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Maruti Suzuki India Ltd. Notes to Accounts
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You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 440729.53 Cr. P/BV 4.95 Book Value (Rs.) 2,834.77
52 Week High/Low (Rs.) 14125/10725 FV/ML 5/1 P/E(X) 30.39
Bookclosure 01/08/2025 EPS (Rs.) 461.20 Div Yield (%) 0.96
Year End :2025-03 

2.16 Provisions and contingencies

Provisions: Provisions are recognised when there is
a present obligation as a result of a past event and it
is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and there is a reliable estimate of the amount of the
obligation. Provisions are determined by discounting the
expected future cash flows at a pre tax rate that reflects
current market assessment of the time value of money and
the risks specific to the liability.

Contingent Liabilities: Contingent liabilities are disclosed
when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the
occurrence or non occurrence of one or more uncertain
future events not wholly within the control of the Company
or a present obligation that arises from past events where
it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount
cannot be made.

2.17 Financial instruments

A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and financial
liabilities are recognised when the Company becomes a
party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial

instruments (other than financial assets and financial
liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in the Statement
of Profit and Loss. Subsequently, financial instruments
are measured according to the category in which they
are classified.

2.18 Financial assets

All purchases or sales of financial assets are recognised
and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial
assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured
in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets.

2.18.1 Classification of financial assets

Classification of financial assets depends on the nature
and purpose of the financial assets and is determined at
the time of initial recognition.

The Company classifies its financial assets in the following
measurement categories:

• Those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and

• Those measured at amortised cost

The classification depends on the Company’s business
model for managing the financial assets and the contractual
terms of the cash flows.

A financial asset that meets the following two conditions
is measured at amortised cost unless the asset is
designated at fair value through profit or loss under the
fair value option:

• Business model test: the objective of the Company’s
business model is to hold the financial asset to collect
the contractual cash flows.

• Cash flow characteristic test: the contractual
term of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.

A financial asset that meets the following two conditions is
measured at fair value through other comprehensive income
unless the asset is designated at fair value through profit
or loss under the fair value option:

• Business model test: the financial asset is held
within a business model whose objective is
achieved by both collecting cash flows and selling
financial assets.

• Cash flow characteristic test: the contractual term
of the financial asset gives rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

All other financial assets are measured at fair value through
profit or loss.

2.18.2 investments in equity instrument at fair value
through other comprehensive income (FVTOCI)

On initial recognition, the Company can make an
irrevocable election (on an instrument by instrument basis)
to present the subsequent changes in fair value in other
comprehensive income pertaining to investments in equity
instrument. This election is not permitted if the equity
instrument is held for trading. These elected investments
are initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains
/ losses arising from changes in fair value recognised in
other comprehensive income. This cumulative gain or loss
is not reclassified to the Statement of Profit and Loss on
disposal of the investments.

The Company has equity investments in certain entities
which are not held for trading. The Company has elected
the fair value through other comprehensive income
irrevocable option for all such investments. Dividend on
these investments are recognised in the Statement of
Profit and Loss.

2.18.3 Equity investment in subsidiaries, associates and
joint ventures

Investments representing equity interest in subsidiaries,
associates and joint ventures are carried at cost less any

provision for impairment. Investments are reviewed for
impairment if events or changes in circumstances indicate
that the carrying amount may not be recoverable.

2.18.4 Financial assets at fair value through profit or loss
(FVTPL)

Investment in equity instrument are classified at fair value
through profit or loss, unless the Company irrevocably
elects on initial recognition to present subsequent changes
in fair value in other comprehensive income for investments
in equity instruments which are not held for trading.

Financial assets that do not meet the amortised cost
criteria or fair value through other comprehensive income
criteria are measured at fair value through profit or loss. A
financial asset that meets the amortised cost criteria or fair
value through other comprehensive income criteria may be
designated as at fair value through profit or loss upon initial
recognition if such designation eliminates or significantly
reduces a measurement or recognition inconsistency
that would arise from measuring assets and liabilities or
recognising the gains or losses on them on different bases.

Investments in debt based mutual funds are measured at
fair value through profit or loss.

Financial assets which are fair valued through profit or loss
are measured at fair value at the end of each reporting
period, with any gains or losses arising on remeasurement
recognised in the Statement of Profit and Loss.

