AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF MARUTI UDYOG
LIMITED
1. We have audited the attached consolidated balance sheet of
Maruti Udyog Limited and its subsidiaries, joint ventures
and associated (The Group) as at 31st March, 2007, the
consolidated profit and loss account and the consolidated
cash flow statement for the year ended on that date annexed
thereto, which we have signed under reference to this report.
These consolidated financial statements are the responsibility
of Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based
on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements
are prepared, in all material respects, in accordance with an
identified financial reporting framework and are free of
material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
3. We did not audit financial statements of the subsidiaries,
joint ventures and associate companies for the year ended
March 31, 2007. The financial statements of the subsidiaries
and joint ventures reflect total assets of Rs 515 million and
Rs 1435 million, respectively as at March 31, 2007, total
revenue of Rs. 967 million and Rs 3,031 million respectively,
and net cash flows from operating activities of Rs. 143 million
and Rs. 81 million respectively, for the year ended on that
date. The Financial Statements of associates reflect net profit
after tax of Rs 68 million for the year ended March 31, 2007.
These financial statements have been audited by other
auditors whose reports have been furnished to us, and our
opinion, in so far as it relates to the amounts included in
respect of these subsidiaries, joint ventures and associates,
is based solely on the report of the other auditors. Attention
Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007
is invited to Note 8 (a) and 8 (b) of Notes to accounts
(Schedule 23) regarding certain associates whose financial
statements are unaudited, the impact of which is not likely
to be material.
4. We report that the consolidated financial statements have
been prepared by the company in accordance with the
requirements of Accounting Standard 21-Consolidated
Financial Statements, Accounting Standard 23-Accounting for
investments in Associates in Consolidated Financial
Statements and Accounting Standard 27-Financial Reporting
of Interests in Joint Ventures, issued by Institute of Chartered
Accountants of India and on the basis of the separate audited
financial statements of Maruti Udyog Limited and its
subsidiaries, joint ventures and associates included in the
consolidated fianancial statements.
5. On the basis of the information and explanations given to us
and on consideration of the separate audit reports on
individual audited financial statements of Maruti Udyog
Limited and its aforesaid subsidiaries, joint ventures and
associates, in our opinion, the consolidated financial
statements give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the consolidated balance sheet, of
the consolidated state of affairs of the Group as at
31st March 2007;
(b) in the case of the consolidated profit and loss
account, of the consolidated results of operations
of the Group for the year then ended on that date;
and
(c) in the case of consolidated cash flow statement, of
the consolidated cash flows of the Group for the
year then ended on that date.
Anupam Dhawan
Membership Number – F 084451
Partner
For and on behalf of
Place: New Delhi PRICE WATERHOUSE
Date: 24th April, 2007 Chartered Accountants
85
 C O N S O L I D A T E D B A L A N C E S H E E T
AS AT 31ST MARCH, 2007 (Rs. in Million)
SCHEDULE As at As at
31.03.07 31.03.06

SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Capital 1 1,445 1,445
Reserves and Surplus 2 68,620 70,065 54,285 55,730
MINORITY INTEREST - 95

LOAN FUNDS
Secured Loans 3 804 882
Unsecured Loans 4 5,901 6,705 5,814 6,696

DEFERRED TAX (Note 13 on Schedule 23)

Deferred Tax Liabilities 2,822 2,033
Deferred Tax Assets (1,110) 1,712 (1,223) 810
Total 78,482 63,331

APPLICATION OF FUNDS
FIXED ASSETS 5
Gross Block 62,102 50,137
Less: Depreciation (35,106) (32,789)
26,996 17,348
Capital Work-In-Progress 6 2,416 29,412 3,143 20,491

INVESTMENTS 7 35,146 21,147

CURRENT ASSETS, LOANS AND ADVANCES
Inventories 8 7,241 8,894
Sundry Debtors 9 7,767 6,680
Cash and Bank Balances 10 14,374 19,874
Other Current Assets 11 384 487
Loans and Advances 12 9,290 6,546
39,056 42,481
LESS: CURRENT LIABILITIES AND PROVISIONS
Current Liabilities 13 20,477 16,209
Provisions 14 4,655 4,579
25,132 20,788
Net Current Assets 13,924 21,693

Total 78,482 63,331

SIGNIFICANT ACCOUNTING POLICIES 22
NOTES TO ACCOUNTS 23

This is the Consolidated Balance Sheet referred to The Schedules referred to above form
in our report of even date. an integral part of the Consolidated Balance Sheet.

ANUPAM DHAWAN JAGDISH KHATTAR H. NAGAO ANIL RUSTGI

Membership Number - F 084451 Managing Director & CEO Joint Managing Director Company Secretary & Chief Legal Officer
Partner
For and on behalf of PRICE WATERHOUSE
Chartered Accountants
New Delhi
April 24, 2007

86 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

C O N S O L I D A T E D P R O F I T A N D L O S S A C C O U N T
FOR THE YEAR ENDED 31ST MARCH, 2007 (Rs. in Million)
SCHEDULE For the For the
year ended year ended
31.03.07 31.03.06
INCOME
Gross Sales 15 172,935 148,003
Less: Excise Duty 25,718 27,126
Net Sales 147,217 120,877
Income from Services [Net of expenses Rs. 705 million
(Previous year Rs. 2,025 million)] 667 555
[Share of Joint Ventures Rs. 60 million
(Previous Year Rs. 33 million)]
Other Income 16 7,010 5,335
Total 154,894 126,767
EXPENDITURE
Consumption of Raw Materials and Components 102,435 89,427
(Note 4 on Schedule 23)
[Share of Joint Ventures Rs. 1,061 million (Previous Year Rs 648 million)]
Purchase of Traded Goods 6,224 4,693
[Share of Joint Ventures Rs. 65 million (Previous Year Rs. 49 million)]
Consumption of Stores 1,097 824
Employees Remuneration and Benefits 17 2,965 2,377
Manufacturing, Administrative and Other Expenses 18 8,990 6,520
Selling and Distribution Expenses 19 5,010 3,979
Total 126,721 107,820
Less: Vehicles/Dies for Own Use 143 67
Add : (Increase) /Decrease in Work-in-progress,
Finished Goods & Spare Parts 21 1,994 (2,006)
Total 128,572 105,747
Earnings before Interest, Depreciation, Tax and Amortisations 26,322 21,020
(EBIDTA)
Interest 20 404 223
Depreciation 5 2,755 2,891
3,159 3,114
Consolidated Profit before Tax 23,163 17,906
Less : Tax Expense - Current Tax 6,184 5,991
- Deferred Tax (Note 13 on Schedule 23) 903 (313)
- Fringe Benefit Tax 69 62
- Previous Years 124 -
Consolidated Profit after Tax but before Minority Interest 15,883 12,166
Minority Interest - (25)
Consolidated Profit after Tax and Minority Interest 15,883 12,191
Add: Brought forward from previous year’s account 45,107 35,289
60,990 47,480
Less: Loss of Maruti Suzuki Automobile India Limited adjusted on 25
amalgamation (Note 15 on Schedule 23)
Less: Impact of Transition adjustment for ‘Employee Benefit’ 4
Consolidated Profit available for appropriation 60,961 47,480
Less: Appropriations :
Debenture Redemption Reserve 17 31
General Reserve 1,562 1,189
Proposed Dividend 1,300 1,011
Corporate Dividend Tax 219 142
Balance carried forward to Balance Sheet 57,863 45,107
Basic/Diluted Earnings Per Share (in Rupees) (Note 12 on Schedule 23) 54.98 42.20
SIGNIFICANT ACCOUNTING POLICIES 22
NOTES TO ACCOUNTS 23
This is the Consolidated Profit and Loss Account referred to The Schedules referred to above form an
in our report of even date. integral part of the Consolidated Profit and Loss Account.
ANUPAM DHAWAN JAGDISH KHATTAR H. NAGAO ANIL RUSTGI
Membership Number - F 084451 Managing Director & CEO Joint Managing Director Company Secretary & Chief Legal Officer
Partner
For and on behalf of PRICE WATERHOUSE
Chartered Accountants
New Delhi
April 24, 2007

