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Chapter-1

Introduction

Bicycle, bike, or cycle,, is a pedal-driven, human-powered vehicle with two wheels attached to a frame, one behind the other.

First introduced in 19th-century Europe, bicycles now number over one billion worldwide, providing the principal means of transportation in many regions, notably China and the Netherlands. They are also a popular form of recreation, and have been adapted for use in many other fields of human activity, including children's toys, adult fitness, military and police applications, courier services, and cycle sports.

The basic shape and configuration of a typical bicycle has hardly changed since the first chain-driven model was developed around 1885The bicycle has affected history considerably, in both the cultural and industrial realms. In its early years, bicycle construction drew on pre-existing technologies; more recently, bicycle technology has, in turn, contributed ideas in both old and newer areas.

The Indian Cycle IndustryBicycle was seen in India in the year 1890. Import of cycles, however, started in 1905 and continued for more than 50 years. Complete ban on imports was announced by the Government in July, 1953, but cycle kept on simmering in the country till 1961. In 1890, selling price of an imported bicycle was around Rs. 45/-; in 1917, during the First World War the price jumped to Rs. 500/- but dropped considerably, month by month and came down to Rs. 35/- or so (U. K. makes) and Rs. 15/- or so (JapaneseIt would be interesting to mention that in 1919, five persons in Punjab imported cycles and used them on The Mall, Simla. These included one Bishop, Two military men and two contractors including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of Ludhiana). Under special permission of the Governor, they were allowed to use cycles on 'The Mall' only for one hour in a day. They imported B.S.A. Cross Bar Cycle from U.K. and it used to be a kind of Mela at that particular hour on the Mall in Simla, the scene watched by hundreds of people everyday. Later, a firm was formed under the name of Singh & Co. with shops on Railway Road, Jalandhar and Bazar Vakillan, Hoshiarpur, which imported bicycles in the year 1930 onwards. With an annual turnover of 12 million bicycle in an year, Indian bicycle industry stand at no-2 position in the world.MAJOR PLAYERS IN INDIA IN BI- CYCLE INDUSTRY HERO CYCLE

ATLAS

AVON

NEELAM

LOCAL PLAYERS OPERATING IN PUNJAB

NEELAM

KW

RAJA CYCLE

The changing cycle

India may be the second largest producer of bicycles in the world but precious little has been done to promote the cause of cycling in the country. Shveta Pathak reports that the cycle industry is today churning out beauties that could easily make a style statement but the road ahead is rough for the two-wheeled bikes. And, the status-conscious still refuse to adopt them as a DO you remember the tinkle of the bell as daakiya Rajesh Khanna delivers the post in the song Daakiya daak laya? Or, the very urbane Aamir Khan making your breath stop for a while as he competes for the famous race in Jo Jeeta Wohi Sikander? If you do, you mustnt have forgotten the spirit lent to these moments by the good old bicycle.

India is the largest cycle manufacturer in the world after China. The Indian industry doles out 1.25 crore bicycles every year with almost each day witnessing new designs, colours and features. Even as environmentalists and the health-conscious worry about the rising number of motorised vehicles on our roads, the easy-on-pocket two-wheeled vehicle still pedals its way to almost every Indian household.

The good old black or green cycle bought by your grandpa and passed on to your father has now given way to a mind-boggling range to choose from. In short, today you could make a style statement with your bike.

Mode of TransportMarket players say they are bringing varied innovations to cater to the changing demands of the consumers. Onkar Singh Pahwa, managing director, Avon Cycles India, one of the leading cycle producers in the country, says: "The regular black or green bicycles dominated the market a few years ago and the customers ranged from workers and office-goers to school and college students. However, the customer profile has enormously changed and the proportion of those relying on cycles as a mode of transport is declining. A significant number of buyers now are school-goers and to attract them, we are coming out with a large number of models with variations in colours, shapes, accessories, key features and the type of material used."

As per estimates, the proportion of those going in for standardised bicycles has come down from 90-95 per cent to 50-55 per cent in the last five-10 years. The consumer segment that is speedily getting bigger comprises kids. This brings relief to cycle-makers as the affordability range is higher and there is more scope for innovations. Thanks to this segment, the loss in terms of volumes is covered up by the revenue inflow.

No wonder school-goers on fancy bikes are a common sight. To attract the young, there are all kinds of attractive colours to choose from: silver, golden, red, hot pink, turquoise, fluorescent shades, etc. The same applies to designs that could have a K, R, Y or a diamond-shaped frame; raised handles, handles with elbow rest, bar ends; brakes with a side pull system; foam-padded saddles; wheels with plastic discs; and an in-built dress guard for ladies bikes.

The designs cater to needs as well as the budget of cyclists. So besides the regular bikes for routine cycling, the market offers sports bikes, mountain terrain bicycles, bikes with gears, and roadsters that accommodate two riders. One of the latest offerings includes the battery-operated bikes.

"Earlier purchase decisions were instant on account of the limited options. But these days people like to know about the many varieties and are much more conscious," a dealer says.

Priced Rs 15,000 onward, the battery-operated bikes are the latest attraction. On a single charge, they can run 40-60 km at a speed of 23 km an hour. These bikes, however, would be preferred by those who are planning a purchase for reasons other than health improvement.

"Considering the rising fuel costs and pollution, these bikes are ideal. They are low on maintenance cost too," says Pahwa. The company is targeting office-goers and students for these slick bikes and is hopeful of an encouraging response.

"Howsoever much might be the rise in number of cars, motor cycles et al, it remains unlawful to hand them over to kids. In contrast, battery-operated bikes need no registration and licence to ride them."

Indian companies, which have come out with a large variety of bikes, have a long way to go even as they effectively combated competition that came from global market leader China. The diminishing number of cyclists is a cause of worry for environmentalists and economists. While manufacturers attribute the change in trend to rising income levels, the other factors could be easy finance options for motorised vehicles, urbanisation and status symbol attached to expensive vehicles. "Despite studies coming out with shocking details on rise in diseases like heart attacks, people are more worried about their status," remarks Pramod Sharma, co-ordinator, Yuvsatta, an NGO that has also launched a project to promote cycling.

Sadly, efforts to motivate people to take to cycling remain negligible when compared with the situation in other countries. Most countries provide separate tracks for cyclists, have regular cycling tours and even film festivals promoting bicycles.

New York and London are celebrating the sixth annual bicycle film festival, and it is quite common for various organisations in most countries to conduct cycle tours. This phenomenon is rare in our country.

One might find a few tour operators giving an option to "foreign tourists" for cycle tours, but there is no such attractive offer for domestic tourists and the general public.

The industry rues that the government is not taking measures to promote use of cycles. Barring places like Chandigarh that have cycle tracks (which incidentally are not put to much use), a cycle rider is not safe on Indian roads keeping in view the stupendous increase in fast-moving motorised vehicles.

"Time and again we have been asking the government to take measures in this direction. Come to think of it, the bicycle is the need of the day given the increasing pollution, rising fuel costs and health hazards on account of leading a fast-paced life. Unfortunately, efforts in this direction do not seem to be a priority with the government," says a leading manufacturer.

"Safety is a major concern when it comes to using the cycle as a mode of transport. Unless people feel safe about the vehicle, the usage is unlikely to increase," says Tejinder Singh, director, physical education, Sri Aurobindo College of Management and Commerce, Baddowal.