2.18.5 Cash and cash equivalents

In the Statement of Cash Flows, cash and cash
equivalents include cash in hand, cheques and drafts in
hand, balances with bank and deposits held at call with
financial institutions, short-term highly liquid investments
with original maturities of three months or less that
are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet and forms part of
financing activities in the Statement of Cash Flows. Book
overdraft are shown within other financial liabilities in the
balance sheet and forms part of operating activities in the
Statement of Cash Flows.

2.18.6 impairment of financial assets

The Company assesses impairment based on expected
credit losses (ECL) model to the following:

• financial assets measured at amortised cost

• financial assets measured at fair value through other
comprehensive income

Expected credit loss are measured through a loss
allowance at an amount equal to:

• the twelve month expected credit losses (expected
credit losses that result from those default events
on the financial instruments that are possible within
twelve months after the reporting date); or

• full life time expected credit losses (expected credit
losses that result from all possible default events over
the life of the financial instrument).

For trade receivables or any contractual right to
receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115 -
Revenue from Contracts with Customers, the Company
always measures the loss allowance at an amount equal
to lifetime expected credit losses.

1.18.7 Derecognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive
cash flows from the financial asset or

• Retains the contractual rights to receive the
cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one
or more recipients.

1.18.8 Foreign exchange gains and losses

The fair value of financial assets denominated in a
foreign currency is determined in that foreign currency
and translated at the exchange rate at the end of each
reporting period. For foreign currency denominated
financial assets measured at amortised cost or fair
value through profit or loss the exchange differences are
recognised in the Statement of Profit and Loss except
for those which are designated as hedge instrument in
a hedging relationship. Further change in the carrying
amount of investments in equity instruments at fair
value through other comprehensive income relating to
changes in foreign currency rates are recognised in other
comprehensive income.

2.19 Financial liabilities and equity instruments

2.19.1 Classification of debt or equity

Debt or equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and
an equity instrument.

2.19.2 Equity instruments

An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the
Company are recognised at the proceeds received, net of
direct issue costs.

2.19.3 Financial liabilities

All financial liabilities are subsequently measured at
amortised cost using the effective interest rate method or
at fair value through profit or loss.

2.19.3.1 Trade and other payables

Trade and other payables represent liabilities for goods
or services provided to the Company prior to the end of
financial year which are unpaid.

2.19.3.2 Borrowings

Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the Statement of Profit and Loss
over the period of the borrowings using the effective
interest rate method.

Borrowings are removed from the balance sheet when
the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities
assumed, is recognised in the Statement of Profit and Loss.

2.19.3.3 Foreign exchange gains or losses

For financial liabilities that are denominated in a foreign
currency and are measured at amortised cost at the end
of each reporting period, the foreign exchange gains and
losses are determined based on the amortised cost of
the instruments and are recognised in the Statement of
Profit and Loss.

The fair value of financial liabilities denominated in a
foreign currency is determined in that foreign currency
and translated at the exchange rate at the end of the
reporting period. For financial liabilities that are measured
as at fair value through profit or loss, the foreign exchange
component forms part of the fair value gains or losses and
is recognised in the Statement of Profit and Loss.

2.19.3.4 Lease liabilities

The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. Lease liabilities
are remeasured with a corresponding adjustment to the
related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a
termination option.

2.19.3.5 Derecognition of financial liabilities

The Company derecognises financial liabilities when, and
only when, the Company’s obligations are discharged,
cancelled or have expired.

2.20 Derivative financial instruments

The Company enters into foreign exchange forward
contracts and certain other derivative financial instruments
to manage its exposure to foreign exchange rate risks
and commodity price risks. Further details of derivative
financial instruments are disclosed in note 33.

Derivatives are initially recognised at fair value at the
date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of
each reporting period. Derivatives are carried as financial
assets when the fair value is positive and as financial
liabilities when the fair value is negative. The resulting
gain or loss is recognised in the Statement of Profit and
Loss immediately unless the derivative is designated and
effective as a hedging instrument which is recognised in
other comprehensive income (net of tax) and presented as
a separate component of equity which is later reclassified
to profit or loss when the hedge item affects profit or loss.

2.20.1 Embedded derivatives

Derivatives embedded in a host contract that is an asset
within the scope of Ind AS 109 - Financial Instruments are
not separated. Financial assets with embedded derivatives
are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.

Derivatives embedded in all other host contract are
separated only if the economic characteristics and

risks of the embedded derivative are not closely related
to the economic characteristics and risks of the host
and are measured at fair value through profit or loss.
Embedded derivatives closely related to the host contracts
are not separated.

