Submitted To

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Submitted By: Gagandeep Singh(84010) Tavleen Bajaj(84055)

RIMT Maharaja Aggrasen Engineering College

ACKNOWLEDGEMENT

We wish to thank Dr.Japneet Kwatra for her valuable editorial contribution during the preparation of this manuscript. My special thanks to Lect. Ms. Urvashi Vashisht,who assisted in the preparation of this manuscript. We would also like to express our gratitude to all those who gave us the possibility to complete this report. We are also greatly indebted for the co-operation and guidance of our friends throughout the project report. further we would also like to express our gratitude towards the university authority for beginning a program which enables us to learn a lot in this process.

PREFACE

In this report the reader will encounter the entire journey of hero group, starting from its evolution to, its growth, to achievements, purpose of being formulated, and the companies which they established and are the part of hero group today. Finally I wish to thank Mr Er.Harinder Singh for reliving us of the burden of revising many of the topics in the report and contributing new material. We consider ourself lucky enough to go through this project;really,it was a great learning experience. In this report we have tried to give comprehensive picture of details of our project. The reason why we choose this topic was that the hero group is one o the most recognized business houses in India and we were really attracted to go through a complete study of this business group.

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY 2. INTRODUCTION 3. COMPANY PROFILE 4. COMPANY PRODUCTS 5. EVOLUTION & GROWTH. 6. CONCLUSION 7. APPENDICES 8. BIBLIOGRAPHY

EXECUTIVE SUMMARY
Hero group was established in 1944 in Amritsar as a bicycle spare parts business. After independence and partition of India they shifted to Ludiana and commenced a business unit “HERO CYCLES” IN 1956. HERO is a brand name associated with two-wheelers in India and is being owned by Munjal brothers i.e Mr Satyanand Munjal,Mr Omprakash Munjal,The Late Mr Dayanand Munjaland The Late Mr Ramankant Munjal. Hero group ranks amongst the top ten Indian business houses comprising 20 companies. It is a vast conglomerate of companies either in the form of collaborations, joint ventures or fully owned subsidiaries with more than Rs10000 crore turnovers annually. It is a group now being 50+years old and is a now one of the most widely recognized bands. It has sold more than 15 million motor cycles and 100 million bicycles in the last 50 years. It has a huge segmented market of its products and services and still are targeting towards potential customers. They export their product to more than 90 countries. Its market capitalization was 4,179 USD million by 2006its revenue touched to 3188 US $Mn. in 2006.

INTRODUCTION
Hero, the brand name synonymous with two-wheelers in India, is a multi-unit, multi-product, geographically diversified, Group of Companies - the reflection of the steely ambition and indomitable grit of the Munjal Family ... Trace the saga of the "Hero" - through more than 50 years of Enterprise and Achievements, of Vision and Planning. Always blazing through the trails of success……… The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured in. The Group's low key, but focussed, style of management has earned the plaudits amidst investors, employees, vendors and dealers, as also worldwide recognition. The growth of the Group through the years has been influenced by the number of factors: The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-intime inventory. The Group boasts of superb operational efficiencies. Every assembly line worker operates two machines simultaneously to save time and improve productivity. The fact that most of the machines are either developed or fabricated in-house, has resulted in low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been working since the beginning of production in the unit and is functional even till date. The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory. This is the Japanese style of production and in India, Hero is the first company to have mastered the art of the just-in-time inventory principle

History
Hero group was started by the four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan in the year 1944 by establishing bicycle spare parts business in Amritsar. After independence and partition of India, they moved to Ludhiana and started a bicycle unit called Hero Cycles in 1956. By 1975, Hero cycles became the largest bicycle manufacturer in India. In 1984, Hero group joined Honda Motors of Japan to create Hero Honda Motors Limited which soon became one of the market leader in motor-cycle sales in India. In 1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world. By the year 2004, Hero Honda became the world' largest manufacturer of two-wheelers with over 48% market share in India. In year 2006, Hero Honda entered the scooter production with launch of its new model - Pleasure.

