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02 Maruti Suzuki India Limited ANNUAL REPORT 2007-08

Company at a Glance

a millionpromises...

Maruti Suzuki India Limited

50%

smaller, fewer, lighter and more

beautiful.

style and design quotient

(formerly Maruti Udyog Limited), a

subsidiary of Suzuki Motor Corporation of Japan, is India's largest

passenger car company, accounting for over of the domestic car

market.

From its very inception, Maruti Suzuki has brought to India, a simple yet

powerful Japanese philosophy

The benefits of product quality, safety and cost consciousness have

been fused and filliped in order to present the Indian populace with cars

high on the . The extreme relevance of our

brands in the Indian car arena, in beat with the lifestyles and desires of

our changing nation has made us the market favourites, for over two

decades. Gaining ground from strength to strength, we are inspirited

now more than ever, to push boundaries and conquer new horizons.

54.21%Suzuki Motor

Corporation

EQUITY STRUCTURE

45.79%Others (Financial institutions, mutual funds, banks, public etc.)

03COMPANY AT A GLANCE

7,000,000

Cars produced and sold cumulatively

711,818

Our domestic car sales for 2007-08.

53,024

Our car exports for 2007-08.

2,628

The number of workshops that provide customers with maintenance support in 1220 cities.

7,090

Our employee strength (March 2008).

INR 17,308 Mn

Recorded Profit after Tax in 2007-08.

600

The number of Maruti Suzuki sales outlets in 393 towns and cities.

INR 188,238 Mn

Total income in 2007-08.

Chairman'sMessage


Mr. R. C. BhargavaChairman


09CHAIRMAN'S MESSAGE

Dear Shareholder,

It gives me great pleasure to reach you through this Annual Report. My association with Maruti goes back 27 years, with a break of only a few years when I was not directly connected with the Company.

Suzuki Motor Corporation has been a pillar of strength and has unstintingly supported the Company ever since we signed the Joint Venture and

ndLicense Agreements on 2 October 1982. The Government of India

recognized this and awarded Chairman O. Suzuki with the Padma Bhushan. The role of the Government in the growth of Maruti was no less important. A partnership flourishes only when both partners add value. The Government also showed great

Maruti Suzuki is now very much on the global map, recently being rated as the fourth most reputed automobile company in the world. This has happened because of the contribution of all the stake holders of Maruti.

wisdom and foresight by gradually diluting its shareholding in the Company and listing Maruti on the stock exchange. This has created conditions for the Company to compete on equal terms with the best in the world.

The employees of Maruti, whether they are technicians, engineers or sales persons, have fully imbibed the Japanese work culture of making constant improvements, and placing the prosperity of the Company as the means of their own advancement. I believe there are very few companies in India where this kind of employee involvement, commitment and performance can be found. This should be a source of great comfort to you, because it assures the future success of the Company.

"The employees of Maruti, whether they are technicians, engineers or sales persons, have fully imbibed the Japanese work culture of making constant improvement, and placing the prosperity of the Company as the means of their own advancement."

"One of Maruti's great strengths is that we

have internal resources to finance both R&D expansion as well as

capital investments. The higher interest rates,

and the risk of making large borrowings to

finance capital costs, will not affect us."

10

The Indian automobile component industry has come of age. We now have some world class manufacturers in India and Indian companies are acquiring manufacturing companies abroad. The growth of the Indian automobile industry and of Maruti has been possible because of the support from our suppliers. We look forward to all of them growing with us.

Maruti Suzuki dealers of cars and spare parts are our interface with customers. It is through their efforts that Maruti remains by far the biggest car company in India, with a market share of 54%. I am sure that they will continue to do all that is required to maintain the leadership position of the Company.

The authorised service stations of Maruti should not be forgotten. They are spread all over India and give huge comfort to owners of Maruti vehicles because of the assurance of service support, whenever and where ever needed.

The Indian economy has grown at a compound rate of about 9% annually for the last 4 years. The automobile industry has correspondingly grown rapidly. This year, there are concerns about a slow down. The sub prime crisis in the USA, accompanied by the huge rise in crude oil prices have triggered inflationary pressures in most parts of the world, particularly the developing countries. Interest rates have gone up, and money supply is being tightened by the Central Banks. The general expectation is that industrial growth, including the sale of automobiles, will be adversely affected. So far, during the first three months of this year, the Company has done quite well recording a sale of 180,093 vehicles in the domestic market - a growth rate of 12%. The Company will continue to make all efforts to maintain a reasonable rate of growth.

Personally, I expect the GDP growth to still exceed 8% this year and, because of the excellent models which the Company has launched, to continue to do well.

Maruti Suzuki India Limited ANNUAL REPORT 2007-08


"Maruti is working at developing vehicles which will use cheaper alternative fuels like CNG. The R&D effort will also have to enable our vehicles to meet the new emission and safety regulations, which are to come into force in 2010."

11

Maruti Suzuki started exports in the late eighties and has since then exported cars to more than a hundred countries of the world. This year, it will re-enter the European market with a highly fuel efficient and environment friendly compact car. This car will also be sold in India and other global markets.

The car market in India is growing increasingly competitive. This is not surprising, as global manufacturers are bound to come where they see a growing market. Maruti has a strategy for the future. With Suzuki's support, an ambitious plan of building R&D capabilities has been launched. The intention is that we should be able to design small cars in India, which are best suited for the Indian market.

I do believe that with the rising price of petrol and diesel, the market for smaller cars will grow faster. This trend is already visible in the world. Maruti is working at developing vehicles which will use cheaper

alternative fuels like the CNG. The R&D effort will also have to enable our vehicles to meet the new emission and safety regulations which are to come into force in 2010.

At the same time, Suzuki's unmatched expertise will continue to help us expand and modernize our manufacturing facilities. This is essential to meet competition. One of Maruti's great strengths is that we have internal resources to finance both R&D expansion as well as capital investments. The higher interest rates, and the risk of making large borrowings to finance capital costs, will not affect us. Being somewhat conservative in financial matters does have its advantages.

The Company recognises that its real strength is its employees. All efforts will continue to keep them motivated and happy.

Long term sustained growth of a Company requires that not only

should all stake holder interests be well protected, but the environmental impact of operations recognized and properly safeguarded. This is very much a part of the Company's corporate social responsibility approach.

I thank you for the confidence and trust you have placed in the Company.

With best wishes and warm regards,

R. C. Bhargava

Chairman

CHAIRMAN'S MESSAGE


Dear Shareholder,

You will be happy to know that Maruti Suzuki achieved its highest ever sales, both in the domestic and export markets, during 2007-08. It was our best year also in terms of financial performance.

Our parent company, Suzuki Motor Corporation, achieved its medium term turnover target of 3.5 trillion Yen two years ahead of schedule. It has taken a more aggressive target in its revised medium term plan. New capacities have come up in Japan and in certain overseas operations.

We have enjoyed a 25-year relationship with customers in India, and we continue to be very positive about the future of this country. We are aware that there will be

challenges from time to time, especially if macro economic factors cease to be conducive over the next year or so. But we will use our strengths, such as successful new models, a wide and reputed network, acknowledged product quality and strong customer connect, to counter these challenges.

We have laid down a clear road map to achieve an annual sale of one million cars in the domestic market and 200,000 exports by 2010-11. In addition, the management team at Maruti Suzuki has identified specific initiatives to serve customers better and ensure our leadership in the future. We have shared our thoughts in detail in the following pages.

On a personal note, I am delighted to take the role of the Managing Director

at Maruti Suzuki. I was associated with the Maruti Project, before this company was set up 25 years ago. In all, I have been directly involved with Maruti Suzuki and India for over 17 years, and followed its fortunes closely as non executive Chairman since 2002.

Yet, I am pleasantly struck by what I

have found here: high quality people,

with an amazing ability to work in a

team, supported by sound systems

and processes. I believe, the credit for

Maruti Suzuki's success should go to

its people, led by my predecessor

Mr. Jagdish Khattar. This, together

with supportive dealers, suppliers and

business partners, gives me the

confidence that we will excel in

diverse areas of our business and

fulfill our million promises.

Interview with Mr. S. Nakanishi, Managing Director & CEO


I am pleasantly struck by what I have found here: high quality people, with an

amazing ability to work in a team, supported by sound systems and processes.

13INTERVIEW WITH MR. S. NAKANISHI, MANAGING DIRECTOR & CEO

“My idea is: Let us start thinking at the next level. While strengthening our leadership in the Indian market, we have to see how we can enhance our global role and contribution in different areas.”

Our parent company is always ready to

support us whenever required with advice

as well as practical help.

I have identified certain key questions about Maruti Suzuki which I have been asked frequently by investors, media persons, our business partners and other well wishers. I have attempted to answer those questions in the following pages.

I thank you for your support and invite you to go through the contents of the Annual Report.

With best wishes and warm regards,

Shinzo Nakanishi

Q.

A.

Q.

A.

Q.

A.

Q.

A.

You have said that Maruti Suzuki is ready to play a much bigger role in Suzuki's global operations. What did you have in mind?

The year 2007-08 has been the best for Maruti Suzuki in terms of domestic sales, exports and turnover. What do you see as the way forward?

It is quite simple. Maruti Suzuki has been the leader of the Indian car market for over two decades. By focusing on India alone, it has become a major contributor to Suzuki's global turnover and profit. My idea is: Let us start thinking at the next level. While strengthening our leadership in the Indian market, we have to see how we can enhance our global role and contribution in different areas. For example, quality and productivity have improved manifold in Maruti Suzuki in the last few years. Let us now channelise it to the next level, where we become the exclusive base to manufacture small cars for Europe. The A-Star model will become a reality. Similarly, Maruti Suzuki's R & D capability has evolved. Its contribution to global design projects has been recognised, first with the Swift and now the Concept A-Star. Let us do more.

Further, Maruti Suzuki has been rated first in customer satisfaction for eight years in a row. We are sharing our experience on this with Suzuki operations worldwide. The same applies to our dealer practices, supply chain, quality processes, information technology, parts operations and so on. In each of these, we have attained a certain standard and should look to contribute to global thinking. That will enhance our capability and enable us to serve Indian customers better. While Europe is important, we need not be confined to it. Suzuki operations in South Asia, South East Asia, the Middle East and Africa can also gain from the experience and expertise of Maruti Suzuki.

Our target is to achieve annual sales of one million cars in the domestic market in 2010-11. We also want to export 200,000 cars annually by that time. We are preparing ourselves by expanding capacity to one million per annum, by October 2008. We will also encourage our suppliers and dealers to invest in new capacity. The number of our sales points will increase from about 600 now to 1,000 in three years. The workshop network will go up by 45% to service more cars on the road.

Maruti Suzuki will launch World Strategic Models like A-Star and Splash in India, so that Indian customers can continue to get global quality and design at the same time as customers in Europe and Japan. In addition, our growing inhouse capability in R & D will enable us to refresh models

and launch special editions to create excitement for the customer. Our programs to improve productivity and quality as well as reduce cost, have yielded excellent results in recent years, will continue in-house and at our suppliers.

Quite a few companies have indicated that they will launch cars well below Maruti 800. I commend their effort. But we have decided not to follow them, taking into account the trend of the Indian customer and Maruti Suzuki's specific position.

Let me explain. For over 20 years, millions of Indian people have bought Maruti Suzuki cars. Most of them, I believe, have been very happy with the overall experience and would like to continue their relationship with Maruti Suzuki. They are happy with the reliability of our cars, performance and fuel efficiency, our service support, the overall cost of ownership and so on. But these customers and their children would not like to buy the same cars from us now. Their incomes have grown. Their lifestyles have changed. They have exposure to global design, not just in cars but also in other products. Their expectations of service have gone up. Most of them would still want compact cars for practicality, but they would want these cars to be more stylish, loaded with features and superior engines and at least as reliable and fuel efficient as their earlier cars. We have decided to devote our resources and energy in meeting the needs of these customers and others like them who will upgrade from lower segment cars in the future.

Yes, there are reports that more companies will enter the premium compact and entry sedan segment. While Maruti Suzuki enjoys a strong connect with the Indian customer, we are taking specific steps to strengthen our leadership over the next 5-10 years, as well. After investing in manufacturing facilities, we are now ready to invest in marketing infrastructure and brand building. We will set up display showrooms, more like brand centres, where customers can see the entire range of Maruti Suzuki models, experience our technology, and connect better with us. Similarly, we will invest in stockyards for cars and spares in different parts of the country so that customers' needs can be served faster and better. Over the next three to five years, we will also introduce next generation engines, which will be even more fuel efficient and environment friendly.

Why is Maruti Suzuki keeping out of the ultra low cost car or the so called 1-lakh car segment?

But competition will intensify in the compact and premium compact segment as well…


Q.

A.

Q.

A.

Q.

A.

Q.

A.

We will also expand our diesel programme. We are scaling up capability in R & D and setting up a centre that will be at par with Suzuki, Japan.

I do not think such a trade-off between growth and profitability is essential. We are investing in new capacity and models. We would obviously like to grow our volumes. Will it necessarily mean sacrificing profits? Perhaps not. We have had several models in the last few years that continue to show strong sales growth. They have scored on account of their bold design, top-end features and attractive price, made possible by aggressive cost targets. At the same time, there are models in the Indian car market which, despite heavy discounts, are being shunned by customers. Both growth and profitability are important and can co-exist. If you were to look at Suzuki Motor Corporation's medium term plan, for instance, you would find targets for both volume as well as profitability.

Yes, when we exported about 53,000 cars in 2007-08, that was the highest ever in our history. But we now want to take it to 200,000 cars annually by 2010-11. Our export effort will be led by Suzuki's fifth World Strategic Model, A-Star, which will be manufactured exclusively in Maruti Suzuki. It will be exported mainly to Europe, but also to other markets in the world. Maruti Suzuki has been exporting cars for more than a decade, and we find customers draw reassurance from the fact that cars manufactured by Maruti Suzuki have a place in the most demanding markets. Our immediate challenge is to create infrastructure to transport such a large number of cars and have forged partnerships for this.

Maruti Suzuki and India are obviously in focus at Suzuki headquarters. With or without me, there is a great deal of attention towards India and the interesting dynamics of customer behaviour here. Suzuki is ploughing back a large chunk of its profits from Maruti Suzuki, rather than repatriate them as dividend, which is a good indication of its positive outlook for India and Maruti.

Suzuki is well known for its technology strength, especially in mini and compact cars. In recent years, it has also evolved a new design philosophy

Will you choose growth and market share over profitability?

You also have an ambitious export plan for the future…

In your other role as director on the Board of Suzuki Motor Corporation, are you able to make any additional contribution to the growth of Maruti Suzuki?

that is more bolde and aggressive, as evident in cars like Swift and SX4. This new design philosophy has been appreciated in markets across the globe, including India. Suzuki's major contribution will continue to be in terms of providing a pipeline of new models. That is important. Unless a company has a range of models in any segment, it cannot be a serious player in that segment. Besides, together with us, Suzuki is building R & D capability within Maruti Suzuki. Suzuki's support in terms of superior manufacturing benchmarks and processes will, of course, continue. I am in a very good position to understand the capabilities, constraints and opportunities for mutual cooperation in both Suzuki and Maruti, and that should hopefully bring additional value to both companies.

I have been directly associated with Maruti Suzuki for 17 years in all, and India is almost second home. Maruti Suzuki has excellent people, and enjoys a close relationship with its partners including dealers and suppliers. These aspects are not easily visible to an outsider. Under the leadership of my predecessor, Mr. Jagdish Khattar, and with the support of Suzuki Motor Corporation, Maruti Suzuki has overcome difficult challenges over the last decade. That has made our people more confident, and also skilful and capable. I am struck by the high quality of people and their ability to work as a team to deliver on promised objectives. The challenge is to not turn complacent and continue to strengthen the culture of improvement.

One of the important thing we have done is to create a clear second line of leadership which is in-charge of five critical verticals of the organisation. Each of these verticals is headed by two Managing Executive Officers, one of whom is generally a Director on the Board. These Managing Executive Officers will together lead the Company towards achieving the goals and targets we have set for ourselves. While I, as the MD & CEO remain accountable for the performance of the organisation, ownership and decision making is shared among more people. That is in tune with my personal style, and I believe it also brings benefits to the organisation.

Finally, you have been associated with Maruti since before its inception. How does it feel to be now Managing Director?

15INTERVIEW WITH MR. S. NAKANISHI, MANAGING DIRECTOR & CEO


Board of Directors

Mr. R. C. BhargavaChairman

Mr. Shinzo NakanishiManaging Director & CEO

Mr. Shuji OishiDirector & Managing Executive Officer (Marketing & Sales)

Mr. Tsuneo OhashiDirector & Managing Executive Officer (Production)

Mr. Keiichi AsaiDirector & Managing Executive Officer (Engineering)


17BOARD OF DIRECTORS

Mr. Osamu SuzukiDirector

Mr. Kenichi AyukawaDirector

Mr. Amal GanguliDirector

Ms. Pallavi ShroffDirector

Mr. Manvinder Singh BangaDirector

Mr. Davinder Singh BrarDirector

BusinessHighlights


NET SALES AND PROFIT AFTER TAX

5,4

22

11,8

91 17,3

08

178,603

120,034

90,812

-

5,000

10,000

15,000

20,000

25,000

30,000

2003-04 2005-06 2007-08-

50,000

100,000

150,000

200,000

PAT (Rs Mn) Net Sales (Rs Mn)

MARGINS

PAT (%)EBITDA (%)

15.20%

17.10% 17.50%

6.00%

9.90% 9.70%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

2003-04 2005-06 2007-08

PROFIT AND LOSS RATIOS AS % TO NET SALES

77.3%76.8%

76.4%

3.3%

1.9% 2.0%

6.2%

2.4%3.2%

70.0%

72.0%

74.0%

76.0%

78.0%

80.0%

2003-04 2005-06 2007-080.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Material Cost Employee cost Depreciation

EARNINGS PER SHARE & BOOK VALUE

41.2

59

.9

18

.8

124

189

297

-

30.0

60.0

90.0

120.0

150.0

2003-04 2005-06 2007-080

50

100

150

200

250

300

350

EPS (Rs) Book Value (Rs)


19BUSINESS HIGHLIGHTS

RETURN ON AVERAGE EQUITY

Return on Average Equity

24.00%20.50%

5.00%7.00%9.00%

11.00%13.00%15.00%17.00%19.00%21.00%23.00%25.00%

2003-04 2005-06 2007-08

16.50%

SALES VOLUME

Exports (Units) Domestic (Units)

800,000

700,000600,000

500,000400,000

300,000

100,000200,000

2003-04

42

0,9

47

51,175

527

,03

8

34,784

711,

818

53,024

2005-06 2007-08

OPERATIONAL PRODUCTIVITY (INDEXED)

Indexed Parameters

100

100

100

100

100 11

3

15

85

49

4

120

PlantManpower

Hrs./Veh InhouseWarranty

DirectPass

80

100

60

40

20

0

2001-02 2007-2008

TOTAL PASSENGER VEHICLE INDUSTRY

Multi Purpose Vehicle

Utility Vehicles

6%

16%

Passenger Cars 78%

Indu

stry

Seg

men

ts

Maruti S

uzuki's Market S

hare

46.00%100%

89.0%

1.6%

51.4%

Since inception, Maruti Suzuki has produced and sold over 7 million

vehicles including 500,000 units in exports markets. The company sold a

record 764,842 vehicles in 2007-08 including 53,024 units of exports. Maruti's revenue has grown consistently over the years. In 2006-07, it

recorded turnover of INR 145,922 million which rose to INR 178,603 million in 2007-08, displaying a growth of over 20% vis-à-vis the previous year. At the end of fiscal 2007-08, it had a market share of over 50% of the Indian passenger car market.

InhouseRejection

Directors' Report


32

thYour Directors have pleasure in presenting the 27 Annual Report

together with the Audited Accounts for the year ended

st31 March 2008.


FINANCIAL RESULTS

The Company's performance during the year is summarised below:

3333DIRECTORS' REPORT

Gross Total Income 219,128 178,043

Profit before Tax 25,030 22,798

Provision for taxation (Incl. Prev. Year) 7,722 7,178

Profit after Tax 17,308 15,620

Balance brought forward 56,373 43,939

MSAIL (Maruti Suzuki Automobiles India Limited)

Loss: Adjusted on Amalgamation and

Transition Adjustment for Employee Benefit 0 88

Profit available for appropriation 73,681 59,471

Appropriations:

Debenture Redemption Reserve 0 17

General Reserve 1,731 1,562

Proposed Dividend 1,445 1,300

Corporate Dividend Tax 248 219

Balance carried forward to Balance Sheet 70,257 56,373

2007-08 2006-07

(Rs. in Million)

FINANCIAL HIGHLIGHTSThe gross revenue (net of excise) of the Company for the year was Rs. 188,238 million as against Rs. 152,523 million in the previous year showing an impressive growth of 23.4%. Earnings before depreciation, interest, tax and amortization (EBDITA) stood at Rs. 31,308 million against Rs. 25,888 million in the previous year, recording a jump of 20.9%.

Based on technical evaluation and market considerations, the Company has, with effect from 1st April 2007, revised the estimated useful life of certain assets which resulted in depreciation being higher by Rs. 2,122 million for the current year with a corresponding reduction in profit for the year and net fixed assets. Profit before tax (PBT) stood at Rs. 25,030 million againstRs. 22,798 million in the previous year showing a growth of 9.8% and Profit after Tax (PAT) stood atRs. 17,308 million againstRs. 15,620 million in the previous year showing a growth of 10.8%.

The Board recommends a dividend of 100% (i.e. Rs. 5 per equity share of

stRs. 5 each) for the year ended 31 March 2008 amounting to Rs. 1,445 million as against a dividend of 90% amounting to Rs. 1,300 million, paid

stfor the year ended 31 March 2007.

With the requisite approval of the members and of the Central Government, the name of the Company was changed to 'Maruti Suzuki India Limited' with effect from

th17 September 2007.

The Company has been awarded the highest financial credit-rating of

DIVIDEND

CHANGE OF NAME

CRISIL RATINGS

AAA/Stable (long term) and P1+ (short term) on its bank facilities by CRISIL. The rating underscores the financial strengths of the Company in terms of the highest safety with regard to timely fulfillment of its financial obligations.

The Company has again been awarded ISO: 27001 Certification by STQC Directorate (Standardisation, Testing & Quality Certificate), Ministry of Communications and Information Technology, Government of India afterre-assessment. The Company is thus certified to meet international standards for maintaining information security.

The Company also has an ISO 14001:2004 Certification which has been similarly awarded again on re-assessment by AIB-Vincotte International Ltd., Brussels, Belgium.

Both the Company's plants at Gurgaon and Manesar areISO: 9001 certified. The Company is subject to re-assessment at regular intervals for re-certification.

The Company's press shop has TS 16949 Certification which is also subject to re-assessment at regular intervals.

The operations during the year are exhaustively discussed in the report on Management Discussion and Analysis which forms a part of this Annual Report. Some highlights are mentioned below:

For the year 2007-08, the Company achieved its highest ever sales of

QUALITY

HIGHLIGHTS OF OPERATIONS

Vehicle Business

Domestic

711,818 vehicles in passenger cars (including MPV) and grew by 12% over 2006-07, whereas the passenger car industry growth was 11.8%.

The Company maintained its leadership position in the A2 segment with the market share remaining above 58%.The Company achieved a new leadership position in A3 segment by launching 2 new models SX4 and DZire during the year, thereby increasing its market share from 15% to 22%.

In the MUV segment, the Company launched the new Grand Vitara - a stylish, muscular and 5-seater SUV in July 2007.

In 2007-08, the Company exported 53,024 vehicles to 46 countries posting a growth of 35% over last year. The top 5 export markets were Algeria, Chile, Indonesia, Egypt and Sri Lanka. Cumulative exports crossed the landmark figure of 500,000 units.

The Company signed an agreement with the Adani group for exporting 200,000 units annually through the Mundra port in Gujarat. The Company plans to export its new model - 'A-Star' which is scheduled to launch in the last quarter of 2008-09 and also plans to invest Rs. 40 Crores in building a Pre-delivery Inspection (PDI) centre at the port.

Sales of spare parts & accessories

continued to show a healthy growth

in 2007-08 and crossed the

milestone of Rs. 1,000 crores. It

resulted in a growth of 19 % over

Exports

Spares and Accessories Business


34

Directors' Report Contd.


the previous year. Robust growth of

service load at the dealerships, a

result of continued focus to achieve

higher levels of customer

satisfaction and presence of parts

distribution network for ensuring

easy and widespread availability of

genuine parts were the key

contributors for this performance.

The record sales performance was

affected through the Company's

vast dealership network. Including

the extension counters, total new

car sales outlet increased to 600

covering 393 cities. The Company

plans to increase the network size

to 1000 outlets in the next three

years.

In addition to this, there are 265

‘Maruti True Value’ outlets spread

across 166 cities, which are engaged

in the sale, purchase and exchange of

pre-owned cars. ‘Maruti True Value’ is

the largest organised pre-owned car

sales network in India.

