Financial Statement of Honda Motors:

Honda has adopted IFRS 16 "Leases" with a date of initial application of April 1, 2019. Honda used the
modified retrospective approach, under which the cumulative effect of initial application was recognized as an
adjustment to the opening balance of equity at the date of initial application. Therefore, the comparative
information has not been restated and continues to be reported under the previous accounting policy.

Previously, Honda determined at contract inception whether an arrangement was or contained a lease under IAS
17"Leases" and IFRIC 4 "Determining whether an Arrangement contains a Lease". Honda assesses whether a
contracts or contains a lease under IFRS 16 on or after April 1, 2019. Honda applied the practical expedient to
grandfather the assessment of which a contract was or contained a lease when applying IFRS 16. Therefore,
Honda applied IFRS 16 to all contracts entered into prior to April 1, 2019 and identified as leases under IAS 17
and IFRIC 4.

IFRS 16 introduced a single on-balance lease accounting model for lessees. A lessee recognizes a right-of-use
asset representing its right to use the underlying asset and a lease liability representing its obligation to make
lease payments. In addition, expenses related to leases change from straight-line operating lease expenses to
depreciation charge for right-of-use assets and interest expense on lease liabilities. At transition, Honda
recognized the lease liabilities for leases previously classified as an operating lease under IAS 17, and measured
these liabilities at the present value of the remaining lease payments, discounted using Honda's incremental
borrowing rate as of April 1, 2019. The weighted average rate applied was 1.19%. The right-of-use assets were
measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease
payments relating to that lease recognized in the statement of financial position immediately before the date of
initial application. In addition, Honda applied the following practical expedients when applying IFRS 16.

 Applied a single discount rate to a portfolio of leases with reasonably similar characteristics
 Adjusted the right-of-use assets by the amount of any provision for onerous leases under IAS 37
"Provisions”
 Contingent Liabilities and Contingent Assets" recognized immediately before the date of initial
application as an alternative to performing an impairment review
 Excluded initial direct costs from the measurement of the right-of-use assets at the date of initial
application.
1. Profit and Loss Account of Honda Motors in Rs. Cr. (MARCH 2021)

Profit And Loss A/c

INCOME

Revenue From Operations [Gross] 938.94

Less: Excise/Service Tax/Other Levies 0

Revenue From Operations [Net] 938.94

Other Operating Revenues 0

Total Operating Revenues 938.94

Other Income 14.53

Total Revenue 953.47

EXPENSES

Cost Of Materials Consumed 496.16

Purchase Of Stock-In Trade 56.81

55.04
Changes In Inventories Of FG,WIP And Stock-In Trade

107.40
Employee Benefit Expenses

Finance Costs 0.28

Depreciation And Amortization Expenses 20.26

Other Expenses 151.38

Total Expenses 887.33

2. Balance Sheet of Honda Motors in Yen (million) MARCH 2021
Balance Sheet
Assets
Current assets:
Cash and cash equivalents 2,672,353
Trade receivables 633,909
Receivables from financial services 1,878,358
Other financial assets 190,053
Inventories 1,560,568
Other current assets 365,769
Non-current assets:
Investments accounted for using the equity method 655,475
Receivables from financial services 3,282,807
Other financial assets 441,724
Equipment on operating leases 4,626,063
Property, plant and equipment 3,051,704
Intangible assets 760,434
Deferred tax assets 132,553
Other non-current assets 209,695
Total assets 20,461,465
Liabilities and Equity
Current liabilities:
Trade payables 958,469
Financing liabilities 3,248,457
Accrued expenses 449,716
Other financial liabilities 209,065
Income taxes payable 43,759
Provisions 287,175
Other current liabilities 593,447
Non-current liabilities:
Financing liabilities 4,221,229
Other financial liabilities 303,570
Retirement benefit liabilities 578,909
Provisions 238,439
Deferred tax liabilities 698,868
Other non-current liabilities 344,339
Total liabilities 12,175,442
Equity:
Common stock 86,067
Capital surplus 171,823
Treasury stock (273,940)
Retained earnings 8,142,948
Other components of equity (114,639)
Equity attributable to owners of the parent 8,012,259
Non-controlling interests 273,764
Total liabilities and equity 20,461,465
3. Ratio and Interpretation of Honda Motors

Profitability
Gross profit / (loss) margin % 5.6
Operating profit / (loss) margin % 4.3
Profit / (loss) before tax % 4.1
Profit / (loss) after tax % 2.7
Liquidity
Current ratio Times 1.5
Quick ratio Times 1.1
Long term debt to equity Times 0.2
Total liabilities to equity Times 2.5
Activity
Total assets turnover Times 1.5
Fixed assets turnover Times 8.4
Stock turnover ratio Times 5.5
Interest cover (BT) Times 24.9
Interest cover (AT) Times 16.4
Number of days stock Days 66
Earning
Return on capital employed % 8.9
Return on equity (BT) % 16
Return on equity (AT) % 10.3
Earings / (loss) per share (BT) Rs. 19.5
Earning / (loss) per share (AT) Rs. 12.6
Price earning ratio (AT) Times 21.7
Dividend per ordinary share Rs. 4.5
Dividend payout ratio % 36

4. CSR (Corporate Social Responsibility) of Honda Motors

 Honda Motorcycle & Scooter India will strive to be a Company which the society wants to exist.
 HMSI shall direct its resources to the extent reasonable in order to improve the quality of life of the
people by focusing on Environment, Education, Sports, Rural Development & other Humanitarian &
Social causes to enhance the joys in their lives.

 HMSI will respect Human dignity and all applicable laws.

 HMSI will positively impact & influence society for its sustainable development.
 HMSI is committed to build a sustainable business with strong relevance and a commitment to inclusive
growth and contribute to the society by supporting causes on various concerns including road safety,
healthcare, environment sustainability, promoting education, promoting sports and other rural
development activities.
 WE ARE
EMPOWERING GIRLS
SAVING NATION

 Constitution of CSR Committee:

A Corporate Social Responsibility Committee (“the CSR Committee”) has been constituted by the Board
of Directors to oversee the CSR agenda of the Company. The committee has been formed as per the
requirements of Section 135 of the Companies Act, 2013 and Companies (Corporate Social
Responsibility Policy) Rules, 2014.