The Beginning
We look over our shoulders, we see the past. We use it to make a better present and a beautiful tomorrow, as tomorrow isn’t just another day, it’s another chance for us to better ourselves and to excel. Hero Cycles is a product of this philosophy. The philosophy that instills commitment, team work and foresight. Hero’s colossal journey started before independence. The four Munjal brothers, hailing from a small town called Kamalia, now in Pakistan, are the men who are behind the mission. Brotherhood apart, what knit the men together was the wealth of will, integrity, ambition & determination. In the year 1944, they decided to start a business of bicycle spare parts in Amritsar. Its is modest beginning and the next 3 years saw the business grow rapidly.But the dark clouds of partition eclipsed their plans of the future. With renewed vigour and optimism, the operational base was shifted to Ludhiana. By 1956, the brothers had began manufacturing key components of bicycles and as a logical way forward, began to assemble the entire cycle at their manufacturing plant in Ludhiana. In the early days, the plant had a capacity for 25 cycles per day. Over the next few years, the Bicycle Unit started growing in stature and size, attracting skilled engineers, technocrats, administrators and entrepreneurs. From a modest beginning of mere 639 bicycles in the year 1956, Hero Cycles products over 18500 cycles a day today, the highest in global reckoning. With the 48% share of the Indian market, this volume has catapulted Hero in the ‘Guinness Books of World Records’ in 1986 and edge over global players is being maintained since then. A tiny acorn has now become a mighty Oak. From cycle to two - wheelers was a natural step, and the Hero Group came into being. The Hero Group, today, is a vast conglomerate of companies, either in the form of collaborations, joint ventures or fully owned subsidiaries, with more than Rs. 10000 Crore turnover annually. Hero Group, besides being the world’s largest manufacturers of bicycles, motorcycles and chains to this date, has diversified into newer segments like Information Technology, IT Enabled Services and Financial Service

The Vision
"We, at the Hero Group are continuously striving for synergy between technology, systems and human resources to provide products and services that meet the quality, performance, and price aspirations of the customers. While doing so, we maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the group to excellence in everything we do."

The Mission Statement
"Its our mission to strive for synergy between technology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of our customers. While doing so, we maintain the highest standards of ethics and societal responsibilities. " This mission is what drives us to new heights in excellence and helps us forge a unique and mutually beneficial relationship with all our stakeholders. We are committed to move ahead resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr. Om Prakash Munjal, the late Mr. Dayanand Munjal and late Mr. Raman Kant Munjal. Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP.

Company Profile

"Hero", the brand name symbolizing the steely ambition of the Munjal brothers, came into being in the year 1956. From a modest manufacturer of bicycle components in the early 1940's to the world's largest bicycle manufacturer today, the odyssey was fueled by one vision - to build longlasting relationships with everyone, including workers, dealers and vendors. This philosophy has paid rich dividends through the years. Hero, a name synonymous with two wheelers in India is today a multi-unit, multi-product, geographically diversified Group of companies. Through fully integrated operations, the Munjals roll their own steel, make critical components such as free wheels for their bicycles, and have the foresight to simultaneously diversify into myriad ventures, like product designing, IT enabled services, finance and insurance, just to name a few. Like every success story, Hero's saga contains an element of spirit and enterprise; of achievement through grit and determination, coupled with vision and meticulous planning. Throughout its success trail, the Hero Group and its members have displayed unwavering passion of setting higher standards for themselves and delivering simply the best to their customers. The Hero Group philosophy is: "To provide excellent transportation to the common man at easily affordable prices and to provide total satisfaction in all its spheres of activity." Thus apart from being customer-centric, the Hero Group also provides its employees with a fine quality of life and its business associates with a total sense of belonging. "Engineering Satisfaction" is the prime motive of the Hero Group and it has become a way of life and a part of the work culture of the Group. This is what drives the Group to seek newer vistas, adopt faster technology and create quality driven products to the utmost satisfaction of customers, partners, dealers and vendors. Today the Hero Group has a number of accolades and achievements to its credit … yet consumer requirements and newer technologies provide fresh challenges every day, and at Hero the wheels of progress continue to turn ...

Products/Services

Motorcycles Cycles, Auto Components, and Cold Rolled Steel Shock Absorbers Aluminium Castings & Pistons Mopeds, Scooterette, and Health Care Equipment International Trading Arm Auto Components Cycle and Auto Components Cycle Components, Auto Components, and Machine tools Financial Services Two-Wheelers Non Ferrous (Aluminium) Castings Sheet Metals and Fabricated Auto Components Financial Services IT, Training & Education , Insurance Distribution Product & Engineering Design Payment Services IT Enabled Services Auto Components

GROWTH

One of the most widely recognized brands in India Members – among the leaders in their business Hero Cycles is the World’s largest bicycle maker Hero Honda is the World’s largest two wheeler Manufacturer Others include Auto components, Engineering design, Call Centre/ BPO, Training & Learning Market capitalization of over €3.43 billion (USD 4.18 bn) Global partnerships: Over 5,000 business associates Over 23,000 employees Sold more than 15 million motorcycles and 100 million bicycles in the last 50 years:

Hero strategy that made hero cycles and hero Honda global leaders, revolved around five themes
Hero Group NOT only as a “low cost provider” but also as “VALUE FOR MONEY” provider Build strong alliances and relationships with all stakeholders in the chain Benchmark against best global practices Product Innovation keeping in mind the sensitivities of the target market Strong culture of performance Hero Group has always believed in growth through

Hero group has always believed in growth through partnerships and sharing the fruits of growth
International partnership

Hero Honda motors are most successful Honda joint venture, worldwide functioning for now over two decades. The relationship with SHOWA corporation, japan is over 20 years old and Munjal Showa is the largest manufacturers of shock absorber in India. Partnership with other stakeholders. Large number of five thousand has had a successful partnership with group for over four decades. The group has helped develop a large number of venders who have grown along with companies and therefore have a strong commitment in success of the business. The group enjoys a very healthy respect amongst institutions including banks, central and state government.

