Form 6-K
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No.1-7628

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF May 2013

COMMISSION FILE NUMBER: 1-07628

HONDA GIKEN KOGYO KABUSHIKI KAISHA

(Name of registrant)

HONDA MOTOR CO., LTD.

(Translation of registrant’s name into English)

1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F        *         Form 40-F                    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):                    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):                    

 

 

 


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Contents

Exhibit 1:

CELAYA, Mexico, May 2, 2013 - Honda de Mexico, S.A. de C.V. announced plans to construct a new transmission plant in Celaya, near the city of Guanajuato, on the same site as the new automobile plant currently under construction that will begin production of the Honda Fit in Spring 2014.

Exhibit 2:

The Board of Directors of Honda Motor Co., Ltd. (the “Company”), at its meeting held on May 16, 2013, resolved to propose a matter of “Amendments to Articles of Incorporation” as follows as an agenda item for the Company’s 89th ordinary general meeting of shareholders scheduled to be held on June 19, 2013.

Exhibit 3:

The Board of Directors of Honda Motor Co., Ltd., at its meeting held on May 16, 2013, resolved to convene the Company’s 89th ordinary general meeting of shareholders as follows.

Exhibit 4:

Notice of Convocation of the 89th Ordinary General Meeting of Shareholders of Honda Motor Co., Ltd. (the “Company”) has become available on May 29, 2013 on the Company’s website written below.

http://world.honda.com/investors/stock_bond/meeting/

Exhibit 5:

The English translation of unconsolidated financial information for the fiscal year ended March 31, 2013 included in exhibit of Notice of Convocation of the 89th Ordinary General Meeting of Shareholders of Honda Motor Co., Ltd.

Exhibit 6:

BEIJING, China, May 28, 2013 - Guangqi Honda Automobile Co., Ltd., an automobile production and sales joint venture of Honda in China, held a ceremony to commemorate the start of construction of a third production line and an engine plant within the property of the existing ZengCheng Plant.

Exhibit 7:

Bengaluru, India, May 28, 2013 - Honda Motorcycle & Scooter India Pvt. Ltd., the second largest motorcycle company in India inaugurated its most advanced and latest third motorcycle production plant at Narsapura Area, District Kolar (Karnataka) today.


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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

HONDA GIKEN KOGYO KABUSHIKI KAISHA (HONDA MOTOR CO., LTD.)

/s/ Kohei Takeuchi

Kohei Takeuchi
Chief Financial Officer
Honda Motor Co., Ltd.

Date: June 14, 2013


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Honda to Build New Transmission Plant in Celaya, Mexico

CELAYA, Mexico, May 2, 2013—Honda de Mexico, S.A. de C.V. announced plans to construct a new transmission plant in Celaya, near the city of Guanajuato, on the same site as the new automobile plant currently under construction that will begin production of the Honda Fit in Spring 2014.

For details, please refer to the website of Honda Motor Co., Ltd

http://world.honda.com/news/2013/c130502New-Transmission-Plant-Mexico/index.html


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[Translation]

May 16, 2013

 

To:    Shareholders of Honda Motor Co., Ltd.
From:    Honda Motor Co., Ltd.
   1-1, Minami-Aoyama 2-chome,
   Minato-ku, 107-8556 Tokyo
   Takanobu Ito
   President and Representative Director

Notice Concerning Partial Amendments to Articles of Incorporation

The Board of Directors of Honda Motor Co., Ltd. (the “Company”), at its meeting held on May 16, 2013, resolved to propose a matter of “Amendments to Articles of Incorporation” as follows as an agenda item for the Company’s 89th ordinary general meeting of shareholders scheduled to be held on June 19, 2013.

Particulars

 

1. Reasons for Amendments

The amendments are for making an addition to the Company’s business objects for the purpose of conducting electricity generation using renewable energy, etc. and the supply and sale of such electricity (Article 2 of the proposed amendments).

 

- 1 -


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2. Contents of amendments

Portions of the existing Articles of Incorporation will be amended as follows:

(The underlines indicate the portions to be amended.)

 

Present Articles

  

Proposed Amendments

Chapter I.    General Provisions

  

Chapter I.    General Provisions

(Objects)

   (Objects)
Article 2.    Article 2.
The object of the Company shall be to carry on the following business:    The object of the Company shall be to carry on the following business:

1.

  

1.

|    [Provisions omitted]

  

|    [Same as at present]

8.

  

8.

[Newly established]

  

9. Electricity generation and supply and sale of electricity

9. [Provisions omitted]

  

10. [Same as at present]

 

3. Schedule

Scheduled date of the ordinary general meeting of shareholders for the purpose of the amendments to the Articles of Incorporation:

Wednesday, June 19, 2013

Scheduled date when amendments to the Articles of Incorporation come into effect:

Wednesday, June 19, 2013

 

- 2 -


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[Translation]

May 16, 2013

 

To:    Shareholders of Honda Motor Co., Ltd.
From:    Honda Motor Co., Ltd.
   1-1, Minami-Aoyama 2-chome,
   Minato-ku, 107-8556 Tokyo
   Takanobu Ito
   President and Representative Director

Notice Concerning 89th Ordinary General Meeting of Shareholders

The Board of Directors of Honda Motor Co., Ltd., (the “Company”), at its meeting held on May 16, 2013, resolved to convene the Company’s 89th ordinary general meeting of shareholders as follows.

Particulars

 

1. Date and time

10:00 a.m. on Wednesday, June 19, 2013

 

2. Place

GRAND PACIFIC LE DAIBA

Palais Royal on the first basement level

2-6-1 Daiba, Minato-Ku, Tokyo

 

3. Agenda:

Matters to be reported:

 

  1. Report on the business report, consolidated financial statements and unconsolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013); and

 

  2. Report on the results of the audit of the consolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013) by the independent auditors and the Board of Corporate Auditors.

Matters to be resolved:

First Item:

Distribution of Dividends


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Second Item:

Partial Amendments to the Articles of Incorporation

Third Item:

Election of Thirteen (13) Directors

Fourth Item:

Election of One (1) Corporate Auditor


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LOGO     Securities Code Number: 7267

NOTICE OF CONVOCATION OF

THE 89TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

TO BE HELD AT GRAND PACIFIC LE DAIBA, TOKYO, JAPAN

ON JUNE 19, 2013 AT 10:00 A.M.

(This is a translation of the original notice

in the Japanese language mailed on May 29, 2013

to stockholders in Japan, and is for reference purposes only.)

HONDA MOTOR CO., LTD.

(HONDA GIKEN KOGYO KABUSHIKI KAISHA)

TOKYO, JAPAN


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[Translation]

May 29, 2013

To Stockholders:

Notice of Convocation of the 89th

Ordinary General Meeting of Shareholders

Dear Stockholders:

You are hereby notified that the 89th Ordinary General Meeting of Shareholders will be held as stated below. You are respectfully requested to attend the meeting.

Please note that, if you do not plan to attend the annual meeting, you may vote by the method outlined below. We request that you exercise your vote after examining the reference documents and other materials enclosed that are related to the annual meeting.

Vote by mail: Please indicate whether you are in favor of, or opposed to, the proposals on the enclosed Annual Meeting Proxy Card, and then send the proxy card to arrive no later than 6:00 p.m. on Tuesday, June 18, 2013.

 

Yours faithfully,
Honda Motor Co., Ltd.
1-1, Minami-Aoyama, 2-chome
Minato-ku, Tokyo
By: Takanobu Ito
President and Representative Director

Request: We request that when arriving at the meeting you present the voting right exercise form enclosed herewith to the meeting hall receptionist.

 

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Particulars

 

1. Time and Date:   

10:00a.m. on June 19, 2013 (Wednesday)

2. Place:    GRAND PACIFIC LE DAIBA
   Palais Royal on the first basement level, at 2-6-1 Daiba, Minato-ku, Tokyo

3. Agenda:

Matters to be reported:

 

  1. Report on the Business Report, Consolidated Balance Sheets and Consolidated Statements of Income for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013);

 

  2. Report on the results of the audit of the consolidated financial statements for the 89th Fiscal Year (from April 1, 2012 to March 31, 2013) by the independent auditors and the Board of Corporate Auditors.

Matters to be resolved:

First Item:

Distribution of Dividends

Second Item:

Partial Amendments to the Articles of Incorporation

Third Item:

Election of Thirteen (13) Directors

Fourth Item:

Election of One (1) Corporate Auditor

4. Matters to Be Resolved at the Meeting

 

(1) When proxies submitted show no indication of approval or disapproval on the voting right exercise form, these will be treated as votes of approval for proposals.

 

(2) When proxy voting rights are exercised through indications on the voting right exercise form and, in addition, through voting via the Internet and, therefore, voting rights are exercised more than once, the votes submitted via the Internet will be regarded as the effective votes.

 

(3) When voting rights are exercised more than once via the Internet, the last votes submitted via the Internet will be regarded as the effective votes.

Details regarding these agenda items are contained in the “Business Report for the 89th Fiscal Year,” which is appended to this Notice of Convocation.

 

* In the case that revisions are made to the general shareholders’ meeting reference materials or attached materials, the revised items will be posted on the Company’s website.

Japanese    http://www.honda.co.jp/investors    English     http://world.honda.com/investors

 

3


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REFERENCE DOCUMENTS

CONCERNING EXERCISE OF VOTING RIGHT

Reference matters with respect to the proposals:

FIRST ITEM: Distribution of Dividends

The Company strives to maintain a global perspective, to develop its operations in many countries throughout the world and to increase its corporate value.

With respect to the distribution of profits, the Company regards the distribution of profits to its stockholders to be one of the most important issues for management. The Company will make dividend distributions after taking into account its long-term strategy and consolidated earnings performance and will also acquire its own stock from time to time with the objectives of improving capital efficiency and flexibly implementing capital policies.

Retained earnings will be allocated toward financing R&D activities that are essential for the future growth of the Company and toward capital expenditures and investment programs that will expand the Company’s operations for the purpose of improving business results and strengthening the Company’s financial condition.

Regarding the year-end dividends for the fiscal year under review, the following conditions are proposed:

(1) Conditions and Total Value of Dividend Assets Allocated to Stockholders

¥19 per share of common stock

Total value of ¥34,243,648,510

(2) Effective Date of Distribution of Dividends

June 20, 2013

 

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SECOND ITEM: Partial Amendments to the Articles of Incorporation

(1) Reasons for Amendments

The amendments were made to make an addition to the Company’s business objects for the purpose of conducting electricity generation using renewable energy, etc. and the supply and sale of such electricity (Article 2 of the proposed amendments).

(2) Contents of Amendments

Portions of the existing Articles of Incorporation will be amended as follows:

(The underlines indicate the portions to be amended.)

 

Present Articles

 

Proposed Amendments

Chapter I.

 

(Objects)

 

Article 2.

 

The object of the Company shall be to carry on the following business:

 

1.

 

|    [Provisions omitted]

 

8.

 

9. [Provisions omitted]

 

Chapter I.

 

(Objects)

 

Article 2.

 

The object of the Company shall be to carry on the following business:

 

1.

 

|    [Same as at present]

 

8.

 

9. Electricity generation and supply and sale of electricity

 

10. [Same as at present]

 

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THIRD ITEM: Election of Thirteen (13) Directors

The term of office of each of the twelve (12) current Directors is due to expire at the close of this meeting. It is proposed that the total number of directors be increased by one in order to further strengthen the management system so that thirteen (13) Directors will be appointed at this meeting. The names and particulars of the candidates for the position of Director are provided below.

 

Candidate
No.

  

Name

(Date of birth)

  

Resume, current position and responsibilities

* denotes important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

1.

   Fumihiko Ike    Joined Honda in February 1982    27,400    None
   (May 26, 1952)    Chief Operating Officer for Power Product Operations in April 2003      
      Director of the Company in June 2003      
      Chief Operating Officer for Business Management Operations in April 2006      
      Managing Director of the Company in June 2007      
      Chief Operating Officer for Regional Operations (Asia & Oceania) in April 2008      
      President and Director of Asian Honda Motor Co., Ltd. in April 2008      
      Senior Managing Officer and Director of the Company in April 2011      
      Chief Operating Officer for Business Management Operations in April 2011      
      Risk Management Officer in April 2011      
      General Supervisor, Information Systems in April 2011      
      Chief Operating Officer for IT Operations in April 2012      
      Government & Industrial Affairs in April 2012      
      Chairman and Representative Director of the Company in April 2013 (present)      

2.

   Takanobu Ito    Joined Honda in April 1978    26,400    None
   (August 29, 1953)    Executive Vice President of Honda R&D Americas, Inc. in April 1998      
      Director of the Company in June 2000      
      Senior Managing Director of Honda R&D Co., Ltd. in June 2001      
      Managing Director of the Company in June 2003      
      Motor Sports in June 2003      
      President and Director of Honda R&D Co., Ltd. in June 2003      
      General Supervisor, Motor Sports in April 2004      
      General Manager of Suzuka Factory of Production Operations in April 2005      
      Managing Officer of the Company in June 2005      
      Chief Operating Officer for Automobile Operations in April 2007      
      Senior Managing Director of the Company in June 2007      
      President and Director of Honda R&D Co., Ltd. in April 2009      
      President and Director of the Company in June 2009      
      President, Chief Executive Officer and Representative Director of the Company in April 2011 (present)      
      Chief Operating Officer for Automobile Operations in April 2011      

 

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Candidate
No.

  

Name

(Date of birth)

  

Resume, current position and responsibilities

* denotes important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

3.

   Tetsuo Iwamura    Joined Honda in April 1978    26,400    None
   (May 30, 1951)    Chief Operating Officer for Parts Operations in April 2000      
      Director of the Company in June 2000      
      Chief Operating Officer for Regional Operations (Latin America) in April 2003      
      President and Director of Honda South America Ltda. in April 2003      
      President and Director of Moto Honda da Amazonia Ltda. in April 2003      
      President and Director of Honda Automoveis do Brasil Ltda. in April 2003      
      Managing Director of the Company in June 2006      
      Chief Operating Officer for Regional Operations (North America) in April 2007 (present)      
      President and Director of Honda North America, Inc. in April 2007 (present)      
      President and Director of American Honda Motor Co., Inc. in April 2007 (present)      
      Senior Managing Director of the Company in June 2008      
      Senior Managing Officer and Director of the Company in April 2011      
      Senior Managing Officer of the Company in June 2011      
      Executive Vice President and Executive Officer in April 2012 (present)      
      Representative Director of the Company in June 2012 (present)      
      Chief Operating Officer for Automobile Operations in April 2013 (present)      
      Risk Management Officer in April 2013 (present)      
      (Important concurrent positions in other companies or organizations)      
     

*  President and Director of Honda North America, Inc.

     
     

*  President and Director of American Honda Motor Co., Inc.

     

 

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Candidate
No.

  

Name

(Date of birth)

  

Resume, current position and responsibilities

* denotes important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

4.