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 87

 C O N S O L I D A T E D C A S H F L O W S T A T E M E N T
FOR THE YEAR ENDED 31ST MARCH, 2007 (Rs. in Million)
For the For the
year ended year ended
31.03.07 31.03.06

A. Cash flow from Operating Activities:

Net Profit before Tax 23,163 17,906

Adjustments for:
Depreciation 2,755 2,891
Interest Expense 404 223
Interest Income (1,109) (1,076)
Dividend Income (1,534) (723)
Net Loss on Sale / discarding of Fixed Assets 3 220
Profit on sale of Investments (389) (100)
Debts / Advances Written off 22 -
Provision for Doubtful Debts and Advances 6 10
Provisions no longer required written back (459) (54)
Impact of transition provision of Accounting Standard 15 (5) -
‘Employee Benefit’

Operating Profit before Working Capital changes 22,857 19,297

Adjustments for changes in Working Capital :

(Increase)/Decrease in Sundry Debtors (1,115) (606)

(Increase)/Decrease in Other Current Assets, Loans & Advances (2,688) (158)
(Increase)/Decrease in Inventories 1,653 (2,160)
Increase/(Decrease) in Current Liabilities and Provisions 4,444 4,061

Cash generated from Operating Activities 25,152 20,434

Taxes (Paid) / Received (Net of TDS) (6,565) (6,018)

Net Cash from Operating Activities 18,586 14,416

B. Cash flow from Investing Activities:

Purchase of Fixed Assets (11,873) (4,397)
Sale of Fixed Assets 194 334
Sale of Investments 109,253 88,222
Purchase of Investments (122,863) (93,436)
Interest received (revenue) 1,156 985
Dividend received 1,534 723
Equity Investment* (120) -

Net Cash from Investing Activities (22,719) (7,569)

88 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

 Rs. in Million)
For the For the
year ended year ended
31.03.07 31.03.06

C. Cash flow from Financing Activities:

Contribution from Minority Interest - 120

Proceeds from short term borrowings 361 306
Repayment of short term borrowings (415) (2,644)
Proceed from long term borrowings 89 5,690
Repayment of long term borrowings (26) -
Interest paid (365) (220)
Dividend paid (1,011) (578)

Net Cash from Financing Activities (1,367) 2,674

Net Increase/(Decrease) in Cash & Cash Equivalents (5,500) 9,521

Cash and Cash Equivalents as at 1st April (Opening Balance) 19,874 10,353
Cash and Cash Equivalents as at 31st March (Closing Balance) 14,374 19,874

Cash and Cash Equivalents comprise 14,374 19,874

Cash, Cheques & Drafts (in hand) 947 463
Balance with Scheduled Banks in Current Accounts 347 137
Balance with Scheduled Banks in Deposit Accounts 13,080 19,274

*The Company purchased 30% share of Suzuki Motor Corporation in erstwhile Maruti Suzuki Automobile India Limited (MSAIL), which subsequently
got amalgamated with Maruti Udyog Limited.

Notes :
1 The above Cash Flow Statement has been prepared under the indirect method as set out in Accounting
Standard -3 on “Cash Flow Statement” issued by the Institute of Chartered Accountants of India.
2 Cash and Cash equivalent includes Rs. 2 Million (Previous Year Rs. 2 Million) in respect of unclaimed dividend,
the balance of which is not available to the company.
3 Figures in bracket represents cash outflow

This is the Consolidated Cash Flow Statement referred to

in our report of even date.

ANUPAM DHAWAN JAGDISH KHATTAR H. NAGAO ANIL RUSTGI

Membership Number - F 084451 Managing Director & CEO Joint Managing Director Company Secretary & Chief Legal Officer
Partner
For and on behalf of PRICE WATERHOUSE
Chartered Accountants
New Delhi
April 24, 2007

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 89

 S C H E D U L E S
SCHEDULE 1 - SHARE CAPITAL (Rs. in Million)
As at As at
31.03.07 31.03.06
AUTHORISED CAPITAL
744,000,000 Equity Shares of Rs. 5 each (Previous year
310,000,000 equity shares of Rs. 5 each) 3,720 1,550
Of the above -
As per the scheme of amalgamation of the Company’s wholly owned subsidiary
Maruti Suzuki Automobile India Limited (MSAIL) with the Company
from the appointed date of 01-April-2006, the authorised capital of MSAIL
after splitting each share into 20 share of the face value of Rs. 5 each has beceme part
of authorised capital of the Company

ISSUED, SUBSCRIBED AND PAID-UP CAPITAL 1,445 1,445

288,910,060 Equity Shares of Rs. 5 each (Previous year 288,910,060 equity
shares of Rs. 5 each) fully paid up.

Of the above -
- 8,840,000 Equity Shares of Rs. 5 each (Previous year 8,840,000 equity
shares of Rs. 5 each) were issued for consideration other than cash to
Government of India for vesting assets under Maruti Limited
(Acquisition and Transfer of Undertaking) Act, 1980
- 156,618,440 Equity Shares of Rs. 5 each (Previous year 156,618,440
equity shares of Rs. 5 each) are held by Suzuki Motor Corporation,
the Holding Company and its nominees
1,445 1,445

SCHEDULE 2 - RESERVES AND SURPLUS

Balance as at Additions Transfer during Balance as at
1st April, during the the year 31st March
2006 year 2007

Capital Reserve on consolidation (includes Joint Venture share of

Rs. 3 Million, Previous year Rs. 3 Million) 31 - - 31
Share Premium Account (Includes Joint Venture Share of Rs. 5 Million,
previous year Rs. 5 Million) 4,246 - - 4,246
Debenture Redemption Reserve 158 17 75 100
General Reserve 4,743 1,637 - 6,380
Balance as per Profit and Loss Account (includes Joint Venture
share of Rs. 53 Million, Previous Year Rs. 45 Million) 45,107 12,785 29 57,863
54,285 14,439 104 68,620

SCHEDULE 3 - SECURED LOANS

As at As at
31.03.07 31.03.06
LONG TERM LOANS
9% Non-Convertible Debentures- Series II secured by mortgage on specific Buildings
and Plant and Machinery (the total loan of Rs. 1,000 million Redeemable
at par - 30% on 4th December, 2005, 30% on 4th December, 2006 (already paid)
and balance 40% on 4th December, 2007 (classified as short term as at 31st March 2007) - 400
(See below)
- From Others
Loan from Sundaram Finance 1
(Secured against vehicles taken on finance lease) -

SHORT TERM LOANS

- FROM BANKS
Cash Credit/Working Capital Demand Loans/Rupee Loans secured by pari passu first 233 17
charge on the stock, book debts and other current assets.

