splendor plus - Hero MotoCorp

Transcription

Design and Developed by Bounce Design
Printed by Thompson Press
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A N N UA L R E P O R T 0 7
0 8
Hero Honda Motors Limited
34, Community Centre, Basant Lok,
Vasant Vihar, New Delhi-110 057, India
PH. 91-11-2614 2451, 2614 4121
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India and Bharat co-exist today. India comprises of fastgrowing cities and towns; Bharat is made up of villages
entering the economic mainstream. As we enter our 25th
year, we seek to walk and march with both India and Bharat.
H
Corporate Profile 04
Chairman’s Message 10
Board of Directors 14
Management Discussion & Analysis 16
Industry and Segment Dynamics 18
Results and Financial Analysis 24
Operation, Reach & Supply Chain 28
CONTENT
People And Environment 32
Social Responsibility 36
Directors’ Report 43
Corporate Governance Report 47
FAQ’s 71
Auditors’ Report 74
Balance Sheet 78
Profit & Loss Account 79
Cash Flow Statement 80
US GAAP 115
03
02
CORPORATE PROFILE
“If your actions inspire others to dream more, learn
more, do more and become more, you are a leader.”
In some ways, Hero and Honda are like
two volumes of a single book. What has
made the book a bestseller is the fact
that right from the outset, the co-authors
knew the script they had to write in order
to be successful in the Indian market.
Over the course of two and a half
decades, both partners have finetuned and perfected their roles. As the
largest motorcycle producer in the
world, Honda has been able to
consistently provide technical knowhow, design specifications and R&D
innovations to its most prolific affiliate in
the world, Hero Honda. This has led to
the development of world class, valuefor-money motorcycles and scooters
for the Indian market.
On its part, the Hero Group has taken on
the singular and onerous responsibility
of developing the supply chain,
ramping up production facilities, setting
up distribution networks and creating
customers.
Since both partners are completely
focused on their respective skills, they
have been able not just to complement
each other, but also draw from each
others strengths. In the process, Hero
Honda has gone on to create history, by
becoming one of the most successful
joint ventures in the world.
Today, every second motorcycle sold in
the country is a Hero Honda. There are
more than 22 million Hero Hondas on
Indian roads today. There are more
Hero Honda bikes on this country's
roads than the total population of some
European countries put together!
The company's growth in the twowheeler market in India is the result of an
intrinsic ability to increase reach in new
geographies and growth markets. Hero
Honda's motorcycles and scooters are
sold and serviced through a network of
over 3500 customer touch points.
These outlets comprise of a mix of
dealers, service centres and stockists
located across rural and urban India,
and with every passing year, the
network is augmented.
Hero Honda has built two world-class
manufacturing facilities at Dharuhera
and Gurgaon in Haryana. These two
units now churn out over 3 million bikes
per year. The company's third, and its
largest and most sophisticated plant at
Haridwar has also gone on-stream.
All this has happened in the span of just
two and a half decades!
Leaders create pathways where none
exist. In the 1980’s – much before
“green” became a fashionable word,
Hero Honda became the first company
in India to prove that it was possible to
drive a vehicle without polluting the
roads. The company introduced new
generation motorcycles that set
industry benchmarks for fuel thrift and
low emission.
A legendary ‘Fill it - Shut it - Forget it'
campaign captured the imagination of
commuters across India and Hero
Honda sold millions of bikes purely on
the commitment of increased mileage.
Today, as Hero Honda enters its silver
jubilee year, a riveting ‘Dhak Dhak Go’
sets the tone for India's Gen Next, its
emerging classes and its aspiring
classes.
The true test of champions comes
when the going gets tough. Champions
show the way by doing the basic things
right. In a particularly difficult year, when
the rest of the motorcycle industry
shrunk by 14 per cent, Hero Honda has
protected its turf and has actually grown
its market share, by re-establishing a
lead of more than one million bikes over
its nearest rival.
Not one to rest on its laurels, the
company believes the best is yet to
come. Today, Hero Honda is powering
its way through a market that —despite
the short term hiccup—hasn't still
unleashed its true potential, since
barely 2 per cent of the population has
been penetrated so far.
Not surprisingly, the company is in no
mood to take its hand off the throttle. As
Brijmohan Lall Munjal, the Chairman,
Hero Honda Motors succinctly puts it,
"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.'’
05
04
07
06
WE CELEBRATE
EVENTS AND WE
CELEBRATE TIME.
BUT OUR MOST
IMPORTANT
CELEBRATIONS, ARE
OF ACHIEVEMENTS.
CHAIRMAN’S MESSAGE
Dear Shareholders,
As I sat on the stage during the
inauguration of our third plant in April this
year, a fleeting thought crossed my
mind: have we really entered our 25th
year?
I remembered vividly how we started a
quarter of a century ago: our first plant
came up in the wilderness. We used dirt
tracks to reach our factory. Yet here I
was, sitting in front of India's first
automobile factory that connects
vendors through conveyor belts!
Friedrich Nietzsche once famously
remarked: “For a tree to become tall, it
must grow tough roots along the
rocks''. As we enter our silver jubilee
year, we have shown how.
As interest rates climbed during the
year, the industry went into de-growth,
against all expectations and
projections. Domestic motorcycle
sales shrunk by 12 per cent and for the
first time in more than a decade,
motorcycle's share of the overall twowheeler pie actually came down by
around 2 per cent.
For most of the two-wheeler industry
therefore, managing 2007-08 was like
trying to grow on rocky terrain. The subsoil was far from nourishing and the
business climate was harsh. Yet, strong
companies, like strong trees, learn to
adapt and adjust. They grow tough
roots along the rocks.
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10
Luckily, we weathered the storm -- and
actually surpassed our tally of the
previous year marginally. More
significantly, your company boosted its
share in the domestic motorcycle
market to more than 54 per cent—the
highest share in recent memory. As the
year ended, your company led its
nearest competitor in the domestic
two-wheeler market by more than 1
million units.
I think it would be safe to summarise
2007-08 as the year in which we
migrated from schemes to themes.
Despite difficult market conditions, we
resisted the temptation to bump up
sales artificially through comprehensive
festival-related discounts. Instead, we
invested in new models and upgrades.
Our performance in the domestic
premium segment gives me special
satisfaction, since our share increased
from 15 per cent to nearly 24 per cent. In
my last message, I talked about our
plans to consolidate our presence in
this part of the market; we are clearly on
track.
In my last message, I had said that we
were taking measures to ensure that
are profitability gets back on track.
Near-stagnant topline performance
forced us to look inwards: at process
efficiencies, at our supply chain and at
our sales frontline. We tweaked,
changed and rationalised where
possible and managed to increase our
operating margins from 11.9 per cent to
13.1 per cent.
Going forward, I expect our supply
chain to become even leaner as
ongoing online projects go live. I am
happy to report that our online vendor
connectivity program – which seeks to
links our plant with vendor premises on
a real-time basis-- has made rapid
progress, with more than 70 per cent of
vendors seamlessly integrated.
Likewise, dealer management system
software is also rolling out on a national
basis very shortly.
In my last message, I had also said that
the slowdown would be temporary. This
year, when conditions are even more
trying, I continue to hold this view. This
company has coped with high interest
rates before. This company has coped
with double-digit inflation before. So
what we are seeing today is nothing
extraordinary.
Of course, good times do not last
forever—perhaps years of 30 per cent
growth will become rare in the future.
But just as good times don't last forever,
nor do bad times. The current degrowth in the industry is also an
aberration caused by external factors
outside the control of the auto industry.
It is not driven by fundamentals.
Indeed, the ground conditions that
drove this country and this company
have not changed.
Two Indias exist today. Both excite me
equally. By the end of this decade, India
is expected to have an urban
population of 173 million. This is
significant, since urbanisation rises with
GDP per capita in a “hockey stick”
fashion.
I am equally excited about rural India.
Government development schemes
are finally showing signs of working at
the grassroots—landless farmers from
Uttar Pradesh and Bihar who
traditionally migrated to Punjab to work
are now demanding higher wages to
come, since there is work available at
home, for the first time. In 1990, for
every Rs. 4300 earned by an Indian
villager, an urbanite made Rs. 3526
more. Today, the difference has
dropped to Rs. 2408. This is a clear
sign of progress.
Increasingly, the rural economy is a
microcosm of the national economy.
Today, India's 700 million villagers now
account for the majority of consumer
spending in the country, more than Rs.
4300 billion a year. Millions step into
consumerism each year, graduating
from the economics of necessity to the
economics of gratification, buying
themselves products we make.
We in Hero Honda are actively seeking
to be part of this miracle. In December
2007, we launched a unique national
level rural connect program called Haar
Gaon, Haar Aangan (every village,
every house). It is my belief that this
program, as it gains critical momentum
in the years to come, it will sustain this
company well into the next decade.
Marching with India and walking with
Bharat—this, I believe, should be our
leitmotif in our silver jubilee year.
We chose to see 2007-08 like a glass of
half-full water; and we were able to
make the most of adversity. Yet I would
like to stress that the road ahead won't
be entirely smooth.
Throughout the year in review,
customers in the entry and executive
segments began to postpone buying
decisions. By the middle of the fiscal,
effective interest rates for the twowheeler industry hovered around 20 per
cent.
Being motorcycle-centric, we were also
affected. The high rates led to largescale delinquencies and defaults in a
number of regions. This in turn forced
financiers to withdraw loan facilities in a
number of dealerships.
reduce the impact of the monthly fuel
bill on the household budget.
Since fuel prices are not expected to
soften in the near term, fuel-efficient
industries such as ours could be
beneficiaries.
We will continue to be confident and
aggressive about the future, we will also
be patient. I read somewhere that
patience is waiting. Not passively
waiting - that is laziness; but to keep
going when the going is hard and
slow - that is real patience.
Yours sincerely,
Brijmohan Lall
Chairman
High interest rates continue as I write
this, but these are beyond our control.
Nevertheless, the management is
convinced it can, to an extent, control
rampant delinquencies by partnering
NBFC lenders with regional strengths
and strong grassroot connections,
instead of depending entirely on
national level banks.
Though much smaller in size, regional
non-banking financial companies are
able to leverage their excellent domain
knowledge on local borrowers. This
ensures extremely low levels of nonperforming assets. These NBFC’s
could be our ideal finance partners,
especially in smaller towns and rural
areas, where national-level banks have
poor distribution networks. We tied up
with a regional financier during the year
and hope to sew up more regional tieups in the months to come.
Inflation is another concern. While it is
true that double-digit inflation of 11-12
per cent would certainly upset
household budgets and postpone
certain purchases, the rise in auto fuel
prices might actually turn out to be a
blessing in disguise for the two-wheeler
industry. It is my belief that costeffective and fuel-efficient modes of
transport will become more popular. In
fact, I will not rule out the possibility of a
number of car-owning homes actually
buying an additional two-wheeler to
13
12
BOARD OF DIRECTORS
ALTERNATE DIRECTOR
Brijmohan Lall Munjal
Chairman
Om Prakash Munjal
Non-Executive Director
Satoshi Matsuzawa
(Alternate Director to Mr. Takashi Nagai)
OUTGOING DIRECTORS
Pawan Munjal
Managing Director & CEO
Masahiro Takedagawa
Tatsuhiro Oyama
(upto May 11, 2007)
Dr. Vijay Laxman Kelkar
Non-Executive and Independent Director
(upto December 31, 2007)
Toshiaki Nakagawa
Joint Managing Director
Sunil Kant Munjal
Yutaka Kudo
Whole-time Director
(upto May 31, 2008)
Sumihisa Fukuda
Technical Director
Takashi Nagai
(w.e.f. June 01, 2008)
(w.e.f. May 11, 2007)
Pradeep Dinodia
Non-Executive and Independent
Director
Ms. Shobhana Bhartia
Director
Narinder Nath Vohra
Non-Executive and Independent Director
(upto June 24, 2008)
COMMITTEE OF DIRECTORS
Audit Committee
Gen. (Retd.) Ved Prakash Malik
Director
Sunil Bharti Mittal
Director
Pradeep Dinodia
REMUNERATION
COMMITTEE
SENIOR MANAGEMENT TEAM
Sr. Vice President & CFO
Chairman
Chairman
Pradeep Dinodia
Member
Ravi Sud
Anil Dua
Sr. Vice President-Sales,
Marketing and Customer Care
Member
Vikram S. Kasbekar
Dr. Pritam Singh
Director
Analjit Singh
Director
Meleveetil Damodaran
Director
(w.e.f. June 16, 2008)
Dr. Pritam Singh
Member
COMPLIANCE OFFICER
Ilam C. Kamboj
SHAREHOLDERS'
GRIEVANCE COMMITTEE
Dr. Pritam Singh
Chairman
G.M. Legal & Company Secretary
Plants Head-Operations
and Supply Chain
Dr. Anadi S. Pande
Vice President-HRM, Corporate
Planning and Strategy
Vijay Sethi
Vice President-Information Systems
Pradeep Dinodia
Member
For more information please visit www.herohonda.com
15
14
MANAGEMENT DISCUSSION & ANALYSIS
Industry And Segment Dynamics
Performance Across Segments
Results And Financial Analysis
Operations, Reach & Supply Chain
Manufacturing
Vendor Mangement
Distribution Network
Rural Network
People And Environment
The Human Touch
Information Systems
Environment
Cautionary statement
Statements in this management discussion and analysis describing the Company's objectives,
projections, estimates and expectations may be 'forward looking statements' within the meaning
of applicable laws and regulations. Actual results might differ substantially or materially from
those expressed or implied. Important developments that could affect the company's operations
include significant changes in political and economic environment in India or key markets
abroad, tax laws, litigation, labour relations and interest costs.
17
16
INDUSTRY AND
SEGMENT DYNAMICS
“A leader leads by example, whether he intends to or not.”
In the previous year, there were early
signs that growth in the two wheeler
industry was slowing. Within the space
of a year, the pace of the fall has been
quite dramatic, and perhaps for the first
time since economic reforms started in
1991, India's domestic two wheeler
market entered a period of de-growth.
The industry clocked total volumes of
8.03 million during the year in review, a
fall of nearly 5 per cent compared to the
previous year. The picture was bleaker
in the domestic market, where the
industry clocked sales of 7.19 million, a
decline of 8 per cent.
While the motorcycle industry continues
to dominate the structure of the two
wheeler industry, this category's
contribution to the domestic two
wheeler industry actually declined
during the year from 83 per cent to a little
over 79 per cent—a clear symptom of
the ongoing slowdown. In fact, this is
the first time since the early nineties
since motorcycles’ share of the two
wheeler market has actually declined;
reversing a consistently growing trend
from the previous year.
In contrast, there was another trend
reversal during the year. After appearing
to go into decline since the early 1990s,
the scooter market clocked a revival of
sorts during the year. After suffering at
the hands of motorcycles for many
years, scooter sales in the domestic
market as a percentage of motorcycle
sales actually increased from 12.4 per
cent to 14.8 per cent.
As in previous years, the three price
points in the motorcycle segment
continued to grow at different paces.
Dark clouds had started gathering in the
entry segment during the previous year,
with sales of entry level bikes growing at
just 5 per cent. During the year in review,
the entry segment in the domestic
market shrunk visibly from over 36 per
cent of total motorcycle sales to around
30 per cent. In just two years, the entry
segment's share in the total motorcycle
mix has declined by 10 percent.
motorcycle market actually increased
by 4.4 per cent. The executive segment
now makes up nearly 57 per cent of the
motorcycle segment, compared to
52.5 per cent in the previous year. Quite
obviously, the decline of the entry
segment has been so sharp, that the
absolute reduction in executive
segment sales has translated into a
relative increase in the executive
segment's overall share in the
motorcycle mix.
This sharp decline shows the clear
impact of interest rates on two wheeler
buyers at the entry level. Interest rates
started firming up in early 2007, and
have shown no signs of letting up ever
since; the slump in the entry segment
has coincided with this rise. This is an
indication that the entry segment is very
interest elastic, and buyers in this
segment (SEC B and C) react to higher
interest rates perhaps by either
postponing or cancelling their
purchase decisions.
The premium segment was the only
category of motorcycles that managed
to actually increase absolute sales in a
sharply declining market. Sales in the
domestic market for this segment
actually increased by 2.2 per
cent—while the premium segment's
overall share of the motorcycle market
increased from 11.1 per cent to 13 per
cent. This shows that of the three
segments the interest effect has
affected premium buyers the least. This
isn't surprising, considering that buyers
in the premium segment mostly fall in
the SEC A category, who are the least
likely to postpone purchase decisions
on account of an increase in the EMI.
Rising interest rates impacted the
deluxe segment of the motorcycle
industry as well, albeit to a lesser extent.
It was a matter of some irony that even
where all the major players in the
executive segment clocked an overall
decline in numbers, the executive
segment's share of the domestic
At a broader level, there is no real cause
for alarm in the executive segment or
the premium segment, despite the
current decline and slowdown.
According to the National Council of
Applied Economic Research (NCAER)
in 2001-02, there were 61 million
Indians belonging to families that
19
18
earned more than Rs. 2 lacs a year; by
2005-06, that number had crossed 100
million. In 2009-10, this number is
projected to increase to 173 million. It is
safe to assume that the bulk of the
buyers from these segments will opt for
either entry or deluxe segment
motorcycle offerings. On the other
hand, it has now been established
beyond doubt that a large chunk of
entry segment buyers will continue to
react when there is a spike in interest
rates. In other words, two wheeler
makers have few options but to ride out
the difficult times.
Performance Across Segments
Hero Honda's sales in the entry
segment declined by over 6 per cent;
the same as the rest of the motorcycle
industry. However, even in a declining
market Hero Honda's share of entry
segment went up from 28.7 per cent to
36.6 per cent—a clear indication that
sales of manufacturers in the entry
segment shrank substantially. In
contrast, Hero Honda was able to limit
the damage and in the process
increased its market share. Hero Honda
now finds itself in a situation to turn a
position of relative weakness into a
position of strength.
Hero Honda's story in the executive
segment was similar. Compared to the
previous year, sales of executive
segment bikes in the domestic market
were down 1.18 per cent. However, the
company still maintained its iron-grip in
this—the largest segment of the two
wheeler market -- by increasing its
share from 68.9 per cent to 71.5 per
cent.
up by a whopping 69 per cent
compared to the previous year. In 200607, Hero Honda had grown 25 per cent
in this segment.
In the course of a single year, the
company increased its share of the
overall premium motorcycle segment
by more than 8 percent; the company's
premium bikes now account for 23.5
per cent of the total premium pie. Given
the pace of growth of this segment
against the backdrop of a young and
affluent middle class. There is no doubt
that this segment will drive Hero
Honda's growth in the future.
Hero Honda turned in its best
performance in the domestic market's
premium segment, where its sales went
21
20
FOR US, EVERY
CELEBRATION IS
ENJOYABLE BECAUSE
IT IS DIFFERENT.
WHAT MAKES THEM
MEMORABLE, ARE THE
PEOPLE WE
CELEBRATE WITH.
RESULTS
AND
FINANCIAL
ANALYSIS
Rs.1056 crores in 2006-07 to
Rs.1225 crores in 2007-08. The
improvements on the margins was
accomplished through better sales
realisations and effective cost
rationalisation measures which
included better control over
Table 2: Key Indicators of Profitability
2006-07 2007-08
• Sales :
Despite a slow down in the two
wheeler industry, the annual sales
of the Company grew at 0.01 per
cent. Hero Honda clocked sales
volume of 3,337,142 units in 200708 compared to 3,336,756 units in
2006-07. In value terms total sales
(net of excise duty) increased by
4.4 per cent to Rs.10332 crores
from 9900 crores in 2006-07.
OPBDIT/Sales (%)
11.9
13.1
OPBT/Sales (%)
10.7
11.9
PBIT/Sales (%)
12.4
13.3
PBT/Sales (%)
12.6
13.6
PAT/Sales (%)
8.7
9.4
ROACE (%)
51.6
49.0
ROAE (%)
38.3
35.5
The Company's earnings before
interest depreciation and taxes
(EBITDA) margins increased from
11.9 per cent in 2006-07 to 13.1 per
cent in 2007-08 and the Operating
profit (PBT before other income)
increased by 16.0 per cent from
Material cost, Marketing cost,
Overheads apart from sharp focus
on operational efficiencies.
• Other Income :
Other income marginally declined
PROFITS
(Rs. in Crores)
Despite the nominal growth in sales
turnover, better efficiencies in the
working capital management has
improved the cash flow from
operations from Rs 625.05 crores
to 1211.78 crores. Cash flows
before working changes have also
improved from Rs 1227.60 crores
to Rs 1392.56 crores on account of
better EBITDA margins.
The Company spent a total of
Rs.781 crores in investing activities,
which included capacity expansion
and investment in financial assests.
There was also an outflow of
Rs. 432 crores on account of liberal
dividend outflows.
During the year the Company
incurred a capital expenditure of
Rs.375 crores. The funds were
used towards setting up of new
plant at Haridwar in Uttrakhand. The
aggregate capital outlay for the new
production facility is estimated at
Rs.460 crores which has been
funded over the last two financial
years.
• Raw Material Costs:
1225
968
1056
858
810
728
907
1200
971
1076
1253
1500
600
300
0
03-04
05-06
04-05
OPBT
OPBT - PBT before other income
06-07
07-08
PAT
PBT - Profit before tax
PAT - Profit after tax
• Current Asset Turnover:
This ratio, which shows sales as a
proportion of average current
assets, marginally decreased from
11.4 to 11.2, on account of higher
average inventory & bank balance.
• Cash Flows :
• Capital Expenditure :
• Profitability :
900
by 2.3 per cent from Rs. 190 crores
in 2006-07 to Rs.185 crores in
2007-08.
Due to softening metal prices
particularly Aluminum & Nickel in
second half of the year
accompanied with better sales
realisation in comparison to the
previous year the share of material
costs has reduced the overall cost
structure. Raw material costs as a
percentage of total sales declined
from 72.5 per cent in 2006-07 to
71.6 per cent in 2007-08.
DEBT STRUCTURE
Hero Honda has been a debt free
company for the last 7 years. The
unsecured loan of Rs.132 crore from
the state government of Haryana on
account of sales tax deferment, is
interest free and has no holding costs.
Net interest payment by the company
has been negative during the last few
years.
Net Cash Flow From Operations
(Rs. in Crores)
1400
1200
DIVIDEND POLICY
Over the years, the Company has
consistently followed a policy of paying
high dividends, keeping in mind the
cash-generating capacities, the
expected capital needs of the business
and strategic considerations. For 200708, the board has recommended a
dividend of 950 per cent which is higher
than 850 per cent declared in the
previous year. The payout ratio has for
the year been pegged at 45.9 per cent
vis-a-vis 46.3 per cent in the previous
year.
WORKING CAPITAL MANAGEMENT
Hero Honda has always endeavored to
efficiently use the various components
of working capital cycle. Despite the
adverse conditions in the two wheeler
industry, the Company has been able
to effectively control the receivable and
inventories enabling it to continue to
operate on negative working capital.
As a part of its cost rationalization drive,
the Company aggressively availed
cash discounts from vendors by
making payments before due dates.
This not only helped us improve
operating profit margins but also
allowed the Company to deploy the
surplus funds in the core business.
1000
800
600
400
NOTES ON WORKING CAPITAL :
200
0
03-04 04-05 05-06 06-07 07-08
The average of inventory, receivables and
payables have been taken for the
calculations of inventory period , operating
and cash cycle.
Table 1: WORKING CAPITAL MANAGEMENT & LIQUIDITY RATIOS
2005-06
2006-07
2007-08
Inventory Period (Days)
10.5
10.4
11.9
Operating Cycle (Days)
14.9
17.9
21.2
(23.9)
(12.2)
(10.6)
Current Ratio
0.74
0.84
0.68
Acid Test Ratio
0.54
0.59
0.45
Cash Cycle (Days)
25
24
WITH EVERY STEP,
WE EMBRACE THE WINDS
OF CHANGE.
AT EVERY BEND,
WE RIDE UPON THE
GROUND OF OPTIMISM.
FOR US, LIFE IS A
CELEBRATION.
OPERATIONS, REACH
& SUPPLY CHAIN
“Price is what you pay. Value is what you get”
Manufacturing
Hero Honda commissioned its third,
plant at Haridwar during the year, with an
initial installed capacity of 500,000 units.
With this new capacity expansion,
HHML now has an overall annual
capacity of 4.5 million two wheelers.
With this, the Company has become a
global-scale manufacturer.
The Haridwar complex is the largest of
the three Hero Honda plants, spanning
about 275 acres.
consumed within the factory.
The plant has 70 per cent of its area as
green open spaces, and approximately
45,000 square metres of the plant roof
area is being converted into a green
roof.
Vendor Management
Vendor management is critical to Hero
Honda, as nearly 73 per cent of the
production is currently made up of
material cost. During the year, the
company managed an average cost
The plant has lean manufacturing and
practices that ensure efficiency. It is
connected with vendors through
conveyors so that the material can
avoid multiple handling and is delivered
on time.
A national network of 256 vendors
- including 36 ancillaries - forms the
backbone of its plant operations.
The Haridwar plant is one of the
greenest automobile plants in the
country. Effluents are minimised, and
there is zero discharge on liquid
effluents. All waste is treated and
To improve plant efficiencies and
inventory turns, Hero Honda has
extended "Just in Time” (JIT) beyond
the shopfloor. Vendors are also making
critical investments in quality and
reduction of Rs. 343 per vehicle despite
volatility in metal prices.
capacity in collaboration with the
Company. For example, the online
vendor connectivity program has made
rapid progress. Three years ago, the
Company had only 46 vendors
connected online to the company's
factories. By the end of 2008-09, it is
estimated that 72 per cent of the
vendors and their supplies would be
connected online.
Around 100 ancillaries will be setting up
their manufacturing base in Haridwar
over the next two years to ensure a fully
integrated supply chain. To begin with,
40 ancillaries will set up their facility in
the Industrial Parks that are being
specially developed for Hero Honda
ancillaries. During 2008-09, Hero
Honda plans to work with vendors to
develop new vendor production
facilities. 3PL service providers have
also been identified for the Haridwar
plant— a first for any two-wheeler
company in India.
29
28
As part of an ongoing exercise aimed at
quality control, members of senior
management visited vendor premises
for top quality audits. This has resulted
in the reduction of rejection parts per
million (PPM) by 20 per cent.
further study and tactfully optimise its
supply chain. As part of this plan, raw
materials will be optimised so that the
best possible cost advantages accrue
to the company.
During the year, the company launched
a collaborative cost improvement
program with vendors. In this
programme the processes and
Distribution Network
The company has a conscious strategy
of penetrating new markets and
unrepresented territories through its
methods are continuously toned so that
the material cost can be managed
better. Hero Honda is also evaluating
horizontal deployment of third party
logistic services providers (3PL) to
manage costs along the supply chain
better.
distribution network which is made up
of dealers, authorized representatives,
stockists and SSPs. In March 2001, the
company had 826 such customers
points in India. By March 2008, this
number went up to over 3500. On an all
India basis, 50 dealers, 150 SSPs, 267
dealers representatives and 45 city
work agents were added. All the four
In 2008-09, the Company plans to
marketing zones of the Company
showed a uniform increase in new
customers points during the year in
review.
Rural Network
During the year, Hero Honda's
ambitious rural connect program— Har
Gaon, Har Aangan also got underway. A
total of 18,000 villages were covered
out of the targeted 23360 villages with a
population of 5,000 people. In all, more
than 100,000 opinion leaders in these
villages were approached. The rural
initiative was carried out by 500
specially trained rural sales executives
at the dealership level.
31
30
PEOPLE AND ENVIRONMENT
“Pupils should not be taught. Instead, they should be
provided conditions in which they can learn.”
The Human Touch
Hero Honda is continuously making
efforts to create a talent pipeline and to
develop potential leaders.
The Company encourages regular
feedback for phasing-in process
improvement and aligning employee's
goals with business objectives. The
detailed feedback process entered its
fourth year in 2007-08 through the
“Gallup Q12 Employee Engagement
Study”. The findings from Gallup have
already helped managers in building
mutual trust and foster teamwork. In the
process, this is helping make Hero
Honda a better workplace.
At Hero Honda's new plant at Haridwar,
a number of best practices have been
put in place. A flatter organization
structure has been created, policies
and guidelines have been framed and
communicated, and job rotation was
made mandatory for level migration. An
assessment centre was also
introduced to evaluate competency
during level migration.
During the year, an i-LEAP (Individual
Learning Excellence and Award
Program) was started for recognising
the best training projects, and to identify
internal trainers. A number of new inhouse programs were also rolled out, in
order to augment and upgrade existing
work-related and technology-related
skills.
Hero Honda has traditionally enjoyed
excellent industrial relations. Union
elections during the year went off
smoothly and the union body was
formed amicably. To ensure smooth
functioning at the plant, shop floor incharges were empowered to deal with
grievances and discipline issues. At
another level, a biometric attendance
monitoring systems (to avoid proxy
punching) has been started.
Information Systems
A number of key technology initiatives
were either initiated or completed in
2007-08. The application infrastructure
of the organization was extended to
support business processes at the new
production facility at Haridwar. This is
expected to be operational in 2008-09.
During the year, the organisation's entire
network was revamped and
redundancies were built to support
business users. The IT team also
deployed applications for sending real
time business alerts related to
production, sales, service notifications
automatically from the system using
SMS technology. This helped business
users immensely.
This real time system was also used by
business partners to manage their
dispatches and outstandings. To
improve productivity, a number of
applications with work flow capabilities
were developed or enhanced. Also
during the year, the entire information
security policies of the organization
were revamped in order to mitigate
risks.
A new eco-friendly state-of-the-art data
centre was set up and Hero Honda
migrated to a new technology
architecture that included blade servers
and virtualization. This would help
consolidate servers and storage as well
as reduce complexity.
To help Hero Honda prepare for the
future, two major strategic initiatives are
being planned for 2008-09. The first is
Product Lifecycle Management
software. This will help the company in
managing the increase of complexity of
a diverse product portfolio and help
reduce cost and time for developing
new models. The new software is also
expected to improve and scale up
design-level collaboration with vendors
on an on-line basis. The software is also
expected to reduce warranty costs.
The second initiative comprised of
rolling out a Dealer Management
System software across the front end of
the supply chain. This will help Hero
Honda connect with its entire dealer
network. Once the project is complete,
it is expected to improve customer
service and supply chain performance
extensively.
Environment
For a number of years, Hero Honda has
been one of India's most
environmentally sustainable firms. The
company believes that to create a
sustainable enterprise, it is critical to
33
32
strike the right balance between
business, mankind and nature.
The Company has ensured complete
compliance with all applicable
environmental regulations and
practices. For its efforts, Hero Honda
was awarded for Safety Performance
and Best working condition and
Canteen facilities in the plant by the
Government of Haryana for 2007. The
Company has also been nominated for
the Green Manufacturer of the year
under the TERI Corporate Award
Scheme.