   Takashi Yamamoto    Joined Honda in April 1977    18,400    None
   (January 12, 1953)    General Manager of Automobile Purchasing Division 1 for Purchasing Operations in April 2000      
      Director of the Company in June 2000      
      Quality, Certification & Regulation Compliance and Service Technology in April 2002      
      Quality, Certification & Regulation Compliance in April 2004      
      President and Director of Honda Manufacturing of Alabama, LLC in April 2005      
      Operating Officer of the Company in June 2005      
      General Manager of Saitama Factory of Production Operations in April 2007      
      Managing Officer of the Company in June 2007      
      President and Director of Yutaka Giken Co., Ltd. in June 2009      
      Managing Officer of the Company in April 2011      
      General Manager of Automobile Production Planning Office in Production Operations in April 2011      
      Senior Managing Officer of the Company in April 2012 (present)      
      Chief Operating Officer for Production Operations in April 2012      
      Director of the Company in June 2012 (present)      
      Production Operation in April 2013 (present)      
      General Manager of Automobile Production Oversight Unit for Automobile Operations in April 2013 (present)      

5.

   Yoshiharu Yamamoto    Joined Honda in April 1973    18,400    None
   (March 19, 1953)    Managing Director of Honda R&D Co., Ltd. in June 2005      
      Senior Managing Director of Honda R&D Co., Ltd. in June 2007      
      Executive Vice President and Director of Honda R&D Co., Ltd. in June 2010      
      Managing Officer of the Company in April 2011      
      President, Chief Executive Officer and Director of Honda R&D Co., Ltd. in April 2011 (present)      
      Managing Officer and Director of the Company in June 2011      
      Senior Managing Officer of the Company in April 2012 (present)      
      Chief Operating Officer for IT Operations in April 2013 (present)      
      (Important concurrent positions in other companies or organizations)      
      * President, Chief Executive Officer and Director of Honda R&D Co., Ltd.      

 

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Candidate
No.

 

Name

(Date of birth)

 

Resume, current position and responsibilities

* denotes important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

6.

  Masahiro Yoshida   Joined Honda in April 1979    22,100    None
  (March 5, 1957)   Human Resources and Associate Relations for Business Support Operations in April 2007      
    Operating Officer of the Company in June 2007      
    General Manager of Hamamatsu Factory of Production Operations in April 2008      
    Chief Operating Officer for Business Support Operations in April 2010 (present)      
    Director of the Company in June 2010      
    Operating Officer and Director of the Company in April 2011      
    Compliance Officer in April 2012 (present)      
    Managing Officer and Director of the Company in April 2013 (present)      

7.

 

Outside Director candidate

Kensaku Hogen

(August 2, 1941)

 

Ambassador to Canada in April 2001

Director of the Company in June 2005 (present)

(Attendance record)

Attended all 10 meetings of the Board of Directors

   2,500    None

8.

  Outside Director candidate Nobuo Kuroyanagi (December 18, 1941)   President and CEO of Mitsubishi UFJ Financial Group, Inc. (MUFG) in October 2005    1,900    None
    Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) in April 2008      
    Director of the Company in June 2009 (present)      
    Director of MUFG in April 2010      
    Advisor of BTMU in April 2012 (present)      
    (Important concurrent positions in other companies or organizations)      
   

*  Advisor of BTMU

     
   

*  Outside Director of Isetan Mitsukoshi Holdings Ltd.

     
   

*  Outside Director of Mitsubishi Research Institute, Inc.

     
   

*  Outside Director of Tokio Marine & Nichido Fire Insurance Co., Ltd.

     
   

*  Outside Corporate Auditor of Mitsubishi Heavy Industries, Ltd.

     
    (Attendance record)      
    Attended 9 of 10 meetings of the Board of Directors      

 

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Candidate
No.

  

Name

(Date of birth)

  

Resume, current position and responsibilities

* denotes important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

9.

   Takeo Fukui    Joined Honda in April 1969    45,400    None
   (November 28, 1944)    President and Director of Honda Racing Corporation in May 1987      
      Managing Director of Honda R&D Co., Ltd. in May 1987 Director of the Company in June 1988      
      Senior Managing Director of Honda R&D Co., Ltd. in June 1990      
      Executive Vice President and Director of Honda of America Mfg., Inc. in June 1994      
      Managing Director of the Company in June 1996      
      President and Director of Honda of America Mfg., Inc. in June 1996      
      President and Director of Honda R&D Co., Ltd. in June 1998      
      Motor Sports in June 1999      
      Senior Managing Director of the Company in June 1999      
      President and Director of the Company in June 2003      
      Director and Advisor of the Company in June 2009 (present)      

10.

   Yuji Shiga    Joined Honda in April 1982    10,400    None
   (October 7, 1958)    General Manager of Operation Office No. 1 in Regional Operations (North America) in April 2009      
      General Manager of Operation Office No. 2 in Regional Operations (Asia & Oceania) in April 2010      
      Operating Officer of the Company in April 2011      
      Responsible for CIS countries, the Middle & Near East and Africa for Regional Operations in April 2011      
      Chief Operating Officer for Power Product Operations in April 2012 (present)      
      Operating Officer and Director of the Company in June 2012 (present)      

11.

   Kohei Takeuchi†    Joined Honda in April 1982    10,200    None
   (February 10, 1960)    General Manager of Accounting Division for Business Management Operations in April 2010      
      Operating Officer of the Company in April 2011 (present)      
      Chief Operating Officer for Business Management      
      Operations in April 2013 (present)      

12.

   Shinji Aoyama†    Joined Honda in April 1986    6,400    None
   (December 25, 1963)    General Manager of Motorcycle Business Planning Office for Motorcycle Operations in April 2011      
      Operating Officer of the Company in April 2012 (present)      
      Chief Operating Officer for Motorcycle Operations in April 2013 (present)      

13.

   Noriya Kaihara†    Joined Honda in April 1984    3,000    None
   (August 4, 1961)    General Manager of Parts Sales and Service Division for Customer Service Operations in April 2010      
      General Manager of Automobile Quality Assurance Division in April 2012      
      Operating Officer of the Company in April 2013 (present)      
      Responsible for Quality in April 2013 (present)      

 

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Notes:

   1. † denotes new candidates.
   2. Matters related to Outside Director candidates are as follows:
   (1) Kensaku Hogen and Nobuo Kuroyanagi are candidates for the position of Outside Director as defined in Article 2, Paragraph 3, Item 7 of the Enforcement Regulations of the Company Law.
   (2) Kensaku Hogen has been registered as an Independent Director as provided for in the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and if he is elected, he is scheduled to continue to serve as an Independent Director.
  

(3) Reasons for selection of candidates for the position of Outside Director

 

Kensaku Hogen is proposed as a candidate because the Company wishes to receive his advice about the Company’s activities given from an objective, broad-ranging and high-level perspective, and based on his rich experience and high level of insight regarding diplomacy. Although he has no experience of being engaged in corporate management other than having served as an outside officer in the past, the Company believes that he can perform the duties of an Outside Director based on his experience and insight mentioned above.

  

Nobuo Kuroyanagi is proposed as a candidate because the Company wishes to receive his advice on the Company’s activities given from an objective, broad-ranging and high-level perspective, and based on his rich experience and high level of insight regarding corporate management.

   (4) Outline of contents of the limited liability contracts with candidates for the position of Outside Directors
   Based on Article 427, Paragraph 1 of the Company Law and Article 28 of the Articles of Incorporation, the Company has entered into contracts with both candidates which limit their liabilities, in accordance with Article 423, Paragraph 1 of the Company Law, to the minimum liability amount that is stipulated in Article 425, Paragraph 1 of the Company Law.
  

If both candidates are re-elected, the Company plans to extend the term of each of their limited liability contracts.

   (5) Incidence of inappropriate corporate operations at other companies for which the candidate was serving as an officer (during the past five years), acts which were done to prevent the occurrence of such incidences and acts which were done as measures taken after the occurrence of such incidence
           At The Senshu Ikeda Bank, Ltd., where Nobuo Kuroyanagi served as an Outside Director from June 2010 until June 2012, the following were discovered: an incidence of embezzlement of customers’ savings by a part-time worker in November 2010, an incidence of fraudulent withdrawal by an employee through the misuse of the maximum amount of overdraft in March 2011 and, finally, an incidence of embezzlement of customers’ savings by an employee in June 2011. While Nobuo Kuroyanagi was unaware of such facts in advance, he made various recommendations regarding legal compliance, at meetings of the board of directors, on a regular basis and, after the discovery of the aforesaid incidence, Nobuo Kuroyanagi has proactively advised the Company on the implementation of measures to prevent the recurrence of such incidence through the strengthening of the Company’s internal systems for checks, etc. and the enhancement of employee training, etc.
   (6) Number of years since the candidate initially assumed the position of Outside Director (up to the end of this general meeting of shareholders)
   Kensaku Hogen    Eight years
   Nobuo Kuroyanagi    Four years

 

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FOURTH ITEM: Election of One (1) Corporate Auditor

The term of office of the Corporate Auditor Hideki Okada is due to expire at the close of this meeting. It is proposed that one (1) Corporate Auditor be elected at this meeting. The name and particulars of the candidate for the position of Corporate Auditor are provided below. The Board of Corporate Auditors has consented to the submission of this item to this meeting.

 

Candidate
No.

  

Name
(Date of birth)

  

Resume, current position

and important concurrent positions

in other companies or organizations

  

Number of shares
of the Company held

  

Special interest
between the candidate
and the Company

1.    Kunio Endo    Joined Honda in April 1981    4,000    None
   (August 23, 1957)    General Manager of Finance Division in Business      
      Management Operations in April 2006      
      General Manager of Accounting Division for Business      
      Management Operations in April 2007      
      President and Director of American Honda Finance Corp. in November 2010      
      President and Director of Honda Canada Finance Inc. in November 2010      

 

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Business Report for the 89th Fiscal Year

For the Period From: April 1, 2012 To: March 31, 2013

1. OUTLINE OF BUSINESS

(1) Review of Operations

Honda’s consolidated net sales and other operating revenue for the year amounted to ¥9,877.9 billion, an increase of 24.3% from the previous fiscal year, due primarily to increased revenue in automobile business operations as production recovered from the impact of the Great East Japan Earthquake and the floods in Thailand as well as favorable foreign currency translation effects.

Consolidated operating income for the year amounted to ¥544.8 billion, an increase of 135.5% from the previous fiscal year, due primarily to an increase in sales volume and model mix as well as cost reductions, despite increased SG&A and R&D expenses.

Consolidated income before income taxes and equity in income of affiliates for the year totaled ¥488.8 billion, an increase of 89.9% from the previous fiscal year.

Equity in income of affiliates amounted to ¥82.7 billion for the year, a decrease of 17.6% from the previous fiscal year.

Consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal year ended March 31, 2013 totaled ¥367.1 billion, an increase of 73.6% from the previous fiscal year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the fiscal year amounted to ¥203.71, an increase of ¥86.37 from ¥117.34 for the previous fiscal year.

Motorcycle Business

For the years ended March 31, 2012 and 2013

 

     Unit (thousands)  
     Honda Group Unit Sales      Consolidated Unit Sales  
   Year ended
Mar. 31, 2012
     Year ended
Mar. 31, 2013
     Change      (%)      Year ended
Mar.31, 2012
     Year ended
Mar. 31, 2013
     Change      (%)  

Motorcycle business

     15,061         15,494         433         2.9         8,650         9,510         860         9.9   

Japan

     220         217         -3         -1.4         220         217         -3         -1.4   

North America

     200         250         50         25.0         200         250         50         25.0   

Europe

     198         179         -19         -9.6         198         179         -19         -9.6   

Asia

     12,412         13,035         623         5.0         6,001         7,051         1,050         17.5   

Other Regions

     2,031         1,813         -218         -10.7         2,031         1,813         -218         -10.7   

 

Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.

With respect to Honda’s sales for the year by business segment, in motorcycle business operations, revenue from sales to external customers decreased 0.7%, to ¥1,339.5 billion from the previous fiscal year, due mainly to unfavorable foreign currency translation effects, despite increased consolidated unit sales. Operating income totaled ¥110.2 billion, a decrease of 22.7% from the previous fiscal year, due primarily to unfavorable foreign currency effects, despite an increase in cost reductions.

 

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Table of Contents

Automobile Business

For the years ended March 31, 2012 and 2013

 

     Unit (thousands)  
     Honda Group Unit Sales      Consolidated Unit Sales  
     Year ended
Mar. 31, 2012
     Year ended
Mar. 31, 2013
     Change      (%)      Year ended
Mar. 31, 2012
     Year ended
Mar. 31, 2013
     Change      (%)  

Automobile business

     3,108         4,014         906         29.2         2,482         3,408         926         37.3   

Japan

     588         692         104         17.7         580         685         105         18.1   

North America

     1,323         1,731         408         30.8         1,323         1,731         408         30.8   

Europe

     158         171         13         8.2         158         171         13         8.2   

Asia

     837         1,122         285         34.1         219         523         304         138.8   

Other Regions

     202         298         96         47.5         202         298         96         47.5   

 

Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our automobile business. As a result, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our automobile business.

In automobile business operations, revenue from sales to external customers increased 32.8%, to ¥7,709.2 billion, from the previous fiscal year due mainly to an increase in consolidated unit sales and favorable foreign currency translation effects. Operating income totaled ¥285.9 billion, an increase of ¥363.1 billion from the previous fiscal year, due primarily to an increase in sales volume and model mix as well as cost reductions, despite increased SG&A expenses and R&D expenses.

Financial Service Business

Revenue from customers in the financial services business increased 6.3%, to ¥548.5 billion, from the previous fiscal year due mainly to an increase in revenue from operating leases and favorable foreign currency translation effects. Operating income decreased 7.0%, to ¥158.1 billion, from the previous fiscal year due mainly to an increase of expenses for lease residual values.

Power Product and Other Businesses

For the years ended March 31, 2012 and 2013

 

     Unit (thousands)  
     Honda Group Unit Sales/Consolidated Unit Sales  
     Year ended
Mar. 31, 2012
     Year ended
Mar. 31, 2013
     Change      (%)  

Power product business

     5,819         6,071         252         4.3   

Japan

     392         314         -78         -19.9   

North America

     2,314         2,604         290         12.5   

Europe

     1,121         1,004         -117         -10.4   

Asia

     1,472         1,572         100         6.8   

Other Regions

     520         577         57         11.0   

 

Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. In power product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales for the year ended March 31, 2012 and for the year ended March 31, 2013, since no affiliate accounted for under the equity method was involved in the sale of Honda power products.

Revenue from sales to external customers in power product and other businesses increased 1.3%, to ¥280.6 billion, from the previous fiscal year, due mainly to an increase in consolidated unit sales of power products and favorable foreign currency translation effects, despite decreased revenue in other businesses. Honda reported an operating loss of ¥9.5 billion, a deterioration of ¥5.5 billion from the previous fiscal year due mainly to increased R&D expenses.