90 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

SCHEDULE 3 -SECURED LOANS (Contd.) (Rs. in Million)
As at As at
31.03.07 31.03.06
- FROM OTHERS
9% Non-Convertible Debentures- Series II secured by mortgage on
specific Buildings and Plant and Machinery ( Redeemable at par on
4th December 2007) (Long-term as at 31st March 2006) (Previous year redeemable at
par 4th December 2006) (See above) 400 300

Loan from Sundaram Finance (Payable within 1 Year) 1 -

(Secured against vehicles taken on finance lease)
Others - 3

635 720
Share in Joint Ventures 169 162
804 882

SCHEDULE 4 - UNSECURED LOANS

As at As at
31.03.07 31.03.06
LONG TERM LOANS - FROM BANKS
Foreign Currency Loans* 5,673 5,690
(Loan from Japan Bank of International Corporation and Bank of Tokyo Mitsubishi)
Share in Joint Ventures 228 124
*Guaranteed by Suzuki Motor Corporation, Japan, the Holding Company 5,901 5,814

SCHEDULE 5 – FIXED ASSETS

Particulars Gross Block Depreciation Net Block
As at Additions/ Deductions/ As at As at For the Deductions/ As at As at As at
01.04.06 Adjustments Adjustments 31.03.07 31.03.06 year Adjustments 31.03.07 31.03.07 31.03.06
Freehold land (Note 1) 232 - - 232 - - - - 232 232
Leasehold land (Note 5) 1,640 - - 1,640 4 1 - 5 1,635 1,636
Building (Note 2) 2,873 1,512 (19) 4,366 742 113 - 855 3,511 2,131
Plant and Machinery (Note 3) 43,880 10,670 (388) 54,162 31,265 2,484 (282) 33,467 20,695 12,615
Electronic Data Processing Equipment 857 240 (134) 963 567 104 (134) 537 426 290
Furniture, Fixtures and Office Appliances 307 43 (4) 346 137 19 (2) 154 192 170
Vehicles
Owned 345 135 (90) 390 74 33 (20) 87 303 271
Leased 3 3 - 1 - 1 2 3
Total 50,137 12,600 (635) 62,102 32,789 2,755 (438) 35,106 26,996 17,348
Previous Year Figures 51,036 1,708 (2,607) 50,137 31,951 2,891 (2,053) 32,789 17,348
Share in Joint Ventures (Note 4) 584 148 (71) 661 193 42 - 235 426
Previous Year Figures 505 98 (19) 584 157 37 (1) 193 391

(1) Cost of land amounting to Rs. 4 million (Previous year Rs. 4 million) is not yet registered in the name of the Maruti Udyog Ltd. A part of this land has been made available to group companies.
(2) Cost of building amounting to Rs. 32 million (Previous year Rs. 32 million) is not yet registered in the name of the Maruti Udyog Ltd..
(3) Plant and Machinery includes pro-rata cost amounting to Rs. 374 million (Previous year Rs. 374 million) of a Gas Turbine jointly owned by the group companies and other companies.
(4) The Joint Ventures’ share is included in the above schedule.
(5) Leasehold land includes 600 acres of land allotted to Maruti Udyog Ltd. by HSIDC, a part of which has been made available to group companies.
(6) Additions include Rs 101 million (Previous year Rs Nil) interest capitalised on foreign currency loan.

SCHEDULE 6 - CAPITAL WORK-IN-PROGRESS

As at As at
31.03.07 31.03.06
Plant and Machinery 943 667
Civil Work-in-progress 447 1,857
Capital Advances 999 613
2,389 3,137
Share in Joint Ventures 27 6
2,416 3,143

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 91

 SCHEDULES

SCHEDULE 7 - INVESTMENTS (Rs. in Million)

As at As at
Trade Investments : 31.03.07 31.03.06

Long Term :
Investment in Associates 2,291 1,805
(Includes Rs. 28 Million of Capital Reserves on acquisition
of certain associates)

Other Investments:

Long Term (Unquoted):

Mutual funds 24,052 14,398

Current (Unquoted) :
Mutual funds 8,802 4,942
35,145 21,145
Share in Joint Ventures 1 2
35,146 21,147

SCHEDULE 8 - INVENTORIES
As at As at
31.03.07 31.03.06

COMPONENTS AND RAW MATERIALS

In transit/under inspection 1,616 1,880
With vendors 117 102
At factory 1,747 3,480 846 2,828
STORES AND SPARES
Vehicles 816 682
Machinery 23 5
Consumables 58 35
In transit/under inspection 18 915 33 755
Tools at factory 138 86
Dies and Moulds 41 36
Work-in-Progress 309 248
Finished Goods 2,247 4,857
7,130 8,810
Share in Joint Ventures 111 84

7,241 8,894

SCHEDULE 9 - SUNDRY DEBTORS

As at As at
31.03.07 31.03.06

DEBTS OUTSTANDING FOR MORE THAN SIX MONTHS

Unsecured - Considered Good 1,189 616
- Considered Doubtful 273 273
1,462 889
Less: Provision for Doubtful Debts (273) 1,189 (273) 616
Other Debts :
Unsecured - Considered Good 6,454 5,979
7,643 6,595
Share in Joint Ventures 124 85
7,767 6,680

92 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

SCHEDULE 10 - CASH AND BANK BALANCES (Rs. in Million)
As at As at
31.03.07 31.03.06

Cash in hand 5 6
Cheques in hand 941 456
Bank Balances with Scheduled Banks in :
Current Accounts:* 278 132
Deposit Accounts: 13,080 19,274

14.304 19,868
Share in Joint Ventures 70 6

14,374 19,874

* Includes Unclaimed Dividend amounting to Rs. 2 Million

(Previous year Rs. 2 Million)

SCHEDULE 11 - OTHER CURRENT ASSETS

As at As at
31.03.07 31.03.06

INTEREST ACCRUED ON DEPOSITS, LOANS AND ADVANCES

Secured - Considered Good 42 41
- Considered Doubtful 6 6

48 47
Less: Provision for Doubtful Interest 6 42 6 41

Unsecured - Considered Good 199 218

- Considered Doubtful 1 1

200 219
Less: Provision for Doubtful Interest 1 199 1 218

CLAIMS - UNSECURED
Considered Good 143 199
Considered Doubtful 56 62

199 261
Less: Provision for Doubtful Claims 56 143 62 199

Interest Accrued on Investments - Secured - 29

384 487
Share in Joint Ventures – –

384 487

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 93

 SCHEDULES

SCHEDULE 12 - LOANS AND ADVANCES (Rs. in Million)

As at As at
31.03.07 31.03.06

LOANS
Secured - Considered Good 47 59
- Considered Doubtful 11 17
58 76
Less: Provision for Doubtful Loans 11 47 17 59

Unsecured - Considered Good

- To others 362 1,707
- Considered Doubtful 1 1
363 1,708

Less: Provision for Doubtful Loans 1 362 1 1,707

ADVANCES RECOVERABLE IN CASH OR IN KIND

OR FOR VALUE TO BE RECEIVED:
Unsecured - Considered Good 2,283 182
- Considered Doubtful 72 73
2,355 255
Less: Provision for Doubtful Advances 72 2,283 73 182