RatiHero Group’s Ability to Compete
• The Group has a proven track record of managing long term relationships with its domestic as well as global partners • The Group has demonstrated capabilities to manage a large pool of people (23,000+ employees) which is a pre-requisite for success in this business • The Group has consistently exceeded customer expectations by understanding their needs both expressed and implied • The Group’ s value proposition is based on providing value for money by managing cost (without compromising on quality) and efficient use of resources • The Group has attained leadership position through its service orientation

Financial Growth
Hero Honda has a strong record over nearly five decades.

COMPTETIVE ADVANTAGE
1 Technological tie-up: hero group ties-up with Honda motors,japan give it edg over other domestic peers in two ways: (a) company does not have to earmark funds for technological research and can concentrate more on market expansion. (b) the company’s access to ready-to-use technology of international standards give it the opportunity to enter in international market as well. The company pays hero Honda a royality of approximately 2.4 per cent of net sales.

2 Dealer and service network: the dealer and after sales service network forms a crucial part of success formula for any consumer product. The same applies to two-wheeler industry. It has the highest number of service centre approximately 3000 as well as highest sales per dealer. 3 Concentration on rural areas: The company currently derives approximately 60% of its revenues from rural areas. The company is connected to over 18000 villages through its rural programs such as “ har gaon har angan”. Besides the company has employed over 500 special trained rural sales executive at the dealership level. 4 Less dependence on credit sales: It derives approximately 10% of its sales through financing.

Two Wheeler Industry (Sales of 5090594 units in April-November 08)

Motorcycle (79%)

Scooters (15%)

Mopeds (6%)

Industry Leaders: Hero Honda (58%) Bajaj Auto (24%)

Industry Leaders: HMSI (58%) TVS Motors (22%)

Industry Leaders TVS Motors (99%)

TVS Motors (8%) Kinetic Motors (0.5%)

Hero Honda (12%)

Growth in terms of revenues
Over the last couple of decades, the main reason behind the growth of Hero Group is their approach, which is based on technology, marketing and manufacturing expertise. The main focus of the group is on managing finance and resources. It also focuses on high labour productivity and low employee turnover. [11] Growth in revenue and net profits

The graph provided, shows the group’s growth in revenue (in US$ Mn) since 1997-98 till 2005-06. As is clearly visible from the graph, the company has increased its revenue from $ 555 Mn in 1997-98, to $ 3188 Mn in 2005-06, i.e. an increase of $ 2633 in the span of 8 years. [9] Not only was there a tremendous rise in revenues, but also in the net profits for the group. For the same time period, the company witnessed a growth from $ 27 Mn in 1997-98 to $ 255 Mn in 2005-06. [9] Graph 1: Showing Growth of the Group in revenue and net profit. [9] Revenues (US$ Mn) Years 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 555 681 829 1110 1455 1810 2269 2751 3188 27 39 55 70 120 137 203 218 Profit (US$ Mn)

Marketing Strategies
Hero Group’s philosophy is based on the understanding of consumer demands, market segments and available opportunities. The strategy is totally customer driven, with nation wide network of dealers, making sure that the group’s product is accessible throughout the country. At the same

time, upgrading to new technologies and committed service has been the main reason behind the successful growth of the group. [5]

Strategy:
According to the Greg Fisher, many International businesses, especially MNCs, develop strategies for three distinct levels within the organization to cope with the complexities of the international strategic management. [6] These levels of strategies are: 1. Corporate strategy. [6.1] 2. Business strategy. [6.1] 3. Functional strategy. [6.1] Throughout the years of its growth, Hero Group has actively looked at diversification. The use of Related Corporate Diversification strategy after company’s growth in manufacturing activities led to the establishment of the Hero Cycles Cold Rolling Division, Munjal and Sunbeam Castings, Munjal Auto Components and Munjal Showa Limited amongst other component-manufacturing units. [11] Then there were the expansion into the automotive segment with the setting up of Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic, went into commercial production in 1978. Then came Hero Motors which introduced Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of Austria. Then the group looked into other industrial segments for its further growth, and followed Unrelated Diversification Strategy to enter into other segments like exports, financial services, information technology, which includes customer response services and software development. Further expansion is expected in the areas of Insurance and Telecommunication.