 

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Table of Contents

¡ Net Sales Breakdown

 

      Yen (millions)  

Business Segment

   FY2012 From
April 1, 2011 to
March 31, 2012

(reference)
     FY2013 From
April 1, 2012 to
March 31, 2013
     Change from the previous fiscal year
(reference)
 
                            (%)               

Grand Total

     7,948,095         9,877,947         1,929,852         24.3   

Japan

     1,517,927         1,652,995         135,068         8.9   

North America

     3,480,732         4,586,412         1,105,680         31.8   

Europe

     515,739         534,517         18,778         3.6   

Asia

     1,458,799         2,093,034         634,235         43.5   

Other Regions

     974,898         1,010,989         36,091         3.7   

Motorcycle Business
(motorcycles only)

     1,348,828         1,339,549         -9,279         -0.7   

Japan
(motorcycles only)

     72,915         72,949         34         0.0   

North America
(motorcycles only)

     97,306         112,176         14,870         15.3   

Europe
(motorcycles only)

     96,146         86,424         -9,722         -10.1   

Asia
(motorcycles only)

     579,562         667,473         87,911         15.2   

Other Regions
(motorcycles only)

     502,899         400,527         -102,372         -20.4   

Automobile Business

     5,805,975         7,709,216         1,903,241         32.8   

Japan

     1,329,645         1,462,664         133,019         10.0   

North America

     2,855,683         3,905,276         1,049,593         36.8   

Europe

     355,963         388,464         32,501         9.1   

Asia

     836,301         1,385,449         549,148         65.7   

Other Regions

     428,383         567,363         138,980         32.4   

Financial Services Business

     516,148         548,506         32,358         6.3   

Japan

     28,926         34,282         5,356         18.5   

North America

     455,558         484,275         28,717         6.3   

Europe

     8,175         7,256         -919         -11.2   

Asia

     2,878         3,145         267         9.3   

Other Regions

     20,611         19,548         -1,063         -5.2   

Power Product & Other Businesses

     277,144         280,676         3,532         1.3   

Japan

     86,441         83,100         -3,341         -3.9   

North America

     72,185         84,685         12,500         17.3   

Europe

     55,455         52,373         -3,082         -5.6   

Asia

     40,058         36,967         -3,091         -7.7   

Other Regions

     23,005         23,551         546         2.4   

 

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Table of Contents

(2) Capital Expenditures

Capital expenditures during the fiscal year totaled ¥593,628 million. The breakdown of capital expenditures by business segment was as follows:

 

     Yen (millions), %  

Business Segment

   FY2012
(reference)
     FY2013      Change in  amount
(reference)
     Change (%)
(reference)
 

Motorcycle Business

     62,075         73,513         11,438         18.4   

Automobile Business

     334,196         505,045         170,849         51.1   

Financial Services Business

     316         551         235         74.4   

Power Product & Other Businesses

     10,005         14,519         4,514         45.1   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     406,592         593,628         187,036         46.0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating Lease Assets

     683,767         793,118         109,351         16.0   

Note: Intangible assets are not included in the table above.

In addition to investments for new model introductions, the Company’s capital investments were predominantly utilized for expanding, rationalizing and renovating manufacturing facilities as well as for expanding sales and R&D facilities.

(3) Liquidity and Capital Resources

Funds for financing capital investments in Honda’s manufacturing and sales businesses are provided mainly from cash generated by operating activities, bank loans and the issuance of commercial paper. The outstanding balance of funds for Honda’s manufacturing and sales businesses at the end of the fiscal year under review was ¥540.2 billion.

Honda funds its financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of monetary assets, commercial paper, corporate bonds and from operating companies. The outstanding balance of funds for Honda’s financial services subsidiaries at the end of the fiscal year under review was ¥4,863.5 billion.

(4) Preparing for the Future

Honda aims to achieve global growth by further encouraging and strengthening innovation and creativity and creating quality products that please the customers and exceed their expectations.

Honda will focus all its energies on the tasks set out below, aiming to get back on a growth trajectory as it pursues the vision toward 2020 of “providing good products to customers with speed, affordability and low CO2 emissions.”

 

1. Research and Development

In connection with its efforts to develop the most effective safety and environmental technologies, Honda will continue to be innovative in advanced technology and products. Honda aims to create and introduce new value-added products to quickly respond to specific needs in various markets around the world. Honda will also continue its efforts to conduct research on experimental technologies for the future.

 

2. Production Efficiency

Honda will establish and enhance efficient and flexible production systems at its global production bases and supply high quality products, with the aim of meeting the needs of its customers in each region. Learning from the experience of disasters such as the Great East Japan Earthquake and the Thai floods, Honda will work at improving its global supply chain, implementing disaster prevention measures at each place of business and devising more effective business continuity plans (BCPs).

 

3. Sales Efficiency

Honda will remain proactive in its efforts to expand product lines through the innovative use of IT and will show its continued commitment to different customers throughout the world by upgrading its sales and service structure.

 

4. Product Quality

In response to increasing customer demand, Honda will upgrade its quality control by enhancing the functions of and coordination among the development, purchasing, production, sales and service departments.

 

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Table of Contents
5. Safety Technologies

Honda is working to develop safety technologies that enhance accident prediction and prevention, technologies to help reduce the risk of injuries to passengers and pedestrians from car accidents and technologies that enhance compatibility between large and small vehicles, as well as expand its lineup of products incorporating such technologies. Honda will reinforce and continue to advance its contribution to traffic safety in motorized societies in Japan and abroad. Honda also intends to remain active in a variety of traffic safety programs, including advanced driving and motorcycling training programs provided by local dealerships.

 

6. The Environment

Honda will step up its efforts to create better, cleaner and more fuel-efficient engine technologies and to further improve recyclables throughout its product lines. Honda has now set a target to reduce CO2 emissions from its global products by 30% by the end of 2020 compared to year 2000 levels. In addition to reducing CO2 emissions during production and its supply chain, Honda will strengthen its efforts to realize reductions in CO2 emissions through its entire corporate activities. Furthermore, Honda will strengthen its efforts in advancing technologies in the area of total energy management, to reduce CO2 emissions through mobility and people’s everyday lives.

 

7. Continuing to Enhance Honda’s Social Reputation and Communication with the Community

In addition to continuing to provide products incorporating Honda’s advanced safety and environmental technologies, Honda will continue striving to enhance its social reputation by, among other things, strengthening its corporate governance, compliance and risk management as well as participating in community activities and making philanthropic contributions.

Through these company-wide activities, Honda will strive to be a company that its shareholders, investors, customers and society want to exist.

(5) Employees of the Group and the Parent Company

(a) Honda Employees

 

Business Segment

   Number of Employees  
   FY2012 (reference)     FY2013     Change (reference)  

Motorcycle Business

     39,954         (14,540     40,430         (14,404     476         (-136

Automobile Business

     134,357         (10,405     138,443         (13,052     4,086         (2,647

Financial Services Business

     2,145         (95     2,157         (113     12         (18

Power Product & Other Businesses

     10,638         (2,924     9,308         (3,354     -1,330         (430
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

     187,094         (27,964     190,338         (30,923     3,244         (2,959
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
(b) Employees of the Parent Company       
     FY2012 (reference)     FY2013     Change (reference)  

Number of employees

     24,888         (2,909     23,983         (4,261     -905         (1,352

Average age

     43.6        44.3        0.7   

Average number of years employed by the Company

     22.5        23.0        0.5   

 

Note: The number of employees of the Honda Group and the Company refers to full-time employees. The average number of temporary employees is shown in parentheses.

 

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Table of Contents

2. COMMON STOCK

 

(1) Total Number of Shares Issued    1,811,428,430 shares

 

(2) Number of Stockholders

  

 

221,028  

 

(3) Principal Stockholders

  

 

Name

   Number of Shares
Held (thousands)
   Percentage as against  Total
Shares Issued (%)

Japan Trustee Services Bank, Ltd. (Trust Account)

   126,568    7.0

The Master Trust Bank of Japan, Ltd. (Trust Account)

   83,741    4.6

Meiji Yasuda Life Insurance Company

   51,199    2.8

Moxley & Co. LLC

   50,169    2.8

Tokio Marine & Nichido Fire Insurance Co., Ltd.

   44,917    2.5

JPMorgan Chase Bank 380055

   41,688    2.3

SSBT OD05 OMNIBUS ACCOUNT–TREATY CLIENTS

   38,029    2.1

The Chase Manhattan Bank, N.A. London, S.L. Omnibus Account

   36,896    2.0

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

   36,686    2.0

Nippon Life Insurance Company

   34,700    1.9

 

Notes:   1.       

The number of shares described above rounds off figures of less than 1,000 shares.

 

  2.   

Ownership percentages are calculated using the total number of shares issued minus treasury stock (9,131 thousand shares).

 

  3.    Moxley & Co. LLC is an official holder of stock of JPMorgan Chase Bank, which is a depositary institution for American Depositary Receipts (ADRs).

3. STOCK WARRANTS

No relevant information

 

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Table of Contents

4. CORPORATE OFFICERS

(1) Directors and Corporate Auditors

 

Title

  

Name

  

Area of Responsibility

or Principal Occupations

President, Chief Executive Officer and Representative Director    Takanobu Ito    Chief Operating Officer for Automobile Operations
Executive Vice President, Executive Officer and Representative Director    Tetsuo Iwamura   

Chief Operating Officer for Regional Operations (North America)

President and Director of Honda North America, Inc.

President and Director of American Honda Motor Co., Inc.

Senior Managing Officer and Director    Tatsuhiro Oyama   

Chief Operating Officer for Motorcycle Operations

Chief Officer of Driving Safety Promotion Center

Senior Managing Officer and Director    Fumihiko Ike   

Chief Operating Officer for Business Management Operations

Chief Operating Officer for IT Operations

      Risk Management Officer
      Responsible for Government & Industrial Affairs
Senior Managing Officer and Director    Tomohiko Kawanabe    Responsible for Quality, Certification and Regulation Compliance
Senior Managing Officer and Director    Takashi Yamamoto    Chief Operating Officer for Production Operations
Senior Managing Officer and Director    Yoshiharu Yamamoto    President, Chief Executive Officer and Director of Honda R&D Co., Ltd.
Director    Kensaku Hogen   
Director    Nobuo Kuroyanagi    Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
      Outside Director of Isetan Mitsukoshi Holdings Ltd.
      Outside Director of Mitsubishi Research Institute, Inc.
      Outside Director of Tokio Marine & Nichido Fire Insurance Co., Ltd.
      Outside Corporate Auditor of Mitsubishi Heavy Industries, Ltd.
Director and Advisor    Takeo Fukui   
Operating Officer and Director    Masahiro Yoshida    Chief Operating Officer for Business Support Operations
      Compliance Officer
Operating Officer and Director    Yuji Shiga    Chief Operating Officer for Power Product Operations
Corporate Auditor (Full-time)    Masaya Yamashita   
Corporate Auditor (Full-time)    Hideki Okada   
Corporate Auditor    Hirotake Abe    Certified Public Accountant
      Outside Corporate Auditor of ITC NETWORKS CORPORATION
      Outside Corporate Auditor of NIPPON STEEL & SUMITOMO
      METAL CORPORATION
Corporate Auditor    Tomochika Iwashita    Outside Corporate Auditor of DCM Holdings Co., Ltd.
Corporate Auditor    Toshiaki Hiwatari    Lawyer
      Outside Director of Nomura Securities Co., Ltd.
      Outside Corporate Auditor of TOYO KANETSU K.K.
      Advisor of TMI Associates

 

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Table of Contents
Notes:   1.        Directors Kensaku Hogen and Nobuo Kuroyanagi are Outside Directors in accordance with Article 2-15 of the Company Law.
  2.    Corporate Auditors Hirotake Abe, Tomochika Iwashita and Toshiaki Hiwatari are Outside Corporate Auditors in accordance with Article 2-16 of the Company Law.
  3.    Corporate Auditor Hideki Okada has considerable operating experience regarding financial and accounting departments in the Company and its subsidiaries. In addition, Corporate Auditor Hirotake Abe has extensive knowledge and experience as a certified public accountant. Together, Mr. Okada and Mr. Abe have abundant knowledge related to finance and accounting.
  4.    The Company has appointed Kensaku Hogen as an independent (outside) director and Hirotaka Abe and Toshiaki Hiwatari as independent (outside) corporate auditors as provided for by each of the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange and reported their appointment to each of these stock exchanges.
  5.    The Bank of Tokyo-Mitsubishi UFJ, Ltd., is one of the Company’s principal shareholders, and the Company has transactions relationships with the Bank of Tokyo-Mitsubishi UFJ, including deposits and foreign exchange. In addition, the Tokio Marine & Nichido Fire Insurance Co., Ltd., is one of the Company’s principal shareholders, and the Company has transactions relationships with Tokio Marine & Nichido Fire Insurance, including insurance contracts. The Company has transaction relationships with NIPPON STEEL & SUMITOMO METAL CORPORATION and purchases steel and related products from that company. The Company also has transaction relationships with Mitsubishi Heavy Industries, Ltd., and purchases automobile parts from the company. The Company has no other special capital or transactions relationships with other companies.
  6.    The Company has introduced the Operating Officer System to strengthen operations in regions and local workplaces and implement quick and appropriate decisions. The Operating Officers of the Company (excluding Operating Officers who also hold the position of Director) are as follows: (As of March 31, 2013)

 

Title

  

Name

  

Area of Responsibility
or Principal Occupations

Senior Managing Officer    Hidenobu Iwata    President and Director of Honda of America Mfg., Inc.
Managing Officer    Manabu Nishimae    Chief Operating Officer for Regional Operations (Europe, the Middle & Near East and Africa)
      President and Director of Honda Motor Europe Ltd.
Managing Officer    Koichi Fukuo    Executive in Charge of Business Unit No. 1, Automobile Operations
Managing Officer    Hiroshi Kobayashi    Chief Operating Officer for Regional Operations (Asia & Oceania)
      President and Director of Asian Honda Motor Co., Ltd.
      President and Director of Honda Automobile (Thailand) Co., Ltd.
Managing Officer    Sho Minekawa    Chief Operating Officer for Regional Sales Operations (Japan)
Managing Officer    Toshihiko Nonaka    Responsible for Products, Automobile Operations
      Executive Vice President and Director, Honda R&D Co., Ltd.
Managing Officer    Takuji Yamada    Executive Vice President and Director of American Honda Motor Co., Inc.
Managing Officer    Masahiro Takedagawa    Chief Operating Officer for Regional Operations (Latin America)
      President and Director of Honda South America Ltda.
      President and Director of Honda Automoveis do Brasil Ltda.
Managing Officer    Yoshiyuki Matsumoto    Executive in Charge of Business Unit No. 3, Automobile Operations
Managing Officer    Ko Katayama    General Manager of Saitama Factory of Production Operations
Operating Officer    Seiji Kuraishi    Chief Operating Officer for Regional Operations (China)
      President of Honda Motor (China) Investment Co., Ltd.

