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Company Information

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MARUTI SUZUKI INDIA LTD.

25 August 2025 | 09:19

Industry >> Auto - Cars & Jeeps

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ISIN No INE585B01010 BSE Code / NSE Code 532500 / MARUTI Book Value (Rs.) 2,834.77 Face Value 5.00
Bookclosure 01/08/2025 52Week High 14401 EPS 461.20 P/E 31.03
Market Cap. 449878.64 Cr. 52Week Low 10725 P/BV / Div Yield (%) 5.05 / 0.94 Market Lot 1.00
Security Type Other

ACCOUNTING POLICY

You can view the entire text of Accounting Policy of the company for the latest year.
Year End :2025-03 

2 MATERIAL ACCOUNTING POLICIES

2.1 Statement of compliance

The financial statements have been prepared as a going
concern in accordance with the Indian Accounting
Standards (“Ind AS”) prescribed under section 133 of the
Companies Act, 2013 (“the Act”) and other accounting
principles generally accepted in India.

2.2 Basis of preparation and presentation

The financial statements have been prepared on the
historical cost convention on accrual basis except for
certain financial instruments which are measured at fair
value at the end of each reporting period, as explained in
the accounting policies mentioned below. Historical cost
is generally based on the fair value of the consideration
given in exchange of goods or services.

All assets and liabilities have been classified as current
or non-current according to the Company’s operating
cycle and other criteria set out in the Act. Based on the
nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating
cycle as twelve months for the purpose of current and
non-current classification of assets and liabilities.

2.3 Going concern

The Board of Directors have considered the financial
position of the Company as at March 31, 2025 and the
projected cash flows and financial performance of the
Company for at least twelve months from the date of
approval of these financial statements as well as planned
cost and cash improvement actions, and believe that the
plan for sustained profitability remains on course.

The Board of Directors have taken actions to ensure that
appropriate long-term cash resources are in place at
the date of signing the accounts to fund the Company’s
operations.

2.4 Use of estimates and judgements

The preparation of financial statements in conformity
with Ind AS requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amount of
assets, liabilities, income, expenses and disclosures
of contingent assets and liabilities at the date of these
financial statements and the reported amount of revenues
and expenses for the years presented. Actual results may
differ from the estimates.

Estimates and underlying assumptions are reviewed
at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods affected.

In particular, information about significant areas of
estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect
on the amounts recognised in the financial statements are
included in the following notes:

2.4.1 Provision for employee benefits

Provision for employee benefits requires that certain
assumptions such as expected future salary increases,
average life expectancy and discount rates etc. are
made in order to determine the amount to be recorded
for retirement benefit obligations. Substantial changes in
the assumed development of any of these variables may
significantly change the Company’s retirement benefit
obligations,
(refer note 17 (i) and note 32)

2.4.2 Provision for warranty and product recall

The Company creates provision based on historical
warranty claim and product recall experience. In addition,
assumptions on the amounts of potential costs are also

included while creating the provisions. The provisions
are regularly adjusted to reflect new information.
[refer note 17 (ii)]

2.4.3 Contingent liabilities: Income taxes and Excise
duty

Income taxes: The Company’s tax jurisdiction is in India.
Significant judgements are involved in determining
the provision for income taxes including judgement on
whether tax positions are probable of being sustained in
tax assessments. A tax assessment can involve complex
issues, which can only be resolved over extended time
periods.
[refer note 37(A)(iv)]

Excise duty: Litigations comprise complex issues with
material amounts involved and are connected with a high
degree of uncertainty. Such litigations can only be resolved
over extended time periods.
[refer note 37(A)(i)]

Accordingly, the assessment of whether an obligation
exists on the balance sheet date as a result of an event in
the past, and whether a future cash outflow is likely and
the obligation can be reliably estimated, largely depends
on estimations by the management.

2.4.4 Provision for litigation / disputes, other
contingent liabilities related to litigation/disputes

The Company faces litigations and claims from various
authorities and parties which are connected with a degree
of uncertainty. Such litigations can only be resolved over
extended time periods. Accordingly, the assessment of
whether an obligation exists on the balance sheet date as
a result of an event in the past, and whether a future cash
outflow is likely and the obligation can be reliably estimated,
largely depends on estimations by the management.
[refer
note 17 (iii) and 37(A)(ii), (iii), (v to ix)]

2.4.5 Property, Plant and Equipment - Useful economic
life

Property, plant and equipment represent a significant
proportion of the asset base of the Company. The
charge in respect of periodic depreciation is derived after
determining an estimate of an asset’s expected useful life
and the expected residual value at the end of its life. The
useful lives and residual values of Company’s assets are
determined by the management at the time the asset is
acquired and reviewed periodically, including at least at
each financial year end.
(refer note 4)