Mode of entry in the international market

In the domestic market, Hero cycles soon started giving good competition to already wellestablished players in the market such as Hind cycles and Atlas cycles. The major reason behind this was the fact that the Hero cycles were comparatively cheaper and was sturdy and reliable, giving the customers value for their money. [5] After the group success in the domestic market, Munjal brothers looked for International market for further growth, to achieve additional sales, and to extend its product’s life cycle. To enter into the Global market, Hero Groups used one of the simpler and common modes of market entry i.e. exporting [5] Until 1960s there were not many Indian companies, into exporting bicycles. But, after 1963, when the Hero Group started exporting bicycles, a new era of export started in the Indian bicycle segment. The Hero Group initially started exporting to Africa and Middle East, but now there major export is to Europe and America. [3] To meet the requirements in the international market, this group has been constantly changing to newer and better technologies. It has also taken some extra measures like setting up a special Export Oriented Unit (EOU) named Gujarat Cycles Limited (now Munjal Auto Industries Limited), to cope up with requirements for international standards. The main areas where this unit exports its manufactured products is in the markets of developed countries like France, Germany, United Kingdom, etc , where the requirements are of high standard. [3] Not only in the cycle’s segment, but the group also excelled in other fields in the international market, like the Hero Majestic Moped was a huge success not only in the Indian market, but also in the International market. This eventually made the Hero group moped as the largest exported moped from India. Another bike “Hero Puch” was the first Indian bike to be assembled outside India. It was first assembled in Spain, and then had its assembly plants in Mauritius and Egypt. Now it has become quite popular in various countries like Paraguay, Mexico, Argentina, Turkey and Holland. The Group’s company, Munjal Showa Limited is one of the largest suppliers of shock absorbers to major auto giants in Japan, U.S., and the U.K. in developed markets. [3]

Another division of the group was formed in 1993, “Hero Exports”, which was responsible for the International trading of the group for all the segments, and was also recognized by the Government of India as a trading house. [3] The recent development in International market for the group is in the field of Software Development and the ITES industry through Hero Corporate Service Limited. It provides services to various corporations in the USA, UK, and Australia. To further facilitate its exports it has set up its offices in UK and USA to manage their corporate relationships. [3]

International market:
Fig 1: Different countries where ‘Hero Group’ provide their services and products [3] Hero cycles Hero Honda motors Hero Motors Hero Corporate Service Limited Hero Management Service Limited (Hero ITES) Munjal Showa Limited Other then exporting, hero group has also actively participated in joint ventures with many companies located in international as well as local market; Hero entered a joint venture for technical and financial participation with one of the world's largest automotive makers, Honda Motor Company Limited, Japan, in 1984. This joint venture was formed to manufacture the companies’ first 100cc motorcycle for the Indian market. [4] In order to provide low-cost and fuel efficient two-wheeler for the market hero group entered into technical collaboration with Steyr Damiler Punch, Austria in 1987

Another company of hero group which is named as Munjal Showa Limited was formed when group collaborates financially and technically with Showa Corporation, Japan in order to manufacture front forks, shock absorbers, and gas struts. [4] In order to grow its bicycle segments and to improve its production hero cycle’s cold rolling division was set up with technical collaboration with Wean United, USA. And Kawasaki Steel Corporation, Japan. [4] After the successful joint ventures and market growth in bicycles and two-wheelers, Hero Group’s Munjal-eSystems, which is a Microsoft Gold certified partner and also a ISO 9001:2000 certified company, started expanding in Enterprise-oriented and Software Solutions division. [4] Another sector Hero Mindmine, has provided extensive services in the BPO/Customer service for various sectors such as Airlines,IT, Pharma, FMCG, etc. For training purpose for the same, it has alliance with two other companies: 1. DynEd Corporation, that provides classroom coaching for English and Multimedia. [4] 2. ACS Incorporated, USA, which is a fortune 500 company, that helps HeroITES to provide services in customer acquisition and customer interaction for the BPO industry. Combined they provide services to countries like the US, Canada, Argentina and India. [4] It also has various alliances in Production Engineering industry. Hero Global Design is the exclusive representative of Porsche Design GesmbH (studio) in India. For industrial and automobile design, it has venture with German company Target Design. [4]

Marketing Mix
To appeal to the customer in a powerful way, it is necessary to analyze the marketing mix or the four P’s of marketing, that are, 1. Product Strategies

2. Place or Distribution Strategies. 3. Pricing Decision. 4. Promotion Strategies.

Product Strategies
In order to develop its product strategy the group relies on the 3 R's-- Reach, Research and Reliability as its basic building blocks. Using feedback from the market, a fully-equipped R&D center has consistently created best practices in designing, testing and harmonization. This emphasis has helped Hero group to build the products that are ahead of their time. [6.2, 7]

Place or Distribution strategies
Distribution is nothing but the link between the company and the end users. Place strategy involves consideration of distribution, that the product or service takes between the production and the final consumer. This strategy is different for different countries, so group spends a considerable amount of time in examining the different systems that are in place, criteria to choose distributors and channels and how the distribution segmentation can be accomplished. [6.2, 7] However it is difficult to standardize the distribution system and to use the same approach in every country, so there are many differences to be considered while developing the distribution strategy. Some of the approaches that the group considers for developing this strategy are consumer spending habits, location where consumers are used to buying, selecting the best possible distributor to carry their product, checking the financial strength of the distributor, considering the nature of the market and the competition etc. [6.2, 7]

Pricing strategy
Again pricing strategy of the group differs from country to country. The different factors that the group considers for developing there pricing strategy are government control, market diversity, currency fluctuations, and price escalation forces.

