Hero Honda Motors

1.  CONTINGENT LIABILITIES:
 
                                              (Rupees in crores)
                                        This year         Previous year
 
 i) In respect of excise matters           8.17                  -
 
 The above matters are subject to legal proceedings in the ordinary
 course of business. The legal proceedings when ultimately concluded
 will not, in the opinion of management, have a material effect on the
 results of operations or the financial position of the Company.
 
 2.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for Rs. 92.37 crores (previous year Rs. 56.37
 crores).
 
 3.  Commercial production commenced at Haridwar plant on April 7, 2008.
 Expenditure incurred on the project upto April 6, 2008 has been
 included in Schedule 5 under the head  Pre-operative Expenditure
 (pending allocation). Pre-operative expenditure otherthan those which
 are directly allocable has been allocated pro-rata to fixed assets and
 capital work in progress.
 
 4.  The Company has 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. 10.51
 crores (previous year Rs. 11.47 crores) have been charged under Lease
 rentals  in Schedule 11.
 
 5.  As the Companys 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, specified in the Companies
 (Accounting Standards) Rules, 2006 are not applicable.
 
 6.  Related party disclosures under Accounting Standard 18
 
 a) i) Parties in respect of which the Company is a Joint venture: 
 
 Honda Motor Co. Limited, Japan
 
 Hero Cycles Limited
 
 Bhadurchand Investments Private Limited
 
 Hero Investments Private Limited
 
 ii) Associate of the Company:
 
 Hero Honda Finlease Limited
 
 b) Key management personnel
 
 Mr. Brijmohan Lall Munjal     Chairman
 
 Mr. Pawan Munjal Managing     Directors CEO
 
 Mr. Toshiaki Nakagawa         Joint Managing Director
 
 Mr. Yutaka Kudo               Whole time director 
                               (w.e.f. April 1,2007 to May 30,2008)
 
 Mr. Sumihisa Fukuda           Whole time director (w.e.f June 1,2008)
 
 
 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.
 
 7. The Company has entered into Discretionary Portfolio Management
 Agreements, administered through ICICI Prudential Asset Management
 Company Limited-PMS, IIM-Optimix Porfolios-Capital enhancer. Escorts
 Securities Limited, Reliance Capital Asset Management Ltd, Fortis
 Investment Management, Birla Sunlife Asset Management Company Private
 Limited collectively called Portfolio Managers. In terms of the said
 agreements, the Portfolio Managers have dealt in mutual funds,
 debentures, bonds, government securities, equity shares, equity stock
 futures, equity stock options equity index options and such other
 securities, made on behalf of the Company. However, there are no
 outstanding derivative contracts as at March 31,2009.
 
 8.  The Companys borrowing facilities, comprising fund based and non
 fund based limits from various bankers, are secured by way of
 hypothecation of inventories, receivables, movable assets and other
 current assets.
 
 9.  The Company has identified parties covered under the The Micro,
 Small, and Medium Enterprises Development Act, 2006 on the basis of
 the confirmations 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.
 
 10.  Employee Benefits
 
 Defined benefit plans
 
 In accordance with the Payment of Gratuity Act 1972, Company provides
 for gratuity, as 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 Group Gratuity Scheme of
 Life Insurance Corporation of India.
 
 11.  Previous years figures have been recast/regrouped wherever
 necessary.