The service network had a total of

2,628 service outlets including

dealer workshop as well as Maruti

Authorised Service Stations,

covering 1220 cities. The Company

plans to expand it by 45% in the

next three years.

The Company's new car

manufacturing plant at Manesar

started operations in September

2006 with an initial capacity of

100,000 units. At the end of the

year, it achieved an expanded

installed capacity of 170,000 units.

Network

New Car Manufacturing Plant

EXPANSION OF MANUFACTURING

FACILITIES

All the newly launched models

namely Swift, SX4 and DZire are

being manufactured in Manesar.

The Company plans to produce its

new export oriented model- ‘A-Star’

from the same plant and to

increase the capacity to 300,000

units by October 2008.

The Company is setting up a new

gasoline engine plant in its

Gurgaon facilities. The new engines

produced will be more fuel efficient

and help to serve the customer

better. The plant will be

commissioned by producing

engines for ‘A-Star’ followed by

other models in the coming years.

During the year under review, your

Company has entered into two joint

ventures. The first is with 'Magneti

Marelli Powertrain S.p.A.' (Magneti

Marelli) for manufacture of Electric

Control Units (ECUs). Magnetti

Marelli is a Fiat group company and

one of the largest manufacturers of

ECUs with operations in several

countries. This joint venture will

enable the Company to procure

ECUs locally which will result not

only in reduction in the cost but

also ensure a highly reliable and

regular supply of ECUs. A Joint

Venture Company was incorporated

under the name and style of

'Magneti Marelli Powertrain India

Private Limited' with equity

participation of Magnetti Marelli,

Suzuki Motor Corporation and the

Company in the ratio of 51%, 30%

and 19% respectively.

The second joint venture is with

New Engine Facility

STRATEGIC ALLIANCES Joint Venture Projects

'Futaba Industrial Co., Ltd.' (Futaba)

for manufacture of Exhaust

Systems Components (ESCs).

Futaba is the largest manufacturer

of ESCs in Japan and has

operations in many countries. This

joint venture will ensure supply of

high quality ESCs to the Company. A

Joint Venture Company was

incorporated under the name and

style of 'FMI Automotive

Components Limited’ with equity

participation from Futaba and the

Company in the ratio of 51% and

49% respectively.

The manufacturing facilities of these

Joint Ventures are located at 'Maruti

Suzuki Suppliers Park' in IMT

Manesar, Gurgaon, Haryana.

The Company intends to make itself

a manufacturing and export hub for

its various models. This will result in

exports of a considerable high

volume of products from India.

Exports of such high volume of

products require a dedicated, modern

and high quality port. To meet such

specialised requirements, the

Company entered into an

agreement with Mundra Port and

Special Economic Zone Limited

(MPSEZL) to develop a mega car

terminal at Mundra Port for export

of Company's products. This

arrangement will ensure availability

of requisite infrastructure at the

Port and export of products in an

efficient manner.

The Company is India's most awarded car Company. Some of the awards won by the Company during the year under review are:nThe prestigious Golden Peacock

Service Arrangement with Mundra Port

AWARDS/RECOGNITION

35DIRECTORS' REPORT

Award for excellence in the field

of Environment Management in

Automobile Sector.

nJD Power Customer

Satisfaction Award. This award

has been received for the 8th

time in a row.

n2007 India IQS Award for

Maruti Swift which has been

highest ranked model in the

Premium Compact car

segment.

n2007 India APEAL for Maruti

Zen Estilo which has been

highest ranked model in

Compact car segment.


Swift which has been highest

ranked model in Premium

Compact car segment.


SX4 which has been highest

ranked model in Midsize car

segment.

n"Car Manufacturer of the Year"

Award by NDTV.

nICICI-NDTV Profit Viewers

Choice Award for Maruti SX4 in

the Midsize car segment.

nCNBC TV-18 Autocar Midsize

Car Award for Maruti SX4.

nCNBC TV-18 Autocar Value for

Money for Maruti SX4.

nCNBC TV 18 Autocar Award for

Viewers Choice for Maruti SX4.

nCNBC TV-18 Autocar

Manufacturer Award.

n"Manufacturer of the Year"

Award in the Passenger Car

category by Auto Monitor

Awards.

SUBSIDIARY COMPANIES

In 2007-08, the insurance business

as a whole has earned a Profit

Before Tax (PBT) of Rs. 419 million,

an increase of 12% as compared to

PBT for 2006-07. The insurance

business has been able to write

more than 1.77 million policies and

collect premium of approximately

Rs. 12,500 million. Total policies

issued since inception crossed the

landmark figure of 5 million. Inspite

of the prevailing competition,

Maruti Insurance (MI) has improved

on new car penetration by 2% to

88% (out of 100 customer buying

new cars, 88 buy MI) and renewal

penetration by 11% to 70%

(measured on the base of past 3

year retails). In terms of infrastructure

upgradation, the IT application has

been upgraded to dot-net platform.

This provides greater flexibility to

handle business in de-tariffed

times and has much faster

response time which is highly

desirable with the current volumes.

An online policy renewal system has

been set up by which customers can

renew their policies themselves

through the internet and pay the

premium through credit cards. Claim

handling and payment have also

been brought online - this will be

further advanced in the coming

years.

The online systems will help its

customers in achieving fast turn

around time and will provide

improved transparency.

The premium rates were completely

de-tariffed with effect from 1st

January 2008. Keeping pace with

the market, premiums were

reduced by 20%, providing the best

value for money to the customers.

Innovative and customer friendly

products in the MI portfolio will be

offered to the customers, once the

product change is permitted by

Insurance Regulatory and

Development Authority (IRDA). The

challenges in the de-tariffed regime

are welcome with the aim to

enhance insurance services to

customers, resulting in the better

financial performance.

The subsidiary companies are

discussed below:

This Company sells insurance

policies to Maruti car owners in a

tie-up with National Insurance

Company Ltd. For 2007-08, it

recorded total revenue of

Rs. 585.65 million and PBT

Rs. 258.83 million, an increase of

59.52 % over the previous year.



tie-up with Bajaj Allianze General

Insurance Company Ltd. For

2007-08, it recorded total revenue

of Rs. 76.73 million and PBT

Rs. 34.91 million, an increase of

7.24 % over the previous year.



tie-up with New India Assurance

Company Ltd.

Maruti Insurance Business

Agency Limited

Maruti Insurance Distribution

Services Limited

Maruti Insurance Agency

Solutions Limited


36



For 2007-08, total revenues were

Rs. 109.41 million and PBT Rs.

48.22 million, an increase of

49.5% over the previous year.



tie-up with Royal Sundaram Alliance

Insurance Company Ltd. For

2007-08, its total revenues were

Rs. 166.63 million and PBT Rs.

74.89 million, an increase of

53.4% over the previous year.



tie-up with Iffco Tokyo General

Insurance Company Ltd. In 2007-

08, being the first year of its

commercial activities, it has

generated revenue of Rs. 5.20

million and PBT Rs. 1.99 million.



tie-up with ICICI Lombard General

Insurance Company Ltd. The

Company was incorporated on 18th

October 2007. It has generated

revenue of Rs. 0.61 million and

earned PBT Rs. 0.10 million.

The Company has contributed

towards smooth operation of

business processes at Maruti True

Value outlets and supported the

dealerships in enhancing the sale

of certified pre-owned cars under

Maruti Insurance Agency Network

Limited

Maruti Insurance Agency Services

Limited

Maruti Insurance Agency

Logistics Limited

True Value Solutions Limited

the brand ‘Maruti True Value’. True

Value has contributed significantly

to our effort of customer retention

by facilitating repurchase of new

cars and has made significant

contribution towards enhancing

dealer profitability.

The Company's key strength is its

human capital. The Company has,

during 2007-08, spent about Rs.

10 Crores on training of its

employees.

The Company conducts programs

such as "Bulandi" and "Chunauti"

for the workmen and technicians to

enhance pride in being an

employee of the Company and also

to create team synergy. At the

middle management level, the

focus of the programs is to

inculcate leadership qualities while

at the Director level, one or more

retreats take place so that the

Directors can unwind and take a

detached view of self development

and the organisation.

The Company goes further and

trains its dealers' and vendors'

workforce. 3200 programs have

been conducted covering more

than 13000 dealers' sales persons.

The Company's "Maruti Centre of

Excellence" (MACE) is a team

dedicated to the development of

vendors' employees.

In programs like "Family Connect"

and "Parivar Milan", family

members of the employees are

invited to interact with top

HUMAN RESOURCE DEVELOPMENT

management to get a feel of the

workplace and environment. The

idea is to develop better

understanding and increase the

support and co-operation for the

employees from their families.

The outbound training programs

(OBT) encourage learning while

having fun. The training encourages

team work and teams come back

fully motivated to face future

challenges.

The Company believes in long term

sustainability initiatives in the

interest of its various stakeholders.

The detailed description on these

activities is presented in a separate

section in this Annual Report.

Mr. R.C. Bhargava assumed the

position of Chairman of the Board

on 19th December 2007.

Mr. Manvinder Singh Banga,

Mr. Amal Ganguli and Mr. Davinder

Singh Brar retire by rotation at the

ensuing Annual General Meeting

and, being eligible, offer

themselves for re-appointment.

The Company spent a long time

under the leadership of Mr. Jagdish

Khattar who always spurred on the

employees to achieve milestones

and inspired them to work as a

team. His contribution in every

sphere is enduring, distinct and

unique. The Board records its

appreciation of his outstanding

SUSTAINABILITY

DIRECTORS

37DIRECTORS' REPORT

achievements and the goodwill, the

Company has been able to earn

due to his untiring and selfless

efforts, farsightedness and

visionary skills. Mr. Khattar retired

from the office of Managing

Director and CEO in the normal

course from the close of business

on 18th December 2007.

The position of Managing Director

& CEO has been taken by

Mr. Shinzo Nakanishi, who has

about 37 years of experience with

Suzuki Motor Corporation (SMC).

The Board, whole heartedly,

welcomes Mr. Shinzo Nakanishi as

the new Managing Director & CEO

of the Company.

Mr. Tsuneo Ohashi, Mr. Keiichi Asai

and Mr. Kenichi Ayukawa were

appointed as Additional Directors.

The Board welcomes all of them

and looks forward for their

dedicated support. They hold their

office up to the date of the ensuing

Annual General Meeting and being

eligible, offer themselves for

appointment. Notices under Section

257 of the Companies Act, 1956

proposing their candidature for

appointment have been received.

During the year, Mr. Hirofumi Nagao

was re-appointed as Whole-time

Director. However, due to

withdrawal of his nomination by

SMC, Mr. Hirofumi Nagao resigned

from his office with effect from the

close of business on 10th July 2008.

Mr. Tsuneo Kobayashi and

Mr. Masayuki Osada also resigned

with effect from close of business

on 2nd December 2007 and

1st January 2008 respectively due

to withdrawal of nomination by

SMC. The Board places on record

its sincere appreciation for the

services rendered by them during

their tenure.

Mr. Toshiaki Hasuike was also

appointed as a Director on the

Board during the year but due to his

promotion at SMC, he could not

assume his office.

As required under Section 217(2AA)

of the Companies Act, 1956, the

Directors confirm having:

a) followed, in the preparation of

the Annual Accounts, the

applicable accounting

standards with proper

explanation relating to material

departures;

b) selected such accounting

policies and applied them

consistently and made

judgements and estimates that

are reasonable and prudent so

as to give a true and fair view

of the state of affairs of your

Company at the end of the

financial year and of the profit

of your Company for that

period;

c) taken proper and sufficient

care for the maintenance of

adequate accounting records

in accordance with the

provisions of the Companies

Act, 1956, for safeguarding the

assets of your Company and

DIRECTORS' RESPONSIBILITY

STATEMENT

for preventing and detecting

fraud and other irregularities;

and

d) prepared the Annual Accounts

on a going concern basis.

A statement giving details of

conservation of energy, technology

absorption, foreign exchange

earnings and outgo in accordance

with the Companies (Disclosure of

Particulars in the Report of Board of

Directors) Rules, 1988 is annexed

as Annexure A.

As required by the provisions of

Section 217(2A) of the Companies

Act, 1956, read with the Companies

(Particulars of Employees) Rules,

1975, as amended, the names and

other particulars of the employees

are set out in Annexure B to the

Directors' Report. However, as per

the provisions of Section

219(1)(b)(iv) of the Companies Act,

1956, the Annual Report is being

sent to all the shareholders of the

Company excluding the aforesaid

information. Any shareholder

interested in obtaining such

particulars may write to the

Company Secretary at the

Registered Office of the Company.

In terms of approval granted by the

CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS

AND OUTGO

PERSONNEL

SUBSIDIARY COMPANIES'

ACCOUNTS


38



Central Government under Section

212(8) of the Companies Act,

1956, copy of the balance sheets,

profit & loss accounts, reports of

the Board of Directors and Auditors

of the subsidiaries have not been

attached with the Balance Sheet of

the Company. These documents will

be made available upon request by

any investor of the Company or

subsidiary companies and shall be

kept for inspection by any investor

at the Registered Office of the

Company. However, as directed by

the Central Government, the

financial data of the subsidiaries

have been furnished under

"Financial Statement of Subsidiary

Companies" forming part of the

Annual Report. Further, pursuant to

Accounting Standard AS - 21 issued

by the Institute of Chartered

Accountants of India, Consolidated

Financial Statements presented by

the Company includes financial

information of its subsidiaries.

In accordance with the Accounting

Standard AS - 21 on Consolidated

Financial Statements read with

Accounting Standard AS - 23 on

Accounting for Investments in

CONSOLIDATED FINANCIAL

STATEMENTS

Associates and Accounting

Standard AS - 27 on Financial

Reporting for Interest in Joint

Ventures, the Audited Consolidated

Financial Statements are provided

in the Annual Report.

The Company has complied with

the Corporate Governance

requirements, as stipulated under

Clause 49 of the Listing Agreement.

A separate section on Corporate

Governance alongwith a certificate

from the Auditors of the Company

confirming the compliance, is

annexed and forms part of this

Report.

The Auditors, M/s Price Waterhouse,

Chartered Accountants, hold office

until the conclusion of the ensuing

Annual General Meeting and are

recommended for re-appointment.

Certificate from the Auditors has

been received to the effect that their

re-appointment, if made, would be in

accordance with Section 224 (1B) of

the Companies Act, 1956.

In conformity with the directives of

the Central Government, the

CORPORATE GOVERNANCE

AUDITORS

COST AUDITORS

Company has appointed

M/s R. J. Goel & Co., Cost

Accountants, as the Cost Auditors

under Section 233B of the

Companies Act, 1956 for the audit

of the cost accounts for the motor

vehicles business for the year

ending on 31st March 2009.

The Board of Directors would like to

express its sincere thanks for the

co-operation and advice received

from the Government of India and

the Haryana Government. Your

Directors also take this opportunity

to place on record their gratitude

for timely and valuable assistance

and support received from Suzuki

Motor Corporation, Japan, as well

as from the employees of the

Company including the Japanese

staff, dealers, vendors, customers,

business associates, auto finance

companies, State Government

Authorities and all concerned,

without which it would not have

been possible to achieve all round

progress and growth of the

Company. Your Directors are

thankful to the shareholders for

their continued patronage.

ACKNOWLEDGMENT

39DIRECTORS' REPORT

For and on behalf of the Board of Directors

Shinzo Nakanishi R.C.BhargavaManaging Director Chairman& CEO

New Delhi21st July 2008

Renewable Energy Department, Haryana Government has awarded first prize for excellence in implementation of Energy Conservation measures in the industrial sector.

In 2007-08, two important investments have been made to better the environmental performance:

— New incinerator to meet the stringent emission norms as per the CPCB guidelines for safe disposal of hazardous waste.

— Expansion of hazardous waste storage pits.

A. ENERGY CONSERVATION

In pursuit of continual improvement towards energy conservation and compliance with environmental regulations, many initiatives have been taken and implemented in2007-08.

Efforts in these areas have been recognised by two awards won by the Company.

World environment foundation has declared the Company as the winner of the Golden Peacock Award for Environment Management 2007.

Directors' Report

ANNEXURE A

Information in accordance with the Companies (Disclosure of Particulars in the

Report of Board of Directors) Rules, 1988, and forming part of the Directors'

Report for the year ended 31st March 2008.



Some of the activities that contributed

to significant reduction in energy consumption are listed below:

— Energy efficient fans in cooling towers;

— Special transformer to minimise the energy losses;

— Energy efficient motors and blowers in the air washer system for shop cooling;

— Energy efficient chillers for air conditioning;

— Building Management System and Variable Air Volume System for optimised cooling in the workplaces and also reduce the energy consumption;

— Energy efficient lighting (T-5 and electronic choke);

— Energy efficient air dryers;

— Increased re-use of waste heat of combustion for running equipment.

In 2007-08, per vehicle consumption of Steam (kg/veh) and compressed air (Nm3/veh) were reduced by 0.08% and 1.93%. However consumption of electricity (kWH/veh), process gas (m3/veh) and water (m3/veh) have gone up by 0.83%, 2.18% and 8.51% respectively. The main reason for increase in the consumption is setting up of new engine plant and trial productions of new engines. The impact of power and fuel cost on manufacturing cost is 13%.

nSof styling like concept generation, model making and designing

B. RESEARCH & DEVELOPMENT (R&D)

1. Specific areas in which R&D has been carried out by the Company.

A) Building Full ModelChange Capability

A-1) Vehicle Design andDevelopment

Vehicle Design

kill enhancement in core areas

including Class A surfaces, was done. Design development capabilities for front and rear facia, front and rear underbody and interiors including seats and instrument panel were further strengthened.

nR&D demonstrated its talent and

capability by designing the Concept Car "A-Star" for showcasing at Auto Expo'08 and Geneva Motor Show'08.

nDMU (Virtual Design Review) has been added to R&D activity to enable virtual validation to reduce cycle time and development cost. Also PLM (Product Life Cycle Management) has been inducted to manage CAD, CAM and CAE data for in-house designing and also to collaborate with Suzuki Motor Corporation, Japan and suppliers.

nCMA software was developed for carrying out Target Costing. Also Design capability for components/ systems for VA-VE (Value Analysis- Value Engineering) was strengthened during the year.

nResearch in the specific areas of emission reduction and emission testing was carried out along with the Engine development for BSIV countermeasure. ECU calibration and engine performance improvements were done in order to optimise the engine performance.

nDurability testing of vehicles, vehicle components and engines was conducted. Exterior and interior parts safety and strength testing was also carried out for new model development.

Virtual Design Validation

Development and Testing

New System Development

Body Design

Engine and Transmission Design

nIn the field of alternate fuel technology, development of LPG system for MPI engine was done.

nResearch in the area of Electronic Systems and Controllers Development for new generation vehicles was carried out.

nSide Door Crush Tester - The setting up of this facility has enabled optimisation of design, reduction in time & cost required for completing the development process. Now development and homologation testing can be done in-house.

nPaint Booth for Styling Design - The facility has enabled painting of the various concept models and taking it to the final realistic stage as per the designed concept.

nDurability Tester for transmission testing - The setting up of the durability tester for endurance testing of various transmission parts was another major achievement which has enabled carrying out of all transmission related development activity in-house.

nThermal Shock Tester set up for engine dyno - With the setting up of this facility, it has been possible to evaluate in-house various parts which are subjected to thermal load/ thermal shock e.g. Cylinder Head gasket, cylinder block, piston train, seals etc. for their durability under extremely cold (-30 deg. C) & normal ambient conditions.

nUp-gradation of Performance Chassis Dynamometer Lab.-With the up-gradation, the testing facility has become more user-friendly and versatile with new software and

A-2) Facility set up for R&D

41DIRECTORS' REPORT - ANNEXURE A

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. EFFORTS IN BRIEF MADE TOWARDS TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

- Localisation, development and testing of parts for existing and new models.

- Capabilities strengthened in component and vehicle evaluation, benchmarking and design optimisation.

- Capabilities being further strengthened in area of alternative fuels like Diesel, CNG and LPG.

- VA -VE at the time of design and localisation to maximise cost benefit.

- Acquiring design and cost knowledge through teardown and benchmarking and using it in future designs and cost reduction.

- Global sourcing and advanced sourcing to get the advanced technologies into India at lower costs. (Efforts made towards technology absorption, adaptation and innovation by either local vendors and helping world-leading component suppliers to set up shop in India).

- Design and development of electronic speedometers, keyless alarm controllers for enhancing comfort and convenience.

additional thermocouple ports, analog ports, online viewing, data logging and multiple data storage. The upgraded facility is now suitable for carrying out fuel economy tests for three fuels- Petrol, Diesel and LPG.

Triaxial Suspension Simulator for designing of suspension parts - The facility has helped in designing of suspension parts for new introductions.

- Launch of SX4.

- Launch of Swift Minor.

- Launch of Swift DZire.

- Focused model cost down.

- To develop capability for full model change.

- To upgrade R&D capabilities for total evaluation of products.

- Emphasis on VA-VE & innovative cost reduction ideas to cut down costs.

- Carry out continuous up-gradation of existing models.

- Maximum localisation for achieving cost reduction in existing as well as new models.

- Compliance with Bharat Stage IV emission norm and other new regulations.

- Developing knowledge of costing of various Automotive Technologies through standard cost tables and cost benchmarking.

- Cost planning of new products coinciding with the new Product planning to put cost in the right perspective at the concept stage and give target cost to designers.

- Design in cost reduction to reduce costs from concept stage itself.

- Develop more products with alternative fuel option.

Suspension and Brakes Design

n

2. Benefits derived as a result of above R&D

3. Future plan of action

2.BENEFITS DERIVED AS A RESULT OF ABOVE EFFORTS

- Indigenisation of various vehicle aggregates at lower costs.

- Improvement and up-gradation of existing models for improved comfort, style and better value for money.

- Continuous reduction in product cost through VA-VE.

- Compliance to new regulations.

- Significant cost reduction of new model parts compared to existing models, ensuring that the new models are profitable from day one.

- Significant cost reduction obtained in existing models.

Annexure A Contd.

4. Expenditure incurred on R&D

Particulars FY'08 FY'07

(Rs. in Million)

a. Capital 312 103

b. Recurring 646 536

c. Total 958 639

d. Total R&D expenditure as a 0.44% 0.36%

Percentage of total turnover



Activities relating to exports

i) Initiatives taken to increase exports: Please refer to "Highlights of Operations - Exports" in this Report and report on Management Discussion and Analysis.

ii) Development of new export markets for products and services- Please refer to "Highlights of Operations - Exports" in this Report and report on Management Discussion & Analysis.

iii) Exports plans

The Company will resume its exports to Europe with ‘A Star’ which is expected to start from last quarter of 2008-09. The Company will continue the export of other models to non- European markets. By 2010-11, the Company plans to export 200,000 units.

3. IMPORTED TECHNOLOGY

Technology Imported 1. Integrated Audio with Audio controls on steering wheel

2. Glass Antennae

Year of Import 2007-08

Status of absorption Above technologies have been used in product introduced during the year.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO (CASH BASIS)(Rs. in Million)

a) Foreign Exchange used: Equivalent

(i) Raw materials and Components 13,355 12,256

(ii) Capital goods 10,542 823

(iii) Dies and Moulds, Maintenance spares and other items 711 500

iv) Royalty, interest, dividend and others 5,610 3,865

b) Foreign Exchange earned: Equivalent 7,812 5,015

FY'08 FY'07

43DIRECTORS' REPORT - ANNEXURE A

For and on behalf of the Board of Directors

Shinzo Nakanishi R.C.BhargavaManaging Director Chairman& CEO

New Delhi21st July 2008

Corporate Governance Report

CORPORATE GOVERNANCE PHILOSOPHYMaruti Suzuki (the Company) is fully committed to practicing sound corporate governance and upholding the highest business standards in conducting business. Being avalue-driven organisation, the Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance, viz., integrity, equity, transparency, fairness, disclosure, accountability and commitment to values.

The Company fosters a culture in which high standards of ethical behaviour, individual accountability

and transparent disclosure are ingrained in all its business dealings and shared by its Board of Directors, Management and Employees. The Company has established systems and procedures to ensure that its Board of Directors is well-informed and well-equipped to fulfil its overall responsibilities and to provide the management with the strategic direction needed to create long-term shareholder value.

The Company has a multi-tier management structure, comprising the Board of Directors at the top and followed by Managing Executive Officers, Executive Officers and Divisional Heads. Through this, it is ensured that:

MANAGEMENT STRUCTURE


44 Maruti Suzuki India Limited ANNUAL REPORT 2007-08 Maruti Suzuki India Limited ANNUAL REPORT 2007-08

The Company has laid down a Code of Conduct for the members of the Board and

identified senior management personnel of the Company.

nStrategic supervision is provided by the Board;

nControl and implementation of Company's strategy is achieved effectively;

nOperational management remains focussed on implementation;

nInformation regarding the Company's operations and financial performance are made available adequately;

nDelegation of decision making with accountability is achieved;

nFinancial and operating control and integrity are maintained at an optimal level;

nRisk is suitably evaluated and dealt with.