For developing countries like India, they have come up with special economical product to suit everyone’s need. For instance, they manufacture motorcycles for different sections. To attract more customers and make it accessible to everyone the pricing for these bikes starts from as low as AUD $800 for CD 100 bikes and varies to high-end bikes such as Karizma which is worth AUD $2500 and so on. [6.2, 7]

Promotion Strategies
The Hero Group promotes their goods and services through advertising and personal selling. However, specific approach differs as per the products nature. They have promoted their product with advertising in different ways right from print media to slogans and campaigns. Through sponsoring different events, such as Hero Honda Sa Re Ga Ma Pa or Campus Rock Idols, which generally involve common people, they have become very popular in the public. [7, 8] They also actively participate in social activities, to gain the trust and confidence of their customers. They have done a lot of work of socio-humanitarian nature in different fields such as healthcare, education, environment, public amenities, sports and entertainment, donations in both cash and kind, employment generating programs, adult literacy mission, rural health care and safety awareness programs. [6.2, 7, 8]

SWOT Analysis
Strength Weakness

Latest Upgraded Technology, Well known Brand name,

Comparatively new in other industries like the ITES industry. Very few services and products offered to the

Good Public Image, Strong Market Share, Long lasting Business relationship with workers, dealers and Vendors, Strong dealer network across the world, Skilled Workforce, High labor productive rate in the world, Constantly Innovated Products and ideas, Has strong R&D department, Has strong marketing & management team, Reputation for production of high quality goods, Collaborations with most advance players in the market, Opportunities Still can diversify further in many areas like Four wheeler Industry, Telecommunication sector, Bank sector, FMCG products, Retail industries, etc.

higher income group.

Threats High competition from other companies in the same industry, like from Bajaj Automobiles in the two-wheeler industry, or TI in the bicycle manufacturing department in

India. Demand of bicycles is decreasing

Milestones
Hero’s success saga contains the element of courage, great, determination, enterprises and perseverance coupled with vision and meticulous planning: 1956 Hero Cycles Ltd. is established. 1961 Rockman Cycle Industries Ltd. Established, which is today the largest manufacturer of bicycle chains & hubs in the world. 1963 Bicycles exports take off from India – a faray into the international market. 1971 Highway Cycles was set up. It is today the largest manufacturer of single speed & multi-speed freewheels in the country. 1975 Hero Cycles Limited became the largest manufacturer of bicycles in India. 1978 Majestic Auto Limited was formed and Hero Majestic Moped was introduced. 1981 Munjal Casting established. 1984 Hero Honda Motors Limited established in joint venture with Honda Motors, Japan to manufacture Motorcycles. It is now the world’s largest producer of two-wheelers. 1985 Munjal Showa Ltd. established to manufacture shock absorbers and sturts and is today one of the topmost shock absorber manufacturer companies in this country. 1985 100 cc Hero Honda Motorcycle was launched, which, later on in 1988, became No.1 among all motorcycles in India.

1986 Hero Cycles Limited entered the Guinness Books of World Records as the largest bicycle manufacturer in the world. 1987 Hero Motors, a division of Majestic Auto Limited set up in collaboration with Steyr Diamler Puch of Austria. 1987 Gujarat Cycles Limited, now known as Munjal Auto Centre Ltd. was established to manufacture and export state-of-the-art bicycles and light products in its full automated plant at Wagodia. 1987 Sunbeam Auto Limited, earlier a unit of Highway Cycle Ind.Ltd., established as an ancillary to Hero Honda. It has the largest die casting plant in India. 1988 Hero Puch was introduced by Hero Motors Ltd. which was a revolutionary machine to set new records of petrol efficiency in 50 to 65 cc engines. 1989 Ranger bicycles (a generic name for Mountain Bikes today) was introduced by Hero Cycles Limited. 1990 Hero Cold Rolling Division established, which is one of the most modern steel cold rolling plants in India. 1991 Hero Honda received National Productivity Council Award and also the Economic Times – Harvard Business School Association Award against 200 contenders. 1991 Hero Cycles introduced Kidd – the first branded bike in children’s segment. 1992 Hero Cycles introduces Impact, the first citibike in India. 1992 Munjal Showa Ltd. received national safety award.

