4/15/2010

[TYPE THE
COMPANY NAME]

BALANCE SHEET ANALYSIS OF MARUTI SUZUKI

Prepared By: Submitted to: Dr. Himani Joshi

Dipa Shah Krishna Rajput Nikita Saghvi Mitesh Shah Bharat Maheshvari Keyur Savalia

ACKNOWLEDGEMENT
An acknowledgement is the expression of ones thanks giving to the people who have extended their help in every possible way. Help is a voluntary fulfillment of duty, which, all the people mentioned below have performed it to their maximum possible, in a way giving us & our research the utmost important.

At the onset, we wish to express our gratitude to Dr. Himani Joshi, Academic Coordinator, and CA Ms. Neha Saxena, faculty at Stevens Business School for their keen interest, constant support & help in completing this report successfully.

We would also like to thanks to the authors, journals and websites for providing us the related information to our projects subject.

TABLE OF CONTENTS
Sr. No. 1 2 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4 5 5.1 5.2 5.3 6 6.1 Particular Acknowledgement Executive Summary Company profile Introduction Key Data Vision Mission Market Scenario Sales Analysis Market Share Financial Highlight Meaning of Analysis and Objective of Study Importance of Cash Profit Theory Meaning and Importance Of Ratio Utility Of Ratio Analysis Classification Of Ratio Profitability Ratio 6.1.1 Gross Profit Ratio 6.1.2 Net Profit Ratio 6.1.3 Expenses Ratio 6.1.4 Operating Ratio 6.1.5 Return on Investment 6.1.6 Return on Share Holders Fund 6.1.7 Return on Equity Share Capital 6.1.8 Return on Equity Share holders Fund Page No. 02 05 06 06 07 07 07 08 09 10 11 15 15 16 16 18 18 18 20 22 23 24 25 26 27

6.1.9 Earning per Share 6.1.10 Dividend Per Share 6.1.11 Price Earning Ratio 6.1.12 Dividend Yield Ratio 6.1.13 Interest coverage Ratio 7 7.1 7.2 7.3 7.4 7.5 7.6 8 8.1 8.2 8.3 9 9.1 9.2 10 11 12 13 14 Activity/Turnover Ratio Overall turnover Ratio Fixed Assets Turnover Ratio Debtor Turnover Ratio Creditor Ratio Creditor Turnover Ratio Stock Turnover Ratio Liquidity Ratio Current Ratio Liquid Ratio Quick / Acid Test Ratio Leverage Ratio Proprietary Ratio Debt Equity Ratio Accounting Policy 2009 Notes To Account Auditors Report Conclusion Appendix 1 Appendix 2 Appendix 3 Appendix 4

28 29 30 31 32 33 33 34 35 36 37 38 39 39 40 41 42 42 43 44 48 50 55 56 57 58 60

Executive summary

In this report, we have tried to explain how one can find out financial result with the help of ratio analysis and some more in portent graphs with the help of Ratio Analysis. We can easily understand the profitability of the business, efficiency of business, useful in inter comparison. It is also useful for budgeting control and decisionmaking. Ratio analysis helps interested parties like share holders, investors, creditors, government also and analysis to make an evaluation of a certain aspect of a firms performances.

Financial analysis is essential for any business entity. It is the tool to communicate with creditors, debtors, suppliers and all those who are directly or indirectly associated with an organization.

Here in this project report we have discussed about various components of balance sheet and their significance. We have done in depth analysis of ratios. Detailed analysis of creditors, debtors, equity share holders, debenture holders of Maruti Suzuki are also described. The growth trend of Maruti Suzuki is also mentioned here. We have also mentioned profit trends, dividend trends, revenue analysis, profit analysis, and analysis of companys liquidity are discussed here. In a nut shell this report gives the complete financial analysis of Maruti Suzuki for five years.