2.21 Hedge accounting

The Company designates certain hedging instruments, in
respect of foreign currency risk, as either fair value hedges
or cash flow hedges. Hedges of foreign exchange risk on
firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity
documents the relationship between the hedging
instrument and the hedged item, along with its risk
management objectives and its strategy for undertaking
various hedge transactions. Furthermore, at the inception
of the hedge and on an on-going basis, the Company
documents whether the hedging instrument is highly
effective in offsetting changes in fair values or cash flows
of the hedged item attributable to the hedged risk.

Changes in the fair value of these contracts that are
designated and effective as hedges of future cash flows
are recognised in other comprehensive income (net of tax)
and the ineffective portion is recognised immediately in
the Statement of Profit and Loss. Amount accumulated in
equity are reclassified to the profit or loss in the periods in
which the forecasted transaction occurs.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, or exercised,
or no longer qualifies for hedge accounting. For forecast
transactions, any cumulative gain or loss on the hedging
instrument recognised in other equity is retained there until
the forecast transaction occurs.

Note 33 sets out details of the fair values of the derivative
instruments used for hedging purposes.

2.22 Offsetting Financial Instruments

Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or realise
the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent on future events
and must be enforceable in the normal course of business
and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.

2.23 Government Grant

Government grants are recognised where there is
reasonable assurance that the Company will comply
with the conditions attaching to them and the grants
will be received.

Government grants are recognised in the Statement of
Profit and Loss on a systematic basis over the periods in
which the Company recognises as expense the related
cost for which the grants are intended to compensate.

Government grants related to assets is presented in the
balance sheet by setting up the grant as deferred income.
The grant set up as deferred income is recognised in the
Statement of Profit and Loss on a systematic basis over
the useful life of the asset.

2.24 Earnings Per Share

Basic earnings per share has been computed by dividing
the net income by the weighted average number of shares
outstanding during the year. Diluted earnings per share
has been computed using the weighted average number
of shares and diluted potential shares, except where the
result would be anti-dilutive.

2.25 Dividends

Final dividends on shares are recorded on the date of
approval by the shareholders of the Company.

2.26 Royalty

The Company pays / accrues for royalty in accordance
with the relevant licence agreements.

2.27 Business combinations

Acquisitions of subsidiaries and businesses are accounted
for using the acquisition method. Acquisition related costs
are recognised in the Statement of Profit and Loss as
incurred. The acquiree’s identifiable assets, liabilities and
contingent liabilities that meet the conditions for recognition
are recognised at their fair value at the acquisition date,
except certain assets and liabilities that are required to be
measured as per the applicable standard.

Purchase consideration in excess of the Company’s
interest in the acquiree’s net fair value of identifiable
assets, liabilities and contingent liabilities is recognised
as goodwill. Excess of the Company’s interest in the net
fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over the purchase consideration is

recognised, after reassessment of fair value of net assets
acquired, in the Capital Reserve.

Common control

A business combination involving entities or businesses
under common control is a business combination in which
all of the combining entities or businesses are ultimately
controlled by the same party or parties both before
and after the business combination and the control is
not transitory.

Business combinations involving entities under common
control are accounted for using the pooling of interests
method. The net assets of the transferor entity or business
are accounted at their carrying amounts on the date
of the acquisition subject to necessary adjustments
required to harmonise accounting policies. Any excess or
shortfall of the consideration paid over the share capital
of transferor entity or business is recognised as capital
reserve under equity.

2.28 Rounding off amounts

All amounts disclosed in the financial statements and
the accompanying notes have been rounded off to the
nearest million as per the requirement of Schedule III of the
Companies Act 2013, unless otherwise stated.

3 applicability of new and revised ind as

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended March 31,
2025, MCA has notified Ind AS - 117 Insurance Contracts
and amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f April 1, 2024. The Company has reviewed the
new pronouncements and based on its evaluation has
determined that it does not have any significant impact on
the standalone financial statements.

(i) Provisions for employee benefits

The provision for employee benefits include compensated absences, retirement allowance, post retirement medical benefit
plan and gratuity.