A green vendor development program
was launched on the World
Environment Day June 5, 2007. A green
charter was released giving specific
guidelines to the vendors and
suppliers. A total of 31 vendors were
selected in the first phase and in all, 256
vendors will be covered and certified as
green vendors over a period of 5 years.
Each vendor will initiate EARN programs
in the areas of pollution prevention,
waste reduction, water conservation,
energy conservation and statutory
compliances. Each vendor will be
evaluated and certified cluster wise.
During the year, an environmental plan
to reduce hazardous waste from the
pollution control facilities was
developed. As much as 30% of sludge
generated was reduced through a
sludge decanter system. The company
also increased the conversion rate of
paint sludge into useful primer from 15
MT to 25MT per month.
Hero Honda has also successfully
developed primer from the waste paint
sludge, which used to be incinerated
earlier. This development has been
demonstrated to the state authorities,
and the Company is seeking
authorization to use this practice on a
regular basis. The converted primer has
already been used on the products,
which has passed all quality
parameters.
To fulfill its commitment towards water
conservation, a recycling plant of 400KL
per day capacity with reverse osmosis
technology has been installed which
recycles the sewage effluent into the
process at the Haridwar plant. A similar
project has also under progress at the
Dharuhera plant and this is likely to be
completed in 2008.
The plant has been improved by adding
a forced draft ventilation system. An
additional local exhaust system was
provided in the weld shop and vehicle
testing area to minimize the effects of
airborne contaminants. Electrostatic
precipitators were also installed in the
machine shop to capture the aerosoles
at source and prevent exposure of the
workmen.
Since the state of Haryana is one of the
driest in the country, Hero Honda has
always emphasized heavily on ground
water recharging. During the year, 2
more injection wells were added,
covering an additional area of 4500 Sq
metres. In all, Hero Honda now as 25
injection wells in the plants. Also during
the year, an exhaustive feasibility study
was conducted to extend the Rain
Water Harvesting Scheme for Roads
and other pucca surfaces in the plants.
The project will be executed in 2008-09.
SOCIAL RESPONSIBILITY
“Life laughs at you when you are sad; smiles at you
when you are happy. But life salutes you when you
make others happy.”
Hero Honda Motors takes considerable
pride in its community relationships,
especially ones at the grassroots that
have evolved over time. The Company
has played a pivotal role in bringing an
economically and socially backward
region in Dharuhera, Haryana, into the
national economic mainstream through
direct interventions in education,
to 9 months. The Centre has also been
equipped with modern machines to
prepare the girls for the Garment Export
Industry, where placement is 100%.
Also during the year, women from four
villages near the factory at Dharuhera
benefitted from food-processing
place them with BPO/Call Centres,
provided the students also have the
requisite computer training.
A vocational centre for boys is expected
to start during 2008-09 and will run on
the lines of an ITI. The centre will provide
training in Fitter, Welding, Carpentry and
Plumbing & Electrician Trades. It is
planned to train approx. 50 students
every year, and efforts will be made to
accommodate them in group
companies.
The Foundation also runs an Adult
Literacy Program, a marriage facilitation
service for underprivileged girls,
besides doorstep healthcare programs
and medical camps for the local
population. A graduate teacher from the
targeted village is appointed to teach
the elders. Approx 650 people have
benefited from this scheme spread
over 20 villages.
healthcare, vocational training, creation
of social and physical infrastructure,
and environment management.
Most of the group's social enterprises –
including the Rural Development
Centre-- are planned and executed by
the Raman Kant Munjal Foundation.
To help local people, especially
women, Hero Honda has set up a
vocational training centre which runs a 6
months Diploma Course for Tailoring,
Embroidery and carpet weaving, etc.
During the year in review, the Centre
was upgraded. It now trains 50 girls per
batch up from 25 & the duration of the
course was increased from six months
courses conducted at the Centre.
In February 2007, the Foundation had
set up a computer training & learning
centre in partnership with Microsoft. A
total of 8 to 10 batches (boys and girls)
are run simultaneously consisting of 1820 students per batch. Till date, close to
400 students have been trained at the
centre.
In every CSR Project undertaken, the
Foundation always involves either a
local NGO preferably the village itself or
panchayat members not only during
execution but also for subsequent
sustainability/maintenance of project. In
certain areas such as computer
learning by rural youth Udyan Care, a
reputed NGO has been made a partner
in association with Microsoft.
To enhance the value of rural youth in
the job market, a spoken English
course was started during the year.
Currently the course is being run in three
Batches during the day. It is proposed
to train approx 120 students per year.
The Foundation will make an effort to
In Projects like Hygiene, Sanitation &
Safe Drinking Water, Local Government
Representatives such as Block
Development Officers are also
involved.
37
36
CORPORATE
INFORMATION
Statutory Auditors
A.F. Ferguson & Co.
Chartered Accountants,
9, Scindia House,
Kasturba Gandhi Marg,
New Delhi 110 001, India
Tel : 011-2331 5884
Principal Bankers
ABN Amro Bank N.V.
Bank of America NT & SA
Canara Bank
Citibank N.A.
HDFC Bank Limited
HSBC Limited
ICICI Bank Limited
Punjab National Bank
Standard Chartered Bank
The Bank of Tokyo-Mitsubishi UFJ Limited
Cost Auditors
Ramanath Iyer & Co.
BL-4 (Paschmi), Shalimar Bagh
Delhi 110 088
Tel. : 011-27481904
Technical & Financial Collaborators
Honda Motor Co., Ltd.,
1-1, 2 - chome,
Minami - Aoyama,
Minato - ku,
Tokyo 107-8556, Japan
www.world.honda.com
Dharuhera Plant
69 KM Stone,
Delhi-Jaipur Highway,
Dharuhera, Distt. Rewari,
Haryana 122 100, India
Tel.: 01274-264 012-15
Fax : 01274-267 024
Registered & Corporate Office
34, Community Centre,
Basant Lok, Vasant Vihar,
New Delhi 110 057, India
Tel.: 011-2614 2451, 2614 4121
Fax : 011-2615 3913
www.herohonda.com
Gurgaon Plant
37 KM Stone,
Delhi-Jaipur Highway,
Sector 33, Gurgaon,
Haryana 122 001, India
Tel.: 0124-2372 123-134
Fax : 0124-2373 141-142
Registrar & Transfer Agents
Karvy Computershare Pvt. Ltd.
Plot No. 17-24, Vithlrao Nagar,
Madha Pur, Hyderabad 500 081
Tel.: 040-23420815-820
Fax : 040-23420814
Haridwar Plant
Plot No. 3 Sector-10,
11E, SIDCUL,
Roshanabad,
Haridwar 248 001
Uttrakhand
Tel.: 01334 - 239513
Fax : 01334 - 239512
39
38
A N N U A L R E P O R T 0 7
0 8
FINANCIAL HIGHLIGHTS & KEY RATIOS
Financial Highlights
(Rupees in crores)
Particulars
2003-04
2004-05
2005-06
2006-07
2007-08
Sales (Nos.)
2070147
2621400
3000751
3336756
3337142
Growth in sales (nos.) (%)
23.4
26.6
14.5
11.2
0.01
10517
Total net income
5997
7559
8870
10090
Growth in Total inocme (%)
15.5
26.1
17.4
13.7
4.2
Profit before tax
1072
1217
1412
1246
1410
Profit after tax
728
810
971
858
968
Share capital
39.94
39.94
39.94
39.94
39.94
Reserves and Surplus
1099
1453
1969
2430
2946
Total debt
175
202
186
165
132
Net fixed assets
589
715
994
1355
1549
Total assets (net)
1314
1695
2195
2635
3118
Market capitalisation
9797
10943
17781
13753
13869
569
564
641
485
575
2003-04
2004-05
2005-06
2006-07
2007-08
Economic Value Added (EVA)
Key Ratios
Particulars
Long term Debt/Equity
OPBDIT*/Net Sales (%)
Nil
Nil
Nil
Nil
Nil
16.8
15.7
15.7
11.8
13.1
11.9
OPBT**/Net Sales (%)
15.6
14.6
14.4
10.7
Profit after tax/ Total income (%)
12.1
10.7
11.0
8.5
9.2
Return on average equity (%)
72.9
61.6
55.5
38.3
35.5
Return on average capital employed (%)
92.8
80.9
72.3
50.6
49.0
EVA/Capital employed (%)
49.3
37.5
32.9
20.1
20.0
20
20
20
17
19
Dividend payout (%)
61.9
56.3
46.9
46.3
45.9
Earning per share (Rs.)
36.5
40.6
48.6
43.0
48.5
8.6
7.3
8.8
5.6
4.6
Dividend per share (Rs.)
Market value/book value (times)
Notes:
*OPBDIT: Operating Profit before Depreciation, Interest and Tax
**OPBT: PBT before Other income
41
40
ECONOMIC VALUE ADDED (EVA) STATEMENT
0 8
DIRECTORS’ REPORT
(Rupees in crores)
2003-04
2004-05
2005-06
1,154
1,504
1,945
2,415
2,877
Avg Debt/Avg Capital (%)
2.2
1.8
1.3
1.1
1.1
Avg Equity/Avg Capital (%)
97.8
98.2
98.7
98.9
98.9
Cost of Debt (% post-tax )
0.7
0.7
1.0
0.6
0.9
Avg Cap Employed
2006-07
2007-08
Cost of Equity
Beta
0.90
1.01
0.98
0.75
0.59
Cost of Risk Free Debt (%)
5.13
6.67
7.52
8.15
7.94
10
10
10
10
10
14.18
16.74
17.32
15.65
13.83
Market Premium (%)
Cost Of Equity (%)
FINANCIAL RESULTS
(Rupees in crores)
For the year ended
March 31, 2008
March 31, 2007
Gross Sales
12,038.53
11,542.04
Net Sales and other Income
10,517.22
10,089.81
1,534.79
1,362.89
(35.81)
(22.99)
160.32
139.78
1,410.28
1,246.10
Profit before Finance charges
and Depreciation
Less: Finance charges
Depreciation
Profit before tax (PBT)
EVA
Profit after Tax
On behalf of the Board, I take immense pleasure on presenting the 25th Annual Report of the Company. The report is being presented along with the
Audited Statement of Accounts for the financial year ended March 31, 2008.
728
810
971
858
968
1
1
2
1
1
-
Current
436.81
375.81
NOPAT=PAT + Interest*(1-t)
729
812
973
859
969
-
Deferred
1.20
9.42
Cost of Capital
160
247
333
374
394
-
Fringe Benefit Tax (FBT)
4.39
2.98
EVA
569
564
641
485
575
967.88
857.89
Add: Interest*(1-tax rate)
Less: Provision for tax
Profit after tax (PAT)
Return on Capital Employed (%)
63.2
54.0
50.0
35.6
33.7
Weighted Average Cost of Capital (%)
13.9
16.5
17.1
15.5
13.7
EVA/Capital employed (%)
49.3
37.5
32.9
20.1
20.0
Add: Balance of profit brought forward
1,594.78
1,224.05
Balance available for appropriation
2,562.66
2,081.94
379.41
339.47
Corporate Dividend Tax
64.48
57.69
Transfer to General Reserve
97.00
90.00
2,021.77
1,594.78
Appropriations
ENTERPRISE VALUE
Market Capitalisation
9797
10943
17781
13753
13869
175
202
186
165
132
Less: Financial Assets
1708
2044
2221
2010
2698
EV (Enterprise Value)
8264
9101
15746
11909
11303
6.3
5.4
5.9
4.5
3.6
Add: Debt
EV/Yr. End Capital Employed (Times)
Dividend
- Proposed Final
Balance carried to Balance Sheet
Dividend (%)
Basic and Diluted Earnings Per Share (EPS) (Rs.)
950
850
48.47
42.96
43
42
BUSINESS PERFORMANCE
Your Company defied a process of de-growth in the industry and
achieved cumulative sales of 33,37,142 units of two-wheelers. In the
process, Hero Honda consolidated its leadership position in domestic
two-wheeler market with more than 52 per cent market share. The
Company successfully launched seven new models including
variants during the year under review.
On the financial front, total income (net of excise duty) of the Company
grew by 4.2 per cent from Rs. 10, 090 crores in previous year to
Rs. 10,517 crores during 2007-08. The Company posted a net profit
(PAT) of Rs. 968 crores, compared to Rs. 858 crores in the previous
fiscal, a growth of 13 per cent. Despite the increasing pressure on
inputs, your Company was able to maintain EBIDTA margins at 13.1
per cent, compared to 11.9 per cent in the previous year.
During the year, Hero Honda also retained, for the seventh year in a row,
its position as the World's Number One Two Wheeler Company. During
2007-08, your Company achieved another landmark of reaching
cumulative sales of 20 million bikes.
In the course of the year, your Company launched new models
(including variants) including Splendor NXG, Hunk, New Super
Splendor, New Passion Plus, Commemorative Splendor+ and a
refreshed version of Pleasure.
A detailed discussion on the business performance and future outlook
has been given in the chapter on Management Discussion & Analysis
Report.
DIVIDEND
Few manufacturing companies in the Indian corporate sector have a
better dividend pay out record than Hero Honda. We have
recommended a Dividend of 950 per cent i.e. Rs.19 per equity share of
Rs. 2 aggregating to Rs. 379.41 crores (exclusive of corporate
dividend tax) for your approval for the financial year ended March 31,
2008. 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
production capacity of 0.5 million units which would be scaled up to a
million units by 2008-end. The total capital outlay on the new
manufacturing facility has been around Rs. 375 crores. The new plant
will employ flexible production techniques enabling production of
different models in the Company's portfolio. In addition to
manufacturing for the domestic market, the plant will also cater to
export requirements.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position
of the Company have occurred between April 1, 2008 and the date on
which this Report has been signed.
BOARD OF DIRECTORS
During the period under review, Mr. Tatsuhiro Oyama resigned from
directorship on May 11, 2007 and Mr. Takashi Nagai was appointed as
an Additional Director in Non-Executive Category on May 11, 2007.
Further, Dr. Vijay Laxman Kelkar has resigned from directorship on
December 31, 2007.
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. M.
Damodaran was appointed as an Additional Director in the NonExecutive and Independent Category w.e.f. June 16, 2008. Mr.
Narinder Nath Vohra has resigned from Directorship w.e.f. June 24,
2008.
The Board place on record their sincere appreciation and gratitude for
the 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 wish them a successful and fruitful
tenure with the Company.
At the ensuing Annual General Meeting, Ms. Shobhana Bhartia,
Mr. Sunil Bharti Mittal, Mr. Masahiro Takedagawa and Mr. Pradeep
Dinodia 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 relating to Directors, who are to be
appointed and re-appointed has been furnished after the Explanatory
Statement to the Notice of the ensuing Annual General Meeting.
0 8
the following statement in terms of Section 217(2AA) of the Companies
Act, 1956:
loss from unauthorised use or disposition and those transactions are
authorised, recorded and reported correctly.
1. that in the preparation of the annual accounts for the year ended
March 31, 2008, the applicable accounting standards have been
followed;
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 so as to ensure that the
financial and other records are reliable for preparing financial and other
statements and for maintaining accountability of assets.
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, 2008 and of the profit of
the Company for the financial year ended March 31, 2008;
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, 2008 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 forms part of this
Report.
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 - I.
A sum of Rs. 97 crores have been transferred to the General Reserve of
the Company. This reaffirms the inherent financial strength of the
Company.
Your Directors recommend their re-appointment at the ensuing Annual
General Meeting.
INTERNAL CONTROL SYSTEMS
NEW MANUFACTURING FACILITY AT HARIDWAR
DIRECTORS' RESPONSIBILITY STATEMENT
Hero Honda has a proper and adequate system of internal controls.
This ensures that all assets are safeguarded and protected against
Your Company inaugurated its third plant - the "Shrine of Technology" in
the holy city of Haridwar in Uttarakhand. The plant has an initial
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make
The Company also has an Audit Committee, comprising of 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
nine 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 assessment and
minimization. It ensures that all the Risks are timely defined and
mitigated in accordance with the well structured risk management
Process. The Audit Committee reviews periodically the risk
management process.
RATINGS
The rating agency ICRA Limited, has reviewed and reaffirmed the
ratings assigned to the Company for its Non-convertible Debenture
Programme as LAAA indicating the highest credit quality, A1+ for its
Non-fund based facilities and LAAA to Fund based facilities. These
ratings indicate the highest credit quality carrying lowest credit risk.
Another rating agency CRISIL reviewed and assigned AAA/Stable
rating to the bank loan and P1+ rating to the Cash Credit Limit & Letter
of Credit Limit Facility.
Further, CRISIL also has reaffirmed the 'GVC 1' rating assigned to the
Company for the third consecutive time. This governance and value
creation (GVC) rating indicates that the company's capability with
respect to creating wealth for all its stakeholders while adopting sound
corporate governance practices is the highest. The rating reflects the
high standards of corporate governance practised by your Company.
45
44
FIXED DEPOSITS
During the year under review, the Company has not accepted any
deposit under Sections 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 reappointment. 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.
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 "Human Resource Management"
of Management Discussion & Analysis, which forms part of this Annual
Report.
PARTICULARS OF EMPLOYEES
The observations of Auditors in their report, read with the relevant notes
to accounts are self explanatory and therefore do not require further
explanation.
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) 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
G.M. Legal & Company Secretary at the Registered Office of the
Company.
COST AUDITORS
ACKNOWLEDGMENT
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
2008-09 and necessary application for obtaining the requisite approval
has been filed with the Government. The Cost Auditors' Report for
2007-08 will be forwarded to the Central Government in pursuance of
the provisions of the Companies Act, 1956.
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
Hero Cycles Limited and Honda Motor Co., Ltd., Japan and for the
encouragement and assurance, which our collaborator has given for
the growth and development of the Company.
The Board recommends their re-appointment.
AUDITORS' REPORT
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.
The Board, also, takes this opportunity to express its deep gratitude for
the continued co-operation and support received from its valued
shareholders.
LISTING
For and on behalf of the Board
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
ANNEXURE - I TO DIRECTORS' REPORT
CORPORATE GOVERNANCE REPORT
Philosophy on 'Code of Corporate Governance'
Hero Honda's philosophy of Corporate Governance stems from its
belief that the Company's business strategy and plans should be
consistent with the welfare of all its stakeholders, including
shareholders. Good Corporate Governance practices enable a
Company to attract financial and human capital and leverage these
resources to maximize long-term shareholder value, while preserving
the interests of multiple stakeholders, including society at large.
Corporate Governance rests upon the four pillars of: transparency, full
disclosure, independent monitoring and fairness to all, especially to
minority shareholders. Hero Honda has always strived to promote
Good Governance practices, which ensure that:
• A competent management team is at the helm of affairs;
• The Board is strong with an optimum combination of Executive
and Non-Executive (including Independent) Directors, who
represent the interest of all stakeholders;
• The Board is effective in monitoring and controlling the
Company's affairs;
• The Board is concerned about the Company's shareholders; and
• The Management and Employees have a stable environment.
0 8
We believe 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
to maximise "Your" long-term value.
The Securities and Exchange Board of India (SEBI) has specified
certain mandatory governance practices, which are incorporated in
Clause 49 of the Listing Agreement of Stock Exchanges.
Hero Honda is committed to benchmark itself with the best standards
of Corporate Governance, not only in form but also in spirit. This
section, along with the section on 'Management Discussion & Analysis'
and 'General Shareholder's Information' constitute Hero Honda's
compliance with the Clause 49 of the Listing Agreement.
BOARD OF DIRECTORS
Composition of the Board
As on March 31, 2008, the Company's Board of Directors consisted of
fifteen Directors. Four Directors, including the Chairman, are Executive;
four are Non-Executive and seven are Non-Executive and
Independent. The fifty per cent of the Board consists of Independent
Directors including Dr. Vijay Laxman Kelkar, Non-Executive and
Independent Director, who resigned from the directorship of the
Company w.e.f. December 31, 2007, the vacancy has been filled
within the prescribed 180 days with the appointment of
Mr. M. Damodaran, as Non-executive and Independent Director,
therefore the composition of the Board is in consonance with the
Clause 49. Details of the composition of the Board, number of
meetings held during their tenure and attended by them etc., are given
in Table 1.
Brijmohan Lall Munjal
Chairman
New Delhi
July 29, 2008
As on March 31, 2008 the total number of employees on the records of
the Company were 4321.
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46
TABLE 1: DETAILS ABOUT COMPANY'S BOARD OF DIRECTORS / ATTENDANCE RECORD DURING FINANCIAL YEAR 2007-08
Name of Director
Number of Board
Attendance at
Meetings held during last AGM
his/her tenure and
attended by him/her
Number of Committee Number of Committee Number of outside
Memberships
Chairmanships held
Directorships held
(including Chairman
ships) held
Held
(excluding Private Companies, Foreign Companies and
Section 25 Companies)
Attended
Executive Directors
Mr. Brijmohan Lall Munjal
6
6
Yes
None
None
8
Mr. Pawan Munjal
6
6
Yes
None
None
1
Mr. Toshiaki Nakagawa
6
6
Yes
None
None
1
Mr. Yutaka Kudo
6
6
Yes
None
None
1
Non-Executive Directors
Mr. Om Prakash Munjal
6
Nil
No
None
None
10
Mr. Sunil Kant Munjal
6
5
Yes
None
None
14
Mr. Masahiro Takedagawa
6
3
Yes
1
None
2
1
Mr. Tatsuhiro Oyama
1
Nil
N.A.
None
None
1
Mr. Takashi Nagai2
5
Nil
No
None
None
Nil
Non-Executive and
Independent Directors
Mr. Narinder Nath Vohra
6
3
Yes
2
1
1
Mr. Pradeep Dinodia
6
6
Yes
7
5
8
6
4
Yes
4
None
3
Mr. Analjit Singh
6
2
No
None
None
12
6
3
Yes
3
None
5
Dr. Vijay Laxman Kelkar
5
2
Yes
4
None
13
6
2
No
2
2
14
Mr. Sunil Bharti Mittal
6
1
No
None
None
8
Dr. Pritam Singh
3
Notes:
1. Mr. Tatsuhiro Oyama has resigned from his Directorship on May 11, 2007.
2. Mr. Takashi Nagai was appointed as an Additional Director on the Board w.e.f. May 11, 2007.
3. Dr. Vijay Laxman Kelkar has resigned from the Directorship on December 31, 2007.
4. Mr. Yutaka Kudo has resigned from his Directorship and Whole-time Directorship on May 31, 2008.
5. Mr. Narinder Nath Vohra has resigned from the Directorship on June 24, 2008.
Four Directors namely Mr. Brijmohan Lall Munjal (Executive Chairman in
the whole-time employment of the Company), Mr. Pawan Munjal
(Managing Director & CEO), Mr. Om Prakash Munjal (Non-Executive
Director) and Mr. Sunil Kant Munjal (Non-Executive Director) belong to
the promoter family of the Hero Group, which owns 26 per cent equity
in the Company. Four Directors namely Mr. Toshiaki Nakagawa (Joint
Managing Director), Mr. Yutaka Kudo (Whole-time Director),
Mr. Masahiro Takedagawa (Non-Executive Director) and Mr. Takashi
Nagai (Non-Executive Director) are nominees of Honda Motor Co.,
Ltd., Japan, which too, owns 26 per cent equity in the Company. Apart
from these, the rest of the Board constitutes of Non-Executive and
Independent Directors.
Board Meetings
0 8
Further, there are no pecuniary relationships or transactions between
the Independent Directors and the Company, except for the sitting fees
drawn by the Non-executive Directors and sitting fees and commission
drawn by the Non-executive and Independent Directors for attending
the meeting of the Board and its Committee(s) thereof.
Shareholding of Non-Executive Directors
Name of the Director
Category
No. of shares held
Non-Executive
Director
Non-Executive
Director
25,000
32,500
During 2007-08, the Board of Directors met 6 (six) times on May 11,
2007; May 31, 2007; July 24, 2007; September 18, 2007; October 18,
2007 and January 31, 2008.
Apart from the above, none of the Non-Executive (including
Independent) Directors hold any shares (as own or on behalf of other
person on beneficial basis) in the Company.
The longest gap between any two Board Meetings was for a period of 3
months and 13 days.
Information Supplied to the Board
Directors' Attendance Record and Directorships / Committee
Memberships
Details are given in Table 1.
As per Clause 49 of the Listing Agreement entered into with the Stock
Exchange(s), an Independent Director means a Non-Executive
Director who;
• apart from receiving director's remuneration, does not have any
material pecuniary relationships or transactions with the Company,
its promoters, its directors, its senior management, its holding
Company, its subsidiaries or associates which may affect
independence of the director;
• is not related to promoters or persons occupying management
positions at the board level or at one level below the board;
• has not been an executive of the company in the immediately
preceding three financial years;
• is not a partner or an executive of the statutory audit firm or the
internal audit firm that is associated with the company and has not
been a partner or an executive of any such firm for the last three
years and the legal firm(s) and consulting firm(s) that have a
material association with the entity.
• is not a material supplier, service provider or customer or a lessor or
lessee of the company, which may affect independence of the
Director;
• is not a substantial shareholder of the Company i.e. owning two
percent or more of the block of voting shares.
None of the Director on the Board holds the office of Director in more
than 15 companies nor are they members in Committees of the Board
in more than 10 Committees or Chairman of more than 5 Committees.
Board members are given agenda papers along with necessary
documents and information in advance of each meeting of the Board
and Committee(s). However, in case of business exigencies or
urgency of matter, the resolutions are passed by way of circulation. In
addition to the regular business items, the following items/ information
are regularly placed before the Board to the extent applicable:
• Annual operating plans and Budgets, Capital budgets and
updates;
• Purchase and disposal of major fixed assets;
• Quarterly and half yearly results of the Company;
• Minutes of the Audit Committee, Shareholders' Grievance
Committee,
Remuneration Committee and Committee of
Director's meetings;
• Information on recruitment and remuneration of senior
management just below the Board level including appointment or
removal of CFO and Company Secretary;
• Any material defaults in financial obligations to and by the
Company, or substantial non-payments for goods sold by the
Company;
• Fatal or serious accidents, dangerous occurrences, any material
effluent or pollution problems;
• Transactions that involve substantial payment towards goodwill,
brand equity or intellectual property;
• Materially important show cause, demand, prosecution and
penalty notices;
• Details of quarterly foreign exchange exposures and steps taken
by the management to limit the risks of adverse exchange rate
movement;
• Sale of material nature, of investments and assets, which are not in
the normal course of business;
49
48
• Details of Joint Ventures and Agreements or variations thereof;
• Quarterly Statutory Compliance Report;
• Non-compliance of any regulatory, statutory nature or listing
requirements and shareholder's service such as non-payment of
dividend, delay in share transfer etc.;
• Investments strategy/plan;
• Any issue which involves possible public or product liability claims
of substantial nature, including any judgment or order which may
have passed strictures on the conduct of the Company or taken an
adverse view regarding another enterprise that can have negative
implications on the Company; and
• Significant labour problems and their proposed solutions. Also,
any significant development in Human Resources/Industrial
Relations front like signing of Wage Agreement, implementation of
Voluntary Retirement Schemes etc.
Code of Conduct
We at Hero Honda have laid down a code of conduct for all Board
members and senior management of the Company. The code of
conduct is available on the website of the Company
www.herohonda.com. The code has been circulated to all the
members of the Board and senior management and they have
affirmed compliance with the code of conduct. A declaration signed by
the Chief Executive Officer (CEO) to this effect is attached to the Annual
Report.
Risk Management
We at Hero Honda have established an effective risk assessment and
minimization procedures, which are reviewed by the Board
periodically. There is a structure in place to identify and mitigate various
risks faced by the Company from time to time.
BOARD LEVEL COMMITTEES
AUDIT COMMITTEE
The genesis of Hero Honda's Audit Committee can be traced back to
the Audit Sub-Committee, constituted in 1987. Since then it has been
dealing with matters prescribed by the Board of Directors on a case to
case basis. In general, the primary role/objective of the Audit
Committee is to review the financial statements of the Company,
strengthen internal controls & look into all transactions having monetary
implications on the functioning of the Company. The nomenclature,
constitution and terms of reference of the Committee were revised on
January 16, 2001 and an Audit Committee was set up as per the
provisions of the Section 292A of the Companies Act, 1956 and Clause
49 of the Listing Agreement of the Stock Exchange(s).
As on March 31, 2008, the Committee had four Non-Executive and
Independent Directors in accordance with the prescribed guidelines.
Mr. Pradeep Dinodia, a leading Chartered Accountant, is the Chairman
of the Committee. The other members are Dr. Pritam Singh,
Gen.(Retd.) Ved Prakash Malik and Mr. Narinder Nath Vohra, all learned
personalities in their respective fields. The members of the Committee
have adequate knowledge in the field of finance, accounting, and law.
The role and "terms of reference" of the Audit Committee includes the
following:
• Overseeing
- the Company's financial reporting process and disclosure of its
financial information to ensure that the financial statements are
correct, sufficient and credible.
• Recommending
- the appointment, re-appointment, replacement and removal of
the statutory auditor, fixation of audit fees and approving
payments for any other services.
• Reviewing
- with the management the annual financial statements with
primary focus on matters required to be included in the Directors'
Responsibility Statement, changes, if any in accounting policies
and practices and reasons thereof, compliance with accounting
standards and guidelines of stock exchange(s), major
accounting entries, qualifications in draft audit reports, related
party transactions & the going concern assumption.
- with the management, the quarterly financial statements before
submission to the board for approval.
- the adequacy of internal control systems and the internal audit
function and reviewing the Company's financial and risk
management policies.
- the findings of any internal investigations by the internal auditors
into matters where there is suspected fraud or irregularity or a
failure of internal control systems of a material nature and
reporting the matter to the Board.
- the reports furnished by the internal auditors, discussion with
internal auditors on any significant findings and ensuring suitable
follow up thereon.
- Directors' overseas traveling expenses.
The Sr. Vice President & CFO, Internal Auditors, Statutory Auditors and
Cost Auditors attend the meetings of the Committee on the invitation of
the Chairman. Mr Ilam C. Kamboj, G.M. Legal & Company Secretary
acts as the Secretary of the Committee.
During the year, 9 (Nine) meetings of the Audit Committee were held on
April 09, 2007; April 23, 2007; May 11, 2007; July 24, 2007; September
18, 2007; September 28, 2007; October 18, 2007; December 14,
2007; and January 29, 2008 in due compliance with the stipulated
provisions. The attendance record of members of the Audit Committee
is given in Table 2.
TABLE 2: DETAILS OF THE AUDIT COMMITTEE
Name of committee
member
Position
held
Mr. Pradeep Dinodia
Gen. (Retd.) V.P. Malik
Dr. Pritam Singh
Mr. N.N.Vohra
Chairman
Member
Member
Member
No. of meetings
held during
his tenure
9
9
9
9
No. of meetings
attended
9
7
7
7
REMUNERATION COMMITTEE
The Company had set up a Remuneration Committee on January 16,
2001 to review and recommend the payment of annual salaries,
commission, and finalise service agreements and other employment
conditions of Executive Directors. The Committee takes into
consideration the best remuneration practices being followed in the
industry while fixing appropriate remuneration packages.