If the cycle industry is to continue growing, India has to ensure the safety of cyclists and popularise cycling as sport too besides generating awareness about its other benefits. Otherwise, we would lose out on not just the industry but also on a healthier and cost-effective means of transport, say industrialists.

A case for bikesONE of its kind in the country, Greentire, a project launched by Chandigarh-based NGO Yuvsatta, is an endeavour to "motivate more and more people to ride bicycle more often". Says co-ordinator Pramod Sharma, "We have got a good response and some of our members, who include students and office-goers, have even taken to going to offices on bicycles."

The NGO promotes use of cycles by forming cycle clubs, organising cycle tours around Chandigarh and by holding cycle games.

Quoting a recent study, Sharma says: "Considering that every third death in a place like Chandigarh is due to heart attack, using the cycle becomes all the more important."

A major hurdle is the mindset of the status-conscious against using the cycle. Sharma insists that it is important to break this mind-set. "Unlike other countries where people do not make a fuss about cycling and happily take to it, people here consider it below their dignity to cycle to office. It is from here that excuses like time consumption arise."

Insisting on the need for efforts from the government, he says building cycle tracks would be a step in the direction. "Barring Chandigarh, no other city has them, which is sad. We are perhaps the only country that doesnt even seem bothered about the issue."

Despite the odds, this NGO has had many successes in terms of various people, including bank and corporate employees, shedding their initial hesitation and taking to cycling as a mode of transport.

"While it would require a lot of effort to make people use it for transportation, we have been quite successful in gathering people for cycle tours and games," he smiles.

For the status-conscious, Sharma suggests: "May be they could go in for the Mercedes bicycle, priced at Rs 1.5 lakh plus. Even though the bike wouldnt get the luxury of six-lane metalled roads, the pleasure is every bit worth it."

Bicycle industry eyes urban market

If car manufacturers are flooding the market with luxury brands, why should the bicycle industry lag behind? Bicycle companies in India are now focusing on urban markets and are looking to expand their base in the professional and adventure categories.

The bicycle business is flourishing worldwide with the poor and the moneyed classes alike are interested in using this mode to reach their destinations. It resulted in the global companies experimenting with the change and spreading their wings across the globe.

The latest bikes are for the urban kids. This sizable population has the tendency to facsimile the West, especially in their lifestyles. And since the adventure sport is growing rapidly there, we hope a good response in India too. The opening up of amusement parks in Indian cities is a positive sign, he added.He further said the sales of hi-end products is expected to grow with the Commonwealth games in 2010. Rajendra Varma, Coordinator, non motorised transport, Initiative for Transportation and Development Programmes (ITDP), a Delhi based NGO, believes that growing awareness among people about the benefits of cycling for body muscles could be one reason for constant hike in the sale.

As people dont have much time for physical exercise nowadays, we have instituted an organisation called Delhi Cycling Club with an aim to make people aware about the benefits of cycling in keeping the body fit and also participate in minimizing air pollution by not using heavy vehicles, he adds.

He further said that we should promote culture of cycling in India by making stricter laws for cyclists safety on roads. Demanding biking to be given the status of a professional sport like cricket, a biker from Bangalore, Vibhor feels, Cycling in India should be promoted to make it a professional sport.

A local club owner at Pune, Nilesh says, Cycling has evolved from being a hobby to a passion for me. With a group of few, we work with local cyclists, who also own biking shops and try to make the people aware about the sport. Gary Fisher introduced the adventure sport Mountain biking to the west for the first time in 1974. Since then it has grabbed the attention of the youth.

An eco-friendly mode of transportation, bicycles are being revived across the world and the steps are taken, especially by the symbols of modernization, like the Metro in the capital in encouraging commuters to pedal their way to their destinations

Profile(HEROGROUP)

"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 long-lasting 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 Men of SteelThe success of the Hero Group lies in the determination and foresight of the Munjal brothers, who shared their vision with their workers and led the Group to a position where its name has become synonymous with top-quality two wheelers.

The flame kindled by the Munjal brothers in 1956 with the flagship company Hero Cycles; Mr. Satyanand Munjal, Mr. Brijmohan Lall Munjal and Mr. O. P. Munjal continue to carry the torch and are actively involved in the day-to-day operations of the Hero Group.

The saga is being continued with the same zeal by the second and third generations of the family and by the large working force of the Hero Group. The spirit of enterprise which dominates the progress of the Group is characteristic of the land where it all began - the City of Ludhiana, in Punjab - home to some of lndia's finest workers and entrepreneurs.

The Hero Group is a thriving example of three generations of a family working and striving together to ensure quality, satisfaction and extensive growth.

TheDrivingForce-Chairman

Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero Group was born in 1923, in what is now Pakistan. After partition, the Munjal brothers started a small business of manufacturing bicycle components in Ludhiana in North India in the face of the bottlenecks of industrial infrastructure and investments. Dr Lall led a small time manufacturer of 60 cycles a day to become a manufacturing giant, which churns out not only over 17,000 cycles per day but is also diversified into various domains. Undoubtedly, Dr.Lall is a first generation business entrepreneur of the 1950s'.

Dr.Lall has enriched the Hero Group with his vision of sound business governance and value driven management practices. His foresight has made the Hero Group a leader in its business. Dr Brijmohan Lall is a role model for Indian Industry in corporate governance and ethical and value-driven management practices. His principle-based leadership has led the Group companies to receive the best industrial governance and safety awards and acquire stringent value certifications.

Dr.Lall was amongst the first Indian industrialists to effectively implement backward integration and he is acknowledged as the trend setter in the area. Apart from the promotion of the Indian industry, he is the actively involved in many national associations such as CII, SIAM, ASSOCHAM and PHD and is a member of the Regional Board of the Reserve Bank of India. He is Honorary Fellow of the Indian Institute of Industrial Engineering.

In 1995, Dr.Lall received the National Award for outstanding contribution to the Development of Indian Small Scale Industry. (NSIC award - presented by the President of India)

In 1999, the Business Baron recognized him as the "Most Admired CEO."

The PHD Chamber of Commerce and Industry presented him with the Distinguished Entrepreneurship Award in 1997, in recognition of his outstanding exemplary entrepreneurship.

Banaras Hindu University, Varanasi one of the most prestigious Universities of India conferred him with a Doctrate; degree of " Doctors of letters" Honoris Causa in October 2004

The Government Of India honoured him with the prestigious " Padma Bhushan"in March 2005 for his contribution to Trade and Industry

Dr.Lall has made an unfailing commitment of his time, energy and resources to strive for the upliftment of the communities and villages around the Group's manufacturing units. He has encouraged the setting up of numerous medical, educational and infrastructure facilities. Amongst his notable contributions to his adoptive city, Ludhiana, are the Ludhiana Stock Exchange, the Ludhiana Aviation Club - of which he is still the president - and the Dayanand Medical College and Hospital.

Hero Group CompaniesHero Group ranks amongst the Top 10 Indian Business Houses comprising following companies, with an estimated turnover of 5600 Crores during the fiscal year 2006-2007.