COMPANY PROFILE
INTRODUCTION

First Indian automobile company to join the million clubs Invests Rs 1,700 Crore in new facility to expand capacity by 2.5 lakh units
Maruti Udyog Limited (MUL) was established in Feb 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system. It was established with the objectives of - modernizing the Indian automobile industry, producing fuel efficient vehicles to conserve scarce resources and producing indigenous utility cars for the growing needs of the Indian population. A license and a Joint Venture agreement were signed with the Suzuki Motor Company of Japan in Oct 1983, by which Suzuki acquired 26% of the equity and agreed to provide the latest technology as well as Japanese management practices. Suzuki was preferred for the joint venture because of its track record in manufacturing and selling small cars all over the world. There was an option in the agreement to raise Suzukis equity to 40%, which it exercised in 1987. Five years later, in 1992, Suzuki further increased its equity to 50% turning Maruti into a nongovernment organization managed on the lines of Japanese management practices. Maruti created history by going into production in a record 13 months. Maruti is the highest volume car manufacturer in Asia, outside Japan and Korea, having produced over 5 million vehicles by May 2005. Maruti is one of the most successful automobile joint ventures, and has made profits every year since inception till 2000- 01. In 2000-01, although Maruti generated operating profits on an income of Rs 92.5 billion, high depreciation on new model launches resulted in a book loss. REGISTERED AND CORPORATE OFFICE: 11th Floor, Jeevan Prakash Building, 25, Kasturba Ganghi Marg, New Delhi 110001

 KEY DATA 1. Country: 2. BSE: 3. NSE: 4. Exchanges: 5. Major Industry: 6. Sub Industry: 7. 2009 Sales: (Year Ending Jan 2010) 8. Employees: 9. Currency: 10. Market Cap: 11. Fiscal Yr Ends: 12. Shares Outstanding: 13. Share Type: 14. Closely Held Shares:

INDIA 532500 MARUTI BOM Automotive Diversified Automotive Mfrs. 206,638,000,000 7,159 Indian Rupees 399,028,129,369 March 288,910,060 Ordinary 156,618,440

VISION The leader in the India Automobile Industry, Creating Customer Delight and Shareholders Wealth; A pride of India

MISSION To provide maximum value for money to their customers through continuous improvement of products and services

 MARKET SCENERIO (2008 -09)

Maruti has a network of 681 sales outlets across 454 cities all over India. The service network covers 1,314 towns and cities, bolstered by 2,767 authorized service outlets. The company's change in strategy and emphasis on developing effective marketing communications was their highlights.

 SALES ANALYSIS

The company vouches for customer satisfaction. For its sincere efforts it has been rated (by customers) first in customer satisfaction among all car makers in India for ten years in a row in annual survey. Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, has been the leader of the Indian car market for over two decades. During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti cars are on Indian roads since the first car was rolled out on 14 December 1983. And finally in 2009-10, the nation's number one car manufacturer joined a select club of global automobile makers, when it became the first automobile company in India to produce one million (10 lakh) cars in a year.

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 MARKET SHARE

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MARUTI SUZUKI FINANCIALS FOR 2008-09

Total Income up 14.28 per cent; Premium compacts and sedan segment drive top line growth

Fiscal 2008-09
The company's Total Income (Net of Excise) (Income from Operations plus Other Income) for the financial year 2008-09 climbed to Rs 21,453.8 Crore. This is the highest Total Income (Net of Excise) ever in the company's history, and marks a growth of 14.28 per cent over 2007-08. The growth in Total Income (Net of Excise) included higher realizations, largely contributed by the company's popular hatch-back Swift and premium sedan Swift Dzire (Diesel and Petrol variants). Net Profit during the year stood at Rs 1,218.7 Crore, down 29.6 per cent over 2007-08. The company's EBDITA for the year stood at Rs 2,433.4 Crore, a fall of about 22 per cent over the previous year. During the year, commodity prices went up sharply and remained high for most part of the year. Forex fluctuations were also adverse and impacted the bottom-line significantly. In recent months, commodity prices have eased. With regard to foreign currency exposure, the company's exports in 2009-10 are expected to be higher and cover its imports.