As on March 31, 2008, the Committee had three Non-Executive and
Independent Directors as its members in accordance with the
prescribed guidelines. Gen. (Retd.) Ved Prakash Malik, is the Chairman
of the Committee. The other members are Mr. Narinder Nath Vohra and
Mr. Pradeep Dinodia. Mr. Ilam C. Kamboj, G.M. Legal & Company
Secretary acts as the Secretary of the Committee.
During the year the committee did not meet, as there was no business
to transact.
0 8
Remuneration Policy
Remuneration paid to Executive Directors
The remuneration paid to Executive Directors is recommended by the
Remuneration Committee and approved by the Board of Directors, in
the Board meeting, subject to the subsequent approval by the
shareholders at the general meeting and such other authorities, as the
case may be.
At the Board meeting, only the Non-Executive and Independent
Directors participate in approving the remuneration paid to the
Executive Directors. The remuneration is fixed considering various
factors such as qualification, experience, expertise, prevailing
remuneration in the corporate world and the financial position of the
Company. The remuneration structure comprises of Basic Salary,
Commission, Perquisites and allowances, Contribution to provident
fund and other funds. Besides these, a fixed commission @ 1 per cent
of net profit computed in accordance with Section 198 of the
Companies Act, 1956, is paid as per the terms of appointment.
As of now, the Company does not have any Employee Stock Options
Plans (ESOPs). Term of appointment of Executive Director is 5 (five)
years. Further, no notice period and severance fee is applicable for the
above-mentioned Executive Directors.
Remuneration paid to Non-Executive Directors
The Non-Executive Directors of the Company are paid sitting fees of
Rs. 16,500 for each meeting of the Board, Audit Committee,
Remuneration Committee and Shareholders' Grievance Committee
attended by them.
However, in addition to the sitting fees, Non-executive and
Independent Directors shall be entitled to remuneration by way of
commission upto 0.10 per cent of profits of the Company for every
financial year as approved by the members at their 24th Annual General
Meeting held on July 24, 2007.
Tables 3 and 4 gives details of remuneration paid to Directors. During
2007-08, the Company did not advance any loans to any of its
Directors.
- foreign exchange exposure.
• Complying
- with the provisions of listing agreement laid down by the Stock
Exchange(s) and legal requirements concerning financial
statements.
• Discussing
- with external auditors before the audit commences, of the nature
and scope of audit. Also post audit discussion to ascertain any
area of concern.
• Looking
- into the reasons for substantial defaults in the payments to the
shareholders (in the case of non-payment of declared
dividends) and creditors.
TABLE 3: REMUNERATION TO EXECUTIVE DIRECTORS
Executive Directors
Salary* (Rs.)
Commission Fixed ** (Rs.)
Total (Rs.)
97,99,178
14,78,25,000
15,76,24,178
Mr. Pawan Munjal
95,32,492
14,78,25,000
15,73,57,492
41,91,795
14,78,25,000
15,20,16,795
Mr. Yutaka Kudo
34,29,869
14,78,25,000
15,12,54,869
Notes:
* Salary includes Basic Salary, Perquisites and allowances, Contribution to provident and other funds.
** Total Commission is calculated @ 1% of the net profit calculated in accordance with Section 198 of the Companies Act, 1956.
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TABLE 4: REMUNERATION TO NON-EXECUTIVE DIRECTORS
Non-Executive Directors
Sitting fees (Rs.)
Commission (Rs.)
Total (Rs.)
82,500
N.A.
82,500
Mr. Pradeep Dinodia
3,13,500
11,50,000
14,63,500
Mr. N.N. Vohra
2,31,000
7,50,000
9,81,000
Gen.(Retd.) V.P. Malik
1,81,500
6,50,000
8,31,500
Dr. Pritam Singh
2,14,500
6,13,000
8,27,500
Mr. Analjit Singh
33,000
1,00,000
1,33,000
33,000
1,00,000
1,33,000
Dr. Vijay L. Kelkar1
33,000
1,00,000
1,33,000
Nil#
#
Nil
Nil#
N.A.
Nil
No sitting fee was paid to Mr. Om Prakash Munjal, Mr. Tatsuhiro Oyama (Director upto May 11, 2007) & Mr. Takashi Nagai (Director w.e.f. May 11,
2007) as they did not attend any of the meetings of the Board held during the financial year 2007-08.
# Mr. Sunil Bharti Mittal & Mr. Masahiro Takedagawa have opted not to receive sitting fees which were accrued to them on account of attending the
meetings of the Board.
1 Dr. Vijay Laxman Kelkar has resigned from the Directorship w.e.f. December 31, 2007.
0 8
SHAREHOLDERS' GRIEVANCE COMMITTEE
SHARE TRANSFER COMMITTEE
This Committee, constituted on January 16, 2001, specifically looks
into redressal of shareholders' and investors' grievances arising out of
issues regarding share transfers, dividends, dematerialisation and
related matters.
This Committee was constituted on January 31, 2007 as a measure of
Good Corporate Governance practice and to streamline the work
related to share transfer etc. which was earlier approved by the
Committee of Directors. Mr. Ravi Sud, Sr. Vice President & CFO and
Mr. Ilam C. Kamboj, G.M. Legal & Company Secretary are its members.
As on March 31, 2008, the Committee had three Non-Executive and
Independent Directors in accordance with the prescribed guidelines.
Mr. Narinder Nath Vohra, is the Chairman of the Committee. The other
members are Dr. Pritam Singh and Mr. Pradeep Dinodia. Mr. Ilam C.
Kamboj, G.M. Legal & Company Secretary acts as the Secretary of the
Committee.
The Company has an efficient system of dealing with investors'
grievances. The Chairman and the Managing Director & CEO of the
Company take personal interest in all matters of concern for investors
as and when necessary. The Company Secretary being the
Compliance Officer carefully looks into each issue and reports the
same to the Shareholders' Grievance Committee. In the meetings of
the committee the status of all shareholders' complaints, requests etc.
alongwith letters received from all statutory authorities were reviewed.
During the year, 4 (four) meetings of the Shareholders' Grievance
Committee were held on April 09, 2007; July 24, 2007; October 18,
2007 and January 29, 2008.
Details of shareholders complaints and their status are given in the
section on "General Shareholder's Information". The attendance
record of members of the Shareholders' Grievance Committee is given
in Table 5.
TABLE 5: DETAILS OF SHAREHOLDERS' GRIEVANCE COMMITTEE
Name of committee
member
Position
held
Mr. N.N. Vohra
Chairman
Mr. Pradeep Dinodia Member
Dr. Pritam Singh
Member
No. of meetings
held during
his tenure
4
4
4
No. of meetings
attended
4
4
3
COMMITTEE OF DIRECTORS
Apart from these Committees, the Company also has a Committee of
Directors. As on March 31, 2008, the Committee comprised of
Mr. Brijmohan Lall Munjal, Chairman; Mr. Pawan Munjal, Managing
Director & CEO; Mr. Toshiaki Nakagawa, Joint Managing Director;
Mr. Yutaka Kudo, Whole-time Director, Mr. Ravi Sud, Sr. Vice President &
CFO and Mr. Ilam C. Kamboj, G.M. Legal & Company Secretary as its
members.
Constituted in 1985, the Committee deals with matters delegated by
the Board from time to time.
This Committee meets whenever required. During the year under
review 35 (thirty five) meetings of the Committee were held.
DISCLOSURES
Related Party Transactions
The Company follows the following policy in disclosing the related party
transactions to the Audit Committee:
a) A Statement in the Summary form of transactions with related
parties in the ordinary course of business is placed periodically
before the Audit Committee.
b) There are no material individual transactions with related parties,
which are not in the normal course of business and which are not
on an arm's length basis.
Disclosures on materially significant related party transactions that
may have potential conflict with the interest of the company at large.
There are no materially significant transactions made by the Company
with its promoters, Directors or Management or relatives etc. that may
have potential conflict with the interest of the Company at large.
Accounting Treatment in preparation of Financial Statements
The guidelines/accounting standards laid down by the Institute of
Chartered Accountants of India (ICAI) have been followed in
preparation of the financial statements of the Company.
Compliances by the Company
There has neither been any non-compliance of any legal provision of
applicable law, nor any penalty, stricture imposed by the stock
exchanges or SEBI or any other authorities, on any matters related to
capital market during the last three years.
Insider Trading
In compliance with the SEBI regulation on prevention of insider trading,
the Company has instituted a comprehensive code of conduct for its
management, staff and relevant business associates. The code lays
down guidelines, which advises them on procedures to be followed
and disclosures to be made, while dealing with shares of the Company
and cautioning them on consequences of non-compliances.
This Committee meets whenever required. During the year under
review 4 (four) meetings of the Committee were held.
53
52
CEO & CFO CERTIFICATION
Certificate from Mr. Pawan Munjal, Managing Director & CEO and
Mr. Ravi Sud, Sr. Vice President & CFO in terms of Clause 49(V) of the
Listing Agreement for the year under review was placed with the Board
of Directors of the Company in their meeting held on April 24, 2008. A
copy of the same certificate on the financial statements for the financial
year ended March 31, 2008 and the Code of Conduct is given along
with this Report.
APPOINTMENT AND RE-APPOINTMENT OF DIRECTORS
Ms. Shobhana Bhartia, Mr. Sunil Bharti Mittal, Mr. Masahiro Takedagawa
and Mr. Pradeep Dinodia, Directors of the Company, retire by rotation at
the ensuing Annual General Meeting (AGM) and being eligible, offer
themselves for re-appointment.
Further, since the last AGM, Mr. Sumihisa Fukuda and
Mr. M. Damodaran were appointed as Additional Directors on the
Board of the Company and has been proposed to be appointed as
Directors by the shareholders at the ensuing AGM of the Company.
The brief resume of the said Directors proposed to be appointed and
re-appointed is given alongwith the Notice of the AGM being sent
along with the Annual Report.
MEANS OF COMMUNICATION
The Company has regularly sent, both by post as well as by fax (within
15 minutes of closure of the Board meeting) the annual audited as well
as quarterly un-audited results to both the Stock exchanges, BSE &
NSE, after they are taken on record by the Board of Directors.
0 8
The Company's half yearly results (period ended September 30, 2007)
and annual results (year ended March 31, 2008) have been published
in English, Hindi and other Regional newspapers (viz. The Times of
India, The Economic Times, Hindustan Times, Financial Express, The
Mint, Navbharat Times, Mumbai Mirror and Financial Times).
GENERAL BODY MEETINGS
Results for the quarter ended June 30, 2007 and December 31, 2007
have been published in English, Hindi and other Regional newspapers
(viz. The Economic Times, The Times of India, The Hindustan Times,
Financial Times, Mumbai Mirror, Bangalore Mirror, Ahmedabad Mirror,
Financial Express and Jansatta). Further, the Company's quarterly, half
yearly and annual results have also been sent to the individual
shareholders of the Company. Results for each quarter, half year and
annual results for the year ended March 31, 2008 have been displayed
on the Company's website www.herohonda.com. The website also
displays official news releases and distribution schedule, as required
by Clause 35 of the Listing Agreement.
Pursuant to the provisions of Section 192A of the Companies Act, 1956, there was no matter as required to be dealt by the Company to be passed
through postal ballot.
Moreover, pursuant to Clause 51 of the Listing Agreement, financial
information like annual and quarterly financial statements and
shareholding pattern etc. are available on the SEBI web-site
www.sebiedifar.nic.in. The Company Secretary being the Compliance
Officer ensures the correctness and authenticity of the information filed
in the said website.
Details of Annual General Meeting (AGM)
Location, date and time of general meetings held during the last three years and Ordinary and Special resolutions passed thereat are given in Table 6.
TABLE 6: DETAILS OF AGM'S
Year
2006-07
2005-06
During the year ended March 31, 2008, various presentations were
made to analysts and Institutional investors. Further, the Management
Discussion & Analysis (MDA) Report, throwing light on the
operations, business performance, financial and other important
aspects of the Company's functioning forms part of this Annual Report.
2004-05
Time, Day, Date & Location
10:30 A.M.
Tuesday,
July 24, 2007,
Airforce Auditorium,
Subroto Park,
Dhaula Kuan,
New Delhi 110010
04:30 P.M.
Thursday,
September 14, 2006,
Subroto Park,
Dhaula Kuan,
New Delhi 110010
10:00 A.M.
Tuesday,
August 23, 2005,
Subroto Park,
Dhaula Kuan,
New Delhi 110010
Summary of Resolutions Passed
Ordinary Resolutions
• Appointment of Mr. Yutaka Kudo as Director and Whole-time Director.
• Appointment of Mr. Takashi Nagai as Director.
Special Resolution
• Payment of commission to Non-Executive Independent Director(s).
• Appointment of Mr. Sunil Bharti Mittal as Director.
• Appointment of Mr. Toshiaki Nakagawa as Director and Joint Managing Director.
• Appointment of Mr. Masahiro Takedagawa as Director.
• Re-appointment of Mr. Pawan Munjal as Managing Director.
Special Resolutions
• Re-appointment of Mr. Brijmohan Lall Munjal as Chairman and Director in the
Whole-time employment of the Company.
• Keeping of Registers/Returns/ Documents at the Registered Office.
• Appointment of Mr. Analjit Singh as Director.
• Appointment of Dr. Pritam Singh as Director.
• Appointment of Ms. Shobhana Bhartia as Director.
• Appointment of Dr. Vijay Laxman Kelkar as Director.
• Appointment of Mr. Miki Yamamoto as Director and Joint Managing Director.
• Appointment of Mr. Takao Eguchi as Director and Whole-time Director.
• Appointment of Mr. Motohide Sudo as Director.
55
54
GENERAL SHAREHOLDER'S INFORMATION
Stock Codes
Stock Market Data
The Company's stock codes at the primary exchanges are:
The Company's market capitalisation is included in the computation of
the BSE -100, BSE - 200, BSE - 500, BSE Sectoral Indices, S&P CNX
Nifty, S&P CNX 500 and CNX 100. Monthly high and low quotations as
well as the volume of shares traded at the National Stock Exchange of
India Limited (NSE) and Bombay Stock Exchange Limited (BSE) is
given in Table 7.
Annual General Meeting
Date:
September 25, 2008
Day:
Thursday
Time:
11:00 A.M.
Venue:
0 8
Stock Code
Reuters Code
Bloomberg
BSE
500182
HROH.BO
HH IN
NSE
HEROHONDA
HROH.NS
NHH IN
Airforce Auditorium, Subroto Park,
Dhaula Kuan, New Delhi 110010
TABLE 7: SHARE PRICE DATA FOR 2007-08 (IN RS.) (SHARES OF RS. 2 PAID UP VALUE)
National Stock Exchange of India Limited, Mumbai (NSE)
Financial Calendar
Month
Financial year: April 1 to March 31
For the year ended March 31, 2008 results were announced on:
First quarter ended June 30, 2007
July 24, 2007
Total
Volume
High
Quantity
(In Rs.)
Date
Volume on
that date
Low
Quantity
(In Rs.)
Date
Volume on
that date
Quantity
Second quarter and half year ended September 30, 2007
October 18, 2007
April' 07
4265707
700.00
25-Apr-07
335022
620.90
12-Apr-07
238021
Third quarter ended December 31, 2007
January 31, 2008
May' 07
5406193
742.80
31-May-07
1082189
647.80
22-May-07
123080
Fourth quarter and year ended March 31, 2008
April 24, 2008
For the year ending March 31, 2009, results will be announced on: (Tentative and subject to change)
First quarter ending June 30, 2008
July, 2008 (4th week)
June' 07
4348615
744.85
1-Jun-07
287935
650.00
19-Jun-07
153965
July' 07
4379334
730.00
3-Jul-07
103368
655.10
11-Jul-07
222773
August' 07
5055233
684.00
9-Aug-07
219978
610.00
24-Aug-07
81740
September' 07
3710303
775.00
25-Sep-07
337672
633.50
5-Sep-07
65151
Second quarter and half year ending September 30, 2008
October, 2008 (3rd week)
October' 07
4984564
774.70
15-Oct-07
332802
690.00
3-Oct-07
161838
Third quarter ending December 31, 2008
January, 2009 (3rd week)
November' 07
5086172
752.00
2-Nov-07
335338
619.90
23-Nov-07
219044
April, 2009 (3rd week)
Book closure
The dates of book closure are from Thursday, September 11, 2008 to
Thursday, September 25, 2008 (both days inclusive).
Dividend payment
1. Bombay Stock Exchange Limited, (BSE) based at Phiroz
Jeejeebhoy Towers, 25th Floor, Dalal Street, Mumbai 400 001; &
December ' 07
3683215
749.00
26-Dec-07
52786
680.00
10-Dec-07
91320
January' 08
5329007
721.00
3-Jan-08
730380
550.00
22-Jan-08
282771
February' 08
6687308
779.00
4-Feb-08
454881
662.30
12-Feb-08
368631
March' 08
7300970
785.00
3-Mar-08
815989
631.35
24-Mar-08
507010
2. National Stock Exchange of India Limited, (NSE) based at
Exchange Plaza, Plot No. C/1 G Block, Bandra Kurla Complex,
Bandra East, Mumbai 400 051.
HERO HONDA’S SHARE PRICE MOVEMENT VIS A VIS NIFTY
(Monthly High)
Further, the Company had applied for delisting of its shares from The
Calcutta Stock Exchange Association Limited (CSE) and complied
with the procedural formalities for the same immediately after the
approval received from the shareholders, but the final approval of the
same is still awaited. However, the in-principal approval has been
received after the grant of approval by the De-listing Committee of the
CSE.
Listing Fees
Listing on Stock Exchange
As on March 31, 2008, the securities of the Company are listed on the
following exchanges:
Listing fees for the year 2008-09 has been paid to the stock
exchanges, wherein the equity shares of the Company are listed (i.e.
BSE & NSE) within the stipulated time.
Share Price
HHML
The Board of Directors has recommended 950 per cent dividend for
the financial year 2007-08. The dividend, if approved by shareholders
at the ensuring AGM shall be paid to those shareholders whose names
appear on the Register of Members as on Thursday, September 25,
2008. In respect of shares held in electronic form, the dividend will be
payable to the beneficial owners of the shares as on the closing hours
of business on Wednesday, September 10, 2008 as per the details
furnished by the Depositories for this purpose.
795
785
775
765
755
745
735
725
715
705
695
685
675
NIFTY
6400
6200
6000
5800
5600
5400
5200
Nifty
Fourth quarter and year ending March 31, 2009
5000
4800
4600
4400
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
4200
2007-08
57
56
Bombay Stock Exchange Limited, Mumbai (BSE)
Month
April' 07
May' 07
June' 07
July' 07
August' 07
September' 07
October' 07
November' 07
December' 07
January' 08
February' 08
March' 08
Total
Volume
High
Quantity
(In Rs.)
956109
1197136
1167911
788397
1137264
935331
1251800
692195
702928
1455231
2704988
1314564
696.90
739.00
745.00
726.90
685.00
786.00
775.00
747.95
735.00
723.90
785.00
785.00
Distribution of Shareholding by Size
Date
Volume on
that date
Low
Quantity
(In Rs.)
61839
203059
114285
83270
34586
63652
48306
41356
29714
14345
122844
274302
565.00
655.20
651.05
663.00
605.05
631.50
701.00
655.00
680.00
561.00
662.00
633.00
26-Apr-07
31-May-07
1-June-07
18-July-07
9 Aug-07
25-Sep-07
11- Oct-07
30-Nov-07
6- Dec-07
4-Jan-08
4-Feb-08
4-Mar-08
Date
Volume on
that date
Quantity
19-Apr-07
25-May-07
19-Jun-07
12-July-07
29-Aug-07
6- Sep-07
19- Oct-07
9- Nov-07
31-Dec-07
22-Jan-08
12- Feb-08
24-Mar-08
28068
11429
187870
46457
18467
41094
33451
4532
9463
92235
16904
14193
Table 8 lists the distribution of Shareholding by number of shares held and Shareholding Pattern in percentage (pursuant to Clause 35 of the Listing
Agreement) as on March 31, 2008.
TABLE 8:
No. of shares held (Rs.2 paid up)
Folios
Shares of Rs. 2 paid up
Numbers
%
Numbers
%
Upto 500
39189
79.64
3833856
1.92
501 - 1000
7634
15.51
5782140
2.90
1001- 5000
1872
3.80
3661189
1.83
5001-10000
153
0.31
1067062
0.53
10001- 50000
180
0.38
4465555
2.24
50001 and above
178
0.36
180877698
90.58
49206
100.00
199687500
100.00
TOTAL
Shareholding Pattern
Category
code
Category of
shareholder
Number of
shareholders
Total number
of shares
Number of
shares held in
dematerialized form
HERO HONDA’S SHARE PRICE MOVEMENT VIS A VIS SENSEX .
(Monthly High)
Sensex
800
790
780
770
760
750
740
730
720
710
700
690
680
670
660
650
(A)
21200
20800
20400
20000
19600
19200
18800
18400
18000
17600
17200
16800
16400
16000
15600
15200
14800
14400
14000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2007-08
Total shareholding
as a percentage of
total number of shares
As a
percentage
of (A+B)
(1)
(a)
(b)
Sensex
Share Price
HHML
0 8
(c)
(d)
(e)
(2)
(a)
(b)
(c)
(d)
Shareholding of Promoter
and Promoter Group
Indian
Individuals/ Hindu
Undivided Family
Central Government/
State Government(s)
Bodies Corporate
Financial Institutions/
Banks
Any Other (Specify)
Sub-Total (A)(1)
Foreign
Individuals (Non-Resident Individuals
/ Foreign Individuals)
Bodies Corporate
Institutions
Any Other (specify)
Sub-Total (A)(2)
Total Shareholding of
Promoter and Promoter
Group (A)= (A)(1)+(A)(2)
(B)
(1)
(a)
(b)
Public shareholding
Institutions
Mutual Funds/ UTI
Financial Institutions/ Banks
As a
percentage
of (A+B+C)
59
4044715
361365
2.03
2.03
0
0
0
0
0
8
0
53788840
0
52163330
0
26.93
0.00
26.93
0.00
0
0
0
0.00
0.00
67
57833555
52524695
28.96
28.96
1
0
0
51918750
0
0
0
0
0
26.00
0.00
0.00
26.00
0.00
0.00
1
51918750
0
26.00
26.00
68
109752305
52524695
54.96
54.96
81
35
7753072
315464
7677237
295409
3.88
0.16
3.88
0.16
59
58
Contd...
(c)
(d)
(e)
(f)
(g)
(h)
(2)
(a)
(b)
(c)
(C)
Central Government/ State Government(s)
Venture Capital Funds
Insurance Companies
Foreign Institutional Investors
Foreign Venture Capital Investors
Any Other (Foreign Banks)
Sub-Total (B)(1)
Non-institutions
Bodies Corporate
Individuals i. Individual shareholders holding
nominal share capital up to Rs. 1 lakh.
ii. Individual shareholders holding
nominal share capital in
excess of Rs. 1 lakh.
Any Other (Specify)
- Non Resident Indians
- Clearing Members
- Trusts
- Foreign Nationals
Sub-Total (B)(2)
Total Public Shareholding
(B)= (B)(1)+(B)(2)
TOTAL (A)+(B)
Shares held by Custodians and against
which Depository Receipts have been issued
GRAND TOTAL (A)+(B)+(C)
the financial year 2007-08 were 83,586 which were completed in the
prescribed period. Shares under objection were returned within two
weeks time.
18
261
14867980
49208761
14867980
49170561
7.45
24.64
7.45
24.64
395
72145277
72011187
36.13
36.13
795
1448160
1412594
0.73
0.73
47238
13885673
9186764
6.95
6.95
5
1070315
65650
0.54
0.54
576
116
182408
19302
182338
19302
0.09
0.01
0.09
0.01
12
1
48743
49138
1182810
1250
17789918
89935195
1182810
1250
12050708
84061895
0.59
0.00
8.91
45.04
0.59
0.00
8.91
45.04
49206
0
199687500
0
136586590
0
100.00
0.00
100.00
0.00
49206
199687500
136586590
100.00
100.00
Confirmations in respect of the requests for dematerialisation of shares
are being sent to the respective depositories i.e. NSDL & CDSL
expeditiously.
Registrar & Transfer Agents
The shares of the Company are traded in compulsory demat segment.
As on March 31, 2008, 68.40 per cent of the total share capital is held in
dematerialised form with National Securities Depository Limited
(NSDL) and Central Depository Services Limited (CDSL). During the
year under review, share certificates involving 5,26,11,075 shares of
Rs. 2 each, were dematerialised by the shareholders. These represent
26.35 percent of the total share capital of the Company.
All work related to Share Registry, both in physical form and electronic
form, is handled by the Company's Registrar and Transfer Agents.
Company has appointed M/s. Karvy Computershare Private Limited as
the Registrar & Share Transfer Agent of the Company in place of
M/s. MCS Limited w.e.f. June 1, 2007.
Not Applicable
Karvy Computershare Pvt.Ltd.
(Unit: Hero Honda Motors Limited)
Plot No. 17-24, Vithalrao Nagar,
Madhapur, Hyderabad-500081,
Tel No : 040-23420815-820, Fax : 040-23420814
E-mail: mailmanager@karvy.com
Details of Public Funding obtained in the last three years
Share Transfer System
The Company has not obtained any public funding in the last three
years.
The Share Transfers (pertaining to shares in physical mode) are
approved by the Share Transfer Committee which meets regularly on a
weekly/fortnightly basis. The total number of shares transferred during
Outstanding GDR's/ADR's/Warrants or any Convertible Instruments
Conversion Date and likely impact on equity
Investors' Services
The Company has Board Level Committees dealing with investor
issues, which have been discussed in detail earlier. Table 9 lists the
complaints/requests/reminders received and redressed during 200708. During the financial year, the Company has attended to most of the
investors' grievances/correspondence within a period of 10-15 days
from the date of receipt of the same.
TABLE 9: COMPLAINTS/REQUESTS RECEIVED AND REDRESSED DURING 2007-08
Sl. No
Nature of Complaints / Requests
Received
Cleared
Pending
1.
Non receipt of shares
159
158
1
2.
Request for issue of duplicate shares
104
104
0
3.
Non receipt of dividend warrant
352
352
0
4.
Change of address
354
354
0
5.
Mandate cases/bank description
187
187
0
6.
Miscellaneous (Shares)
2070
2070
0
COMPANY'S REGISTERED ADDRESS
New Delhi 110 057
Tel: 011 2614 2451, 2614 4121
Fax: 011 2615 3913
website: www.herohonda.com
PLANT LOCATIONS
Dematerialisation of Shares and Liquidity
0 8
Gurgaon Plant
37 K.M. Stone, Delhi-Jaipur Highway,
Sector 33,
Gurgaon 122 001
Haryana
Tel: 0124 - 2372 123-134
Fax: 0124 - 2373 141-142
Dharuhera Plant
69 K.M. Stone, Delhi-Jaipur Highway,
Dharuhera, Distt. Rewari 122 100
Haryana
Tel: 01274 - 264 012-015
Fax: 01274 - 267 024
Haridwar Plant
Plot No. 3, Sector - 10,
11E, SIDCUL,
Roshanabad, Haridwar 248 001
Uttrakhand
Tel: 01334 - 239513
Fax: 01334 - 239512
NON-MANDATORY REQUIREMENTS
The Company has not adopted the non-mandatory requirements as
specified in Annexure - 3 of the Listing Agreement except clause (b)
relating to Remuneration Committee.
Investors' Correspondence may be addressed to
Mr. Ilam C. Kamboj, G.M.-Legal & Company Secretary,
e-mail: ickamboj@herohonda.com or
to the Registrar & Transfer Agents i.e Karvy Computershare Pvt. Ltd.
e-mail: mailmanager@karvy.com
Queries Relating to the Financial Statements of the Company may
be addressed to
Mr. Ravi Sud, Sr. Vice President & CFO,
e-mail: ravisud@herohonda.com
For and on behalf of the Board
Brijmohan Lall
Chairman
July 29, 2008
New Delhi
61
60
0 8
CERTIFICATE
CERTIFICATE OF CEO & CFO
TO THE MEMBERS OF HERO HONDA MOTORS LIMITED
CERTIFICATION BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF
THE COMPANY
We have examined the compliance of conditions of Corporate Governance by Hero Honda Motors Limited
for the year ended March 31, 2008, as stipulated in clause 49 of the Listing Agreement of the said Company
with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our
examination was limited to procedures and implementation thereof, adopted by the Company for ensuring
the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
We, Pawan Munjal, Managing Director & Chief Executive Officer (CEO) and Ravi Sud, Sr. Vice President & Chief
Financial Officer (CFO) of Hero Honda Motors Limited, to the best of our knowledge and belief certify that:
1.
We have reviewed the Balance Sheet and Profit and Loss Account of the Company for the year ended
March 31, 2008 and all its schedule and notes on accounts, as well as the Cash Flow Statement.
2.
To the best of our knowledge and information:
In our opinion and to the best of our information and according to the explanations given to us, we certify that
the Company has complied with the conditions of Corporate Governance as stipulated in the
abovementioned Listing Agreement.
a. these statements do not contain any materially untrue statement or omit to state a material fact or
figures or contains statement that might be misleading;
b. these statements together present a true and fair view of the Company's affairs and are in compliance
with existing accounting standards, applicable laws and regulations.
We state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
For A .F. FERGUSON & CO.
Chartered Accountants
Manjula Banerji
Partner
(Membership no. 86423)
3.
We also certify, that based on our knowledge and the information provided to us, there are no
transactions entered into by the Company, which are fraudulent, illegal or violate the company's code of
conduct.
4.
We are responsible for establishing and maintaining internal controls and procedures for the Company,
and we have evaluated the effectiveness of the Company's internal controls and procedures.
5.
We have disclosed, based on our most recent evaluation, wherever applicable, to the company's
auditors and through them to the audit committee of the Company's Board of Directors:
a. Significant changes in internal control during the year;
b. Any fraud, which we have become aware of and that involves Management or other employees who
have a significant role in the Company's internal control systems;
Place: New Delhi
Date: July 29, 2008
c. Significant changes in accounting policies during the year.
We further declare that all board members and senior management have affirmed compliance with the code of
conduct for the year 2007-08.
For Hero Honda Motors Ltd.
New Delhi,
April 24, 2008
Pawan Munjal
For Hero Honda Motors Ltd.
Ravi Sud
63
62
ANNEXURE - II TO DIRECTORS' REPORT
Information Under Section 217(1)(e) of the Companies Act, 1956 read
with Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 and forming part of the Directors' Report for the
year ended March 31, 2008 ;
Note: The additional investment cannot be precisely ascertained, and
is part of the Repairs and Maintainence; consumables expenditure and
investments in fixed assets.
c)
I. CONSERVATION OF ENERGY
Hero Honda Motors Limited has always recognised the importance of
energy. Energy is a vital resource for industrialization and economic
growth but also is responsible for factors leading to climate change. By
reducing emissions, energy conservation is an important part of
lessening climate change. Energy conservation is often the most
economical solution to energy shortages and is a more
environmentally benign alternative to increased energy production.
