B. Economics Project

Submitted By:
Hamza Ameer Khan

2171303
Submitted To:
Sir Zahid Pervaiz
Business Economics
Final Project
Atlas Honda
Table of Contents
 Acknowledgment
 Executive Summary
 Introduction to the company
 Interview question
 Strategic Goals
 Quality Policy
 Financial Statement
 Analysis of Financial Statement
 Conclusion
Acknowledgement
With the name of ALLAH the most beneficent and merciful”
This assignment is the challenged work we have done. For all the struggle
that we have been through, we are amazed and grateful for this granted
opportunity.
I would like to express profound gratitude to Mr. Iftikhar Ahmed current

National Manager who has served Atlas Honda in one of the three cores of
marketing for more than 40 years. We would also like to thank our advisor
as well as our Business Economics instructor Sir Zahid Pervaiz Sb for his
prompt and detailed advice. His guidance was a valuable asset showing us
what an academic professional is ought to be.
Executive Summary
The purpose of this project was to visit and study the Financial Report of
Atlas Honda who is the market leader in the motorcycle industry and its
efficient working shows this position can be maintained and improved even
further in the years to come. Its nearest competitors have still a long way to
go. The reasons behind this are the quality standards at Atlas, its
committed workforce and ample chances of growth at all levels in the
organization.
This report contains the research in working of Financial Report at Atlas

Honda.
Introduction to the Company
 Organization OVERVIEW:
The company was created by the merger of Panjdarya Limited and
Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing
concerns were established by the Atlas Group. Atlas Honda Limited
manufactures and markets Honda motorcycles in collaboration with
Honda Motor Company Japan. The Company also manufactures
various hi-tech components in-house in collaboration with leading
parts manufacturers like Showa, Atsumitech, Nippon Denso and Toyo
Denso. Honda motorcycles are by far the largest selling motorcycles
in the country with an unmatched reputation for high quality, reliability
and after-sales-service.
 Vision Statement:
Market leader in the motorcycle industry emerging as globally competitive
center of production and exports.
 Mission Statement:
A dynamic growth oriented company through market leadership, excellence
in quality and service and maximizing export, ensuring attractive returns to
equity holders, rewarding associates according to their ability and
performance, fostering a network of engineers and researchers ensuing
unique contribution to the development of the industry, customer
satisfaction and protection of the environment by producing emission
friendly green products as a good corporate citizen fulfilling its social
responsibilities in all respects.
INTERVIEW
 A brief introduction about company:

o Honda Atlas Cars Limited is a joint venture between Honda Motor
Company Japan and the Atlas Group of Companies, Pakistan.
Honda was established in 1994 in Pakistan. Their head office is in
Manga Mandi and their marketing department is in Defense
Lahore. It’s a business to business organization. Honda Atlas has
been a pioneer in introducing several technologies for the first
time in Pakistan such as PGMF-1(Programmed fuel injection),
VTEC (Variable Value Timing and lift electronic control, Automatic
transmission, Crystal lights, Oriel (Roof with both tilt and slide
functions), Four wheel Disk Brakes and ABS Brakes (Anti-lock
braking system).
 Name:
o Atlas Honda
 When came to existence:

o The company came to existence in1988.
 No of Employees:
o There are more than 10k employees working at Honda.
 Type of Organization:
o Atlas Honda is a Japanese multinational corporation primarily
known as a manufacturer of auto mobiles and motorcycle.
 Do you have a proper website for your
company?
o Yes, we have proper website http://www.atlashonda.com.pk for
our company.
 What kind of information do you display at

their website?
o . The website displays their Products, Dealership, Investor
relations, Atlas group, Career, Media and how to contact us.
 How do you remain in touch with their

customers, suppliers and employees?
1. CUSTOMERS: Like a good friendship we maintain our