As on 31st March 2008, the Company's Board of Directors

BOARD OF DIRECTORS

COMPOSITION OF THE BOARD

consists of eleven members. The Chairman of the Board is a non-executive Director. The Board is made up of five executive Directors and six non-executive Directors, of whom four are independent as given in Table 1.

No Director is related to any other Director. All non-executive independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board.

S. Name of Category No. of Outside No. of Outside No. the Directors Directorship(s) Committee(s)

Public Private Member Chairman

1 Mr. R. C. Bhargava Chairman, 7 2 4 4Non-Executive

12 Mr. Shinzo Nakanishi Managing 5 2 1 --Director and CEO, Executive

3 Mr. Hirofumi Nagao Executive 3 - 2 -

4 Mr. Shuji Oishi Executive 1 1 - -25 Mr. Tsuneo Ohashi Executive 1 - - -

36 Mr. Keiichi Asai Executive 1 - - -

7 Mr. Osamu Suzuki Non-Executive 1 - - -

8 Mr. Amal Ganguli Independent 10 3 4 4

9 Ms. Pallavi Shroff Independent 4 1 - -

10 Mr. Manvinder Singh Banga Independent - - - -

11 Mr. Davinder Singh Brar Independent 2 9 1 -

stTABLE 1: Composition of the Board of Directors as on 31 March 2008

45CORPORATE GOVERNANCE REPORT

1 Appointed with effect from 19th December 2007

2 Appointed with effect from 1st January 2008

3 Appointed with effect from 29th January 2008

Notes:

a. Foreign companies, bodies corporate, private companies and companies under Section 25 of the Companies Act, 1956 are excluded for the above purpose.

b. The committees considered for the purpose are those prescribed under Clause 49 (I) (C) of the Listing Agreement.

As stipulated by Clause 49 of the Listing Agreement, none of the

Directors was a member of more than 10 committees or a Chairman of more than 5 committees across all companies in which he/she is a Director.

The Board met six times during the year-24th April 2007, 26th July 2007, 5th September 2007, 29th October 2007, 29th January 2008 and 13th March 2008. The Board meets at least once in a quarter with a gap of not more than four months between any two meetings. However, additional meetings are held whenever necessary. Table 2 gives the attendance record of the Directors at the six Board Meetings as well as the last Annual General Meeting.

BOARD MEETINGS

* Mr. Banga joined Board Meeting in July 2007 and January 2008 through tele-conference

1 Ceased to be Director with effect from 19th December 2007.

2 Ceased to be Director with effect from 26th May 2007.

3 Ceased to be Director with effect from 2nd December 2007.

4 Appointed with effect from 1st January 2008.

5 Appointed with effect from 29th January 2008.

6 Ceased to be Director with effect from 1st January 2008.

TABLE 2: Board Meeting attendance record of the Directors in 2007-2008

Name of Director Number of meetings attended(Total meetings held: 6) last AGM

Whether attended

Mr. R.C. Bhargava 6 Yes1Mr. Jagdish Khattar 4 Yes

Mr. Shinzo Nakanishi 5 Yes

Mr. Hirofumi Nagao 6 Yes2Mr. Shinichi Takeuchi 1 N.A.

3Mr. Tsuneo Kobayashi 4 Yes

Mr. Shuji Oishi 6 Yes4

Mr. Tsuneo Ohashi 2 N.A5Mr. Keiichi Asai 2 N.A

Mr. Osamu Suzuki 3 Yes

Ms. Pallavi Shroff 3 No

Mr. Amal Ganguli 6 Yes

Mr. Manvinder Singh Banga 1* No

Mr. Davinder Singh Brar 5 Yes6 Mr. Masayuki Osada 3 Yes

INFORMATION SUPPLIED TO THE BOARD

The Board has complete access to all information of the Company.Inter-alia, the following information is provided to the Board and the agenda papers for the meetings are circulated in advance of each meeting or are tabled in the course of such meeting:

nAnnual operating plans, capital & revenue budgets and updates;

nQuarterly results of the Company and its operating divisions or business segments;

nMinutes of meetings of Audit Committee and other committees of the Board;

nInformation on recruitment and remuneration of senior officers, just below the Board level, including appointment or removal of Chief Financial Officer and Company Secretary;

nMaterially important show cause, demand, prosecution and penalty notices;

nFatal or serious accidents or dangerous occurrences;

nAny materially significant effluent or pollution problems;

nAny materially relevant default in financial obligations to and by the Company or substantial non-payment for goods sold by the Company;

nAny issue which involves possible public or product liability claims of a substantial nature;

nDetails of any joint venture or collaboration agreement;

nTransactions that involve substantial payments towards goodwill, brand equity or intellectual property;



Corporate Governance Report Contd.

nSignificant labour problems and their proposed solutions;

nAny significant development in the human resources and industrial relations fronts;

nSale of material nature of investments, subsidiaries, assets, which is not in the normal course of business;

nQuarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement, and

nNon-compliance of any regulatory, statutory nature or listing requirements and shareholder services such as

non-payment of dividend, delay in share transfer, etc.

Table 3 gives details of the remuneration paid to Directors during 2007-08. The Company did not advance any loans to any of its Directors in the year under review.

REMUNERATION PAID / PAYABLE TO DIRECTORS

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.)

Mr. Shinzo Nakanishi* None 31,59,980 15,00,328 70,000 - 47,30,308

Mr. Jagdish Khattar None 2,75,14,623 50,10,929 - - 3,25,25,552

Mr. Tsuneo Kobayashi None 77,56,583 20,87,159 - - 98,43,742

Mr. Shinichi Takeuchi None 14,88,802 7,00,820 - - 21,89,622

Mr. Hirofumi Nagao* None 96,75,214 45,00,000 - - 1,41,75,214

Mr. Shuji Oishi None 89,25,868 37,77,128 - - 1,27,02,996

Mr. M. Osada None 43,41,205 16,94,262 - - 60,35,467

Mr. Tsuneo Ohashi* None 22,57,146 969,672 - - 32,26,818

Mr. Keiichi Asai* None 16,23,370 671,311 - - 22,94,681

Mr. R. C. Bhargava None - - 1,00,000 17,60,000 18,60,000

Mr. O. Suzuki None - - 30,000 - 30,000

Mr. Amal Ganguli None - - 1,20,000 15,50,000 16,70,000

Ms. Pallavi Shroff None - - 70,000 7,75,000 8,45,000

Mr. Manvinder Singh Banga None - - 10,000 3,25,000 3,35,000

Mr. Davinder Singh Brar None - - 1,10,000 10,75,000 11,85,000

TABLE 3: Remuneration paid or payable to Directors during 2007-08

Name of Director Relation-ship with other Directors

Salary & Perquisites

Performance linked bonus

Sitting fees

Commission Total

* Subject to approval of shareholders in ensuing Annual General Meeting.

The members of the Company had earlier approved payment of commission to non-executive Directors as permitted by the Companies Act, 1956 and in the last Annual General Meeting held on 6th September 2007, approved an increase in the overall limit of commission to Rs. 1 Crore per annum with effect from 1st April 2006. As such, the commission for 2006-07 was also paid during 2007-08 as per following details:

Name of Director Commission (2006-07)(Rs.)

Mr. R. C. Bhargava 12,60,000

Mr. Amal Ganguli 8,60,000

Ms. Pallavi Shroff 8,00,000

Mr. Manvinder Singh Banga 5,00,000

Mr. Davinder Singh Brar 8,60,000

The performance criteria defined by the Board for the Whole-time Directors including Managing Director is as under:

a) Actual achievement in terms of growth in sales, profit, etc. as compared to the previous year;


e) Compliance with listing and other legal requirements relating to financial statements.

f) Disclosure of any related party transactions.

g) Qualifications in the draft audit report.

4. Reviewing, with the management, the quarterly/annual financial statements before submission to the Board for approval.

5. Reviewing with the management, performance of Statutory and Internal Auditors, the adequacy of internal control system.

6. Reviewing the adequacy of internal audit function including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

7. Discussion with Internal Auditors about any significant findings and follow up thereon.

8. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

9. Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern.

10. Looking into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

11. Reviewing the functioning of the Whistle Blower mechanism, in case the same is existing.

b) Actual achievement of growth as compared to the budget approved at the beginning of the year; and

c) Growth of market share of Company's products as compared to key competitors in the Industry.

No employee of the Company is related to any Director of the Company.

Members of the Company at the Annual General Meeting held on 6th September 2007, approved payment of remuneration by way of commission to independent Directors at a sum not exceeding 1% of the net profits of the Company subject to a ceiling of Rs. 100 Lac per annum with effect from 1st April 2006 for a period not exceeding five years. The payment of commission is based on certain criteria such as attendance at the Board/ Board level committee meetings, time devoted, current trends prevailing in the industry etc.

Table 4 shows the composition of the Audit Committee. All the members of the Audit Committee are financially literate and Mr. Amal Ganguli, the Chairman, has expertise in accounting and financial management.

The Director responsible for the finance function, the head of internal audit and the representative of the Statutory, Internal and Cost Auditors are permanent invitees to the Audit

Non-Executive Directors' remuneration

I. Audit Committee

Composition

COMMITTEES OF THE BOARD

TABLE 4: Composition of Audit Committee

Name Category Designation

Mr. Amal Ganguli Independent Chairman

Mr. Shinzo Nakanishi Executive Member

Mr. Davinder Singh Brar Independent Member

Ms. Pallavi Shroff Independent Member




Committee. Mr. Anil Rustgi, Company Secretary & Chief Legal Officer acts as the Secretary to the Audit Committee. Other Directors and members of management are also invited from time to time as appropriate.

The Role of the Audit Committee includes the following:

1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2. Recommending the appointment and removal of Statutory Auditors, fixation of audit fee and also approval for payment for any other services.

3. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Clause (2AA) of section 217 of the Companies Act, 1956.

b) Changes, if any, in accounting policies and practices and reasons for the same.

c) Major accounting entries involving estimates based on the exercise of judgment by the management.

d) Significant adjustments made in the financial statements arising out of audit findings.

Role

12. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

13. Reviewing any other matter which may be specified as role of the Audit Committee under the amendments, if any, from time to time, to the Listing Agreement, Companies Act and other statutes.

The Audit Committee met four times thin the year under review- on 24 April

th th2007, 25 July 2007, 29 October th2007 and 29 January 2008. Table

5 gives the details of attendance.

Table 6 shows the composition of the Shareholders' / Investors' Grievance Committee of the Company.

The Company Secretary & Chief Legal Officer acts as the Secretary to the Committee and is the Compliance Officer.

Meetings

II. Shareholders' / Investors' Grievance Committee

Composition

Objective

The Committee oversees redressal of shareholder and investor grievances, transfer of shares, non - receipt of balance sheet, non - receipt of declared dividends and related matters. The Committee also oversees the performance of the Registrar and Transfer Agents, recommends measures for overall improvement in the quality of investors' services, approves issue of duplicate / split / consolidation of share certificates and reviews all matters connected with the securities transfers.

In order to provide efficient and timely services to investors, the Board has delegated the power of approval of issue of duplicate / split / consolidation of share certificate, transfer of shares, transmission of shares, dematerialisation / rematerialisation of shares not exceeding 2000 equity shares per transaction to the Managing Director,

Director & Managing Executive Officer and Company Secretary & Chief Legal Officer severally.

Meetings

Investor Grievance Redressal

During the year, Shareholders'/ Investors' Grievance Committee met

th thtwice i.e. on 24 April 2007 and 29 October 2007. Table 7 gives the attendance record.

During the year, 34 complaints were received and resolved. No transfer of shares was pending as on 31st March 2008.

This Annual Report has a detailed report on Management Discussion and Analysis.

During the year, there were no transactions of material nature with the promoters, the Directors or the management, their subsidiaries or relatives, etc. that had potential conflict with the interest of the Company. All disclosures related to financial and commercial transactions where Directors may have a potential interest are provided to the Board, and the interested Directors do not participate in the discussion nor do they vote on such matters. None of these transactions has a potential conflict with the interests of the Company.

MANAGEMENT

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

DISCLOSURES MADE BY THE MANAGEMENT TO THE BOARD

th*Appointed as Chairman with effect from 29 October 2007.

th** Ceased to be a member with effect from 19 December 2007.

Name Nature Designation

Mr. R.C. Bhargava* Non-Executive Chairman

Mr. Jagdish Khattar** Executive Member

Mr. Shinzo Nakanishi Executive Member

Mr. Hirofumi Nagao Executive Member

Mr. Davinder Singh Brar Independent Member

TABLE 6: Composition of Shareholders'/Investors' Grievance Committee

Mr. Shinzo Nakanishi 2

Mr. Jagdish Khattar 2

Mr. Hirofumi Nagao 2

Mr. R. C. Bhargava 2

Mr. Davinder Singh Brar 2

Names Meetings attended in 2007 - 08 (Total Meetings held: 2)

TABLEShareholders' / Investors' Grievance Committee members

7: Attendance record of


TABLE 5: Attendance record of Audit Committee members

Names Status Meetings Attended in 2007 - 08 (TotalMeetings held: 4)

Mr. Amal Ganguli Chairman 4

Mr. Shinzo Nakanishi Member 3

Mr. Davinder Singh Brar Member 4

Ms. Pallavi Shroff Member 2

Board and identified senior management personnel of the Company.

The Code of Conduct has been posted on the Company's website www.marutisuzuki.com

The Code of Conduct has been circulated to all the members of the Board and senior management personnel and they have affirmed their compliance with the said Code of Conduct for the financial year

stended 31 March 2008. A declaration to this effect signed by Mr. Shinzo Nakanishi, Managing Director & CEO of the Company forms part of this report as Annexure - A.

CEO/ CFO CERTIFICATION

The Company has in place a well defined and transparent control self assessment mechanism to evaluate the effectiveness of internal controls over financial reporting. To facilitate certification by CEO/CFO for the financial year 2007-08, key internal controls over financial reporting were identified and adequately assessed to provide sufficient comfort. To ensure complete transparency and effectiveness of the self assessment, the whole process was carried out through an on line web based tool called “Controls Manager”.

RELATED PARTY TRANSACTIONS

CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

None of the transactions with any of the related parties was in conflict with the interests of the Company. Details of transactions between the Company and its subsidiaries, fellow subsidiaries, joint ventures, associates during 2007-08 are given in Note no. 26 in Schedule 23 to the annual accounts.

All related party transactions are negotiated on an arm's length basis and are in the interests of the Company.

The Company has laid down a Code of Conduct for the members of the




ENABLING CONTROLS SELF ASSESSMENTS THROUGH THE CONTROLS MANAGER

Process for reporting

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Business Unit: Finance Department - Corporate Process Owner: Idris Kaboglu (Finance Controller)

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Notes reference: Information & Communication:

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Reviewingauthority

Key Steps

With the successful implementation of the online controls self assessment framework, the Company has become one of the few companies in India to have a transparent framework for evaluating the internal controls over financial reporting, thereby reinforcing the commitment to adopt best corporate governance practices.

As required by clause 49 of the listing agreement, the certificate duly signed by Mr. S. Nakanishi, Managing Director and Mr. Hirofumi Nagao, Director & MEO (Admin) (in charge of finance function) was placed before the Board of Directors at its meeting

thheld on 24 April 2008.

The Company has established appropriate risk assessment and minimisation procedures. The process for formulating a defined risk assessment framework encompassed, inter-alia, a methodology for assessing and identifying risks on an ongoing basis, risk prioritising, risk mitigation, monitoring plan and comprehensive reporting on management of enterprise wide risks.

An Executive Risk Management Committee (ERMC) is in place to review the risk management activities of the Company on a regular basis. The composition of the Committee includes the Managing Director and all Whole-time Directors. Risks are evaluated by ERMC. In addition to the Company level risks, ERMC also reviews, from time to time, any new risks that may arise due to market dynamics and changes in the business environment. The Audit Committee and the Board of Directors also review the status of the risk management activities in the Company.

RISK ASSESSMENT AND MINIMISATION PROCEDURE

LEGAL COMPLIANCE REPORTING

CODE FOR PREVENTION OF INSIDER TRADING PRACTICES

DETAILS OF NON COMPLIANCE

The Board periodically reviews reports of compliance with all laws applicable to the Company, as well as steps taken by the Company to rectify instances of non-compliances.

The Company has developed comprehensive legal compliance scheduling and management software by which specific compliance tasks are assigned to each individual. The software enables in planning and monitoring all compliance activities across the Company as shown below:

The Company has instituted a comprehensive Code of Conduct for its Board, senior executive, managerial staff and relevant business associates in compliance with the SEBI regulations on prevention of insider trading.

No penalties or strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market since the listing of the Company's shares on 9th July 2003.

SUBSIDIARY COMPANIES INFORMATION

SHAREHOLDERS

RE-APPOINTMENT / APPOINTMENT OF DIRECTORS

A statement, wherever applicable, of all significant transactions and arrangements entered into by the Company's subsidiaries is presented to the Board of the Company at its meetings.

The Audit Committee of the Company reviews the financial statements and investments made by unlisted subsidiary companies. The minutes of unlisted subsidiary companies are placed before the Board.

As per the Articles of Association of the Company and relevant provisions of the Companies Act, 1956, Mr. Manvinder Singh Banga, Mr. Amal Ganguli and Mr. Davinder Singh Brar retire by rotation at the forthcoming Annual General Meeting (AGM) of the Company and being eligible, offer themselves for re appointment.

Following Directors were appointed/re-appointed/designated during the year:


Factory

Factory

REGIONAL OFFICES

MEANS OF COMMUNICATIONSnMr. R. C. Bhargava was designated as Chairman with

theffect from 19 December 2007.

nMr. Shinzo Nakanishi was appointed as Managing Director and CEO with effect

thfrom 19 December 2007.

nMr. Tsuneo Ohashi was appointed as Whole-time

st Director with effect from 1January 2008 and also re-designated as Director & Managing Executive Officer (Production).

nMr. Hirofumi Nagao was re-appointed as a Whole-time

rdDirector with effect from 23 September 2007 and also re-designated as Director & Managing Executive Officer (Administration).

nMr. Toshiaki Hasuike was appointed as Whole-time

stDirector with effect from 1 January 2008. However, due to his promotion at Suzuki Motor Corporation, he could not assume his office.

nMr. Keiichi Asai was appointed as Whole-time Director with

theffect from 29 January 2008 and also re-designated as Director & Managing Executive Officer (Engineering).

All the above appointment / re-appointments of Whole-time Directors are subject to the approval of the members in the ensuing AGM. Brief resumes of the above Directors recommended for appointment / re-appointments at the AGM are furnished in the explanatory statement of the Notice of the AGM.

Financial results are published quarterly and annually in "The Times of India", "Economic Times" and in Hindi editions of "Navbharat Times”.

All monthly sales are sent to Stock Exchanges as well as displayed on website www.marutisuzuki.com. As a good corporate governance practice, monthly sales and press releases are sent to the shareholders through their available e-mail ids.

All official news releases are sent to Stock Exchanges as wel l as displayed on the Company's website www.marutisuzuki.com.

The Company's website www.marutisuzuki.com contains a dedicated segment called 'Investors' where all information needed by shareholders is available including ECS Mandate, Nomination Form and Annual Report.

Annual Report is circulated to members and others entitled thereto like Auditors, Equity Analysts, etc.

The Corporate Filing and Dissemination System (Corp filing) is jointly owned, managed and maintained by BSE and NSE. All disclosures and communications to BSE and NSE are filed electronically through this portal. Hard copies of the said disclosures and correspondence are also filed with the Stock Exchanges.

Following e-mail ids have been exclusively dedicated for the investors queries:

[email protected]@karvy.com. Queries relating to Annual Report may be sent to [email protected] and queries relating to transfer of shares and splitting/ consolidation /demat / remat/ of share certificates may be sent to [email protected]

Financial Results

Monthly Sales

News Releases

Website

Annual Report

Corporate Filing and Dissemination System

Exclusive e-mail ids for Investors

COMPANY'S SNAPSHOTIncorporation :

CIN :

Equity Structure :

No.of cars sold :(2007-08)

Profit after Tax :(2007-08)

Employee Strength :

th24 February 1981

L34103DL1981PLC011375

54.21% is held by Suzuki MotorCorporation, Japan and balance isheld by public, etc.

764,842 including53,024 exports.

INR 17,308 million

7,090 (March 2008)




GENERAL BODY MEETINGS

The Company had passed certain special resolutions in the previous three AGM's. No special resolutions were required to be put through postal ballot last year.

ndDate: 2 September 2008

Day: Tuesday

Time: 10:00 a.m.

Venue: Airforce Auditorium, Subroto Park, New Delhi 110010

st stFinancial Year: 1 April to 31 March.

stFor the year ending 31 March 2009, results will be announced:

By end of July 2008: First quarter results.

By end of October 2008: Second quarter results.

By end of January 2009: Third quarter results.

By middle of May 2009: Fourth quarter and Annual results.

The period of book closure is from th nd20 August 2008 to 2 September

2008 (both days inclusive).

ADDITIONAL SHAREHOLDER INFORMATION

ANNUAL GENERAL MEETING

FINANCIAL YEAR

BOOK CLOSURE

DIVIDEND PAYMENT

A dividend payment of Rs. 5 per equity share will be paid on or after

nd2 September 2008, subject to the approval of the members in the Annual General Meeting.

LISTING ON STOCK EXCHANGES

The equity shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE). The annual listing fees for the year 2008-09 have been paid to both these Stock Exchanges. Table 9 lists the Company's Stock Exchange codes. The Company has also paid the annual custodial fee for the year 2008-09 to both the depositories namely, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Financial Year Location Date Time

2004 - 05 Airforce Auditorium, 9th September 2005 10.00 A. M.Subroto Park, New Delhi



TABLE 8: Details of the last three AGMs of the Company.

Bombay Stock Exchange Limited, Mumbai (BSE) 532500

National Stock Exchange of India Limited (NSE) MARUTI

Table 9: Stock Code

ISIN No: INE585B01010

STOCK MARKET DATA

Table 10 gives the monthly high and low prices of the Company's equity shares at the BSE and the NSE for the year 2007 08. Chart A plots the movement of Company's share prices with BSE Sensex for the year 2007-08.

Chart A


MSIL stock price performance relative to sensex

MARUTI SENSEX

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00

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sex

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Maruti Suzuki India Limited ANNUAL REPORT 2007-08 54

REGISTRAR AND TRANSFER AGENT

SHARE TRANSFER SYSTEM

SHAREHOLDING PATTERN

Karvy Computershare Pvt. Limited

Plot No 17 - 24, Vittalrao Nagar

Madhapur

Hyderabad 500 081

Ph No: 040-23420815 / 818

Fax No. : 040-23420814

Mail Id: [email protected]

Website: www.karvy.com

The Company's shares are transferred in dematerialised form and are traded on the stock exchanges compulsorily in the demat mode. Any request for rematerialisation and / or transfer of shares in physical mode is also attended within the stipulated time.

Table 11 and 12 lists the shareholding pattern and distribution schedule of equity shares of the

stCompany as on 31 March 2008.

Bombay Stock Exchange National Stock Exchange

Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

April 2007 815.00 738.00 840.00 741.00

May 2007 843.85 780.00 848.70 751.25

June 2007 830.50 713.00 876.00 715.05

July 2007 857.90 742.55 860.00 745.00

August 2007 872.00 720.00 872.90 715.00

September 2007 1026.90 854.00 1028.00 803.55

October 2007 1252.00 900.00 1248.00 960.25

November 2007 1100.00 930.00 1100.00 930.25

December 2007 1099.00 979.00 1098.00 973.45

January 2008 1009.00 700.00 1055.00 700.00

February 2008 924.90 751.00 923.90 750.10

March 2008 945.55 795.05 944.50 790.00

TABLE 10: Monthly high & low quotation of the Company's equity share

Category No. of shares held Shareholding (%)

Promoter's holding

Promoters

- Foreign Promoters 15,66,18,440 54.21

Sub-Total (A) 15,66,18,440 54.21

Non-Promoters Holding

Institutional Investors

Mutual Funds and UTI 1,88,43,389 6.52

Banks, Financial Institutions, Insurance Companies (Central / State Govt. Institutions / Non-government Institutions) 4,80,08,194 16.62

FIIs 4,53,47,942 15.70

Sub-Total (B) 11,21,99,525 38.84

Others

Private Corporate Bodies 1,11,70,286 3.87

Indian Public (including NSDL & CDSL) 83,18,919 2.88

NRIs / OCBs 3,03,595 0.11

Trust, HUF & Others 2,99,295 0.10

Sub-Total (C) 2,00,92,095 6.95

GRAND TOTAL (A + B + C) 28,89,10,060 100.00

TABLE 11: Shareholding Pattern as on 31st March 2008



TOP TEN SHAREHOLDERSstList of Top-ten shareholders as on 31 March 2008 is as follows;

Name % of holding1. Suzuki Motor Corporation 54.212. Life Insurance Corporation of India 10.933. HSBC Global Investments Funds A/C HSBC 1.98

Global Investment Funds A/C Mauritius Limited4. State Bank of India (equity) 1.705. T Rowe Price International INC A/C 1.61

T Rowe New Asia Fund6. LIC of India Market Plus 1.077. LIC of India Money Plus 0.978. ICICI Prudential Life Insurance Company Limited 0.82 9. Bajaj Allianz Life Insurance Company Limited 0.5310. HDFC Standard Life Insurance Company Limited 0.50

Total 74.32

PLANT LOCATION

ADDRESS FOR CORRESPONDENCE

SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI):

The Company has four plants, three located in Palam Gurgaon Road, Gurgaon, Haryana and one located at Manesar Industrial Town, Gurgaon, Haryana.