The company has BEE trained energy managers who are continuously
working to curb the wasteful usage of energy and adopting
equipments with better energy efficiency.
FORM-A
Form for Disclosure of Particulars with respect to Conservation of
Energy
For Dharuhera Plant
Energy conservation measures taken and their impact
A.
-
Power consumption has been reduced with the following
measures taken during the year under review:
Product Unit (Motorcycle
• Replacement of Fixed speed compressors with VFD
compressors in AC & Refrigeration system - saving energy
12342 KWH / year.
Electricity
a)
Purchased
Units (KWH)
Amount (Rs.)
Rate/unit (Rs.)
b)
• Provision of FRP fans in place of aluminum casting in cooling
towers - saving energy 264132 KWH/year.
2.
• Installation of individual circuits for main machine - saving
power of AC chillers 6000 KWH/year.
For the reduction in power consumption the following measures has
been envisaged and planned for:
• BIO MASS gasifier power generating set
• Vapour Absorption machine for chillers
• Heat Recovery from Incinerator
• Heat Recovery from DG sets at HHD
1672595
B.
Previous Year
8451452
34,295,811
4.06
41664025
Nil
34847158
Nil
Own generation
Through diesel generator Unit
Self (KWH)
Hired (KWH)
Furnace Oil, LDO, HPS* etc.
Quantity (K.Ltrs)
Total amount (Rs.)
Average Rate/Ltr. (Rs.)
1598921
5426026
23,464,923
4.32
Unit per-ltr.of Diesel Oil (Cost/unit)
Self (KWH/Ltr.)
Hired (KWH/Ltr.)
• Replacement of low rating oil injected compressors with higher
rating oil free compressors - saving energy 51000 KWH/ year.
Additional Investments and Proposals being implemented for
reduction of consumption of energy
Current Year
2.
Power and fuel consumption per unit of production
1.
• Installation of VFD on cooling tower fans - saving energy in
winter season 2448 KWH / year.
• Installation of real timer on FDV's - saving energy
150000 KWH / year.
b)
Total energy consumption and energy consumption per unit of
production as per Form - A given below.
a)
• Installation of VFD on air supply unit in paint shop - saving
energy 71000 KWH/ year.
A.
Impact of measures at a) and b) for reduction of energy
consumption and consequent impact on the cost of
production of goods.
It is difficult to quantify the impact of individual projects on
production as no. of equipments are being added during the
period.
d)
For Gurgaon Plant
B.
3.98
Nil
2,067.888
41,704,620
20.17
1824.905
3,02,48,767
16.58
Consumption per unit of production
1) Electricity (KWH/Motorcycle)
28.15
2) Furnace Oil, LDO, HPS etc
1.24
(Ltr./Motorcycle)
27.08
1.14
*used for the purpose of Boiler used for production of motorcycle.
Power and fuel consumption per unit of production
Product unit (Motorcycle)
1660865
1740975
1. Electricity
a) Purchased Unit (KWH)
Nil
Nil
Amount (Rs.)
Nil
Nil
Rate/unit
Nil
Nil
Own generation
Through diesel generator unit
Self (KWH)
Hired (KWH)
Unit per-ltr.of Diesel Oil Cost/unit
Self, (KWH/Ltr.)
Hired (KWH/Ltr.)
Furnace Oil, LDO, HPS etc.**
Quantity (K.Ltrs)
Total amount (Rs.)
Average Rate/Ltr. (Rs.)
Consumption per
unit of production
1) Electricity (KWH/Motorcycle)
2) Furnace Oil. LDO, HPS etc.
(Ltr./Motorcycle)
II.
56115270
Nil
56830801
Nil
4.08
Nil
4.11
Nil
159.201
4,398,916
27.63
481.893
1,10,05,176
22.84
Current Year
Previous Year
33.79
0.10
32.64
0.28
• During the year under review 6 more items have been
localised.
• Compliance made to the Regulations
3
Specific areas in which R & D carried out by the Company
• New Model Technology Absorption carried out by the
company.
• Indigenisation of CKD Parts
• Multi Source Approval
• Meeting Legislative Norms
• Active Participation in deciding the needs of future
Automobile regulations in India
Benefits derived as a result of the above R & D activities
• Splendor NXG (100 cc - 4 Stroke), Hunk (150 cc - 4 Stroke),
Pleasure New Aesthetics, Super Splendor Cast Wheel,
Passion Plus Cast Wheel, CD Deluxe Cast Wheel, Splendor
Plus Cast Wheel and Splendor Plus Limited Edition were
launched.
• Multi source Components have been added to existing
models
Future plan of action
• Launching of new Models;
• Indigenisation plan 17 more items to be localized;
• Compliance Plan for Future Regulations :T.A & COP for Safety Critical Components, EMC, Mass
Emission Norms (BS- IV), Safety Related Standards, E-10
compliance
4. Expenditure on R & D
(Rupees in Crores)
Year Ended
Year Ended
March 31, 2008
March 31, 2007
I) Capital
19.42
8.11
ii) Recurring
18.78
17.85
iii)Total R & D expenditure
as a percentage of Sales
(as per P & L A/c)
0. 37
0. 26
B) Technology Absorption, Adaptation and Innovation
1
Efforts in brief, made India technology absorption,
adaptation and innovation
More parts development approval in India
2.
Benefits derived as a result of the above efforts e.g. product
improvement, cost reduction, product development, import
substitution
PARTICULARS AS PER FORM B
(A) Research & Development (R&D)
2
• New sources added for existing models
Previous year
**used for the purpose of hot water generator used for
production of motorcycle.
1
4.12
Nil
Current year
0 8
• New Model Development to increase market share
• Supply capacities and quality of bought out parts (BOP)
increased with Multi Source Development to support the
increasing production
• Indigenisation - to meet cost challenge.
• Compliance to latest regulations.
Further in the last five years the Company’s ancillaries have imported
technologies regarding Emission Devices (Cat. Converter), Digital
Speedo Meter, Gear Primary Driven (Forging), Cast Wheels, Drive
Chain (Solid Bush Type), Fuel Injection, Real Time Mileage Indicator,
Non-asbestos Brake Shoe & Gasket, Trichrome, Low Friction High F.E.
Engine Technology, LED Lighting Devices, Puncture Resistant Wheel
Tube & Rear Cushion with Reservoir Tank etc.
• Alternate power i.e wheeling power from Electrical grid
65
64
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
A)
Export Activities / Initiatives to Increase Exports /
Development of New Export Markets / Export Plans
EXPORT INITIATIVES IN 2007-08
During the year under review, your Company exported 90571 twowheelers, and in value terms, this implied a decline of 7 per cent.
There was no significant growth in exports as per projection.
The Company however was successful in launching New CD Deluxe,
Passion, Glamour, Splendor NXG and HUNK in Bangladesh and
Sri Lanka. The Company was also able to combat the competition in
the premium segment due to the positive response from HUNK.
The concept of Just 4 her showroom and the New Pleasure launch in
Sri Lanka helped us gain higher share in the Scooter category.
Infrastructure development and process improvement on the after sale
service front has been undertaken extensively.
EXPORT PLAN FOR 2008-09
• Concentration on existing markets and Exploration of New
channels for business growth;
• To maintain market leadership in Bangladesh;
• Launch Splendor NXG in Columbia;
• Continue Sales & Service training as ongoing process in
overseas markets;
DETAILS OF DIRECTORS OF HERO HONDA MOTORS LIMITED
• Launch seasonal/festival based Promotional and Contest
schemes;
Name of Director
Status
Directorship held
• Focus on workshop Automation and after sale service to the
customer;
EC
Daimler Hero Commercial Vehicles Limited
Easy Bill Limited
Hero Cycles Limited
Hero Financial Services Limited
Hero Honda Finlease Limited
Munjal Auto Industries Limited
Munjal Showa Limited
Shivam Autotech Limited
Sunbeam Auto Limited
BCM Energies Private Limited
Munjal Bros. Private Limited
Mr. Pawan Munjal
MD
Hero Investment Private Limited
JMD
Mr. Sumihisa Fukuda
TD
NED
Easy Bill Limited
Hero Cycles Limited
Hero Financial Services Limited
Hero Global Design Limited
Hero Motors Limited
Highway Industries Limited
Majestic Auto Limited
Munjal Bros. Private Limited
Roma Cycle Manufacuturing Co. (P) Limited
NED
Abhyuday Manufacturing & Automotive Limited
Arrow Infrastructure Limited
DCM Shriram Consolidated Limited
Easy Bill Limited
Flourish Manufacturing & Automotive Limited
Hero Corporate Services Limited
Hero Cycles Limited
Hero Ergo Life Insurance Company Limited
• Explore to increase spare parts business.
B)
EARNINGS & OUTGO
Foreign exchange earnings during the period under report was
Rs. 243.64 crores, compared to Rs. 263.50 crores in the previous year.
On account of Royalty, Technical Guidance Fee, Technical Know-how
fee, Export Commission, Travel and other accounts, Advertisement
a n d P u b l i c i t y, t h e f o r e i g n e x c h a n g e o u t g o w a s
Rs. 332.49 crores, compared to Rs. 371.61 crores in the previous year,
a decline of 10.52 per cent.
The outgo on account of Dividend was Rs. 88.26 crores compared to
Rs.103.84 crores in the previous year.
Outgo for import of components, spare parts, raw materials and capital
goods outgo was Rs. 574.06 crores compared to
Rs. 283.07 crores in the previous year.
0 8
Committee
Membership
Committee
Chairmanship
67
66
Name of Director
Status
Directorship held
Committee
Membership
Committee
Chairmanship
Hero Management Service Limited
Hero Mindmine Institute Limited
Hero Motors Limited
Satyam Auto Components Limited
Bahadur Chand Investments (P) Limited
Thakurdevi Hydro (P) Limited
Thakurdevi Investments (P) Limited
NED
Honda Siel Cars India Limited
Honda Siel Power Products Limited
Honda Motor India Private Limited
Honda Motorcycle & Scooters India Private Limited
NED
NEID
BSES Rajdhani Power Limited
BSES Yamuna Power Limited
Reliance Infrastructure Limited
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Mr. Pradeep Dinodia
NEID
Audit Committee
Shareholders'
Grievance
Committee
Micromatic Grinding Technologies Limited
RSWM Limited
Shriram Pistons & Rings Limited
SPR International Auto Exports Limited
Ultima Finvest Limited
Manisha Commercial Pvt. Limited
Panasonic Sales and Services India Pvt. Limited
Seracom Pvt. Limited
Serva Commercial Pvt. Limited
Shabnam Commercial Pvt. Limited
Shriram Holographics Pvt. Limited
NEID
Delhi Stock Exchange Limited
Dish TV India Limited
Godrej Properties Limited
Directorship held
Committee
Membership
Committee
Chairmanship
Audit Committee
Shareholders'
Grievance
Committee
Mr. Analjit Singh
NEID
Acqvire Talent Services Limited
IDBI Limited
Malsi Estates Limited
Malsi Holdings Limited
Max Health Staff International Limited
Max Healthcare Institute Limited
Max India Limited
Max Medical Services Limited
Max New York Life Insurance Company Limited
Neeman Medical International (Asia) Limited
Vodafone Essar Limited
BAS Investments Private Limited
Boom Investments Private Limited
Delhi Guest Houses Private Limited
Doon Holiday Resorts Private Limited
Dynavest India Private Limited
Mohair Investments and Trading Co. (P) Limited
MV Healthcare Services Private Limited
Scorpios Beverages Private Limited
Terra Planet Estates Private Limited
Trophy Estates Private Limited
Trophy Holdings Private Limited
Trophy Resorts Guest Houses Private Limited
TVP Investments Private Limited
Urban Space Consultants Private Limited
Vitasta Estates Private Limited
Ms.Shobhana Bhartia
NEID
Air Travel Bureau Limited
Britex India Limited
Firefly e-ventures Limited
Goldmerry Investment & Trading Co. Limited
HT Media Limited
HT Music and Entertainment Limited
HTL Investment & Trading Co. Limited
Nilgiri Plantation Limited
Audit Committee
Mr. Takashi Nagai
Dr. Pritam Singh
Status
Parsvnath Developers Limited
DFM Foods Limited
Name of Director
0 8
Shareholders'
Grievance
Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
Audit Committee
69
68
0 8
FREQUENTLY ASKED QUESTIONS (FAQS)
Name of Director
Status
Directorship held
Ronson Traders Limited
Shradhanjali Investment & Trading Co. Limited
The Hindustan Times Limited
Udit (India) Limited
Usha Flowell Limited
Yashovardhan Investment & Trading Co. Limited
Earthstone Holding Private Limited
Earthstone Holding (one) Private Limited
Earthstone Holding (two) Private Limited
Earthstone Holding (three) Private Limited
Mr. Meleveetil Damodaran
NEID
NEID
Bharti Airtel Limited
Bharti AXA General Insurance Company Limited
Bharti AXA Life Insurance Company Limited
Bharti Enterprises Limited
Bharti Telecom Limited
Bharti Telesoft Limited
Bharti Teletech Limited
Bharti Ventures Limited
Bharti (LM) Holdings Pvt. Limited
Bharti (SBM) Holdings Pvt. Limited
Bharti Enterprises (Holdings) Pvt. Limited
Bharti Retail (Holdings) Pvt Limited
Bharti Wal-Mart Pvt Limited
Field Fresh Foods Pvt. Limited
Tech Mahindra Limited
SREI Sahaj e-Village Limited
Committee
Membership
Committee
Chairmanship
Q:
There is nominal growth in Topline but Profitability has
increased in double digit of the Company, reasons?
Q:
What is the Company strategy on exploring new markets for
exports ?
A:
Total Turnover during the financial year 2007-08 increased 4.24%
to a record high of Rs.10,517.22 crores from Rs.10,089.81 crores
during 2006-07.
The Profit after tax (PAT) for 2007-08 was recorded at Rs. 967.88
crores as compared to Rs.857.89 crores in 2006-07. PAT as a
percentage of Total Turnover has been increased from 8.50% to
9.20%.
A:
The penetration level of two wheelers in India is still very low and it
is perceived that domestic demand would continue to be robust
in the foreseeable future. Therefore, the Company would focus
primarily on fulfillment of the domestic demand. With the start of
new manufacturing facilities at Hardwar, the Company would
enhance focus on export segment as well and explore new
markets in co-operation with Honda.
Q:
When the New Plant at Haridwar would start, level of capacity
and its impact on profitability of the Company?
A:
The new plant at Haridwar has been started in April 2008 with initial
capacity of 500,000 units. New plant would be using a state of
the art technology with significant scalability option at relativity low
investment. We plan to increase the capacities to 1,000,000 and
subsequently to 1,500,000 over the coming years.
Considering the excise and income tax incentive available to the
new plant there would be positive impact on the profitability of the
Company.
Q:
What is the management's outlook on the operating margin in
the coming period considering hardening of metal prices and
weakening of rupee ?
A:
The incessant increase in most of the input commodities ranging
from Steel Aluminum Rubber etc would adversely affect the
operating margins of any automobile manufacturer. However we
have tried protecting our margins through various measures,
which include higher sales realization, increased focus on
controlling cost and operational efficiencies.
Q:
What steps the Company has taken to improve corporate
governance?
A:
The Company is committed to benchmark itself with global
standards in all areas including corporate governance. The
Company's annual report contains substantial disclosures on the
Board of Director, audit committee, remuneration committee,
shareholders grievance committee, financial and stock
performance, etc. In addition, an attempt has been made to
benchmark governance with the guidelines recommended by
the SEBI Committee on Corporate Governance (SEBI is the apex
authority for regulating capital markets in India)
Audit Committee
The improvements on the margins was accomplished through
better sales realisations and effective cost rationalisation
measures which included better control over Material cost,
Marketing cost, Overheads and all-round focus on operational
efficiencies .
Q:
What is your outlook on two wheeler industry?
A:
The long term outlook for two wheelers and motorcycles in
particular remains positive given the low levels of penetration
which provide tremendous growth potential and a healthy GDP
growth in years to come. However, our outlook for the next fiscal ie
2008-09 remains conservative driven by continued slackness in
credit availability and higher financing cost and rising inflation,
which erodes the purchasing power of the consumer.
Q:
A:
Notes:
EC
:
Executive Chairman
MD
:
Managing Director
JMD
:
TD
:
Technical Director
NED
:
Non- Executive Director
NEID
:
Non- Executive & Independent Director
Details of Directorships is as on July 29, 2008
Last year Company has launched several new models, please
appraise us the performance of these models and what about
new launch during the current year ?
During the year 2007-08 Company has launched following new
models HUNK & SPLENDOR-NXG along with several new
variants and refreshes. These new models have been very well
accepted by the market and now running under mass
production.
There are several new and improved models in pipeline and will
be disclosed in due course of time.
Q:
With the hardening of interest rates, would the demand for
motorcycles be affected ?
A:
A sizeable segment of the two wheelers sales today happens
through financing. Hence, any increase in the interest cost would
adversely affect the sales growth. However, the low levels of two
wheeler penetrations, rising disposable income and a favourable
age demography of Indian population would help in increasing
the market size. The Company has tie-ups with various preferred
financers and is in the process to empanelling regional players
with proven credentials to increase the penetration in smaller
towns semi urban and rural areas.
Financial results are published as per the latest Accounting
Standards prescribed by the Institute of Chartered Accountants
of India. The results are published in a transparent manner and
there has been no non-compliance of any legal provision of
applicable laws.
71
70
Auditors' Report
Annexure to Auditors' Report
Balance Sheet, Profit & Loss
Account and Cash Flow Statement
Schedules
US GAAP
ANNEXURE REFERRED TO IN PARAGRAPH '3' OF THE AUDITORS’ REPORT TO THE MEMBERS
OF HERO HONDA MOTORS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2008.
AUDITORS’ REPORT
TO THE MEMBERS OF HERO HONDA MOTORS
LIMITED
1.
2.
3.
4.
We have audited the attached balance sheet of Hero Honda
Motors Limited, as at March 31, 2008 and also the profit and loss
account and the cash flow statement for the year ended on that
date, annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
As required by the Companies (Auditor's Report) Order, 2003,
issued by the Central Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we enclose in the
Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
Further to our comments in the Annexure referred to in paragraph
3 above, we report that:
i) we have obtained all the information and explanations, which
to the best of our knowledge and belief were necessary for the
purposes of our audit;
ii) in our opinion, proper books of account as required by law
have been kept by the Company so far as appears from our
examination of those books;
iii) the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the
books of account;
0 8
iv) in our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement, dealt with by this report, comply with the
accounting standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956;
v) on the basis of written representations received from the
Directors and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31,
2008 from being appointed as a Director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956;
vi) in our opinion and to the best of our information and according
to the explanations given to us, the said accounts give the
information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2008;
b) in the case of the Profit and Loss Account, of the profit for
the year ended on that date; and
c) in the case of Cash Flow statement, of the cash flows for
the year ended on that date.
FOR A.F. FERGUSON & CO.
Manjula Banerji
Partner
(Membership number: 86423)
Place: New Delhi
Date: April 24, 2008
(I) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a system of physical
verification, which is designed to cover all fixed assets over a
period of three years and in accordance therewith, physical
verification of a major portion of fixed assets of the Company
was carried out during the current year. In our opinion, the
frequency of physical verification is reasonable having regard
to the size of the Company and the nature of its fixed assets.
(c) In our opinion and according to the information and
explanations given to us, a substantial part of the fixed assets
has not been disposed off by the Company during the year.
(ii) (a) During the year, the inventories have been physically verified by
the management. In our opinion, the frequency of verification
is reasonable.
(b) In our opinion and according to the information and
explanations given to us, the procedures of physical
verification of inventories followed by the management are
reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) On the basis of our examination of the records of inventories,
we are of the opinion that the Company is maintaining proper
records of inventories. The discrepancies noticed on physical
verification of inventories as compared to book records were
not material and have been properly dealt with in the books of
account.
(iii) (a) According to the information and explanations given to us, the
Company has, during the year, not granted any loan, secured
or unsecured to Companies, firms and other parties covered in
the registered maintained under Section 301 of the Companies
Act, 1956, other than unsecured loans aggregating Rs. 240
crores granted to a Company covered in the registered
maintained under Section 301 of the Companies Act, 1956.
The maximum amount due during the year was Rs. 60 crores
and the year end balance of loans granted was Rs. 50 crores.
(b) In our opinion and according to the information and
explanations given to us, the rate of interest and other terms
and conditions of the loans granted by the Company, as
referred to in paragraph 4(iii)(a) of the Companies (Auditor's
Report) Order, 2003 (hereinafter referred to as the Order)
above, are, prima- facie, not prejudicial to the interest of the
Company.
(c) According to the information and explanations given to us, the
parties, to whom the loans have been granted by the
Company, as referred to in paragraph 4(iii)(a) above, have
been regular in repayment of the principal amount as stipulated
and have been regular in payment of interest.
(d) According to the information and explanations given to us,
there are no overdue amounts in respect of the loans granted
as referred to in paragraph 4(iii) (a) above and interest thereon.
(e) According to the information and explanations given to us, the
Company has, during the year, not taken any loans, secured or
unsecured, from companies, firms and other parties covered
in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, paragraphs 4(iii) (f) and (g) of the Order
are not applicable.
(iv) According to the information and explanations given to us, there is
an adequate internal control system commensurate with the size
of the Company and the nature of its business with regard to
purchase of inventories, fixed assets and with regard to the sale of
goods. There are no sales of services during the year. Further, on
the basis of our examination and according to the information and
explanations given to us, we have neither come across nor have
been informed of any instance of major weaknesses in the
aforesaid internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that during the year, the particulars of the
contracts/arrangements referred to in section 301 of the
Companies Act, 1956 have been entered in the register
required to be maintained under that section.
(b) According to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the
Companies Act, 1956, and exceeding the value of Rs. 5 lacs in
respect of any party during the year, having regard to the
explanation that some of services/ items purchased are of a
specialized nature for which there are no alternate sources of
supply to enable comparison of the prices, these have been
made at prices which are reasonable to prevailing market
prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) According to the information and explanations given to us, the
Company has an adequate internal audit system commensurate
with its size and nature of its business.
75
74
wealth tax, customs duty, excise duty, cess, value added tax,
Haryana local area development tax and other material
statutory dues applicable to it with the appropriate authorities.
We are informed that there are no undisputed statutory dues as
at the year end, outstanding for a period of more than six
months from the date they became payable.
(viii) We have broadly reviewed the books of account maintained by
the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under Section
209(1)(d) of the Companies Act, 1956 and are of the opinion that,
prima facie, the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed
examination of the records with a view to determining whether
they are accurate or complete.
(b) According to the information and explanations given to us and
the records of the Company examined by us, there are no
disputed dues in respect of wealth tax, customs duty and
cess, which have not been deposited. The following are the
particulars of sales tax, excise duty, service tax and income tax
dues not deposited/deposited under protest by the Company
on account of disputes as at March 31, 2008:-
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company
has been regular in depositing undisputed statutory dues
including provident fund, investor education and protection
fund, employees' state insurance, income-tax, sales-tax,
Name of the Statute
Sales Tax laws
Central Excise Laws
Income-tax Act
Nature of dues
Sale Tax
Excise Duty
Amount*
(Rs. in crores)
Amount paid
under protest
(Rs. in crores)
Period to which
the amount relates
Forum where
dispute is pending
1.90
1.90
1998-1999 to 1999-00
Commissioner
(Appeals)
0.32
-
2000-01
CESTAT
0.39
-
2002-03 to 2005-06
Commissioner
(Appeals)
Service Tax
22.10
0.45
2002-03 to 2005-06
CESTAT
Income Tax
5.73
5.73
2000-01 to 2001-02
Income Tax
Appellate Tribunal
31.44
31.44
2001-02 to 2003-04
Commissioner
(Appeals)
0 8
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we
report that short term funds have not been used to finance long
term investments.
(x)
The Company does not have accumulated losses at the end of
the financial year March 31, 2008. Further, the Company has not
incurred any cash losses during the financial year ended March
31, 2008 and in the immediately preceding financial year ended
March 31, 2007.
(xi)
According to the records of the Company examined by us and on
the basis of information and explanations given to us, the
Company has not defaulted in repayment of dues to banks
during the year. The Company has not taken any loans from
financial institutions and has not issued debentures during the
year.
(xx) The Company has not raised any money by way of public issue
during the year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and
advances during the year on the basis of security by way of
pledge of shares, debentures and other securities.
(xxi) Based upon the audit procedures performed and information
and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during
the course of our audit for the year ended March 31, 2008.
(xiii) According to the information and explanations given to us, the
provisions of any special statute as specified under paragraph
4(xiii) of the Order are not applicable to the Company.
For A.F. FERGUSON & CO.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments.
(xv) According to the information and explanations given to us, the
Company has not given any guarantees during the year for loans
taken by others from banks or financial institutions.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
Manjula Banerji
Partner
(Membership No.: 86423)
Place : New Delhi
Date: April 24, 2008
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes
for which they were obtained.
* Amount as per demand orders including interest and penalty wherever quantified in the order.
The following matters have been decided in favour of the Company, although the department has preferred appeals at higher levels:
Name of the Statute
Nature of the dues
Amount
(Rs. in crores)
Period to which
amount relates
Forum where dispute
is pending
Central Excise Laws
Excise Duty
2.57
1986-87 to 1990-91
Supreme Court
Income-tax Act
Income-Tax
6.43
1987-88, 1989-90, 1992-93
1993-94, 1995-96, 1996-97
High Court
0.96
1995-96, 1997-98, 2000-01
Income Tax Appellate Tribunal
77
76
HERO HONDA MOTORS LIMITED
0 8
BALANCE SHEET AS AT MARCH 31, 2008
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2008
(Rupees in crores)
Schedule
No.
As at March
31, 2008
As at March
31, 2007
SOURCES OF FUNDS
LOAN FUNDS
Unsecured
DEFERRED TAX LIABILITIES
1
2
39.94
2,946.30
2,986.24
39.94
2,430.12
2,470.06
132.00
132.00
130.59
165.17
165.17
129.58
3,248.83
2764.81
9
TOTAL
FIXED ASSETS
Gross block
Less: Depreciation
Net block
Capital work in progress
4
1,938.78
782.52
1,156.26
392.44
1,548.70
1800.63
635.10
1165.53
189.92
1355.45
PRE - OPERATIVE EXPENSES (PENDING ALLOCATION)
5
16.05
-
INVESTMENTS
6
2,566.82
1973.87
DEFERRED TAX ASSETS
9
5.22
1.38
CURRENT ASSETS, LOANS AND ADVANCES
Inventories
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
7
317.10
297.44
131.09
5.69
185.46
936.78
275.58
335.25
35.78
3.60
263.06
913.27
Less: CURRENT LIABILITIES AND PROVISIONS
Current liabilities
Provisions
8
Net current assets
1,324.98
499.76
1,824.74
(887.96)
1041.92
437.24
1479.16
(565.89)
TOTAL
3,248.83
2764.81
Per our report attached
For A. F. FERGUSON & CO.
Year ended
Year ended
No.
March 31, 2008
March 31, 2007
12,038.53
1,706.73
10,331.80
185.42
10,517.22
11,542.04
1,642.08
9,899.96
189.85
10,089.81
8,982.43
160.32
(35.81)
9,106.94
8,726.92
139.78
(22.99)
8,843.71
Profit for the year before tax
Provision for taxation
- current
- deferred
- fringe benefit
1,410.28
1,246.10
436.81
1.20
4.39
375.81
9.42
2.98
Profit after tax
Balance of profit brought forward
967.88
1,594.78
857.89
1,224.05
Balance available for appropriation
2,562.66
2,081.94
379.41
64.48
97.00
2,021.77
2,562.66
339.47
57.69
90.00
1,594.78
2,081.94
48.47
42.96
Gross sales
Less: Excise duty
Net sales
Other income
10
EXPENDITURE
Manufacturing and other expenses
Depreciation
Interest (net)
11
4
12
3
APPLICATION OF FUNDS
Notes to the accounts
Schedule
INCOME
SHAREHOLDERS' FUNDS
Share capital
Reserves and surplus
(Rupees in crores)
13
For and on behalf of the Board of Directors
BRIJMOHAN LALL MUNJAL
Chairman
MANJULA BANERJI
Partner
Membership no. 86423
PAWAN MUNJAL
PRADEEP DINODIA
Director
RAVI SUD
New Delhi
April 24, 2008
ILAM C. KAMBOJ
APPROPRIATIONS
Proposed dividend
Tax on dividend
Transfer to general reserve
Balance carried to balance sheet
Basic and diluted earnings per share face value Rs. 2/-each ( in rupees)
Per our report attached to the balance sheet
13
Chairman
MANJULA BANERJI
Partner
PAWAN MUNJAL
PRADEEP DINODIA
Director
RAVI SUD
New Delhi
April 24, 2008
ILAM C. KAMBOJ
79
78
0 8
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2008
(Rupees in crores)
A.
CASH FLOW FROM OPERATING ACTIVITIES
Net profit before tax
Adjustments for:
Add: Depreciation
Loss on fixed assets sold/discarded
Exchange differences
Loss on sale of non-trade current investments
Provision for diminution in value of investment:
Current non trade investment
Long term non trade investment
Interest - others and financial charges
Provision for doubtful debts
Year ended
March 31, 2008
Year ended
March 31, 2007
1,410.28
1,246.10
160.32
4.36
(0.98)
19.54
139.78
13.80
1.66
19.62
1.29
1.28
2.00
4.59
1.00
1.27
1.61
0.30
179.04
192.40
Less: Interest received on long term non-trade investments
Interest received on loans, deposits etc.
Profit on sale of fixed assets
Dividend income:
On current Investments - Non-trade
On long-term investments-Trade
Profit on sale of non-trade investments:
On current investments
Operating profit before working capital changes
Adjustments for:
Add: Increase / (decrease) in trade payables
Increase in security deposits from dealers
12.81
37.81
0.09
10.64
24.60
0.32
4.24
2.72
6.53
5.43
152.45
150.02
197.54
1,227.60
210.12
1,392.56
185.64
2.04
187.68
Less: Increase /(decrease) in trade and other receivables
Increase in inventories
(115.05)
41.52
(73.53)
1,653.77
441.99
1,211.78
Cash generated from operations
Less: Direct taxes paid
Net cash from operating activities
B.
(30.83)
2.34
(28.49)
129.68
49.03
178.71
1,020.40
395.35
625.05
(Rupees in crores)
Year ended
March 31, 2008
Year ended
March 31, 2007
14,731.39
(781.01)
519.03
233.00
13,417.71
14,169.74
(273.13)
432.33
1.61
415.23
56.01
20.61
493.46
(432.33)
(493.46)
Increase/(decrease) in cash and cash equivalents (A+B+C)
(1.56)
(141.54)
Cash and cash equivalents at the beginning of the year
16.66
158.72
15.10
16.66
0.52
17.18
Less: Purchase of fixed assets
Inter corporate deposits paid
Purchase of investments
374.92
190.00
14,166.47
Net cash (used) in investing activities
C.