1993 Hero Exports was established as International Trading Division for group & non-group products. 1995 Hero Corporate Services Ltd. was established. 1995 The first exerbike from Hero Group was introduced with the name – Allegro. 1996 Hero Winner, a large wheeled scooter with a choice of 50 cc & 75 cc engines was launched by Hero Motors Ltd. 1996 Munjal Showa Ltd. received British Council’s National Safety Award. 1998 Hero Briggs & Stratton Auto (P) Ltd. was set up to produce 4-stroke two wheeler engines in various cubic capacities. 1998 Munjal Auto Components established to manufacture gear shaft & gear blanks for motorcycles. 2000 The first fully automated bicycles by the name ‘POWERBIKE’ was introduced by Hero Cycles Limited. Hero Corporate diversified into I.T. and I.T. Enabled Services through its services segment Hero Corporate Services Limited. 2001 Hero Honda emerges as the market leader in motorcycles with the sales of over a million motorcycles and a market share of 47%. 2001 Hero Global Design established to offer engineering services in CAD/CAM/CAE related to new product development design, engineering, manufacturing. 2002 Hero Cycles Limited ties up with National Bicycle Industries, a part of Matsushita Group, Japan, to manufacture high end bicycles. 2002 Fastener World established. 2002 Easy Bills Limited established to offer utility bill collection and retail services.

2003 Super Starter Series launched by Hero Cycles Limited. 2003 Tie-up with Live Bridge Inc., U.S.A., Aprilia Scooters, Haly & Bombardier Rotax GmbH of Germany. 2003 Hero Honda continues to be the world’s largest manufacturer of two-wheelers with the market of more than 48%. 2004 Hero Retail Insurance Business established. 2004 Super Smart Series introduced by Hero Cycles Limited.

The Achievements
The Group and its management have acquired a number of accolades and achievements over the years: Hero Group Management style has been acclaimed internationally by World Bank and BBC, UK. Hero Group is discussed as a case study at London Business School, UK and INSEAD, France. World Bank has acclaimed Hero Cycles as a role model in vendor development based on a worldwide study. The London Business School, UK, has done a case study on the Group as model of entrepreneurship. Boston Consulting Group has ranked Hero Group as one of the top ten Business Houses on Economic value, in India. HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05. The Hero Group is recognized as a long term partner and an ideal employer: -- Hero Group's partnership with Honda Motors, Japan is over 20 years old -- Hero Group's Partnership with Showa Manufacturing Corporation, Japan is over 18 years old. Group Chairman, Mr Brijmohan Lall Munjal received the coveted "Ernst & Young Entrepreneur of the Year" award for 2001.

Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asia's leading companies award (2003) by Far Eastern Economic Review.

Hero Cycles is the World's largest manufacturer of Bicycles with annual sales volume of over 4.8 million cycles. Hero Cycles Limited is a Guinness Book Record holder since 1986 as the world's largest manufacturer of bicycles, with annual sales volume of 5.2 million bicycles in FY 2004. Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession.

Hero Group of Companies
Hero Group ranks amongst the Top 10 Indian Business Houses comprising 18 companies, with an estimated turnover of US$1.8 billion during the fiscal year 2003-2004.

Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero Exports
LO GO

Majestic Auto Limited

Rockman Cycle Industries
LOG O

Highway Cycle Industries
LOG O

Sunbeam Auto Limited
LOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

BOARD OF DIRECTORS

No. Name of the Directors 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Mr. Brijmohan Lall Munjal Mr. Pawan Munjal Mr. Toshiaki Nakagawa Mr. Sumihisa Fukuda Mr. Om Prakash Munjal Mr. Sunil Kant Munjal Mr. Masahiro Takedagawa Mr. Satoshi Matsuzawa (Alternate Director to Mr. Takashi Nagai) Mr. Pradeep Dinodia Gen.(Retd.) Ved Prakash Malik Mr. Analjit Singh Dr. Pritam Singh Ms. Shobhana Bhartia Mr. Sunil Bharti Mittal

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

15. Mr. Meleveetil Damodaran 16. Mr. Arun Nath Maira

BRIEF PROFILE OF DIRECTORS

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

Mr. Brijmohan Lall Munjal is currently on the board of the following companies: No. Name of Company 1 2 3 4 5 6 7 8 9 Hero Honda Motors Limited Hero Cycles Limited Hero Honda Finlease Limited Munjal Showa Limited Sunbeam Auto Limited Easy Bill Limited Hero Financial Services Limited Munjal Auto Industries Limited Shivam Autotech Limited Nature of Office Chairman and Whole-time Director Chairman and Director Chairman and Director Chairman and Director Chairman and Director Director Director Director Director Director