For transfer/split/dematerialisation/ rematerialisation of shares, payment of dividend on shares and any other query relating to shares of the CompanyFor shares held in dematerialised formTo the investor's Depository Participant(s) and/orKarvy Computershare Pvt. LimitedPlot No 17 24, Vittalrao NagarMadhapurHyderabad 500 081Ph No: 040-23420815 818Fax No. : 040-23420814Mail Id: [email protected]: www.karvy.comFor shares held in physical form Karvy Computershare Pvt. Limited or(at the above given address) At the Company's following address:Maruti Suzuki India Limited

th11 Floor, Jeevan Prakash25 K.G.Marg, New Delhi-110001Phone no- (91)-11-23316831Email:[email protected]: www.marutisuzuki.com

ICSI is one of the premier professional bodies in India. For better corporate governance, ICSI has issued 6

stsecretarial standards as on 31 March 2008. These Secretarial Standards are recommendatory in nature. The Company observes these Secretarial Standards voluntarily.

TABLE 12: Distribution Schedule as on 31st March 2008

Shareholding Class Number of shareholders % Number of shares %

1 to 5000 109473 99.56 7963951 2.76

5,001 to 10,000 76 0.07 560125 0.19

10,001 to 20,000 71 0.06 1025837 0.36

20,001 to 30,000 35 0.03 887062 0.31

30,001 to 40,000 34 0.03 1227656 0.43

40,001 to 50,000 28 0.03 1290837 0.45

50,001 to 1,00,000 84 0.08 6233707 2.16

1,00,001 and above 157 0.14 269720885 93.34

TOTAL 109958 100 288910060 100.00

DEMATERIALISATION OF SHARES AND LIQUIDITY

SECRETARIAL AUDIT

As on 31 March 2008, 45.79% of the Company's total paid up equity capital representing 132,284,572 equity shares was held in dematerial-ised form and the balance 54.21% representing 15,66,25,488 equity shares was held in physical form. The equity shares of the Company are listed under 'specified category' in BSE and are part of Nifty in NSE.

As stipulated by the Securities and Exchange Board of India (SEBI), a qualified practicing Company Secretary carries out the secretarial audit and provides a report to reconcile the total admitted capital with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the stock exchanges and is also placed

st

before the Board of Directors. The audit, inter-alia, confirms that the total listed and paid up capital of the Company is in agreement with the aggregate of the total number of shares in dematerialised form (held with NSDL and CDSL) and total number of shares in physical form.

The Company has no outstanding GDRs / ADRs / Warrants or any Convertible instruments.

The Company has not obtained any public funding in the last three years.

The Chairman's office with required facilities is being maintained by the Company at its expense, for use by its non-executive Chairman.

OUTSTANDING GDRS / ADRS / WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATEAND LIKELY IMPACT ON EQUITY

DETAILS OF PUBLIC FUNDING OBTAINED IN THE LAST THREE YEARS

ADOPTION OF NON-MANDATORY REQUIREMENTS



Auditors' Certificate regarding compliance of conditions of Corporate Governance

To the Members of Maruti Suzuki India Limited (Formerly Maruti Udyog Limited)

We have examined the compliance of conditions of Corporate Governance by Maruti Suzuki India Limited (formerly Maruti Udyog

Limited) for the year ended March 31, 2008, as stipulated in Clause 49 of the Listing Agreement(s) of the said Company with

stock exchange(s) in India.

The compliance of conditions of Corporate Governance is the responsibility of the Company's management. Our examination was

carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of the

Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to procedures and implementation

thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor

an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us we certify that the Company has

complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement(s).

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness

with which the management has conducted the affairs of the Company.

Partner Membership No: F 084451

For and on behalf of

Place: Gurgaon Price Waterhouse

Date: July 21, 2008 Chartered Accountants

ANNEXURE A

DECLARATION OF THE MANAGING DIRECTOR & CEO

This is to certify that the Company has laid down Code of Conduct for all the Board members and senior management personnel

of the Company and the same is uploaded on the website of the Company – www.marutisuzuki.com

Further, certified that the members of the Board of Directors and senior management personnel have affirmed the compliance

stwith the Code applicable to them during the year ended 31 March 2008.

thDate: 5 July 2008 Shinzo Nakanishi

Place: New Delhi Managing Director & CEO


Anupam Dhawan

Our Management Team


OVERVIEWThe Indian economy grew at an impressive 9 percent in GDP during 2007-08. Of late, inflation has hardened and oil and certain other commodity prices have shot up, resulting in higher interest rates and an uncertain outlook for the very near term. However, the country's economy is still expected to continue to grow robustly, if at a slightly slower pace.

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the sixth successive year of positive growth. But, industry performance during the year was

INDUSTRY OVERVIEW

inconsistent, with periods of high growth interspersed by months of low demand. Growth was model-specific, driven by select brands from different industry players as opposed to the general buoyancy witnessed during the previous year (2006-07).

The Company's domestic sale volume grew slightly more than the industry at 12 percent, and was the highest ever since inception. While continuing to lead in the A2 segment (compact cars), the Company also regained leadership of the A3 segment (sedans) after a gap of several years.

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the

sixth successive year of positive growth. But, industry performance during the year

was inconsistent, with periods of high growth interspersed by months of low

demand. Growth was model-specific, driven by select brands from different

industry players.


Management Discussion and Analysis

57

Strong partnerships are the backbone of our promise.


Our Steer Leaders

Mr. S. Maitra

Mr. N. Fujita

Managing Executive Officer (Supply Chain)

Executive Officer (Supply Chain)

“Our suppliers make more than 70 percent by value of a Maruti Suzuki car. They have a critical role in ensuring that our customers get global quality and design, like customers in the developed countries. We will continue collaborating with our suppliers, as we always have, to reduce cost and enhance quality. But this partnership will now do more. As Maruti Suzuki develops R & D capabilities, our suppliers will also build design and development capability in their own areas. Together, we will fulfil the promise of more models, more upgrades, more features -- at attractive prices ”

Mr. S. Y. Siddiqui

Managing Executive Officer (Administration)

“In pursuit of our ambitious growth & expansion plans amidst a competitive & tough business environment, our talent pool is going to be a key strength. We have made consistent efforts to create a positive, enabling and high performance work environment at Maruti Suzuki as a pre-requisite towards talent acquisition, talent nurturing and talent management. The people development roadmap at Maruti Suzuki also entails to build the leadership pipeline facilitating the high potentials to take up senior & top management roles, envision the future, define business innovation & strategies and lead high performing teams for us to achieve customer delight, organizational growth & strongly retain the leadership position in the Auto Industry in India.”

Mr. Mayank Pareek

Mr. S. Oishi

“

Executive Officer (Marketing & Sales)

Director & Managing Executive Officer (Marketing & Sales)

A million promises, to us, is about delighting the customer. We have the support of high quality people and systems of Maruti Suzuki, all of whom are converging to the cause of the customer. Our vast and growing network of dealers enables us to reach customers in the farthest corners. We will continue to expand this network, and also enhance the quality of customer experience with Maruti Suzuki. Fulfilling a million promises is about understanding the needs of the customer, stated and unstated, and designing our products and services around them. As India prospers, transforms, aspires and grows younger, we will remain sensitive to change, keep pace and meet commitments like we first did 25 years ago.”

Our Steer Leaders

Mr. M. M. Singh

Mr. T. Ohashi

Managing Executive Officer (Production)

Director and Managing Executive Officer (Production)

“We aspire to make cars that are consistently world class in terms of quality and cost, built by a strong, highly motivated & committed team. Maruti Suzuki is currently scaling up capacities by installing world-class equipment and machines for cars and engines. At the same time, with the blend of Japanese fundamentals & locally built new techniques, we build flexibility in our operations that allows quick product mix changes to meet changing customer requirements. Our success has always been due to our people who have shown outstanding commitment, team work and a never ending urge to improve. The man on the shop floor will continue to lead us in our journey of a million promises.”

Mr. I. V. Rao

Mr. K. Asai

Managing Executive Officer (Engineering)

Director & Managing Executive Officer (Engineering)

“Maruti Suzuki has successfully leveraged the strengths of Suzuki Motor Corporation in the areas of technology, design and quality. We have now developed capabilities in design and development, and collaborated with Suzuki engineers in designing world strategic models like Swift and SX4. Going forward, Maruti Suzuki will rapidly scale up capability and infrastructure in R & D, so we can continue to offer customers many more new models, with the same bold and aggressive design, loaded with features and priced attractively. We will continue to apply Japanese-style attention to quality and processes, both within the company and at our suppliers. Our service network, widely acknowledged for its reach and quality, will expand further and touch many more Indian customers as we move forward to fulfill a million promises.”



Our Management Team

59MANAGEMENT TEAM


Our Management Team


OVERVIEWThe Indian economy grew at an impressive 9 percent in GDP during 2007-08. Of late, inflation has hardened and oil and certain other commodity prices have shot up, resulting in higher interest rates and an uncertain outlook for the very near term. However, the country's economy is still expected to continue to grow robustly, if at a slightly slower pace.

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the sixth successive year of positive growth. But, industry performance during the year was

INDUSTRY OVERVIEW

inconsistent, with periods of high growth interspersed by months of low demand. Growth was model-specific, driven by select brands from different industry players as opposed to the general buoyancy witnessed during the previous year (2006-07).

The Company's domestic sale volume grew slightly more than the industry at 12 percent, and was the highest ever since inception. While continuing to lead in the A2 segment (compact cars), the Company also regained leadership of the A3 segment (sedans) after a gap of several years.

The domestic passenger car industry grew 11.8 percent in 2007-08, making this the

sixth successive year of positive growth. But, industry performance during the year

was inconsistent, with periods of high growth interspersed by months of low

demand. Growth was model-specific, driven by select brands from different

industry players.



57

Strong partnerships are the backbone of our promise.


Our Steer Leaders

Year 2007-08 was the first full year of the Company's new diesel programme, and its 1.3 litre DDis engine mounted on the Swift and also on the Swift DZire, has proved to be popular with Indian customers. The Company's new model in the premium sedan segment, SX4, also registered strong performance, allaying concerns that the Company's image as a compact car leader would hamper its performance in the premium segments.

While Alto continued to be India's largest selling car, the entry level segment comprising Maruti 800 and Alto remained flat after the surge witnessed in 2006-07.

Towards the end of the fiscal year, the Company launched Swift DZire, its third new model for the year and the seventh in three years. A sedan based on the Swift platform, the DZire demonstrates the Company's growing in-house capability in design and development. It is also an example of

common platforms, enabling the Company to offer more model choice and features to customers at an attractive price.

The Company's exports were also the highest ever since inception, and grew 35 percent owing to concerted efforts to develop new markets and increase presence in existing ones.

The export portfolio, so far dominated by Alto and Maruti 800, will be bolstered with the launch of A-Star during the latter part of 2008-09. The Company has entered into a partnership with Mundra Port for a dedicated car terminal, including a stockyard and parking area, in preparation for the sharp scale-up in exports in the next few years.

The uptrend in commodity prices, notably steel, continued during the year. The Company was able to use a mix of measures to reduce cost, improve localisation and enhance efficiency to mitigate the impact.

During the last quarter, the Company adopted a new and more conservative depreciation policy assuming a lower useful life of plant and machinery, dies and IT assets. The higher depreciation provision, is a move by the Company to proactively align its financial accounting with shorter product lifecycles anticipated in the future.

In its conduct with all key stakeholders, the Company's approach continued to be one based on mutual respect, partnership and long term sustainability. The road safety programme expanded as the number of Maruti Driving Schools doubled during the year. The Company also adopted four villages in the vicinity of its Manesar Plant, and worked in partnership to improve the quality of life of the community.

The Company's investment projects, including capacity expansion at the Manesar Plant and the new KB engine plant, were well within schedule and cost estimates.

CNBC TV-18 -Autocar Award Car Manufacturer

of the year

61MANAGEMENT DISCUSSION AND ANALYSIS

MACRO FACTORS

Although the year had started with some concerns on the macro economic front, the performance was satisfactory on most parameters. GDP grew 9%, with manufacturing clocking a growth of 8.8%.

Car loan is the critical growth driver of the industry. Moves by the Reserve Bank of India and the Government to contain inflation inevitably led to a rise in interest rates. By April 2007, the interest rates had moved up by 400 basis points in 18 months.

By itself, this may not have led to a significant increase in the monthly installment paid on a car loan. But taken together with other loan repayment obligations of a household, such as home loans, the higher interest rates did become a significant additional burden on middle class families and may have deterred purchase of a new car in some cases.

Anti-inflation measures also resulted in tighter liquidity. Banks and finance companies have had to rework their loan portfolios and priorities, and allocations to retail segments including car loans have come down in some cases.

LEADERSHIP

Mr. Jagdish Khattar retired as Managing Director on December 18, 2007. He had served in that position for eight years. The Board of Directors acknowledged Mr. Khattar's contribution in leading the Company through a period of major changes in

the industry, and safeguarding its leadership and market share in an intensely competitive market.

Mr. S. Nakanishi, who had been the Chairman (non-executive) of the Company since May 2002, was appointed as the Managing Director.



Mr R. C. Bhargava, a non executive Director, was appointed the Chairman of the Company.

The Company has since opted for a new management structure which clearly defines a second line of leadership, while also providing more opportunities for growth, for Indian managers.

Under the new structure, the Company has identified five critical verticals viz. Marketing & Sales,R & D, Manufacturing, Administration and Supply Chain. Each of these verticals is headed by a team of two persons, one of whom is also a Director on the Board.

This discussion and analysis is


structured in a way that while retaining focus on the overall business of the Company, it will separately outline key issues and the broad direction envisaged for each of these verticals.

NDTV Award Car Manufacturer

of the year

DOMESTIC MARKETThe Company launched three new models during the year, including premium sedan SX4, a luxury Sports Utility Vehicle Grand Vitara and an entry level sedan Swift DZire (in both petrol and diesel versions). With this, the Company has launched seven models in three years. During the year, the Company discontinued production of Esteem, its entry sedan launched in 1994, which enjoyed a huge customer following for its combination of unmatched performance and low cost of ownership.

Both the SX4 and Swift DZire have been received well from the start,

and have contributed to the Company regaining the leadership position in the A3 segment (sedans). In turn, this has catalysed efforts to expand the Company's image from being a leader in small cars to a manufacturer offering the full range of models to customers.

The Grand Vitara, imported in small numbers as a Completely Built Unit from Japan, further showcases the Company's ability to offer a complete portfolio of products.

The year witnessed two new model launches by competitors in the A2

BUSINESS PERFORMANCE

The Company held on to its share in the entire passenger vehicle market at 46%

and was able to increase it marginally from 51% to 51.4% in passenger cars. The

Company's share in the A2 segment (compact cars) remained above 58%. In the A3

segment, the Company's share increased to 21.9 percent, from 15.1 percent in the

previous year.




segment, which accounts for the bulk of the Company's business. There was a new competitor model in the A3 segment as well. Besides, there were several new variants by competitors. While the new offerings have taken some share away from the existing ones, they have helped expand the market overall.

The passenger vehicle industry hasthree categories

nPassenger Cars

nUtility Vehicles (UV)

nMulti Purpose Vehicles (MPV)

The share of each industry segment and share of the Company in each segment are shown in the chart above. The Company held on to its share in the entire passenger vehicle market at 46% and was able to increase it marginally from 51% to 51.4% in passenger cars. The Company's share in the A2 segment (compact cars) remained

above 58%. In the A3 segment, the Company's share increased to 21.9 percent, from 15.1 percent in the previous year.

The Company's success in the market can be attributed, broadly, to the new product design philosophy emerging from Suzuki Motor Corporation, a disciplined approach to cost that enables more features at less price, and market initiatives.

The new design philosophy at Suzuki Motor Corporation, witnessed first in the Swift, is bold, aggressive and distinctly European. This philosophy is reflected in the Group's other World Strategic Models, such as SX4, Grand Vitara, A-Star and Splash. The success of the Company's new models is an indication that this new design philosophy has been well accepted by Indian customers.

In addition, the Company's new models have consistently offered

more features than comparable competitor offerings, and are very competitively priced. This has been made possible by a disciplined target cost approach towards new models, followed within the Company and at our suppliers.

In recent years, the Company has also undertaken a series of market initiatives, notably the expansion of the sales network, offering the entire range of car-related services in a convenient and transparent manner and implementing standards to improve customer service.

The success of the Company's new models, such as Swift and SX4, has strengthened the profitability of dealerships. In addition, car-related products and services like insurance, finance, extended warranty, spares and accessories have further boosted the bottomline of the network. Further, with a car population of nearly 6.5 million Maruti Suzuki cars, service

Auto Monitor Awards Car Manufacturer of

the Year


MARUTI'S MARKET SHARE IN EACH SEGMENT

Multi Purpose Vehicle

Utility Vehicles

6%

16%

Passenger Cars 78%

Indu

stry

Seg

men

ts

Maruti S

uzuki's Market S

hare

46.00%100%

89.0%

1.6%

51.4%

maintenance and repairs make a healthy contribution to profitability of dealerships. These factors are encouraging channel partners to reinvest in sales outlets, workshops and increasing their sales force.

A major driver of sales performance is the pre-owned car business, or TrueValue, which facilitates new car sales through exchange and trade-ins and also contributes to dealer profitability. A total of 84,323 new cars were sold in exchange, accounting for 12 percent of total new car sales.

There is some data, collected by independent market research groups, to suggest that car ownership periods are declining in the Indian market. With customers inclined to replace cars faster, exchange will be a key tool in driving sale of new cars. This trend will also boost the pre-owned car market overall, as more and better cars become available.

The Company has in place robust systems to aid dealers in monitoring and improving performance. These include Balanced Score Card, Customer Satisfaction Surveys and Dealer Profitability models. With the roll-out of the Dealer Management System, an IT-based national network, dealer's management can access a wealth of data to enable them to monitor diverse facets of their operations including customer satisfaction indices.

The Company sold 53,024 units during 2007-08. This is the highest ever export volume in a year for the Company, and marked a growth of 35 percent over the previous year. The Company's contribution

EXPORTS

towards total exports by the industry increased to 25% from 20% last year. Cumulative exports made by the Company crossed the milestone of 500,000 vehicles.

Using A-Star, a Euro V compliant model in the “A” segment, the Company plans to re-launch itself in the European markets which it had left two years earlier for want of a suitable model. The Company is targeting a yearly volume of 100,000 in Europe and other parts of the world. This model is likely to be launched overseas in the last quarter of 2008-09.

The Company has decided that while focussing on volume growth, it will enhance efforts to improve profitability from export operations.

Exports will enable the Company to be at the frontier of technology, quality and manufacturing excellence.

The Company draws competitive advantage from the fact that its car

SPARE PARTS AND ACCESSORIES

parts are priced competitively and are affordable. In recent years, the focus has been to improve access and availability by setting up a national network of spare parts distributors.

In the Accessories business, enterprising dealers have used Maruti Genuine Accessories to create customised versions of the Company's existing models. In many cases, these special edition cars have enhanced sales, improved margins and enable the Company to address younger customer profiles. Although at a nascent stage, these dealer initiatives signify the potential offered by this business.

During the year, the Company achieved a new milestone: a gross turnover of Rs 10 billion in the spares and accessories business. This marked a growth of 19 percent over the previous year.

The business is supported by a robust back end operation, which employs technology and competence in logistics to deliver on time to customers across the country.



Chile

Algeria Egypt

Sri Lanka

Indonesia


TOP 5 & OTHER EXPORT MARKETS

In recent years, there are clear trends that customer

expectations from a car have evolved considerably. Car

customers now seek contemporary styling, international

quality and latest features that enhance their safety and

convenience, while expecting performance and fuel

efficiency, like their parents did before them.



Keeping our promises by getting closer to our customers.

69

SALES NETWORK

280

182

375

227

600

393

700

600

500

400

300

200

100

2003-04 2005-06 2007-08

Sales Outlets

Cities covered

SERVICE NETWORK

1,9202,500

3,000

2003-04 2005-06 2007-08

Service points

Cities covered

1,001

2,096

1,092

2,628

1,220

2,000

1,500

1,000

500

CUSTOMER DELIGHT

During the year, the Company took forward several initiatives to retain its top position in the area of customer satisfaction. These initiatives ranged from product design and quality to network expansion, and included new service programmes to meet latent needs of customers.

In recent years, there are clear trends that customer expectations from a car have evolved considerably. Car customers now seek contemporary styling, international quality and latest features that enhance their safety and convenience, while expecting

performance and fuel efficiency, like their parents did before them.

These changing preferences are reflected in the sales data for existing segments in the car market: models and variants that promise only economy and low acquisition cost are increasingly losing out to models and variants that are rich in features, style and safety. This trend holds true across segments, including among entry level cars.

The Company's product plan is designed for these changing customer expectations. World


ET Avaya GlobalConnect Awards

Most CustomerResponsive

Company



Strategic Models like Swift and SX4, which offer bold European design and high end features are targeted specifically at these customers.

In the field, the products were supported by rapidly expanding networks. The Company has diverse networks for new cars, spares, service, pre-owned cars and so on, and all of them were in expansion mode last year to enable the Company to get closer to the customer.

In particular, the Company encouraged dealers to recruit Resident Sales Executives, dynamic youngsters from rural areas who would network with local communities and operate from there, rather than report daily to a sales showroom in an urban location.

Going forward, the Company sees its network as a source of competitive advantage. Rising real estate prices and restrictions on land use in many cities are together hampering the setting up of new car showrooms and workshops, specially in prime locations.

The Company ranked first in thCustomer Satisfaction for the 8

successive year in the annual survey by J D Power Asia Pacific. It was the only player above industry average, despite the much higher number of customers it has to serve.

Certain unique initiatives by the Company, such as the facility at service workshops to pick up and drop cars of women customers, came in for appreciation. J D Power's Survey found that customers who received such service were notably more delighted.

The Company dealers and authorized service stations serviced more than 10 million cars in the year.

At the back end, the Company took measures to improve productivity of workshops so that customers can get their cars serviced faster. This also improves dealer profitability, generating more revenues from the same fixed assets. The Express Service started by some dealers offers to complete a standard service for a customer's car in two hours.

Another innovation was Maruti Mobile Support - a special version of Versa that has been suitably modified to function as a service station. It is able to cover areas where a service station is not viable or where customers want service at their doorstep. At present, 120 Maruti Mobile Service vans are plying in more than 80 cities.

The Company used technology to meet customer needs and even delight them. Following feedback that the Company's cars were more prone to theft owing to their resale value, the Company worked on an anti-theft immobiliser or i-CATS system for all its new cars.

The Company has also ensured that the entire fleet of trucks, carrying new cars from the factory to dealerships, is GPRS-enabled. This allows dealerships to give customers a more accurate picture of when their

car is likely to be delivered, and to some extent addresses a major source of dissatisfaction among customers.

The Company's efforts to satisfy all car-related needs -- from learning to drive a car at Maruti Driving Schools to car insurance, extended warranty and eventually exchanging the existing car for a new one --- under one roof at dealerships also enhance customer satisfaction.

The Company is taking its interpretation of connect with the customer into a new paradigm. After investing in manufacturing facilities, the Company is now ready to invest in marketing infrastructure. It has identified some mega projects to build the foundation of this new initiative:

Car display showrooms or brand centres in prominent urban locations, where customers can see the entire range of models, experience technology and so on.

Car stockyards is an effort to ensure that customers are able to get their choice of model, variant and colour, in time.

Spares stockyards in select centres across the country to meet customer requirements faster.

FUTURE PROMISE

n

n

n

JD Power Customer Satisfaction Index StudyRanked Highest in

Customer Satisfaction Index 8 times in a row

JD POWER CSI SURVEY

800

600

400

900

850

750700

650

550500

450

2001 2002 2003 2004 2005 2006 20072000

100

150


Maruti Score

Industry Average


Using technology to give our customersmore for less.

73


In recent years, the Company has accomplished

significant improvements on most operational

parameters, such as Hours per Vehicle and Direct

Pass Rate. The use of electronic tools such as

in the areas of jigs and die designs,

manufacturing feasibility simulations, automatic line

balancing, and validating factories and material flow in

virtual environment, have helped make operations cost

efficient.