CASH FLOW FROM FINANCING ACTIVITIES
Interest paid - others and financial charges
Dividend paid
Tax on dividend
Repayment of long term borrowings
2.00
339.47
57.69
33.17
Net cash (used) in financing activities
D.
Cash and cash equivalents at the end of the year
Cash and bank balances
Unrealised exchange loss/(gain)
15.19
(0.09)
Schedule 13
CASH FLOW FROM INVESTING ACTIVITIES
Sale of fixed assets
Sale of investments
Inter corporate deposits received back
Interest received on long term non-trade investments
Interest received on loans, deposits etc.
Dividend income:
On current investments-Non-trade
On long-term investments-Trade
1.03
13,703.86
190.00
10.72
37.81
3.87
13,633.86
211.75
10.57
24.60
Per our report attached to the balance sheet
MANJULA BANERJI
Partner
4.24
2.72
6.53
5.43
13,896.61
New Delhi
April 24, 2008
13,950.38
Chairman
PAWAN MUNJAL
PRADEEP DINODIA
Director
RAVI SUD
ILAM C. KAMBOJ
81
80
0 8
SCHEDULES 1 to 13 ANNEXED TO AND FORMING PART OF THE ACCOUNTS
1)
3) LOAN FUNDS
SHARE CAPITAL
(Rupees in crores)
As at March
As at March
31, 2008
31, 2007
(Rupees in crores)
AUTHORISED
UNSECURED LOANS
25,00,00,000 (Previous year 25,00,00,000 )
Other loans and advances
Equity shares of Rs. 2 each
50.00
50.00
As at March
As at March
31, 2008
31, 2007
132.00
165.17
132.00
165.17
Sales tax deferment from the
State Government of Haryana
(Include Rs. 53.51 crores (previous year Rs. 33.17 crores) due within one year)
4,00,000 (Previous year 4,00,000 ) Cumulative
convertible preference shares of Rs. 100 each
4.00
4.00
4.00
4.00
58.00
58.00
4,00,000 (Previous year 4,00,000 ) Cumulative
redeemable preference shares of Rs. 100 each
4) FIXED ASSETS
(Rupees in crores)
Gross block (at cost)
ISSUED, SUBSCRIBED AND PAID UP
As at
March
19,96,87,500* (Previous year 19,96,87,500) Equity
shares of Rs. 2 each fully paid up
39.94
39.94
39.94
39.94
* Of the above 11,98,12,500 (Previous year 11,98,12,500) shares had been allotted as fully paid
31, 2007
- Freehold
77.55
- Leasehold
81.80#
Plant and machinery
(Rupees in crores)
#
-
Deductions
As at
March 31, 2008
CAPITAL RESERVES
On shares forfeited (#Rs. 4250)
#
For the
On
year deductions
31, 2008 31, 2007
As at
March
As at
March
As at
March
31, 2008 31, 2008 31, 2007
191.68
1,222.69
3.24
-
80.79
-
-
-
-
80.79
77.55
-
-
81.80
0.52
1.15
-
1.67
80.13
81.28
-
212.14
29.30
6.13
-
35.43
176.71
162.38
496.06 108.80
11.96
592.90
701.25
726.63
20.46
86.52 *
15.06 1,294.15
Furniture, fixtures and
office equipment
17.64
3.50
1.79
19.35
5.30
1.12
0.60
5.82
13.53
12.34
Vehicles
14.78
8.04
1.69
21.13
4.04
3.14
0.75
6.43
14.70
10.74
43.32
4.43
0.82
46.93
29.01
4.13
0.75
32.39
14.54
14.31
151.17
31.32
-
182.49
70.87
37.01
-
107.88
74.61
80.30
processing machines
Intangible assets
##
-
-
##
835.34
97.00
7.81*
924.53
1,594.78
426.99
-
2,021.77
2,430.12
523.99
7.81
2,946.30
REVENUE RESERVES
General reserve
As at
March
Computer and data
-
Share premium account on forfeited
shares reissued(##Rs. 25500)
As at
March
Tangible assets
Buildings
2) RESERVES AND SURPLUS
Additions
Additions Deductions
Net block
Land
bonus shares by capitalisation of general reserve.
As at
March 31,2007
Depreciation
- Model fee
Total
1,800.63
157.51
19.36 1,938.78
635.10 161.48@
14.06
782.52 1,156.26
Previous year
1,471.97
373.29
44.63 1,800.63
522.60 139.78
27.28
635.10
1,165.53
Surplus, being balance in profit
and loss account
Capital work in progress {including capital advances Rs. 73.39 crores (Previous year Rs. 38.26 crores)}
392.44
189.92
1,548.70 1,355.45
Note :
Previous year
1,969.39
460.73
-
2,430.12
* Includes Rs. Nil (Previous year decrease of Rs. 1.13 crore) due to fluctuation in exchange rates
# Include land at Haridwar pending registration in the name of the Company.
* Adjustment of employee benefit schemes as per revised accounting standard AS 15, net of deferred tax assets of Rs 4.03 crores
(refer note - 14)
@ Includes Rs. 1.16 crores(Previous year Rs. Nil) transferred to Pre- operative expenditure (pending allocation)
83
82
5)
6)
PRE-OPERATIVE EXPENDITURE (PENDING ALLOCATION)
0 8
INVESTMENTS (contd.)
(Rupees in crores)
(Rupees in crores)
As at March
As at March
As at March
As at March
31, 2008
31, 2007
31, 2008
31, 2007
and components
0.19
-
Consumption of stores and spares
0.05
-
Power and fuel
5.73
-
leave encashment benefit
4.12
-
Contribution to provident and other funds
0.33
-
Consumption of raw materials
Payments to and provisions for employees:
Salaries, wages, bonus, gratuity and
Rent
0.09
-
Exchange fluctuation
0.82
-
Insurance
0.53
-
Rates and Taxes
0.45
-
Technical guidance fee
0.40
-
Professional charges
2.18
-
1.16
-
16.05
-
Depreciation
6)
INVESTMENTS
As at March
31, 2008
(Rupees in crores)
As at March
31, 2007
CURRENT INVESTMENTS
(cost or fair value which ever is lower)
Non-trade
Unquoted
In Mutual fund units:
Debt fund
(Units of the face value of Rs. 10 each)
ICICI Prudential Mutual Fund
Nil (Previous year 46644836) units in institutional FMP -15 months plan-series-XXV
Nil (Previous year 70653402) units in blended plan A-Growth
Nil (Previous year 20000000) units in hybrid fixed maturity plan-13 months plan-Institutional-Growth
Nil (Previous year 35000000) units in FMP Series 35-Three Months Plan A-Retail -Growth
Nil (Previous year 96344009) units in FMP Series 35-Three Months Plan B-Retail -Growth
Nil (Previous year 10000000) units in FMP Series 34-1 Year Plan A-Institutional -Growth
30000000 (Previous year 30000000) units in FMP Series 34-Fifteen Months Plan -Institutional -Growth
20000000 (Previous year 20000000) units in FMP Series 34-One Year Plan B Institutional Growth
70000000 (Previous year 175000000) units in equity and derivatives fund -Income
optimiser-Institutional Growth
30.00
20.00
50.00
73.25
20.00
35.00
96.34
10.00
30.00
20.00
70.00
175.00
25000000 (Previous year Nil) units in FMP Series36-Eighteen Months
Plan B -Institutional Growth
25000000 (Previous year Nil) units in Interval Fund II Quarterly Interval
Plan C-Retail Cumulative
40000000 (Previous year Nil) units in FMP Series 39-Six Months
Plan A Retail Cumulative
25000000 (Previous year Nil) units in FMP Series41-Fourteen Months
Plan Institutional Cumulative
15000000 (Previous year Nil) units in FMP Series42-Three Months
Plan A Retail Growth
12500000(Previous year Nil) units in FMP Series43-Thirteen Months
Plan B Institutional Growth
20000000 (Previous year Nil) units in FMP Series43-Thirteen Months
Plan D Retail Growth
Birla Sunlife Mutual Fund
Nil (Previous year 16000000) units in fixed term plan series D -Growth
Nil (Previous year 7500000) units in FTP -Quarterly-Series-5 -Growth
Nil (Previous year 15000000) units in FTP -Half Yrly-Series-2 -Growth
20000000 (Previous year 20000000) units in FTP -INSTL-Series U-Growth
15000000 (Previous year Nil) units in FTP -INSTL-Series V-Growth
20000000 (Previous year Nil) units in Qtly Interval-Series 5-Growth
30000000 (Previous year Nil) units in FTP-INSTL-Series AK-Growth
24475250 (Previous year Nil) units in Interval Income
Fund -INSTL-Quarterly-Series 2-Growth
4227865 (Previous year Nil) units in Income Plus-Growth
HDFC Mutual Fund
Nil(Previous year 20000000) units in FMP 13 M June 2006
(1)-Institutional Plan- Growth
Nil (Previous year 5000000) units in FMP 90 D January 2007
(3)-Wholesale Plan- Growth
25000000 (Previous year Nil) units in FMP 18M November 2007
(VI) Wholesale Plan- Growth
30000000 (Previous year Nil) units in FMP 18M January 2008
(VII) Wholesale Plan- Growth
18100000 (Previous year Nil) units in Arbitrage Fund Wholesale Plan - Growth
Standard Chartered Mutual Fund
Nil (Previous year 5000000) units in Grindlays fixed maturity 7th plan -B -Growth
Nil (Previous year 25000000) units in Grindlays fixed maturity -16th plan A -Growth
Nil (Previous year 5000000) units in fixed maturity Plan - Yearly Series 1-Growth
Nil (Previous year 10000000) units in fixed maturity Plan - Quarterly Series 3-Growth
25.00
-
25.00
-
40.00
-
25.00
-
15.00
-
12.50
-
20.00
-
20.00
15.00
20.00
30.00
25.00
16.00
7.50
15.00
20.00
-
15.00
-
-
20.00
-
5.00
25.00
-
30.00
18.10
-
-
5.00
25.00
5.00
10.00
85
84
6)
6)
0 8
(Rupees in crores)
20000000 (Previous year Nil) units in fixed maturity Plan - Yearly Series 8-Growth
9641249 (Previous year Nil) units in Arbitrage Fund -Plan B-Growth
24488468 (Previous year Nil) units in Arbitrage Fund -Plan B-Dividend
As at March
As at March
As at March
As at March
31, 2008
31, 2007
31, 2008
31, 2007
20.00
10.00
25.35
10.00
5.00
-
-
25.00
25.00
-
10.00
12.00
15.00
12.00
25.00
5.00
-
20.00
-
Tata Mutual Fund
Nil (Previous year 25000000) units in fixed horizon fund series 6-scheme B-Growth
Nil (Previous year 25000000) units in fixed horizon fund series 8-scheme D-IG-Growth
Nil (Previous year 10000000) units in fixed horizon fund series 8-scheme
E-Growth-Inst Plan
F-Growth-Inst Plan
12000000(Previous year 12000000) units in S I P FUND -Scheme I-Growth
E-Growth-Inst Plan
19143885 (Previous year Nil) units in Dynamic Bond Fund Option B-Growth
20000000 (Previous year Nil) units in Fixed Horizon Fund Series 17
Scheme D-Institutional Plan -Growth
15000000 (Previous year Nil) units in Fixed Income Portfolio Fund
Scheme A2 Institutional -Growth
15000000 (Previous year Nil) units in Fixed Income Portfolio Fund
Scheme B2 Institutional -Growth
24740431(Previous year Nil) units in Floating Rate Fund Long Term-Growth
15.00
-
15.00
30.00
-
Kotak Mutual Fund
Nil (Previous year 5000000) units in FMP series 14 -Growth
Nil (Previous year 7500000) units in FMP 3 M series 8 -Growth
15000000 (Previous year 15000000) units in FMP 15 M Series 2 -Growth
20000000 (Previous year Nil) units in FMP 12 M Series 4 Institutional-Growth
51056254 (Previous year Nil) units in FMP 3 M Series 26-Growth
7124384 (Previous year Nil) units in Bond (Short Term)-Growth
15.00
20.00
51.05
10.00
5.00
7.50
15.00
-
Templeton Mutual Fund
Nil (Previous year 15000000) units in Fixed Horizon Fund 3 months plan-inst. -Growth
20000000 (Previous year Nil) units in Fixed Horizon Fund Series VII -Plan
D -institutional -Growth
20.00
(Rupees in crores)
15.00
-
HSBC Mutual Fund
Nil (Previous year 35000000) units in fixed term series 9-Growth
-
35.00
ABN Amro Mutual Fund
Nil (Previous year 41703848) units in fixed term plan series 4 quarterly plan D Growth
Nil (Previous year 15000000) units in fixed term plan series 4 quarterly plan E Growth
-
41.71
15.00
Nil (Previous year 51848377) units in fixed term plan series 4 Half Yearly plan A Growth
Nil (Previous year 20000000) units in Dual Advantage Fund Plan A Series 1 Inst Growth
5000000 (Previous year 5000000) units in FTPS5 14 Mths plan Inst Growth
5000000 (Previous year Nil) units in Fixed Term Plan -Ser-8-Yly Plan A -Inst. Growth
9572584 (Previous year Nil) units in Flexible short Term Plan -Ser A Gr.-Renewal
33542575 (Previous year Nil) units in Interval Fund Quarterly Plan H Growth-Ren
15000000 (Previous year Nil) units in FTP Ser 10 Plan F Inst. Growth
40256676 (Previous year Nil) units in Flexi Debt Fund -Regular -Growth
Deutsche Mutual Fund
Nil (Previous year 25000000) units in fixed term fund-series 14-Growth Plan
Nil (Previous year 10000000) units in fixed term fund-series 23-Growth Option
Nil (Previous year 5000000) units in fixed term fund-series 27-Growth Option
5000000 (Previous year 5000000) units in fixed term fund-series
24-Institutional Plan-Growth Option
Escorts Mutual Fund
Nil (Previous year 471885) units in income plan - Growth
ING Vysya Mutual Fund
Nil (Previous year 20000000) units in fixed maturity fund series VII -Growth option
Nil (Previous year 10000000) units in fixed maturity fund series xxi -Growth option
5000000 (Previous year 5000000) units in fixed maturity fund series xxii -Growth option
Nil (Previous year 3000000) units in fixed maturity fund series xxiv -Growth
5000000 (Previous year Nil) units in fixed maturity fund- xxviii -Growth
Reliance Mutual Fund
Nil (Previous year 50000000) units in fixed tenor fund plan A -Growth Option
10000000(Previous year 10000000) units in fixed tenor fund plan B -Growth Plan
5000000(Previous year 5000000) units in fixed Horizon fund- Institutional
plan C -Series I-Institutional Growth plan
Nil (Previous year 40000000) units in fixed Horizon fund I- Annual
Plan -Series III-Institutional Growth plan
Nil (Previous year 77401572) units in fixed Horizon fund II- Quarterly
Plan -Series II-Institutional Growth plan
Nil (Previous year 25000000) units in fixed Horizon fund II- Quarterly
Plan -Series I-Institutional Growth plan
25000000(Previous year 25000000) units in fixed Horizon fund III- Annual
Plan Series IV-Institutional Growth Plan
10000000 (Previous year Nil) units in Annual Interval Fund
-Series1-Institutional Growth Plan
25000000 (Previous year Nil) units in Fixed Horizon Fund IV
-Series 6-Institutional Growth Plan
5.00
5.00
10.00
35.00
15.00
50.00
51.85
20.00
5.00
-
-
25.00
10.00
5.00
5.00
5.00
-
1.00
5.00
5.00
20.00
10.00
5.00
3.00
-
10.00
5.00
50.00
10.00
5.00
-
40.00
-
77.40
-
25.00
25.00
25.00
10.00
-
25.00
-
87
86
6)
6)
0 8
(Rupees in crores)
30000000 (Previous year Nil) units in Fixed Horizon Fund IV
-Series 7-Institutional Growth Plan
46542367 (Previous year Nil) units in Monthly Interval Fund -Series
II-Institutional Growth Plan
5000000 (Previous year Nil) units in Fixed Horizon Fund -VI -Series
2-Institutional Growth Plan
12500000 (Previous year Nil) units in Fixed Horizon Fund -IX -Series
20000000 (Previous year Nil) units in Fixed Horizon Fund VII -Series
Principal Mutual Fund
Nil (Previous Year 47963255) units in income fund Growth plan
Nil (Previous year 25000000) units in fixed maturity plan (FMP-31) Series
III Instt. Growth plan-Nov 06
Lotus India Mutual Fund
20000000 (Previous year Nil) units in FMP-14 Months -Series II-Institutional Growth
20000000 (Previous year Nil) units in FMP-14 Months -Series III-Institutional Growth
As at March
As at March
As at March
As at March
31, 2008
31, 2007
31, 2008
31, 2007
30.00
-
50.00
-
5.00
-
12.50
-
20.00
-
-
50.00
-
25.00
20.00
20.00
-
(Units of the face value of Rs.100 each)
68780 (Previous year Nil) units in Gold ETF -Open Ended Scheme
7.00
-
AIG Global Investment Group Mutual Fund
150000 (Previous year Nil) units in Short Term Fund Institutional Growth
DSP Merrill Lynch Mutual Fund
Nil (Previous year 154224) units in fixed term plan - series 1 H-Growth Institutional
Nil (Previous year 203789) units in fixed term plan - series1 I-Growth Institutional
606525 (Previous year Nil) units in Strategic Bond Fund -Institutional- Growth
250000 (Previous year Nil) units in fixed term plan series3D-Institutional-Growth
50000 (Previous year Nil) units in fixed term plan series3H-Institutional Growth
Nil (Previous year 25000000) units of dynamic multi- manager FOF scheme -Series 2-Growth
14000000 (Previous year Nil) units of dynamic multi- manager FOF scheme -Series 3-Growth
13300000 (Previous year Nil) units of dynamic multi- manager FOF scheme -Series 4-Growth
5000000 (Previous year Nil) units of Active Short Term FOF -Growth
14.00
13.30
5.00
25.00
-
ABN AMRO MUTUAL FUND
15000000 (Previous year 15000000) units in Multi Manager Fund Series 2A Growth
5000000 (Previous year 5000000) units in Multi Manager Fund Series 3- Growth
15.00
5.00
15.00
5.00
70.00
(1.00)
69.00
15.00
-
61.39
25.00
5.00
15.42
20.38
1,249.89
1,383.35
Fund of Funds
21.61
73.91
73.91
Less: Provision for Diminution in Value
Repurchase Price Rs. 76.46 crores (Previous year Rs. Rs. 69.00 crores)
Equity fund
Escorts Mutual Fund
21839119 (Previous year 14734210) units in opportunities fund -dividend
2439024 (Previous year 3414634) in units of high yeild equity plan-Dividend
3000000 (Previous year Nil) in units of Infrastructure Fund-Growth
29.41
2.50
3.00
19.12
3.50
-
ING Vysya Mutual Fund
Nil (Previous year 1000000) units in CUB fund - Dividend Option
-
1.00
Nil (Previous year 5000000) units in DSP Merrill Lynch Small and Mid Cap -Reg Dividend
-
5.00
25.00
-
5.00
-
4000000 (Previous year Nil) units in Long Term Advantage Fund Series 1 - Growth
10000000 (Previous year Nil) units in Special Situations Fund - Growth
4.00
10.00
-
JP Morgan Mutual Fund
1955990 (Previous year Nil) units in India Smaller Companies Fund- Growth Plan
2.00
-
Tata Mutual Fund
7000000 (Previous year Nil) units in Indo-Global Infrastructure Fund- Growth
7.00
-
Optimix Mutual Fund
25000000 (Previous year Nil) units in Multi-Manager Equity fund - Option A-Growth
Repurchase Price Rs. 1302.86 crores (Previous year Rs. 1425.42 crores)
Optimix Mutual Fund
21612178 (Previous year 25000000) units of active debt
multi -manager FOF scheme- Growth
(Rupees in crores)
5000000 (Previous year Nil) units in Sustainable Development Fund - Growth
25.00
89
88
6)
6)
0 8
(Rupees in crores)
LIC Mutual Fund
3000000 (Previous year Nil) units in Infrastructure Fund- Growth Plan
Less: Provision for diminution in value
As at March
As at March
As at March
As at March
31, 2008
31, 2007
31, 2008
31, 2007
Debentures
3.00
90.91
(1.87)
89.04
28.62
28.62
Liquid fund
ICICI Prudential Mutual Fund
115809498 (Previous year 83112217) units in Institutional Liquid Plan -Super Institutional Growth
43365134 (Previous year 4210065) units in cash plus- institutional premium-Growth
HSBC Mutual Fund
Nil (Previous year 8492857) units in cash fund - institutional plus - Growth
111112150 (Previous year 116324079) units in Liquidity Fund- Growth Option
Kotak Mutual Fund
14710840 (Previous year Nil) units in Liquid (Institutional Premium)- Growth
104536055 (Previous year Nil) units in Money Plus Institutional Growth
Lotus India Mutual Fund
31498614 (Previous year Nil) units in Liquid Fund -Super Institutional Growth
914761 (Previous year Nil) units in Liquid Plus Fund- Institutional Option-Growth Option
AIG Global Investment Group Mutual Fund
481912 (Previous year Nil) units in Liquid Fund- Super Institutional Growth
Mirae Asset Mutual Fund
500000 (Previous year Nil) units in Liquid Plus Fund- Super Inst Growth Option
CitiFinancial Consumer Finance India Ltd
Citi Financial 500 Debentures -Redeemable Non Convertible Secured
NCD Issue Series-326 of Rs 100000 each
5.00
Repurchase Price Rs. 5.00 crores (Previous year Rs. Nil)
137.80
91.15
-
5.00
-
Non-trade
Unquoted
Investments under Portfolio Management Services #
56.00
5.00
-
10.00
135.00
130.55
24.00
-
125.01
-
35.00
-
292149 (Previous year 320146) units in liquidity Fund Instt. - Growth
(Rupees in crores)
ICICI Prudential Asset Management Company
Debt Fund
ICICI Prudential Mutual Fund (units of the face value of Rs.10 each)
Nil (Previous year 7642650) units in FMP Series 34-3 Months C
2000000 (Previous year Nil) units in FMP Series 42-3 Months Plan B Retail Growth
10503452 (Previous year Nil) units in Interval Fund-Quarterly Interval Plan1Retail Growth
2.00
10.77
7.64
-
Liquid Fund
8448391 (Previous year 2202315) units in liquid plan Super institutional Growth Option
10.04
2.38
4.90
-
Debentures
50 Debentures (Previous year Nil) of Citicorp Finance Ref
NCD SR 187 MD 20/01/2010 of Rs 980000 each
27.71
10.02
IIM -Optimix Portfolios- Capital Enhancer
33.02
35.00
100.00
-
50.20
-
50.00
746.03
Liquid Fund
Principal Mutual Fund (Units of Face Value of Rs 10 each)
Nil (Previous year 180485) units in Principal Cash Management Fund Liquid Option Growth
Debt Fund
Reliance Mutual Fund - Debt Fund (units of the face value of Rs.10 each)
Nil (Previous year 25506476) units in Fixed Horizon Fund -2 Qly PLN Series -5
20991585 (Previous year Nil) units in Flexible Income Fund - Growth
Deutsche Mutual Fund (units of the face value of Rs.10 each)
49198196 (Previous year Nil) units in DWS Money Plus Advantage Instl Fund
-
0.25
-
25.51
31.30
-
50.02
81.32
25.76
271.70
91
90
6)
6)
0 8
(Rupees in crores)
(Rupees in crores)
As at March
As at March
As at March
As at March
31, 2008
31, 2007
31, 2008
31, 2007
Reliance Portfolio Management
Debentures
Reliance Blended Debt Plus -Hybrid Option -Series II-500000 Debentures of
Citicorp Finance (India) Ltd NCDS Series 163 of Rs 100.00 each
Reliance Blended Debt Plus -Hybrid Option -Series VII-1000000 Debentures of
DSP Merrill Lynch Capital Ltd Series 2007/EQ of Rs 100.00 each
Reliance Blended Debt Plus -Hybrid Option -Series X-1000000 Debentures of
DSP Merrill Lynch Capital Ltd Series 2008/AM of Rs 100.00 each
Escorts Securities Limited
Debt Fund
Escorts Mutual Fund (units of the face value of Rs.10 each)
14641 (Previous year 29747) units in Floating Rate Fund -Growth Option
Liquid Fund
Templeton Mutual Fund- (units of the face value of Rs.1 each)
Nil (Previous year 121800000) units in India Money Market Account -Dividend Plan
Escorts Mutual Fund (units of the face value of Rs.10 each)
2825896 (Previous year Nil) units in Liquid Plan Growth
HDFC Mutual Fund (units of the face value of Rs.10 each)
7646722 (Previous year Nil) units in Cash Management Fund Savings Plan
Equity Shares Quoted
Nil (Previous year 20000) equity shares of Rs. 1.00 each fully paid up of Ashok Leyland
Nil (Previous year 40000) equity shares of Rs. 10 each fully paid up of IFCI Ltd
Nil (Previous year 1250) equity shares of Rs. 2 each fully paid up of IVRCL Infrastructure & Project Ltd
Nil (Previous year 1500) equity shares of Rs. 10 each fully paid up of IPCL
Nil (Previous year 4000) equity shares of Rs. 10 each fully paid up of Syndicate Bank
Market Price Rs. Nil (Previous year Rs. 0.33 crores)
5.00
5.00
10.00
-
10.00
25.00
5.00
125523 (Previous year Nil) equity shares of Rs. 10 each fully paid up of Bharat Heavy Electricals Ltd
52238 (Previous year Nil) equity shares of Rs.10 each fully paid up of ICICI Bank
276654 (Previous year Nil) equity shares of Rs.2 each fully paid up of Siemens Ltd
6430 (Previous year Nil) equity shares of Rs10 each fully paid up of
Mundra Port & Special Economic Zone Ltd
109489 (Previous year Nil) equity shares of Rs10 each fully paid up of
Rural Electrification Corporation Ltd
Market value Rs. 48.45 crores (Previous year Rs. 3.21 crores)
16.04
5.11
26.29
0.28
-
1.15
-
Unquoted
10800 (Previous year Nil) equity shares of Rs.5496.12 each fully paid up of Bombay Stock Exchange
0.02
0.03
-
12.18
3.31
-
12.73
16.06
12.21
-
0.09
0.12
0.05
0.04
0.03
0.33
-
# Investments have been made under the Discretionary Portfolio Management
Agreement entered into between the Company and ICICI Prudential Asset
Management Company Limited, IIM-Optimix Portfolios -Capital Enhancer,
Escorts Securities Ltd, Reliance Portfolio Management (Portfolio Managers)
are being held in the name of the Portfolio Manager as envisaged in the aforesaid Agreement.
48.87
(0.42)
48.45
3.14
3.14
5.94
-
166.10
(6.10)
160.00
165.47
0.63
166.10
(4.82)
161.28
35.01
-
3.46
2,566.82
3.46
1,973.87
LONG TERM INVESTMENTS
(at cost less provision for permanent diminution, if any)
Non-trade
Quoted
In Bonds
UNIT TRUST OF INDIA
15918732 (Previous year 15918732) 6.75% Tax free US64 bonds of Rs.100 each
60903 (Previous year 60903) 6.60% Tax free ARS bonds of Rs.100 each
Market value Rs.160.75 crores (Previous year Rs.154.32 crores)
Maturity value Rs 159.80 crores (Previous year Rs 159.80 crores)
165.47
0.63
Unquoted
National Bank For Agriculture and Rural Development
42700 (Previous year Nil) Bhavishya Nirman Bonds @ 8200 each
A 10 Year Zero Coupen Bond of NABARD- maturity Rs 20000.00 per bond
Trade
Unquoted
In Equity Shares:
2715000 (Previous year 2715000) equity shares of Rs. 10 each fully paid up
of Hero Honda Finlease Limited.
Non-trade
In Equity Shares:
Quoted
Nil (Previous year 6181) equity shares of Rs. 10 each fully paid up of Parsvnath Developers Limited
Nil (Previous year 152202) equity shares of Rs. 10 each fully paid up of Idea Cellular Ltd
Nil (Previous year 55200) equity shares of Rs. 2 each fully paid up of HCL Tech Ltd
-
0.19
1.14
1.81
93
92
6)
6) INVESTMENTS (contd.)
The following investments were purchased and sold during the year
At Cost
(Rupees in crores)
Purchase
Units
The following investments were purchased and sold during the year under portfolio management scheme
Units
At Cost
(Rupees in crores)
Purchase
Sold
Amount
0 8
Sold
Units
Amount
Units
Amount
Liquid Funds
Units of the face value of Rs.1000 each
681320
751219003
94700000
75.00
870.19
9.47
681320
685482598
217175389
75.00
796.71
21.65
Debt Funds
372646256
424.67
372300345
413.74
50
4.90
-
-
Amount
Mutual Funds
Debt Funds
Fund of Funds
Equity Fund
Liquid Fund
Mutual Funds
1817355216
1366378
1,914.26
137.79
2061474411
599085
2,125.30
60.20
32300000
32.30
28387822
28.39
95813299
99.29
36728009
37.00
5866673866
33481146
6,815.99
3,536.25
5657780794
31612468
6,539.90
3,338.04
Equity Shares
Shares of Face value of Rs 10 each
Parsvnath Developers Limited
Idea Cellular Limited
ICICI Bank Limited
Bharat Heavy Electricals Ltd
Omaxe Ltd
Central Bank of India
Bombay Stock Exchange
PowerGrid Corporation of India Ltd
Mundra Port and Special Economic Zone Ltd
Rural Electrification Corporation Ltd
HCL Technologies Limited
Siemens Ltd
Bonds
Bhavishya Nirman Bonds @ 8200 each-A 10 Year Zero
Coupen Bond of NABARD- maturity Rs 20000.00 per bond
Debentures
Citi Financial Debentures -Redeemable Non Convertible
Secured NCD Issue Series-326 of Rs 100000 each
278476
401364
11250
38094
10800
122380
7430
109489
26.71
51.27
0.35
0.39
5.94
0.64
0.33
1.15
6181
152202
226238
275841
11250
38094
122380
1000
-
0.19
1.14
21.60
35.24
0.35
0.39
0.64
0.04
-
346654
32.94
55200
70000
1.81
6.65
42700
35.01
-
500
5.00
-
12,695.61
12,196.88
Debentures
Debentures of Citicorp Finance Ref NCD
SR 187 MD 20/01/2010 of Rs 980000 each
Reliance Blended Debt Plus -Hybrid Option -Series
VII-1000000 Debentures of DSP Merrill Lynch Capital Ltd
Series 2007/EQ of Rs 100.00 each
Reliance Blended Debt Plus -Hybrid Option Series X-1000000 Debentures of DSP Merrill Lynch
Capital Ltd Series 2008/AM of Rs 100.00 each
1000000
10.00
-
-
1000000
10.00
-
-
Equity Shares
ABG Shipyard Limited
Allsec Technologies Limited
Alstom Projects India Limited
Arvind Mills Ltd
Axis Bank Limited
Bank Of India
Bharat Heavy Electricals Ltd
Bhushan Steel Limited
Britannia Industries Ltd
Cairn India Limited
Canara Bank
Cummins India Ltd.