 

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Table of Contents

Title

  

Name

  

Area of Responsibility
or Principal Occupations

Operating Officer    Katsushi Watanabe    General Manager of Kumamoto Factory of Production Operations
Operating Officer    Toshiaki Mikoshiba    President of Guangqi Honda Automobile Co., Ltd.
Operating Officer    Yoshi Yamane    General Manager of Suzuka Factory of Production Operations
Operating Officer    Takashi Sekiguchi    President and Director of Honda Canada Inc.
Operating Officer    Takahiro Hachigo    Executive Vice President and Director of Honda Motor Europe Ltd.
      Managing Officer of Honda R&D Co., Ltd.
      President and Director of Honda R&D Europe (U.K.) Ltd.
Operating Officer    Hiroshi Sasamoto    President, Chief Executive Officer and Director of Honda Engineering Co., Ltd.
Operating Officer    Hiroyuki Yamada    Chief Operating Officer for Customer Service Operations
Operating Officer    Chitoshi Yokota    Executive in Charge of Business Unit No. 2, Automobile Operations
Operating Officer    Michimasa Fujino    President and Director of Honda Aircraft Company, LLC.
Operating Officer    Soichiro Takizawa    Executive Vice President and Director of Honda Motor Europe Ltd.
      President and Director of Honda of the U.K. Manufacturing Ltd.
Operating Officer    Kohei Takeuchi    General Manager of Accounting Division for Business Management Operations
Operating Officer    Naoto Matsui    Chief Operating Officer for Purchasing Operations
Operating Officer    Mitsugu Matsukawa    Executive Vice President of Honda Motor (China) Investment Co., Ltd.
Operating Officer    Shinji Aoyama    General Manager of Motorcycle Business Planning Office for Motorcycle Operations

 

  7.        As of April 1, 2013, the following changes in Representative Director and Operating Officers were announced by the Company.

 

Title

  

Name

  

As of March 31, 2013

Chairman and Representative Director    Fumihiko Ike    Senior Managing Officer and Director
Senior Managing Officer    Sho Minekawa    Managing Officer
Managing Officer and Director    Masahiro Yoshida    Operating Officer and Director
Managing Officer    Katsushi Watanabe    Operating Officer
Managing Officer    Chitoshi Yokota    Operating Officer
Operating Officer    Noriya Kaihara    General Manager of Automobile Quality Assurance Division

 

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Table of Contents

(2) Remuneration of Directors and Corporate Auditors, Etc.

 

      Yen (millions)  

Item

   Directors
(Outside Directors)
    Corporate Auditors
(Outside Corporate Auditors)
    Total
(Outside Directors  and
Corporate Auditors)
 
   Number of
persons
    Value of
payments
    Number of
persons
    Value of
payments
    Number of
persons
    Value of
payments
 

Remuneration

    

 

13

(2

  

   

 

543

(23

  

   

 

7

(4

  

   

 

181

(47

  

   

 

20

(6

  

   

 

724

(71

  

Bonuses

    

 

12

(2

  

   

 

248

(7

  

   

 

—  

(—  

  

   

 

—  

(—  

  

   

 

12

(2

  

   

 

248

(7

  

    

 

 

     

 

 

     

 

 

 

Total

      

 

792

(30

  

     

 

181

(47

  

     

 

973

(78

  

    

 

 

     

 

 

     

 

 

 

 

Notes:   1.        Remuneration is limited to ¥1,300 million per month for Directors and ¥270 million per month for Corporate Auditors.
  2.    “Remuneration” shown in the table above is the amount of remuneration that the Company paid to its Directors, Corporate Auditors as well as its Outside Directors and Corporate Auditors during the fiscal year under review. This amount includes remuneration paid to two Directors and two Corporate Auditors who resigned as of the closing of the 88th Ordinary General Meeting of Shareholders that was held on June 21, 2012.
  3.    Bonuses to directors are included in the previously mentioned maximum amount for compensation to Directors, and the amount shown was decided by the meeting of the Board of Directors held on April 26, 2013.

(3) Principal Activities of Outside Corporate Officers during the Fiscal Year under Review

(a) Principal Activities during the Fiscal Year under Review

 

Post

  

Name

  

Attendance Record

  

Principal Activities during the Fiscal Year under Review

Director    Kensaku Hogen    Attended all 10 meetings of the Board of Directors    Based on abundant experience and considerable knowledge regarding international diplomacy, he provides advice regarding the Company’s operations from an objective and highly sophisticated perspective.
Director    Nobuo Kuroyanagi    Attended 9 of 10 meetings of the Board of Directors    Based on abundant experience and considerable knowledge regarding corporate management, he provides advice regarding the Company’s operations from an objective and highly sophisticated perspective.
Corporate Auditor    Hirotake Abe    Attended 9 of 10 meetings of the Board of Directors Attended all 10 meetings of the Board of Auditors    Based on abundant experience and considerable knowledge as a certified public accountant, he conducts auditing activities from a broad and sophisticated perspective.
Corporate Auditor    Tomochika Iwashita    Attended all 10 meetings of the Board of Directors Attended all 10 meetings of the Board of Auditors    Based on abundant experience and considerable knowledge regarding corporate management, he conducts auditing activities from a broad and sophisticated perspective.
Corporate Auditor    Toshiaki Hiwatari    Attended all 8 meetings of the Board of Directors Attended all 7 meetings of the Board of Auditors    Based on abundant experience and considerable knowledge as a legal affairs specialist, he conducts auditing activities from a broad and sophisticated perspective.

All Outside Directors have been selected based on their abundant experience and considerable knowledge, and they provide necessary comments during the deliberation of proposals.

 

Note: The record of meetings attended by auditor Toshiaki Hiwatari is based on attendance at the meetings of the Board of Directors and the Board of Auditors following their election on June 21, 2012.

 

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Table of Contents

(b) Summary of Content of Liability Limitation Contracts

The Company has entered into liability limitation contracts with all Outside Directors and Outside Corporate Auditors based on the provisions of Article 427, Paragraph 1 of the Company Law and of the Company’s Articles of Incorporation, to the effect of limiting the liability for damages provided for in Article 423, Paragraph 1 of the Company Law to the minimum liability amount provided for in Article 425, Paragraph 1 of the Company Law.

5. FINANCIAL AUDIT COMPANY

(1) Name of Financial Audit Company

KPMG AZSA LLC

(2) Financial Audit Company Remuneration, Etc., for the Fiscal Year under Review

 

(a)

   Remuneration, etc.    ¥ 422 million   

(b)

   Total profit on monetary and other assets to be paid by the Company and its subsidiaries    ¥ 536 million   

 

Notes:

  1.    

 

  

The audit contract between the Company and its financial audit company does not itemize remuneration for auditing work based on the Company Law of Japan, auditing work based on the Financial Instruments and Exchange Law of Japan and auditing work based on the Securities Exchange Law of the United States. Because of this and because it is impractical to itemize these categories of remuneration, the figure shown in line item (a) above is a total figure.

 

  2.

 

  

In addition to the services specified in Article 2, Paragraph 1 of the Japanese Certified Public Accountants Law, the Company paid the independent accounting firm for advisory and other services related to the application of the International Financial Reporting Standards.

 

  3.

 

  

Of the Company’s principal subsidiaries, Yachiyo Industry Co., Ltd., as well as overseas subsidiaries are audited by financial audit companies other than the financial audit company employed by the Company.

 

(3) Policy Regarding Dismissal or Non-Re-Employment of Financial Audit Company

In the case that the Company’s financial audit company was recognized to have committed a serious legal infraction, sharply lowered the quality of its audit services or otherwise shown grounds for determining it was inappropriate for employment as a financial audit company, the Company has the policy of, in accordance with procedures stipulated in the Company Law, dismissing its financial audit company or submitting resolutions proposing the financial audit company’s dismissal or non-re-employment to the general meeting of shareholders.

 

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6. THE COMPANY’S SYSTEMS AND POLICIES

Systems to Ensure Directors’ Execution of Duties Complies with Laws and Regulations and the Articles of Incorporation and Other Systems to Ensure the Appropriateness of the Company’s Operations

The Company’s Board of Directors made the following decisions regarding enhancements in the Company’s Internal Control Systems.

 

1. Systems for ensuring that the execution of duties by directors and employees complies with the law and the Company’s Articles of Incorporation

The Company has prepared the Honda Conduct Guidelines which provide for conformity with applicable laws and internal rules and regulations as guidelines for conduct which should be shared by the Company’s management and employees and implements measures to ensure that all management personnel and employees are made aware of and follow these guidelines. The Company establishes its compliance system such as by appointing a Compliance Officer, who is a director in charge of compliance-related initiatives and by establishing the Business Ethics Committee and the Business Ethics Improvement Proposal Line.

 

2. Systems related to retention and management of information on execution of duties by directors

Information related to the execution of duties by directors, including minutes of Board of Directors meetings and other important meetings, is retained and stored appropriately in accordance with the Company’s document management policy.

 

3. Regulations and other systems related to risk management

Important management issues are taken up by the Board of Directors, Executive Council and/or Regional Operating Boards, which discuss them in accordance with established rules of procedure, assess associated risks and make decisions after due consideration.

A Risk Management Officer is appointed as a director in charge of promoting risk management initiatives. The Risk Management Officer playing the main role, risk information is collected and evaluated (of these risks, significant risk is promptly reported to the division in charge along with instructions on the countermeasures, and its progress is then monitored). For large-scale disasters requiring Company-level crisis management, the Company organizes the system, such as by establishing the Corporate Crisis Management Policy and Honda Crisis Response Rules.

 

4. Systems for ensuring that the execution of duties by directors is being conducted efficiently

The Company has established a system for operating its organizational units that reflects its fundamental corporate philosophy. For example, separate headquarters have been set up for each region, business and function, and an operating officer has been assigned to each headquarters and main division. In addition, we have implemented a system that enables prompt and appropriate decision making by having the Executive Council and Regional Operating Boards deliberate on important management issues.

To conduct management efficiently and effectively, business plans are prepared on an annual basis and for the medium term, and measures are taken to share these plans.

 

5. Systems for ensuring that the corporate group, comprised of the Company and its subsidiaries, conducts business activities appropriately

The Company and its subsidiaries share the Honda Conduct Guidelines and basic policies regarding corporate governance. In addition, each subsidiary works to promote activities that are in compliance with the laws of countries in which they operate and practices observed in their respective industries as they endeavor to enhance corporate governance. The Company examines the state of internal control in each subsidiary, and confirms how the Internal Control Systems are established and operated, through enlightenment efforts with subsidiary directors and liaising with the compliance officer of each subsidiary. As for the business execution of the subsidiary, the Company helps with the establishment of account settlement rules. When it comes to important management issues, the Company requests the subsidiary to obtain prior approval from the Company or to report to the Company according to its internal rules. The business control division of the Company regularly receives reports on the subsidiary’s business plans to confirm the appropriateness of the operation. The Business Ethics Office of the Company works with the proposal line of the subsidiary in an effort to support an appropriate and swift response to a risk or problem. The Audit Office, an independent unit supervising operations and directly reporting to the president and CEO, effectively supervises the state of work in progress at each division and subsidiary and works with the internal supervision division of subsidiaries, aiming at the completion of the internal supervision system in the Honda Group.

In the case of a company accounted for by the equity method, the Company works to improve corporate governance throughout the Group by seeking the understanding and cooperation of such companies with Honda’s basic corporate governance policies.

 

6. Provision of employees when assistance is requested by corporate auditors and independence of such employees from directors The Corporate Auditors’ Office has been established as a supportive staff organization directly under the Board of Corporate Auditors to provide support to corporate auditors.

 

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7. Systems for ensuring directors and employees report to corporate auditors and other systems related to the reporting to corporate auditors

In addition to regularly reporting the state of operations at the Company and its subsidiaries and the state of implementation and operation of internal control systems, including those related to compliance and risk management, any information that may have a significant impact on the Company’s operations is also reported to the corporate auditors.

 

8. Other systems for ensuring the effectiveness of audits by corporate auditors

Corporate auditors work closely with the Audit Office, which serves as the Company’s internal audit department, to conduct business audits of the Company and its subsidiaries. Additionally, corporate auditors attend the Executive Council and other important meetings.

7. POLICY REGARDING DECISIONS FOR DISTRIBUTION OF DIVIDENDS, ETC.

The Company strives to carry out its operations worldwide from a global perspective and to increase its corporate value. With respect to the redistribution of profits to our shareholders, which we consider to be one of the most important management issues, the Company’s basic policy for dividends is to make distributions after taking into account its long-term consolidated earnings performance.

The Company will also acquire its own shares at the optimal timing with the goal of improving efficiency of the Company’s capital structure and implementing a flexible capital policy. The present goal is to maintain a shareholders’ return ratio (i.e., the ratio of the total of the dividend payment and the repurchase of the Company’s own shares to consolidated net income attributable to Honda Motor Co., Ltd.) of approximately 30%. Retained earnings will be allocated toward financing R&D activities that are essential for the future growth of the Company and capital expenditures and investment programs that will expand its operations for the purpose of improving business results and strengthening the Company’s financial condition.

The Company plans to distribute year-end cash dividends of ¥19 per share for the year ended March 31, 2013. As a result, total cash dividends for the year ended March 31, 2013, together with the first quarter cash dividends of ¥19, the second quarter cash dividends of ¥19 and the third quarter cash dividends of ¥19, are planned to be ¥76 per share, an increase of ¥16 per share from the annual dividends paid for the year ended March 31, 2012.

Also, please note that the year-end cash dividends for the year ended March 31, 2013 is a matter to be resolved at the general meeting of shareholders.