The spirit to manufacture outstanding quality products at affordable prices and to manage the perfect balance of fine quality and engineering satisfaction, is the Hero Group philosophy that drives the wheels of progress for the Group Companies and the Hero Group, as a whole A brief overview of the ever progressing and highly success-oriented Hero Group Companies are:

1. Hero Honda Motors Limited

2. Hero Cycles Limited

3. Hero Cycles Limited (Unit II)

4. Munjal Showa Limited

5. Majestic Auto Limited

6. Hero Exports

7. Munjal Auto Industries Limited

8. Sunbeam Auto Limited

9. Munjal Castings

10. Highway Industries Limited

11. Rockman Cycle Industries Limited

12. Hero Cycles Cold Rolling Division

13. Munjal Auto Components

14. Satyam Auto Components Limited

15. Hero Global Design

16. Easy Bill Limited

17. Hero Motors Limited (Hero Puch

18. Herosoft

19. Hero Corporate Service Limited

20. Hero MindmineTurnover of the group (2006-07): Rs. 5600 Crores Hero Cycles Limited

Hero Honda Motors Limited

Hero Cold Rolling Division

Hero Motors Limited

Hero ExportsLOGO

Majestic Auto Limited

Rockman Cycle IndustriesLOGO

Highway Cycle IndustriesLOGO

Sunbeam Auto LimitedLOGO

Munjal Auto Industries Limited

Munjal Showa Limited

Munjal Castings

Munjal Auto Components

Hero Global Design

Hero Corporate Services Limited -

- Hero ITES

- Hero Mind mine

- Hero Soft

Munjal e-systems

Profile (HERO CYCLES)

Hero Cycles Limited

TypePrivate company

Founded1956

HeadquartersLudhiana

KeypeopleBrijmohan Lal Munjal

IndustryBicycles

RevenueRs

10,0000 crores 2004-2005

Websitehttp://www.herocycles.com/

Hero Cycles Limited, based in Ludhiana Punjab, India, is the largest bicycle and related product manufacturing company of India. The Hero Cycles Factory in Ludhiana is considered to be the largest and the most efficient factory in the worldHistoryHero 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. 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.

Companys Profile

Year of establishment:

1956

Registered Office:

Hero Nagar G.T. road, Ldh

No. of employees:

3155 (513 staff &2642 workers)

Turnover of the company:

1400 crores

Net profit:

63 crores

Products:

mfg. of Bicycles & Bicycles parts

Constitution

Closely Held Public Company

Works / Plant

Unit no.I (cycle and C.R Division);

Hero Nagar, G.T road, ldh

Unit no. II;

Plot no.8, site IV,

Sahibabad Industrial Area,

Ghaziabad (U.P)

Unit No.III; (New Hero Auto Rim Division &New Cycle Division) Focal Point, Phase VIII,

Mangli, Chandigarh Road,ldh Promoters of the hero cycles Mr. Dayanand Munjal founded the Hero Group of companies. The mission of the hero Group was to establish themselves as the leaders in the bicycle industry in India and strive to sustain this position continuously looking for technology and product innovation Hero Group has come a long way. The Hero Group is a multifaceted group of companies, which has been successfully operating in the areas of bicycles, motor cycles, mopeds, ancillary units and cold rolled steel. It is uncompromising quest for leadership, not just in numbers but also in huge number. Leadership in Hero is a way of word the Spirit of Hero. It is the spirit that keeps the group moving all the way. It manifests it-self in whatever the group does and it is every where, in the company, whether its employees, customers, vendors, suppliers etc. Munjal brothers run the company with great dedication and sincerity. Hero is the largest selling company of bicycles and motor cycles. Sh. BrijMohan Lall munjal is chairman of the company, and his two brothers Sh. Satyanand munjal and Sh. Omparkash Munjal are co-chairman cum managing directors of the company.

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 lateMrRamanKantMunjal. Mr Brijmohan Lall Munjal, Chairman & MD - THE HERO GROUP.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

SUPER BRAND

Globally, a select few, exceptionally powerful brands, are recognized as Super Brands. Some of the Indian brands have made it into this unique hall of fame, and amongst that coveted group features Hero Cycles. Super Brands are actually the big ideas which provoke us to explore the realms of our dreams and inspire us to live satisfying life styles. Anchored in omnipotent consumer insights, the super brands go beyond mere functional promises as they trigger deeply embedded emotional chords.Hero Cycles has been one of the most progressive and dynamic brands for the decades now. More than 3200 dealers, 4800 employees and more than 9.6 Crore satisfied customers, have directly or indirectly, endeavoured tirelessly to make Hero Cycles a phenomenal success and are the true guardians of this brand.

Ambitions, belief, empathy and a strong culture of sensitivity are at the heart of Hero Cycles brand. Each of these values is reflected in the companys products, its communication and its dealings with suppliers, employees, dealers and customers. Be it companys environment friendly manufacturing processes or the brand initiatives for the lower income customers, leadership is all about capturing the hearts & minds of the people- the way a true Hero always does.

Born out of PassionThe ore goes into fire only to shed off its impurities. Similar is the man whose virtues shine when he is tried by the fire of life. Taking upon Novelty itself as a competitor, the Hero Cycles, has been always striving for perfection and innovation in every aspect of their dealings. The pursuit to innovate is endless at Hero, so much so that innovation has become a buzz word in Hero premises. Hero Cycles has been able to use changes and new trends to its advantage by identifying emerging need gaps and expanding its product portfolio to appeal to different kinds of customers. In its endeavour to keep a step-ahead of times, Heros most advanced & modern R & D department continuously creates innovative products having functional attributes & aesthetics, meeting the aspirational needs of its proud customers around the globe. As a result, Hero Cycles was able to launch several new concepts and models in bicycles like the Mountain Bikes, Racer Bikes, Dirt Terrain Bikes & D-frame bikes besides creating a variety of cycles for different user segments and sub-segments including women and children, students, adventure seekers, labourers, city customers and fitness conscious. Rolling out nineteen new models in just one year, itself speaks volume for Heros emphasis on innovations & designs

Quality : The Driving ForceAt Hero Cycles, quality is a tradition, be it in the form of well trained labour, technically superb machines or world class quality. The conformance to quality at Hero begins on shop floor, with every worker ensuring at each stage manufacturing, that only perfect product passes through his hands. Heros production department too believes in following the zero-defect approach and continuous upgradation of its manufacturing systems. The marketing and operations teams are also constantly creating new and effective strategies using modern management techniques. And finally, every Hero cycle goes through a series of rigorous quality checks before it leaves the factory. No wonder, Hero is in proud possession of ISO-9001, ISO-9002 & BVQI certifications and also ISO 14001, environmental compliance endorsement from the Ministry of Environment.

Constant quality upgradation ensures that the company stays in the global mainstream and maintains its edge, through excellence. A technology tie-up with National Bicycle Industries of Japan led to the launch of the World 1 series of cycles, besides introduction of new frame designing and features like- A-frame, D-frame, Y-frame, Swan shaped frame, speedometers & indicators among others

Heroes moving the GlobeToday Hero Cycles is one of the handful companies in India which can boast of the global scale of operations, not just in size or superior technology, but also its innovative marketing strategies. True to its leadership stature, Hero has not only achieved a volume of production that can be matched by no other cycle manufacturer in the world, but has also started exporting bicycles to countries like US, Germany and Japan, which is a manifestation of Heros quality and marketing capability. Heros forays into the overseas markets pioneered the Indian export in bicycle segment as early as 1963. While initial exports were restricted to the Africa and the Middle-East, today more than 50% bicycle exports meet the demands of sophisticated markets in Europe and America. Indeed, to dare to explode from a small town of Ludhiana to worlds best and household name in 89 countries, it has Herculean task by any standards.This Super Brand has still a long way to go but there is no hurdle too big and no accomplishment permanent as this super brand thrives on the philosophy that Heroes in the market-place are the ones, who forge strong relationship by being relevant, constant and persistent, ...the True Heroes - in spirit and in form.BULIDING RELATION

At Hero, its always believed that there is much more to life than just business. As a company with a heart, it has certain commitments towards its employees, the society and the nation. Though growing incomes, changing life styles and availability of cheap customer finance has changed the market scenario enormously, Hero believes that cycles can still be the driving force of the rural economy. By introducing the loan facilities under Hero Cycle Loan Yojana through Corporation Bank and Oriental Bank of Commerce, Hero Cycles has enabled low income customers to purchase cycles on easy terms.