Deccan Aviation Limited
Educomp Solutions Limited
Era Infra Engineering Limited
Escorts Ltd
HDFC Bank Ltd
Hindustan Petroleum Corporation Ltd.
ICICI Bank Limited
IFCI Limited
Indian Petrochemichals Corporation Ltd
530
852
43522
483500
1500
8015
1450
250
17
2000
3000
1250
5100
150
3000
775
750
1300
4202
1079432
23300
0.02
0.03
2.68
2.38
0.07
0.13
0.21
0.02
0.00
0.03
0.06
0.03
0.08
0.02
0.15
0.01
0.07
0.05
0.44
7.23
0.75
530
852
43522
483500
1500
8015
1450
250
17
2000
3000
1250
5100
150
3000
775
750
1300
4202
1119432
18200
0.02
0.03
2.68
2.38
0.07
0.13
0.21
0.02
0.00
0.03
0.06
0.03
0.08
0.02
0.15
0.01
0.07
0.05
0.44
7.34
0.58
95
94
6)
6)
0 8
(Rupees in crores)
Purchase
Infrastructure Development Finance Company Limited
Jaiprakash Hydro-Power Limited
Kalpataru Power Transmission Ltd
Mangalore Refinery And Petrochemicals Ltd.
Man Aluminium Limited
Mphasis Limited
Nagarjuna Fertiliser & Chemicals Ltd.
NIIT Technologies Limited
Nucleus Software Exports Limited
Orchid Chemicals & Pharmaceuticals Ltd
Petronet LNG Limited
Power Finance Corporation Limited
Power Grid Corporation Of India Limited
Punjab National Bank
Reliance Capital Limited
Reliance Industries Ltd
Reliance Petroleum Limited
Sasken Communication Technologies Limited
Spanco Telesystems And Solutions Ltd
Strides Arcolab Limited
Syndicate Bank
Tata Elxsi (India) Ltd
Tata Teleservices (Maharashtra) Limited
TRF Ltd
Union Bank Of India
United Spirits Limited
Vijaya Bank
Voltamp Transformers Limited
Havells India Limited
Infosys Technologies Ltd.
Maharashtra Seamless Ltd
Reliance Communications Ltd
Reliance Natural Resources Limited
Welspun Gujarat Stahl Rohren Limited
(Rupees in crores)
Sold
Purchase
Units
Amount
Units
Amount
22750
544269
750
1125
3000
50450
1957889
2351
2200
130827
4400
2000
7700
1500
5650
135675
1100
1500
336
15000
1500
1829950
400
500
12000
500
238406
500
0.20
2.04
0.08
0.00
0.05
1.48
4.23
0.09
0.08
3.43
0.02
0.02
0.08
0.07
0.96
3.09
0.04
0.04
0.01
0.09
0.05
7.68
0.06
0.03
0.13
0.04
1.50
0.03
22750
544269
750
1125
3000
50450
1957889
2351
2200
130827
4400
2000
7700
1500
5650
1320
135675
1100
1500
336
19000
1500
1829950
400
500
12000
500
238406
500
0.20
2.04
0.08
0.00
0.05
1.48
4.23
0.09
0.08
3.43
0.02
0.02
0.08
0.07
0.96
0.21
3.09
0.04
0.04
0.01
0.12
0.05
7.68
0.06
0.03
0.13
0.04
1.50
0.03
Amount
Units
Amount
Bharat Forge Co. Ltd
Deccan Chronicle Holdings Ltd.
DLF Limited
Elecon Engineering Co Ltd
Everest Kanto Cylinder Limited
HCLTechnologies Ltd
IVRCL Infrastructures & Projects Ltd
Larsen & Toubro Limited
Nagarjuna Construction Co. Ltd
Nicholas Piramal India Ltd
Punj Lloyd Limited
Satyam Computer Services Ltd
Siemens Ltd
Wipro Ltd
2000
2000
55602
300
200
2000
29151
1050
6500
2500
2000
17310
988
2700
0.06
0.03
3.15
0.01
0.02
0.06
1.35
0.23
0.11
0.06
0.08
0.76
0.11
0.13
2000
2000
55602
300
200
2000
30401
1050
6500
2500
2000
17310
988
2700
0.06
0.03
3.15
0.01
0.02
0.06
1.41
0.23
0.11
0.06
0.08
0.76
0.11
0.13
Ashok Leyland Ltd
Centurion Bank Of Punjab Limited
Dabur India Ltd
Hindustan Construction Co. Ltd
Hindustan Unilever Limited
Marico Limited
Panacea Biotec Ltd.
Tata Consultancy Services Limited
Voltas Ltd
87479
45300
2700
1400
25862
2640
2315
1350
10756
0.33
0.21
0.03
0.02
0.55
0.02
0.10
0.14
0.11
107479
45300
2700
1400
25862
2640
2315
1350
10756
0.43
0.21
0.03
0.02
0.55
0.02
0.10
0.14
0.11
1,470.86
Aggregate value of
4000
450
1067
2700
2767391
4800
0.24
0.08
0.05
0.11
11.77
0.05
4000
450
1067
2700
2767391
4800
0.24
0.08
0.05
0.11
11.77
0.05
New Delhi Television Limited
175710
6.45
175710
6.45
ABB Limited
Amtek Auto Ltd
Berger Paints (I) Ltd
150
1500
4391
0.05
0.06
0.02
150
1500
4391
0.05
0.06
0.02
Sold
Units
Quoted investments -Long Term
Quoted investments-Current
Unquoted investments
1,374.07
As at March 31,2008
Book value
Market value
160.00
48.45
2,358.37
2,566.82
160.75
48.45
-
As at March 31,2007
Book value
Market value
161.28
3.47
1809.12
1973.87
154.32
3.53
-
97
96
7)
7)
0 8
(Rupees in crores)
As at March
31, 2008
CURRENT ASSETS
INVENTORIES #
Stores and spares (at cost or under)
Loose tools (at cost or under)
Raw materials and components *
Finished goods *
Two wheelers
Spare parts
Work in progress *
22.27
13.46
219.77
19.30
12.95
167.59
30.92
14.08
16.60
317.10
44.31
13.46
17.97
275.58
* Lower of cost and net realisable value
# Includes goods in transit Rs. 64.87 crores (Previous year Rs 17.78 crores)
SUNDRY DEBTORS
Debts outstanding for a year exceeding
six months
Secured
- considered good
Unsecured
- considered good
- considered doubtful
Other debts
Secured
- considered good
Unsecured
- considered good
Less: Provision for doubtful debts
CASH AND BANK BALANCES
Cash in hand
Cheques in hand
With scheduled banks:
On current accounts
On deposit accounts
On dividend current accounts
With post office (pledged with excise authorities)
On deposit account
On savings account
OTHER CURRENT ASSETS
Interest accrued on investments
LOANS AND ADVANCES
(Unsecured and considered good)
Advances recoverable in cash or in kind or for
value to be received
Inter corporate deposits
(Rupees in crores)
As at March
31, 2007
Income-tax recoverable
Income-tax deducted at source
Deposits with excise authorities on
current account
8)
As at March
31, 2008
As at March
31, 2007
47.51
3.50
43.52
4.16
2.13
185.46
0.33
263.06
CURRENT LIABILITIES AND PROVISIONS
(Rupees in crores)
CURRENT LIABILITIES
Sundry creditors: ( refer note no. 12)
Total outstanding dues of small and micro
Enterprises #
Total outstanding dues of creditors other
than small scale industrial undertakings
Other liabilities ##
Security deposits from dealers
As at March
31, 2008
As at March
31, 2007
-
3.75
756.07
541.21
27.70
1,324.98
551.07
461.44
25.66
1041.92
379.41
6.39
64.48
5.80
43.68
499.76
339.47
3.85
57.69
36.23
437.24
1.19
2.76
6.96
0.49
1.49
2.37
14.77
278.72
304.40
6.96
297.44
14.20
319.07
337.62
2.37
335.25
0.25
0.11
0.21
0.25
14.32
0.51
115.90
15.64
0.51
19.12
#
The Company does not owe any sum which is outstanding for more than 30 days
## Other liabilities do not include any amount outstanding as on March 31, 2008 which are required to be credited to the Investor
Education and Protection Fund (Fund)
131.09
0.01
0.04
35.78
9)
5.69
5.69
3.60
3.60
82.32
50.00
165.05
50.00
PROVISIONS
Proposed dividend
Provision for taxation less payments
Provision for tax on dividend
Employee benefit schemes
Warranties
DEFERRED TAX ASSETS AND LIABILITIES
DEFERRED TAX ASSETS
Accrued expenses deductible on payment
Others
DEFERRED TAX LIABILITIES
Accumulated depreciation
As at March
31, 2008
(Rupees in crores)
As at March
31, 2007
1.97
3.25
5.22
0.24
1.14
1.38
130.59
130.59
129.58
129.58
99
98
10) OTHER INCOME
Year ended
March 31, 2008
Dividend income
On current investments
- Non trade
On long term investments - Trade
4.24
2.72
(Rupees in crores)
Year ended
March 31, 2007
6.96
12.81
132.91
0.09
1.38
31.27
185.42
6.53
5.43
11.96
10.64
130.40
0.32
36.53
189.85
Year ended
March 31, 2008
(Rupees in crores)
Year ended
March 31, 2007
7911.58
470.53
7441.05
39.44
7401.61
58.56
7335.83
178.28
7157.55
28.21
7129.34
44.31
13.46
17.97
75.74
11.22
64.52
31.43
27.16
13.95
72.54
5.78
66.76
30.92
14.08
16.60
61.60
7.78
53.82
44.31
13.46
17.97
75.74
11.22
64.52
7412.31
9.77
7402.54
7190.14
11.43
7178.71
Interest on long term non trade investments
Profit on sale of non trade current investments*
Profit on sale of fixed assets
Exchange difference
Miscellaneous income
* After adjusting loss on sale of current investments aggregating Rs. 19.54 crores (previous year Rs. 19.62 crores)
11)
MANUFACTURING AND OTHER EXPENSES
MATERIALS CONSUMED
Purchase of spares etc. for re-sale
Consumption of raw materials and components
Less: - Sale of components to ancillaries on cost to cost basis
Less: - Cash discount
Add:
Opening stock
Two wheelers
Spare parts
Work in progress
Less: Excise duty on opening stock
Net opening stock
Less: Closing stock
Two wheelers
Spare parts
Work in progress
Less: Excise duty on closing stock
Net closing stock
Net consumption
Less: Scrap sales
OTHER EXPENSES#
Payments to and provisions for employees:
Salaries, wages, bonus, gratuity and
leave encashment benefit
Contribution to provident and other funds
Staff welfare expenses
Expenses for manufacturing, administration and selling:
Stores and tools consumed
Power and fuel
Rent
Repairs and maintenance:
Plant and machinery
Buildings
Others
Insurance
Exchange fluctuation
Rates and taxes
Packing, forwarding, freight etc.
Royalty
Advertisement and publicity
Commission:
Export
Others
Donations
Lease rent
Other expenses
Provision for diminution in value of investments:
Current non trade investment
Long term non trade investment
0 8
350.48
14.01
18.96
327.74
12.21
13.86
63.75
56.55
4.22
67.76
52.45
3.36
27.41
3.66
0.83
10.90
15.27
266.75
276.70
221.78
25.80
2.96
0.64
11.40
0.70
13.50
250.06
254.37
241.43
15.09
0.91
11.47
4.59
209.63
12.59
3.02
15.61
1.37
12.15
0.30
224.47
2.57
4.36
8,982.43
1.00
1.27
2.27
13.80
8,726.92
Year ended
March 31, 2008
2.00
37.81
(35.81)
(Rupees in crores)
Year ended
March 31, 2007
1.61
24.60
(22.99)
11.60
3.49
1.29
1.28
Loss on fixed assets sold/discarded
# Research and development expenses of Rs. 18.78 crores (previous year Rs. 17.85 crores) have been
charged to respective heads
12) INTEREST (NET)
Interest - others and financial charges
Less: Interest received on loans, deposits, etc*
* Income tax deducted at source Rs. 2.15 crores (previous year Rs. 1.03 crores)
101
100
vii)
0 8
Foreign currency transactions
13)
NOTES TO THE ACCOUNTS
1
SIGNIFICANT ACCOUNTING POLICIES
Exchange differences are dealt with as follows:-
i)
Transactions in foreign currency are recorded at the exchange rate prevailing at the time of the transaction. In case of liabilities relating
to the acquisition of fixed assets from a country outside India, incurred upto March 31, 2007, the loss or gain on translation (at the rates
prevailing at the year end or at the forward rates where forward cover has been taken) and roll over charges in respect of forward cover
are included in the carrying amount of the related fixed assets and liabilities. All loss or gain on translation subsequent to March, 31
2007 are charged to revenue in the year in which it is incurred other than expenses relating to preoperative period.
Accounting convention
The financial statements are prepared under the historical cost convention, in accordance with applicable accounting standards and
relevant presentational requirements of the Companies Act, 1956.
ii)
Fixed / Intangible assets and depreciation / amortisation
Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, duties , taxes and other
incidental expenses. Roll over charges on forward exchange contracts and loss or gain on translation of foreign currency liabilities for
acquisition of fixed assets from a country outside India incurred upto March 31, 2007 are added to or deducted from the cost of the
assets. All loss or gain on translation of foreign currency liabilities for fixed assets commissioned subsequent to March 31, 2007 are
charged to revenue in the year in which they arise.
Current assets (other than inventories) and current liabilities, (other than relating to fixed assets) are restated at the rate prevailing at the
year end. In respect of forward contracts, the forward premium or discount is recognised as income or expense over the life of contract
in the profit and loss account and the exchange difference between the exchange rate prevailing at the year end and the date of the
inception of the forward exchange contract is recognised as income or expense in the profit and loss account.
viii)
Depreciation is charged on a pro-rata basis at the straight line method rates prescribed in schedule XIV to the Companies Act, 1956
except where the historical cost of a depreciable asset has undergone a change due to increase or decrease in foreign currency
liability on account of exchange fluctuations. The depreciation on the revised unamortised depreciable amount is provided
prospectively over the residual useful life of the asset. Assets covered under employee benefit schemes are amortised over a period
of five years. Assets costing upto Rs. 5000 each are fully depreciated in the year of purchase.
- Scrap is accounted for on sale basis.
ix)
Intangible assets, comprising of expenditure on model fee etc, incurred are being amortised on a straight line method over a period of
five years.
x)
Preoperative expenses pending allocation
xi)
Investments
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Inventories
xii)
Stores and spares and loose tools are stated at cost or under.
-
Weighted average cost
Materials in transit
-
Actual cost
Work in progress and finished goods
-
Material cost plus appropriate share of
labour, manufacturing overheads and excise duty.
vi)
Employee benefits
a)
Defined contribution plan
Provident fund, Superannuation fund and Employee' State Insurance Corporation (ESIC) are the defined contribution schemes
offered by the Company. The contributions to these schemes are charged to the profit and loss account of the year in which
contribution to such schemes becomes due.
b)
Provisions and contingent liabilities
Provision involving substantial degree of estimation in measurement are recognized when there is a permanent obligation as a result
of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in
the notes.
Raw materials and components, finished goods and work in progress are valued at cost or net realisable value, whichever is lower.
The bases of determining cost for various categories of inventories are as follows:Stores and spares, loose tools, raw materials and components
Taxation
The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Incometax Act, 1961.
Current investments are stated at lower of cost and fair value computed categorywise. Long term investments are stated at cost less
provision for permanent diminution, if any.
v)
Research and development expenses
Research and development expenditure of a revenue nature is expensed out under the respective heads of account in the year in
which it is incurred.
Expenses directly related to construction activity or incidental thereto, are allocated to fixed assets at the time of completion of the
project.
iv)
Warranty claims
Warranty costs are provided on accrual basis on the total sales of two wheelers during the year, which are based on past experience of
claims.
Leasehold land has been amortised over the period of lease.
iii)
Sales
Sale of goods is recognised at the point of despatch of finished goods to the customers. Gross sales are inclusive of applicable
excise duty and freight but are exclusive of sales tax.
xiii)
Derivatives
Foreign currency derivatives are used to hedge risk associated with foreign currency transactions. All open position as at the close of
the year are valued by marking them to the market and provision is made for losses if any.
2.
CONTINGENT LIABILITIES :
(Rs. in crores)
i)
In respect of income-tax cases pending at various stages of appeal with the authorities
This year
Previous year
-
20.24
Defined benefit plan and Long term Employee benefits
Gratuity liability and long term employee benefits, are provided on the basis of an actuarial valuation made at the end of each financial
year. Actuarial gains or loss arising from such valuation are charge to revenue in the year in which they arise.
103
102
The above matters are subject to legal proceedings in the ordinary course of business. The legal proceeding when ultimately concluded will
not, in the opinion of management, have a material effect on the result of operation or the financial position of the Company.
3.
Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 56.37 crores (Previous year Rs. 145.35
crores).
4.
The Company has also entered into operating lease agreements for motor vehicles, dies and data processing machines. These lease
arrangements are cancellable in nature and range between two to four years. The aggregate lease rentals under these arrangements
amounting to Rs. 11.47 crores (Previous year Rs. 12.15 crores) have been charged under "Lease rentals " in Schedule 11.
5.
6.
0 8
Transactions with related parties during the year
a)
Parties in respect of which the Company is an joint venture/associate.
(Rs. in crores)
This year
Previous year
88.26
103.84
276.70
254.37
Honda Motors Co. Limited, Japan
Dividend paid
Royalty
As the Company's business activity falls within a single primary business segment viz. "Two wheelers and its parts" and is a single geographical
segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued by The Institute of Chartered
Accountants of India are not applicable.
Export commission
11.60
12.59
Model fees
31.32
47.13
Two wheeler sales are covered by a warranty period of two/three years. The details of provision for warranties are as under:
0.87
1.38
16.39
19.87
Purchase of raw materials, components and spares
(Rs. in crores)
Hero Cycles Limited
This year
Previous year
Provision at the beginning of the year
36.23
30.50
Dividend paid
29.42
34.61
Additional provision made during the year
33.35
30.01
Purchase of raw materials, components and spares
63.59
53.62
29.42
34.61
29.42
34.61
11.47
12.15
2.72
5.43
Intercorporate deposits given
190.00
233.00
Intercorporate deposits repaid
190.00
208.00
1.51
1.22
-
3.99
50.00
50.00
3.84
4.33
Amount used during the year
25.90
24.28
Hero Investments Private Limited
Provision at the end of the year
43.68
36.23
Dividend paid
Bhadurchand Investments Private Limited
7
Related party disclosures under Accounting Standard 18
Dividend paid
a)
Parties in respect of which the Company is a joint venture/associate.
Lease rental expenses
Honda Motor Co. Limited, Japan
Hero Cycles Limited
Bhadurchand Investments Private Limited
Hero Investments Private Limited
Dividend received
Interest received on Inter corporate deposits
b)
Expenses recovered
Key management personnel
Mr. Pawan Munjal
Mr. Yutaka Kudo
Mr. Takao Eguchi
-
Chairman
Whole time director (wef April 1, 2007)
Whole time director (Upto March 31, 2007)
Balance outstanding at the year end
-Receivables
-Payables
b)
Key management personnel
(Rs. in crores)
c)
Enterprises over which key management personnel and their relatives are able to exercise significant influence:Brijmohan Lall Associates, A.G. Industries Private Limited, Hero Corporate Services Limited, Highway Industries Limited, Majestic
Auto Limited, Munjal Auto Industries Limited, Munjal Showa Limited, Rockman Industries Limited, Sunbeam Auto Limited, Satyam
Auto Components Limited, Hero Motors Limited, Shivam Autotech Limited, Cosmic Kitchen Private Limited, Easy Bill Limited,
Hero Mindmine Institute Limited, Indian School of Business and Raman Kant Munjal Foundation.
This year
Previous year
15.76
14.00
Mr. Pawan Munjal
15.74
13.89
-
13.32
15.20
13.44
Managerial Remuneration
Mr. Takao Eguchi (upto March 31, 2007)
105
104
Mr Yutaka Kudo (wef April 1, 2007)
15.13
-
8.
Earnings per share
Balance outstanding at the year end
-Payables (including commission)
59.20
52.16
This Year
Previous Year
967.88
857.89
19,96,87,500
19,96,87,500
48.47
42.96
Profit after taxation as per profit and loss account (Rs.in crores)
Weighted average number of equity shares outstanding
c)
Basic and diluted earnings per share in rupees (face value -Rs.2 per share)
Enterprises over which key management personnel and their relatives are able to exercise significant influence
0 8
(Rs. in crores)
Purchase of raw materials and components
Sale of components etc
This year
Previous year
1976.60
2034.93
2.83
5.11
Intercorporate deposits repaid
-
3.75
Interest received on Inter corporate deposits
-
0.01
Payment towards rent and other services
3.56
3.47
Donation
0.60
0.73
9.
The Company has entered into Discretionary Portfolio Management Agreements, administered through ICICI Prudential Asset Management
Company Limited, IIM-Optimix Porfolios-Capital enhancer, Escorts Securities Limited, Reliance Portfolio Manager (Portfolio Managers). In
terms of the said agreements, the Portfolio Managers have dealt in mutual funds, debentures, equity stock futures, equity stock options and
equity index options on behalf of the Company. However, there are no outstanding derivative contracts as at March 31, 2008.
10.
Information pursuant to clause 4 (ix) (b) of the Companies (Auditor's Report) Order, 2003 in respect of disputed dues, not deposited as at
March 31, 2008, pending with various authorities
Name of the Statute
Nature of dues
Amount*
(Rs in crores)
Amount paid under
protest (Rs in crores)
Sales Tax Laws
Sales tax
1.90
1.90
Central Excise Laws
Excise duty
0.32
-
0.39
-
Balance outstanding as at the year end
-Receivables
-Payables
-
-
177.22
145.87
Significant related party transactions included in the above are as under :(Rs. in crores)
This year
Income-tax Act
186.56
172.91
Munjal Showa Limited
556.06
566.90
379.23
470.50
Hero Motors Limited
1.69
3.03
-
0.97
0.85
-
3.20
3.20
Indian School of Business
2002-03 To 2005-06 Commissioner (Appeals)
Services Tax
22.10
0.45
2002-03 to 2005-06
CESTAT
5.73
5.73
2000-01 to 2001-02
Income Tax
Appellate Tribunal
31.44
31.44
2001-02 to 2003-04 Commissioner (Appeals)
0.60
0.40
-
0.33
Name of the Statute
Nature
Amount
(Rs in crores)
Period to which
the amount relates
(various years covering
the period)
Forum where
Department has
preferred appeals
Central Excise Laws
Excise Duty
2.57
1986-87 to 1990-91
Supreme Court
Income-tax Act
Income-tax
6.43
1987-88, 1989-90, 1992-93,
High Court
1993-94, 1995-96, 1996-97
Donation
Raman Kant Munjal Foundation
CESTAT
The following matters have been decided in favour of the Company, although the department has preferred appeals at higher levels:
Payment for services
2000-01
* Amount as per demand orders including interest and penalty wherever quantified in the order.
Sale of components etc.
Satyam Auto Components Limited
1998-99 to 1999-00 Commissioner (Appeals)
Previous year
Forum where pending
Income-Tax
Purchase of raw materials and component
Period to which
the amount relates
0.96
11.
1995-96, 1997-98, 2000-01
Income Tax
Appellate Tribunal
The Company's borrowing facilities, comprising fund based and non fund based limits from various bankers, are secured by way of
107
106
12.
13.
hypothecation of inventories, receivables, movable assets and other current assets.
Current service cost
The Company has identified parties covered under the "The Micro, Small, and Medium Enterprises Development Act, 2006” on the basis of the
confirmation received. There is no outstanding balance payable as at the close of the financial year to such parties. Further, no interest has
been paid or payable to such parties under the said Act. In the previous year amount of Rs 3.75 crores was related to small scale industrial
undertakings.
Benefits paid
(0.95)
3.59
Present value of defined benefit obligation at the end of the year
32.23
Changes in the present value of the plan asset is as follows
This Year
Amount in Foreign
currency (crores)
2.15
Actuarial (gain)/ loss on obligation
The unhedged foreign currency exposures as at March 31 are as under:
Purpose
0 8
Fair value of plan asset at the beginning of the year
Previous Year
Amount in Rs
(crores)
Amount in Foreign
currency (crores)
Return on plan asset
Amount in Rs
(crores)
Receivables
USD 1.10
44.43
USD 0.69
29.90
Payables
JPY 38.71
15.28
JPY 3.09
1.12
USD
-
USD 0.07
2.95
EURO 0.02
1.21
EURO 0.27
15.49
17.44
1.62
Contributions
14.12
Benefits paid
-
Actuarial (gain)/ loss on obligation
(0.95)
Fair value of plan asset at the end of the year
32.23
Reconciliation of the present value of defined benefit obligation and the fair value of the plan assets
14.
Employee Benefit Schemes
During the year the Company has adopted Accounting Standard 15 (Revised 2005) Employee Benefits. Accordingly, the Company has
provided for defined benefit schemes and long term employee benefits on the basis of actuarial valuation done as per projected unit credit
method. In accordance with the transitional provision in the revised accounting standard Rs 7.81 crores net of deferred tax asset of Rs 4.03
crores has been adjusted from the opening balance of general reserves.
Present value of defined benefit obligation at the end of the year
32.23
Fair value of plan asset at the end of the year
32.23
Net asset/(liability) as at the close of the year
-
Expenses recognised in the profit and loss account
Defined contribution plans
Current service cost
2.15
Interest cost
2.03
This year
(Rs. in crores)
Previous year
(Rs. in crores)
9.77
8.39
Net actuarial (gain) / loss
3.59
Employer Contribution to Supperannuation Fund
4.27
3.53
Expenses recognised in the profit and loss account.
6.15
Employer Contribution to ESIC
3.03
2.90
Employer Contribution to Provident Fund
Return on plan assets
(1.62)
Discount rate
8.00%
Expected Rate of return on plan assets
9.10%
Defined benefit plans
In accordance with the Payment of Gratuity Act 1972, Company provides for gratuity, a defined benefit plan. The gratuity plan provides for a
lumsum payment to the employees at the time of separation from the service on completion of vested period of employment i.e five years.
The liability of gratuity plan is provided based on actuarial valuation as at the end of each financial year based on which the Company
contributes the ascertained liability to a fund.
This year
(Rs. in crores)
Changes in the present value of the defined benefit plan are as follows
Present value of defined benefit obligation at the beginning of the year
Interest cost
25.41
2.03
Note:- The estimates of future salary increases considered in the actuarial valuation take into account inflation, seniority, promotion and other relevant
factors such as supply and demand in the employment market
15.
Additional Information
a)
Details of capacity and production:
Class of goods
Units
Licensed capacity*
Installed capacity**
Actual Production***
This year
Previous year
This year
Previous year
This year
Previous year
200000
200000
3400000
3400000
3333460
3339896
Motorised two wheelers upto
350CC engine capacity
Nos.
109
108
d)
*The Company's products are exempt from Licensing requirements under New Industrial Policy in terms of Notification no. S.O.477(E)
dated 25th July,1991.
** On triple shift basis, as certified by the management and relied on by the auditors being a technical matter.
CIF Value of imports:
Class of goods
This year
(Rs. in crores)
Previous year
(Rs. in crores)
Capital goods*
66.14
109.13
*** Includes 175 (Previous year 243) two wheelers produced and capitalised during the year.
b)
Particulars in respect of opening stock, purchases, sales and closing stock for each class of goods dealt with by the Company:
Class of goods
Units
Opening stock
Purchases
This year
Quantity
Two wheelers
Spares
Previous year
Value Quantity
Value
(Rs. in crores)
(Rs. in crores)
Nos. 14812
-
*
Previous year
Quantity
Value
(Rs.in crores)
** Includes items sold to ancillaries on cost to cost basis for assembling of components.
-
-
-
-
13.46
27.16
*
-
*
58.56
Value of imported and indigenous raw materials, components and spares consumed and percentage of each to the total
consumption:
58.56
Class of goods
*
58.59
-
Gross Sales
e)
Closing stock
Spares
Previous year
This year
Previous year
Value Quantity
Value Quantity
Value Quantity
Value
(Rs. in crores)
(Rs. in crores)
(Rs. in crores)
(Rs.in crores)
Nos. 3337142+
-
Miscellaneous
Components
7.58
166.36
* Excludes increase of Rs. Nil (Previous year increase of Rs.1.13 crore) capitalised due to fluctuation in exchange rates.
This year
Two wheelers
103.92
404.00
31.43
Units
Quantity
Raw materials **
Components, spare parts and others **
44.31 11915
57.77
Class of goods
This year
Quantity
Value
(Rs. in crores)
11,353.48 3336756+
10,913.08 10955
*
684.73
*
628.16
*
0.32
*
0.80
*
Value
Percentage
Value
Percentage
(Rs. in crores)
%
(Rs. in crores)
%
-Imported **
0.24
0.00
0.30
0.00
27.70
0.38
35.43
0.50
49.99
0.67
78.97
1.10
7,363.12
98.95
7,042.85
98.40
44.31
-Indigenous
14.08
13.46
Components
-Imported **
11,542.04
45.00
57.77
7,441.05 *
-Imported
-Indigenous
+ Excluding 175 (Previous year 243) two wheelers capitalised.
Raw materials and components consumed:
Units
Components
MT
This year
6130.02
*
7,157.55 *
100.00
5.96
34.08
4.71
27.99
11.53
65.92
12.12
72.01
17.49
100.00
16.83
100.00
*Excludes Rs.0.44 crore (Previous year Rs 0.64 crore) for two wheelers produced and capitalised during the year
** Excludes items sold and purchased as indigenous components.
Quantity
Steel sheets
100.00
Spares consumed (charged to
repairs and maintenance)
* It is not practicable to furnish quantitative information in view of the considerable number of items diverse in size and nature. These items in
value individually account for less than 10% of the total value of the purchases, stocks and turnover of the aforesaid spares and miscellaneous
components.
Class of goods
Previous year
Raw materials
30.92 14812
*
This year
-Indigenous
12,038.53
c)
0 8
Previous year
Value
(Rs. in crores)
27.94
7,413.11
Quantity
7514.26
*
Value
(Rs. in crores)
f)
Expenditure in foreign currency (on accrual basis) :
35.73
7,121.82
Royalty
7,157.55 **
This year
(Rs. in crores)
Previous year
(Rs. in crores)
276.70
254.37
2.62
2.36
* It is not practicable to furnish quantitative information of components consumed in view of the considerable number of items diverse in
size and nature. These items in value individually account for less than 10% of the total value of components consumed.