Trends in Dividends (reference)

 

 

     Yen
      FY2010    FY2011    FY2012    FY2013

Classification

   First
quarter
   Second
quarter
   Third
quarter
   Year-
end
   Total    First
quarter
   Second
quarter
   Third
quarter
   Year-
end
   Total    First
quarter
   Second
quarter
   Third
quarter
   Year-
end
   Total    First
quarter
   Second
quarter
   Third
quarter
   Year-
end
  Total

Dividends

   8    8    10    12    38    12    12    15    15    54    15    15    15    15    60    19    19    19    19

(planned)

  76

(planned)

 

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Consolidated Balance Sheets

 

     Yen (millions)  

As of March 31, 2012 and 2013

   2012      2013  

ASSETS

     

Current assets:

     

Cash and cash equivalents

   ¥ 1,247,113       ¥ 1,206,128   

Trade accounts and notes receivable

     812,155         1,005,981   

Finance subsidiaries–receivables, net

     1,081,721         1,243,002   

Inventories

     1,035,779         1,215,421   

Deferred income taxes

     188,755         234,075   

Other current assets

     373,563         418,446   
  

 

 

    

 

 

 

Total current assets

     4,739,086         5,323,053   
  

 

 

    

 

 

 

Finance subsidiaries–receivables, net

     2,364,393         2,788,135   

Investments and advances:

     

Investments in and advances to affiliates

     434,744         459,110   

Other, including marketable equity securities

     188,863         209,680   
  

 

 

    

 

 

 

Total investments and advances

     623,607         668,790   
  

 

 

    

 

 

 

Property on operating leases:

     

Vehicles

     1,773,375         2,243,424   

Less accumulated depreciation

     300,618         400,292   
  

 

 

    

 

 

 

Net property on operating leases

     1,472,757         1,843,132   
  

 

 

    

 

 

 

Property, plant and equipment, at cost:

     

Land

     488,265         515,661   

Buildings

     1,492,823         1,686,638   

Machinery and equipment

     3,300,727         3,832,090   

Construction in progress

     191,107         288,073   
  

 

 

    

 

 

 
     5,472,922         6,322,462   

Less accumulated depreciation and amortization

     3,499,464         3,922,932   
  

 

 

    

 

 

 

Net property, plant and equipment

     1,973,458         2,399,530   
  

 

 

    

 

 

 

Other assets

     614,298         612,717   
  

 

 

    

 

 

 

Total assets

   ¥ 11,787,599       ¥ 13,635,357   
  

 

 

    

 

 

 

 

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Table of Contents
     Yen (millions)  
     2012     2013  

LIABILITIES AND EQUITY

    

Current liabilities:

    

Short-term debt

   ¥ 964,848      ¥ 1,238,297   

Current portion of long-term debt

     911,395        945,046   

Trade payables:

    

Notes

     26,499        31,354   

Accounts

     942,444        956,660   

Accrued expenses

     489,110        593,570   

Income taxes payable

     24,099        48,454   

Other current liabilities

     221,364        283,304   
  

 

 

   

 

 

 

Total current liabilities

     3,579,759        4,096,685   
  

 

 

   

 

 

 

Long-term debt, excluding current portion

     2,235,001        2,710,845   

Other liabilities

     1,454,937        1,630,085   
  

 

 

   

 

 

 

Total liabilities

     7,269,697        8,437,615   
  

 

 

   

 

 

 

Equity:

    

Honda Motor Co., Ltd. stockholders’ equity:

    

Common stock

     86,067        86,067   

Capital surplus

     172,529        171,117   

Legal reserves

     47,184        47,583   

Retained earnings

     5,758,641        5,995,626   

Accumulated other comprehensive income (loss), net

     (1,646,078     (1,236,792

Treasury stock

     (26,117     (26,124
  

 

 

   

 

 

 

Total Honda Motor Co., Ltd. stockholders’ equity

     4,392,226        5,037,477   
  

 

 

   

 

 

 

Noncontrolling interests

     125,676        160,265   
  

 

 

   

 

 

 

Total equity

     4,517,902        5,197,742   
  

 

 

   

 

 

 

Commitments and contingent liabilities

    

Total liabilities and equity

   ¥ 11,787,599      ¥ 13,635,357   
  

 

 

   

 

 

 

 

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Table of Contents

Consolidated Statements of Income

 

     Yen (millions)  

Years ended March 31, 2012 and 2013

   2012     2013  

Net sales and other operating revenue

   ¥ 7,948,095      ¥ 9,877,947   

Operating costs and expenses:

    

Cost of sales

     5,919,633        7,345,162   

Selling, general and administrative

     1,277,280        1,427,705   

Research and development

     519,818        560,270   
  

 

 

   

 

 

 

Total operating costs and expenses

     7,716,731        9,333,137   
  

 

 

   

 

 

 

Operating income

     231,364        544,810   

Other income (expenses):

    

Interest income

     33,461        25,742   

Interest expense

     (10,378     (12,157

Other, net

     2,956        (69,504
  

 

 

   

 

 

 

Total other income (expenses)

     26,039        (55,919
  

 

 

   

 

 

 

Income before income taxes and equity in income of affiliates

     257,403        488,891   

Income tax expense:

    

Current

     86,074        125,724   

Deferred

     49,661        53,252   
  

 

 

   

 

 

 

Total income tax expense

     135,735        178,976   
  

 

 

   

 

 

 

Income before equity in income of affiliates

     121,668        309,915   

Equity in income of affiliates

     100,406        82,723   
  

 

 

   

 

 

 

Net income

     222,074        392,638   

Less: Net income attributable to noncontrolling interests

     (10,592     25,489   
  

 

 

   

 

 

 

Net income attributable to Honda Motor Co., Ltd.

   ¥ 211,482      ¥ 367,149   
  

 

 

   

 

 

 
     Yen  

Basic net income attributable to Honda Motor Co., Ltd. per common share

   ¥ 117.34      ¥ 203.71   
  

 

 

   

 

 

 

 

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Consolidated Statements of Changes in Equity

 

    Yen (millions)  
    Common
stock
    Capital
surplus
    Legal
reserves
    Retained
earnings
    Accumulated
other
comprehensive
income (loss), net
    Treasury
stock
    Total
Honda Motor
Co., Ltd.
stockholders’
equity
    Non-
controlling
interests
    Total
equity
 

Balance at March 31, 2011

  ¥ 86,067      ¥ 172,529      ¥ 46,330      ¥ 5,656,151      ¥ (1,495,380   ¥ (26,110   ¥ 4,439,587      ¥ 132,937      ¥ 4,572,524   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transfer to legal reserves

        854        (854         —            —     

Dividends paid to Honda Motor Co., Ltd. shareholders

          (108,138         (108,138       (108,138

Dividends paid to noncontrolling interests

                  (15,763     (15,763

Capital transactions and others

                  (783     (783

Comprehensive income (loss):

                 

Net income

          211,482            211,482        10,592        222,074   

Other comprehensive income (loss), net of tax

                 

Adjustments from foreign currency translation

            (116,812       (116,812     (1,323     (118,135

Unrealized gains (losses) on marketable securities, net

            5,899          5,899        (87     5,812   

Unrealized gains (losses) on derivative instruments, net

            (29       (29       (29

Pension and other postretirement benefits adjustments

            (39,756       (39,756     103        (39,653
             

 

 

   

 

 

   

 

 

 

Total comprehensive income

                60,784        9,285        70,069   
             

 

 

   

 

 

   

 

 

 

Purchase of treasury stock

              (8     (8       (8

Reissuance of treasury stock

              1        1          1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2012

    86,067        172,529        47,184        5,758,641        (1,646,078     (26,117     4,392,226        125,676        4,517,902   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transfer to legal reserves

        399        (399         —            —     

Dividends paid to Honda Motor Co., Ltd. shareholders

          (129,765         (129,765       (129,765

Dividends paid to noncontrolling interests

                  (6,250     (6,250

Capital transactions and others

      (1,412             (1,412     1,189        (223

Comprehensive income (loss):

                 

Net income

          367,149            367,149        25,489        392,638   

Other comprehensive income (loss), net of tax

                 

Adjustments from foreign currency translation

            415,462          415,462        15,350        430,812   

Unrealized gains (losses) on marketable securities, net

            7,933          7,933        51        7,984   

Unrealized gains (losses) on derivative instruments, net

            (52       (52       (52

Pension and other postretirement benefits adjustments

            (14,057       (14,057     (1,240     (15,297
             

 

 

   

 

 

   

 

 

 

Total comprehensive income

                776,435        39,650        816,085   
             

 

 

   

 

 

   

 

 

 

Purchase of treasury stock

              (8     (8       (8

Reissuance of treasury stock

              1        1          1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2013

  ¥ 86,067      ¥ 171,117      ¥ 47,583      ¥ 5,995,626      ¥ (1,236,792   ¥ (26,124   ¥ 5,037,477      ¥ 160,265      ¥ 5,197,742   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Consolidated Statements of Cash Flows

 

     Yen (millions)  

Years ended March 31, 2012 and 2013

   2012     2013  

Cash flows from operating activities:

    

Net income

   ¥ 222,074      ¥ 392,638   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation excluding property on operating leases

     345,105        335,536   

Depreciation of property on operating leases

     209,762        254,933   

Deferred income taxes

     49,661        53,252   

Equity in income of affiliates

     (100,406     (82,723

Dividends from affiliates

     95,106        84,705   

Provision for credit and lease residual losses on finance subsidiaries–receivables

     13,032        10,059   

Impairment loss on investments in securities

     1,062        —     

Damaged and impairment loss on long-lived assets and goodwill excluding property on operating leases

     10,590        —     

Impairment loss on property on operating leases

     1,514        4,773   

Loss (gain) on derivative instruments, net

     (1,847     35,027   

Decrease (increase) in assets:

    

Trade accounts and notes receivable

     (35,475     (90,495

Inventories

     (154,222     (74,662

Other current assets

     2,883        2,019   

Other assets

     (24,000     (27,243

Increase (decrease) in liabilities:

    

Trade accounts and notes payable

     242,814        (95,192

Accrued expenses

     (25,718     52,021   

Income taxes payable

     (7,568     21,764   

Other current liabilities

     (12,395     (4,489

Other liabilities

     (14,744     (4,384

Other, net

     (55,690     (66,795
  

 

 

   

 

 

 

Net cash provided by operating activities

     761,583        800,744   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Increase in investments and advances

     (23,129     (34,426

Decrease in investments and advances

     14,647        19,850   

Payment for purchase of available-for-sale securities

     (1,784     (5,642

Proceeds from sales of available-for-sale securities

     1,879        1,347   

Payment for purchase of held-to-maturity securities

     (26,078     (5,186

Proceeds from redemption of held-to-maturity securities

     47,193        17,005   

Proceeds from sales of investments in affiliates

     9,957        —     

Capital expenditures

     (397,218     (626,879

Proceeds from sales of property, plant and equipment

     23,260        44,182   

Proceeds from insurance recoveries for damaged property, plant and equipment

     16,217        9,600   

Acquisitions of finance subsidiaries–receivables

     (1,784,720     (1,951,802

Collections of finance subsidiaries–receivables

     1,765,204        1,833,669   

Purchase of operating lease assets

     (683,767     (793,118

Proceeds from sales of operating lease assets

     365,270        418,086   

Other, net

     —          3,558   
  

 

 

   

 

 

 

Net cash used in investing activities

     (673,069     (1,069,756
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from short-term debt

     6,778,336        6,775,636   

Repayment of short-term debt

     (6,882,932     (6,621,897

Proceeds from long-term debt

     1,151,971        1,101,469   

Repayment of long-term debt

     (967,588     (970,702

Dividends paid

     (108,138     (129,765

Dividends paid to noncontrolling interests

     (15,763     (6,250

Sales (purchases) of treasury stock, net

     (7     (7

Other, net

     (24,109     (28,917
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (68,230     119,567   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (52,150     108,460   
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (31,911     (40,985

Cash and cash equivalents at beginning of the year

     1,279,024        1,247,113   
  

 

 

   

 

 

 

Cash and cash equivalents at end of the period

   ¥ 1,247,113      ¥ 1,206,128   
  

 

 

   

 

 

 

 

30


Table of Contents

The Notes to the Consolidated Statutory Report

Significant Accounting Policies:

 

1. Consolidated subsidiaries

Number of consolidated subsidiaries: 369

Corporate names of principal consolidated subsidiaries:

American Honda Motor Co., Inc., Honda of America Mfg., Inc., Honda Canada Inc., Honda R&D Co., Ltd., American Honda

Finance Corporation

 

2. Affiliated companies

Number of affiliated companies: 86

Corporate names of major affiliated companies accounted for under the equity method:

Dongfeng Honda Automobile Co., Ltd., Guangqi Honda Automobile Co., Ltd., P.T. Astra Honda Motor

 

3. Changes of consolidated subsidiaries and affiliated companies

Consolidated subsidiaries:

Newly formed consolidated subsidiaries: 16

Reduced through reorganization: 25

Affiliated companies:

Newly formed affiliated companies: 0

Reduced through reorganization: 2

 

4. The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America in accordance with Article 120-2 (1) of the Companies Act. The Company omits some disclosure items and notes in accordance with the second sentence of Article 120-2 (1) of the Companies Act.

 

5. Inventories are stated at the lower of cost, determined principally by the first-in, first-out method, or market.

 

6. Honda classifies its debt and equity securities in the following categories: available-for-sale, trading or held-to-maturity. Debt securities that are classified as “held-to-maturity” securities are reported at amortized cost. Debt and equity securities classified as “trading” securities are reported at fair value, with unrealized gains and losses included in earnings. Other marketable debt and equity securities are classified as “available-for-sale” securities and are reported at fair value, with unrealized gains or losses, net of deferred taxes, included in accumulated other comprehensive income (loss) in the stockholders’ equity section of the consolidated balance sheets.

 

7. Goodwill, all of which is allocated to Honda’s reporting units, is not amortized but instead is tested for impairment at least annually.

 

8. Depreciation of property, plant and equipment is calculated principally by the straight-line method based on estimated useful lives and salvage values of the respective assets.

Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. In recent years, because sales of global strategic product models are increasing, Honda has been enhancing its production systems and the versatility of production equipment to have better flexibility to meet changes in global customer demand. Further, Honda has resumed more normalized capital expenditures which Honda had previously held down due to financial crisis beginning in the fiscal year ended March 31, 2009. Effective April 1, 2012, Honda changed to the straight-line method of depreciation because management believes it better reflects the future economic benefit from the usage of property, plant and equipment under this more flexible and versatile production arrangement. The effect of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with the FASB Accounting Standards Codification (ASC) 250 “Accounting Changes and Error Corrections”.

As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥56,300 million. Net income attributable to Honda Motor Co., Ltd. and Basic net income attributable to Honda Motor Co., Ltd. per common share for the year ended March 31, 2013 increased by approximately ¥35,746 million and ¥19.83.

 

9. Honda applies hedge accounting for certain foreign currency forward contracts related to forecasted foreign currency transactions between the Company and its subsidiaries.

 

10. The allowance for credit losses on finance subsidiaries–receivables is maintained at an amount management deems adequate to cover estimated losses on finance receivables. The allowance is based on management’s evaluation of many factors, including current economic trends, industry experience, inherent risks in the portfolio and the borrower’s ability to pay.

 

11. The allowance for losses on lease residual values is maintained at an amount management deems adequate to cover estimated losses on the uninsured portion of the vehicles’ lease residual values. The allowance is also based on management’s evaluation of many factors, including current economic conditions, industry experience and the finance subsidiaries’ historical experience with residual value losses.