2.4.6 Leases

Ind AS 116 - Leases requires lessees to determine the lease
term as the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use of
such option is reasonably certain. The Company makes
an assessment on the expected lease term on a lease-
by-lease basis. In evaluating the lease term, the Company
considers factors such as any significant leasehold
improvements undertaken over the lease term, costs
relating to the termination of the lease and the importance
of the underlying asset to the Company’s operations taking
into account the location of the underlying asset and the
availability of suitable alternatives. The lease term in future
periods is reassessed to ensure that the lease term reflects
the current economic circumstances.
(refer note 35)

2.5 Revenue recognition

The Company recognises revenue when the amount of
revenue and its related cost can be reliably measured and
it is probable that future economic benefits will flow to the
entity and degree of managerial involvement associated
with ownership or effective control have been met for each
of the Company’s activities as described below. Amounts
disclosed as revenue are net of returns, discounts, sales
incentives, goods and services tax.

2.5.1 Sale of products

Revenue from contract with customers for domestic and
export sales of vehicles, spare parts, dies and moulds,
components and accessories is measured at the amount
of transaction price (net of variable consideration) on
satisfaction of its performance obligation. The performance
obligation is satisfied by transferring control of the
promised goods to its customer which takes place upon
dispatch of the aforesaid goods from the factory/port.

The transaction price of goods sold is net of variable
consideration on account of discounts and incentives as
per contract/scheme bulletins.

2.5.2 Other operating revenues

2.5.2.1 Income from services

Income from engineering services are recognised as the
related services are performed. Income from extended
warranty is recognised as income over the relevant period
of extended warranty. Income from other services are
accounted over the period of rendering of services.

Income from services include certain performance
obligations that are satisfied over a period of time.
Any amount received in advance in respect of such
performance obligations that are satisfied over a period
of time is recorded as a contract liability and recorded as
revenue when service is rendered to customers.

2.5.2.2 Sale of scrap

Revenue from sale of scrap is measured at the amount
of transaction price when the performance obligation is
satisfied by transferring control of the scrap which takes
place upon dispatch of the aforesaid scrap from the factory.

2.5.2.3 Recovery of freight and service charges

The Company arranges transportation at the time of
dispatch of products and invoices it to customers including
for service charge and accordingly recognises it as revenue
when the performance obligation is satisfied which takes
place upon arrangement of transportation and dispatch of
goods by the Company.

2.5.2.4 Income from royalty

Revenue from royalty is recognised on an accrual
basis in accordance with the substance of the
relevant arrangements.

2.6 Other Income

Dividend is recognised when the Company’s right to
receive the payment is established, it is probable that the
economic benefits associated with the dividend will flow
to the Company and the amount of the dividend can be
measured reliably.

Interest income from a financial asset is recognised
when it is probable that the economic benefits will flow
to the Company and the amount of income can be
measured reliably.

2.7 Leases

2.7.1 The Company as lessor

Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified
as operating leases.

Amounts due from lessees under finance leases are
recognised as receivables at the amount of the Company’s
net investment in the leases. Finance lease income is

allocated to accounting periods so as to reflect a constant
periodic rate of return on the Company’s net investment
outstanding in respect of the leases. When the Company
is an intermediate lessor, it accounts for its interests in the
head lease and the sublease separately. The sublease is
classified as a finance or operating lease by reference to
the right of-use asset arising from the head lease.

Rental income from operating leases is recognised on
a straight-line basis over the term of the relevant lease.
Where the rentals are structured solely to increase in line
with expected general inflation to compensate for the
Company’s expected inflationary cost increases, such
increases are recognised in the reporting period in which
such benefits accrue.

The Company did not make any adjustments to the
accounting for assets held as a lessor as a result of
adopting the new lease standard.

.7.2 The Company as lessee

The Company assesses whether a contract contains
a lease, at inception of a contract. At the date of
commencement of the lease, the Company recognises
a ‘right-of-use’ asset and a corresponding liability for
all lease arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short-term
leases) and low value leases. For these short-term and low
value leases, the Company recognises the lease payments
as an operating expense on a straight-line basis over the
term of the lease.

Right-of-use asset are measured at cost comprising
the following:

- the amount of initial measurement of liability

- any lease payments made at or before the
commencement date less the incentives received

- any initial direct costs, and

- restoration costs

They are subsequently measured at cost less accumulated
depreciation and impairment losses.