Digital

Engineering Engineering

Digital

OPERATIONS

The Company produced 777,017 cars during the year, and achieved a production of 1 million in the 16 months ending March 2008. This translates into the Company rolling out a car every 22 seconds during the two-shift operation. The entire effort of Japanese best practices and Indian innovation is to ensure that manufacturing at this scale is achieved with high quality, productivity, safety and optimal cost.

In recent years, the Company has made significant improvements on most operation parameters, including Hours Per Vehicle (measure of productivity) and Direct Pass Rate

The Company is expanding into a new generation technology of light-weight, fuel-efficient and clean K-series gasoline engines.

(measure of quality). It continued to build on this and achieve incremental improvements during the year.

Innovative methods were used to secure widespread employee participation, especially in promoting all-round Safety.

A new software based system, Multi-Level Production System (MLPS), was introduced to build flexibility in operations. In-house automation continued to be a key driver of productivity. As the Company expanded manpower in line with new capacity, the technical training centre,




PROCUREMENT

FUTURE AGENDA

About three fourth of the car, by value, is outsourced. Any improvement in the car in terms of technology and design, quality or cost has to essentially include the Company's vendors and their support.

In the year 2007-08, the Company signed two joint venture agreements with global component manufacturers for cost reduction through localisation of components for Maruti Suzuki cars. The first was with Magneti Marelli, aimed at the production of electronic control units (ECU) for diesel engines and the second with Futaba Industrial Company, Japan for production of exhaust system parts.

The Company is setting up a Suppliers Park in Manesar, close to its car plant on an area of 100 acres for Just-In-Time supplies. Both the above joint ventures are located in this Suppliers Park.

An informal Suppliers' Club has been formed by the Company's vendors and it gives a good forum for building personal relationships, understanding key issues and exchanging best practices at the CEO level. The Company organised a visit of the members to Japan for some plant visits and the Tokyo Motor Show.

In the early eighties, the Company made significant efforts in trying to develop a component industry from ground zero. Over the next two decades, about 110 foreign technology collaborations were facilitated and Maruti Suzuki

started last year, helped technicians and new joinees shorten their learning curve.

The Company is expanding into a new generation technology of light-weight, fuel-efficient and clean K-series gasoline engines. The Company has put up a state-of-the-art engine plant employing highly automated, energy efficient & environment friendly equipment for low pressure and high pressure Aluminium die casting to produce parts of the new series engines.

At present, the plant rolls out World Strategic Models such as Swift (diesel & petrol), SX4 and DZire (diesel & petrol). These models have seen buoyant market demand.

In addition, the fifth World Strategic Model derived from Concept A-Star would also roll out from the Manesar facility later this year. The next fiscal year is also critical as the Company targets to export 200,000 units by 2010.

In view of these developments, the plant's capacity was enhanced from an initial 100,000 units per annum to 170,000 units per annum during the year 2007-08. The Company is committed to achieve a capacity of 300,000 units per annum by October this year.

This year, the Company actively deployed the latest tools like Digital Engineering in the areas of jigs and die design; manufacturing feasibility simulations, automatic line balancing and validating factories and material flow in a virtual environment.

EXPANSION INTO NEW TECHNOLOGIES AT GURGAON

EXPANSION OF CAPACITY AT MANESAR

CAPABILITY BUILDING

engineers worked closely with the vendors' engineers to enable to deliver cars which are both high quality and cost competitive. Now, the relationship has matured and most direct vendors or Tier 1 vendors are competent enough to work on their improvement, but there is major scope for modernization of some sections of Tier 2 vendors. The Company has identified this as an opportunity for further quality, upgradation and cost reduction.

The second focus area for component cost reduction is raw material yield improvement across all manufacturing processes, like sheet metal, castings, forgings and machining. Every component is studied in detail and innovative ideas are tried, to reduce the input material weight for the same component output. The total cost of raw material as a percentage of net sales ranges from 15% to 20%.

Nikkei Monozukuri Award

In recognition of craftsmanship- and technology-related excellence to Manesar Plant



Innovation is our impetus, world class cars our goal.

The new design philosophy at Maruti Suzuki, witnessed first in

the Swift, is bold, aggressive and distinctly European. This

philosophy is reflected in the Group's other World Strategic

Models, such as SX4, Grand Vitara, A-Star and Splash. The

success of the Company's new models is an indication that this

new design philosophy has been well accepted by Indian

customers.


77

During the year, the Company took decisive steps towards building design and development capability, in-house. The number of engineers in R & D went up from 258, at the start of the year, to 398 engineers by the end of the year.

The Company's R & D capability has evolved in recent years, as evident in the face-lifts given to existing models. The Company's engineers have also collaborated with Suzuki counterparts in the design of World Strategic Models, notably the Swift. Upgrading engine systems to meet stricter emission norms and

The medium term objective is to develop capability for full model change and

launch a model, over the next 3-5 years. In the meantime, growing in-house

capability is enabling the Company to launch face-lifts and special editions of

existing models at a much faster pace.

introducing alternate fuel options have also been handled independently by the Company.

Suzuki will continue to provide new models to the Company for launch in India. While developing a full range of products, Suzuki is in a unique position to offer a range of compact cars. This is likely to be a competitive advantage for the Company for many years, especially against new entrants in the compact car segment.

At the same time, the Company has taken a decision to develop its in-house capability with the support of

R&D


Number of Engineers in R&D

NUMBER OF ENGINEERS IN R&D

25

8

2006-07 2007-08 2010-11

39

8

100

0

1200

1000

800

600400

200

0e



that have an important role in achieving this goal, have also taken suitable measures to support this effort.

During the Auto Expo in New Delhi in January 2008, the Company showcased a Concept version of its forthcoming model, A-Star. Adding to the excitement was the fact that two young designers from the Company were part of the Suzuki-Maruti team that created the Concept A-Star, and they were duly feted and acknowledged by visitors.

For young aspirants in design and engineering colleges, the Concept A-Star was a window to the excitingR & D work happening at the Company. By choosing New Delhi for the global launch of Concept A-Star, Suzuki reinforced its commitment to India.

As the Company develops capability in-house, it also expects that suppliers in key areas will also scale up their R & D effort. In

Suzuki. In line with this, the number of engineers will be scaled up to 1000 by 2010. The Company will also set up an R & D centre and test track, at par with the facility at Suzuki, Japan.

The medium term objective is to develop capability for full model change and launch a model, over the next 3-5 years. In the meantime, growing in-house capability is enabling the Company to launch face-lifts and special editions of existing models at a much faster pace.

To develop capabilities, engineers are being provided exposure to live projects in Suzuki, Japan. Over 90 engineers have so far done long term training programs at Suzuki, for periods ranging between six months to two years. This process will be speeded up significantly to meet the goal of full model change capability.

Following clear direction and commitment from the management, functions such as Human Resources,

recent years, the Company has gained by involving suppliers early in the process of new product development.

This model of concurrent engineering has enabled the Company to launch World Strategic Models like Swift and SX4 in India at almost the same time as Europe and Japan. It has also helped meet stringent cost and localisation targets at launch, while enhancing capability and exposure among suppliers. An all-round scale up in design and development capability could yield more such benefits in the medium term.

The Company is extending its R&D capability development plan backwards to its Tier 1 vendors. It has established a Computer Aided Engineering platform shared among key vendors, the Company and Suzuki, Japan.

Auto Monitor Awards Young Achievers Award to

Rajesh Gogu & Saurabh Singh for designing Concept A-Star


Our people make the difference.



The Company was able to keep its retention levels well above

industry benchmarks. This was a result of several focused

efforts by the Company. Shop floor workers, normally confined

to technical training, were trained in behavioral attributes as

well. Sales managers were given exposure to manufacturing

tools like root cause analysis and problem solving.

The 360 Degree Feedback Program, which started with senior

management last year, covered more managers and executives

this year.

81

With the Company expanding its manufacturing capacity and market network, and scaling up R & D capability, there was focus on recruiting people across all levels and roles. The Company's image as a respected and caring corporation, offering challenging assignments and growth opportunities, helped attract talented youngsters.

The Company was able to keep its retention levels well above industry benchmarks. This was a result of several focused efforts by the Company.

While training targets in terms of man days were exceeded, what is more

important is that people- development initiatives in general were made more

effective and relevant. There were customised training programs in strategy and

leadership for general managers.

While training targets in terms of man days were exceeded, what is more important is that people- development initiatives in general were made more effective and relevant. There were customised training programs in strategy and leadership for general managers.

Shop floor workers, normally confined to technical training, were trained in behavioral attributes as well. Sales managers were given exposure to manufacturing tools like root cause analysis and problem solving. Employees in supervisory roles were encouraged to make performance

THE MARUTIAN




old as the Company, continued to make a significant contribution to business performance. Employees implemented a record 108,885 suggestions during 2007-08, as against 85,428 suggestions received previous year.

This has lead to net savings of worth Rs. 666 million in 2007-08 as against Rs. 509 million in 2006-07.

The number of employees increased from 5,521 employees (March 2007) to 7,090 (March 2008). Much of this growth was accounted for by shop floor workers in line with capacity expansion at the Manesar Plant.

Industrial Relations were cordial throughout the year and no man days were lost on account of strikes or disruptions.

appraisals and feedback more effective and transparent, and were trained suitably.

The 360 Degree Feedback Program, which started with senior management last year, covered more managers and executives this year.

The Company introduced a program enabling select employees to pursue higher education in management and technical fields. The policy of a fast track for a small number of employees, introduced last year, also helped retention.

Many of the above initiatives were based on feedback from employees, stated and unstated, obtained during frequent communication meetings and two-way interactions. The Company strengthened the concept of Stay Interviews (as opposed to exit interviews), to understand employee aspirations, delight factors and areas for improvement.The Suggestions Scheme, which is as

The INSSAN Awards Highest number of suggestions

per employee


278 321

509666

-10000

40000

90000

140000

190000

240000

2004-05 2005-06 2006-07 2007-080100200300400500600700800

No. of Suggestions Cost Saving (Rs Mn)

72

04

6

85

42

8

108

88

5

762

01

SUGGESTION & SAVINGS

All critical processes like product development,

manufacturing, upstream and downstream

supply chain in the organisation benefit from

the Company’s IT System to handle the

complexity of multiple models and variants,

maintain lean inventory levels and enhanced

process efficiency.



The IT factor.

85

In recent years, the Company has used IT to enhance interface with the customer. It has deployed a world class Dealer Management Solution across its vast network of dealers throughout the country. The solution has helped dealer managements to access a wide range of information about their operations, as also customer satisfaction and feedback.

Information security continues to be a focus area and comprehensive security policy and procedures are reviewed on regular basis. The Company got the ISO 27001 Certification renewed during the year.

The Company now has a world class data center. It incorporates best practices of

data centre infrastructure encompassing fire, flood & earthquake safety with

multiple level of access control to ensure high availability & information security to

the organisation.

The Company now has a world class data center. It incorporates best practices of data centre infrastructure encompassing fire, flood & earthquake safety with multiple level of access control to ensure high availability & information security to the organisation. A comprehensive set of operational policy & procedures are in place to monitor the data center.

INFORMATION TECHNOLOGY




One of Maruti's great strengths is

that we have internal resources to

finance both R&D expansion as well

as capital investments. The higher

interest rates, and the risk of making

large borrowings to finance capital

costs, will not affect us.



We're financially equipped to deliver on our promise.

89

REVISION OF USEFUL LIFE OFASSETS HIGHER DEPRECIATION

Based on technical evaluations and considering various market trends like shortening of product life cycles, the Company has, with effect from April 1, 2007, revised the estimated useful life of certain Plant and Machinery from between 9 - 13 years to between 8 -11 years, of dies and jigs from 5 years to 4 years and Electronic Data Processing Equipment from 6 years to 3 years. This change has resulted in additional depreciation of Rs. 2,122 million for the current year with a corresponding reduction in profit for the year and net fixed assets.

FINANCIAL PERFORMANCE

The guiding principle of the Company's treasury investments is safety and

prudence. In view of this, the Company invested its surplus funds in debt schemes

of mutual funds and short-term bank fixed deposits. This has enabled the Company

to earn reasonable and stable returns in a volatile interest rate scenario.

PROVISION FOR FOREIGN CURRENCY DERIVATIVE INSTRUMENTS

Pursuant to the announcement on "Accounting for Derivatives" issued by Institute of Chartered Accountants of India in March 2008, the Company has made a provision aggregating Rs. 505 million during the current year, computed on the 'Mark-to-Market' basis, on the derivative instruments outstanding as at March 31, 2008. Foreign currency covers are taken to reduce exposure to changes in exchange rates.




TABLE 1. MSIL's abridged profit and loss account for 2007-08 (Rs. million)

Parameters 2007-08 2006-07

1 Gross Sales 209,493 171,442

Vehicles 197,990 161,367

Spares, dies, moulds 11,503 10,075

2 Excise duty 30,890 25,520

3 Net sales (1-2) 178,603 145,922

4 Income from services 759 617

5 Total operating income 179,362 146,539

6 Other income 8,876 5,984

7 Total income 188,238 152,523

8 Consumption of raw materials &components, stores & traded goods 136,468 110,494

9 Employee costs 3,562 2,884

10 Manufacturing, administrative and other costs 11,298 8,258

11 Selling and distribution expenses 5,602 4,999

12 Financial expenses 596 376

13 Depreciation 5,682 2,714

14 Total expenditure 163,208 129,725

15 PBT (7-14) 25,030 22,798

16 Current tax 7,509 6,089

17 Deferred tax 26 897

18 Fringe benefit tax 98 67

19 Previous year tax 89 125

20 PAT (15-16-17-18-19) 17,308 15,620


Parameters 2007-08 2006-07 Change

Material cost 76.41% 75.72% -0.69%

Employee cost 1.99% 1.98% -0.01%

Manufacturing & admin expenses 6.33% 5.66% -0.67%

Selling and distribution expenses 3.14% 3.43% +0.29%

EBITDA 17.53% 17.74% -0.21%

Depreciation 3.18% 1.86% -1.32%

PBT 14.01% 15.62% -1.61%

TABLE 2. Financial Performance Ratios (As a Percentage of Net Sales)

TABLE 4. Income from investment of surplus fund (Rs. million)

Interest on fixed deposits 645 318

Dividend from debt mutual funds 1,637 1,467

Profit from sale of investments 898 389

Total 3,180 2,174

2007-08 2006-07

WORKING CAPITAL MANAGEMENT

TREASURY OPERATIONS

Around 75% of the Company's components by value are outsourced, and manufacturing is undertaken based on Just-In-Time (JIT) inventory principles. Working capital management, therefore, plays a key role in the Company's operations. The inventory turnover ratio of the Company has increased from 13.9 in 2006-07 to 15.7 in 2007-08. The average receivables holding period has decreased from 11.7 days in 2006-07 to 9.4 days in 2007-08.

The Company has efficiently managed its surplus funds through careful treasury operations. The guiding principle of the Company's treasury investments is safety and prudence. In view of this, the Company invested its surplus funds in debt schemes of mutual funds and short-term bank fixed deposits. This has enabled the Company to earn reasonable and stable returns in a volatile interest rate scenario. Table 3 lists the different portfolios, while Table 4 lists the returns on these investments of surplus funds.

INTERNAL CONTROLS AND ADEQUACY

The Company has a proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, and that all transactions are authorised, recorded and reported correctly. The internal control system is designed to ensure that financial and other records are reliable for preparing financial information and other data, and for

92

maintaining accountability of assets. The internal control system is supplemented by an extensive program of internal audits, reviews by management, and documented policies, guidelines and procedures.

TABLE 3. Investment of surplus funds (Rs. million)

Bank fixed deposits 0 0% 13,080 28.6%

Debt mutual fund units 48,656 100% 32,657 71.4%

Total 48,656 100% 32,753 100.0%

31-Mar-08 % of total 31-Mar-07 % of total



The Company operates in an environment which is affected by various factors some of which are controllable while some are outside the control of the Company. The activity of risk management in the Company is reviewed by the audit committee through a sub committee, Executive Risk Management Committee (ERMC). The ERMC includes Managing Director & CEO and all Managing Executive Officers of the Company. It reviews the risk management activities of the Company on a regular basis in addition to scanning for any new risks that may arise due to changes in the business environment. While the

possibility of a negative impact from one or more risks can not be totally precluded the Company proactively takes reasonable steps and makes efforts to mitigate significant risks that may affect it.

The demand for the Company's products is affected by changes in the macro economic conditions like interest rates, excise duty rates, inflation, oil prices, etc. Over the last few months, there have been significant changes in the economic environment. There have been positives like excise duty reduction on

MACRO ECONOMIC FACTORS

RISK FACTORS

The Company has established an appropriate risk management framework. All such

risks have been identified and categorised based on their nature and significance.

The detailed mitigation plans for each such risk have been formulated, effected and

reviewed periodically.




compact cars, personal income tax reduction and some negatives like hardening of interest rates and oil price escalation. Though the Company is exposed to all these factors, the Company's presence in diverse product segments, in diverse geographies and in diverse fuel segments helps to spread the risk.

A number of global and homegrown vehicle manufacturers are working on and launching new products, using various technologies. The consumer will have more products to choose from and as a result there is a risk of low acceptance of the Company's products. The Company is conscious of this fact. Till now, it has been able to satisfy Indian customers and guard its market share despite intensifying competition. It has a package of products, network presence and downstream services which helps to make its offering attractive to the customer. It has also identified R&D and customer connect initiatives to build its competitive advantage further.

The Company is making heavy investment in the areas of capacity expansion, R&D and marketing infrastructure. Sustained demand of products is critical to generate returns on such investments. Capacity utilisation shall be a key parameter to ensure business viability both for the Company and its channel partners. The Company has been quite calibrated in putting up investments in the past. It also does a careful cost benefit analysis to ensure, the investment generates a competitive advantage to help secure volumes.

As domestic competition intensifies, skilled manpower becomes critical. Acquisition and retention of key

COMPETITION PRODUCT LAUNCHES

INVESTMENTS AND UTILISATION

TALENT ACQUISITION AND RETENTION

managerial and technical talent has become a challenge for the industry and the corporate sector. The Company is focusing in a major way on its people environment and people connect, and implementing a wide range of training and development programs to enable younger managers to deliver more value.

The Company's manufacturing facilities, its critical information systems and supplier units are geographically centralised in the State of Haryana. Any natural calamity such as earthquake, or man made factors like industrial relations problems and political uncertainty may significantly impair the business operations of the Company. The Company has taken specific steps for information systems continuity as stated in the IT section. The Company follows a sourcing policy which amongst other factors, balances the twin objectives of economies of scale and de-risking of component supplies. The Company enjoys excellent industrial relations with its employees owing to people connect initiatives. At the same time, it remains vigilant.

Raw Material and Components comprise almost three fourth of the total sales price of a car.

In addition to procuring steel and aluminium directly for the Company's in-house operations, some commodity procurement is also done by its suppliers as inputs to the components and assemblies supplied to the Company. The main

GEOGRAPHIC CONCENTRATION

COMMODITY PRICE RISK

risk to the Company is from price movements in steel and ferrous materials, aluminum, plastics, rubber and precious metals like platinum, palladium and rhodium.

The total commodity content in the car as a percentage of net sales varies between 15 percent to20 percent by cost. While the Company does not have much room in price negotiation on commodities, in the past five years it has been able to employ some initiatives to control and reduce its material cost to net sales ratio from 82.3 percent to 76.4 percent despite heavy commodity price increases. These initiatives include a program on raw material yield improvement and consolidation of raw material purchase along with its suppliers. In addition, the Company has an elaborate and structured program of cost reduction across the entire supply chain.

To deal with such risks and more, the Company has established an appropriate risk management framework. All such risks have been identified and categorised based on their nature and significance. The detailed mitigation plans for each such risk have been formulated, effected and reviewed periodically.


The Company attained its highest ever domestic sales and exports during the year. There were many positive developments during the year that augur well for the future: the success of new models including two in the sedan segment, customer appreciation for the new Suzuki design philosophy of bold and aggressive cars, success of the Company's new diesel program, a sales and workshop network that is profitable and growing, scale-up in R & D strength and of course, top ratings in customer satisfaction for eight years in a row.

By all accounts, competition will intensify in the future as more players enter, new models are launched and new market segments are created. In particular, with several markets internationally

remaining flat or showing slow growth, global manufacturers are directing investments and focus towards the Indian market.

Besides, the government has systematically created a conducive environment for the passenger car industry, particularly compact cars, further encouraging investments from global players.

While the Company enjoys a strong customer connect and has an excellent track record, it is approaching the future afresh and taking nothing for granted.

The Company has laid down a clear roadmap for the next three years, and is working towards a target of domestic sale of 1 million units and exports of 200,000 units by2010-11.

OUTLOOK




By all accounts, competition will intensify in the future. While the Company enjoys a strong customer connect and has an excellent track record, it is approaching the future afresh and taking nothing for granted.

past few years. While there is some reversal in the macro environment, it remains to be seen whether this is a short term phenomenon or a more sustained shift in the trend. The Company has decided on certain critical initiatives to retain leadership in the long term. These include investments in marketing infrastructure such as brand centres and regional stockyards for cars and parts, all of which will enhance customer satisfaction. The development of in-house R & D capability, combined with strong support from Suzuki in terms of models, technology and best practices, will also help the Company strengthen leadership in the future.

It is expanding capacity, strengthening the network, recruiting talent, working on next generation engines and enhancing its cost and productivity initiatives to attain these targets. The new model launch plan remains aggressive: the Company is committed to launch two World Strategic Models, A-Star and Splash, in India over the next 12-15 months.

Macro economic factors like GDP growth, inflation, interest rates, currency changes, fiscal policies and commodity prices have a strong bearing on the Company's business. Barring commodity prices, the other factors have been, by and large, positive for the passenger car industry over the


DISCLAIMERStatements in this management discussion and analysis describing the Company's objectives, projections, estimates and expectations are categorised as 'forward looking statements' within the meaning of applicable laws and regulations.

Actual results may differ substantially or materially from those expressed or implied.

Important developments that could affect the Company's operations include a downward trend in the domestic auto - industry, rise in input costs, exchange rate fluctuations, and significant changes in the political and economic environment in India, environmental standards, tax laws, litigation and labour relations.

Since inception, the Company has proactively taken

care of the needs and sustainable growth of its

stakeholders and they in turn, have supported the

Company in achieving its vision and business results

year after year. As a result, sustainability has become

an integral part of the Company's approach to

business and decision making.



4060

80 100 120140

160

180

OFF

Sensitivity towards all stakeholders.

99

Sustainability

The Company is currently evolving a comprehensive Sustainability Policy and Guidelines to ensure that while working to enhance shareholder wealth, interest of stakeholders continues to act as a guide for actions and decisions in the future as well.

Sustainability at Maruti Suzuki refers to sum total of all the actions and initiatives

undertaken by the Company for its long-term survival and growth.

To achieve longterm sustainability and prosperity the Company has nurtured a

socially responsible behaviour towards its various stakeholders.

OUR STAKEHOLDERS

OUR CUSTOMERS

Sustainability begins with customers. The Company has a robust customer feedback system through which it

100

Business Partners

ShareholdersInvestors

Environment

Employees

Customers

LocalCommunity



assesses the changing aspirations and requirements of customers. Over the past two decades, the Company has been successful in bringing out products that not just meet but exceed customer's expectations.

The aspiration to give more for less to the customers has given the Company a competitive edge in competitive times. The VA-VE initiatives (Value Analysis & Value Engineering) pursued aggressively by the Company in partnership with suppliers have helped the Company reduce cost of making a car without compromising on quality. Every year the Company celebrates company wide Quality Month awareness programmes in association with its suppliers. While VA-VE efforts continue all through out the year, the Company also observes a VA-VE month every year, during which it is able to create more awareness and consciousness towards the cause.

A wide and deep service network spread across the country has helped

the Company reach customers not only in metro cities but also in semi-urban, Tier-2 and Tier-3 cities.

In addition, the Company introduced many new initiatives such as car pick & drop facility by service workshops for women car owners, Maruti Mobile Support to offer door step car servicing, Express Service bays, special bays that can offer maintenance service in less than 2 hours, and so on.

The Company has a stringent customer complaint monitoring system. Besides period syndicated surveys, the Company systematically compiles customer feedback and ratings on a daily basis. The findings are reported in the weekly Management Committee Meeting.

This has regularly led to improvements in product quality, features, processes and customer interface. For example, feedback that Maruti Suzuki cars were more prone to theft owing to high resale value led

101SUSTAINABILITY

the Company to develop and install an anti-theft device- the immobiliser system called i-CATS in all its new cars, much before regulatory requirement. The Company was first among all car manufacturers in the country to offer this safety device in compact cars.

In manufacturing where a sizeable percentage of inputs are bought from vendors and suppliers, the ability to continuously improve quality and reduce costs is directly dependent on vendors doing the same.

In light of this statement, the Company guides suppliers in adopting latest technologies, and transfers its best practices in the areas of productivity improvement, quality enhancement and cost reduction.