relationship with our customers by remaining in contact with
them through text, calls and social media.
 We provide facilities for our customers like discount on first
oil change and etc.
 If there is any built in fault in our product we repair that for
free and stop the remaining production to avoid that fault,
that is why our customers rely on HONDA and we are
leading brand in PAKISTAN.
2. SUPPLIERS: Honda is the leading brand in Pakistan with
11.8% improvement in their product with the help of
suppliers for the past 5 years.
 Supplier search for newest technology at cheap rate
and are paid extra bonuses for that so for extra bonus
they work hard for that and remain in touch with us.
 If our supplier gives us good profit at the end of year
we provide them more facilities like car, bike etc.
3. EMPLOYEES: We make them feel like family so our
employees are very touchy with Honda.
 Our work is tough, if our employee is good in his work
we provide them good salaries, incentives and bonus.
 After their job time we are connected to them through
mobiles, land lines, Emails and their location services.
 If our employees work after their limited time we
provide them extra good price in shape of cash or
product and their job security increased.
Through these channels and services we remain in touch
with our employees, supplier and customers.
 What is the use of information technology in

their organization?
 The data which were written manually are now being

computerized. They are using their own software
designed by a private software developer company in
which their sales and purchases.
 Excel; initial recording is done through this software
 They are using SC/Tetra computational fluid dynamics software for
fluid analysis of key components of Honda bikes.
 We are using software named as ECU tuning, this software works in
tuning or modifying.
 We are using a portable tablet tester, a bar code scanner, a software
named as Honda Interface Module (HIM) for vehicle communication.
 If there is any software issue we use software named as Ob.
Strategic Goals:
 Customers
Our customers are the reason and the source of our business. It is our joint
aim with our dealers to ensure that the customer enjoys the highest level of
satisfaction from use of Honda motorcycle.
 Quality
To ensure that our products and services meet the set standards of
excellence.
 Local Manufacturing
To be the industry leader in indigenization of motorcycle parts.
 Technology
To develop and maintain distinct business advantages through continuous
induction of improved hard and soft technologies.
 Shareholders
To ensure health and viability of business and thus safeguarding
shareholders interest by maximizing profit. payment of regular satisfactory
dividends and adding values to the shares.
 Employees
To enhance and continuously update each members capabilities and
education and to provide an environment which encourages practical
expression of the individual potential in goal directed team efforts and
compensate them attractively according to their abilities and performance.
 Corporate Citizen
To comply with all government laws, rules and regulations and to maintain
a high standard of ethics in all operations and to act as a responsible
members of the society.
Quality Policy
 Commitment to provide high quality motorcycle and parts

 Right work in first attempt and on time.
 Maintain and continuously improve quality.
 Training of man power and acquisition of latest technology
 Safe, clean and healthy environment.
 Market leadership and prosperity for all.
 Six Years Financial statement
 Statement of profit and Loss (In Rupees 000)
Particulars 2018 2017 2016 2015 2014 2013

Profit and
Loss Account
Sales 77478845 6453402 55022415 45772177 44478713 42325242
1
Cost of sales (69188101) (5775498 (4937650 (41098571 (40253929 (38646049
7) 6) ) ) )
Gross Profit 8290744 677903 5645909 4673606 4224784 3679193

4
Sales & marketing (1852057) (1630773 (1456152) (1314231) (1293938) (1206648)
expenses )
Administrative (634594) (602343) (499915) (432622) (430054) (387477)
Expenses
Other income 877908 916333 637074 543924 420651 322668
Other operating (445037) (404740) (310682) (245132) (223989) (190453)

expenses
Share of profit of 50607 61084 43475 26283 - -

an associated
profit- net of Tax
Profit from 6287571 511859 4059709 3251828 2697454 2217283
operations 5
Finance Cost (22725) (25853) (15280) (8190) (8036) (9726)
Profit Before 6264846 509274 4044429 3243638 2689418 2207557

Taxation 2
Taxation (1601211) (1340263 (1042630) (892747) (687858) (599753)
)
Profit After 4663635 375247 3001799 2350891 2001560 1607804
Taxation 9
 Six Years Financial statement
 Statement of profit and Loss (In Percentage)
Particulars 2018 2017 2016 2015 2014 2013

Profit and
Loss Account
Sales 100 100 100 100 100 100
Cost of sales (89.3) (89.5) (89.7) (89.8) (90.5) (91.3)
Gross Profit 10.7 10.5 10.3 10.2 9.5 8.7