10 Daimler Hero Commercial Vehicles Limited

MR. PAWAN MUNJAL

Mr. Pawan Munjal is the Managing Director and CEO of the Company. He is responsible for growth and strategic planning for the entire Group. A graduate in mechanical engineering, Mr. Munjal has been instrumental in bringing about technological and managerial excellence in the Company's operations. He has been the Chairman of several Committees of CII. He is also on the board of Indian Institute of Management, Lucknow . An avid golfer, Mr. Munjal is Past Chairman of the Asian PGA Tour Board of Directors and the Past President of Professional Golfers Association of India (PGAI). Under his guidance, Hero Honda launched the Hero Indian Sports Academy (HISA) in collaboration with Laureus Foundation to provide equal opportunities in sports to various communities and to reward talent in the country. Mr. Pawan Munjal is currently on the Board of the following companies:

No. Name of Company 1 2 3 Hero Honda Motors Limited Hero Honda Finlease Limited Daimler Hero Commercial Vehicles Limited

Nature of Office Managing Director Director Director

MR. TOSHIAKI NAKAGAWA

Mr. Toshiaki Nakagawa joined the Company as Joint Managing Director on February 1, 2006. He joined Honda Motor Co., Ltd, Japan in April 1973 and later on took various assignments at Senior Positions in world wide Honda net work, such as staff member of UK, Hongkong and President of Honda Czech Republic, Honda France and General Manager of Honda Beijing Office. Before joining the Company, he held the position as General Manager of Operating Office of China, ASEAN succeeding by Operating Office No.1 (North America, South America and Europe) at Honda Head Office, Japan. His specialization is “Overseas Sales of Automobiles and Motorcycles.” Mr. Nakagawa is currently on the Board of the following companies:

No. Name of Company 1 2 Hero Honda Motors Limited Hero Honda Finlease Limited

Nature of Office Joint Managing Director Director

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

No. Name of Company 1 Hero Honda Motors Limited

Nature of Office Whole-time Director

MR. OM PRAKASH MUNJAL

Mr. Om Prakash Munjal is also founder Director of the Company. He is the Co-Chairman and CEO of Hero Cycles Limited, the largest producer of bicycles and bicycle components in the world. Under his leadership, Hero Cycles has found its way into the Guinness Book of World Records. In 1990, Mr. Munjal was awarded the "Indira Gandhi National Unity Award" by the President of India. Mr. Om Prakash Munjal is currently on the Board of the following companies: No. Name of Company 1 2 3 4 5 6 7 8 9 Hero Cycles Limited Majestic Auto Limited Hero Financial Services Limited Hero Motors Limited Munjal Auto Industries Limited Shivam Autotech Limited Highway Industries Limited Hero Global Design Limited Easy Bill Limited Nature of Office Co-Chairman and Managing Director Chairman & Director Chairman & Director Director Director Director Director Director Director Director Director

10 Hero Honda Motors Limited 11 Hero Honda Finlease Limited

MR. SUNIL KANT MUNJAL Mr. Sunil Kant Munjal born on December 14, 1957 , at Ludhiana is aged 49 years. After his graduation he underwent training in the field of Mechanical Engineering. Presently

he is Managing Director of Hero Cycles Ltd. (C.R. Division) and Hero Corporate Services Limited. In 2004-05, Mr. Munjal became the President of Confederation of Indian Industry (CII), India 's premier business association. He is also on the Board of Indian School of Business, Hyderabad and is visiting faculty at various Business Schools and Corporate. His specialization is in Business Studies and Holistic Management Practices. Apart from the above he is a member of Prime Minister's Council on Trade and Industry, Consultative Group on Industry, Planning Commission, Government of India and SEBI Committee on Disclosures. He has made significant contributions to some of the National-level Economic and Labour reforms in India either by chairing some of the reforms Committee or as a member.

Mr. Sunil Kant Munjal is currently on the board of the following companies:

No. Name of Company 1 2 3 4 5 6 7 8 9 Hero Management Service Limited Hero Corporate Service Limited Shivam Autotech Limited Hero Cycles Limited DCM Shriram Consolidated Limited Easy Bill Limited Hero Honda Motors Limited Hero Motors Limited Satyam Auto Components Limited

Nature of Office Chairman & Managing Director Chairman Chairman Managing Director Director Director Director Director Director Director Director Director Director Director Director

10 Flourish Manufacturing & Automotive Ltd. 11 Daimler Hero Commercial Vehicles Limited 12 Abhayuday Manufacturing & Automotive Ltd 13 Arrow Infrastructure Limited 14 Hero Mindmine Institute Limited 15 Hero Ergo Life Insurance Company Limited