The Company has set up Maruti Centre for Excellence (MACE) in collaboration with some of its suppliers to achieve these objectives.

OUR PARTNERS - SUPPLIERS

Golden Peacock Award For excellence in the field of

Environment Management

Sustainability Contd.

With the help of MACE, now the Company is assisting its direct suppliers in upgrading their sub-suppliers or (Tier-2 suppliers).

Most of the suppliers and joint venture companies are located near Company's manufacturing facilities in Gurgaon and Manesar, which are sensitive areas from Industrial Relations perspective.

Therefore, the Company has identified Industrial Relations and Human Resource as two important areas of interventions with suppliers. The HR team of MSIL maintains very close interaction with them on almost regular basis.

The Company has been passionately building its sales and service network since its inception.

The Company has set up 16 Regional Training Centres across the country to continuously upgrade skills of dealer employees as per new technologies and customers' requirements.

In recent years, the Company has conducted a comprehensive national survey of its dealer employees to gauge their level of satisfaction. By many accounts, this is a rare initiative by any principal company. Based on the results of the survey, the Company formed a cross functional team of senior management from sales, network development and HR to identify an action plan to improve satisfaction levels of dealer employees. One of the initiatives, for instance, was providing car loans at low rates of interest for good performers with repayment guarantee provided by the dealer.

The Company has put in place a strong mechanism for Corporate Governance to enhance confidence of its large number

OUR PARTNERS - DEALERS

SHAREHOLDERS AND INVESTORS

of shareholders and investors in the Company. The Company complies with all guidelines of SEBI, Stock exchange, etc.

The Company has enforced highly conducive working environment for its employees. MSIL does not support favouritism in recruitment, promotion, providing compensation, or termination based on caste, religion, gender or age. The Company offers equal opportunity for growth to all employees.

During the year, the Company finalised its policy on affirmative action as per the guidelines laid down by Confederation of Indian Industries.

In March, the Company celebrated a month long Safety Awareness Drive.

The drive aimed to sensitise employees and their families towards

EMPLOYEES

SAFETY POLICY

importance of safe working place,

safer homes and need for safer traveling. The drive coincided with the National Safety Month, and was led by members of the top management.

The theme of this year's Safety Drive was Hum sab ka ek hi sankalp, suraksha pratham suraksha pratham. (Together let us pledge Safety First, Safety First).

Giving high priority to work place safety, Maruti Suzuki firmly believes that a plant designed to be safe is far more productive than otherwise. In light of this fact, the Company has undertaken concerted initiatives to eliminate work place mishaps, over the last 25 years.

One of the most exciting exercise of this annual drive is that the employees themselves identify areas, activities and operations that could be unsafe or hazardous. Named as Kekken Yuichi Training, the end result of the exercise is that the employee suggests



measures that are appropriate to make the work place hazard free. The Company has a vigilant policy in place that monitors issues of work place safety on a weekly basis.

The Company has remained ahead of regulatory requirements in pursuit of environment protection and energy conservation at its manufacturing facilities, and in development of products that use fewer natural resources and are environment friendly.

Total energy consumption at the facilities has come down by 26 percent compared to the beginning of the decade.

The Company credited the Just-in-Time philosophy adopted and internalised by the employees as the prime reason that helped to excel in this direction.

ENVIRONMENT

From the perspective of capacity expansion, 2007-08 was one of the busiest years for the Company.

The Company commissioned a new plant for KB series engines at Gurgaon facility and the annual capacity of the Manesar plant was enhanced from 100,000 units to 170,000 units during 2007-08.

Despite capacity enhancements the Company closely monitored its power and water consumption.

While power consumption was lower by 30 percent and the Water consumption stood 61 percent lower that the levels of 2000-01.

The CO (Carbon Dioxide) emissions 2

per vehicle (produced during manufacturing) are lower by 38 percent compared to 2000-01 levels.

103SUSTAINABILITY

ADOPTING ENERGY SAVING TECHNOLOGIES

While the Company continues to improve energy saving initiatives through numerous Kaizens (continuous improvements) on the shop floor, the thrust on adopting energy saving technologies has increased phenomenally.

Three-coat-one-bake painting system: The Company introduced the three-coat-one-bake system at its Manesar facilities.

In this state-of-the-art painting system, three wet-on-wet coats are applied and baked together. Conventional painting systems use two baking steps before the final finish. This facilitates lower energy consumption and yet improves the productivity levels.

The green co-efficient of this system is much better than that of the conventional system.

PRACTICING 3R (REDUCE, REUSE AND RECYCLE)

GREENING OF SUPPLY CHAIN

COMMUNITY INITIATIVES

ROAD SAFETY

The Company has been promoting 3R since its inception. As a result the Company has not only been able to recycle 100% of treated waste water but also reduced fresh water consumption by 28%. The Company has implemented rain water harvesting to recharge the aquifers. Also, recyclable packing for bought out components is being actively promoted.

The Company has been facilitating implementation of Environment Management System (EMS) at its suppliers' end. Regular training programmes are conducted for all the suppliers on EMS. Surveys are conducted to assess the vendors who need more guidance. The systems and the environmental performance of suppliers are audited.

The Company works closely with local communities around its manufacturing facilities to improve their quality of life. The Company has adopted four villages surrounding its Manesar plant - Kasan, Dhana, Alihar and Baas Kusla and launched sustainable livelihood programmes for under privileged communities. The initiatives are focused on four key areas: Health, Education, Employment Generation through Vocational Trainings & Basic Infrastructure Development.

The Company has been playing a leading role for many years now in promoting road safety and safe driving in the Country. The Company believes that in addition to monetary support, one of the best ways for corporates to fulfill their social responsibility is by offering their managerial skills to society.

In line with this, the Company manages two Institutes of Driving Training & Research (IDTR) in Delhi and Maruti Driving Schools across the country. Through these facilities, the Company has brought international standards in driving training and state-of-the-art training infrastructure in the country.

The first major step towards promoting road safety was in the year 2000 when Delhi Government invited the Company to manage the Institute of Driving Training and Research (IDTR) and start driving training courses. The Company introduced training facilities and infrastructure including world-class driving test tracks, advanced computer simulators and training modules as per international standards at the institute, which is spread over an area of 14.5 acres. Regular research in road safety and safe driving was also started at the Institute. In 2006, the second IDTR was set up to promote road safety by primarily targeting non-commercial drivers and impart driving training to them. This Institute is also equipped with the same facilities and infrastructure as made available in the first IDTR.

In a landmark move, the Company signed an MoU with the Government of Gujarat, to set up, manage and run The Gujarat Regional Automobile Training Institute ( to be referred as GUJARATI) at Gajadara village of Waghodia taluka in Vadodara district.

It is the first of its kind initiative in the country. The Institute will not only provide driving training to tribal youth, it will also offer automobile technical training to them and help their employability.

SETTING UP GUJARATI

Several other state governments, such as Haryana, Bihar, Uttarakhand, Chattisgarh and West Bengal have also approached the Company to set up driving training institutes in their states. The Company has already signed an MoU with the Government of Haryana for setting up two driving training institutes at Rohtak and Bahadurgarh.

The Company has also involved its dealers across the Country in promoting road safety and safe driving. In collaboration with them, the Company has set up 34 Maruti Driving Schools in 32 different locations across the Country. These schools are equipped with world class, state-of-the-art driving simulators and offer beginners as well as refresher training programmes. Over 35,000 people have been trained so far.

MARUTI DRIVING SCHOOLS


105AUDITORS' REPORT

TO THE MEMBERS OF MARUTI SUZUKI INDIA LIMITED

(Formerly Maruti Udyog Limited)

1. We have audited the attached Balance Sheet of Maruti Suzuki India Limited (Formerly Maruti Udyog Limited), as at 31st March, 2008, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the 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 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. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we further report that:

i) (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items, except furniture and fixtures, office appliances and certain other assets aggregating to Rupees 398 million, over a period of three years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, the fixed assets have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

ii) (a) The inventory (excluding materials lying with vendors)has been physically verified by the management during the year. In respect of inventory lying with the vendors, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii) The company has not taken or granted any loans, secured or unsecured, from / to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered into the register maintained under Section 301 of the Act.

Auditors' Report

MARUTI SUZUKI INDIA LTD.


(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time. In respect of purchase of goods and materials including components from the holding company, the prices paid for these items are not comparable as these are of special nature.

vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under.

vii) In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, employees' state insurance, income tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess as at March 31, 2008 which have not been deposited on account of a dispute have been stated in Note 33 on schedule 23.

x) The company has no accumulated losses as at March 31, 2008 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any bank or debenture holders as at the balance sheet date.

xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the company.

xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the company.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii) On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

xix) The company has no outstanding debentures as at the year end.

xx) The company has not raised any money by public issue during the year.


107AUDITORS' REPORT

xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

4. Further to our comments in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub-section(3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors as on March 31st 2008 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2008;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Anupam DhawanMembership Number-F084451PartnerFor and on behalf of

Place:New Delhi Price WaterhouseDate: April 24, 2008 Chartered Accountants




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

ANUPAM DHAWAN SHINZO NAKANISHI HIROFUMI NAGAO ANIL RUSTGIMembership Number - F 084451 Managing Director & CEO Director & Managing Company Secretary Partner Executive officer - Admin & Chief Legal Officer For and on behalf ofPRICE WATERHOUSEChartered AccountantsNew DelhiApril 24, 2008

Balance Sheet As at 31st March, 2008

(Rs in Million)

AS AT31.03.07

SCHEDULE AS AT 31.03.08

SOURCES OF FUNDS

SHAREHOLDERS' FUNDS

LOAN FUNDS

DEFERRED TAX (Note 19 on Schedule 23)

Total

APPLICATION OF FUNDS

FIXED ASSETS

INVESTMENTS

CURRENT ASSETS, LOANS AND ADVANCES

LESS: CURRENT LIABILITIES AND PROVISIONS

Total

SIGNIFICANT ACCOUNTING POLICIES

NOTES TO ACCOUNTS

Capital 1 1,445 1,445

Reserves and Surplus 2 82,709 84,154 67,094 68,539

Secured Loans 3 1 635

Unsecured Loans 4 9,001 9,002 5,673 6,308

Deferred Tax Liabilities 2,697 2,776

Deferred Tax Assets (996) 1,701 (1,101) 1,675

94,857 76,522

5

Gross Block 72,853 61,468

Less: Depreciation (39,888) (34,871)

32,965 26,597

Capital Work-In-Progress 6 7,363 40,328 2,507 29,104

7 51,807 34,092

Inventories 8 10,380 7,014

Sundry Debtors 9 6,555 7,474

Cash and Bank Balances 10 3,240 14,228

Other Current Assets 11 331 384

Loans and Advances 12 10,403 9,241

30,909 38,341

Current Liabilities 13 24,492 20,110

Provisions 14 3,695 4,905

28,187 25,015

Net Current Assets 2,722 13,326

94,857 76,522

22

23

109PROFIT AND LOSS ACCOUNT


Profit and Loss Account For the year ended 31st March, 2008

This is the Profit & Loss Account referred to The Schedules referred to above form anin our report of even date. integral part of the Profit & Loss Account.


INCOME

TotalEXPENDITURE

Total

TotalEarnings before interest, depreciation, tax and amortizations (EBIDTA)

Profit before Tax

Profit after Tax

SIGNIFICANT ACCOUNTING POLICIESNOTES TO ACCOUNTS

Gross Sales 15 209,493 171,442less: Excise Duty 30,890 25,520Net Sales 178,603 145,922Income from Services [Net of expenses Rs 208 million 759 617(previous year Rs 705 million)]Other Income 16 8,876 5,984

188,238 152,523

Consumption of Raw Materials and Components 130,342 101,374(Note 4 on Schedule 23)Purchase of Traded Goods 7,771 6,159Consumption of Stores 1,470 1,097Employees Remuneration and Benefits 17 3,562 2,884Manufacturing, Administrative and Other Expenses 18 11,298 8,258Selling and Distribution Expenses 19 5,602 4,999

160,045 124,771Less: Vehicles/ Dies for Own Use 198 143Add : (Increase) /Decrease to Work-in-progress and Finished Goods and Spare Parts 21 (2,917) 2,007

156,930 126,63531,308 25,888

Interest 20 596 376Depreciation (Note 24 on Schedule 23) 5 5,682 2,714

6,278 3,09025,030 22,798

Less : Tax Expense - Current Tax 7,509 6,089- Deferred Tax (Note 19 on Schedule 23 ) 26 897- Fringe Benefit Tax 98 67- Previous Years 89 125

17,308 15,620Add: Brought forward from previous year's accounts 56,373 43,939Less: Loss of Maruti Suzuki Automobile India Limited adjusted on - 84amalgamationLess: Impact of transition adjustment for 'Employee Benefit' - 4Profit available for appropriation 73,681 59,471Less: Appropriation :

Debenture Redemption Reserve - 17General Reserve 1,731 1,562Proposed Dividend 1,445 1,300Corporate Dividend Tax 248 219

Balance carried forward to Balance Sheet 70,257 56,373Basic/Diluted Earnings Per Share (in Rupees) (Note 18 on Schedule 23) 59.91 54.06

2223

SCHEDULE

(Rs in Million)

For the year ended

31.03.07

For the year ended

31.03.08


A. Cash flow from Operating Activities:

Adjustments for:

Operating Profit before Working Capital changes

Adjustments for changes in Working Capital :

Cash generated from Operating Activities

Net Cash from Operating Activities

B. Cash flow from Investing Activities:

Net Cash from Investing Activities

Net Profit before Tax 25,030 22,798

Depreciation 5,682 2,714

Interest Expense 596 376

Interest Income (1,408) (1,109)

Dividend Income (1,668) (1,528)

Net Loss on Sale / discarding of Fixed Assets 24 4

Profit on sale of Investments (898) (389)

Debts / Advances Written off - 22

Provision for diminution in value of investment 26

Provisions no longer required written back (855) (459)

Opening Loss of MSAIL adjusted from opening surplus on amalgamation - (84)

Impact of transition provision of Accounting Standard 15 - (5)

Employee Benefit

Mark to Market loss on Derivatives 505 -

27,034 22,340

- (Increase)/Decrease in Sundry Debtors 919 (1,035)

- (Increase)/Decrease in Other Current Assets, Loans & Advances (1,191) (1,523)

- (Increase)/Decrease in Inventories (3,366) 1,798

- Increase/(Decrease) in Current Liabilities and Provisions 3,555 5,170

26,951 26,750

- Taxes (Paid) (Net of TDS) (8,647) (6,352)

18,304 20,398

Purchase of Fixed Assets (16,999) (14,073)

Sale of Fixed Assets 69 123

Sale of investments 170,123 109,253

Purchase of investments (186,966) (122,444)

Interest received 1,490 1,127

Dividend received 1,668 1,528

(30,615) (24,486)

Cash Flow Statement For the year Ended 31st March, 2008

(Rs in Million)

For the year ended

31.03.08

For the year ended

31.03.07


111CASH FLOW STATEMENT

(Rs in Million)

For the year ended

31.03.07

This is the Cash Flow Statement referred toin our report of even date.


C. Cash flow from Financing Activities:

Net Cash from Financing Activities

Net Increase/(Decrease) in Cash & Cash Equivalents

Cash and Cash Equivalents as at 1st April (Opening Balance)

Cash and Cash Equivalents as at 31st March (Closing Balance)

Cash and Cash Equivalents comprise

Proceeds from Short term borrowings 3,999 233

Proceeds from Long term borrowings - 5,675

Repayment of Short term borrowings (634) (317)

Interest paid (743) (280)

Dividend paid (1,299) (1,011)

1,323 4,300

(10,988) 212

14,228 14,016

3,240 14,228

3,240 14,228

Cash, Cheques in hand 1,339 946

Balance with Scheduled Banks in Current Accounts 1,633 202

Balance with Scheduled Banks in Deposit Accounts - 13,080

Balance with Other Banks in Current Accounts 268 -

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 3 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.

For the year ended

31.03.08



SCHEDULE 1 - SHARE CAPITAL

Authorised Capital

SCHEDULE 3 - SECURED LOANS

LONG TERM LOANS

FROM OTHERS

SHORT TERM LOANS

- FROM BANKS

- FROM OTHERS

744,000,000 Equity Shares of Rs. 5 each (Previous year 3,720 3,720

744,000,000 equity shares of Rs. 5 each)

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.

-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

Balance as at 1st Additions Transfer toApril, 2007 during the General

Year Reserve

SCHEDULE 2 - RESERVES AND SURPLUS

Share Premium Account 4,241 - - 4,241

Debenture Redemption Reserve 100 - 100 -

General Reserve 6,380 1,831 - 8,211

Balance as per Profit and Loss Account 56,373 13,884 - 70,257

67,094 15,715 100 82,709

Loan from Sundaram Finance Limited 1 2

(Secured against vehicles taken on finance lease)

(Payable within 1 Year Rs 0 Million - Previous Year Rs 1 Million)

Cash Credit/Working Capital Demand Loans/Rupee Loans - 233

secured by pari passu first charge on the stock, book debts and

other current assets.

9% Non-Convertible Debentures- Series II secured by mortgage - 400

on specific Buildings and Plant and Machinery

(Redeemed at par on 4th December 2007)

1 635

Balance as at31st March

2008

(Rs in Million)

AS AT31.03.07

Schedules

(Rs in Million)

AS AT31.03.07

AS AT 31.03.08


AS AT 31.03.08

113SCHEDULES

(Rs in Million)

AS AT31.03.07

AS AT 31.03.08

SCHEDULE 4 - UNSECURED LOANS

SHORT TERM LOANS - FROM BANKS

LONG TERM LOANS - FROM BANKS

SCHEDULE 6 - CAPITAL WORK-IN-PROGRESS

Export Credit 3,999 -

Foreign Currency Loans * 5,002 5,673

(Loan from Japan Bank of International Corporation and

Bank of Tokyo Mitsubishi) *(Guaranteed by Suzuki Motor Corporation ,

Japan, the Holding Company)

9,001 5,673

Plant and Machinery 3,653 1,048

Civil Work-in-Progress 576 447

Capital Advances 3,134 1,012

7,363 2,507

(Rs in Million)

AS AT 31.03.08

AS AT31.03.07


SCHEDULE 5 - FIXED ASSETS (Note 23, 24 and 29 on Schedule 23)

Particulars Gross Block at Cost Depreciation Net Block

AS AT Additions Deductions/ UP TO For the Deductions/ AS AT01.04.07 Adjustments 01.04.07 year Adjustments 01.04.07

Freehold land (Note 1 & 4) 1,274 - - 1,274 - - - - 1,274 1,274

Leasehold land 570 - - 570 4 - - 4 566 566

Building (Note 2) 4,243 1,210 (1) 5,452 836 137 (1) 972 4,480 3,407

Plant and Machinery (Note 3) 53,727 10,330 (648) 63,409 33,269 5,106 (635) 37,740 25,669 20,458

Electronic Data ProcessingEquipment 949 277 (4) 1,222 529 337 (4) 862 360 420

Furniture , Fixtures and Office Appliances 332 81 (1) 412 150 23 - 173 239 182

Vehicles:

- Owned 370 245 (104) 511 82 78 (25) 135 376 288

- Leased 3 - - 3 1 1 - 2 1 2

Total 61,468 12,143 (758) 72,853 34,871 5,682 (665) 39,888 32,965 26,597

Previous Year Figures 49,546 12,486 (564) 61,468 32,594 2,714 (437) 34,871 26,597

(1) Cost of land amounting to Rs. 4 million (Previous year Rs. 4 million) is not yet registered in the name of the Company. 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 Company.

(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 Company with its group companies and other companies.

(4) Freehold Land includes 600 acres of land allotted to the Company by Haryana State Industrial Development Corporation , a part of which has been made available to group companies.

(5) Additions include Rs. Nil interest capitalised on foreign currency loan (Previous year Rs 101 million)

AS AT UP TO AS AT31.03.08 31.03.08 31.03.08



Schedules Contd.

(Rs in Million)

AS AT31.03.07

SCHEDULE 7 - INVESTMENTS

SCHEDULE 8 - INVENTORIES

SCHEDULE 9 - SUNDRY DEBTORS

(Note 30 on Schedule 23)

Trade Investments :

Long Term:

Quoted Equity Shares (Fully Paid) 111 111

Unquoted Equity Shares (Fully Paid) 3,037 1,321

Investment in Subsidiary Companies

Unquoted Equity Shares (Fully Paid) 3 3

Other Investments:

Long Term (Unquoted) :

Mutual Funds 37,710 24,052

Current (Unquoted) :

Mutual Funds 10,946 8,605

51,807 34,092

Aggregate Value of Unquoted Investments 51,696 33,981

Aggregate Value of Quoted Investments 111 111

Market Value of Quoted Investments 2,195 2,704

Components and Raw Materials

In transit/under inspection 1,053 1,498

With vendors 120 117

At factory 2,204 3,377 1,747 3,362

Stores and Spares

Vehicles 877 818

Machinery 20 23

Consumables 67 58

In transit/under inspection 25 989 18 917

Tools at factory 147 138

Dies and Moulds 0 41

Work-in-Progress 459 309

Finished Goods 5,408 2,247

10,380 7,014


Debts outstanding for more than six months

Unsecured - Considered Good 1,128 1,017

- Considered Doubtful 266 273

1,394 1,290

Less: Provision for Doubtful Debts 266 1,128 273 1,017

Other Debts :

Secured 318 378


6,555 7,474

AS AT 31.03.08

115SCHEDULES

(Rs in Million)

AS AT31.03.07

AS AT 31.03.08

SCHEDULE 10 - CASH AND BANK BALANCES

SCHEDULE 11 - OTHER CURRENT ASSETS

SCHEDULE 12 - LOANS AND ADVANCES

Cash in hand 4 5

Cheques in hand 1,335 941

Bank balances with Scheduled Banks in :

Current Accounts:* 1,633 202

Deposit Accounts: - 13,080

Bank balances with Other Banks 268 -

3,240 14,228

*Includes unclaimed dividend amounting to Rs. 3 Million(Previous Year Rs. 2 Million)

Bank balances with Other Banks

Bank - ABN Amro Bank Ltd - Current Account 226 -

Bank-Mizuho Corporation Bank Ltd - Current Account 42 -

Interest accrued on Deposits, Loans and Advances

Secured - Considered Good 40 42


46 48

Less: Provision for Doubtful Interest 6 40 6 42

Unsecured - Considered Good 119 199


120 200

Less: Provision for Doubtful Interest 1 119 1 199

Claims - Unsecured

Considered Good 172 143

Considered Doubtful 43 56

215 199

Less: Provision for Doubtful Claims 43 172 56 143

331 384

(Notes 21 & 22 on Schedule 23)

Loans

Secured - Considered Good 45 47


54 58

Less: Provision for Doubtful Loans 9 45 11 47

Unsecured - Considered Good 1,594 362


1,595 363

Less: Provision for Doubtful Loans 1 1,594 1 362



(Rs in Million)

AS AT31.03.07

AS AT 31.03.08

Advances recoverable in cash or in kind

or for value to be received:



2,885 2,347

Less: Provision for Doubtful Advances 72 2,813 72 2,275

Deposits - Considered Good unless otherwise stated

Balance with Customs, Port Trust and other

Government Authorities 5,896 6,546

Inter Corporate Deposits Considered Doubtful 140 140

Less :Provision for Doubtful Deposits 140 - 140 -

Other Deposits 55 11

10,403 9,241

Sundry Creditors (Note 20 on Schedule 23)

Due to Micro and Small enterprises 234 176

Others 8,315 8,549 8,920 9,096

Advances from Customers/Dealers 737 440

Book Overdraft 3,525 928

Unclaimed Dividend * 3 2

Other Liabilities 10,157 7,604

Deposits from Dealers, Contractors and Others 1,425 1,797

Interest Accrued but not due on :

Loans - 12

Others 96 96 231 243

24,492 20,110

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

(Note 25 and 27 on Schedule 23)

Litigation related provisions 596 710

Leave Encashment/ Gratuity 457 441

Warranty & Product Recall 253 541

Proposed Dividend 1,445 1,300

Corporate Dividend Tax 246 219

Others Provisions 273 539

Taxation (Net of Advance-tax Rs 7,470 million - Previous Year Rs 5,709 Million) 425 1,155

3,695 4,905

SCHEDULE 13 - CURRENT LIABILITIES

SCHEDULE 14 - PROVISIONS


Schedules Contd.