 

12. Provisions for retirement benefits are provided based on the fair value of both projected benefit obligations and plan assets at the end of the fiscal year to cover for employees’ retirement benefits. The Company recognizes its overfunded or underfunded status for the defined benefit postretirement plan as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status in accumulated comprehensive income (loss), net of taxes. Prior service cost (benefit) is amortized by using the straight-line method and the estimated average remaining service years of employees. Actuarial loss is amortized if unrecognized net gain or loss exceeds ten percent of the greater of the projected benefit obligation or the market-related value of plan assets by using the straight-line method and the estimated average remaining service years of employees.

 

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13. Estimated warranty expenses are provided based on historical warranty claim experience with consideration given to the expected level of future warranty costs as well as current information on repair costs. Included in warranty expense accruals are costs for general warranties on vehicles Honda sells and product recalls.

 

14. Honda’s common stock-to-ADS exchange ratio is one share of common stock to one ADS.

Changes in Accounting Policy

Adoption of New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05 “Presentation of Comprehensive Income”, which amends the FASB Accounting Standards Codification (ASC) 220 “Comprehensive Income”. This amendment requires reporting entities to report other comprehensive income as components of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and is effective retrospectively.

In December 2011, the FASB issued ASU 2011-12 “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”, which defers the effective date of pending amendments to current accounting guidance prescribed in ASU 2011-05.

Honda adopted ASU 2011-05 as amended by ASU 2011-12, effective April 1, 2012, and discloses consolidated statements of comprehensive income as two separate but consecutive statements.

Notes to Consolidated Balance Sheets:

 

1. The allowance for assets are as follows: Yen (millions)

 

      Mar. 31, 2012      Mar. 31, 2013  

The allowance for doubtful trade accounts and notes receivables

     7,293         7,885   

The allowance for credit losses for finance subsidiaries–receivables

     20,616         17,828   

The allowance for losses on lease residual values for finance subsidiaries–receivables

     5,366         3,354   

The allowance for doubtful accounts for other assets

     23,036         22,754   

 

2. Net book value of property, plant and equipment that were subject to specific collateral securing indebtedness and debt-related mortgages are as follows: Yen (millions)

 

      Mar. 31, 2012      Mar. 31, 2013  

Mortgaged assets:

     

Trade accounts and notes receivables

     10,119         12,422   

Inventories

     3,289         11,154   

Property, plant and equipment

     22,102         26,169   

Finance subsidiaries–receivables

     570,655         724,399   

Mortgage-related debts:

     

Short-term debt

     305,069         397,297   

Long-term debt

     280,747         351,591   

 

3. Honda has entered into various guarantee and indemnification agreements which are primarily for employee bank loans to cover their housing costs as follows: Yen (millions)

 

      Mar. 31, 2012      Mar. 31, 2013  

Bank loans of employees for their housing costs

     28,165         26,475   

If an employee defaults on his/her loan payments, Honda is required to perform under the guarantee. The undiscounted maximum amount of Honda’s obligation to make future payments in the event of defaults is shown above. As of March 31, 2013, no amount has been accrued for any estimated losses under these obligations, as it is probable that the employees will be able to make all scheduled payments.

 

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Notes to Consolidated Statements of Stockholders’ Equity:

 

      Mar. 31, 2012      Mar. 31, 2013  

1. The number of shares outstanding

     1,811,428,430         1,811,428,430   
      Mar. 31, 2012      Mar. 31, 2013  

2. The number of treasury shares

     9,128,871         9,131,140   

3. The total amount of dividends for the fiscal year ended March 31, 2013, was ¥129,765 million. The Company intends to distribute year-end cash dividends of ¥136,974 million to the stockholders of record on March 31, 2013.

Note on Financial Instruments:

Current Status of Financial Instruments

 

1. Policy Regarding Financial Instruments

The policy of Honda is to support its business activities by maintaining sufficient capital resources, a sufficient level of liquidity and a sound balance sheet. In its cash management activities, the Company invests principally in highly safe, short-term financial instruments. Honda meets its operating capital requirements primarily through cash generated by operations, bank loans and the issuance of commercial paper. In addition, the Company’s finance subsidiaries fund those financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of finance receivables, commercial paper, corporate bonds and intercompany loans.

 

2. Risk Associated with Financial Instruments and Related Risk Management System

The Company reduces the credit risk arising from trade accounts and notes receivables and finance subsidiaries–receivables by requiring compliance with its internal credit management regulations. To minimize the foreign currency fluctuation risk of the foreign currency denominated receivables, the Company enters into foreign currency forward exchange contracts and foreign currency purchased option contracts. Regarding the lease receivables held by the Company’s finance subsidiaries, losses may be incurred when proceeds from the sale of the returned vehicles are less than the contractual residual value. The Company’s finance subsidiaries periodically review the estimated residual value of the leased vehicles to monitor the residual value risk.

Available-for-sale securities mainly consist of equity securities. Held-to-maturity securities mainly consist of government and agency debt securities. In order to manage the price fluctuation risk, the Company periodically estimates the fair value of these securities.

To manage the liquidity risk associated with short-term and long-term debt, the Company diversifies its sources of funds. To reduce the interest rate fluctuation risk, the Company enters into interest rate swap contracts. To minimize the foreign currency fluctuation risk of the foreign currency denominated payables, the Company enters into currency swap contracts.

The Company enters into derivative contracts within the actual demand of its business activities in accordance with the risk management policy. The derivative instruments contain an element of risk in the event the counterparties are unable to meet the terms of the agreement. However, Honda minimizes the risk exposure by limiting the counterparties to major international banks and financial institutions meeting established credit guidelines.

The Company applies hedge accounting for certain foreign currency forward exchange contracts related to forecasted foreign currency transactions between the Company and its subsidiaries.

 

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Fair Value of Financial Instruments

The carrying amount, estimated fair value and difference of financial instruments at March 31, 2013 are as follows: Yen (millions)

 

     Carrying Amount     Estimate Fair Value     Difference  

Finance subsidiaries–receivables

     4,278,460        4,326,333        47,873   

Available-for-sale securities

     128,848        128,848        —     

Held-to-maturity securities

     16,511        16,556        45   

Short-term and long-term debt

     (4,894,188     (4,966,318     (72,130

Derivative instruments

     54,883        54,883        —     

 

Note: The book value of the previously mentioned finance subsidiaries–receivables excludes direct finance leases (net) from the amount of finance subsidiaries–receivables appearing on the balance sheets. The amount of direct finance leases (net) at the end of the fiscal year under review was ¥425,870 million. Also, the previously mentioned finance subsidiaries–receivables include the amount of finance subsidiaries–receivables, which is presented in the balance sheet items trade accounts and notes receivable and other assets. The amount of such finance subsidiaries–receivables at the end of the fiscal year under review was ¥673,193 million.

The methodologies and assumptions used to estimate the fair values of financial instruments are as follows:

 

1. Cash and cash equivalents, trade receivables and trade payables

The carrying amounts approximate fair values because of the short maturity of these instruments.

 

2. Finance subsidiaries–receivables

The fair values of retail receivables and commercial loans are estimated by discounting future cash flows using the current rates for these instruments of similar remaining maturities. Given the short maturities of wholesale flooring receivables, the carrying amount of those receivables approximates fair value.

 

3. Available-for-sale securities

The fair value of marketable equity securities is estimated by using quoted market prices. To estimate fair value of auction rate securities, Honda uses third-party developed valuation model which obtains a wide array of market observable inputs, as well as unobservable inputs, including probability of passing or failing auction at each auction.

 

4. Held-to-maturity securities

The fair value of Government bonds is estimated by using quoted market prices. The fair value of U.S. government agency debt securities is estimated based on proprietary pricing models provided by specialists and/or market makers and the models obtain a wide array of market observable inputs such as credit ratings and discount rates.

 

5. Debt

The fair values of bonds are estimated by using quoted market prices. The fair values of short-term loans and long-term loans are estimated by discounting future cash flows using interest rates currently available for loans of similar terms and remaining maturities.

 

6. Derivative instruments

The Company holds foreign currency and interest rate derivative instruments. The fair values of foreign currency forward exchange contracts and foreign currency option contracts are estimated using market observable inputs such as spot exchange rates, discount rates and implied volatility. The fair values of currency swap agreements and interest rate swap agreements are estimated by discounting future cash flows using market observable inputs such as LIBOR rates, swap rates, and foreign exchange rates. The credit risk of Honda and its counterparties are considered on the valuation of foreign exchange and interest rate instruments.

Non-marketable securities are excluded from the above table as it is not possible to estimate the future cash flow and it is deemed to be extremely difficult to measure the fair value. The carrying amount of non-marketable securities is ¥11,749 million at March 31, 2013.

Notes to Information about Per Common Share:

Honda Motor Co., Ltd. shareholders’ equity per common share and basic net income attributable to Honda Motor Co., Ltd. per common share are as follows: Yen

 

     Mar. 31, 2012      Mar. 31, 2013  

Honda Motor Co., Ltd. shareholders’ equity per common share

     2,437.01         2,795.03   

Basic net income attributable to Honda Motor Co., Ltd. per common share

     117.34         203.71   

 

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Honda Motor Co., Ltd. shareholders’ equity per common share has been computed by dividing Honda Motor Co., Ltd. shareholders’ equity by the number of shares outstanding at the end of each period. The numbers of common shares, at the end of the years ended March 31, 2012 and 2013 were 1,802,299,559 and 1,802,297,290, respectively. Basic net income attributable to Honda Motor Co., Ltd. per common share has been computed by dividing net income attributable to Honda Motor Co., Ltd. by the weighted average number of shares outstanding during each period. The weighted average numbers of shares outstanding for the years ended March 31, 2012 and 2013 were 1,802,300,720 and 1,802,298,819, respectively. There were no potentially dilutive shares issued during the years ended March 31, 2012 or 2013.

 

Note: Honda corrects Honda Motor Co., Ltd. shareholders’ equity for the year ended March 31, 2012. Honda Motor Co., Ltd. shareholders’ equity per common share is also adjusted. For detailed information, please refer to Consolidated Financial Summary “[10] Other. 3. Immaterial corrections of the prior year’s Consolidated Balance Sheets and Consolidated Statements of Changes in Equity.”

Other

 

1. Impairment loss on investments in affiliates

For the fiscal year ended March 31, 2013, Honda recognized an impairment loss of ¥12,757 million, net of tax, on certain investments in affiliates which have quoted market values because of an other-than-temporary decline in fair value below their carrying values. The fair values of the investments were based on quoted market price. The impairment loss is included in equity in income of affiliates in the accompanying consolidated statement of income.

 

2. Impact on the Company’s consolidated financial position or results of operations of the floods in Thailand

In October 2011, Thailand suffered from severe floods that caused damage to inventories and machinery and equipment of certain consolidated subsidiaries and affiliates of the Company. Accordingly, production activities in plant facilities at Honda and its affiliates had been temporarily affected by the floods for the year ended March 31, 2012.

Honda recognized ¥23,420 million in costs and expenses, of which ¥10,680 million is included in cost of sales and ¥12,740 million is included in selling, general and administrative expenses in the accompanying consolidated statement of income for the year ended March 31, 2012. These costs and expenses mainly consist of losses on damaged inventories of ¥7,330 million, which is included in cost of sales, and losses on damaged property, plant and equipment of ¥7,654 million, which is included in selling, general and administrative expenses.

In addition, Honda recognized insurance recoveries of ¥21,725 million and ¥16,278 million for the years ended March 31, 2012 and 2013, respectively, which are included in selling, general and administrative expenses in the accompanying consolidated statement of income. Honda recognizes insurance recoveries in excess of the incurred losses when settlements with insurance companies are reached.

 

3. Immaterial corrections of the prior year’s Consolidated Balance Sheets and Consolidated Statements of Changes in Equity Honda corrected its attribution method used to calculate the projected benefit obligation for certain pension plans, which resulted in an increase in other liabilities for prior fiscal years. Cumulative effect adjustments have been made as of April 1, 2011, the earliest period presented, to increase other liabilities by ¥17,228 million and to decrease retained earnings by ¥10,388 million, net of tax. Honda believes that the effects of this correction were inconsequential to the Company’s consolidated financial statements for the fiscal year ended March 31, 2012; therefore, no other adjustments were made to those consolidated financial statements.

 

4. Immaterial corrections of the prior years’ Consolidated Statements of Cash Flows

Adjustments have been made to correct previous understatements in both depreciation excluding property on operating leases, which is included in cash flows from operating activities, and payments of other debt, which is included in Other, net in cash flows from financing activities, in the consolidated statements of cash flows for the year ended March 31, 2012. These adjustments increased previously reported net cash provided by operating activities and increased previously reported net cash used in financing activities by ¥24,109 million for the year ended March 31, 2012.

Regarding the Notes for the Previous Fiscal Year

The notes for the previous fiscal year contain additional information for reference.

 

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¡ Segment Information (reference)

(a) Business Segment Information

For the year ended March 31, 2012

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
& Other
Businesses
    Segment
Total
     Reconciling
Items
    Consolidated  

Net sales and other operating revenue:

                 

External customers

     1,348,828         5,805,975        516,148         277,144        7,948,095         —          7,948,095   

Intersegment

     —           16,767        10,428         12,590        39,785         (39,785     —     

Total

     1,348,828         5,822,742        526,576         289,734        7,987,880         (39,785     7,948,095   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Cost of sales, SG&A and R&D expenses

     1,206,226         5,899,948        356,570         293,772        7,756,516         (39,785     7,716,731   

Segment income (loss)

     142,602         (77,206     170,006         (4,038     231,364         —          231,364   

Assets

     1,006,684         4,955,791        5,644,380         305,235        11,912,090         (124,491     11,787,599   

Depreciation and amortization

     43,564         289,845        211,325         10,133        554,867         —          554,867   

Capital expenditures

     62,075         349,605        686,495         10,005        1,108,180         —          1,108,180   

For the year ended March 31, 2013

 

  

 
     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
& Other
Businesses
    Segment
Total
     Reconciling
Items
    Consolidated  

Net sales and other operating revenue:

                 

External customers

     1,339,549         7,709,216        548,506         280,676        9,877,947         —          9,877,947   

Intersegment

     —           14,374        11,750         10,994        37,118         (37,118     —     

Total

     1,339,549         7,723,590        560,256         291,670        9,915,065         (37,118     9,877,947   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Cost of sales, SG&A and R&D expenses

     1,229,316         7,437,599        402,098         301,242        9,370,255         (37,118     9,333,137   

Segment income (loss)

     110,233         285,991        158,158         (9,572     544,810         —          544,810   

Assets

     1,095,357         5,759,126        6,765,322         309,149        13,928,954         (293,597     13,635,357   

Depreciation and amortization

     34,665         290,522        256,166         9,116        590,469         —          590,469   

Capital expenditures

     73,513         540,625        794,869         14,519        1,423,526         —          1,423,526   

Notes:

 

1. Intersegment sales and revenues are generally made at values that approximate arm’s-length prices.

 

2. Unallocated corporate assets, included in reconciling items, amounted to ¥399,732 million as of March 31, 2012 and ¥293,583 million as of March 31, 2013, respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of intersegment transactions.