The entire amount of the provision for compensated absences of ' 7,628 million (as at March 31, 2024: ' 6,432 million) is
presented as current, since the Company does not have unconditional right to defer settlement of any of these obligations.
However, based on past experience, the Company does not expect all employees to avail the full amount of accrued leave
or require payment for such leave within next 12 months. Leave obligation not expected to be settled with next 12 months
as at March 31, 2025 is
' 6,508 million (as at March 31, 2024: ' 5,369 million).

(ii) Provision for warranty and product recall

Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the
reporting period and is also made for estimated product recall in respect of products sold. These claims are expected to
be settled as and when warranty/product recall claims will arise. Management estimates the provision based on historical
warranty claims/product recall claims information and any recent trends that may suggest future claims for warranty and
product recall that could differ from historical amounts.

(iii) Provision for litigation / disputes and others

I n the ordinary course of business, the Company faces litigations and claims from various authorities and parties. The
Company assesses such claims and monitors the legal environment on an ongoing basis, with the assistance of external
legal counsel, wherever necessary. The Company records a liability for any claim where a potential loss is probable and
capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are
considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a
liability in its accounts unless the loss becomes probable [refer note 37(A)].

Note: Pursuant to the issuance of Circular No. 248/5/2025-GST dated March 27, 2025 by the Central Board of Indirect
Taxes and Customs (CBIC), which provides clarifications on various issues relating to GST Amnesty Scheme concerning the
availment of benefits under Section 128A of the CGST Act, 2017, the Company is currently in the process of evaluating its
entitlement to avail the benefit of waiver of interest and penalty. This evaluation pertains to ongoing litigations of
' 552 million
which relates to employee secondment arrangement under GST regime for the financial years 2017-18 to 2019-20, under the
GST Amnesty Scheme, in accordance with the controls laid out by the Company in respect of such assessment. Based on
its ongoing assessment, the Company believes that the aforesaid provision is adequate.

30 SEGMENT INFORMATION

The Company is primarily in the business of manufacturing, purchase and sale of motor vehicles, components and spare parts
(“automobiles”). The other activities of the Company comprise facilitation of pre-owned car sales, fleet management and car
financing. The income from these activities is not material in financial terms but such activities contribute significantly in generating
demand for the products of the Company.

The Board of Directors of the Company, which has been identified as being the Chief Operating Decision Maker (CODM), evaluates
the Company’s performance, allocates resources based on the analysis of the various performance indicator of the Company as
a single unit. Therefore there is no reportable segment for the Company.

interest risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in the value of the liability.

Longevity risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants
both during and after employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk

The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future.
Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the
present value of obligation will have a bearing on the plan’s liability.

Sensitivity analysis

Significant actuarial assumption for the determination of defined obligation are discount rate, expected salary growth rate, attrition
rate and mortality rate. The sensitivity analysis below have been determined based on reasonably possible changes in respective
assumption occurring at the end of reporting period, while holding all other assumptions constant.

If the discount rate increases (decreases) by 1%, the defined benefit obligation would decrease by ' 1,234 million (increase by
' 1,478 million) [As at March 31, 2024: decrease by ' 1,060 million (increase by ' 1,227 million)].

If the expected salary growth rate increases (decreases) by 1%, the defined benefit obligation would increase by ' 1,295 million
(decrease by
' 1,107 million) [As at March 31, 2024: increase by ' 1,049 million (decrease by ' 895 million)].

32.1 The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment
received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India and
subsequently on November 13, 2020 draft rules were published and invited for stakeholders’ suggestions. However, the
date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when
it comes into effect and will record any related impact in the period the Code and rules thereunder become effective.

Level 1: Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to
quoted prices in the active market. This category consists of quoted equity shares and open ended schemes of debt mutual
funds.

Level 2: Valuation techniques with observable inputs. This level of hierarchy includes items measured using inputs other than
quoted prices included within Level 1 that are observable for such items, either directly or indirectly. This level of hierarchy
consists of investments in close ended schemes of debt mutual fund investments and over the counter (OTC) derivative contracts.

Level 3: Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not
based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based
on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor
based on available market data. The main item in this category are unquoted equity instruments.

The management assessed that fair value of trade receivables, cash and cash equivalents, other bank balances, loans, security
deposit, fixed deposits with banks, interest accrued, other current financial assets (except derivative financial assets), short term
borrowings , trade payables, lease liabilities and other current financial liabilities (except derivative financial liabilities) approximate
their carrying amounts largely due to short-term maturities of these instruments.