Social Activities Undertaken By The Company:
Hero Group's humane approach is manifested in all aspects of commercial production. The Group undertakes various projects and activities of socio-humanitarian nature to contribute to the National Mainstream. Group Companies, Hero Cycles Limited and Hero Honda Motors Limited have been pioneers within the Group, in undertaking socially productive work of myriad nature. Healthcare Raman Munjal Memorial Hospital is a 100-bed hospital with a well-equipped laboratory, a fully functional operation theatre, an out patient department as well as a casualty section. A fully equipped mobile clinic provides comprehensive health care to the rural masses in Dharuhera. The medical centre on the factory premises of the Group Companies is open for the sub-urban and rural communities of the surrounding areas. The medical centre is also equipped to provide First Aid and ambulance facility for road accident victims. Other efforts, under the auspices of Hero Cycles Limited include: Eye Camps: With over 15,000 patients examined and about 1700 cataract operations performed so far, these Eye Camps have also aided patients with free accommodation, food and medicines. Family Planning Camps: Held since 1993 at the Civil Hospital, Rewari and Bawal, these camps offer monetary incentives to the masses to adopt family planning measures. Blood Donations Camps: These camps are being organised on a regular basis since 1992. 464 units have been donated to Indian Red Cross Society in the last camps. ENT Check up Camps: Conducted by specialists from AIIMS, these camps have been organized since November 1997 Heart Check-up Camps: Since July 1988, free camps are being organized in collaboration with Escorts Heart Institute and Research Centre, where specialised diagnosis methods like Echocardiography and ECG are used. Rehabilitation Camps: Conducted with the assistance of the District Rehabilitation Centre, Red Cross Society, Rewari, these camps help physically challenged villagers to rehabilitate and reemploy themselves. Many patients have found a new lease of life on account of the physical aids given to them.

Conclusion Results of Group initiatives
The Group’s philosophy of empowering and training human capital, use of appropriate technologies, constantly being close to the customer and maintaining a healthy work environment with the highest standards of ethics and corporate governance has resulted in the Group companies excelling in their chosen field through a service attitude year after year, leading to impressive financials and healthy returns to all stakeholders. Hero group has build leadership positions primarily due to its belief in the following principles: 1. Understanding stakeholders (incl. international partners and customers) expectations and delivering value for money. 2. Managing relation 3. Creating a performance culture 4. “partnership approach” with ancillaries 5. Efficient current asset management 6. Accepting and using ever changing technology as a facilitator 7. Strong quality and process orientation. The constant and the determined effort to gain customer’s trust and satisfaction along with the zeal to provide the best product to the customer through innovation and latest technology, has been the primary reason behind the remarkable growth of the Hero Group. The other factors such as understanding of customer’s needs and choice, a close watch on the market, corporate excellence and understanding of corporate social responsibility and stronger relationships with the investors, partners, vendors and dealers along with the customer have been equally important in their achievement. [11] Due to all these reasons, the Hero Group has been able to excel especially in the bicycles and motorcycles manufacturing. They have received numerous awards including the “Bike Maker of the year award” for continuously 6 years from 2001-2006 by Overdrive magazine. Their effort and hard work in every field can be seen as it was ranked 4th in “Overall Best Managed Company” category, ranked 3rd in “Best Financial Management” and “Best Operational Efficiency” category, ranked 6th in “Overall Best Investor Relations” category by Asiamoney in the year 2002. [12]

The management style adopted by the Hero Group has been commended internationally as well by different organizations such as World Bank and BBC, UK, acclaiming it as a role model in vendor development internationally. At London Business School, UK, and Insead, France it is studied as case studies as a model of entrepreneurship. [12] The Hero Group has been considered as one of the top ten Business Houses on Economic value in India by the Boston Consulting Group. [12] The two-wheeler department that is Hero Honda Motors has received the highest ratings for Corporate Governance in 2003, and Best Governed Company award in private sector in 2004 by CRISIL, which is India’s Leading Ratings, Risks and Advisory Company. [12] Hero Group has received awards not only in the domestic market but it has also received awards for its excellence in international trade. Engineering Exports Promotion Council has awarded Hero Cycles with the Best Exporter Award for the last 28 years in succession. [12]

Appendix
1 HSBC-Merril Lynch has estimated Hero Group to be amongst the top value creators in the five years 2001-05. 2 The Hero Group is recognized as a long term partner and an ideal employer: -- Hero Group's partnership with Honda Motors, Japan is over 20 years old -- Hero Group's Partnership with Showa Manufacturing Corporation, Japan is over 18 years old. 3 Group Chairman, Mr Brijmohan Lall Munjal received the coveted "Ernst & Young Entrepreneur of the Year" award for 2001. 4 Hero Cycles was ranked 3rd amongst top Indian companies Review 2000 - Asia's leading companies award (2003) by Far Eastern Economic Review.

Bibliography
1 Fare east economic review April, 2004 2 Magazines: India today Competitive success review 3 Websites: www.herogroup.com www.theherocycles.com

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