Commitment to its employees is just as important as commitment to the society. All efforts are taken to make sure that employees are provided the best working conditions as work culture at Hero revolves around the philosophy-if theres one way to work, its with the heart. At Hero Cycles, there is a strong affinity towards building the relationships with employees, workers, vendors and dealers. Job security, growth opportunity and

respect are the unspoken, yet understood components of every mans package who chooses to work within the fold of Hero family. It is quite common to find two generations of the same family working together in the company, or the workers sharing their skills with other family members and passing on finest training to each other. It goes without saying that people at Hero are its largest investment and easily the largest asset.

At customer front too, Heros perception of customer relationship management (CRM) does not end with merely meeting their expectations and aspirations or by ensuring complete customer delight by overnight turnaround of customer complaints, but it goes several steps beyond that horizon. The company believes in delivering value to the customers even before they feel the need. This has helped Hero Cycles develop immense brand loyalty and customer satisfaction. Like a true Super Brand, Hero has been able to attract the respect and awe of not only its users, but also those who are directly or indirectly exposed to itPromotions

Until 1986, the company had no need for mass communication. But as competition started growing, Hero Cycles begun to feel the need for creating lasting impression on the customers mind. In the mid 1980s Hero was perceived to be the manufacturer of the basic black bicycles. The company required an image change. It needed to communicate to customers the vast portfolio of products that it had, particularly in the recreational segment. The launch of innovative products and their use as image builders happened simultaneously. Since 1986, the communication strategy has been to build each product separately and create a unique positioning for them. In this way the Ranger was positioned as the bike for outdoor fun, Impact was the preferred choice among city riders and Jet was projected as the lightest running roadster while Hawk was the racers edge. Each of these launches and their promotion, gave the Hero brand a new meaning. The brand has also used celebraties - including film stars Sanjay Dutt, Rani Mukherjee, Hrithik Roshan and Ameesha Patel. The latest is Indias new bowling sensation, Irfan Pathan who has also been a real life Hero cycle user.MilestonesHero's success saga contains an element of spirit and enterprise; of achievement through grit and determination, coupled with vision and meticulous planning.

1956Hero Cycles Limited is established.

1961Rockman Cycles Industries Limited established, which is today the largest manufacturer of bicycle chains and hubs.

1963It pioneered bicycle exports from India - a foray into the international market.

1971Highway Cycles was set up to meet the demands of Hero Cycles. It is today the largest manufacturer of single speed and multi-speed freewheels.

1975Hero Cycles Limited became the largest manufacturer of bicycles in India.

1978Majestic Auto Limited was formed and the Hero Majestic Moped was introduced.

1981Munjal Castings established.

1984Hero Honda Motors Limited established in joint venture with Honda Motors of Japan, to manufacture motorcycles.

1985Munjal Showa Limited established to manufacture shock absorbers and struts and is today among the top two shock absorber manufacturing companies in India.

1985The 100 cc Hero Honda Motorcycle arrived and by 1988 was the No. 1 among all motorcycles in India.

1986Hero Cycles Limited entered the Guinness Book of Records as the largest bicycle manufacturer in the World.

1987Hero Motors, a division of Majestic Auto Limited set up in collaboration with Steyr Daimler Puch of Austria.

1987Gujarat Cycles Limited, now known as Munjal Auto Industries Limited was established to manufacture and export state-of-the-art bicycles and allied products in its fully automated plant at Waghodia.

1987Sunbeam Auto Limited, earlier a unit of Highway Cycles Limited, established as an ancillary to Hero Honda. It is the largest die casting plant in India.

1988Introduced "Hero Puch" from Hero Motors Limited. This revolutionary machine immediately set new records of petrol efficiency and usable power in 50 - 65 cc machines.

1990Hero Cold Rolling Division established and is one of the most modern steel cold rolling plants.

1991Hero Honda receives National Productivity Council's Award.

1991Hero Honda receives the Economic Times - Harvard Business School Association Award against 200 contenders.

1992Munjal Showa Limited receives National Safety Award.

1993Hero Exports established as the International Trading Division for Group and non-Group products.

1993Hero Motors becomes Indias largest exporter of two wheelers

1995Hero Corporate Services Limited as the service segment for the Hero Group Companies, ancillaries, suppliers, dealers and other associates.

1996- Hero Winner, a large-wheeled scooter was introduced by Hero Motors Limited with a choice of 50 cc and 75 cc engines.

1996Munjal Showa Limited receives British Council's National Safety Award.

1998- Hero Briggs and Stratton Auto Private Limited was set up to produce 4-stroke two-wheeler engines in various cubic capacities.

1998Munjal Auto Components established to manufacture gear shafts and gear blanks for motorcycles.

2000The Hero Group diversifies into IT and IT enabled services through its service segment - Hero Corporate Services Limited.

2000-2001Hero Honda emerges as the market leader in motorcycles with sales of over a million motorcycles and a strong market share of 47%.

2001Hero Global Design established to offer engineering services in CAD/CAM/CAE related to New Product Development, Design, Engineering and Manufacturing.

2002Hero Cycles ties up with National Bicycle Industries, part of Matsushita Group to manufacture high-end bicycles.

2002Fastener World Established.

2002Easy Bill Established to offer utility bill collection & retail services.

2003Tie up with Livebridge Inc., USA.

2004Tie up with Bombardier - Rotax GmbH for scooter engines.

2004Tie up with Aprilia Scooters, Italy.

2004Hero Honda continues as the World's largest manufacturer of two-wheelers with annual sales volume of 2.07 million motorcycles and a market share of 48%.

2004Retail Insurance business established.

2004HeroITES, a division of HeroCorporate Service Limited hived off as a division of new company Hero Management Service Limited.

2005HeroITES strengthens its relationship with ACS,USA,USD 5.0 billion market cap and Fortune 500 company.

2006Hero Honda enters the scooter segment, launches 100cc "Pleasure"

2006Hero Honda crosses a unit sales threshold of 3.0 million motorcycles

2006Hero Group celebrates Golden Jubilee year since inception.It was commemorated by sales of over 15 million motorcycles & over 100 million bicycles.

Today, Hero Group comprises of 20 companies, 300 ancillary suppliers, deep market penetration with over 5,000 outlets, 23,000 + employee and has a turnover of US$ 3.20 billion (FY 2006).Board of directors

Sh. Brijmohan lal munjal (Chairman)

Sh. Satyanand munjal (Co- Chairman cum M.D. of works)

Sh. Om parkash munjal (Co- Chairman cum M.D. of mktg. & admn.)

Sh. Vijay kumar munjal (M.D. of international marketing)

Sh. Suresh chandra munjal (M.D. of domestic mktg.)