117SCHEDULES

(Rs in Million)

For theyear ended

31.03.07

SCHEDULE 15 - SALES

SCHEDULE 16 - OTHER INCOME

SCHEDULE 17 - EMPLOYEES REMUNERATION AND BENEFITS

SCHEDULE 18 - MANUFACTURING, ADMINISTRATIVE AND OTHER EXPENSES

Vehicles 197,990 161,367

Spare Parts / Dies and Moulds / Components 11,503 10,075

209,493 171,442

Interest on:

a) Fixed Deposits / Securities (Gross) (Includes TDS of 645 318 Rs. 146 Million - previous year Rs. 69 million)

b) Receivables from Dealers (Gross) (includes TDS 423 339of Rs. 35 Million - previous year Rs. 22 million)

c) Advances to Vendors (Gross) (Includes TDS of 317 190Rs. 65 Million - previous year Rs. 43 million)

d) Others 23 1,408 262 1,109

Sale of Scrap (Net of Excise) 1,616 1,206

Sales Tax Benefit 136 319

Miscellaneous Receipts (Gross) (Includes TDS of Rs. 8 Million - previous year Rs.3 million ) 1,183 750

Profit on Sale of Investments:

Long Term Investments 849 337

Short Term Investments 49 898 52 389

Dividend:

Trade Investments - Long Term 31 61

Others 1,637 1,668 1,467 1,528

Provisions no longer required written back 855 459

Recovery of Service Charges 346 291

Less: Repair Cost of Damaged Vehicles 44 302 67 224

Exchange Variation (Net) 810 -

8,876 5,984

Salaries ,Wages ,Allowances and Other Benefits 3,134 2,551

(Net of Staff cost recovered Rs 64 million - previous year Rs 43 million)

Contribution to Provident and Other Funds 181 156

Staff Welfare Expenses 242 173

Group Insurance 5 4

3,562 2,884

Power and Fuel (Net of amount recovered Rs 574 million, previous year Rs 362 million) 1,473 974

Rent 72 65

Rates, Taxes and Fees 7 5

For theyear ended

31.03.08



(Rs in Million)

AS AT 31.03.08

For theyear ended

31.03.07

Insurance 73 65

Repairs and Maintenance :

Plant and Machinery 281 251

Building 137 106

Others 90 508 81 438

Royalty 4,952 3,673

Tools / Machinery Spares Charged Off 774 517

Net Loss on Sale/discarding of Fixed Assets 24 4

Bad Debts/Advances Written Off - 22

Exchange Variation (Net) - 94

Loss on Mark to Market of derivatives 505 -


Diminution in value of investment 26 -

Other Miscellaneous Expenses 2,884 2,401

11,298 8,258

Advertisement and Sales Promotion 3,730 3,389

Warranty & Product Recall 254 234

Transportation and Distribution Expenses 1,618 1,376

5,602 4,999

Interest

Fixed :

Foreign Currency Loans 425 238

Debentures 21 446 44 282

Others 150 94

596 376

Work-in-Progress

Opening Stock 309 248

Less: Closing Stock 459 (150) 309 (61)

Finished Goods

Opening Stock 2,247 4,857

Less: Closing Stock 5,408 2,247

(3,161) 2,610

Less: Excise Duty on Increase/ (Decrease) of Finished Stock (446) (2,715) 424 2,186

Spare Parts-Traded

Opening Stock 690 573

Less: Closing Stock 742 (52) 691 (118)

(2,917) 2,007

SCHEDULE 19 - SELLING AND DISTRIBUTION EXPENSES

SCHEDULE 20 - INTEREST

SCHEDULE 21 - (INCREASE) /DECREASE IN WORK-IN-PROGRESS, FINISHED GOODS & SPARE PARTS

For theyear ended

31.03.08


Schedules Contd.

119SCHEDULES

SCHEDULE 22 - SIGNIFICANT ACCOUNTING POLICIES

1) BASIS FOR PREPARATION OF ACCOUNTS

2) REVENUE RECOGNITION

3) FIXED ASSETS

4) BORROWING COSTS

5) DEPRECIATION

6) INVENTORIES

7) INVESTMENTS

These financial statements have been prepared to comply in all material respects with all the applicable accounting principles in India, the applicable accounting standard notified under section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

Domestic and export sales are recognised on transfer of significant risks and rewards to the customer which takes place on dispatch of goods from the factory / stockyard / storage area and port respectively.

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.

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.

a) Fixed assets except leasehold land and vehicles are depreciated on straight line method on a pro-rata basis from the month in which each assets is put to use.

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 the straight line method at the following useful life:

Plant and Machinery: 8 - 11 Years

Dies and Jigs 4 Years

Electronic Data Processing Equipments 3 Years

In respect of assets whose useful life has been revised, the unamortised depreciable amount is charged over the revised remaining useful life of the assets.

b) Leasehold assets viz land & vehicles are 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 5000 or less are depreciated at the rate of 100%.

d) In case the historical cost of an asset undergoes a change due to an increase or decrease in related long term liability on account of foreign exchange fluctuations, change in duties etc., the depreciation on the revised unamortised depreciable amount is provided prospectively over the residual useful life of the asset. From 1st April 2007 onwards, an increase or decrease in long term liability related to assets on account of foreign exchange fluctuations is charged to revenue.(Also refer note 24 on Schedule 23)

a) Inventories are valued at the 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 valued at Rs. 5,000 or less individually which are charged off to revenue in the year of purchase.

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

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



8) RESEARCH AND DEVELOPMENT

9) FOREIGN CURRENCY TRANSLATIONS

10) RETIREMENT BENEFIT COSTS

11) CUSTOMS DUTY

12) GOVERNMENT GRANTS

13) DEFERRED TAXES

Revenue expenditure on research and development is charged off 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.

a) Foreign currency transactions are recorded at the exchange rates prevailing at the date of transaction. Exchange differences arising on settlement of transactions, are recognised as income or expense in the year in which they arise.

b) At the balance sheet date, all assets, other than fixed assets and liabilities denominated in foreign currency, are reported at the exchange rates prevailing at the balance sheet date.

c) In case of forward foreign exchange contracts where an underlying asset or liability exists at the balance sheet date, the difference between the forward rate and the exchange rate at the inception of the contract is recognised as income or expense over the life of the contract.

d) In case of forward foreign exchange contracts taken for highly probable /forecast transactions, the net loss, if any, calculated on 'Mark to Market' principle as at the balance sheet date is recorded.

e) 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.

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 The New India Insurance Company Limited. The Company's contribution to State Plans namely Employees' State Insurance Fund and Employees' Pension Scheme are charged to revenue every year.

The Company has Defined Benefit Plans namely leave encashment/ compensated absence, Gratuity, Interest on Provident Fund 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 are administered through Trusts.

Termination benefits are recognised as an expense immediately.

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

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

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.

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 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.


Schedules Contd.

121SCHEDULES

14) IMPAIRMENT OF ASSETS

15) PROVISIONS AND CONTINGENCIES

SCHEDULE 23 - NOTES TO ACCOUNTS

1) Contingent Liabilities:

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 recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

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.

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

i. Sales-tax demands of Rs.50 million (Previous year Rs.50 million). Against this, the Company has deposited a sum of Rs. 2 million (Previous year Rs. 2 million) under protest.

ii. Excise duty demands/show-cause notices of Rs. 3,130 million (Previous year Rs. 2,592 million). Against this, the Company has deposited a sum of Rs. 27 million (Previous year Rs. 27 million) under protest.

iii. Customs duty demands of Rs. 118 million (Previous year Rs. 118 million).Against this, the Company has deposited a sum of Rs. 22 million (Previous year Rs. 22 million) under protest.

iv. Income-tax demands of Rs. 9,905 million (Previous year Rs. 8,157 million). Against this, the Company has deposited a sum of Rs. 4,745 million under protest (Previous year Rs. 4,869 million).

v. Service-tax demands of Rs. 253 million (Previous year Rs. 797 million).

vi. Claims against the Company for recovery of Rs 639 million (Previous year Rs. 776 million) lodged by various parties.

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 this, the contingent liability as at the year-end is Rs. Nil (Previous year Rs. Nil).

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 Rs.2 million (Previous year Rs. 2 million).

d) A guarantee given to HDFC Bank Limited 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 balance outstanding as at the year-end is Rs. 194 million. (Previous year Rs. 26 million)

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 balance outstanding as at the year-end is Rs. 1,543 million. (Previous year Rs. 101 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 Company aggregate to Rs 2,764 million (Previous year Rs. 1,050 million).




3) Estimated value of contracts on capital account, excluding capital advances, remaining to be executed and not provided for, amount to Rs.12,692 million (Previous year Rs. 8,076 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. 26 million (Previous year Rs. 56 million) 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 2008, the Company has availed of sales tax benefit amounting to Rs. 1,605 million (Previous year Rs. 1,469 million).

6) The Company 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 financial terms but contribute significantly in generating the demand for the products of the Company. Accordingly, segment information has not been disclosed.

7) The following expenses incurred on Research and Dev-

elopement are included under respective account heads:

8) a) MANAGERIAL REMUNERATION

Employees Remuneration and Benefits 171 154Other Expenses of Manufacturing and 475 382Administration (Including Depreciationon Research and Development assets)

646 536

Salaries and Allowances 35.14 30.95Commission / Performance linked Bonus 26.95 20.80Contribution to Provident Fund 2.19 0.67Gratuity and Leave Encashment Paid 15.17 0.47Estimated value of Perquisites 14.25 14.25

93.70 * 67.14

*Includes profit linked bonus amounting to Rs 11.42 million which is subject to approval of shareholders

*Includes remuneration aggregating Rs 3.2 million paid to a director whose appointment is subject to approval of the shareholders and Rs 6.9 million paid to 2 directors whose appointment is subject to approval of the shareholders and the Central Government.

b) Computation of net profit in accordance with Section 349/ 198 of the Companies Act, 1956

Profit before Taxation 25,030 22,798Add: Depreciation as per accounts 5,682 2,714

Managerial Remuneration Whole Time Directors 88 67Commission to Non-Whole Time Directors 6 -Directors' Sitting Fees (rounded off) 0 0Provision for Diminution in value of Investment 26 -Net Loss on Sale/discarding of Fixed Assets 24 5,826 4 2,785

30,856 25,583

(Rs in Million)

2006-072007-08

Schedules Contd.

123SCHEDULES

(Rs in Million)(Rs in Million)

2006-072007-08

Less: Depreciation as per Section 350 of Companies Act,1956 5,682 2,714Provision no longer required written back 855 459 Profit on Sale of Investments 898 7,435 389 3,562 Net Profit as per Sections 349/350 23,421 22,021Maximum Commission payable to Non-Whole-time Directors @ 1% on Rs. 23421 234 220 million (Previous Year 1% on Rs. 22,021 million) Restricted to 6 -

Statutory Audit 6.83 6.33Other Audit Services / Certification 0.65 0.16Reimbursement of Expenses 0.34 0.11* excluding service tax

Raw Materials and Components 13,279 12,902Capital Goods 8,753 680Maintenance Spares 237 111Dies and Moulds 263 466Other items 79 71

Fees for Technical Services (Net of TDS) 631 417Traveling Expenses 107 96Royalty (Net of TDS) 3,834 2,594Others 333 210

Export of Goods (FOB basis) 7,413 5,781

705 548No. of non-resident shareholders 5 5

No. of shares for which dividend remitted 156,618,440 156,618,440

i) RAW MATERIALS AND COMPONENTSImported 14,138 12,803Indigenous 116,204 88,571

130,342 101,374PERCENTAGE OF TOTAL CONSUMPTIONImported 11% 13%Indigenous 89% 87%

ii) MACHINERY SPARESImported 246 133Indigenous 351 233

597 366PERCENTAGE OF TOTAL CONSUMPTIONImported 41% 36%Indigenous 59% 64%

9) AUDITORS' REMUNERATION*

10) CIF VALUE OF IMPORTS

11) EXPENDITURE IN FOREIGN CURRENCY (CASH BASIS)

12) EARNINGS IN FOREIGN CURRENCY

13) DIVIDEND REMITTED IN FOREIGN CURRENCY (CASH BASIS)Dividend for the year 2006-07 (Previous year 2005-06)

14) VALUE OF IMPORTED AND INDIGENOUSMATERIALS CONSUMED



15) LICENSED CAPACITY, INSTALLED CAPACITY AND ACTUAL PRODUCTION

16) SALES, OPENING STOCK AND CLOSING STOCK

17) STATEMENT OF RAW MATERIALS AND COMPONENTS CONSUMED

PRODUCT UNIT LICENSED INSTALLED ACTUAL

CAPACITY CAPACITY** PRODUCTION

Passenger Cars and

Light Duty Utility Vehicles Nos. - * 520,000 777,017

( - )* (450,000) (667,048)

Notes

* Licensed Capacity is not applicable from 1993-94.

Previous Year figures are in brackets.

**Installed Capacity is as certified by the management and relied upon by the auditors, being a technical matter.

PRODUCT SALES OPENING STOCK CLOSING STOCK

QTY.(Nos.) VALUE QTY.(Nos.) VALUE QTY.(Nos.) VALUE

Passenger Vehicles 764,842 197,990 11,976 2,247 24,174 5,408

(674,924) (161,367) (20,378) (4,857) (11,976) (2,247)

Spare Parts / Components * 11,026 * 818 * 877

* (9,303) * (684) * (818)

Dies and Moulds * 477 * 41 * 0

* (72) * (36) * (41)

Notes :

1. Purchase of traded goods comprise Vehicles, Spares, Components and Dies and Moulds. During the year 1,016 Vehicles (Previous year Nil) were purchased.

2. Closing Stock of vehicles is after adjustment of 23 vehicles (Previous Year - 41) totally damaged.

3. Sales quantity excludes own use vehicles 981 Nos. (Previous Year - 425 Nos.)

4. Sales quantity excludes sample vehicles 69 Nos. (Previous Year - 60 Nos.)

5. Previous Year figures are in brackets.

* In view of the innumerable sizes/numbers (individually less than 10%) of the components, Spare parts and Dies and moulds it is not possible to give quantitative details.

(Rs in Million)


Schedules Contd.

(Rs in Million)

2007-08 2006-07

GROUP OF MATERIAL UNIT QTY. AMOUNT QTY. AMOUNT

Steel Coils MT 154,880 5,713 123,529 4,702

Ferrous Castings MT 23,624 1,693 22,844 1,422

Non-ferrous Castings MT 13,260 2,344 10,880 2,024

Other Components * 119,302 * 92,051

Paints K.LTR 5,809 4,957

MT 3,654 1,290 3,061 1,175

130,342 101,374

* In view of the innumerable sizes/numbers (individually less than 10%) of the components, it is not possible to give quantitative details.

125SCHEDULES

(Rs in Million)

(Rs in Million)

2006-07

Net Profit after tax attributable to shareholders (in Million Rupees) 17,308 15,620

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 Earnings Per Share (In Rupees) 59.91 54.06

Major Components of Deferred Tax arising on account of temporary timing differences along with their movement as at March 31, 2008 are :

20) The Balance due to Micro and Small Scale Enterprises as at March 31, 2008 is Rs. 233 Million (Amount due less than 30 days). A sum of Rs. 0 Million (rounded off) due to these enterprises is under reconciliation as at March 31, 2008. The Company pays its vendors within 30 days and no interest during the year has been paid or is payable under the terms of The Micro, Small and Medium Enterprises Development Act, 2006.

2006-07

Sundry Debtors

Balance at year end

Suzuki Powertrain India Limited 407 451

Suzuki France SA 4 -

S Iberica (including Suzuki Madrid) 0 3

Suzuki GB PLC 10 6

Suzuki Italia SPA 1 -

Suzuki International Europe GMBH 19 9

Suzuki Philippines 1 31

P T Indomobil 10 201

Loans and Advances

Suzuki Powertrain India Limited 472 465

Maximum Balance During the Year 598 566

Suzuki Motorcycle India Limited 2 -

Maximum Balance During the Year 2 -

2007-08

2007-08

18) STATEMENT OF EARNINGS PER SHARE

19) DEFERRED TAX

21) AMOUNT DUE FROM COMPANIES UNDER THE SAME MANAGEMENT


Movement During

Assets 31.03.07 the year

Provision for Doubtful debts / advances 184 (22) 162

Contingent Provisions 494 1 495

Others 423 (84) 339

Total (A) 1,101 (105) 996

Liabilities

Depreciation on Fixed Assets 2,296 (307) 1,989

Exchange gain on account of restatement of ECB - 228 228

Allowances under Income Tax Act, 1961 468 - 468

Deferred Revenue Expenditure 12 - 12

Total (B) 2,776 (79) 2,697

Net Deferred Tax Liability (B) - (A) 1,675 26 1,701

Previous Year 779 896 1,675

31.03.08


22) LOANS AND ADVANCES IN NATURE OF LOANS GIVEN TO SUBSIDIARIES AND ASSOCIATES ETC:

As at Maximum As at Maximum31.3.08 Balance 31.3.07 Balance

Name of Company during the year during the year

Suzuki Powertrain India Limited Associate 248 341 341 442

23) The Company normally acquires vehicles under Finance Leases with the respective underlying assets as security. Minimum lease payments outstanding as of 31st March 2008 in respect of these assets are as follows.

Minimum Lease payments outstanding as on 31st March 08 in respect of assets taken on operating leases are as follows.

24) Based on technical evaluation and market considerations, the Company has, with effect from April 1, 2007, revised the estimated useful life of certain Plant and Machinery from 9 - 13 Years to 8 -11 years, Dies and Jigs from 5 Years to 4 Years and Electronic Data Processing Equipment from 6 Years to 3 Years. This has resulted in depreciation being higher by Rs 2,122 Million for the current year with a corresponding reduction in profit for the year and net fixed assets.

25) The Company has calculated the various benefits provided to employees as under

A. Defined Contribution Plans

a) Superannuation Fund

b) Post Employment Medical Assistance Scheme.

c) Provident Fund

During the year the Company has recognised the following amounts in the Profit and Loss account :-

(In Rs. Million)

Employers Contribution to Superannuation Fund* 19

Employers Contribution to Post Employment Medical Assistance Scheme. 1

Provident Fund 86

Due Lease Payment Minimum Lease

Outstanding as on Payments31st March 08

Within One Year 1 0 1

Later than one Year but less than five Years 1 0 0

2 0 1

Total Minimum Interest not due Present Value of

Total

Due Contingent Rent Lease Payment Outstanding as on

31st March 08

Within One Year 1 1

Later than one Year but less than five Years 1 1

Total Minimum

Minimum Lease Payment Contingent Rent

Paid During the year 1 1

Charged to Profit and Loss Account 1 1


Schedules Contd.

(Rs in Million)

127SCHEDULES

B. State Plans

a). Employers contribution to Employees' State Insurance.*

b). Employers contribution to Employees' Pension Scheme 1995.*

During the year the Company has recognised the following amounts in the Profit and Loss account :-

(In Rs. Million)

Employers contribution to Employees' State Insurance.* 4

Employers contribution to Employees' Pension Scheme 1995.* 34

* Included in Contribution to Provident and Other Funds under Employee Remuneration and Benefits (Refer schedule 17)

C. Defined Benefit Plans

a) Employees' Gratuity Fund.

b) Leave Encashment/ Compensated Absence.

c) Retirement Allowance

In accordance with Accounting Standard 15 (revised 2005), an actuarial valuation was carried out in respect of the aforesaid defined benefit plans based on the following assumptions.

In calculating the leave encashment/ compensated absence liability 23% of the leave has been assumed to be availed of/ encashed during the year.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Leave Encashment/ Employees RetirementCompensated Absence Gratuity Fund Allowance

Discount Rate (per annum) 8.50% 8.50% 8.50%

Rate of increase in compensation levels 6.00% 6.00% 6.00%

Rate of return on plan assets. Not Applicable 8.50% Not Applicable

Expected Average remaining working

lives of employees (years) 21 21 21

Leave Encashment/ Employees RetirementCompensated Absence Gratuity Fund Allowance

Present value obligation as at April,01, 2007 441 484 22

Interest cost 31 40 -

Past Service cost - - -

Current service cost 59 27 3

Curtailment cost - - -

Settlement cost - - -

Benefits Paid 80 23 -

Actuarial (gain)/ loss on Obligations (22) (4) -

Present value obligation as at March,31, 2008 429 524 25




Employees Gratuity Fund

Fair value of Plan Assets as at April,01, 2007 456

Expected return on Plan Assets 39

Contributions -

Benefits Paid 23

Actuarial gain/ (loss) on Obligations 19

Fair value of Plan Assets as at March,31, 2008 491

Changes in the Fair value of Plan Assets

March 31, 2008 March 31, 2007

Leave Employees Retirement Leave Employees Retirement Encashment/ Gratuity Fund Allowance Encashment/ Gratuity Fund Allowance

Compensated Compensated Absence Absence

Present value obligation 429 524 25 441 484 22

Fair value of Plan Assets - 491 - 456

Surplus/ (Deficit) (429) (33) (25) (441) (28) (22)

Unfunded Net Asset/(Liability) recognised in Balance Sheet. (429) (25) (441) (22)

Reconciliation of Present value of Defined Benefit Obligation and Fair value of Assets

Leave Encashment/ Employees Retirement Compensated Absence Gratuity Fund Allowance

Current Service Cost 59 27 3

Past Service Cost - - -

Interest Cost 31 40 -

Expected return on Plan Assets - (39)

Curtailment Cost - -

Settlement Cost

Net Actuarial (gain)/ loss recognised during the year (22) (23) -

Total Expense recognised in Profit & Loss Account 68 5 3

Expenses Recognised in Profit & Loss Account

* Included in Salaries, Wages, Allowances and Other Benefits under Employee Remuneration and Benefits (Refer schedule 17)

(a) Debt Funds 465

(b) Special Deposit with RBI 52

(c) Others 2

Total 519

Constitution of Plan Assets Gratuity

The return on the investment is the nominal yield available on the format of investment as applicable to Approved Gratuity Fund under Rule 101 of Income Tax Act 1962.

Estimated Contribution on account of Gratuity for FY2008-09 will be Rs.3 Million.

Schedules Contd.

129SCHEDULES

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Schedules Contd.

(Rs

in M

illio

n)

131SCHEDULES


(Rs. in Million)

Name of the Company Interest / Face Value Face Value Number Number Dividend Rupees Rupees AS AT AS AT AS AT AS AT

%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007

Long Term Trade Investments:

Quoted Equity Shares (Fully Paid) :

Unquoted Equity Shares (Fully Paid) :

Asahi India Glass Limited 1 1 17,760,000 17,760,000 2 2

Bharat Seats Limited 2 10 4,650,000 465,000 5 5

Denso India Limited 10 10 2,862,758 2,862,758 73 73

Jay Bharat Maruti Limited 5 5 6,340,000 3,170,000 16 16

Machino Plastics Limited 10 10 941,700 941,700 5 5

Sona Koyo Steering Systems Limited 2 2 6,900,000 3,450,000 10 10

111 111

Caparo Maruti Limited 10 10 2,500,000 2,500,000 25 25

Citicorp Maruti Finance Limited 10 10 25,999,990 25,999,990 260 260

Climate Systems India Limited 100 100 518,700 518,700 52 52

J.J. Impex (Delhi) Private Limited 10 10 4,323,750 4,323,750 72 72

Krishna Maruti Limited 10 10 670,000 670,000 7 7

SKH Metals Limited 10 10 2,645,000 2,645,000 49 49

Maruti Countrywide Auto Financial Services Pvt. Limited 10 10 10,400,000 10,400,000 104 104

Nippon Thermostat (India) Limited 10 10 125,000 125,000 1 1

Mark Exhaust Systems Limited 10 10 4,437,465 4,437,465 57 57

Bellsonica Auto Component India Private Limited 100 100 3,540,000 360,000 354 36

Suzuki Powertrain India Limited (Company under same management) 10 10 172,800,000 76,200,000 1,728 762

Magneti Marelli Powertrain India Pvt. Limited 10 - 1,710,000 - 17 -

FMI Automotive Components Limited 10 - 44,100,000 - 441 -

3,167 1,425

Less :Provision for diminution in value 130 104

3,037 1,321

27) THE COMPANY HAS THE FOLLOWING PROVISIONS IN THE BOOKS OF ACCOUNT AS ON 31.03.2008 :

30) THE DETAILS OF INVESTMENT AS PER SCHEDULE 7 ARE PROVIDED BELOW :

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.

28) Pursuant to the announcement on "Accounting for Derivatives" issued by Institute of Chartered Accountants of India in March 2008, the Company has accounted for net losses aggregating Rs 505 million during the current year, computed on 'Mark-to-Market' basis, on the derivative instruments outstanding as at March 31, 2008.The Company does not hold or issue derivative financial instruments for trading or speculative purposes.

29) Pursuant to the issuance of the Companies (Accounting Standard) Rules, 2006 by the Central Government on December 7, 2006, exchange gain amounting to Rs 451 million, on payables for fixed assets acquired in foreign currency has been credited to Profit and Loss account.

