Corporate Profile

The Hero Honda story began with a simple vision the vision of a mobile and an empowered India, powered by Hero Honda. This vision was driven by Hero Honda's commitment to customer, quality and excellence, and while doing so, maintain the highest standards of ethics and societal responsibilities. Twenty five years and 25 million two wheelers later, Hero Honda is closer to fulfilling this dream. This vision is the driving force behind everything that we do at Hero Honda. We understood that the fastest way to turn that dream into a reality is by remaining focused on that vision. There were many unknowns but we kept faith, and today, Hero Honda has been the largest two wheeler company in the world for eight consecutive years. Our growth has kept compounding. The company crossed the ten million unit milestone over a 19-year span. In the new millennium, Hero Honda has scaled this to 15 million units in just five years! In fact, during the year in review, Hero Honda sold more two wheelers than the second, third and fourth placed two-wheeler company put together. With Hero Honda, the domestic two wheeler market was able to show positive growth during the year in review. Without Hero Honda, the domestic market would have actually shrunk. Over the course of two and a half decades, and three successive joint venture agreements later, both partners have fine-tuned and perfected their roles as joint venture partners. What the two partners did was something quite basic. They simply stuck to

their respective strengths. As one of the world's technology leaders in the automotive sector, Honda has been able to consistently provide technical know-how, design specifications and R&D innovations. This has led to the development of world class, value - for- money motorcycles and scooters for the Indian market. On its part, the Hero Group has taken on the singular and onerous responsibility of creating world-class manufacturing facilities with robust processes, building the supply chain, setting up an extensive distribution networks and providing insights into the mind of the Indian customer. Since both partners continue to focus on their respective strengths, they have been able to complement each other. In the process, Hero Honda is recognized today as one of the most successful joint ventures in the world. It is therefore no surprise that there are more Hero Honda bikes on this country's roads than the total population of some European countries put together! The company's meteoric growth in the two-wheeler market in India stems from an intrinsic ability to reach out and come closer to its customers, with every passing year. Hero Honda's bikes are sold and serviced through a network of over 3500 customer touch points, comprising a mix of dealers, service centres and stockists located across rural and urban India. Hero Honda has built two world-class manufacturing facilities at Dharuhera and Gurgaon in Haryana, and its third and most sophisticated plant at Haridwar has just completed a full year of operations. It is difficult to imagine that all this has happened in the span of just two and a half decades!

The best is yet to come. During the year in review, Hero Honda powered its way in a market that, for all practical purposes, was feeling the full effects of the economic slowdown in India. With an economic recovery now clearly on the cards, Hero Honda is all set to ride into another summit. As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly puts it, "We pioneered India's two wheeler industry, we've steered it through difficult times; now it is our responsibility to set the pace again.''

KEY MILESTONES OF HERO HONDA

Year 1983 Event Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed 1984 1985 1987 1989 1991 1992 Hero Honda Motors Ltd. incorporated First motorcycle "CD 100" rolled out 100,000th motorcycle produced New motorcycle model - "Sleek" introduced New motorcycle model - "CD 100 SS" introduced 500,000th motorcycle produced Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder Managing Director, Mr. Raman Kant Munjal 1994 1997 New motorcycle model - "Splendor" introduced 1,000,000th motorcycle produced New motorcycle model - "Street" introduced Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998 1999

2,000,000th motorcycle produced New motorcycle model - "CBZ" introduced Environment Management System of Dharuhera Plant certified with ISO-14001 by DNV Holland Raman Munjal Memorial Hospital inaugurated A Hospital in the memory of founder Managing Director, Mr. Raman Kant Munjal

2000

4,000,000th motorcycle produced Environment Management System of Gurgaon Plant certified ISO-14001 by DNV Holland Splendor declared 'World No. 1' - largest selling single two-wheeler model "Hero Honda Passport Programme" - CRM Programme launched

2001

New motorcycle model - "Passion" introduced One million production in one single year New motorcycle model - "Joy" introduced 5,000,000th motorcycle produced

2002

New motorcycle model - "Dawn" introduced New motorcycle model - "Ambition" introduced Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and Zaheer Khan as Brand Ambassadors