Sh. Ashish kumar munjal (M.D. of unit-II Sahibabad)

Sh. Sunil kant munjal (M.D. of C.R..division)

Sh. Pankaj munjal

(M.D. of new hero auto rim division)

Sh. S.k. rai

(M.D. of works)

Dr. M.a. zahir

(Director)

Dr. D.r. singh

(Director)

Organization Chart: Hero Group

Physical Layout of Hero Cycles Ltd.

C.R.Division

Key to the physical Layout

1. Security

12. Scrap Yard

2. Admn, Block and systems

13. Rim plant

3. Lawn

14. Boiler house

4. Tabular

15. Paint shop

5. Generator Room

16. Main store

6. Scrap Yard

17. Polish Shop

7. Export Store

18. Effluent Treatment plant

8. Export packing

19. Main Shed

9. Canteen

20. Stores

10. Ranger

21. Receipt and dispatch Store

11. Unit V

Major Products

The Hero Cycles Ltd. Manufactures cycles, rims, free wheels, hubs & chains and cold rolled strips as a main product. Company has long portfolio of different range of cycles. Company has 132models in the list, covers all the three section-gents, ladies and kids. It also manufactures cycle parts for its own requirements. After fulfilling the requirements of company, it can export its remaining quantity.The main products are:-

i) Cycles

ii) Rims

iii) Free wheels

iv) Hubs and Chains

v) Cold Rolled strips

.Another feather in the cap

'Hero Cycles Limited'- has added another feather in the cap by entering into strategic tie up with a leading bicycle manufacturer of Japan namely National Bicycle Industries of National Panasonic in august 2002 to provide on technology transfer for up gradation in phased manner.

After its tie up with national Bicycle industries, it has introduced new models as Cross fire , razorback, Synergy, Ranger Max, Hawlk NU Age, Nitrogen and Princess.

Customer satisfaction HERO has been consistently keeping pace with the time, by steady adhering to consumer's aspiration. Over the year, the company has created market segments through product innovation, meeting the aspirations of the youth and middle class the company is honoring the watchword Customer Satisfaction. With its human approach, the company is manufacturing an environment-friendly range of products.

Global Gearing - AlliancesOver the years, Hero Group has strengthened its joint ventures, forged profitable relationships with its partners and allied itself with some of the best players in the market. Technology assimilation through wide sourcing has been and will continue to be an integral part of the progression of the Hero Group.

Technology Related Partnerships/ Alliances & Joint VenturesIT Related AlliancesProduct Engineering Related Alliances

Microsoft, SingaporeDynEd InternationalACS, USAPTCPorsche DesignTarget DesignUniversal Cycles Plc, UKEralMetall, Germany

Atlas: A Journey of Achievements

A man had a dream. To provide quality bicycles to his countrymen at reasonable prices. The man was Late Janki Das Kapur. The dream : Atlas Cycle Industries Ltd.

A modest beginning in an improvised shed at Sonepat. This was transformed into a 25 acre factory complex in a record period of 12 months.

In the very first year of operation 12000 Atlas Cycles rolled out of the plant. Soon, the first consignment of Atlas Cycles was sent overseas. Atlas has since then exported to over 35 countries.

By 1965, Atlas had emerged as India's largest cycle manufacturer. Greater demand, higher production and ever-expanding markets made Atlas a name to reckon with.

It was time for accolades. Atlas was presented with the FICCI Award for 'Best Industrial Relations'. Atlas' growing importance in the international arena did not go unnoticed either. Italy's Gold Mercury International Award was conferred on Atlas. Subsequently, At also received the prestigious EEPC Award for export excellence for the year 198O-81 and several times later on.

The innovations and the constant quest for perfection continued. Atlas Goldline was an instant success all over the country. Then came the Funfleet range of sports bikes which took the market by storm. The racer bike of international class, Atlas Pro-10, was the new breed of cycles to roll out of the Atlas plant.

The honour of being appointed official supplier of bicycles to the IXth Asiad, at Delhi, added another feather to Atlas' cap.With growing demand for its products came the need for achieving self-sufficiency in specialised bicycle components.

To meet its entire steel tube requirements the Atlas Steel Tube mill was set up at Gurgaon.

Not only was dependence on external suppliers broken but the stringent quality controls, synonymous with Atlas, could be maintained.

The frontiers kept expanding. A second cycle plant at Sahibabad raised the production capacity to meet ever growing demand.

New expansions. New entrants. At Atlas this is a process that never seems to stop. An Atlas cycle to suit every individual taste and requirement. The promise of Atlas. The dream of one man fifty years ago. The dream continues. To clock new records, new innovations, new ventures.

T.I Murugappa Group

TypePublic (NSE, BSE)

Founded1900

HeadquartersChennai

KeypeopleM.A. Alagappan (Executive Chairman)

Industrysanitaryware, Life Insurance, General Insurance, fertilisers, abrasives, automotive chains, car door frames & steel tubes

Revenue$ 2 billion

Employees28,000

Websitehttp://www.murugappa.com/

Murguppa Group is an Indian conglomerate with interests in engineering, abrasives, sanitaryware, fertilisers, finance, bio-products and plantations.

The group started in early 20th century. Started at the same Tiruvottriyur, Chennai (Now Carborundum Universal Ltd)in the name of Ajax India Ltd and made hardwares.

The Murugappa Group, headquartered in Chennai, India, is a $ 2 billion (Rs 8,500 crore) conglomerate with interests in engineering, abrasives, sanitaryware, fertilisers, finance, bio-products and plantations. It has 29 companies under its umbrella, of which eight are listed and actively traded on the National Stock Exchange and the Bombay Stock Exchange. Together, they have over 28,000 employees.

Ratio Analysis

Meaning and concept of ratio analysis

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions. However, ratio analysis is not an end itself. It is only a means of better understanding of financial strength and weakness of a firm. Calculation of ratios does not serve any purpose, unless several appropriate ratios are analyzed and interpreted. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios from the same keeping in mind the objective of analysis. The following are four steps involved in the ratio analysis:-

1. Selection of relevant data from financial statement depending upon objective of analysis.

2. Calculation of the appropriate ratios from the above data.

3. Comparison of the calculated ratios with the ratio of same firm in the past, or the ratios developed from projected financial statements or the ratios of some other firms or the comparisons with ratios of the industry to which the firm belongs.

4. Interpretation of the ratios

Functional Classification in view of financial management

Or Classification According to Tests

Liquidity ratios Long-term solvency & Activity ratios Profitability ratios

Leverage ratios

1)Current Ratio 1) Debt Equity Ratio 1)Stock Turnover Ratio 1) G.P ratio

2) Liquid Ratio 2) Debt to total 2) Debtors Turnover 2) N.P ratio

capital ratio ratio 3) Absolute Liquid 3) fixed asset 3) Return on investment turnover ratio

B.1) Debtors turnover ratio 4) Working Capital 4) Return

Turnover ratio on capital

2) Inventory turnover ratio 5) Creditors turnover 5) Earning

ratio per share

6) Total asset turnover 6) Divivend

ratio yield ratio

Ratio analysis of Hero Cycles Ltd

LIQUIDITY RATIO:

It refers to the ability of a concern to meet its current obligation as and when these become due. The short-term obligations are met by realizing amounts from current, floating or circulating assets. These should be convertible into cash for paying obligations of short term nature. The sufficiency or insufficiency of current assets should be assessed by comparing them with short-term liabilities. If current assets can pay-off current liabilities, the liquidity position is satisfactory. On the other hand, if current liabilities may not easily met out of current assets then the liquidity position will be bad.