Description Balance as Additions Utilized/ Reversed on 31.03.07 during the year during the year

a) Litigation related provisions 710 45 159 596

b) Warranty / Product Recall 541 130 418 253

c) Others 529 46 315 260

Balance as on 31.03.08


(Rs. in Million)


%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007

Unquoted Equity Shares in Subsidiary Companies (Fully Paid) :

Other Long Term Investments :

Unquoted Redeemable Preference Shares (Fully Paid) :

Units of Debt Mutual Funds :

Long Term (Unquoted)

Maruti Insurance Business Agency Limited * 10 10 50,000 50,000 0 0

Maruti Insurance Distribution Services Limited 10 10 50,000 50,000 0 0

True Value Solutions Limited 10 10 50,000 50,000 0 0

Maruti Insurance Agencies Solutions Limited 10 10 50,000 50,000 0 0

Maruti Insurance Agencies Network Limited 10 10 50,000 50,000 0 0

Maruti Insurance Agency Services Limited 10 10 50,000 50,000 0 0

Maruti Insurance Agency Logistic Limited 10 - 50,000 0 - 3

3 3

* Formerly known as Maruti Insurance Brokers Limited

Western Paques (India) Limited 14.50% 100 100 500,000 500,000 50 50

50 50

Less :Provision for diminution in value 50 50

- -

ABN Amro FTP Series 2 Growth - 10.0 - 15,000,000 - 150

ABN Amro FTP Series 4 17 Month Growth 10.0 10.0 15,000,000 15,000,000 150 150

ABN Amro FTP Series 5 13 Month Growth 10.0 10.0 15,000,000 15,000,000 150 150

ABN Amro FTP Series 8 yearly Plan E Inst Growth 10.0 - 15,000,000 - 150 -

ABN Amro FTP Series 10 Plan E Inst Growth 10.0 - 10,000,000 - 100 -

Birla Fixed Term Plan Series H Growth - 10.0 - 15,000,000 - 150

Birla FTP Series O Growth 10.0 10.0 15,000,000 15,000,000 150 150

Birla FTP Series AE Growth 10.0 - 20,000,000 - 200 -

Birla FTP Series AR Growth 10.0 - 10,000,000 - 100 -

Canbank Fixed Maturity Plan Growth 10.0 10.0 10,000,000 10,000,000 100 100

DBS Chola FMP Series 6 ( 371 days Plan ) Growth 10.0 10.0 10,000,000 10,000,000 100 100

DSP ML FTP Series 3A Growth - 1,000.0 - 150,000 - 150

DSP ML FMP 12.5 M Series 1 Inst Growth 10 - 40,000,000 - 400 -

DSP ML FMP 13 M Series 1 Inst Growth 10 - 30,000,000 - 300 -

DSP ML FMP 15 M Series 2 Inst Growth 10 - 15,000,000 - 150 -

DSP ML FTP Series 3F Dividend 1,000 - 100,000 - 100 -

Deutsche Fixed Term Fund Serie 5 Growth - 10 - 15,000,000 - 150

DWSFixed Term Fund Series 18 Inst Plan Growth 10 10 10,000,000 10,000,000 100 100

DWS Fixed Term Fund Series 21 Inst Plan Growth 10 10 20,000,000 20,000,000 200 200



DWS Fixed Term Fund Series 35 Inst Plan Growth 10 - 15,000,000 - 150 -




HDFC FMP 13 M March 06 (1) Inst Growth - 10 - 15,000,000 - 150

HDFC FMP 14 M March 07 (3) Growth 10 10 20,000,000 20,000,000 200 200

HDFC FMP 16 M Jan 07 (3) Growth 10 10 15,000,000 15,000,000 150 150

HSBC fixed Term Series 21 Growth 10 10 15,000,000 15,000,000 150 150

HSBC fixed Term Series 23 Growth 10 10 10,000,000 10,000,000 100 100

HSBC Fixed Term Series 4 Growth - 10 - 15,000,000 - 150

ING FMP Series 32 Growth 10 - 20,000,000 - 200 -


Schedules Contd.

133SCHEDULES


(Rs. in Million)


%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007

JM Fixed maturity fund series IV Yearly plan growth 10 10 10,000,000 10,000,000 100 100

JM Fixed maturity fund series VII 13 Month plan 1inst growth 10 - 20,000,000 - 200 -

JM Fixed maturity fund series XI 13 Month plan 1inst growth 10 - 10,000,000 - 100 -

Kotak FMP 13M Series 1 Inst Growth 10 10 20,000,000 20,000,000 200 200

Kotak FMP 13M Series 2 Inst Growth 10 10 15,000,000 15,000,000 150 150

Kotak FMP 15M Series 1 Growth - 10 - 10,000,000 - 100

Kotak FMP 15M Series 2 Growth 10 10 10,000,000 10,000,000 100 100

Kotak FMP 16M Series 1 Growth 10 10 10,000,000 10,000,000 100 100

Kotak FMP Series 13 Growth - 10 - 15,000,000 - 150

Kotak FMP Series XIV Growth - 10 - 10,000,000 100

Kotak FMP 14M Series 3 Growth 10 - 10,000,000 - 100 -




LIC MF FMP Series 15 13 months Growth - 10 - 25,000,000 - 250

LIC MF FMP Series 19 13 months Growth 10 10 25,000,000 25,000,000 250 250



LIC MF FMP Series 5 Growth - 10 - 15,000,000 - 150

LIC MF FMP Series 32 13 months Growth 10 - 25,000,000 - 250 -

LIC MF FMP Series 34 16 months Growth 10 - 30,000,000 - 300 -

Lotus India FMP 14 Month Series 3 Growth 10 - 12,000,000 120 -

Lotus India FMP 14 Month Series 2 Growth 10 - 10,000,000 - 10 -

Lotus India FMP 13 Month Series 4 Growth 10 - 10,000,000 - 100 -

Lotus India FMP 375 days Series 7 Growth 10 - 10,000,000 - 100 -

Principal PNB Fixed Maturity Plan - 385 Days Series 1 Inst Growth - 10 - 15,000,000 - 150

Principal PNB Fixed Maturity Plan - 460 Days Series 1 Growth - 10 - 15,000,000 - 150

Principal PNB Fixed maturity plan (FMP 31) Series III Nov 06 Growth - 10 - 25,000,000 - 250

Principal PNB Fixed maturity plan (FMP 33) 540 days Series I Jan 07 Growth 10 10 25,000,000 25,000,000 250 250

Principal PNB Fixed maturity plan (FMP 36) 460 days Series III March 07 Growth 10 10 20,000,000 20,000,000 200 200

Principal PNB Fixed maturity plan (FMP 44)540 days Series II March 08 Growth 10 - 12,000,000 - 120 -

Pru ICICI FMP series 34 One year plan B IP growth 10 10 25,000,000 25,000,000 250 250

Pru ICICI FMP series 34 Sixteen month IP growth 10 10 25,000,000 25,000,000 250 250

Pru ICICI FMP series 35 Thirteen months Plan B IP growth 10 10 20,000,000 20,000,000 200 200

Pru ICICI FMP series 37 Fourteen months IP growth 10 10 20,000,000 20,000,000 200 200

Prudential ICICI FMP - 16 Month Inst Growth XXVIII - 10 - 10,000,000 - 100

ICICI Prudential FMP series 41 14 M Growth 10 - 10,000,000 - 100 -

ICICI Prudential FMP series 43 13 M Plan D Growth 10 - 10,000,000 - 100 -

Reliance Fixed horizon fund II Annual Plan Plan Series VI Inst Growth 10 10 20,000,000 20,000,000 200 200

Reliance Fixed horizon fund III Annual Plan Plan Series I Inst Growth 10 10 40,000,000 40,000,000 400 400

Reliance Fixed horizon fund III Annual Plan Plan Series IV Inst Growth 10 10 40,000,000 40,000,000 400 400

Reliance Fixed horizon fund IV Series 5 Inst Growth 10 - 50,000,000 - 500 -



Reliance Fixed horizon fund VI Series 3 Inst Growth 10 - 40,000,000 - 400 -



SBI Debt fund series (13 months II) March 07 Growth 10 10 20,000,000 20,000,000 200 200

SBI Debt fund series (13 months) March 07 Growth 10 10 20,000,000 20,000,000 200 200


SBI Debt fund series (13 months) 7 March 08 Growth 10 - 60,000,000 - 600 -

Standard Chartered Fixed Maturity - 2nd Plan - Growth - 10 - 15,000,000 - 150

Standard Chartered fixed maturity 10th Plan Growth - 10 - 10,000,000 - 100

Standard Chartered fixed maturity Plan Yearly Series 3 Growth 10 10 20,000,000 20,000,000 200 200

Standard Chartered fixed maturity Plan Yearly Series 5 Growth 10 10 20,000,000 20,000,000 200 200

Standard Chartered fixed maturity Plan Yearly Series 17 Growth 10 10 - 15,000,000 - 150 -

Standard Chartered fixed maturity Plan Yearly Series 19 Growth 10 10 - 25,000,000 - 250 -

Standard Chartered fixed maturity Plan Yearly Series 20 Growth10 10 - 25,000,000 - 250 -

Sundaram BNP Paribas FTP Series 32 Growth 10 - 15,000,000 - 150 -

Sundaram BNP Paribas FTP 367 days plan 1 Growth 10 - 12,000,000 - 120 -

Sundaram BNP Paribas FTP plan D Growth 10 - 10,000,000 - 100 -

Sundaram BNP Paribas FTP plan E Growth 10 - 10,000,000 - 100 -

Tata Fixed horizon fund series 7 scheme B Growth Inst plan 10 10 20,000,000 20,000,000 200 200

Tata Fixed horizon fund series 7 scheme D Growth Inst plan 10 10 10,000,000 10,000,000 100 100

Tata Fixed Horizon Series 2 - Plan C 18 Months Growth - 10 - 10,000,000 - 100

Tata Fixed Horizon Series 3 - Scheme D Growth - 10 - 10,000,000 - 100

Templeton fixed horizon fund series I 15 Month Plan Growth 10 10 20,000,000 20,000,000 200 200

Templeton Fixed Tenure Fund Serie V 13 month Growth - 10 - 15,000,000 - 150

Templeton Fixed Tenure Fund Serie VII Plan C Growth 10 - 30,000,000 - 300 -

UTI Fixed Term Income Fund Series 1 Plan 18 Q4 Growth - 10 - 15,000,000 - 150

Birla Cash Plus Inst Premium Growth - 10 - 90,412,073 - 1,000

Birla sunlife liquid plus inst growth 10 - 114,877,934 - 1,750 -

Canliquid Institutional Growth - 10 - 19,597,852 - 250

Deutsche Money Plus Fund Inst Growth 10 10 77,637,983 77,637,983 800 800

DSP ML Liquidity Fund Inst Growth - 1,000 - 988,427 - 1,000

HDFC Floating rate income fund short term wholesale growth 10 - 109,853,894 - 1,500 -

HDFC Liquid Fund premium plus plan Growth 10 10 33,406,382 33,406,382 500 500

HSBC Liquid plus fund Inst Plus Growth 10 10 96,558,755 96,558,755 1,000 1,000

ICICI Prudential Flexible income plan growth 10 - 93,861,613 - 1,400 -

ING Vysay Liquid fund Super Inst Plan growth 10 10 89,830,413 89,830,413 1,000 1,000

JM Money Manager Fund Super Plus Plan Growth 10 - 154,666,149 - 1,750 -

Kotak Flexi debt Growth 10 - 19,772,537 - 250 -

Kotak Liquid Inst Premium Growth 10 10 19,814,143 73,250,089 300 1,050

LIC MF Floating Rate fund Growth - 10 - 22,478,982 - 250

LIC MF Liquid Plan Growth - 10 - 79,317,397 - 1,000

Lotus India Liquid plus fund Inst growth 10 - 45,302,165 - 500 -

Principal CMF Liquid Inst Premium Growth 10 10 34,244,816 103,485,709 400 1,150

Principal floating rate fund FMP Inst Growth 10 - 121,682,041 - 1,550

Prudential ICICI Floating Rate Plan Option D Growth - 10 - 49,646,240 - 502

Prudential ICICI Liquid Plan Super Inst Growth 10 10 182,568,132 281,202,539 2,000 3,000

Reliance Liquid Plus fund Inst growth 1,000 - 1,878,155 - 2,050 -

Reliance liquidity fund growth 10 10 44,632,098 44,632,098 500 500

Sundaram Money Fund Super Inst Growth - 10 - 13,709,993 - 200

Tata Floater Fund growth 10 - 125,295,574 - 1,500 -

Tata liquid fund SHIP growth 10 1,000 362,940 362,940 500 500

UTI Liquid cash plan Inst plan growth 10 1,000 406,207 406,207 500 500

UTI Liquid plus fund Inst plan Growth 1,000 - 1,622,514 - 1,750 -

37,710 24,052

(Rs. in Million)


%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007


Schedules Contd.

135SCHEDULES

(Rs. in Million)


%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007

Current (Unquoted)

SBI Premier Liquid fund super inst plan div 10 - 44,151,268 - 467 -

Birlasunlife liquid plus fund inst div 10 - 2,344,064 - 23 -

Deutsche Credit Opportunities cash Fund dividend 10 - 77,846,260 - 785 -

HSBC Liquid plus fund Inst Plus div 10 - 46,847,263 - 470 -

JM Money Manager Fund Super Plus Plan Div 10 - 33,028,345 - 333 -

Kotak Flexi debt div 10 - 962,826 - 10 -

LIC MF Liquid Plus Fund Div 10 - 133,189,703 - 1,333 -

Lotus India liquid plus fund inst div 10 - 18,228,226 - 183 -

ICICI Prudential Flexible income plan div 10 - 5,138,366 - 52 -

Principal floating rate fund FMP Inst div 10 - 42,521,703 - 426 -

Reliance Liquid Plus fund Inst div 1,000 - 39,305 - 39 -

Sundaram BNP Paribas liquid plus fund super inst plan div 10 - 8,436,818 - 86 -

Tata Floater Fund Div 10 - 15,263,137 - 154 -

Templeton India Ultra Short Bond Fund Inst Plan Div 10 - 50,182,446 - 503 -

UTI Liquid plus fund Inst plan div 1,000 - 1,317,839 - 1,319 -

Birla FMP Series 2 quarterly Div payout - 10 - 24,927,709 - 250

Birla FTP HY Series 1 Div payout - 10 - 10,000,000 - 100

Birla FTP Series 5 quarterly Div payout - 10 - 20,000,000 - 200

Birla FTP Series 6 quarterly Div payout - 10 - 25,000,000 - 250

Birla Sunlife interval income inst quarterly S2 Inst Div 10 - 51,276,782 - 513 -



DBS Chola FMP Series 6 (Quarterly Plan 3) Dividend - 10 - 20,000,000 - 200

DSP ML FTA Series 1 I Dividend - 1,000 - 150,000 - 150

DWS Fixed Term Fund Series 23 Dividend - 10 - 25,000,000 - 250

HSBC Interval Fund Plan 1 Inst Div 10 - 20,141,904 - 201 -

ING Vysya Fixed maturity series XX Div - 10 - 10,000,000 - 100

ING Vysya Fixed maturity series XXI Div - 10 - 10,000,000 - 100

JM Fixed maturity fund series IV quarterly plan 2F 1 Dividend - 10 - 15,170,984 - 152

JM interval fund quarterly plan 3 Inst Div 10 - 18,169,199 - 182 -

JM interval fund quarterly plan 6 Inst Div 10 - 20,127,180 - 201 -

Kotak FMP 3M Series 10 Dividend - 10 - 25,243,621 - 252



Kotak quarterly interval plan series 3 div 10 - 19,995,601 - 200 -



Lotus India FMP 3 Month Series 22 div 10 - 25,329,353 - 253 -

Lotus India FMP 3 Month Series 23 div 10 - 15,140,031 - 151 -

Principal PNB Fixed maturity plan (FMP 34) 91 days Series VII Feb 07 Dividend - 10 - 25,000,000 - 250

Principal PNB Fixed maturity plan (FMP 35)91 days Series VIII Feb 07 Dividend - 10 - 20,000,000 - 200

Principal PNB Fixed maturity plan (FMP 38) 91 days Series IX Dividend - 10 - 20,000,000 - 200

Pru ICICI FMP series 34 Three month plus plan A Div - 10 - 50,903,464 - 509

Pru ICICI FMP series 35 Three month plan A Div - 10 - 50,680,000 - 507




Pru ICICI FMP series 35 Three month plan B Div - 10 - 50,492,485 - 505

Pru ICICI FMP series 35 Three month plan C Div - 10 - 25,000,000 - 250

Reliance Fixed horizon fund I Quarterly Plan Series IV Div - 10 - 50,000,000 - 500

Reliance Fixed horizon fund II Quarterly Plan Series I Div - 10 - 40,000,000 - 400

Reliance Fixed horizon fund II Quarterly Plan Series II Div - 10 - 50,000,000 - 500

SBI Debt fund series (90 days) February 07 Dividend - 10 - 20,000,000 - 200

Standard Chartered fixed maturity Plan Quarterly Series 3 Div - 10 - 25,369,000 - 254



Standard Chartered fixed maturity Plan Quarterly Series 25 Div 10 - 35,303,009 - 353 -

Sundaram BNP Paribas FTP Series XXII 90 days Dividend - 10 - 15,000,000 - 150

Sundaram BNP Paribas FTP Series XXIII 90 days Dividend - 10 - 10,000,000 - 100

Sundaram BNP Paribas interval fund quarterly plan c Dividend10 10 24,993,752 - 250 -

Sundaram BNP Paribas FTP 90 days Series 3 inst Dividend 10 - 15,000,000 - 150 150

Tata Fixed horizon fund series 8 scheme D Div IP - 10 - 10,000,000 - 100

Tata Fixed horizon fund series 8 scheme E Div IP - 10 - 15,211,390 - 152

Tata Fixed horizon fund series 8 scheme F Div RP - 10 - 20,180,904 - 202

Tata Fixed horizon fund series 17 scheme D Div 10 - 50,373,888 - 504 -

UTI FMP Half yearly series HFMP / 1206 Dividend - 10 - 20,360,339 - 204

UTI FMP Quarterly series QFMP / 0107/1 Dividend - 10 - 20,281,444 - 203

UTI FMP Quarterly series QFMP / 0207/1 Dividend - 10 - 25,251,756 - 252

10,946 8,605

Less: Provision for diminution: 0 0

10,946 8,605

(Rs in Million)

Name of the Company / Mutual Fund Face Value Purchase Cost Sale /Redemption

Proceeds

Units of Mutual Funds 145,725 150,805 150,852

145,725 150,805 150,852

Previous Year: 96,785 98,940 98,987

31) FOLLOWING SHORT TERM INVESTMENTS WERE PURCHASED AND REDEEMED / SOLD DURING THE YEAR:

(Rs. in Million)


%age 31.03.2008 31.03.2007 31.03.2008 31.03.2007 31.03.2008 31.03.2007

Schedules Contd.

137SCHEDULES

(Rs. In Million)


32) STATEMENT ON ASSETS ,LIABILITIES ,INCOME & EXPENSES OF JOINT VENTURES

Detail of Assets

Detail of Liabilities

Detail of Income

Detail of Expenses

Details of Contingent Liabilities

Details of th Company's share in the Joint Venture Assets ,Liabilities ,Income & Expenses as required by Accounting Standard 27 " Financial Reporting of Interest in Joint Venture " is as indicated below.

SI. No Name of Company % Ownership Country of Interest Incorporation

1 J.J Impex (Delhi) Private Limited 49.13 India

2 Mark Exhaust Systems Limited 44.37 India

3 Bellsonica Auto Components India Limited 30.00 India

4 FMI Automotive India Limited 49.00 India

2006-07

Fixed Assets - Gross Block 707 661

Accumulated Depreciation 280 235

Net Block 427 426

Capital Work-in-Progress 383 27

Investments 0 1 Inventories 108 111

Sundry Debtors 115 124

Cash and Bank Balances 554 70

Other Current Assets 7 0

Loans and Advances 92 41

Deferred Tax Assets 2 9

Secured Loans 125 169

Unsecured 268 228

Current Liabilities 331 183

Provisions 4 1 Deferred Tax Liabilities 45 46

Sales(Net) 1,840 1,493

Income from services 73 60

Other income 35 19

Consumption of Raw Material and Components 1,349 1,061

Purchase of Traded Goods 50 65

Employees Remuneration and Benefits 81 61

Manufacturing Administrative and Other Expenses 152 93

Selling and Distribution Expenses 11 9

Financial Expenses 29 28

Depreciation 46 42

(Increase) / Decrease to Work in progress and Finished Goods 7 (13)

Tax Expense Current 7 3

Tax Expense Deffered 7 6

Claims against the Company lodged by various parties 3 3

Capital commitments 155 2

Outstanding commitments under letter of credit 17 20

2007-08



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Schedules Contd.

139

Registration No. 11,375 of 1980-81 State Code 55

Balance Sheet Date 31-03-08

(Amount in Rupees Million) Public Issue Right Issue

Nil Nil

Bonus Issue Private Placement

Nil Nil

(Amount in Rupees Million) Total Liabilities Total Assets

94,857 94,857

Sources of Funds Paid-up Capital Reserve & Surplus

1,445 82,709

Secured Loans Unsecured Loans

1 9,001

Application of Funds

Net Fixed Assets Investments

40,328 51,807

Net Current Assets Misc. Expenditure

2,722 -

Accumulated Losses Nil

(Amount in Rupees Million) Turnover Total Expenditure

209,493 184,463

Profit Before Tax Profit After Tax

25,030 17,308

Earning per share in Rs. Dividend rate

(Face Value Rs.5) 100%

59.91

(As per monetary terms)

Item Code No.(ITC Code) 8703.00

Product Description Motor Cars

I. Registration Details

II. Capital Raised During the year

III. Position of Mobilisation and Deployment of Funds

IV. Performance of Company

V. Generic Name of Principal Product of Company


Balance Sheet Abstract And Company's General Business Profile

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE


Name of the Subsidiary Company Maruti Maruti True Value Maruti Maruti Maruti Maruti

Insurance Insurance Solutions Insurance Insurance Insurance Insurance

Distribution Business Limited Agencies Agencies Agencies Logistics

Services Agency Solutions Network Services Limited

Limited Limited Limited Limited Limited

The financial year of the subsidiary 31st March 2008 31st March 2008 31st March 2008 31st March 2008 31st March 2008 31st March2008

company ended on

Number of shares in the subsidiary

company held by Maruti Suzuki India

Limited at the above date 50,000 50,000 50,000 50,000 50,000 50,000 50,000

Extent of Holding 100% 100% 100% 100% 100% 100% 100%

The net aggregate of profit/(loss)

of the subsidiary company so far as

these concern the members of

Maruti Suzuki India Limited:

i) dealt with in the accounts of Maruti

Suzuki India Limited amounted to :

a) For subsidiary's financial year

ended on March 31st,2008 Nil Nil Nil Nil Nil Nil Nil

b) For previous financial years

of the subsidiary since it become

subsidiary of

Maruti Suzuki India Limited Nil Nil Nil Nil Nil Nil Nil

ii) not dealt with in the accounts of

Maruti Suzuki India Limited amounted to:

a) For subsidiary's financial year

ended on March 31st, 2008 Rs. 22,283,573 Rs. 162,605,780 Rs. (-) 2,265,115 Rs. 30,324,565 Rs. 46,783,197 Rs.1,246,117 Rs. 34,801

b) For previous financial years

of the subsidiary since it become

subsidiary of

Maruti Suzuki India Limited Rs. 59,428,359 Rs. 344,705,595 Rs.4,358,665 Rs. 45,819,961 Rs 57,896,604 Rs. (-) 59,470 Nil

31st March 2008

New Delhi SHINZO NAKANISHI HIROFUMI NAGAO ANIL RUSTGI

April 24, 2008 Managing Director & CEO Director & Managing Company Secretary

Executive officer - Admin & Chief Legal Officer


Statement Pursuant to Section 212 of the Companies Act, 1956, Relating to Subsidiary Companies

No Particulars MarutiInsurance Insurance Insurance Insurance Insurance Solutions InsuranceBusiness Distribution Agency Agency Agency Ltd. Agency

Agency Services Network Solutions Services Logistics Ltd. Ltd. Ltd. Ltd. Ltd. Ltd.

1 Capital 500,000 500,000 500,000 500,000 500,000 500,000 500,000

2 Reserves & Surpluses 507,311,375 81,711,932 104,679,801 76,144,526 1,186,647 2,093,550 34,801

3 Total Assets 507,811,375 82,211,932 105,179,801 76,644,526 1,686,647 2,593,550 534,801

4 Total Liabilities 507,811,375 82,211,932 105,179,801 76,644,526 1,686,647 2,593,550 534,801

5 Investments 258,639,022 64,848,412 54,533,345 35,059,050 - - -

6 Turnover Income 585,650,665 76,729,570 166,634,757 109,408,122 5,202,174 38,994 613,691

7 Profit Before Tax 258,831,595 34,913,181 74,891,710 48,217,850 1,996,117 (2,452,955) 104,801

8 Tax 87,662,436 11,500,000 25,000,000 16,000,000 750,000 45,239 70,000

9 Prior Period Item 8,563,379 1,129,608 3,108,513 1,893,285 - (233,079) -

10 Profit After Tax 162,605,780 22,283,573 46,783,197 30,324,565 1,246,117 (2,265,115) 34,801

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Directors' ReportFinancial Statement of Subsidiary Companies 2007-08

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