The fair value of the financial assets are determined at the amount that would be received to sell an asset in an orderly transaction
between market participants. The following methods and assumptions were used to estimate the fair values:

Investments in debt mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset
value (NAV) for investments in mutual funds declared by mutual fund house.

Derivative contracts: The Company has entered into variety of commodity forward contracts and foreign currency forward / option
contracts to manage its exposure to fluctuations in commodity price risk and foreign exchange rates. These financial exposures
are managed in accordance with the Company’s risk management policies and procedures. Fair value of derivative financial
instruments, including forward and option contracts are determined using valuation techniques based on information derived
from observable market data and using valuation provided by authorised dealers dealing in commodities and foreign exchange.

Quoted equity investments: Fair value is derived from quoted market prices in active markets.

Unquoted equity investments: Fair value is derived on the basis of income approach, in this approach the discounted cash flow
method is used to capture the present value of the expected future economic benefits to be derived from the ownership of these
investments.

33.2 Financial risk management

The Company’s activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the
financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign
currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for
hedging purposes and not as trading or speculative instruments.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge
accounting in the financial statements.

(B) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and to ensure funds are available for use as per the requirements.

The Company did not have any long term borrowings and has sufficient liquidity (refer note 33.3). The Company raises short
term rupee borrowings for short term cash flow mismatches and has large investments in debt mutual funds which can be
redeemed on a very short notice and hence carries negligible liquidity risk. The Company has undrawn borrowing facilities
of
' 49,700 million as at March 31, 2025 (' 49,369 million as at March 31, 2024) to honour any liquidity requirements arising
for business needs.

(ii) Security price risk
Exposure in equity

The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance
sheet as fair value through OCI.

Equity price sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the year.

If the equity prices had been 5% higher / lower:

Other comprehensive income for the year ended March 31, 2025 would increase / decrease by ' 1,016 million, (for the year ended
March 31, 2024: increase / decrease by
' 947 million) as a result of the change in fair value of equity investment measured at FVTOCI.

Exposure in mutual funds

The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment
in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily
basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investments.

Mutual fund price sensitivity analysis

The sensitivity analysis below have been determined based on Mutual Fund Investment at the end of the reporting period.

If NAV has been 1% higher / lower:

Profit for year ended March 31, 2025 would increase / decrease by ' 5,916 million (for the year ended March 31, 2024 by ' 5,332
million) as a result of the changes in fair value of mutual fund investments.

33.3 Capital management

The Company’s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital

(viii) In respect of disputed Local Area Development Tax (LADT) (upto April 15, 2008) / Entry Tax, the amounts under dispute are
' 21 million (as at March 31, 2024: ' 21 million) for LADT and ' 20 million (as at March 31, 2024: ' 20 million) for Entry Tax.
The State Government of Haryana has repealed the LADT effective from April 16, 2008 and introduced the Haryana Tax on
Entry of Goods into Local Area Act, 2008 with effect from the same date. After implementation of Goods & Services Act in
2017, Entry Tax Act in Haryana was repealed.

(ix) (a) The Competition Commission of India (“CCI”) had passed an order dated August 25, 2014 stating that the Company

has violated certain sections of the Competition Act, 2002 for not making diagnostic tools and genuine spare parts
freely available in the open market and has imposed a penalty of
' 4,712 million. The Delhi High Court, on May 16,
2019, disposed off the Company’s petition stating that the Company had alternative remedies available. Thereafter, the
Company filed a Special Leave Petition before the Supreme Court of India, wherein an interim stay on CCI’s order was
granted on July 1, 2019 and the stay is continuing.

(b) The Competition Commission of India (“CCI”) had initiated suo-moto proceedings in the month of February 2019 alleging
that the Company has violated certain sections of the Competition Act, 2002 relating to resale price maintenance. The
Company filed its response to the Director General’s investigation report against the Company before CCI on 9th
April 2021 and placed its final arguments during the virtual hearing on April 15, 2021. The Company has received the
order from CCI dated August 23, 2021, whereby the Commission has arrived at a decision against the Company and
a penalty of
' 2,000 million was imposed on the Company for imposing a discount control policy. The Company is of
the view that CCI has failed to consider voluminous evidence that it has submitted in its defence. The Company has
been legally advised that there are fair and reasonable grounds to contest the case. The Company has filed an appeal
before the National Company Law Appellate Tribunal (“NCLAT”) to vigorously defend its position against CCI order.
The NCLAT has stayed the operation of CCI order including the cease and desist direction and penalty subject to the
Company depositing 10% of the penalty imposed i.e.
' 200 million. The Company had deposited ' 200 million and is
contesting the case.