1. Current ratio

It is known as working capital ratio. It is a measure of liquidity and used in making analysis of short term financial position. Current Ratio may be defined as the relationship between current assets and current liabilities.

Current Ratio= Current Assets

Current Liabilities

(Amt. in Rs.)

Particulars2003-042004-052005-062006-07

Current Assets3,121,540,7622,972,798,7982,946,438,7233,034,177,090

Current Liabilities 1,949,300,8051,477,718,3041,434,230,4221,864,132,505

Current Ratio1.602.012.051.63

Interpretation:

The current ratio represents a margin of safety for creditors. As a conventional rule, a current ratio of 2:1 or more is considered as idle. From above calculations, it can be seen that before current ratio has improved from years but in 05-06 it is 1.62.on account of increase in liabilities comparatively less increase in assets.

2. Quick ratio

Quick ratio is more rigors test of liquidity than current ratio. It is the ratio between quick assets and current liabilities. Quick ratio refers to all the current assets except Inventory & prepaid expenses.

Quick ratio= Quick assets( current assets inventory - prepaid expenses )

Current liabilities

Particulars2003-042004-052005-062006-07

Quick Assets25470536552,370,091,9002,296,396,8402,267,655,948

Current Liabilities 1,949,300,8051,477,718,3041,434,230,4221,864,132,505

Quick Ratio1.311.601.601.22

Interpretation:

As a rule of thumb quick ratio of 1:1 is considered satisfactory. In above case, quick ratio is satisfactory throughout but before 2005-06 was better. Hence, it indicates that Hero Cycles Ltd. is liquid enough to meet its current liabilities in time.

3. Absolute quick ratio

Cash is the most liquid ratio asset. Absolute liquid assets include cash in hand, cash at bank, marketable securities or temporary investments.

Absolute quick ratio = Cash + marketable securities

Current liabilities

Particulars2003-042004-052005-062006-07

Absolute Liquid Assets56,399,58163,077,24877,168,41969,481,654

Current Liabilities 1,949,300,8051,477,718,3041,434,230,4221,864,132,505

Absolute Liquid Ratio0.030.040.050.04

Interpretation:

The acceptable norm for this ratio is 0.5:1. From above calculations it can be interpreted that absolute liquid ratio was very poor in 2002-03, 2003-04. it was satisfactory in 2004-05. It has slightly improved in 2005-06 but still its not satisfactory.

Efficiency ratios or activity ratios:

Activity ratio measures the efficiency and the effectiveness with which a firm can manage its resources. These are known as the turnover ratios, because they indicate the speed with which assets are converted into cash.

4. Inventory turnover ratioit indicates whether the inventory has been efficiently used or not. It indicated the number of times the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory.

Inventory turnover ratio= Cost of goods sold

Avg. Inventory at cost

Inventory conversion period It is calculated to see the average time taken for clearing the stocks.

Inventory conversion period= Working Days in a year

Inventory Turnover ratio

Articulars2003-042004-052005-062006-07

COGS6,905,102,3397,763,825,0729,037,352,3099,197,560,602

Average Inventory542,671,258588,597,003626,374,391708,281,513

Inventory Turnover Ratio(in times)12.7213.1914.4312.99

Inventory Conversion Period(in days)23.5822.7420.7923.10

Interpretation:

Usually a higher turnover indicates efficient management of inventory. A low turnover ratio indicates over-investment in inventories, dull business. Here company has shown upward trend till 2005 but in 2006 it declines to 22.05 due to more increase in average inventory than cost of goods sold.

5. Debtor turnover ratio

This ratio indicates the velocity of debt collection generally higher the ratio means the more efficient management of debtors or more liquid are debtors and vice verse.

Debtor turnover ratio: net annual sales

Average trade debtors

Average collection period

It represents the average number of days for which a firm has to wait before its receivables are converted into cash. It measures the quality of debtors.

Aver. Collection period = number of working days

Debtor turnover ratio

Particulars2003-042004-052005-062006-07

Net Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410

Average Debtors1,663,212,0581,727,044,3911,742,763,2361,844,321,481

Debtors Turnover Ratio(in times)5.395.636.286.16

Average Collection Period(in days)55.7053.3347.7748.67

Interpretation:

Debtor turnover ratio of Hero Cycles ltd. shows irregular trend as it was increasing till 2005-06 but declined in 2006-07. It indicates less liquid debtors in that year. Average collection period was quiet high in 2003-04 but it declined a good deal in 2004-05. But again it increased a bit in 2006-07. It implies inefficient collection performance.

6. Creditor turnover ratioThis ratio indicates the velocity with which the creditors are turned over in relation to purchases. Generally higher the ratio better it is or otherwise lower the creditor velocity, less favorable are the results.

Creditors Turnover Ratio: Annual purchases

Average trade creditors

Average Payment period

It represents the average number of days taken by the firm to pay its creditors.

Average payment period = number of working days

Creditors turnover ratio

Particulars2003-042004-052005-062006-07

Net Purchases6,334,645,4927,138,764,4908,434,353,2328,522,140,258

Average Creditors1,286,366,7911,371,725,8621,202,784,0001,345,833,421

Creditors Turnover Ratio(in times)4.925.207.016.33

Average Payment Period(in days)60.9257.6542.7847.38

Interpretation:

From above it can be interpreted that CRT has been increasing which is favorable. But it decreased in 2006-07. Also AVP has reduced over years indicating better liquidity position.

7. Working capital turnover ratioIt indicates the velocity of utilization of net working capital. It indicates the efficiency with which working capital is being used by the company.

Working capital turnover ratio = cost of sales

Average of net working capitalParticulars2003-042004-052005-062006-07

Total cost of sales 7,884,901,8518,750,834,2719,832,216,56710,867,966,519

Average working capital1,239,976,9191,333,650,1631,503,644,3981,341,126,443

Working Capital Turnover Ratio (in times)6778

Interpretation:

A higher ratio indicates efficient utilization of working capital. But a very high WCTR is not a good situation for any firm. So overall in the years the working capital turnover ratio is satisfactory.Analysis of long term financial position of Hero Cycles ltd. or Tests of Solvency

8. Debt equity ratio

It shows the relationship between external and internal equities & it is calculated to measure the claim of outsiders and owners against companys assets

Debt equity ratio= outsiders fund

Shareholders funds

Particulars2003-042004-052005-062006-07

Debt (outsiders fund)1,488,245,7151,566,465,1991,775,398,0821,576,254,791

Equity(shareholder's funds)2,585,096,4213,299,592,5873,780,685,8214,427,446,105

Debt Equity Ratio57.5747.4746.9635.60

Interpretation:

As a general rule, there should be equal proportion of owners fund and outsiders funds in financing the firms assets i.e. 1:1. But in above case equity is more than outsiders funds which is favorable from creditors point of view as it provides margin of safety for them. But again it is not considered satisfactory for shareholders indicating Profitability ratios

These ratios measure the result of business operations or overall performance and effectiveness of the firm.14. Gross Profit ratio

Gross profit ratio indicates the relationship of gross profit to sales and it is usually represented as percentage.