DEPOSITS - CONSIDERED GOOD UNLESS OTHERWISE STATED

Balance with Customs, Port Trust and other
Government Authorities 6,546 4,523
Inter Corporate Deposits Considered Doubtful 140 313
Less : Provision for Doubtful Deposits 140 – 313 –
Other Deposits 11 41
9,249 6,,512
Share in Joint Ventures 41 34

9,290 6,546

SCHEDULE 13 - CURRENT LIABILITIES

As at As at
31.03.07 31.03.06

Sundry Creditors 9,256 6,351

Advances from Customers/Dealers 440 960
Book Overdraft 928 946
Unclaimed Dividend* 2 2
Other Liabilities 7,613 5,855
Deposits from Dealers, Contractors and Others 1,812 1,739
Interest Accrued but not due on:
Loans 12 20
Others 231 243 185 205
20,294 16,058
Share in Joint Ventures 183 151

20,477 16,209

*Not due to be credited to Investor Education and Protection Fund

94 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

SCHEDULE 14 - PROVISIONS (Rs. in Million)
As at As at
31.03.07 31.03.06

Litigation Related Provisions 710 833

Leave Encashment 442 308
Warranty & Product Recall 541 714
Proposed Dividend 1,300 1,011
Corporate Dividend Tax 219 142
Others Provisions 539 621
Taxation (Net of Advance-tax) 903 949
4,654 4,578
Share in Joint Ventures 1 1

4,655 4,579

SCHEDULE 15 - SALES
For the For the
year ended year ended
31.03.07 31.03.06

Vehicles 161,367 138,661

Spare Parts / Dies and Moulds / Components 10,075 8,367
171,442 147,028
Share in Joint Ventures 1,493 975

172,935 148,003

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 95

 SCHEDULES

SCHEDULE 16 - OTHER INCOME (Rs. in Million)

For the For the
year ended year ended
Interest on: 31.03.07 31.03.06
a) Fixed Deposits/Securities (Gross) (TDS of
Rs. 69 Million - Previous year Rs. 124 Million) 318 557
b) Receivables from Dealers (Gross) (TDS
of Rs. 22 Million - Previous year Rs. 29 Million) 339 317
c) Advances to Vendors (Gross) (TDS of
Rs. 43 Million - Previous year Rs. 47 Million) 190 195
d) Others 262 1,109 7 1,076
Sale of Scrap (Net of Excise) 1,206 1,134
Sales Tax Benefit (Previous Year includes Prior Period Rs. 55 Million) 319 323
Income from Associates 68 226
Miscellaneous Receipts (Gross) (TDS of Rs. 170 Million
- previous year Rs. 163 Million) 1,683 1,513
Profit on Sale of Investments:
Long Term Investments 337 68
Short Term Investments 52 389 32 100
Dividend:
Trade Investments- Long Term 61 49
Others 1,473 1,534 674 723
Provisions no longer required written back 459 54
Recovery of Service Charges 291 239
Less: Repair Cost of Damaged Vehicles 67 224 67 172

6,991 5,321
Share in Joint Ventures 19 14
7,010 5,335

SCHEDULE 17 - EMPLOYEES REMUNERATION AND BENEFITS

For the For the
year ended year ended
31.03.07 31.03.06

Salaries, Wages, Allowances and Other Benefits 2,570 2,043

Contribution to Provident and Other Funds 157 133
Staff Welfare Expenses 173 154
Group Insurance 4 2
2,904 2,332
Share in Joint Ventures 61 45
2,965 2,377

96 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

SCHEDULE 18 - MANUFACTURING, ADMINISTRATIVE AND (Rs. in Million)
OTHER EXPENSES For the For the
year ended year ended
31.03.07 31.03.06

Power and Fuel (Net of amount recovered Rs. 362 million,) 974 572
previous year Rs. 222 million)
Rent 65 61
Rates, Taxes and Fees 5 19
Insurance 65 63
Repairs and Maintenance :
Plant and Machinery 251 480
Building 106 46
Others 81 438 63 589
Royalty 3,673 2,544
Tools/ Machinery Spares Charged Off 517 304
Net Loss on Sale/discarding of Fixed Assets 4 220
Bad Debts/Advances Written Off 22 -
Provision for Doubtful Debts, Claims, Loans and Advances 6 10
Exchange Variation (Net) 94 400
Other Miscellaneous Expenses 3,034 1,650
8,897 6,432
Share in Joint Ventures 93 88

8,990 6,520

SCHEDULE 19 - SELLING AND DISTRIBUTION EXPENSES

For the For the
year ended year ended
31.03.07 31.03.06

Advertisement and Sales Promotion 3,391 2,670

Warranty Claims 234 234
Transportation and Distribution Expenses 1,376 1,069
5,001 3,973
Share in Joint Ventures 9 6

5,010 3,979
SCHEDULE 20 - INTEREST
For the For the
year ended year ended
31.03.07 31.03.06
Fixed:
Foreign Currency Loans 238 -
Debentures 44 282 130 130
Others 94 74
376 204
Share in Joint Ventures 28 19

404 223

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 97

 SCHEDULES

SCHEDULE 21 - (INCREASE)/DECREASE IN WORK-IN-PROGRESS, (Rs. in Million)

FINISHED GOODS & SPARE PARTS For the For the
year ended year ended
31.03.07 31.03.06

WORK-IN-PROGRESS
Opening Stock 248 499
Less: Closing Stock 309 (61) 248 251
FINISHED GOODS
Opening Stock 4,857 2,261
Less: Closing Stock 2,247 4,857
2,610 (2,596)
Less: Excise Duty on (Increase)/Decrease of Finished Stock 424 2,186 (363) (2,233)

SPARE PARTS - TRADED

Opening Stock 573 559
Less: Closing Stock 691 (118) 573 (14)
2,007 (1,996)
Share in Joint Venture (13) (10)
1,994 (2,006)

98 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

SCHEDULE 22 - SIGNIFICANT ACCOUNTING POLICIES

1. GROUP COMPANIES
Maruti Udyog Limited (The Company) has six wholly owned subsidiaries, three joint venture companies and fourteen associate companies (The
Group), as given in the following table.

During the current year, the company has acquired one new subsidiary and has entered into one new joint venture agreement. Also refer Note
15 on Schedule 23.

Sl. No. Name of Company Relationship Country of Percentage of ownership

Incorporation interest as on 31st March 2007

1 Maruti Insurance Brokers Limited Subsidiary India 100.00

2 Maruti Insurance Distribution Services Limited Subsidiary India 100.00
3 True Value Solutions Limited Subsidiary India 100.00
4 Maruti Insurance Agency Network Limited Subsidiary India 100.00
5 Maruti Insurance Agency Solutions Limited Subsidiary India 100.00
6 Maruti Insurance Agency Services Limited Subsidary India 100.00
7 J.J Impex (Delhi) Private Limited Joint Venture India 49.13
8 Mark Exhaust Systems Limited Joint Venture India 44.37
9 Bellsonica Auto Components India Limited Joint Venture India 30.00
10 Suzuki Powertrain India Limited Associate India 30.00**
11 Climate Systems India Limited Associate India 39.00
12 SKH Metals Limited* Associate India 48.71
13 Jay Bharat Maruti Limited Associate India 29.28
14 Maruti Countrywide Auto Financial Services Limited Associate India 26.00
15 Citicorp Maruti Finance Limited Associate India 26.00
16 Caparo Maruti Limited Associate India 20.00
17 Machino Plastics Limited Associate India 15.35
18 Bharat Seats Limited Associate India 14.81
19 Krishna Maruti Limited Associate India 15.80
20 Asahi India Glass Limited Associate India 11.11
21 Denso India Limited Associate India 10.27
22 Nippon Thermostat (India) Limited Associate India 10.00
23 Sona Koyo Steering Systems Limited Associate India 7.85
* Formerly known as Mark Auto India Limited.
** Percentage of ownership interest has changed from 49% as at March 31, 2006.