Note: The amounts shown in item (A) represent the best possible estimates arrived at on the basis of available information. The
uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been
invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present
obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a
reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been
advised that it has strong legal positions against such disputes.

(B) The Hon’ble Supreme Court in a ruling, had passed a judgment on the definition and scope of ‘Basic Wages’ under the
Employees’ Provident Funds and Miscellaneous Provision Act, 1952. Pending issuance of guidelines by the regulatory
authorities on the application of this ruling, the impact on the Company for the previous periods, if any, cannot be ascertained.
Currently, the Company has started providing for the revised liability w.e.f from April 1, 2019.

(C) The Ministry of Environment, Forest and Climate Change has notified the Environment Protection (End-of-Life Vehicles)
Rules, 2025 (“”ELV Rules””) on January 6, 2025, which come into effect from April 1, 2025. In accordance with ELV
rules, Extended Producer Responsibility (EPR) obligations are imposed on producers (“’’vehicle manufacturers””) for the
scrapping of End-of-Life Vehicles. As per the ELV rules, such obligations are to be fulfilled through the purchase of EPR
certificates from registered Vehicle Scrapping Facilities via a Centralised Online Portal, which is yet to be developed and
made operational. In the absence of this portal, the registration of producers and vendors, pricing mechanism for EPR
certificates, and measurement framework for determining obligations are not yet available.

Consequently, the Company is currently unable to reliably estimate a range of possible outcomes and the impact will be
evaluated once the implementation framework for determining the reliable estimate is established.

38 The Company had entered into a ‘Contract Manufacturing Agreement’ (CMA) on December 17, 2015 with Suzuki Motor
Gujarat Private Limited (SMG) which was then a fellow subsidiary. In accordance with the contractual terms, SMG during
the term of this agreement, was to manufacture and supply vehicles on an exclusive basis to MSIL. The consideration for
the arrangement was to be the cost incurred by SMG to manufacture the cars which was to be charged to the Company on
no-profit-no-loss basis.

The Company evaluated the arrangement in accordance with guidance provided in Ind AS 116 - Leases and concluded that
the specified assets and right to use the same are implied in the agreement. The Company also evaluated the contractual
rights and obligations including relating to pricing, termination and renewal and concluded that a reasonable certainty, as
defined by Ind AS 116 - Leases, does not exist across the lease period. Accordingly no right-of-use assets or lease liability
had been recognised on account of the given arrangement.

Further, as indicated above, in the absence of reasonable certainty, no right-of-use assets or lease liability was recognised.
The payments made towards cost of purchase of vehicles recorded during the year includes ' 24,000 million (previous year
' 22,141 million) towards a component of lease payment for specified assets [Written Down value of specified assets as on
March 31, 2025 is ' 81,883 million (Previous year ' 92,580 million)], as per the information provided by SMG.

Subject to legal and regulatory compliances including minority shareholders approval, the Board of Directors at its meeting
held on July 31,2023 had approved termination of CMA with SMG and exercised the option to acquire 100% equity shares of
SMG from Suzuki Motor Corporation (SMC) and at its meeting held on October 17, 2023 had approved execution of a Share
Purchase and Subscription Agreement (“SPSA”) to acquire 100% equity capital of SMG owned by SMC. Based on the terms
of SPSA, the Company had discharged the consideration for such purchase of 100% of the SMG’s equity shares by way of
issue and allotment of the Company’s equity shares to SMC on a preferential basis for consideration other than cash.

Pursuant to the shareholders approval obtained through postal ballot for issue of equity shares to SMC on preferential
basis, the Board of Directors at its meeting held on November 24, 2023 allotted 12,322,514 equity shares of the Company
having face value of ' 5 each to SMC, at a price of ' 10,420.85 per equity share at a total consideration of ' 128,411 million
(Equity share capital of ' 62 million and Securities premium of ' 128,349 million) on a preferential basis for consideration
other than cash, for the purchase of 100% of 12,841,107,500 equity shares of SMG owned by SMC at share exchange ratio
of 1:1042.085.