2003

Becomes the first Indian Company to cross the cumulative 7 million sales mark Splendor has emerged as the World's largest selling model for the third calendar year in a row (2000, 2001, 2002)

New motorcycle model - "CD Dawn" introduced New motorcycle model - "Splendor +" introduced New motorcycle model - "Passion Plus" introduced New motorcycle model - "Karizma" introduced 2004 New motorcycle model - "Ambition 135" introduced Hero Honda became the World No. 1 Company for the third consecutive year. Crossed sales of over 2 million units in a single year, a global record. Splendor - World's largest selling motorcycle crossed the 5 million mark New motorcycle model - "CBZ*" introduced Joint Technical Agreement renewed Total sales crossed a record of 10 million motorcycles 2005 Hero Honda is the World No. 1 for the 4th year in a row New motorcycle model - "Super Splendor" introduced New motorcycle model - "CD Deluxe" introduced New motorcycle model - "Glamour" introduced New motorcycle model - "Achiever" introduced First Scooter model from Hero Honda "Pleasure" introduced 2006 Hero Honda is the World No. 1 for the 5th year

in a row

HERO HONDA'S MISSION

Hero Hondas mission is to strive for synergy between

technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATE

Hero Honda is a world leader because of its excellent manpower, proven management, extensive dealer network, efficient supply chain and world-class products with cutting edge technology from Honda Motor Company, Japan. The teamwork and commitment are manifested in the highest level of customer satisfaction, and this goes a long way towards reinforcing its leadership status.

BOARD OF DIRECTORS
No. Name Directors of the Designation

1 2 3 4 5 6 7 8

Mr. Brijmohan Lall Munjal Mr. Pawan Munjal Mr. Toshiaki Nakagawa Mr. Sumihisa Fukuda Mr. Om Prakash Munjal Mr. Sunil Kant Munjal Mr. Masahiro

Chairman & Whole-time Director Managing Director & CEO Joint Managing Director Technical Director Non-executive Director Non-executive Director Non-executive Director

Takedagawa Mr. Satoshi Matsuzawa Non-executive Director (Alternate Director to Mr. Takashi Nagai) Mr. Pradeep Dinodia Gen.(Retd.) V. P. Malik Mr. Analjit Singh Dr. Pritam Singh Ms. Shobhana Bhartia Mr. Meleveetil Damodaran Mr. Ravi Nath

9 10 11 12 13 14. 15.

Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director Non-executive & Independent Director

KEY POLICIES
AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY At Hero Honda, our goal is not only to sell you a bike, but also to help you every step of the way in making your world a better place to live in. Besides its will to provide a high-quality service to

all of its customers, Hero Honda takes a stand as a socially responsible enterprise respectful of its environment and respectful of the important issues. Hero Honda has been strongly committed not only to

environmental conservation programmes but also expresses the increasingly inseparable balance between the economic concerns and the environmental and social issues faced by a business. A business must not grow at the expense of mankind and man's future but rather must serve mankind. "We must do something for the community from whose land we generate our wealth." A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal.

Environment Policy
We at Hero Honda are committed to demonstrate excellence in our environmental performance on a continual basis, as an intrinsic element of our corporate philosophy. To achieve this we commit ourselves to:

Integrate environmental attributes and cleaner production in all our business processes and practices with specific consideration to substitution of hazardous chemicals, where viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility.

Comply with all applicable environmental legislation and also controlling our environmental discharges through the principles of "alara" (as low as reasonably achievable).

Institutionalise resource conservation, in particular, in the areas of oil, water, electrical energy, paints and chemicals. Enhance environmental awareness of our employees and dealers / vendors, while promoting their involvement in ensuring sound environmental management.

Quality Policy

Excellence in quality is the core value of Hero Honda's philosophy. We are committed at all levels to achieve high quality in whatever we do, particularly in our products and services which will meet and exceed customer's growing aspirations through:

Innovation in products, processes and services. Continuous improvement in our total quality management systems. Teamwork and responsibility.