Model fee
29.87
47.13
Export commission
11.60
12.59
**Excludes Rs.0.44 crore (Previous year Rs.0.64 crore) for two wheelers produced and capitalised during the year.
Travel and other accounts
5.45
3.64
Advertisement and Publicity
6.25
51.52
7,441.05 **
111
110
g)
h)
I)
Earnings in foreign currency (on accrual basis) :
This year
(Rs. in crores)
Previous year
(Rs. in crores)
FOB value of exports
242.79
262.56
Freight and insurance
0.85
0.94
Previous year
(Rs. in crores)
2.70
2.55
59.13
52.10
61.83
54.65
0.35
-
62.18
54.65
Whole time Directors* Remuneration
Commission
Non-Executive Independent Directors Commission
Directors' sitting fee
0.11
0.13
62.29
54.78
Provision and/or payment in respect of Auditors' Remuneration :
This year
(Rs. in crores)
Previous year
(Rs. in crores)
0.28
0.28
- limited review of unaudited financial results
0.20
0.20
- corporate governance and other certification
0.01
0.03
a) As auditors (Audit fee)
b) In other capacity
Managerial remuneration:
This year
(Rs. in crores)
c) Out of pocket expenses
j)
This year
No. of
Non-Resident
shareholders
Net profit as per section 349 of the
Companies Act,1956
Maximum managerial remuneration to four whole time
directors( including commission) at 10% of net profit
Maximum managerial remuneration to non whole time
directors( including commission) at 1% of net profit
1,410.28
1,246.10
62.29
4.59
1.28
54.78
0.30
1.27
1,478.44
1,302.45
147.84
130.25
14.78
162.62
130.25
Commission component of managerial remuneration to
- Four whole time directors restricted to 1% of net profit
( 1% of net profit) per director
- Non-Executive Independent Directors
0.10% of net profit. Restricted to
59.13
52.10
0.35
-
Commission restricted to
59.48
52.10
No. of equity
shares held
Previous year
Dividend
remitted
(Rs. in crores)
No. of
Non-Resident
shareholders
No of equity
shares held
Dividend
remitted
(Rs. in crores)
-
1
51918750
103.84
2005-2006 - Final
Computation of net profit in accordance with section 198 of the Companies Act,1956.
Profit before taxation as per
profit and loss account
Add:Managerial remuneration
Provision for diminution in value of investment long term
#
Amount remitted in foreign currencies towards dividends during the year:
2006-2007 - Final
Previous year
(Rs. in crores)
#
# This year Rs 80329 (Previous year Rs 85871 )
* Excludes incremental contribution for gratuity, as the contributions are determined for the Company as a whole.
This year
(Rs. in crores)
0 8
16.
1
51918750
88.26
-
88.26
103.84
Previous year's figures have been recast/regrouped wherever necessary.
Chairman
PAWAN MUNJAL
PRADEEP DINODIA
Director
New Delhi
RAVI SUD
ILAM C. KAMBOJ
April 24, 2008
113
112
Reconciliation of Net Income as per US GAAP Accounts and Audited Accounts as per Indian Companies Act 1956
PART IV OF SCHEDULE VI
(Rupees in Millions)
TO THE COMPANIES ACT, 1956
Balance Sheet Abstract and Company's General Business Profile
I.
Net Profit after tax for the year as per audited accounts
Add / (Less) : Profit / (Loss) of
Registration Details
Registration No.
17354
State Code
Balance Sheet Date
- affiliated company
31.03.2008
- held to maturity securities
Public Issue
Nil
Bonus Issue
Nil
Rights Issue
Nil
Private Placement
Nil
III. Position of Mobilisation and Deployment of Funds (Rupees in crores)
3118.24
Sources of Funds
Paid-Up Capital
Reserves & Surplus
39.94
Secured Loans
Unsecured Loans
Total Assets
3118.24
Application of Funds
2946.30
Nil
132.00
2008
2007
2006
2005
2004
9,678.80
8,578.90
9,713.40
8,104.70
7,283.21
12.16
10.67
30.60
57.19
8.66
-
-
22.90
(11.77)
(11.13)
-
11.30
(8.40)
(3.90)
2.40
0.68
5.37
18.26
21.75
18.27
- Income from investments ( unrealised gain/loss )
55
II. Capital Raised during the year (Rupees in crores)
Total Liabilities
0 8
- Exchange fluctuations
- Depreciation effect of exchange fluctuations
- Depreciation on leased assets
-
(76.60)
(93.18)
(137.96)
- Lease rentals paid
-
135.58
117.83
132.16
- Interest portion of lease rentals
-
(9.90)
(15.51)
(31.60)
(167.24)
(103.56)
(2.11)
1.30
-
-
-
7.00
8,439.00
9,722.28
8,175.00
7,272.31
Net Fixed Assets
1548.70
- Provision for deferred tax
Investments
2566.82
- Deferred revenue expenditure
Net Current Assets*
(997.28)
Misc. Expenditure
Nil
Net Income as per US GAAP
180.33
9,871.97
*Includes Deferred Tax Liability (Net) Rs. 125.37 crores
IV. Performance of Company (Rupees in crores)
Turnover
Total Expenditure
9106.94
Profit before tax
1410.28
Profit after Tax
Earnings per share (Rs.)
Dividend Rate (%)
Balance sheet as at March 31
10517.22
2008
2007
2006
2005
2004
Cash and cash equivalents
1,310.92
357.82
1,587.22
176.01
371.20
Trade accounts receivables
2,974.38
3,352.48
1,586.58
895.49
438.01
Inventories
3,171.04
2,755.84
2,265.54
2,042.62
1,881.99
Pre-paid expenses and other current assets
1,911.49
2,666.58
2,773.08
2,431.20
2,398.70
Total current assets
9,367.83
9,132.72
8,212.42
5,545.32
5,089.90
Chairman
Investment (held to maturity securities)
1,599.99
1,612.79
1,595.18
1,596.07
1,601.56
PAWAN MUNJAL
Investment in mutual funds
24,617.11
18,522.31
19,680.81
18,973.12
14,663.41
PRADEEP DINODIA
Director
Investment in affiliate, at equity
264.58
252.42
241.75
211.14
153.96
RAVI SUD
Property, plant and equipment
15,494.75
13,401.08
9,765.51
7,049.94
5,860.07
ILAM C. KAMBOJ
Total assets
51,344.26
42,921.32
39,495.67
33,375.59
27,368.90
967.88
ASSETS
48.47
950
Current Assets
V. Generic names of Three Principal Products/ Services of Company (as per monetary terms)
Item Code No. (ITC Code)
Product Description
87112003
New Delhi
April 24, 2008
115
114
Statement of income for the year ended March 31
2008
2007
2006
2005
2004
7,560.70
5,548.20
6,462.70
6,619.60
6,989.90
Accrued expenses
494.82
417.58
305.02
247.50
195.70
Cost of goods sold
Indian income taxes
63.90
38.50
40.30
45.70
113.50
Selling, administrative and general expense
5,689.15
4,871.05
4,266.15
3,538.05
3,048.75
184.93
206.10
227.27
222.83
190.23
Total current liabilities
13,993.50
11,081.43
11,301.44
10,673.68
10,538.08
Deferred income taxes
1,391.67
1,529.68
1,375.63
981.67
964.78
Long-term debt
1,135.07
1,445.60
1,630.53
1,920.45
1,784.76
16,520.24
14,056.71
14,307.60
13,575.80
13,287.62
LIABILITIES
Trade accounts payable
Other current liabilities
Long term debt due within one year
Total liabilities
0 8
2008
2007
2006
2005
2004
103,318.00
98,999.60
87,139.81
74,216.53
58,324.32
82,724.62
79,931.23
67,548.97
57,308.71
43,933.64
8,619.10
8,558.40
6,979.60
6,055.73
5,296.11
(1,783.26)
(1,748.47)
(1,572.20)
(1,397.42)
(1,635.94)
(358.10)
(229.90)
(51.40)
4.61
18.10
Total expense
89,202.36
86,511.26
72,904.97
61,971.63
47,611.91
Income before income taxes
14,115.64
12,488.34
14,234.84
12,244.90
10,712.41
Indian taxes on income
4,243.97
4,049.34
4,512.56
4,069.90
3,440.10
Net income
9,871.97
8,439.00
9,722.28
8,175.00
7,272.30
49.44
42.26
48.69
40.94
36.42
199,687,500
199,687,500
199,687,500
199,687,500
199,687,500
Net sales
Other (income) and expense
Interest net expense (income)
STOCKHOLDER’S EQUITY
Net earning per share
Common stock, par value; Rs. 2 (previous year Rs 2)
On share value of Rs. 2 each
Authorised 250,000,000 ;
Average common stock outstanding (numbers)
Outstanding shares 199687500
( Previous year 199687500) of Rs 2 each
399.38
399.38
399.38
399.38
0.03
0.03
0.03
0.03
0.03
Retained earnings
34,424.61
28,465.20
24,788.66
19,400.38
13,681.87
Total stockholder’s equity
34,824.02
28,864.61
25,188.07
19,799.79
14,081.28
Total liabilities and stockholder’s equity
51,344.26
42,921.32
39,495.67
33,375.59
27,368.90
Capital surplus
399.38
117
116
0 8
NOTICE
liable to determination by retirement of Directors by rotation.
NOTICE is hereby given that the 25th ANNUAL GENERAL MEETING of
the Members of HERO HONDA MOTORS LIMITED will be held on
Thursday, September 25, 2008 at 11:00 A.M., at Airforce Auditorium,
Subroto Park, Dhaula Kuan, New Delhi - 110 010 to transact the
following business:
RESOLVED FURTHER THAT pursuant to the recommendation
of the Remuneration Committee and subject to the approval of
the Central Government under Sections 269, 198, 309 read
with Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956 approval of the Company be and is
hereby accorded to the appointment of Mr. Sumihisa Fukuda,
as Technical Director in the Whole-time employment of the
Company for a period of five years w.e.f. June 1, 2008 on a
remuneration including minimum remuneration and on terms
and conditions as set out in the Explanatory Statement
attached hereto.
ORDINARY BUSINESS:
1.
To receive, consider and adopt the Audited Balance Sheet of
the Company as at March 31, 2008 and the Profit and Loss
Account for the year ended on that date together with the
reports of the Directors and Auditors thereon.
2.
To declare a dividend of Rs. 19 per Equity Share on
19,96,87,500 Equity Shares of Rs. 2 each for the financial year
2007-08.
3.
To appoint a Director in place of Mrs. Shobhana Bhartia, who
retires by rotation and being eligible, offers herself for
re-appointment.
4.
To appoint a Director in place of Mr. Sunil Bharti Mittal, who
retires by rotation and being eligible, offers himself for
re-appointment.
5.
To appoint a Director in place of Mr. Masahiro Takedagawa,
who retires by rotation and being eligible, offers himself for
re-appointment.
6.
To appoint a Director in place of Mr. Pradeep Dinodia, who
retires by rotation and being eligible, offers himself for
re-appointment.
7.
To appoint M/s. A.F.Ferguson & Co., Chartered Accountants,
New Delhi, the retiring auditors, to hold office as auditors from
the conclusion of this meeting until the conclusion of the next
Annual General Meeting and to fix their remuneration.
RESOLVED FURTHER THAT the aggregate amount of
remuneration payable to Mr. Sumihisa Fukuda in a particular
financial year will be subject to the overall ceiling limit laid down
in Sections 198 and 309 read with Schedule XIII of the
Companies Act, 1956.”
9.
APPOINTMENT OF MR. MELEVEETIL DAMODARAN AS
DIRECTOR OF THE COMPANY
“RESOLVED THAT Mr. Meleveetil Damodaran, who was
appointed as an Additional Director of the Company by the
Board of Directors, in terms of Section 260 of the Companies
Act, 1956 w.e.f. June 16, 2008 and in respect of whom the
Company has received a notice under Section 257 of the
Companies Act, 1956 together with a deposit of Rs. 500
(Rupees five hundred) as required under the Act, be and is
hereby appointed as a Director of the Company and the period
of his office shall be liable to determination by retirement of
Directors by rotation.”
By Order of the Board
for Hero Honda Motors Limited
SPECIAL BUSINESS:
To consider, and if thought fit, to pass, with or without modification(s),
the following resolutions:
New Delhi
July 29, 2008
Ilam C. Kamboj
As Ordinary Resolutions:
8.
APPOINTMENT OF MR. SUMIHISA FUKUDA AS DIRECTOR
AND TECHNICAL DIRECTOR IN THE WHOLE-TIME
EMPLOYMENT OF THE COMPANY
"RESOLVED THAT Mr. Sumihisa Fukuda, who was appointed
as an Additional Director of the Company by the Board of
Directors, in terms of Section 260 of the Companies Act, 1956
w.e.f. June 1, 2008 and in respect of whom the Company has
received a notice under Section 257 of the Companies Act,
1956 together with a deposit of Rs. 500 (Rupees five hundred)
as required under the Act, be and is hereby appointed as a
Director of the Company and the period of his office shall be
Registered Office:
New Delhi-110 057
01
on the information received from the concerned Depositories,
without confirmation from them. In this regard, members are
advised to contact their DP and furnish them the particulars of
any change desired.
NOTES:
1.
2.
3.
4.
5.
The Explanatory Statement pursuant to Section 173(2) of the
Companies Act, 1956, which sets out details relating to
Special Business to be transacted at the meeting is attached
hereto.
8.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND
AND VOTE (ON A POLL ONLY) INSTEAD OF
HIMSELF/HERSELF AND THE PROXY NEED NOT BE A
MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE
EFFECTIVE MUST BE RECEIVED AT THE REGISTERED
OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS
BEFORE THE MEETING.
Pursuant to Section 154 of the Companies Act, 1956, the
Register of Members and the Share Transfer Books of the
Company will remain closed from Thursday, September 11,
2008 to Thursday, September 25, 2008 (both days inclusive).
Pursuant to Clause 49 of the Listing Agreement, the brief
resume/profile of the Directors eligible for re-appointment vide
Item Nos. 3 to 6 are attached hereto.
The dividend as recommended by the Board of Directors,
upon declaration by the members at the 25th Annual General
Meeting, shall be paid to those members whose names
appear on the Register of Members of the Company on
Thursday, September 25, 2008.
The dividend paid for the year from 1995 to 2001 and
remaining unpaid/ unclaimed in the accounts has already
been transferred to IEPF.
9.
10.
In respect of shares held in electronic form, the dividend will be
payable to the beneficial owners of the shares as on closing
hours of business on Wednesday, September 10, 2008 as per
details furnished by the Depositories for this purpose.
6.
7.
In view of the circular no. DCC/FIIT/Cir-3/2001 dated October
15, 2001 issued by SEBI, the ECS facility should mandatorily
be used by the Companies for the distribution of dividend to its
members. Your Company has already started this process and
sent the required forms and details to all the members on
various occasions. Those members holding shares in
physical form, who inspite of repeated reminders have not yet
sent the duly filled in ECS form, which can be downloaded
from the website of the Company to avail the benefits of this
facility, are once again requested to send the same at the
earliest. In case of members holding shares in demat mode,
they should furnish details in the prescribed format to their
Depositories Participant (DP).
The Company is obliged to print such bank details on the
dividend warrants as furnished by National Securities
Depository Limited (NSDL) and Central Depository Services
Limited (CDSL), "the Depositories" to the Company and the
Company can not entertain any request for deletion/change of
bank details already printed on the dividend warrant(s) based
Pursuant to the provisions of Section 205A(5) of the
Companies Act, 1956, the amount of dividend which remains
unpaid/unclaimed for a period of 7 years is transferred to the
"Investor Education and Protection Fund (IEPF)", constituted
by the Central Government and member(s) would not be able
to claim any amount of dividend so transferred to the IEPF. As
such, member(s) who have not yet encashed his/their
dividend warrant(s) is/are requested in his/their own interest to
write to the Registrar & Transfer Agent of the Company i.e. M/s
Karvy Computershare Private Limited immediately for
claiming outstanding dividend declared by the Company
during the years 2002 and onward.
Members must quote their Folio Number / De-mat Account
No. and contact details such as email address, contact no.
etc. in all correspondence with the Company/ Registrar and
Transfer Agent.
Pursuant to the provisions of Section 109A of the Companies
Act, 1956, every member or joint holders holding shares in
physical form may nominate, in the prescribed manner, a
person to whom all the rights in the shares shall vest in the
event of death of the sole holder or all the joint holders. Member
or joint holders holding shares in demat form may contact their
respective DP for availing this facility.
11.
Members are requested to notify immediately any change in
address and signature in case of their physical holdings to the
Registrar & Transfer Agent of the Company i.e. M/s Karvy
Computershare Private Limited and to the respective DP in
case of shares held in electronic mode.
12.
Entry to the Auditorium will be strictly against entry coupon
available at the counters at the venue and against the
exchange of duly filled in, signed and valid attendance slip.
13.
EXPLANATORY STATEMENT
pursuant to Section 173(2) of the Companies Act, 1956
Item No. 8
Mr. Yutaka Kudo, Whole-time Director of the Company has been
assigned another responsibility by Honda Motor Co., Ltd., Japan.
Consequently, he has tendered his resignation from the position of
Director and Whole-time Director of the Company w.e.f. May 31, 2008.
He was associated with the management of the Company since
April 1, 2007.
Mr. Kudo has been succeeded by Mr. Sumihisa Fukuda w.e.f. June 1,
2008. Mr. Fukuda aged 53 years, 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. Immediately before
joining the Company, he was working as Manager in Asian Autoparts
Co. Ltd., Thailand. His specialization to name a few are:
Corporate Members intending to send their authorized
representatives to attend the Meeting are requested to send a
certified copy of Board Resolution authorizing their
representative to attend and vote on their behalf in the Meeting.
15.
Members are requested to bring their copy of the Annual
Report to the meeting.
•
New model quality & standard control methods;
•
Production, manufacturing and quality control for overseas
production; and
•
Production and support for overseas production.
I.
II.
Basic Salary: Rs. 2,01,314 ( Rupees Two lacs one thousand
three hundred fourteen only) per month; (Subject to an
increase of 10% per annum on the Basic Salary of preceding
year);
Commission: He will also be allowed remuneration by way of
commission in addition to Basic Salary, Perquisites and any
other Allowances, benefits or amenities subject to the
condition that the amount of commission shall not exceed 1%
of the net profit of the Company in a particular financial year as
computed in the manner referred to in Section 198 of the
Companies Act, 1956;
I)
Residential Accommodation: The appointee shall be
provided free furnished residential accommodation. In
addition to this the appointee shall be provided with
cook(s), servant(s) and security guard(s);
ii)
Medical Reimbursement: Actual Medical Expenses
incurred by the appointee and his family shall be
reimbursed;
iv) Personal Accident Insurance: Actual premium to be paid
by the Company;
v)
Insurance of House-hold goods: Actual premium to be
paid by the Company;
vi) Car: Facility of car with driver to be used for the business of
the Company;
vii) Telephone: Free telephone facility at residence including
Mobile phone to be used for the business of the
Company;
viii) Leave: One month's leave with full salary for every 11
months of service subject to the condition that leave
accumulated but not availed will not be encashed; and
Mr. Fukuda does not hold any shares (as own or on behalf of other
Your Board of Directors on the recommendation by the Remuneration
Committee in its meeting held on May 12, 2008, appointed Mr.
Sumihisa Fukuda as an Additional Director and Technical Director in
the whole time employment of the Company by way of passing a
resolution by circulation on May 13, 2008 pursuant to Sections 260,
269, 198, 309 read with Schedule XIII and other applicable provisions,
if any, of the Companies Act, 1956 w.e.f. June 1, 2008 for a period of 5
(five) years subject to the approval of the Central Government, if
required and the shareholders in the General Meeting on the
remuneration, including minimum remuneration and other terms and
conditions given hereunder.
Perquisites and allowances: In addition to the above Basic
Salary and Commission, he shall be entitled to the following
Perquisites and allowances:
iii) Club Fees: Actual fees of clubs will be reimbursed;
Apart from being on the Board of Hero Honda Motors Limited, Mr.
Fukuda is Director on the Board of Hero Honda Finlease Limited.
Any briefcase / bags / eatables will not be allowed to be taken
inside the Auditorium.
14.
III.
0 8
ix) Reimbursement of expenses: Reimbursement of
entertainment, traveling, hotel and other expenses actually
and properly incurred for the business of the Company.
IV.
Leave Travel Concession: For the appointee and his family
once in a year incurred in accordance with the rules of the
Company. In case it is proposed that the leave be spent in
home country instead of anywhere in India, return passage
may be allowed for self and family in accordance with the rules
of the Company;
V.
Children's Education Allowance: In case of children studying
in India or abroad expenses subject to maximum of Rs. 5,000
per month per child shall be reimbursed by the Company.
Such allowance shall be admissible upto a maximum of two
children;
VI.
Holiday passage for children studying outside India/family
staying abroad: Return holiday passage is admissible once in
a year by economy class or once in two years by first class to
children from their place of study abroad to India and to the
members of the family from the place of their stay abroad to
India if they are not residing in India with the appointee;
VII.
Reimbursement of expenses incurred for joining duty and
03
02
returning to home country after completion of tenure: Actual
expenses incurred on travel and packing, forwarding, loading/
unloading as well as freight, insurance, custom duty, clearing
expenses, local transportation and installation expenses in
connection with the moving of personal effects for self and
family for joining duty in India. On completion of the tenure, all
the expenses referred to herein above for travel and forwarding
the personal effects to Japan including the passage money
shall also be allowable to the appointee on his finally leaving
the employment of the Company.
If however, the appointee joins another branch of the
same/related multinational Company, the Company shall not
bear their expenses.
Explanation: For the aforesaid purposes "Family" means the
spouse, the dependent children and dependent parents of
the appointee; and
VIII.
Minimum Remuneration:
If in any financial year during the currency of tenure of the
Whole-time Director, the Company has no profits or its profits
are inadequate, the appointee shall be entitled to minimum
remuneration by way of Basic Salary, Perquisites, allowances,
not exceeding the ceiling limit of Rs. 2,00,000 per month and in
addition thereto, he shall also be eligible to the perquisites not
exceeding the limits specified, under para 2 of Section II, Part II
of Schedule XIII to the Companies Act, 1956 or such other
limits as may be prescribed by the Government from time to
time as Minimum Remuneration.
However, the appointee shall not be entitled to any sitting fee for
attending meetings of the Board and/or Committee of Directors. His
office shall be liable to determination by retirement of Director by
rotation.
Mr. Sumihisa Fukuda may be deemed to be interested/ concerned in
the Resolution contained under Item No. 8 of the notice. None of the
other directors is deemed to be interested/concerned in the Ordinary
Resolution under Item No. 8 of the Notice.
The Board of Directors of your Company recommends passing of the
aforesaid Ordinary Resolution.
Item No. 9
Mr. Meleveetil Damodaran has been appointed as an Additional
Director on the Board on June 16, 2008.
Mr. Meleveetil Damodaran, son of Late Sh. P. Chandrasekhara
Menon aged 61 years was born on May 4, 1947.
Mr. Damodaran belongs to the Indian Administrative Service,
Manipur-Tripura cadre and 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 3
identified weak public sector banks.
He is presently, holding the membership of the Board of the following
Companies.
Sl. No. Name of Company
1.
2.
3.
Nature of Office
SREI Sahaj e-Village Limited
Director
Director
Director
RELEVANT INFORMATION
pursuant to Clause 49 IV(G) (i) of the Listing Agreement regarding
Directors being appointed and re-appointed:
Mrs. Shobhana Bhartia
Mrs. Shobhana Bhartia, wife of Mr. Shyam Sunder Bhartia, aged 51
years was born on January 4, 1957 at Kolkata. She belongs to the
distinguished Birla family and has married into another major Industrial
family, the Bhartia Group. Presently, she is the Vice Chairperson and
Editorial Director of HT Media Limited and by virtue of her considerable
domain expertise, especially in the media business she has been
nominated as Rajya Sabha member. 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).
Mr. Damodaran does not hold any shares (as own or on behalf of other
She is presently holding the membership of the Board/ Committee(s)
of the following Companies.
Mr. Damodaran may be deemed to be interested/ concerned in the
Resolution contained under Item No. 9 of the notice. None of the other
directors is deemed to be interested/concerned in the Ordinary
Resolution under Item No. 9 of the Notice.
The Board of Directors of your Company recommends passing of the
aforesaid Ordinary Resolution.
By Order of the Board
for Hero Honda Motors Limited
New Delhi
July 29, 2008
Registered Office:
New Delhi-110 057
Ilam C. Kamboj
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Nature of Office
Air Travel Bureau Limited
Britex India Limited
Firefly e-ventures Limited
Goldmerry Investment & Trading Co. Ltd.
HT Media Limited
Director
Director
Director
Director
Director
V. C. & Editorial
Director
Chairperson Audit Committee
HT Music and Entertainment Limited
Director
HTL Investment & Trading Co. Limited
Director
Nilgiri Plantation Limited
Director
Ronson Traders Limited
Director
Shradhanjali Investment & Trading Co. Ltd.
Director
The Hindustan Times Limited
Director
Chairperson Audit Committee
Udit (India) Limited
Director
Usha Flowell Limited
Director
Yashovardhan Investment & Trading Co. Ltd. Director
Mrs. Bhartia does not hold any shares (as own or on behalf of other
Mr. Sunil Bharti Mittal, son of Late Sh. Sat Paul Mittal, a parliamentarian,
aged 50 years was born on October 23, 1957 at Ludhiana. He has
been appointed as an Additional Director on the Board of the
Company w.e.f. December 30, 2005. He is the founder Director of
Bharti Tele-Ventures Limited (now Bharti Airtel Limited). He is an
Alumnus of Harvard Business School, MA, USA. He is a member of the
Prime Minister's Council on Trade & Industry and is also the founder,
past president and Member of various telecom industry associations.
0 8
Mr. Mittal is immediate past President of the Confederation of Indian
Industry (CII) and the Honorary Consul General of the Republic of
Seychelles in India. He has been conferred the "Padam Bhushan" by
the Union Government for his contribution to the industry. He is winner
of number of awards at national and international level and has been
inducted into the globally renowned and respected International
Telecommunication Union (ITU) Telecom Board, Geneva. He brings
with him around thirty years of rich and diversified industrial experience.
He is presently on the Board of following Companies and does not
hold membership of any other committee of the Board of Directors.
1.
Bharti Airtel Limited
2.
3.
4.
5.
6.
7.
8.
9.
Bharti AXA General Insurance Co. Ltd.
Bharti AXA Life Insurance Co. Ltd.
Bharti Enterprises Limited
Bharti Telecom Limited
Bharti Telesoft Limited
Bharti Teletech Limited
Bharti Ventures Limited
Nature of Office
Chairman &
Managing Director
Chairman
Chairman
Chairman
Chairman
Chairman
Chairman
Chairman
Director
He (either own or held by/for other persons on a beneficial basis)
does not have any shareholding in the Company.
Mr. Masahiro Takedagawa, son of Mr. Hironobu Takedagawa, aged 53
years was born on April 26, 1955 at Kyoto, Japan. He has been
appointed as an Additional Director of the Company w.e.f. May 30,
2006. Mr. Takedagawa started his career with Honda Motor Co.,
Limited, Japan in the year 1979 after having completed his graduation
in Economics from Rikkyo University, Japan. Since then, he has served
Honda at various responsible positions in countries across the globe in
the Sales and Marketing division. At present, he is working as President
& CEO of Honda Siel Cars India Limited, India.
He is presently holding the membership of the Board/ Committee(s) of
the following Companies.
1.
2.
3.
Honda Siel Cars India Limited
Honda Siel Power Products Limited
Nature of Office
Director
President & CEO
Director
MemberAudit Committee
He (either own or held by/for other persons on a beneficial basis)
does not have any shareholding in the Company.
05
04
Mr. Pradeep Dinodia
Mr. Pradeep Dinodia, son of Sh. S. R. Dinodia, aged 54 years was born
on December 2, 1953, at New Delhi. He joined the Board of the
Company w.e.f. March 31, 2001. Mr. Dinodia is a Law Graduate (L.LB)
and a fellow member of The Institute of Chartered Accountants of India
(ICAI). He is a senior partner of M/s. S.R. Dinodia & Company,
Chartered Accountants, New Delhi, looking after Accounting, Legal
and Taxation issue particularly FEMA, Company Law and Direct Tax
matters of various Indian Companies and Multinational Corporations.
Presently he is the Chairman of Taxtation Committee of Federation
Indian Chamber of Commerce and Industry and member of the peer
review Board of the ICAI and member of Executive Committee International Fiscal Association, Indian Branch. He has wide and rich
experience in the field of corporate affairs and allied legal, Taxtation
matters. Since his appointment as a Director, he has been regularly
making valuable contributions in the meetings of Board of Directors
and Committee(s) thereof held from time to time.
3.
4.
5.
6.
7.
Micromatic Grinding Tech. Limited
RSWM Limited
Shriram Pistons & Rings Limited
8.
9.
SPR International Auto Exports Ltd.
Ultima Finvest Limited
Nature of Office
Director
ChairmanAudit Committee
Director
MemberShareholders’
Grievance Comm.
Director
Director
Director
Director
Director
He is presently holding the membership of the Board/ Committee(s) of
the following Companies.
He (either own or held by/for other persons on a beneficial basis) does
not have any shareholding in the Company.
Nature of Office
Mr. Sumihisa Fukuda
Director
MemberAudit Committee
ChairmanShareholders’
Grievance Comm.
Director
The brief profile of Mr. Sumihisa Fukuda has been given in the
Explanatory Statement to Ordinary Resolution No. 8 of this Notice.
1.
2.
DFM Foods Limited
Mr. Meleveetil Damodaran
The brief profile of Mr. Meleveetil Damodaran has been given in the
Explanatory Statement to Ordinary Resolution No. 9 of this Notice.
SHAREHOLDERS’
REFERENCER
CONTENTS
I.
At a Glance
II.
Investor Service and Grievance Handling Mechanism
III.
Matters requiring urgent attention of Shareholders’
IV.
Dividend
V.
Dematerialisation / Rematerialisation of Shares
VI.
Nomination Facility
VII.
Transfer / Transmission / Transposition / Duplicate Certificates
etc.
VIII.
Miscellaneous
IX.
Investor Servicing and Grievance Redressal at External
Agencies
X.
Important Contact Details
07
06
I.
AT A GLANCE
Company in present:
•
Has over 47000 folios of shareholders holding Equity Shares in
the Company.
•
Face value of its Equity Shares is Rs. 2.
•
68 per cent of the Company's Equity Shares are held in demat
form. The ISIN No. of the Company is INE158A01026.
•
Share are under compulsory trading in demat form only.