2. BASIS FOR PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements of the Group have been prepared and presented under the historical cost convention on the accrual basis
of accounting in accordance with the accounting principles generally accepted in India and comply with the mandatory Accounting Standards
issued by the Institute of Chartered Accountants of India to the extent applicable.

The financial statements of the parent company and the subsidiaries have been combined on a line-by-line basis by adding together the book
values of like items of assets, liabilities, income and expenses after eliminating intra-group balances / transactions in full as per Accounting Standard
21 on Consolidated Financial Statements.

Investment in associates (entity over which the company exercises significant influence, which is neither a subsidiary nor a joint venture) are
accounted for using the equity method as per Accounting Standard 23 on Accounting for Investments in Associates in Consolidated Financial
Statements.

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 99

 SCHEDULES

Investments in joint venture undertakings over which the company exercises joint control are accounted for using proportionate consolidation as
per Accounting Standard 27 on Financial Reporting of Interests in Joint Ventures.

All unrealized surpluses and deficits on transactions between the group companies are eliminated.

Accounting policies between group companies are consistent to the extent practicable. Appropriate disclosure is made of significant deviations
from the company accounting policies, which have not been adjusted.

3. REVENUE RECOGNITION
Domestic and Export Sales are recognised on transfer of significant risk and rewards to the customer which takes place on dispatch of goods from
the factory / stockyard / storage area and port respectively.

Finance charges on hire purchase business/ lease rental income are recognized on the basis of implicit rate of return on the value of assets hired
out/leased.

Agency Commission is recognized based on the total net premium collected based on policies issued.

4. FIXED ASSETS
Fixed Assets (except freehold land which is carried at cost) are carried at cost of acquisition or construction or at manufacturing cost (in case of
own manufactured assets) in the year of capitalisation less accumulated depreciation.

Assets acquired under finance lease are capitalized at the lower of their fair value and the present value of minimum lease payments.

5. BORROWING COSTS
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised till the month in
which each asset is put to use as part of the cost of that asset.

6. DEPRECIATION
a) Fixed Assets except for lease hold land are depreciated on straight line method on a pro-rata basis from the month in which the asset is put
to use, at the following rates:

i) Assets capitalised before 02.04.1987

Depreciation has been provided at the rates computed in accordance with Section 205 (2) (b) of the Companies Act, 1956, in terms
of Circular No. 1/86 dated 21.05.86 of the Government of India.

ii) Assets capitalised on or after 02.04.1987

Depreciation has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 except for certain fixed assets
where based on the management’s estimate of the useful life of the assets, higher depreciation has been provided on straight line
method at the following rates:

Plant and Machinery:

Single Shift 7.31%
Double Shift 11.88%
Triple Shift 15.83%
Dies and Jigs 20% to 41%

iii) Depreciation has been provided on Straight Line Method at rate higher than Schedule XIV for some associate companies as follows:

Assets Depreciation rates

Office Buildings 2%
Factory Buildings 5%
Electrical Fittings 33.33%
Plant & Machinery 7.14% - 20.00%
Furniture & Fittings 15.00% - 20.00%
Vehicles 20%
Electronic Processing Equipment’s 20.00% to 33.33%

100 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

 b) Leasehold land is amortised over the period of lease.
c) Plant and machinery the written down value of which at the beginning of the year is Rs. 5,000/- or less and other assets the written down
value of which at the beginning of the year is Rs. 1,000/- or less are depreciated at the rate of 100%.Assets purchased during the year costing
Rs. 5,000/- or less are depreciated at the rate of 100%.
d) In case the historical cost of an asset undergoes a change due to increase or decrease in long term liability on account of foreign exchange
fluctuation, change in duties etc., the depreciation on revised unamortised depreciable amount is provided prospectively over the residual
useful life of the asset.

7. GOODWILL
Goodwill arising on acquisition is amortised to expense on a straight-line basis over the period of estimated benefit but not exceeding three years.

8. INVENTORIES
a) Inventories are valued at lower of cost, determined on the weighted average basis, and net realisable value.
b) Tools are written off over a period of three years except for tools valuing Rs. 5,000/- or less individually which are charged off to revenue
in the year of purchase.
c) Machinery spares (other than those supplied alongwith main plant and machinery, which are capitalized and depreciated accordingly) are
charged to revenue on consumption except those valuing Rs. 5,000/- or less individually, which are charged to revenue in the year of
purchase .

9. INVESTMENTS
Current investments are valued at the lower of cost and fair value. Long-term investments are valued at cost except in case of a permanent
diminution in their value, in which case necessary provision is made.

10. RESEARCH AND DEVELOPMENT

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets and depreciated accordingly.

11. FOREIGN CURRENCY TRANSLATIONS

a) Foreign Currency transactions are recorded at the exchange rate prevailing at the date of transaction. Exchange differences arising on
settlement of transactions, except those relating to fixed assets, are recognised as income or expense in the year in which they arise. The
cost of the respective fixed assets is adjusted for exchange differences arising on repayment of liabilities incurred for the purpose of
acquiring such fixed assets.
b) At the balance sheet date all assets, other than fixed assets, and liabilities denominated in foreign currency are reported at the exchange
rate prevailing at the balance sheet date. The cost of the respective fixed assets is adjusted for increase or decrease in liabilities incurred for
the purpose of acquiring such fixed assets due to application of the exchange rate prevailing at the balance sheet date.
c) The difference between the forward rate and the exchange rate at the inception of a forward contract is recognised as income or expense
over the life of the contract.
d) Profit or Loss arising on cancellation or renewal of a forward contract is recognised as income or expense in the year in which such
cancellation or renewal is made.

12. RETIREMENT BENEFIT COSTS

The Company has Defined Contribution plans for post employment benefits’ namely Provident Fund and Superannuation Fund which are recognised
by the income tax authorities. These funds are administered through trusts and the Company’s contributions thereto are charged to revenue
every year. The Company also maintains insurance policy to fund a post-employment medical assistance scheme, which is a Defined Contribution
plan administered by New India Insurance Company (NIIC). The Company’s contribution to State plans namely Employee State Insurance Fund
and Employee Pension Scheme 1995 are charged to revenue every year.

The Company has Defined Benefit plans namely leave encashment/ compensated absence, Gratuity and Retirement Allowance for employees, the
liability for which is determined on the basis of an actuarial valuation at the end of the year. The Gratuity Fund is recognised by the income tax
authorities and is administered through trusts.

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 101

 SCHEDULES

Termination benefits are recognised as an expense immediately.

Gains and losses arising out of actuarial evaluations are recognised immediately in the Profit and Loss Account as income or expense.