 

3. Depreciation and amortization of Financial Services Business include ¥209,762 million for the year ended March 31, 2012 and ¥254,933 million for the year ended March 31, 2013, respectively, of depreciation of property on operating leases.

 

4. Capital expenditures of Financial Services Business include ¥683,767 million for the year ended March 31, 2012 and ¥793,118 million for the year ended March 31, 2013, respectively, of purchase of operating lease assets.

 

5. Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. Effective April 1, 2012, Honda changed to the straight-line method of depreciation. As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥6,358 million in Motorcycle Business, ¥48,568 million in Automobile Business, ¥77 million in Financial Services Business and ¥1,297 million in Power Product & Other Businesses, respectively. It resulted in an increase of segment income. For further information, refer to “Changes in accounting policy, (b) Change in depreciation method”.

 

6. For the years ended March 31, 2012 and 2013, impacts of the floods in Thailand are mainly included in Cost of sales, SG&A and R&D expenses of Automobile business. For further information, refer to “Other, 2. Impact on the Company’s consolidated financial position or results of operations of the floods in Thailand”.

 

7. Honda corrected the amounts of Assets for the year ended March 31, 2012. For detailed information, refer to “Other, 3. Immaterial corrections of the prior year’s Consolidated Balance Sheets and Consolidated Statements of Changes in Equity”.

 

8. The amounts of Depreciation and amortization for the year ended March 31, 2012 have been corrected from the amounts previously disclosed.

 

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(b) Geographic Segment Information

For the year ended March 31, 2012

 

     Yen (millions)  
     Japan     North
America
     Europe     Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Net sales and other operating revenue:

                    

External customers

     1,774,573        3,500,245         519,329        1,276,621         877,327         7,948,095         —          7,948,095   

Transfers between geographic areas

     1,588,379     

 

214,511

  

  

 

61,463

  

 

 

213,857

  

  

 

15,805

  

  

 

2,094,015

  

     (2,094,015  

 

—  

  

  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     3,362,952        3,714,756         580,792        1,490,478         893,132         10,042,110         (2,094,015     7,948,095   

Cost of sales, SG&A and R&D expenses

     3,472,786        3,491,463         592,901        1,413,608         836,176         9,806,934         (2,090,203     7,716,731   

Operating income (loss)

     (109,834     223,293         (12,109     76,870         56,956         235,176         (3,812     231,364   

Assets

     3,112,901        6,333,851         568,790        1,070,331         611,818         11,697,691         89,908        11,787,599   

Long-lived assets

     1,048,402        1,970,631         111,354        274,182         130,339         3,534,908         —          3,534,908   

 

For the year ended March 31, 2013

 

  

     Yen (millions)  
     Japan     North
America
     Europe     Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Net sales and other operating revenue:

                    

External customers

     1,925,333        4,612,361         536,856        1,926,434         876,963         9,877,947         —          9,877,947   

Transfers between geographic areas

     1,968,179        244,741         105,254        379,213         19,504         2,716,891         (2,716,891     —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     3,893,512        4,857,102         642,110        2,305,647         896,467         12,594,838         (2,716,891     9,877,947   

Cost of sales, SG&A and R&D expenses

     3,715,084        4,648,184         641,650        2,158,889         860,773         12,024,580         (2,691,443     9,333,137   

Operating income

     178,428        208,918         460        146,758         35,694         570,258         (25,448     544,810   

Assets

     3,264,383        7,645,540         673,667        1,523,192         660,856         13,767,638         (132,281     13,635,357   

Long-lived assets

     1,167,236        2,481,097         124,088        434,827         143,570         4,350,818         —          4,350,818   

Notes:

 

1. Major countries or regions in each geographic area:

 

North America    United States, Canada, Mexico
Europe    United Kingdom, Germany, France, Italy, Belgium
Asia    Thailand, Indonesia, China, India, Vietnam
Other Regions    Brazil, Australia

 

2. Sales and revenues between geographic areas are generally made at values that approximate arm’s-length prices.

 

3. Unallocated corporate assets, included in reconciling items, amounted to ¥399,732 million as of March 31, 2012 and ¥293,583 million as of March 31, 2013, respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of transactions between geographic areas.

 

4. Previously, Honda used principally the declining-balance method for calculating the depreciation of property, plant and equipment, excluding property on operating leases. Effective April 1, 2012, Honda changed to the straight-line method of depreciation. As a result of the change in depreciation method, depreciation expense for the year ended March 31, 2013 decreased by approximately ¥42,486 million in Japan, ¥9,602 million in North America, ¥1,068 million in Europe and ¥3,144 million in Asia, respectively. It resulted in an increase in operating income. For further information, refer to “Changes in accounting policy, (b) Change in depreciation method”.

 

5. For the years ended March 31, 2012 and 2013, impacts of the floods in Thailand are included in Cost of sales, SG&A and R&D expenses of Asia. For further information, refer to “Other, 2. Impact on the Company’s consolidated financial position or results of operations of the floods in Thailand”.

 

6. Honda corrected the amounts of Assets for the year ended March 31, 2012. For detailed information, refer to “Other, 3. Immaterial corrections of the prior year’s Consolidated Balance Sheets and Consolidated Statements of Changes in Equity”.

 

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Independent Auditors’ Report

Independent Auditors’ Report

 

The Board of Directors

   May 9, 2013

Honda Motor Co., Ltd.

  

 

  KPMG AZSA LLC   
  Takuji Kanai (Seal)    Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant
  Kenji Tanaka (Seal)    Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant
  Hideaki Koyama (Seal)    Designated Limited Liability Partner, Engagement Partner and Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated statements of income, the consolidated statements of changes in equity and the related notes of Honda Motor Co., Ltd. as at March 31, 2013 and for the year from April 1, 2012 to March 31, 2013 in accordance with Article 444-(4) of the Companies Act.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the second sentence of Article 120-2 (1) of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second sentence of Article 120-2 (1) of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, present fairly, in all material respects, the financial position and the results of operations of Honda Motor Co., Ltd. and its consolidated subsidiaries for the period, for which the consolidated financial statements were prepared.

Emphasis of Matter

As described in Note 8 of Significant Accounting Policies in The Notes to the Consolidated Statutory Report, the Company changed the depreciation method of property, plant and equipment, excluding property on operating leases, effective April 1, 2012. Our opinion is not qualified in respect of this matter.

Other Matter

Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report:

The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Reports as required by the Companies Act.

 

38


Table of Contents

Audit Report of the Board of Corporate Auditors

Audit Report

Mr. Takanobu Ito

President and Representative Director of

Honda Motor Co., Ltd.

The Board of Corporate Auditors has prepared this Audit Report regarding the performance of duties by the Directors for the 89th fiscal year from April 1, 2012 to March 31, 2013, upon deliberation based on the audit reports prepared by each Corporate Auditor, and hereby reports as follows:

1. Auditing Methods Employed by the Corporate Auditors and the Board of Corporate Auditors and Details of Such Methods

The Board of Corporate Auditors established auditing policies, assignment of duties, etc., and received reports from each Corporate Auditor regarding their execution of audits and results thereof, and received reports from the Directors, etc. and the Accounting Auditor regarding performance of their duties, and sought explanations as necessary.

Each Corporate Auditor, in accordance with the auditing standards of Corporate Auditors established by the Board of Corporate Auditors, following the auditing policies, assignment of duties and other relevant matters, communicated with the Directors, the Audit Office and other employees, etc., made efforts to collect information and establish the environment for auditing, and participated in the meetings of the Board of Directors and other important meetings, received reports from the Directors and employees regarding performance of their duties, sought explanations as necessary, examined important documents on business decisions, etc., and surveyed the status of operations and assets at the head office and principal business offices. In addition, each Corporate Auditor monitored and verified the content of the resolution of the Board of Directors regarding the establishment of the system for ensuring that the performance of duties by the Directors as recorded in the Business Report conforms to the laws and regulations and Articles of Incorporation and other systems stipulated in Paragraphs 1 and 3 of Article 100 of the Enforcement Regulations of the Corporation Law as being necessary for ensuring appropriateness of the Company’s operations, and the status of the systems established based on such resolution (Internal Control Systems) by receiving periodic reports from the Directors and employees on the structuring and operation of these systems, and, as necessary, requesting explanations and asking for expression of opinions. With respect to subsidiaries, Corporate Auditors communicated and exchanged information with Directors and Corporate Auditors of subsidiaries, and received business reports from subsidiaries as necessary. Based on the above methods, Corporate Auditors examined the business report and the accompanying detailed statements for this fiscal year.

Furthermore, Corporate Auditors monitored and verified whether the Accounting Auditor maintained its independence and implemented appropriate audits, and received reports from the Accounting Auditor regarding the performance of its duties and sought explanations as necessary. In addition, Corporate Auditors received notice from the Accounting Auditor that “System for ensuring that duties are performed properly” (matters set forth in each item of Article 131 of the Company Accounting Regulations) is established in accordance with the “Quality Control Standards Regarding Audits” (Business Accounting Council, October 28, 2005), etc., and sought explanations as necessary. Based on the above methods, Corporate Auditors examined the unconsolidated financial statements (unconsolidated balance sheets, unconsolidated statements of operations, unconsolidated statements of stockholders’ equity and notes to the unconsolidated financial statements) and the supplementary schedules thereto, and the consolidated financial statements (the consolidated balance sheet, the consolidated statement of income, the consolidated statements of change in equity and notes to consolidated financial statements) for this fiscal year.

2. Results of Audit

 

(1) Results of Audit of Business Report, etc.

 

  1. The business report and the supplementary schedules thereto fairly represent the status of the Company in accordance with the applicable laws and regulations and Articles of Incorporation.

 

  2. No misconduct or material violation of laws, regulations or the Articles of Incorporation was found with regard to the performance of duties by the Directors.

 

  3. The content of the resolution of the Board of Directors regarding the Internal Control Systems is appropriate. In addition, no matters were found for comment with regard to the content of the business report as it is related to Internal Control Systems or with regard to the performance of duties by the Directors.

 

(2) Results of Audit of unconsolidated financial statements and the supplementary schedules thereto.

The methods and results of the audit performed by the Accounting Auditor, KPMG AZSA LLC, are appropriate.

 

(3) Results of Audit of consolidated financial statements.

The methods and results of the audit performed by the Accounting Auditor, KPMG AZSA LLC, are appropriate.

May 14, 2013

Board of Corporate Auditors

Honda Motor Co., Ltd.

 

    Corporate Auditor (Full-time)   Masaya Yamashita (Seal)
    Corporate Auditor (Full-time)   Hideki Okada (Seal)
    Corporate Auditor (Outside)   Hirotake Abe (Seal)
    Corporate Auditor (Outside)   Tomochika Iwashita (Seal)
    Corporate Auditor (Outside)   Toshiaki Hiwatari (Seal)

 

39


Table of Contents

REFERENCE

• Forecasts for the Fiscal Year Ending March 31, 2014

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2014, Honda projects consolidated and unconsolidated results to be as shown below:

These forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the euro will

be ¥95 and ¥120, respectively, for the full year ending March 31, 2014.

Consolidated

 

     Yen (billions)/Changes from
the previous fiscal period
 
     Fiscal year ending
March 31, 2014
 

Net sales and other operating revenue

     12,100         (+22.5 %) 

Operating income

     780         (+43.2 %) 

Income before income taxes and equity in income of affiliates

     780         (+59.5 %) 

Net income attributable to Honda Motor Co., Ltd.

     580         (+58.0 %) 

This announcement contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the euro and other major currencies, as well as other factors detailed from time to time.

Shareholders

 

Categories

   FY2010 Year-End
(As of March 31, 2011)
     FY2011 Year-End
(As of March 31, 2012)
     FY2012 Year-End
(As of March 31, 2013)
 
   Thousand shares      Number of
shareholders
     Thousand shares      Number of
shareholders
     Thousand shares      Number of
shareholders
 

Individuals

     176,239         210,526         180,246         215,138         181,719         218,121   

National and Local Public Entities

     —           —           3         1         —           —     

Financial Institutions

     784,292         270         769,527         260         736,115         260   

Securities Companies

     29,106         72         30,558         65         22,254         76   

Other Domestic Corporations

     179,845         1,573         176,507         1,538         158,924         1,562   

Foreigners

     632,818         1,034         645,456         964         703,282         1,008   

Treasury Stock

     9,126         1         9,128         1         9,131         1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,811,428         213,476         1,811,428         217,967         1,811,428         221,028   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:   The numbers of shares above disregard and round off amounts of less than one thousand.

 

40


Table of Contents

 

LOGO

Honda Motor Co., Ltd.


Table of Contents

Unconsolidated Balance Sheets

 

     Yen (million)  

As of March 31, 2012 and 2013

   2012     2013  

Assets

    

Current assets

    

Cash and bank deposits

     136,648        51,242   

Notes receivable

     4        —     

Accounts receivable

     366,508        417,528   

Securities

     176,509        149,550   

Finished goods

     100,718        70,107   

Work in process

     26,278        29,620   

Raw materials and supplies

     25,571        27,320   

Advance payments

     25,430        13,974   

Prepaid expenses

     4,307        6,799   

Deferred income taxes

     67,949        108,832   

Short-term loans receivable–subsidiaries and affiliates

     22,280        29,869   

Other receivables

     99,438        88,368   

Others

     21,199        13,961   

Allowance for doubtful accounts

     (2,810     (2,875
  

 

 

   

 

 

 

Total current assets

     1,070,034        1,004,300   
  

 

 

   

 

 

 

Fixed assets

    

Tangible fixed assets

    

Buildings

     611,995        669,584   

Accumulated depreciation

     (402,283     (408,953
  

 

 

   

 

 

 

Buildings, net

     209,712        260,631   
  

 

 

   

 

 

 

Structures

     127,699        130,512   

Accumulated depreciation

     (94,257     (95,388
  

 

 

   

 

 

 

Structures, net

     33,442        35,123   
  

 

 

   

 

 

 

Machinery and equipment

     594,245        601,639   

Accumulated depreciation

     (533,001     (525,372
  

 

 

   

 

 

 

Machinery and equipment, net

     61,244        76,267   
  

 

 

   

 

 

 

Vehicles

     15,738        15,921   

Accumulated depreciation

     (13,103     (12,523
  

 

 

   

 

 

 

Vehicles, net

     2,635        3,397   
  

 

 

   

 

 

 

Tools, furniture and fixtures

     223,122        212,038   

Accumulated depreciation

     (205,685     (191,319
  

 

 

   

 

 

 

Tools, furniture and fixtures, net

     17,437        20,719   
  

 

 

   

 

 

 

Land

     336,378        335,703   

Lease assets

     2,656        3,671   

Accumulated depreciation

     (1,428     (1,250
  

 

 

   

 

 

 

Lease assets, net

     1,227        2,421   
  

 

 

   

 

 

 

Construction in progress

     65,333        55,047   
  

 