Right-of-use asset are depreciated over the shorter of
asset’s useful life and the lease term on a straight-line
basis. Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.

Lease liabilities measured at amortised cost include the
net present value of the following lease payments:

- fixed payments (including in-substance fixed
payments), less any lease incentives receivable

- variable lease payment that are based on an index or
a rate, initially measured using the index or rate as at
the commencement date

- amounts expected to be payable by the Company
under residual value guarantees

- the exercise price of purchase option if the Company
is reasonably certain to exercise that option, and

- payments of penalties for terminating the lease, if the
lease term reflects the Company exercising the option.

Lease payments to be made under reasonably certain
extension options are also included in the measurement of
the liability. The lease payments are discounted using the
rate of interest implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases
in the Company, the lessee’s incremental borrowing rate
is used, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain
an asset of similar value to the right-of-use asset in the
similar economic environment with similar terms, security
and conditions.

The Company accounts for each lease component
within the contract as a lease separately from non-lease
components of the contract in accordance with Ind AS 116

- Leases and allocates the consideration in the contract to
each lease component on the basis of the relative stand¬
alone price of the lease component and the aggregate
stand-alone price of the non-lease components.

Lease payments are apportioned between finance
expenses and reduction of the lease obligation so as
to achieve a constant rate of interest on the remaining
balance of the liability. Finance expenses are recognised
immediately in the Statement of Profit and Loss, unless
they are directly attributable to qualifying assets. Variable
lease payments are recognised in the Statement of Profit
and Loss in the reporting period in which the condition that
triggers those payments that occur.

2.8 Foreign currencies

2.8.1 Functional and presentation currency

Items included in the financial statements are measured
using the currency of the primary economic environment
in which the entity operates (‘the functional currency’). The
financial statements are presented in Indian rupee ('), which
is the Company’s functional and presentation currency.

2.8.2 Transactions and balances

Foreign currency transactions are translated into the
functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and
from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange
rates are generally recognised in the Statement of Profit
and Loss. They are deferred in equity if they relate to
qualifying cash flow hedges.

2.9 Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

Interest income earned on the temporary investment of
surplus funds out of specific borrowings pending their
expenditure on qualifying assets are deducted from the
borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the Statement
of Profit and Loss in the period in which they are incurred.

2.10 Employee benefits

2.10.1 Short-term obligations

Liabilities for wages and salaries including non-monetary
benefits that are expected to be settled within the operating
cycle after the end of the period in which the employees
render the related services are recognised in the period in
which the related services are rendered and are measured
at the undiscounted amount expected to be paid.

2.10.2 Other long-term employee benefit obligations

Liabilities for leave encashment and compensated
absences which are not expected to be settled wholly

within the operating cycle after the end of the period
in which the employees render the related service are
measured at the present value of the estimated future
cash outflows using the projected unit credit method. The
benefits are discounted using the market yields at the end
of the reporting period on Government bonds that have
terms approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments
and changes in actuarial assumptions are recognised in
the Statement of Profit and Loss.

2.10.3 Post-employment obligations
Defined benefit plans

The Company has defined benefit plans namely gratuity,
provident fund and retirement allowance for employees.
The gratuity fund and provident fund are recognised by
the income tax authorities and are administered through
trusts set up by the Company. Any shortfall in the size of
the fund maintained by the trust is additionally provided
for in the Statement of Profit and Loss.

The liability or asset recognised in the balance sheet in
respect of gratuity plans is the present value of the defined
benefit obligation at the end of the reporting period less
the fair value of plan assets. The defined benefit obligation
is calculated annually by actuaries using the projected
unit credit method.

The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of the
reporting period on government bonds that have terms
approximating to the terms of the related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is
included in employee benefit expense in the Statement of
Profit and Loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the reporting period in which they occur,
directly in other comprehensive income. They are included
in retained earnings in the Statement of Changes in Equity
and in the balance sheet.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or curtailments

are recognised immediately in the Statement of Profit and
Loss as past service cost.

Defined contribution plans

The Company has defined contribution plans for post¬
employment benefit namely the superannuation fund
which is recognised by the income tax authorities. This
fund is administered through a trust set up by the Company
and the Company’s contribution thereto is charged to the
Statement of Profit and Loss every year. The Company
has no further payment obligations once the contributions
have been paid.

The Company also maintains an insurance policy to fund a
post-employment medical assistance scheme, which is a
defined contribution plan. The Company’s contribution to
State Plans namely Employees’ State Insurance Fund and
Employees’ Pension Scheme are charged to the Statement
of Profit and Loss every year.