In case of certain associate companies, provision for leave encashment has been made on accrual basis.

In case of certain joint venture and associate companies, contributions towards gratuity are charged to Profit & Loss Account on the basis of
premium paid to the Life Insurance Corporation of India.

13. CUSTOMS DUTY

Customs duties available as drawback are debited to purchases and credited to income on export of vehicles.

14. GOVERNMENT GRANTS

Government Grants are recognised in the profit and loss account in accordance with the related scheme and in the period in which these are
accrued.

15. DEFERRED TAX

Tax expense for the period, comprising current tax, fringe benefit tax and deferred tax, is included in determining the net profit/(loss) for the
year.

Current tax is recognised based on assessable profit computed in accordance with the Income Tax Act and at the prevailing tax rate.

Deferred tax is recognized for all the timing differences. Deferred tax assets are carried forward to the extent it is reasonably/ virtually certain
that future taxable profit will be available against which such deferred tax assets can be realized. Deferred tax assets are reviewed at each balance
sheet date and written down/ written up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted at the balance sheet date.

16. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the
Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized
in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

17 PROVISIONS AND CONTINGENCIES

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a
present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

SCHEDULE 23 - NOTES TO ACCOUNTS:

1) Contingent Liabilities:

a) Claims against the Group disputed and not acknowledged as debts:

i. Sales-tax demands of Rs.57 million (includes share of Joint Venture Rs. Nil) (Previous year Rs. 63 million, includes share of Joint
Venture Rs. 7 million). Against this, the Group has deposited a sum of Rs. 2 million under protest (Previous year Rs 2 million).
ii. Excise duty demands/show-cause notices of Rs. 2,665 million (Previous year Rs.1,867 million).Against this, the Group has deposited
a sum of Rs. 27 million (Previous year Rs. 29 million) under protest.
iii. Customs duty demands of Rs. 120 million (Previous year Rs. 120 million). Against this, the Group has deposited a sum of Rs. 22
million (Previous year Rs. 22 million) under protest.
iv. Income-tax demands of Rs. 8,163 million (Previous year Rs. 7,625 million). Against this, the Group has deposited a sum of Rs. 4,869
million under protest (Previous year Rs. 2,756 million).
v. Service-tax demands of Rs. 797 million (Previous Year Rs 557 million).
vi. Claims against the Group for recovery of Rs 805 million (includes share of Joint Venture Rs. 3 million) (Previous year Rs. 706 million)
(includes share of Joint Venture Rs. 3 million) lodged by various parties.

102 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

 b) A Guarantee given to HDFC Limited for term loan of Rs. 300 million (Previous year Rs. 300 million) given by HDFC Limited to Maruti
Employees Co-operative House Building Society Limited, Bhondsi. Against it, the contingent liability as at the year-end is Rs. Nil (Previous
year Rs. 34 million).
c) As co-lessee in agreements entered into between various vendors of the Company, as lessee, and Banks as lessors for leasing of dies and
moulds of certain models aggregating to Rs. 2 million (Previous year Rs. 15 million).
d) A Guarantee given to HDFC Bank against Non-Fund based facilities granted by the Bank to a group company Suzuki Powertrain India
Limited of Rs. 2,000 million (Previous year Rs. 2,000 million). Against this, the contingent liability as at the year-end is Rs 26 million.
(Previous year Rs. Nil)
e) A Guarantee given to HSBC Limited against Non-Fund based facilities granted by the Bank to a group company Suzuki Powertrain India
Limited of Rs. 3,000 million (Previous year Rs. 3,000 million). Against this, the contingent liability as at the year-end is Rs. 101 million.
(Previous year Rs. 256 million)
f) The amounts shown in the 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. The Company engages reputed professional advisors to
protect its interests and has been advised that it has strong legal positions against such disputes.
The amount shown in items (b) to (e) represent guarantees given in the normal course of the Company’s operations and are not expected
to result in any loss to the company on the basis of the beneficiaries fulfilling their ordinary commercial obligations.
2) Outstanding commitments under Letters of Credit established by the Group aggregate to Rs. 1,138 million (includes share of Joint Venture Rs. 20
million) (Previous year Rs. 879 million) (includes share of Joint Venture Rs. 26 million).
3) Estimated value of contracts on capital account, excluding capital advances, remaining to be executed and not provided for, amounts to Rs. 9,332
million (includes share of Joint Venture Rs. 2 million) (Previous year Rs. 10,555 million) (includes share of Joint Venture Rs. 3 million).
4) a) Consumption of raw materials and components has been computed by adding purchases to the opening stock and deducting closing stock
verified physically by the management.
b) Consumption of Raw Material and Components includes a provision of Rs.56 million (Previous year Rs. 56 million) and is net of Rs.Nil
(Previous year Rs. 72 million) for earlier years, on account of estimated reversal of tax benefit on quantity differences on inputs.
5) The Company was granted sales tax benefit in accordance with the provisions of Rule 28C of Haryana General Sales Tax Rules, 1975 for the
period from 1st August, 2001 to 31st July, 2015. The ceiling amount of concession to be availed of during entitlement period is Rs.5,644 million.
Till 31st March 2007, the company has availed of sales tax benefit amounting to Rs. 1,469 million (Previous year Rs. 1,150 million).
6) The Group is primarily in the business of manufacture, purchase and sale of Motor Vehicles 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, which are
incidental to the Company’s business is not material in the financial terms but contribute significantly in generating the demand for the products
of the Company. Accordingly segment information has not been disclosed.
7) Differences between accounting policies of the Company and other group companies:
a) In case of certain associate companies, provision for leave encashment has been made on accrual basis.
b) In case of certain associate and joint venture companies, contributions towards gratuity is charged to Profit & Loss Account on the basis of
premium paid to the Life Insurance Corporation of India.
c) Deferred Revenue Expenditure of Joint Venture and Associate Companies have been charged to Profit & Loss Account in the year of
incurrence.
8) a) The Profit after tax of Denso India Limited, Sona Koyo Steering Systems Limited and Asahi India Glass Limited has been annualised based
on unaudited financial statements of nine months ended 31st December 2006. It is unlikely that the audited results would be materially
different from annualised results.
b) The Profit after tax of Climate Systems India Limited, Citicorp Maruti Finance Limited, Maruti Countrywide Auto Financial Services Limited,
Krishna Maruti Limited, SKH Metals Limited and Nippon Thermostat (India) Limited has been taken on the basis of unaudited financial
statements for financial year ended 31st March 2007. It is unlikely that the audited results would be materially different from un audited
results.

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 103

 SCHEDULES

(Rs. in Million)
2006-07 2005-2006
9) The following expenses incurred on Research and Development
are included under respective account heads:
Employees Remuneration and Benefits 154 120
Other Expenses of Manufacturing and
Administration (including Depreciation
on Research and Development assets) 382 276

536 396
10) a) MANAGERIAL REMUNERATION
Salaries and Allowances 30.95 29.92
Commission/Performance linked Bonus 20.80 16.44
Contribution to Provident Fund 0.67 0.63
Gratuity and Leave Encashment Paid 0.47 0.34
Estimated value of perquisites 14.25 11.10

67.14* 58.43
Share of Joint Ventures 1.89 1.46

69.03 59.89

*Includes remuneration of Mr. T. Kobyashi amounting to Rs. 5.64 million which is subject to approval of shareholders.

b) The above mentioned amount of Rs. 69.03 million (Previous year Rs. 59.89 million)
does not include any provision for gratuity or leave encashment benefit
as the separate figures for the directors are not available.