 

   

 

 

 

Total tangible fixed assets

     727,410        789,312   
  

 

 

   

 

 

 

Intangible assets

    

Patents

     38        26   

Leaseholds

     2,094        2,101   

Trademarks

     13        17   

Software

     10,003        32,131   

Lease assets

     52        8   

Others

     286        543   
  

 

 

   

 

 

 

Total intangible assets

     12,489        34,829   
  

 

 

   

 

 

 

Investments and other assets

    

Investment securities

     86,538        92,752   

Investment securities–subsidiaries and affiliates

     429,109        432,242   

Investments and other assets

     24        24   

Investments–subsidiaries and affiliates

     93,065        93,065   

Long-term loans receivable–employees

     177        139   

Long-term loans receivable–subsidiaries and affiliates

     4,714        3,928   

Receivables in bankruptcy

     6,711        6,462   

Long-term prepaid expenses

     517        551   

Deferred income taxes

     151,589        89,570   

Others

     35,123        23,587   

Allowance for doubtful accounts

     (7,670     (7,442
  

 

 

   

 

 

 

Total investments and other assets

     799,901        734,882   
  

 

 

   

 

 

 

Total fixed assets

     1,539,801        1,559,023   
  

 

 

   

 

 

 

Total assets

     2,609,835        2,563,324   
  

 

 

   

 

 

 


Table of Contents
     Yen (million)  
     2012     2013  

Liabilities

    

Current liabilities

    

Notes payable–trade

     639        1,854   

Accounts payable

     357,527        237,888   

Short-term bonds payable

     —          39,998   

Short-term loans payable

     17,905        24,033   

Current portion of long-term loans payable

     31        28   

Current portion of bonds

     70,000        —     

Lease debt

     527        733   

Other payables

     39,783        98,530   

Accrued expenses

     122,633        99,669   

Income taxes payable

     —          936   

Advances received

     2,889        4,413   

Deposits received

     2,693        3,850   

Deferred revenue

     126        142   

Current portion of accrued product warranty

     29,991        30,011   

Accrued employees’ bonuses

     27,068        29,651   

Accrued directors’ bonuses

     274        272   

Accrued operating officers’ bonuses

     467        449   

Provision for loss on disaster

     17,294        1,145   

Derivatives liabilities

     19,038        49,423   

Others

     1,855        3,395   
  

 

 

   

 

 

 

Total current liabilities

     710,748        626,429   
  

 

 

   

 

 

 

Non-current liabilities

    

Long-term loans payable

     165        131   

Lease debt

     845        1,853   

Accrued product warranty

     33,392        36,141   

Accrued employees’ retirement benefits

     122,922        124,048   

Asset retirement obligation

     596        662   

Others

     6,618        10,575   
  

 

 

   

 

 

 

Total non-current liabilities

     164,540        173,413   
  

 

 

   

 

 

 

Total liabilities

     875,288        799,843   
  

 

 

   

 

 

 

Total net assets

    

Stockholders’ equity

    

Common stock

     86,067        86,067   

Capital surplus

    

Capital reserve

     170,313        170,313   
  

 

 

   

 

 

 

Total capital surplus

     170,313        170,313   
  

 

 

   

 

 

 

Retained earnings

    

Legal reserves

     21,516        21,516   

Other retained earnings

    

Reserve for dividends

     —          —     

General reserve

     1,333,300        1,243,300   

Reserve for special depreciation

     1,551        1,199   

Reserve for reduction of acquisition cost of fixed assets

     14,235        16,276   

Earnings to be carried forward

     104,029        217,288   
  

 

 

   

 

 

 

Total retained earnings

     1,474,633        1,499,582   
  

 

 

   

 

 

 

Treasury stock

     (26,215     (26,222
  

 

 

   

 

 

 

Total stockholders’ equity

     1,704,799        1,729,740   
  

 

 

   

 

 

 

Difference of appreciation and conversion

    

Net unrealized gains on securities

     29,932        33,977   

Deferred loss (gain) on hedges

     (184     (237
  

 

 

   

 

 

 

Total difference of appreciation and conversion

     29,747        33,740   
  

 

 

   

 

 

 

Total net assets

     1,734,546        1,763,480   
  

 

 

   

 

 

 

Total liabilities and net assets

     2,609,835        2,563,324   
  

 

 

   

 

 

 


Table of Contents

Unconsolidated Statements of Income

 

     Yen (million)  

Year ended March 31, 2012 and 2013

   2012     2013  

Net sales

     2,740,052        3,244,070   

Cost of sales

    

Finished goods and parts for sale at beginning of year

     81,540        100,718   

Production cost

     1,756,702        1,697,268   

Others

     326,053        520,331   
  

 

 

   

 

 

 

Total

     2,164,296        2,318,318   
  

 

 

   

 

 

 

Transfer to other accounts

     1,571        2,566   

Finished goods and parts for sale at end of year

     100,718        70,107   
  

 

 

   

 

 

 

Cost of finished goods sold

     2,062,006        2,245,643   
  

 

 

   

 

 

 

Gross profit

     678,045        998,426   
  

 

 

   

 

 

 

Selling, general and administrative expenses

     814,803        894,494   
  

 

 

   

 

 

 

Operating income (loss)

     (136,757     103,932   
  

 

 

   

 

 

 

Non-operating income

    

Interest income

     1,656        1,181   

Dividend income

     182,182        156,492   

Rental income

     22,829        23,585   

Others

     6,389        6,186   
  

 

 

   

 

 

 

Total non-operating income

     213,057        187,446   
  

 

 

   

 

 

 

Non-operating expenses

    

Interest expenses

     97        99   

Contributions

     558        570   

Foreign exchange loss

     9,969        78,884   

Others

     25,285        17,999   
  

 

 

   

 

 

 

Total non-operating expenses

     35,911        97,553   
  

 

 

   

 

 

 

Ordinary income

     40,388        193,825   
  

 

 

   

 

 

 

Extraordinary income

    

Gain on sale of fixed assets

     632        2,549   

Subsidy income

     457        1,337   

Gain on transfer of intellectual property rights

     23,977        —     

Gain of reversal of provision for loss on disaster

     3,511        —     

Others

     2,803        677   
  

 

 

   

 

 

 

Total extraordinary income

     31,383        4,564   
  

 

 

   

 

 

 

Extraordinary losses

    

Loss on disposal of fixed assets

     1,844        3,354   

Loss on devaluation of investment securities–subsidiaries and affiliates

     8,328        —     

Compensation expenses to affiliated company

     13,564        —     

Others

     5,612        285   
  

 

 

   

 

 

 

Total extraordinary losses

     29,348        3,640   
  

 

 

   

 

 

 

Income before income taxes

     42,422        194,750   
  

 

 

   

 

 

 

Income taxes - current

     18,620        21,055   

Income taxes - deferred

     (22,478     18,980   
  

 

 

   

 

 

 

Total income tax

     (3,857     40,036   
  

 

 

   

 

 

 

Net income

     46,280        154,714   
  

 

 

   

 

 

 


Table of Contents

Unconsolidated Statement of Changes in Net Assets

 

     Yen (million)  
     2012     2013  

Stockholders’ equity

    

Common stock

    

Balance at March 31, 2012

     86,067        86,067   
  

 

 

   

 

 

 

Balance at March 31, 2013

     86,067        86,067   
  

 

 

   

 

 

 

Capital surplus

    

Legal capital surplus

    

Balance at March 31, 2012

     170,313        170,313   
  

 

 

   

 

 

 

Balance at March 31, 2013

     170,313        170,313   
  

 

 

   

 

 

 

Total capital surplus

    

Balance at March 31, 2012

     170,313        170,313   
  

 

 

   

 

 

 

Balance at March 31, 2013

     170,313        170,313   
  

 

 

   

 

 

 

Retained earnings

    

Legal reserves

    

Balance at March 31, 2012

     21,516        21,516   
  

 

 

   

 

 

 

Balance at March 31, 2013

     21,516        21,516   
  

 

 

   

 

 

 

Other retained earnings

    

Reserve for dividends

    

Balance at March 31, 2012

     113,300        —     

Changes of items during the period

    

Reversal of reserve for dividends

     (113,300     —     
  

 

 

   

 

 

 

Total changes of items during the period

     (113,300     —     
  

 

 

   

 

 

 

Balance at March 31, 2013

     —          —     
  

 

 

   

 

 

 

General reserve

    

Balance at March 31, 2012

     1,273,300        1,333,300   

Changes of items during the period

    

Provision of general reserve

     60,000        —     
  

 

 

   

 

 

 

Reversal of general reserve

     —          (90,000
  

 

 

   

 

 

 

Total changes of items during the period

     60,000        (90,000
  

 

 

   

 

 

 

Balance at March 31, 2013

     1,333,300        1,243,300   
  

 

 

   

 

 

 

Reserve for special depreciation

    

Balance at March 31, 2012

     2,145        1,551   

Changes of items during the period

    

Provision of reserve for special depreciation

     93        271   

Reversal of reserve for special depreciation

     (687     (623
  

 

 

   

 

 

 

Total changes of items during the period

     (593     (351
  

 

 

   

 

 

 

Balance at March 31, 2013

     1,551        1,199   
  

 

 

   

 

 

 

Reserve for reduction entry

    

Balance at March 31, 2012

     12,979        14,235   

Changes of items during the period

    

Provision of reserve for reduction entry

     1,345        2,316   

Reversal of reserve for reduction entry

     (89     (275
  

 

 

   

 

 

 

Total changes of items during the period

     1,256        2,041   
  

 

 

   

 

 

 

Balance at March 31, 2013

     14,235        16,276   
  

 

 

   

 

 

 

Retained earnings brought forward

    

Balance at March 31, 2012

     113,249        104,029   

Changes of items during the period

    

Reversal of reserve for dividends

     113,300        —     

Provision of general reserve

     (60,000     —     

Reversal of general reserve

     —          90,000   

Provision of reserve for special depreciation

     (93     (271

Reversal of reserve for special depreciation

     687        623   

Provision of reserve for reduction entry

     (1,345     (2,316

Reversal of reserve for reduction entry

     89        275   

Dividends from surplus

     (108,138     (129,765

Net income

     46,280        154,714   

Disposal of treasury stock

     (0     (0
  

 

 

   

 

 

 

Total changes of items during the period

     (9,219     113,259   
  

 

 

   

 

 

 

Balance at March 31, 2013

     104,029        217,288   
  

 

 

   

 

 

 

Total retained earnings

    


Table of Contents
     Yen (million)  
     2012     2013  

Balance at March 31, 2012

     1,536,491        1,474,633   

Changes of items during the period

    

Reversal of reserve for dividends

     —          —     

Provision of general reserve

     —          —     

Reversal of general reserve

     —          —     

Provision of reserve for special depreciation

     —          —     

Reversal of reserve for special depreciation

     —          —     

Provision of reserve for reduction entry

     —          —     

Reversal of reserve for reduction entry

     —          —     

Dividends from surplus

     (108,138     (129,765

Net income

     46,280        154,714   

Disposal of treasury stock

     (0     (0
  

 

 

   

 

 

 

Total changes of items during the period

     (61,857     24,948   
  

 

 

   

 

 

 

Balance at March 31, 2013

     1,474,633        1,499,582   
  

 

 

   

 

 

 

Treasury stock

    

Balance at March 31, 2012

     (26,209     (26,215

Changes of items during the period

    

Purchase of treasury stock

     (7     (8

Disposal of treasury stock

     1        1   
  

 

 

   

 

 

 

Total changes of items during the period

     (6     (6
  

 

 

   

 

 

 

Balance at March 31, 2013

     (26,215     (26,222
  

 

 

   

 

 

 

Total stockholders’ equity

    

Balance at March 31, 2012

     1,766,662        1,704,799   

Changes of items during the period

    

Dividends from surplus

     (108,138     (129,765

Net income

     46,280        154,714   

Purchase of treasury stock

     (7     (8

Disposal of treasury stock

     1        1   
  

 

 

   

 

 

 

Total changes of items during the period

     (61,863     24,941   
  

 

 

   

 

 

 

Balance at March 31, 2013

     1,704,799        1,729,740   
  

 

 

   

 

 

 

Valuation and translation adjustments

    

Valuation difference on available-for-sale security

    

Balance at March 31, 2012

     25,348        29,932   

Changes of items during the period

    

Net changes of items other than shareholder’s equity

     4,583        4,045   
  

 

 

   

 

 

 

Total changes of items during the period

     4,583        4,045   
  

 

 

   

 

 

 

Balance at March 31, 2013

     29,932        33,977   
  

 

 

   

 

 

 

Deferred gains or losses on hedges

    

Balance at March 31, 2012

     (156     (184

Changes of items during the period

    

Net changes of items other than shareholder’s equity

     (28     (52
  

 

 

   

 

 

 

Total changes of items during the period

     (28     (52
  

 

 

   

 

 

 

Balance at March 31, 2013

     (184     (237
  

 

 

   

 

 

 

Total valuation and translation adjustments

    

Balance at March 31, 2012

     25,192        29,747   

Changes of items during the period

    

Net changes of items other than shareholder’s equity

     4,555        3,992   
  

 

 

   

 

 

 

Total changes of items during the period

     4,555        3,992   
  

 

 

   

 

 

 

Balance at March 31, 2013

     29,747        33,740   
  

 

 

   

 

 

 

Total net assets

    

Balance at March 31, 2012

     1,791,854        1,734,546   

Changes of items during the period

    

Dividends from surplus

     (108,138     (129,765

Net income

     46,280        154,714   

Purchase of treasury stock

     (7     (8

Disposal of treasury stock

     1        1   

Net changes of items other than shareholder’s equity

     4,555        3,992   
  

 

 

   

 

 

 

Total changes of items during the period

     (57,308     28,934   
  

 

 

   

 

 

 

Balance at March 31, 2013

     1,734,546        1,763,480   
  

 

 

   

 

 

 


Table of Contents

Guangqi Honda Begins Construction of Third Automobile Production Line and a New Engine Plant

BEIJING, China, May 28, 2013—Guangqi Honda Automobile Co., Ltd., an automobile production and sales joint venture of Honda in China, held a ceremony to commemorate the start of construction of a third production line and an engine plant within the property of the existing ZengCheng Plant.

For details, please refer to the website of Honda Motor Co., Ltd

http://world.honda.com/news/2013/c130528Guangqi-Honda-New-Engine-Plant/index.html


Table of Contents

Honda Inaugurates New Motorcycle Plant in Karnataka

Bengaluru, India, May 28, 2013—Honda Motorcycle & Scooter India Pvt. Ltd., the second largest motorcycle company in India inaugurated its most advanced and latest third motorcycle production plant at Narsapura Area, District Kolar (Karnataka) today.

For details, please refer to the website of Honda Motor Co., Ltd

http://world.honda.com/news/2013/c130528Motorcycle-Plant-Karnataka/index.html