Safety Policy Hero Honda is committed to safety and health of its employees and other persons who may be affected by its operations. We believe that the safe work practices lead to better business performance, motivated workforce and higher productivity.

We shall create a safety culture in the organization by:

Integrating safety and health matters in all our activities. Ensuring compliance with all applicable legislative requirements.

Empowering employees to ensure safety in their respective work places. Promoting safety and health awareness amongst

employees, suppliers and contractors.

Continuous improvements in safety performance through precautions besides participation and training of employees.

FUEL ECONOMY - DO'S & DONT'S

Stretch That Litre In order to get the maximum mileage from your motorcycle you should keep the following points in mind. DO's Drive at steady speed (between 40 to 50 km/hr)

Maintain correct tyre pressure Adjust drive chain tension correctly Get your engine tuned and motorcycle serviced regularly by a Hero Honda authorised dealer

DONT's

Do not keep the clutch lever pressed while riding

Do not run the engine in low gear for long times Do not park your motorcycle under direct sunlight as it causes evaporation of petrol Do not keep brake pedal pressed while riding Do not raise the engine rpm during traffic halts Switch off the engine if the halt is for more than 30 seconds Do not cover Inlet of Air Filter assembly Do not cover the engine in the front and sides. This may restrict the smooth air flow to the engine fins required for air cooling and the engine may run at a higher temperature.

PRODUCTS

SPECIFICATION

SALES PERFORMANCE
HERO HONDA REPORTS LEADERSHIP PERFORMANCE WITH 50 % NET PROFIT IN Q2, '08-09. DEFIES INDUSTRY TREND WITH TURNOVER (NET SALES & OTHER OPERATING INCOME), AT RS. 3202 CRORE; EBIDTA AT 13.58 PER CENT

Aug'06 Total Sales 2,15,076

Aug'07 2,40,875

FY 06-07 12,82,860

FY 07-08 12,63,254

Highlights of Q2, FY'08-09 Total turnover(Net sales & Other Operating income)Rs 3202 crores, growth of 35.6 per cent Net profit after tax at Rs 306.30 crores, growth of 50 per cent EBIDTA margin for the quarter 13.58 per cent

 Total sales for Q2 stands at 9,72,095 units, growth of 28.5 per cent Total sales for H1 stands at 18,66,349, growth of 19.7 per cent Over 55 per cent share in domestic motorcycle market Launches first-of-its kind music video to celebrate 25 years of Hero Honda

New Delhi, October 21, 2008: Hero Honda Motors Ltd (HHML), the world's largest two-wheeler company for seven consecutive years, today firmly reiterated its undisputed leadership in the domestic two-wheeler market with impressive bottom line growth for the second quarter (Q2) July to September - of this financial year (FY) 2008-09. Even as the industry continued to face tough market conditions on account of uncertainty over interest rates and overall credit squeeze, the company reported 50 per cent growth in profit after tax (PAT) at Rs 306.30 crore for the second quarter. Hero Honda's profit after tax in the corresponding period last fiscal (July - Sept, 2007-08) stood at Rs 204.33 crore. Total turnover (Net sales & Other Operating income) grew to Rs 3202 crore, a growth of 35.6 per cent over Rs 2361 crore recorded in the corresponding period last fiscal. The company has recorded an EBIDTA margin of 13.58 per cent in the quarter. The EBIDTA margin in the previous quarter (April - June '08) was 12.20 per cent. The strong financial performance is in line with the company's better-than-industry top line growth. After posting a growth 11.38 per cent in the first quarter, the company kicked off the second

quarter with a 39.8 per cent growth in sales in the month of July, and followed up with 26.8 per cent growth in August and 22.4 per cent in September. Hero Honda consistently keeps growing its share in the domestic motorcycle market, and currently enjoys over 55 per cent share. Hero Honda's cumulative sales for the second quarter (Q2) this FY stands at 9,72,095 units - a growth of 28.5 per cent over Q2 last FY (2007-08). The cumulative sales for the first six months (H1) stands at 18, 66,339 units of two-wheelers compared to 15, 59,486 units sold in H1 in the last FY reflecting a consistent 19.7 per cent growth in cumulative sales.