Sales & marketing (2.4) (2.5) (2.6) (2.9) (2.9) (2.9)
expenses
Administrative (0.8) (0.9) (0.9) (0.9) (1.0) (0.9)
Expenses
Other income 1.1 1.4 1.2 1.1 0.9 0.8
Other operating (0.6) (0.6) (0.6) (0.5) (0.5) (0.4)

expenses
Share of profit of 0.1 0.1 0.1 0.1 - -
an associated
profit- net of Tax
Profit from 8.1 7.9 7.4 7.1 6.0 5.2
operations
Finance Cost (0.03) (0.04) (0.03) (0.02) (0.02) (0.02)
Profit Before 8.1 7.9 7.4 7.1 6.0 5.2

Taxation
Taxation (2.1) (2.1) (1.9) (2.0) (1.5) (1.4)
Profit After 6.0 5.8 5.5 5.1 4.5 3.8

Taxation
Analysis OF Financial Statement
 Sales & Cost of sales
The Company remained focused towards delivering objective
of sustainable growth through value creation. The momentum of increasing
sales continued over the period of six year on account of positive market
demand. It resulted in achievement of cumulative average growth rate of
13% over six years period. Further, cost of sales recorded an cumulative
average growth rate of 12% since 2013, on account of volume growth.
Resultantly, Gross Profit margin improved from 8.7% to 10.7%.
 Selling General and Administrative Expenses

Selling general and administrative expenses remained under control and
as a percentage of sales decreased from 3.8% to 3.2% since 2013.
However, in terms of absolute numbers, increase by 56% over the period
of six years mainly on account of inflation and sales related expense.
 Other Operating Expenses

Other operating expenses increased
from Rs. 190 million in 2013 to Rs. 445 million in 2018 over the period of
six years with cumulative average growth rate of 19 %. These mainly
comprises of provision for workers' welfare funds and workers' profit
participation funds that were directly related to profits.
 Other Operating Income
Other operating income increased from
Rs. 323 million in 2013 to Rs. 929 million in 2018 over the period of six
years with cumulative average growth rate of 22 %. This is on account of
investment of surplus funds in TDRs, mutual funds and income from
associate.
 Taxation
The taxation charge decreased due to
reduction in corporate income tax rates by the federal government.
Profit and Loss Analysis – Income (%) Profit and Loss Analysis – Expenses (%)
Conclusion
After collecting relevant information using different sources we provide the

following conclusion. Sources which included the Interview with the
NATIONAL MANAGER, using the website of the company and observing
the workings of the organizations at different levels, levels which included
from base level of day to day interaction between employees and
customers at different showrooms of the organization, we were able to
gather essential and conclusive Facts and Figures.
Atlas Honda LTD gains its competitive advantage over time which starts
after collaboration with Honda Motors Company Japan. A Consistent
growth and localization of technology from japan to Pakistan was a
breakthrough for competitive advantage. So technology and quality
become immutable competitive advantages. So strategically they are using
this advantage in quite a good and responsible way.

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Submitted By:

Hamza Ameer Khan

With the name of ALLAH the most beneficent and merciful”

I would like to express profound gratitude to Mr. Iftikhar Ahmed current

This report contains the research in working of Financial Report at Atlas

 A brief introduction about company:

 When came to existence:

 What kind of information do you display at

 How do you remain in touch with their

1. CUSTOMERS: Like a good friendship we maintain our

 What is the use of information technology in

 The data which were written manually are now being

 Commitment to provide high quality motorcycle and parts

Particulars 2018 2017 2016 2015 2014 2013

Gross Profit 8290744 677903 5645909 4673606 4224784 3679193

Other operating (445037) (404740) (310682) (245132) (223989) (190453)

Share of profit of 50607 61084 43475 26283 - -

Profit Before 6264846 509274 4044429 3243638 2689418 2207557

Particulars 2018 2017 2016 2015 2014 2013

Cost of sales (89.3) (89.5) (89.7) (89.8) (90.5) (91.3)

Gross Profit 10.7 10.5 10.3 10.2 9.5 8.7

Other operating (0.6) (0.6) (0.6) (0.5) (0.5) (0.4)

Profit Before 8.1 7.9 7.4 7.1 6.0 5.2

Profit After 6.0 5.8 5.5 5.1 4.5 3.8

 Selling General and Administrative Expenses

 Other Operating Expenses

After collecting relevant information using different sources we provide the

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