Hero Honda Motors Ltd.

"Desh ki Dhadkan"

Hero Honda is the World's No.1 two-wheeler manufacturing company having the trust of more than 5 million customers. The company is a joint venture of Hero Cycles of India and Honda Motor of Japan. Achiever, CBZ, CD Dawn, Karizma, Passion, Pleasure and Splendor are its famous brands on Indian roads.

Quick Facts

Founder	Munjal Brothers: Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal.
Year of Establishment	1984 (The Hero Group was established in 1956)
Mission	"Its our mission to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of our customers. While doing so, we maintain the highest standards of ethics and societal responsibilities." - Mr Brijmohan Lall Munjal, Chairman & MD
Foundational Work	Before the establishment of the Hero Group in 1956, Munjal Brothers use to manufacture bicycle components in the early 1940's.
Industry	Automotive - Two Wheelers
Business Group	The Hero Group
Capitalization Ratio	Hero Group - 26% Honda Motor Co., Ltd. - 26% Others - 48% (listing)
Listings & its codes	BSE - Code: 500182 NSE - Code: HERO HONDA Bloomberg - Code: HH@IN
No. of Sales Outlets	1500+
Joint Venture	The Hero Group (India) with Honda Motor Co., Ltd. (Japan)
Registered & Corporate Office	34, Community Centre Basant Lok, Vasant Vihar New Delhi - 110057 Tel.: +(91)-(11)-26142451 - 59 Fax: +(91)-(11)-26143321 / 3198 / 1830; 26152453 / 2132
Work Station	69 Km Stone New Delhi-Jaipur Highway Daruhera - 121106, Haryana
Website	www.herohonda.com www.herogroup.com

Sales Performance:

	Dec'04	Dec'05	Apr'04-Dec'04	Apr'05-Dec'05
Domestic	2225250	238822	1892540	2155479
Exports	5501	6282	43441	72815

Note: Figures show No. of vehicles

Financials at a Glance:

Particulars	2000-01	2001-02	2002-03	2003-04	2004-05
Total Income	3191	4539	5195	5997	7563
Profit before Tax	377	694	885	1072	1217
Profit after Tax	247	463	581	728	810
Total Debt	66	116	134	175	202
Net Fixed Assets	454	491	517	589	715
OPBIT*/Net sales-%	13.2	15.0	16.7	16.8	15.7
OPBT*/Net Sales(%)	11.7	13.9	15.5	15.6	14.6
Dividend Per Share ( Rs)	3.0	17.0	18.0	20	20
Dividend Payout (%)	26.7	75.5	69.8	61.9	56.3

* OPBDIT = Operating Profit before Depreciation, Interest and Tax

**OPBT= PBT before other income

Milestones:

1984	Hero Honda Motors Limited establised in joint venture with Honda Motors of Japan, to manufacture motorcycles.
1985	1985 Arrival of the 100 cc Hero Honda Motorcycle.
1991	1991 Hero Honda receives National Productivity Council's Award. Hero Honda receives the Economic Times - Harvard Business School Association Award against 2 200 contenders.
2004	Hero Honda continues as the World's largest manufacturer of two-wheelers with an annual sales volume of 2.07 motorcycles and a market share of 48%.

* OPBDIT = Operating Profit before Depreciation, Interest and Tax

**OPBT= PBT before other income

Ashok Leyland Company Flashback:

Honda will continue to provide Hero Honda with full and latest technological support. Both of them will develop and expand the two-wheeler business in the country. They agree to strengthen model line up. Honda Motor Co. Ltd., Japan, renewed its Technical Collaboration Agreement for another 10 years, uptill 2014. The previous renewal was in 1994 after the establishment in 1984.

Honda has strengthened its R&D facilities in India and together with R&D in Japan, it will continue to provide Hero Honda with the Leading Edge Honda Technology.

According to Mr. Brijmohan Lall, Chairman, Hero Honda Motors Limited, Hero Honda is a 'Showcase' of an ideal partnership where both the partners have combined their unique strengths and have successfully created the 'World's No. 1' two-wheeler company.

Company Flashback:

Two-wheelers in India is a synonymous to the brand Hero Honda, a unit of Hero Group. Established in 1984 as a joint venture of The Hero Group (India) and Honda Motor Co. Ltd. (Japan), Hero Honda is the 'world's No. 1' two-wheeler company.

Driven by the trust of over 5 million customers, the product range of Hero Honda commands a market share of approximately 50%. Starting with a sale figure of only 43,000 units in 1985-86, the company has reached a high of 26,21,400 units in 2004-05. According to Pawan Munjal, Managing Director and CEO of Hero Honda, the gap with its nearest rival, Bajaj Auto, is over a million units in 2004-05.

On a compounded annual growth rate (CAGR) basis, the sales volume of the company have been growing at 33% for the last 6 years (as stated in 2003-04) and the net sales value at 36% over the same period. Parallel to it, the profit of the company have been growing at 50% CAGR.

The company enjoys debt free status since March 01 and had zero level of contingent liabilities as of 31st March 03. The entire long term debt of Rs. 116 Cr. as on 31st March 03 represents an interest free loan from the Government of Haryana on account of sales tax deferment, and has no costs attached to it.