Gross profit ratio: gross profit*100

Net sales

Particulars2003-042004-052005-062006-07

Gross Profit2,053,641,9271,959,516,6201,907,466,7392,171,776,808

Net Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410

Gross Profit Ratio22.9220.1717.4319.10

Interpretation:

Higher the gross profit ratio better is the result. In 2003-04 ratio was 22.92%. It declined in next tw0 year and then increased in 2006-07 and was 19.10% which is satisfactory.

15. Net profit ratio

It establishes the relationship between net profit and sales. It indicates efficiency of the management in manufacturing, selling, administrating and the other activities of the company.

Net profit ratio = net profit * 100

Sales

Particulars2003-042004-052005-062006-07

Net Profit520,799,861830,190,920585,898,709664,931,302

Net Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410

Net Profit Ratio5.818.555.355.85

Interpretation:

Higher the ratio better is the profitability. In 2003-04, ratio was 5.81% but it improved in 2004-05 but afterwards it falls and then it started increasing in 2006-07 indicating satisfactory overall performance of the firm.

16. Return on shareholders investment or net worth:Popularly known as ROI, this ratio is the relationship between net profits and the shareholders funds.

Return on Shareholders investment = Net profit (after interest & tax)

Shareholders funds

Particulars2003-042004-052005-062006-07

Net Profit520,799,861830,190,920585,898,709664,931,302

Shareholder's Fund2,585,096,4213,299,592,5873,780,685,8214,427,446,105

Return on Shareholder's Investment20.1525.1615.5015.02

Interpretation:

Higher the ratio, better are the results. In 2003-04 ROI was quiet less but it

increased in 2004-05 due to increased profit. Again in 2005-06 it declined due to increased shareholders funds. Hence ROI of HCL has irregular trend.

17. Earning per share:-

Earning per share is a small variation of return on equity capital and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares.

EPS = Net profit after taxes & preference dividend

No. of equity share

Particulars2003-042004-052005-062006-07

Net Profit after tax - Pref. Div.520,799,861830,190,920585,898,709664,931,302

No. of Equity Shares39,821,28039,821,28039,821,28039,821,280

Earning per Share13.0820.8514.7116.70

Interpretation:

EPS of Hero cycles Ltd. has irregular trend as it increased in 2004-05 then declined in 2005-06and then again increased in 2006-07

18. Return on capital employed:

It establishes the relationship between profits and the capital employed.

Return on capital employed = Adjusted Net Profit *100

Net Capital EmployedParticulars2003-042004-052005-062006-07

Adjusted Net Profit679,039,636941,787,571735,872,498636,173,463

Net Capital Employed4,393,411,8215,168,215,0685,836,698,2265,995,322,537

Return on Capital Employed15.4618.2212.6110.61

Interpretation:

It is the prime ratio that measures which measures the efficiency of the business. A higher percentage of return on capital employed will satisfy the owners that their money is profitably utilized.

19. Dividend Pay out ratio

It is calculated to find the extent to which earnings per share have been retained in the business. It is an important ratio because ploughing back of profits enables a company to grow and pay more dividends in future.

Dividend pay out ratio = Dividend per equity share Earning per share

Particulars2003-042004-052005-062006-07

Dividend per share5.541.561.561.56

Earning per share13.0820.8514.7116.70

Dividend Pay Out Ratio0.420.070.110.09

Interpretation:

In 2004 company has given highest dividends in the last 4 years. The company is giving constant dividend i.e.Rs.1.56 per year ignoring fluctuations in the earning per share. It shows that company is retaining enough profits and it is in position to meet contingencies.

OBJECTIVES OF THE RESEARCH:

To study the factors influencing the choice of customers while buying hi-end cycles .

To study the satisfaction level of customers of geared cycles

To study the performance of various cycle brands on selected parameters.

RESEARCH METHODOLGY:

Scope of the study

Scope of the study is restricted to city of BareillyResearch Design

The research design is a pattern or an outline of a research projects working, it is a statement of only the essential elements study, those that provide the basic guidelines for the details of the project. Further a research design is an arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It constitutes the blueprint for collection, measurement and analysis of data. Research design stands for advance planning of the methods to be adopted for collecting the relevant data and the techniques to be used in their analysis, keeping in view of the objectives of the research.

The present study, being conducted, followed a descriptive design. It produces a picture of the phenomenon in which the decision maker is interested. As the data would be responses from a sample containing large number of source. Design of descriptive studies includes the nature and source of the data, the nature of expected results and the analytical method.

The research design for my research is descriptive, as I will be exploring some new facts about the Hero CYCLES .

Data Collection

For my research study the data has been collected by both the primary & secondary means. The primary data has been collected regarding the different attributes to be considered while preparing the questionnaire. The questionnaire was then designed keeping in mind the objectives of the study.

For primary data collection I adopted the structured questionnaire, which was filled by 21 respondents. The questionnaire was filled personally by visiting the respondents at their respective locations.

The secondary data of my research has been collected through magazines, journals and some previous researches..

3.3Sampling PlanSampling is an effective step in the collection of primary data and has a great influence on the quality of results. The sampling plan includes the universe, population, sample size and sample design.

3.4Universe

Universe refers to all the eligible respondents for a particular research around the world.

The universe for my research is all DEALERS OF CYCLES IN INDIA. Universe & population can be same in some researches

Population

Population refers to part of universe from which the sample for conducting the research is selected. Universe & population can be same in some researches.

The population for my research is cycle dealers in the cities of Ludhiana. Bhandita, ferozpurSample unit

Each and every cycle dealer of Hero Cycles Ltd..

Sample size

For this study 21dealers were selected .

Sampling technique

There were 30ealers in all these towns but a few of them were unavailable so questionnaires were got filled from 21dealers.

Chapetr-4

Data Analysis And Interpetation

Q1:HOW LONG YOU HAVE BEEN ASSOCIATED WITH HERO CYCLES?

ANALYSIS

A major chunk of current cycle dealers have been into this trade for a long time that is in this case more than 80% of the dealers have been cycle dealers for more than 15 years now. In fact there is just 2 dealer who has entered into this field in the last 5 years.

Q4: WHAT KIND OF CUSTOMERS PREFER TO BUY Fancy TYPES OF BI-CYCLES?

ANALYSIS

From the graph it has been clear that it is youngster which prefer to buy fancy bi-cyclesQ5: WHAT CUSTOMERS PREFERS WHILE BUYING CYCLE?

ANALYSIS

Price is the most important factor which affects a customers decision while buying a Fancy cycle which is closely followed by looks . Comfort and brand are also important but surprisingly price is not a very important factor for customers of fancy cycle as it is not a product meant for the masses.

Q6: WHAT TYPE OF CYCLES HAS MORE SALES? (IN PERCENTAGE)

Q: 7 Do you think brand name of a company affects the buying Decision of a customer?

Q: 8 Do you think extensive advertisement affects the buying decision of a customer?(IN PERCENTAGE)

Q: 9 what kind of Marketing Strategies you have been following to increase the sale of Hero cycles?

Q: 10 In which companys product you are getting maximum no of complaints?

Q: 11 According to you which media will be effective for advertisement

Q13How will you rate Hero cycles as compare to others? (IN PERCENTAGE)

Q: 16 Do you think there is a bright future of Fancy cycles in the market?

Analysis:Almost 80% of the dealers expect that the future demand for Fancy cycles will be low. Whereas 10% expect that the market would be higher than what it is at present.