•
Equity Shares are listed on Bombay Stock Exchange Limited
(BSE) stock code being 500182 and National Stock Exchange
of India Limited (NSE) stock code being HEROHONDA.
•
Company’s shares are most actively traded security on both
BSE and NSE.
•
Share are freely transferable except as may be required
statutorily.
•
Karvy Computershare Private Limited (Karvy), Hyderabad, an
ISO 9002 Certified Registrars and Transfer Agents, is the
Registrars and Transfer Agents (R&TA) of the Company.
II. INVESTOR SERVICE AND GRIEVANCE HANDLING
MECHANISM
All share related transactions viz., transfer, transmission, transposition,
nomination, dividend, change of name / address / signature,
Registration of mandate / Power of Attorney, replacement / split /
consolidation of share certificates / demat / remat of shares, issue of
duplicate certificates etc. are being handled by Karvy.
Karvy, the largest Registrar in the country, discharges investor service
functions effectively, efficiently and expeditiously. Investors are
requested to correspond directly with Karvy, on all share related
matters.
The Board of Directors of the Company has constituted a
Shareholders' Grievance Committee which oversees and reviews the
redressal of shareholders' complaints related to shares, non-receipt of
Annual Report, non receipt of dividend etc. The Committee oversees
performance of the R&TA and recommends measures for overall
improvement in the quality of investor services.
III. MATTERS REQUIRING THE URGENT ATTENTION OF
SHAREHOLDERS
Register your e-mail address and contact details
payable on transfer of shares held in demat form and risks associated
with physical certificates such as forged transfers, fake certificates and
bad deliveries are avoided.
d)
Exposure to delays / loss in postal service avoided.
e)
As there can be no loss in transit of warrants, issue of duplicate
warrants is not required.
Consolidate Multiple Folios
Which cities provide ECS facility?
Investors should consolidate their shareholding held in multiple folios.
This would facilitate one-stop tracking of all corporate benefits on the
shares and would reduce time and efforts required to monitor multiple
folios.
ECS Facility is currently available to the shareholders at following 68
locations:
Register ECS Mandate and furnish correct bank account particulars
with Company / Depository Participant
Investor should provide an ECS mandate to the Company in case of
shares held in physical form and ensure that the correct and updated
particulars of their bank account are available with the Depository
Participant (DP) in case of shares held in demat form. This would
facilitate in their receiving direct credits of dividends, refunds etc., from
companies and avoid postal delays and loss in transit.
Fill and submit Nomination Form
Investors should register the nominations, in case of physical shares,
with the Company and in case of dematerialised shares with their DP.
Nomination would help successors to get the shares transmitted in
their favor without hassles.
Change in Details
To avoid any hassle and fraudulent transfers, the shareholders are
requested to inform the Karvy about any change in address, signatures
etc. Similarly, information of death of shareholders should also be
communicated immediately to Karvy.
Important Matters relating to Shareholders.
IV.
DIVIDEND
Electronic Clearing Service (ECS) facility
What is payment of dividend through ECS Facility and how does it
operate?
Reserve Bank of India's ECS facility provides investors an option to
receive dividend / interest directly in their bank accounts rather than
receiving the same through post. Under this option, investor's bank
account is directly credited and an advice thereof is issued by the
Company after the transaction is effected. The concerned bank
branch credits investor's account and indicates the credit entry as
"ECS" in his / her passbook / statement of account. The investor does
not have to open a new bank account for the purpose.
Shareholders are requested to register their email address and other
contact details i.e. Mobile / Telephone No., Fax No., etc. with Karvy in
order to get prompt and timely response/communication in the future.
Some of the major benefits of ECS facility are:
Open Demat Account and Dematerialise your shares
a)
Avoid visits to bank for depositing the physical warrant.
Investors should convert their physical holdings of securities into
demat (electronic) holdings. Holding securities in demat form helps
investors to get immediate transfer of securities. No stamp duty is
b)
Prompt credit to the bank account.
c)
Fraudulent encashment of warrants is avoided.
What are the benefits of ECS (payment through electronic facilities)?
Ahmedabad, Agra, Allahabad, Amritsar, Aurangabad, Bengaluru,
Baroda, Bhilwara, Bhopal, Bhubaneshwar, Burdwan, Calicut,
Chandigarh, Chennai, Coimbatore, Dehradun, Dhanbad, Durgapur,
Erode, Gorakhpur, Guwahati, Gwalior, Haldia, Hubli, Hyderabad,
Indore, Jabalpur, Jaipur, Jalandhar, Jammu, Jamshedpur, Jodhpur,
Kakinada, Kanpur, Kochi / Ernakulam, Kolhapur, Kolkata, Lucknow,
Ludhiana, Madurai, Mangalore, Mumbai, Mysore, Nagpur, Nashik,
Nellore, New Delhi, Panaji, Patna, Pondicherry, Pune, Raipur, Rajkot,
Ranchi, Salem, Shimla, Sholapur, Siliguri, Surat, Thiruvananthapuram,
Tirupati, Tirupur, Trichur, Trichy, Udaipur, Varanasi, Vijaywada and
Visakhapatnam.
How to avail of ECS Facility?
Investors holding shares in physical form may send their ECS Mandate
Form, duly filled in, to Karvy. The Form may be downloaded from the
Company's website www.herohonda.com under the section "Investor
Relations" However, if shares are held in dematerialised form, ECS
mandate has to be sent to the concerned Depository Participant (DP)
directly, in the format / procedure prescribed by the DP.
Why cannot the Company take on record bank details in case of
dematerialised shares?
As per the Depository Regulations, the Company is obliged to pay
dividend on dematerialised shares as per the bank account details
furnished by the concerned Depository. The Company is not
authorized to make any changes in such details received from the
Depository. Therefore, investors are requested to keep their bank
particulars updated with the Depository Participants.
0 8
cannot be issued during the validity of the original warrant. On expiry of
the validity period, if the dividend warrant is still shown as unpaid in
records of the Company, duplicate warrant will be issued. Karvy would
request the concerned shareholder to execute an indemnity before
issuing the duplicate warrant.
No duplicate warrant will be issued in respect of dividends which have
remained unpaid / unclaimed for a period of seven years in the unpaid
dividend account of the Company as they are required to be
transferred to the Investor Education and Protection Fund (IEPF)
constituted by the Central Government.
Why do the shareholders have to wait till the expiry of the validity
period of the original warrant?
As the dividend warrants are payable at par at several centres across
the country, banks do not accept 'stop payment' instructions. Hence,
shareholders have to wait till the expiry of the validity of the original
warrant.
What is the procedure for revalidation of dividend warrants?
Shareholders who have not encashed their dividend warrants within
the validity period may send their request of revalidation to Karvy
enclosing the said dividend warrants. Karvy will after due verification of
the records, issue a revalidated dividend warrant. The revalidated
warrant will be valid for a period not exceeding 3 months from the date
of such warrant.
How can a bank or any other person be authorised to receive
dividends on behalf of shareholders?
Shareholders may write to Karvy furnishing the name and address of
the authorised person/bank along with folio number and current
communication address. Karvy will despatch the respective
shareholders' dividend warrants to the concerned person / bank. This
facility is applicable only for the shareholders holding shares in physical
form.
Unclaimed / Unpaid Dividend
Can ECS Facility be opted out by investors?
What are the statutory provisions governing unclaimed dividend?
Investors have a right to opt out from this mode of payment by giving an
advance notice of four weeks, prior to payment of dividend, either to
the Karvy or to the concerned DP, as the case may be.
Prior to amendment of Section 205A and enactment of Section 205C
by the Companies (Amendment) Act, 1999, companies were required
to transfer to the General Revenue Account of the Central Government,
any moneys transferred to the 'unpaid dividend account' and which
remained unpaid or unclaimed for a period of 3 years from the date of
transfer to the unpaid dividend account. With effect from October 31,
1998, any moneys transferred to the 'unpaid dividend account' of the
Company and remaining unpaid or unclaimed for a period of 7 years
from the date it becomes due, shall be transferred to the Investor
Education and Protection Fund (IEPF). Investors are requested to note
that no claims shall lie against the Company or IEPF for any moneys
transferred to IEPF in accordance with the provisions of Section 205C
of the Companies Act, 1956.
Course of Action in case of Non-receipt of Dividend, Revalidation of
Dividend Warrant etc.
What should a shareholder do in case of non-receipt of dividend?
Shareholders may write to the Karvy furnishing the particulars of the
dividend not received, and quoting the folio number/DPID and Client
ID particulars (in case of dematerialised shares). On checking the
details Karvy shall issue duplicate dividend warrant if the dividend
remains unpaid in the records of the Company after expiry of the validity
period of the warrant which is normally three months from the date of its
issue. If the validity period of the lost dividend warrant has not expired,
shareholders will have to wait till the expiry date since duplicate warrant
09
08
What is the status of unclaimed dividend for different years?
How to dematerialise shares?
In view of the statutory provisions, as aforesaid, the status of unclaimed
and unpaid dividend of the Company is given below:
The procedure for dematerialising shares is as under:
Year
Particulars of Percent Date of Declaration Last Date of
Dividend Paid
Claiming unpaid
Dividend
2001-02
2001-02
2002-03
2003-04
2003-04
2004-05
2005-06
2006-07
Interim
Final
Final
Interim
Final
Final
Final
Final
250
600
900
500
500
1000
1000
850
17-Oct-01
12-Aug-02
01-Aug-03
23-Jan-04
17-Aug-04
22-Aug-05
14-Sep-06
24-Jul-07
16-Oct-08
11-Aug-09
31-Jul-10
22-Jan-11
16-Aug-11
21-Aug-12
13-Sep-13
23-Jul-14
What is dematerialisation of shares?
Dematerialisation (Demat) is the process by which securities held in
physical form are cancelled and destroyed and the ownership thereof
is entered into and retained in a fungible form on a depository by way of
electronic balances. Trading in demat form is regulated by the
Depositories Act, 1996 and is monitored by the Securities and
Exchange Board of India (SEBI). The two depositories presently
functioning are National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL).
Why dematerialise shares?
SEBI has notified various companies whose shares shall be traded in
demat form only. By virtue of such notification, the shares of the
Company are also subject to compulsory trading only in demat form on
the Stock Exchanges.
Benefits of Demat
•
A safe, convenient way to hold securities;
•
Immediate transfer of securities;
•
No stamp duty on transfer of securities;
•
Elimination of risks associated with physical certificates such
as bad delivery, fake securities, delays in transit, thefts etc.
• Depository confirms rematerialisation request to the
Company's R&TA.
What rights are conferred on the nominee and how can he exercise
the same?
The nominee is entitled to all the rights of the deceased shareholder to
the exclusion of all other persons. In the event of death of the
shareholder, all the rights of the shareholder shall vest in the nominee.
In case of joint holding, all the rights shall vest in the nominee only in the
event of death of all the joint holders. The nominee is required to apply
to the Company by reporting death of the nominator along with the duly
attested copy of the death certificate. The nominee has an option to
decide to register himself as a shareholder or he/she could send an
application to have the shares transferred to any other person to whom
the nominator could have otherwise transferred the shares. If the
nominee opts to transfer the shares to a third party, he/she should
submit to the Company's R&TA, the transfer deed(s) duly stamped and
executed, along with the relevant certificate(s) and other documentary
proof(s). If shares are held in dematerialised form, nomination has to be
registered with the concerned DP directly, as per the format prescribed
by the DP.
•
Open Beneficiary Account with a Depository Participant (DP)
registered with SEBI.
• The Company's R&TA updates accounts and prints
certificate(s) and informs the Depository.
•
Submit Demat Request Form (DRF) as given by the DP, duly
signed by all the holders with the names and signatures in the
same order as appearing in the concerned certificate(s) and
the Company records.
• Depository updates the Beneficiary Account of the shareholder
by deleting the shares so rematerialised.
VI. NOMINATION FACILITY
•
Obtain acknowledgment from the DP on handing over the
share certificate(s) along with the DRF.
What is nomination facility and to whom it is more useful? What is the
procedure of appointing a nominee?
•
Demat confirmations are required to be completed in 21 days
as against 30 days (excluding time for despatch) for physical
transfer. Service standards prescribed by the Company for
completing demat is three days from the date of the receipt of
requisite documents for the purpose.
Section 109A of the Companies Act, 1956 provides the facility of
nomination to shareholders. This facility is mainly useful for individuals
holding shares in sole name. In the case of joint holding of shares by
individuals, nomination will be effective only in the event of the death of
all joint holders.
•
Receive a confirmation statement of holdings from the DP.
Statement of holdings is sent by the DPs from time to time.
Presently, confirmation is given by DPs on an immediate basis
through email or SMS facilities, thus enabling shareholders to
further trade in the securities immediately. Shareholders should
not send share certificate(s) / documents to the Company /
Company's R&TA directly.
Investors, especially those who are holding shares in single name, are
advised to avail of the nomination facility by submitting the prescribed
Form 2B to Karvy. The said Form may be downloaded from the
Company's website, www.herohonda.com under the section "Investor
Relations". However, if shares are held in dematerialised form,
nomination has to be registered with the concerned DP directly, as per
the format prescribed by the DP.
How to get dividend on dematerialised shares? Will such
shareholders be eligible for receiving Annual Report every year and
also to attend General Meetings?
Who can appoint a nominee and who can be appointed as a
nominee?
V. DEMATERIALISATION / REMATERIALISATION OF SHARES
Dividend of shareholders holding shares in dematerialised will be
credited through ECS/ electronically to the bank accounts as opted by
them while opening the Beneficiary Accounts with the DP. In other
cases, dividend warrants will be despatched to them with the bank
account details, as furnished by the Depositories, printed thereon.
Holding shares in dematerialised form will not have any adverse affect
on the rights of the Shareholders. As members of the Company, they
will be entitled to receive Annual Report, attend General Meetings and
participate and vote thereat to the extent of their shareholding.
Is pledge of dematerialised shares possible?
• Share certificate(s) is despatched to the shareholder.
Individual shareholders holding the shares / debentures in single name
or joint names can appoint a nominee. In case of joint holding, joint
holders together have to appoint the nominee. While an individual can
be appointed as a nominee, a trust, society, body corporate,
partnership firm, karta of HUF or a power of attorney holder cannot be
appointed as nominee(s). Minors can, however, be appointed as a
nominee.
How to avail of nomination facility for more than one folio?
There can be only one nomination for one folio. Folios having different
order or combination of names of shareholders will require separate
nominations.
•
Reduction in paperwork involved in transfer of securities;
Dematerialised shares can be pledged for the purpose of availing of
any funding / loan arrangement with a bank.
•
Reduction in transaction cost;
What is rematerialisation of shares?
•
No odd lot problem, even one share can be sold;
•
Change in address recorded with DP gets registered with all
companies in one go in which the investor holds securities
electronically thereby eliminating the need to correspond with
each of them separately;
It is the process through which shares held in demat form are
converted into physical form by issuance of share certificate(s).
It is possible to revoke / vary a nomination once made. If nomination is
made by joint holders, and one of the joint holders dies, the remaining
joint holder(s) can make a fresh nomination by revoking the existing
nomination.
What is the procedure for rematerialisation of shares?
Are the joint holders deemed to be nominees to the shares?
•
Easy Nomination facility;
•
Smooth Transmission of securities in case of any eventualities.
• Shareholders should submit duly filled in Rematerialisation
Request Form (RRF) to the concerned DP.
• DP intimates the relevant Depository of the request through the
system.
• DP submits RRF to the Company's R&TA.
0 8
Can a nomination once made be revoked / varied?
Joint holders are not nominees, they are joint holders of the relevant
shares having joint rights on the same. In the event of death of any one
of the joint holders, the surviving joint holder(s) of the shares is / are the
only person(s) recognized under law as holder(s) of the shares. Joint
Shareholders may together appoint a nominee.
VII. TRANSFER / TRANSMISSION / TRANSPOSITION / DUPLICATE
CERTIFICATES ETC.
How to get shares registered in favour of transferee(s)?
Transferee(s) need to send share certificate(s) along with share transfer
deed in the prescribed form 7B, duly filled in, executed and affixed with
share transfer stamps, to Karvy. It takes about 7 days for them to
process the transfer, although the statutory time limit fixed for
completing a transfer is one month under the Listing Agreement and
two months under the Companies Act, 1956.
The Government of India, Ministry of Finance, Department of Revenue,
has fixed the Stamp Duty on Transfer (whether with or without
consideration) of shares at the rate of twenty five paise (25 paise) for
every Rs. 100 or part thereof of the market value of the shares on the
date of execution of the transfer deed. The transfer deed is valid for a
period of one year from the date of presentation or till the book closure
date, whichever is later. In case the transfer deed has expired, the
holder may approach the Registrar of Companies to get the same
revalidated. In case of dematerialised shares, the shares are credited
to the purchaser's account by the respective Depository Participant
under the directions of the concerned Depository. Presently, transfer of
dematerialised shares does not attract stamp duty.
Can shares be transferred to a minor, Hindu Undivided Family, Firm,
Trust etc.?
Yes, shares can be transferred to a minor. In such a case the share
transfer deed is required to be signed by the natural guardian on behalf
of the minor.
In the case of Hindu Undivided Family (HUF) shares can be transferred
in the name of the Karta of HUF, in the case of a Firm shares can be
transferred to a partner of the firm and in the case of a Trust shares can
be transferred to a trustee of the trust.
11
10
Can single holding of shares be converted into joint holdings or joint
holdings into single holding? If yes, what is the procedure involved
in doing the same?
Transposition can be done only for the entire holdings under a folio and
therefore, requests for transposition of part holding will not be
accepted by Karvy.
Yes, conversion of single holding into joint holdings or joint holdings
into single holding or transfer within the family members leads to a
change in the pattern of ownership, and therefore, procedure for a
normal transfer as mentioned above needs to be followed.
What is the procedure for obtaining duplicate share certificate(s) in
case of loss / misplacement of original share certificate(s)?
How to get shares registered which are received by way of gift?
Does it attract stamp duty?
The procedure for registration of shares gifted (held in physical form) is
same as the procedure for a normal transfer. The stamp duty payable
for registration of gifted shares would be @ 25 paise for every Rs. 100
or part thereof, of the face value or the market value of the shares
prevailing as on the date of the document, if any, conveying the gift or
the date of execution of the transfer deed, whichever is higher. The
procedure for registration of shares gifted (held in demat form) is the
same as the procedure for transfer of shares in demat form in off
market mode.
What is the procedure for getting shares in the name of surviving
shareholder(s), in case of joint holding, in the event of death of one
shareholder?
The surviving shareholder(s) will have to submit a request letter
supported by a duly attested copy of the death certificate of the
deceased shareholder and accompanied by the relevant share
certificate(s). Karvy on receipt of the said documents and after due
scrutiny, will delete the name of the deceased shareholder from its
records and return the share certificate(s) to the surviving
shareholder(s) with necessary endorsement.
If a shareholder who holds shares in his sole name dies without
leaving a Will, how can his legal heir(s) claim the shares?
The legal heir(s) should obtain a Succession Certificate or Letter of
Administration with respect to the shares and send a true copy of the
same, duly attested, along with a request letter, transmission form, and
the share certificate(s) in original, to Karvy for transmission of the shares
in his / their name(s).
In case of a deceased shareholder who held shares in his / her own
name (single) and had left a Will, how do the legal heir(s) get the
shares transmitted in their name(s)?
The legal heir(s) will have to get the Will probated by the Court of
competent jurisdiction and then send to Karvy a copy of the probated
copy of the Will, along with relevant details of the shares, the relevant
share certificate(s) in original and transmission form for transmission of
the shares in his / their name(s).
How can the change in order of names (i.e. transposition) be
effected?
Share certificates along with a request letter duly signed by all the joint
holders may be sent to Karvy for change in order of names, known as
'transposition'.
Immediately on the knowledge of loss of share certificates, one should
inform Karvy. The information should contain the details of share
certificates so lost, folio no., no. of shares and other relevant
particulars. The said information needs to be signed by the first holder
as per the specimen signature recorded with Hero Honda Motors
Limited. Karvy after checking the details and signatures will mark a
cautionary stop on the folio to prevent any further transfer of such lost
share certificates. On receipt of such request Karvy will send the
complete procedure of obtaining duplicate share certificates.
In the meanwhile, one should lodge a complaint with the police
regarding loss of share certificates.
VIII.MISCELLANEOUS
Change of address
What is the procedure to get change of address registered in the
Company's records?
Shareholders holding shares in physical form, may send a request
letter duly signed by all the holders giving the new address along with
Pin Code. Shareholders are also requested to quote their folio number
and furnish a duly attested copy of any of the following documents i.e.
Ration Card / PAN Card / Passport / Latest Electricity or Telephone Bill /
Lease Agreement etc. towards proof of address.
If shares are held in dematerialised form, information about change in
address needs to be sent to the DP concerned.
Change of name
What is the procedure for registering change of name of
shareholders?
Shareholders' General Rights - interalia
• To receive not less than 21 days notice of general meetings
unless consented for a shorter notice.
• To receive notice and forms for Postal Ballots in terms of the
provisions of the Companies Act, 1956 and the concerned
Rules issued thereunder.
• To receive copies of Balance Sheet and Profit and Loss
Account along with all annexures.
•
To participate and vote at general meetings either personally or
through proxy (proxy can vote only in case of a poll).
• To receive dividends and other corporate benefits like bonus,
rights etc. once approved.
• To demand poll on any resolution at a general meeting in
accordance with the provisions of the Companies Act, 1956.
• To inspect statutory registers and documents as permitted
under law.
• To require the Board of Directors to call an extraordinary general
meeting in accordance with the provisions of the Companies
Act, 1956.
Duties / Responsibilities of Shareholders’
• To remain abreast of corporate developments, company
specific information and take informed investment decision(s).
• To be aware of relevant statutory provisions and ensure
effective compliance therewith.
• Not to indulge in fraudulent and unfair trading in securities nor
to act upon any unpublished price sensitive information.
• To participate effectively in the proceedings of shareholders'
meetings.
• To respond to communications seeking shareholders'
approval through Postal Ballot.
Shareholders may request Karvy for effecting change of name in the
share certificate(s) and records of the Company. Original share
certificate(s) along with the supporting documents like marriage
certificate, court order etc. should be enclosed. Karvy after verification,
will effect the change of name and send the share certificate(s) in the
new name of the shareholders. Shareholders holding shares in demat
form, may request the concerned DP in the format prescribed by DP.
IX. INVESTOR SERVICING AND GRIEVANCE REDRESSAL AT
EXTERNAL AGENCIES
Authority to another person to deal with shares
i) Ministry of Corporate Affairs
What is the procedure for authorising any other person to deal with
the shares of the Company?
Ministry of Corporate Affairs (MCA) has launched a major
e-Governance initiative - "MCA 21" on the MCA portal
(www.mca.gov.in). One of the key benefits of this initiative includes
timely redressal of investor grievances. MCA 21 system accepts
complaints under the e-form prescribed, which has to be filed online.
Shareholders need to execute a Power of Attorney in favour of the
concerned person and submit a notarised copy of the same to Karvy.
After scrutiny of the documents, they will register the Power of Attorney
and inform the shareholders concerned about the registration number
of the same. Whenever a transaction is done by the Power of Attorney
holder this registration number should be quoted in the
communication.
• To respond to communications of SEBI / Depository /
Depository Participant / Brokers / Sub-brokers / Other
Intermediaries / Company, seeking investor feedback /
comments.
0 8
• Debentures / Bonds
• Fixed Deposits - non receipt of amount
• Miscellaneous - non receipts
• Any other
The status of complaint can be viewed by quoting the Service Request
Number (SRN) provided at the time of filing the complaint.
ii) Investor Education and Protection Fund (IEPF)
IEPF is for promotion of investors' awareness and protection of the
interests of investors. IEPF through Investor Helpline is assisting
investors free of charge, in redressal of their grievances. It provides a
facility, to the investors, to lodge their grievance on the website itself.
This facility is available on website www.investorhelpline.in. The
complaints can be lodged on various issues such as:
• Refund Order / Allotment Advice related
• Non-Receipt of Dividend
• Non-Receipt of Share certificates / Units after allotment /
transfer / Bonus / Transmission etc.
• Non-Receipt of Debentures / Bond Certificate or Interest /
Redemption Amount
• Offer for Rights Issue
• Non-Receipt of Investments and returns thereon on Collective
Investment Schemes / Plantation Companies
• Non-Receipt of Annual Report / AGM Notice / Proxy Form
• Non-Registration of Change in Address of Investor
• Non-Receipt of Fixed / Public Deposits related amounts
• Demat related Grievances
iii) Securities and Exchange Board of India (SEBI)
SEBI, in its endeavour to protect the interest of investors, has provided
a platform wherein the investors can lodge their grievances. This facility
is available on the SEBI website (www.sebi.gov.in) under the Investor
Guidance Section. The complaints can be lodged on various issues
such as:
•
Non receipt of dividend
•
Non receipt of share certificates after transfer
•
Matters pertaining to non-receipt of allotment advice/ Refund
Orders
•
Matters pertaining to Debentures
•
Non receipt of letter of offer of rights
•
Any other
After lodging the complaint, the Investors can track the status as well.
The nature of complaint may relate to:
• Shares / Dividends
13
12
iv) Stock Exchanges
a.
National Stock Exchange of India Limited (NSE)
NSE has formed an Investor Grievance Cell (IGC) to redress investors'
grievances electronically. IGC is manned by a team of professionals
who possess relevant experience in the areas of capital markets,
company and legal affairs; especially trained to identify the problem
faced by the investor, and to find and resolve at the earliest. The
Investors have to log on to the website of NSE i.e. www.nseindia.com
and in the Investors Service Centre Section they can fill in Form I or
Form II depending upon the type of complaint and file the same
electronically with NSE. Generally, complaints are resolved within a
period of 45 days.
b.
Bombay Stock Exchange Limited (BSE)
BSE provides an opportunity to its members to file their complaints
electronically through its website www.bseindia.com under the
Investor Desk Section. Here again as in case of NSE, the Investors can
fill in various complaint forms depending upon the nature of their
complaint and file them electronically.
v) Depositories
a.
National Securities Depository Limited (NSDL)
In order to help its clients resolve their doubts, queries, complaints,
NSDL has provided an opportunity wherein they can raise their queries
by logging on to www.nsdl.co.in under the 'Query Now' section or an
email can be marked mentioning the query to relations@nsdl.co.in.
b.
Central Depository Services (India) Limited (CDSL)
Investors who wish to seek general information on depository services
may mail their queries to investors@cdslindia.com. With respect to the
complaints / grievances of the demat accountholders relating to the
services of the Depository participants, mails may be addressed to
complaints@cdslindia.com.
Regional Director (North)
A-14, Sector 1,
PDL Bhawan,
Noida - 201 301
Tel : 0120 - 2445342
Fax : 0120 - 2445341
Registrar of Companies (ROC)
4th Floor, IFCI Tower,
61, Nehru Place,
New Delhi - 110 019
Tel : 011 - 26235704
Fax : 011 - 26235702
National Securities Depository Limited (NSDL)
Trade World, A Wing, 4th & 5th Floors,
Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai 400 013.
Tel : 022 - 2499 4200
Fax : 022 - 2497 2993 / 2497 6351
Website : www.nsdl.co.in
Central Depository Services (India) Limited (CDSL)
Phiroze Jeejeebhoy Towers,
16th Floor, Dalal Street,
Mumbai 400 023.
Tel : 022 - 2272 3333
Fax : 022 - 2272 3199 / 2272 2072
Website : www.cdslindia.com
Registrars and Transfer Agents
Karvy Computershare Private Limited
Plot No. 17-24,
Vithalrao Nagar, Madhapur,
Hyderabad - 500 081
e-mail : mailmanager@karvy.com
Tel : 040 - 23420272 3333
Fax : 040 - 2272 3199 / 2272 2072
Bombay Stock Exchange Limited (BSE)
Phiroze Jeejeebhoy Towers,
Dalal Street,
Mumbai 400 001.
Tel : 022 - 2272 1233 / 4
Fax : 022 - 2272 1919
Website : www.bseindia.com
Ministry of Corporate Affairs
Shastri Bhawan, 5th Floor, A Wing,
Dr. Rajendra Prasad Road, New Delhi - 110 001.
Tel : 011 - 23384660, 23384470, 23389403
Website : www.mca.gov.in
The National Stock Exchange of India Limited (NSE)
"Exchange Plaza" Plot No. C/1,
"G" Block Bandra-Kurla Complex, Bandra (E),
Mumbai 400 051.
Tel : 022 - 2659 8100 / 8114
Fax : 022 - 22 2659 8120
Website : www.nseindia.com
IMPORTANT CONTACT DETAILS
ATTENDANCE SLIP
Regd. Office : 34, Community Centre, Basant Lok, Vasant Vihar, New Delhi - 110 057
Please complete this attendance slip and hand it over at the entrance of the meeting hall.
L.F. No.
No. of Shares Held
Dp.Id.*
Client Id.*
Name(s) in full
Father's/Husband's Name
Address as Regd. with the Company
1.
2.
Depositories
Securities and Exchange Board of India (SEBI)
SEBI Bhavan, Plot No. C4-A,
'G' Block, Bandra-Kurla Complex, Bandra (East),
Mumbai 400 051.
Tel : 022 - 26449000 / 40459000
Fax : 022 - 26598514
Website : www.sebi.gov.in
X.
0 8
3.
I/We hereby record my/our presence at the 25th Annual General Meeting of the Company being held on Thursday, September 25, 2008
at 11:00 a.m. at Airforce Auditorium, Subroto Park, Dhaula Kuan, New Delhi 110010.
Signature of the shareholder(s)/proxy**
1.
2.
3.
* Applicable for investors holding shares in electronic form
** Strike out whichever is not applicable
Note: Attendance slip in original should be complete in all respects.
No gift of any nature will be distributed at the Annual General Meeting.
The members seeking gifts may excuse us.
PROXY
Regd. Office : 34, Community Centre, Basant Lok, Vasant Vihar, New Delhi - 110 057
L.F. No.
No. of Shares Held
Dp.Id.*
Client Id.*
I/We;
Name(s) in full
Father's/Husband's Name
Address as Regd. with the Company
1.
2.
3.
being a member/members of Hero Honda Motors Limited hereby appoint
of
or failing him/her
of
as my/our proxy to vote for me/us and on my/our behalf at the 25th Annual General Meeting of the Company
being held on Thursday, September 25, 2008 at 11:00 a.m. at Airforce Auditorium, Subroto Park, Dhaula Kuan, New Delhi 110010.
Signature of the shareholder(s)
1.
Signature of Proxy(s)
2.
DD
MM
YY
Date:
* Applicable for investors holding shares in electronic form
3.
1.
Affix
15 Paise
Revenue
Stamp
2.
Note: The proxy must be returned so as to reach the registered office of the Company not less than 48 hours before the time for
holding the aforesaid meeting. The proxy need not be a member of the Company.

splendor plus - Hero MotoCorp

Transcription

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