Termination benefits

A liability for the termination benefit is recognised at the
earlier of when the Company can no longer withdraw the
offer of the termination benefit and when the Company
recognises any related restructuring costs.

2.11 Taxation

Income tax expense represents the sum of the tax currently
payable and deferred tax.

2.11.1 Current tax

The tax currently payable is based on taxable profit for
the year. Taxable profit differs from ‘profit before tax’ as
reported in the Statement of Profit and Loss because of
items of income or expense that are taxable or deductible in
other years and items that are never taxable or deductible.
The Company’s current tax is calculated using tax rates
that have been enacted or substantively enacted by the
end of the reporting period.

2.11.2 Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases
used in the computation of taxable profits. Deferred
tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised for all
deductible temporary differences and incurred tax losses
to the extent that it is probable that taxable profits will
be available against which those deductible temporary

differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business
combination) of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset
to be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount
of its assets and liabilities.

2.11.3 Current and deferred tax for the year

Current and deferred tax are recognised in the Statement
of Profit and Loss, except when they relate to items
that are recognised in other comprehensive income or
directly in equity, in which case, the income taxes are also
recognised in other comprehensive income or directly in
equity respectively.

2.12 Property, plant and equipment

Property, plant and equipment are stated at cost of
acquisition or construction less accumulated depreciation
less accumulated impairment, if any. Cost represents
direct expenses incurred on acquisition or construction
of the assets and the share of indirect expenses directly
attributable to construction, allocated in proportion to the
direct cost involved. Freehold land is measured at cost and
is not depreciated.

Such assets are classified to the appropriate categories of
property, plant and equipment when completed and ready
for intended use.

Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the

cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognised when replaced. Other repairs
and maintenance of revenue nature are charged to the
Statement of Profit and Loss during the reporting period
in which they are incurred.

An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits
are expected to arise from continued use of asset. Any
gain or loss arising on the disposal or retirement of an
item of property, plant and equipment is determined
as the difference between the sales proceeds and the
carrying amount of asset and recognised in Statement of
Profit and Loss.

Depreciation methods, estimated useful lives and
residual value

Depreciation is calculated using the straight-line method
on a pro-rata basis from the commissioning month in which
each asset is ready for intended use to allocate their cost,
net of their residual values, over their estimated useful lives.

Estimated useful life of assets are as follows which is based
on technical evaluation of the useful lives of the assets:

The assets’ residual values, estimated useful lives and
depreciation method are reviewed at least at each financial
year end, with the effect of any changes in estimate
accounted for on a prospective basis.

All assets, the individual written down value of which at the
beginning of the year is
' 5,000 or less, are depreciated
at the rate of 100%. Assets purchased during the year
costing
' 5,000 or less are depreciated at the rate of 100%.

Gains and losses on disposal are determined by comparing
proceeds with carrying amount and are credited / debited
to the Statement of Profit and Loss.

Freehold land and Leasehold land in the nature of perpetual
lease is not amortised.

2.13 intangible assets

2.13.1 intangible assets acquired separately

Lump sum royalty, computer software and engineering
support fee are stated at cost less accumulated
amortisation and impairment. Intangible assets are
amortised over their respective individual estimated useful
lives on a straight-line basis, from the date that they are
available for use. Amortisation methods and useful lives
are reviewed periodically at least at each financial year end.

2.13.2 Amortisation methods and useful lives

Intangible assets are amortised on a Straight Line basis
over the estimated useful economic life in the Statement
of Profit and Loss. The estimated useful life of intangible
assets i.e. Software, Lump sum royalty and Engineering
support fee has been estimated as of five years. The
amortisation period and the amortisation method for an
intangible asset is reviewed at the end of each financial
year. If any of these expectations differ from previous
estimates, such change is accounted for as a change in an
accounting estimate. An intangible asset is derecognised
when no future economic benefits are expected from use.

2.14 impairment of tangible and intangible assets

At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset for which the estimates of future
cash flows have not been adjusted.

2.15 inventories

Inventories are valued at the lower of cost, determined on
the weighted average basis and net realisable value.

The cost of finished goods and work in progress
comprises raw materials, direct labour, other direct costs
and appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of
normal operating capacity. Cost of inventories also include
all other costs incurred in bringing the inventories to their
present location and condition. Costs of purchased
inventory are determined after deducting rebates and
discounts. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary
to make the sale.

Machinery spares (other than those supplied along with
main plant and machinery, which are capitalised and
depreciated accordingly) are charged to the Statement
of Profit and Loss on consumption except those valued at
' 5,000 or less individually, which are charged to revenue
in the year of purchase.