Q15:ON THE BASIS OF OVERALL SALES

COMPANYMEAN SCORERANK

AVON2.39II

HERO1.29I

TI2.61III

ATLAS2.71IV

OTHERS2.91V

Hero is the frontrunner in the overall sales followed by Avon . TI , the ghaziabad bases company is third followed by Atlas. Other unorganized manufacturers like Neelam , K.W etc are fifth in the ranking in terms of overall sales.

ON THE BASIS OF OVERALL PRODUCT RANGE

COMPANYMEAN SCORERANK

AVON2.22III

HERO1.28I

TI2.18II

ATLAS2.91IV

OTHERS3.54V

Hero has the most wide products range in the overall cycles segment which is followed by TI. Then comes Avon followed by Atlas .

ON THE BASIS OF OVERALL CUSTOMER SATISFACTION

COMPANYMEAN SCORERANK

AVON2.19II

HERO1.30I

TI2.55III

ATLAS2.73IV

OTHERS3.66V

The customers of hero Cycles Ltd are the most satisfied customers in the cycle market followed by Avon and TI . Atlas comes fourth in the list followed by other unorganized players.

QUSIONNAIREQ1: How long you have been associated with hero cycles (a) 0-5 years (b) 5-10 years (c) 10-15 years (

d) More than 15 years

Q: 2 which company does you represent?

(a) Hero Cycles (b) Atlas (c) Avon (d) Neelam

(e)All of above (f) Any other

Q: 3what kind of Customers prefer to buy types of BI-Cycles?

(a) Youngsters (b) Professional Racers (c) Both

Q: 5 what customers prefer while buying bi-cycles?

(a) Price (b) Comfort (c) Design (d) Colour

(e) Safety Measures (f) Quality

Q: 6 what type of Cycles have more sales?

(a) Standard (b) Roadsters Cycles (c) Both

Q: 7 Do you think brand name of a company affects the buying decision of a customer?

(a) Yes (b) No (c) Cant Say

Q: 8 Do you think extensive advertisement affects the buying decision of a customer?

(a) Yes (b) No (c) Cant Say

Q: 9 what kind of Marketing Strategies you have been following to increase the sale of cycles?

(a) Free gifts (b) Discount (c) Warranties (d) Repair

Q: 10 In which companys product you are getting maximum no of complaints?

(a) Hero Cycles (b) Atlas (c) Avon (d) Neelam

(e)All of above (f) Any other

Q: 11 According to you which media will be effective for advertisement?

(a)Electronics (b) Print (c) Mouth to Mouth

(d) Boards, Holdings and Wall Painting

Q: 12 which factors account for brand switching?

(a) Price (b) After sale service (c) Design (d) Colours

(e) Safety Measures (f) Quality (g) Salesmanship

Q: 13 How will you rate Hero cycles as compare to others companys cycles?

(a) Excellent (b) Good (c) Average (d) Poor

Q: 14 which brand you prefer to sell more?

(a) Standard (b) Roadsters (c) Both

Q: 15 Rating on the basis of

Sale Customer Satisfaction PRODUCTroduct Range

Hero Cycles -------- ---------- --------------

Avon -------- ---------- -------------

Atlas -------- ---------- -------------

TI -------- ---------- --------------

Q: 16 Do you think there is a bright future of Roadsters cycles in the market?

(a) Yes (b) No (c) Cant Say

NAME OF DEALER: SIGNATURE OF DEALER

WITH STAMP

ADDRESS:

CITY:Conculsion 80% of the respondates are given response that they are in the business more than 15 years. Only 10% of respondates are in the business in between 10-15 years. From the graph no-2one can clearly see that hero cycle is no-1 in terms of sale From the graph no-4 we can clearly see that its the youngesters who prefer to buy fany hi-end racing cycles. From the figure-5 one can clearly see that while purchasing hi end bi-cycles price is the most dominating factor followed by safety and quality. Hi-end fancy cycles has more sales as compare to standard cycles. 80% of respondate agreed that brand name of a company effect the buying decision of a customer. 75% of respondate agreed that advertisment plays the important role while influence the customer buying habit. 45% of dealers used the free gifts followed by 35% of dealers discount as marketing tool to inceresce their sales. Avon cycles got th maxmium no of complaints and hero cycles got the less no of complaints. I/3 of the dealers feels that elctroincs as a media is more effecting to promote their respect products. 79% of the dealers rate heros hi-end bi-cycles excellent in terms of quality. 60% of the dealers have said that they will prefer to sell hi-end bi-cycles. Majority of dealers have givrn the response that there is a bright future for hi-end bi-cycles Not only in sales hero is no-1 in trms of customr satisfaction and product range.RECOMANDATIONS

To increase their sales dealers are giving free gifts and discount from their on pockets. Instead of that company shoud has to provide them free gifts and freebies. Some dealers sold local branded cycles with the name of hero cycles. Company should has to take some affermative steps to that dealers which are selling local branded cycles with the name of hero cycles To cater the competetion hero cycles has to concerate more on advertisment.

Bibliography

http://www.entrepreneur.com/money/moneymanagement/financialanalysis/article21940.html

http://www.bized.co.uk/compfact/ratios/liquid1.htm

http://www.rediff.com/money/2007/jun/11bspec.htm

Gupta Shashi et al, Management Accounting and Business Finance, 2005, Kalyani Publishers, Ludhiana, Edition- 13, Pg- 4.1- 4..53.

Panday, I.M.. Financial Management. New Delhi: Vikash Publications House.

Sharma et al, Practical Problems In Management Accounting and Financial Management, 2007, Kalyani Publishers, Ludhiana, Edition -4, Pg 2.1- 2.96.

Company Brochures

http://herogroup.com/

http://www.herocycles.com/

http://en.wikipedia.org/wiki/Corporate_finance http://www.treasury.govt.nz/publicsector/workingcapital/chap2.asp

http://www.planware.org/workingcapital.htm#6

http://www.iloveindia.com/

EFFECT OF BRAND NAME

80%

10%

10%

YES

NO

CAN'T SAY

Board of Directors

EMBED Excel.Chart.8 \s

Mr. Ashish Kumar Munjal

Mr. Suresh Chandra Munjal

Mr. Sunil Kant Munjal

Mr. Vijay Kumar Munjal

Mr. Yogesh Munjal

Mr. O.P.

Munjal

Mr. Brij

Mohan

Lal

Munjal

Mr. G.D.Kapoor

President

Mr. SK

Bhandari

(SVP)

Mr. YN Gupta

(SVP)

Mr. Bharat Goel

(SVP)

Mr.KJS Bindra

(SVP)

Mr. MR Munjal

(VP)

Mr. AC Tiwari

(VP)

Mr. AK Mathur

(VP)

Mr.Ashok Abrol

(VP)

Mr. SS Saini

(VP)

Mr.VL

Sehgal

(Sr.GM)

Mr.RK

Sehgal

(AVP)

Mr. Anil

Bhatia

(AVP)

Mr.Nipun

Dang

(GM)

Mr. KN

Vijay

(AVP)

Mr. Swran Singh

(GM)

Lt Col TK

Anand

(GM)

Mr. Dalip Kumar

(GM)

Mr. Jit

Singh

(GM)

12

13

14

15

16

17

11

4

10

2

1

20

21

5

8

7

6

3

18

PAGE 51

_1280906861.xlsChart4

78

10

12

Sheet1

HERO140

AVON24

ATLAS18

NEELAM10

ANY OTHER8

200

STANDARD78

HI-END FANCY CYCLES10

BOTH12

Sheet1

Sheet2

Sheet3