.61 0.55 0.34
Interest 705.1 706.14 774.98 484.64
631.70
Cover(x) 3
Total
0.00 0.01 0.01 0.01 0.02
Debt/Mcap(x)

PROMINENT AWARDS TO THE COMPANY
Yea Awards & Recognitions

r
200 ET Awards for Corporate Excellence - Hero Honda is the
9 winner of the " Company of the Year" award for 2008 -
09.
200 NDTV Profit Business Leadership Award 2008 - Hero

8 Honda Wins the Coveted "NDTV Profit Business
Leadership Award 2008"
TopGear Design Awards 2008 - Hunk Bike of the Year
Award
NDTV Profit Car India & Bike India Awards - NDTV
“Viewers’ Choice Award” to Hunk in Bike category
IndiaTimes Mindscape and Savile Row ( A Forbes Group
Venture ) Loyalty Awards - “Customer and Brand Loyalty
Award” in Automobile (two-wheeler) sector
Asian Retail Congress Award for Retail Excellence
(Strategies and Solutions of business innovation and
transformation) - Best Customer Loyalty Program in
Automobile category
NDTV Profit Car India & Bike India Awards - Bike
Manufacturer of the year
Overdrive Magazine - Bike Manufacturer of the year
TNS Voice of the Customer Awards:
• No.1 executive motorcycle Splendor NXG
• No.1 standard motorcycle CD Deluxe
• No. premium motorcycle CBZ Xtreme
200 The NDTV Profit Car India & Bike India Awards 2007 in
7 the following category:
• Overall "Bike of the Year" - CBZ X-treme
• "Bike of the Year" - CBZ X-treme (up to 150 cc

category)
• "Bike Technology of the Year" - Glamout PGM FI

KEY POLICIES

AN ENVIRONMENTALLY AND SOCIALLY, AWARE
COMPANY
At Hero Honda, our goal is not only to sell you a bike, but
also to help you every step of the way in making your world
a better place to live in. Besides its will to provide a high-
quality service to all of its customers, Hero Honda takes a
stand as a socially responsible enterprise respectful of its
environment and respectful of the important issues.
Hero Honda has been strongly committed not only to

environmental conservation programmes but also expresses
the increasingly inseparable balance between the economic
concerns and the environmental and social issues faced by a
business. A business must not grow at the expense of
mankind and man's future but rather must serve mankind.
"We must do something for the community from

whose land we generate our wealth."
A famous quote from our Worthy Chairman Mr.Brijmohan Lall
Munjal.
Environment Policy
We at Hero Honda are committed to demonstrate

excellence in our environmental performance on a
continual basis, as an intrinsic element of our corporate
philosophy.

To achieve this we commit ourselves to:
• Integrate environmental attributes and cleaner
production in all our business processes and practices
with specific consideration to substitution of hazardous
chemicals, where viable and strengthen the greening of
supply chain.
• Continue product innovations to improve environmental
compatibility.
• Comply with all applicable environmental legislation
and also controlling our environmental discharges
through the principles of "alara" (as low as reasonably
achievable).
• Institutionalise resource conservation, in particular, in
the areas of oil, water, electrical energy, paints and
chemicals.
• Enhance environmental awareness of our employees

and dealers / vendors, while promoting their
involvement in ensuring sound environmental
management.
Quality Policy
Excellence in quality is the core value of Hero Honda's
philosophy.
We are committed at all levels to achieve high quality in

whatever we do, particularly in our 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.
Safety Policy
Hero Honda is committed to safety and health of its
employees and other persons who may be affected by its
operations. We believe that the safe work practices lead to
better business performance, motivated workforce and
higher productivity.
We shall create a safety culture in the organization by:

• Integrating safety and health matters in all our
activities.
• Ensuring compliance with all applicable legislative
requirements.
• Empowering employees to ensure safety in their
respective work places.
• Promoting safety and health awareness amongst
employees, suppliers and contractors.
• Continuous improvements in safety performance

through precautions besides participation and training
of employees.