11) AUDITORS’ REMUNERATION

Statutory Audit 6.62 6.29
Other Audit Services/Certification 0.28 0.28
Reimbursement of Expenses 0.11 0.23
Share of Joint Ventures 0.47 0.26

12) STATEMENT OF EARNING PER SHARE

Net Profit after tax attributable to shareholders (in Million Rupees) 15,883 12,191
Weighted Average Number of Equity Shares Outstanding
during the year 288,910,060 288,910,060
Nominal value per share (In Rupees) 5.00 5.00
Basic/Diluted Earning Per Share (In Rupees) 54.98 42.20

13) DEFERRED TAX

Major Components of Deferred Tax arising on account of temporary timing differences alongwith their movement as at March 31, 2007 are :

Movement during
Assets 31.03.06 the year 31.03.07
Provision for Doubtful debts / advances 182 2 184
Contingent Provisions 594 (100) 494
Others* 435 (12) 423
1,211 (110) 1,101
Share in Joint Ventures 12 (3) 9
Total (A) 1,223 (113) 1,110

104 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

 (Rs. in Million)

Movement during
31.03.06 the year 31.03.07
Liabilities
Depreciation on Fixed Assets 1,516 780 2,296
Allowances under Income Tax Act, 1961 462 6 468
Deferred Revenue Expenditure 12 – 12
1,990 786 2,776
Share in Joint Ventures 43 3 46

Total (B) 2,033 789 2,822

Net Deferred Tax Liability (B) - (A) 810 902 1,712

Previous Year 1,123 (313) 810

*Includes Rs. 1 Million, impact of change in opening liability on account of Leave encashment due to transition provision of AS-15 (Revised) ‘Employee
Benefits’.

14) The company normally acquires vehicles under Finance Lease with the respective underlying asset as security. Minimum lease payment
outstanding as of 31st March 2007 in respect of these assets are as follows:
(Rs in Million)
Due Total Minimum Interest not due Present Value of
Lease Payment Minimum Lease
Within one year 1 0 1
Later than one year but less than five years 2 0 1
Total 3 0 2
Minimum Lease payment outstanding as on 31st March 2007 in respect of assets taken on operating lease are as follows.
Due Total Minimum Lease Payment Contingent Rent
Outstanding as on 31st March 07
Within One Year 1 1
Later than one Year but less than five Years 3 1

Minimum Lease Payment Contingent Rent

Paid During the year 1 1

Charged to P&L 1 1

15) Amalgamation of the Company’s wholly owned Subsidiary ‘Maruti Suzuki Automobile India Limited’ (MSAIL) with the Company
a) During the year pursuant to the scheme of amalgamation (‘the Scheme’) sanctioned by the Honorable High Court of Delhi which became
effective on November 13, 2006 (the date of filing of the approved scheme with the Ministry of Company Affairs), the entire business and all
assets and liabilities of MSAIL, a company engaged in automobile manufacturing were transferred to and vested in the Company from the
appointed date of April 1, 2006.
The amalgamation was accounted for under the “Pooling of Interest Method” method as prescribed by the Accounting Standard 14 “Account
ing for Amalgamations” issued by the Institute of Chartered Accountants of India. Accordingly, the assets and liabilities of the amalgamated
company have been accounted for as follows:-
(i) The assets and liabilities as at April 1, 2006 were incorporated in the financial statements at book value of the company.
(ii) Minority interest in MSAIL amounting to Rs.25 Million as at April 1, 2006 was adjusted in the Opening Surplus of profit & loss account.

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007 105

106
16) STATEMENT OF TRANSACTIONS WITH RELATED PARTIES

Holding Company Key Management Personnel Associates Fellow subsidiaries

Suzuki Motor Corporation
Joint Ventures
J.J. Impex (Delhi) Private Limited
Mark Exhaust Systems Limited
Bellsonica Auto Component India Pvt Ltd
Mr. Jagdish Khattar - Managing Director Asahi India Glass Limited
Mr. T. Kobyashi** - Joint Managing Director(Senior) Bharat Seats Limited
Mr. Hirofumi Nagao - Joint Managing Director Caparo Maruti Limited
Mr. Shinichi Takeuchi - Marketing Director Climate Systems India Limited
Mr. Shuji Oishi*** - Marketing Director Denso India Limited
Mr. Kinji Saito* Jay Bharat Maruti Limited
Krishna Maruti Limited
Machino Plastics Limited
SKH Metals Limited****
Nippon Thermostat (India) Limited
Sona Koyo Steering Systems Limited
Citicorp Maruti Finance Limited
Maruti Countrywide Auto Financial Services
Limited
Suzuki Motor Iberica S.A. (Including Suzuki Madrid S.A.,
Suzuki France S.A.S.
Suzuki Italia S.P.A.
Suzuki Australia Pty. Ltd.
Suzuki Austria Automobil Handels GmbH
Magyar Suzuki Corporation
Suzuki GB PLC
Suzuki Motor Poland Ltd.
Suzuki International Europe GmbH
Suzuki Cars ( Ireland ) Limited
Suzuki Powertrain India Limited*****
PT Indomobil Suzuki International
(Rs. in Million)

2006–07 2005–06

Joint Associates Holding Fellow Key Total Joint Associates Holding Fellow Key Total
Ventures Company Subsidiaries Management Ventures Company Subsidiaries Management
Personnel Personnel

Outstanding at year end

Loans and advances recoverable
Suzuki Powertrain India Limited - - - 465 - 465 - - - 509 - 509
Krishna Maruti Limited - 162 - - - 162 - 30 - - - 30
Others 62 135 25 - - 222 28 181 1 - - 210
Total 62 297 25 465 - 849 28 211 1 509 - 749

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

Amounts payable
Suzuki Motor Corporation - - 2,833 - - 2,833 - - 2,043 - - 2,043
Others 119 1514 - 387 - 2,020 87 1,161 - 101 - 1,349
Total 119 1514 2,833 387 - 4,853 87 1,161 2,043 101 - 3,392
Guarantees given to third
parties by the Company
Suzuki Powertrain India Limited - - - 104 - 104 - - - 256 - 256
Others - - - - - - 32 57 - - - 89
Total - - - 104 - 104 32 57 - 256 - 345
Proposed Dividend
Suzuki Motor Corporation - - 705 - - 705 - - 548 - - 548
Total - - 705 - - 705 - - 548 - - 548
Amount recoverable
Jay Bharat Maruti Limited - 147 - - - 147 - 146 - - - 146
Machino Plastics Limited - 213 - - - 213 - 130 - - - 130
SKH Metals Limited - 155 - - - 155 - 64 - - - 64
PT Indomobil Suzuki International - - - 201 - 201 - - - - - -
Suzuki Powertrain India Limited - - - 451 - 451 - - - 225 - 225
Others 22 150 89 50 - 311 - 184 4 31 - 219
Total 22 665 89 702 - 1,478 - 524 4 256 - 784
Transaction during
the year -
Purchases of Capital items
Suzuki Motor Corporation - - 2,081 - - 2,081 - - 387 - - 387
Others - 3 - 1 - 4 - - - - - 1
Total - 3 2,081 1 - 2,085 - - 387 1 - 388
Sale of goods
Jay Bharat Maruti Limited - 155 - - - 155 - 137 - - - 137
Machino Plastics Limited - 143 - - - 143 - 19 - - - 19
PT Indomobil Suzuki International - - - 202 - 202 - - - - -
Suzuki Powertrain India Limited - - - 256 - 256 - - 104 - 104
Others 120 237 88 112 - 557 - 343 6 1,831 - 2,180