Pursuant to such purchase of 100% equity shares from SMC, SMG, engaged in manufacturing and sale of motor vehicles,
components and spare parts became a wholly owned subsidiary of the Company. Based on the terms of SPSA, SMG will
continue to manufacture vehicles and parts and supply them to the Company on a ‘no-profit no-loss’ basis till March 31,
2024 or any other date agreed between the Company and SMG. The Company and SMG mutually agreed to continue the
arrangement till March 31, 2026 or such later date as the Company and SMG may decide by mutual agreement.

Further, the Board of Directors at its meeting held on January 29, 2025 had approved the Scheme of Amalgamation
(“Scheme”) between the Company, Suzuki Motor Gujarat Private Limited (a wholly owned subsidiary of the Company) and
their respective shareholders and creditors as per the applicable provisions of the Companies Act, 2013 (“Act”) and rules
framed thereunder. The First Motion application of the Scheme was filed on March 7, 2025 with the National Company
Law Tribunal, New Delhi. The Scheme is subject to the applicable statutory/ regulatory approvals as on the date of these
standalone financial statements.

39 As per the requirements of proviso to Rule 3(1) of the Companies (Accounts) Rules, 2024, accounting software used by the
Company should have a feature of recording audit trail of each and every transaction. The Company’s IT environment is
adequately governed with General information technology controls (GITCs) for financial reporting process and the Company
has assessed all of its IT applications that are relevant for maintaining books of account.

The Company has used accounting software for maintaining its books of account for the year ended March 31, 2025.
However, the audit trail (edit log) feature was not enabled during the year, as the Company is in the process of migrating to
another accounting software in the near future.

The Company has also used various related accounting software wherein, audit trail feature was enabled and which operated
at database level during the month of March 2025 for certain tables. These related accounting software did not have the
feature of recording audit trail (edit log) facility at application level. The Company has not noted any tampering of the audit
trail feature in respect of the various related accounting software for which the audit trail feature was operating.

I n respect of third-party accounting software used by the Company for maintaining and processing certain transactions,
the independent auditor’s report does not cover whether the audit trail was enabled or not, as per the requirements of the
proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014.

40 ADDITIONAL NOTES

a) The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related
parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on
demand or without specifying any terms or period of repayment.

b) The Company was not holding any benami property and no proceedings were initiated or pending against the Company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

c) The Company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under
the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve
Bank of India.

d) The Company did not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.

e) The Company has not traded or invested in Crypto currency or Virtual Currency during year ended March 31, , 2025.

f) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) any funds to or in any other persons or entities, including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g) The Company has not received any funds from any persons or entities, including foreign entities (“Funding Parties”), with
the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in

other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

h) The Company did not have any transaction which had not been recorded in the books of account that had been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey
or any other relevant provisions of the Income Tax Act, 1961).

41 EXPORT PROMOTION CAPITAL GOODS (EPCG)

Export Promotion Capital Goods (EPCG) scheme allows import of capital goods including spares for pre-production,
production and post production at zero customs duty subject to an export obligation of upto 6 times of customs duty saved
on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from authorisation issue date.

The Company has been availing the benefit and have been importing capital goods under the scheme at zero customs duty.
The Company has accounted for the benefits received in accordance with Ind AS 20 - Accounting for Government Grants
and Disclosure of Government Assistance. Accordingly, the Company has accounted for EPCG income amounting to
' Nil
(March 31, 2024 :
' 41 million). Deferred government grant balance as on March 31, 2025 is ' 1,819 million (March 31, 2024 :
' 836 million).

The benefit (savings of customs duty equivalent to non-cenvatable portion) obtained from the Government has been treated
as a Government grant, which has been accounted for as deferred benefit under other current liabilities in note 19 and
recognised as a cost of property, plant and equipment. As per the EPCG scheme, the Company has an export obligation
equivalent to 6 times of total duty saved (refer note 36). The deferred benefit accounted for, shall be credited to Statement
of Profit and Loss on a pro-rata basis as and when the export obligation is fulfilled.

50 The figures of previous year have been re-grouped, wherever necessary, to conform to the current year classification.

51 The standalone financial statements were approved by the Board of Directors and authorised for issue on April 25, 2025.
For and on behalf of the Board of Directors

Hisashi Takeuchi Kenichiro Toyofuku Arnab Roy Sanjeev Grover

Managing Director and CEO Director (Sustainability) Chief Financial Officer Executive officer and Company Secretary

DIN: 07806180 DIN: 08619076 ICSI Membership No: F3788

Place: New Delhi
Date: April 25, 2025


 
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