Conclusion:
Hero Honda has consistently grown at double digits since

inception; and today, every second motorcycle sold in the
country is a Hero Honda. Every 30 seconds, someone in India
buys Hero Honda's top -selling motorcycle – Splendor. This
festive season, the company sold half a million two wheelers
in a single month—a feat unparalleled in global automotive
history.
Hero Honda bikes currently roll out from its three globally
benchmarked manufacturing facilities. Two of these are
based at Dharuhera and Gurgaon in Haryana and the third
state of the art manufacturing facility was inaugurated at
Haridwar, Uttrakhand in April this year. These plants
together are capable of producing out 4.4 million units per
year.
Hero Honda's extensive sales and service network now

spans over 3000 customer touch points. These comprise a
mix of dealerships, service and spare points, spare parts

stockiest and authorized representatives of dealers located
across different geographies.
Hero Honda values its relationship with customers. Its unique

CRM initiative - Hero Honda Passport Program, one of the
largest programs of this kind in the world, has over 3 million
members on its roster. The program has not only helped
Hero Honda understand its customers and deliver value at
different price points, but has also created a loyal
community of brand ambassadors.
Having reached an unassailable pole position in the Indian

two wheeler market, Hero Honda is constantly working
towards consolidating its position in the market place. The
company believes that changing demographic profile of
India, increasing urbanization and the empowerment of rural
India will add millions of new families to the economic
mainstream. This would provide the growth ballast that
would sustain Hero Honda in the years to come. As
Brijmohan Lall Munjal, the Chairman, Hero Honda Motors
succinctly points out, "We pioneered India's motorcycle
industry, and it's our responsibility now to take the
industry to the next level. We'll do all it takes to
reach there.''

Finaical Analysis of Hero Honda Ltd.

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Declaration

I do hereby declare that this report entitled “Hero

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

I do express my deep sense of gratitude to our

I would like to convey my best regards with lot of

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Hero Honda Motors Limited, based in Delhi, India is a joint

The company's most popular model is the Hero Honda's

Type Public company BSE:HEROHONDA M

Founded January 19, 1984 in Gurgaon, Haryana, India

Brijmohan Lal Munjal (chair and founder)

“Hero” is the brand name used by the Munjal brothers for

During the 1980s, the company introduced motorcycles that

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Hero Honda has three manufacturing facilities based at

The 2006 Forbes 200 Most Respected companies list has

India became the second largest two wheeler manufacturer

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

In the mid-1980s, the Indian government regulations

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

In Hero Group there is no organized labor union and family

The Group Chairman, Mr. Lall has actively looked at

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Expansion into the automotive segment started with the

The Hero Group also plans to expand into into other

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Brijmohan Lall Munjal is currently on the board of the

No Name of Company Nature of Office

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

MR. PAWAN MUNJAL

He is also on the board of Indian Institute of Management,

Mr. Pawan Munjal is currently on the Board of the following

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Before joining the Company, he held the position as General

His specialization is “Overseas Sales of Automobiles and

Mr. Nakagawa is currently on the Board of the following

No Name of Company Nature of Office

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Fukuda is currently on the Board of the following

Mr. Om Prakash Munjal is currently on the Board of the

No Name of Company Nature of Office

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

In 2004-05, Mr. Munjal became the President of

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Sunil Kant Munjal is currently on the board of the

Mr. Takedagawa holds the directorship and membership of

MR. TAKASHI NAGAI

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Nagai is on the board of the following companies.:

Mr. Matsuzawa is on the board of the following companies.:

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Dinodia holds the directorship and membership of the

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

He holds the directorship and membership of the

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mr. Singh is currently on the board of the following

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

Mrs. Bhartia is director on the Board of the following

BHADRAK INSTITUTE OF ENGINEERING AND TECHNOLOGY, BHADRAK, ORISSA

MR. MELEVEETIL DAMODARAN