Total 120 535 88 570 - 1,313 - 499 6 1,935 - 2,440

SCHEDULES
 (Rs. in Million)
2006–07 2005–06

Joint Associates Holding Fellow Key Total Joint Associates Holding Fellow Key Total
Ventures Company Subsidiaries Management Ventures Company Subsidiaries Management
Personnel Personnel
Other Income
Finance income/ commission/
Dividend
Jay Bharat Maruti Limited - 47 - - - 47 - 32 - - - 32
Suzuki Powertrain India Limited - - - 88 - 88 - - - - - 112
Citicorp Maruti Finance Limited - 95 - - - 95 - 70 - 112 - 70
Others 13 191 - - - 204 10 212 - - - 222
Total 13 333 - 88 - 434 10 314 - 112 - 436
Other Miscellaneous Income
SKH Metals Limited - 41 - - - 41 - 35 - - - 35
Machino Plastic Limited - 37 - - - 37 - 34 - - - 34
Jay Bharat Maruti Limited - 66 - - - 66 - 71 - - - 71
Suzuki Powertrain India Limited - - - 57 - 57 - - - 40 - 40
Others - 30 1 - - 31 - 42 - - - 42
Total - 174 1 57 - 232 - 182 - 40 - 222

Expenditure

Purchases of goods
Jay Bharat Maruti Limited - 4,455 - - - 4,455 - 3,659 - - - 3,659
Krishna Maruti Limited - 3,820 - - - 3,820 - 3,203 - - - 3,203
Suzuki Motor Corporation - - 9,642 - - 9,642 - - 12,037 - - 12,037
Others 1,731 12,913 - 3,156 - 17,800 1,085 9,440 - 1,795 - 12,320
Total 1,731 21,188 9,642 3,156 - 35,717 1,085 16,302 12,037 1,795 - 31,219

Royalty
Suzuki Motor Corporation - - 3,673 - - 3,673 - - 2,528 - - 2,528
Total - - 3,673 - - 3,673 - - 2,528 - - 2,528

Receiving of services
Suzuki Motor Corporation - - 405 - - 405 - - 239 - - 239
Others - - - - - - - - - 1 - 1
Total - - 405 - - 405 - - 239 1 - 240

Other-expenditure
Suzuki International Europe Gmbh - - - 2 - 2 - - - 23 - 23
Suzuki GB PLC - - - 2 - 2 - - - 22 - 22
Others - - - - - - - 2 1 15 - 18
Total 0 0 - 4 - 2 - 2 1 68 - 63
Managerial Remuneration
Mr. Jagdish Khattar - - - - 21 21 - - - - 15 15
Mr. T. Kobyashi - - - - 6 6 - - - - - -
Mr. Hirofumi Nagao - - - - 14 14 - - - - 12 12
Mr. Shinichi Takeuchi - - - - 14 14 - - - - 12 12
Mr. Shuji Oishi - - - - 13 13 - - - - - -
Mr. Kinjo Saito - - - - 0 0 - - - - 11 11
Total - - - - 68 68 - - - - 50 50

Note:
*Mr. Kinjo Saito was retired on 13th Apr.2006.
** Mr. T. Kobyashi Joined on 14th November 2006.
*** Mr. Shuji Oishi Joined on 13th April 2006.
**** SKH Metals Limited formerly known as Mark Auto Industries Limited
*****Suzuki Powertrain India Limited is also an associate of Maruti Udyog Limited.

Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007

107
 17) The company has the following provisions in the books of account as on 31.03.2007:
(Rs. in Million)
Description Balance as on Additions during Utilized/ Balance as on
01.04.06 the year Reversed during 31.03.07
the year

a) Litigation related provisions 833 167 290 710

b) Warranty / Product Recall 714 289 462 541
c) Others 587 45 103 529

a) Litigation related provisions pertain to the estimated outflow in respect of disputes with various government authorities.
The information required by AS 29, Provisions, Contingent Liabilities and Contingent Assets has not been disclosed on the
grounds that it can be expected to prejudice the interest of the company.
b) Warranty and Product Recall provisions relate to the estimated outflow in respect of warranty and recall cost for products
sold during the year. Due to the very nature of such costs, it is not possible to estimate the timing / uncertainties relating to
their outflows as well as the expected reimbursements from such estimates.
c) Other provisions relate to excise duty, export obligation and guarantees etc. given. Due to the very nature of such costs, it
is not possible to estimate the timing / uncertainties relating to their outflows as well as the expected reimbursements from
such estimates.

18) Derivative Instruments outstanding at the Balance Sheet date

1(a) Forward Contracts on Imports/ Royalty payables: The Company has outstanding forward contracts to buy JPY 6,411 Million
(Previous year JPY 7,000 Million) against USD at an average rate of JPY/USD 118.14 (Previous year JPY/USD 115.38)
maturing over a period of next 3 months. The above contracts have been undertaken to hedge against the foreign exchange
exposures on Import/Royalty payables.
(b) Forward Contracts on Exports: The Company has outstanding forward contracts to sell USD 70 Million (Previous year Nil)
against INR at an average rate of USD/INR 45.42 maturing over a period of next 12 months. The above contracts have been
undertaken to hedge against the foreign exchange exposures on Exports receivables.
(c) Interest Rate swap: The Company has entered into a Constant Maturity Interest Rate swap in the year 2001-02 with a bank
for its Non-convertible Debentures (Series - II), under which the bank will bear the fixed interest liability of 9% p.a. till
maturity and the Company will bear the floating interest burden at a fixed spread over the 5 year Government Security
yields. The outstanding liability of the underlying debentures was Rs.400 million as on 31st March 2007. The above contract
has been undertaken to hedge against the interest rate risk on debenture interest liability.
(d) USD Floating rate/INR Floating rate cross-currency swap: Consequent to the merger of Maruti Suzuki Automobiles India
Ltd, the Company has taken over the USD Floating rate/INR Floating rate Cross-currency swap agreements on foreign
currency loan of USD 124.70 Million. Under these swap agreements, (i) the USD principal has been swapped against the INR
principal on the drawdown date (at inception), (ii) the USD principal repayment obligations swapped against fixed INR
payments and (iii) the USD interest rate (6 Million USD British Bankers Association Interest Settlement Rate (BBA LIBOR)
+ spread) swapped against the INR interest rate (6 Million INR Mumbai Interbank Overnight Indexed Swap + spread) over
the life of foreign currency loan. The above contracts have been undertaken to hedge against the foreign currency risk and
USD interest rate risk.
2. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows:
(Amount in Million)
YEN USD EURO Swiss Franc

Receivables 239 - - -
Payables 911 73 2 6

19) Previous Year’s figures have been recasted / regrouped where considered necessary to make them comparable with the
current year’s figures.

108 Maruti Udyog Limited-Consolidated | ANNUAL REPORT | 2006-2007