Dividend The Board of Directors recommended a dividend of 70 per cent for 2008-09. (Fiscal 2007-08: 100 per cent).

Quarter 4 The company registered Total Income (Net of Excise) (Income from Operations plus Other Income) of Rs 6,538.3 Crore during January-March 2009, a growth of 30.26 per cent compared to January-March 2008. Net profit during January-March 2009 was Rs 243.1 Crore vis--vis Rs 297.7 Crore during January-March 2008. While there was a 17 per cent growth in unit sales during the quarter, the adverse foreign exchange movements during the year, impacted the bottom-line in Q4 as well.

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Highlights of 2008-09
FINANCIAL HIGHLIGHT:
FINANCIAL HIGHLIGHTS Particulars Net Sales (In x10M Rs) Profit Before Tax (In x10M Rs) Reported Net Profit (In x10M Rs) Earnings Per Share-Unit Curr ( In Rs) 2009 20530.1 1675.8 2008 17891.6 2503 2007 14696.3 2279.8 2006 12015.9 1750 2005 10923.8 1304.9 2004 9104.4 769.8 2003 7180.1 282.1

1218.7

1730.8

1562

1189.1

853.6

542.1

146.4

41.57

59.03

53.29

40.65

29.25

18.56

4.88

In the fiscal 2008-09 Maruti Suzuki sold a total of 792,167 vehicles. The annual sales in 2008-09 is the highest ever by the company in its 25 year history. The previous highest annual sales were 764,842 units in 2007-08. During the fiscal, Maruti Suzuki Swift crossed the 3 lakh-sales mark cumulative domestic sales since launch and became the quickest vehicle model to do so. During the fiscal, Maruti Suzuki's Alto continued to be the preferred vehicle for the great Indian middle class crossing the 1 million-mark in cumulative sales in domestic market. The company's sales included exports of 70,023 units in 2008-09, up by 32.1 per cent over sales of 53,024 recorded in 2007-08. The 2008-09 export numbers, the highest ever by the company, was led by A-star, the fuel efficient compact car launched in Europe during the year as Suzuki Alto. The export tally includes around 19,000 units of A-star exported to Europe including United Kingdom, France, Germany, Italy, Netherlands, Denmark and Switzerland. Fiscal 2008-09 marked Maruti Suzuki's Silver Jubilee year in India. Over these 25 years the company has sold over 7 million (70 lakh) cars in the domestic market. Additionally, over half a million cars made by Maruti Suzuki have been exported world-over.

During the year, the company continued its focus on long term initiatives, despite the challenging market situation. These include: Focus on R&D: Manpower strength to 730 engineers from 460 in end March 2008. Company plans 1,000 engineers in R&D by 2010. New technology engine: Brand new facility for K-series engine launched on schedule. Launching new models: A-star launched. Introduced Maruti 800 Duo - an alternate fuel option that runs on LPG and petrol.

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 Annual capacity to manufacture expanded from 800,000 to one million units (Gurgaon plus Manesar plants). Reached out to new segments of customers - government employees and rural customers - through innovative programs. Export of A star (as Suzuki Alto) to Europe commenced as per schedule. Dedicated export port facilities for cars at Mundra completed, used for A-star shipment. Network expansion:

o Sales o Service o True Value

: From 600 sales outlets (in 393 cities) last year to 681 outlets (in 454 cities) : From 2,628 service outlets (1220 cities) last year to 2,767 (in 1314 cities); : From 265 outlets (in 166 cities) last year to 315 outlets (181 cities)

Increased Pre-owned car sales from 1.01 lakh units in 2007-08 to 1.23 lakh units in 2008-09 National Road Safety Mission launched - a nation-wide Corporate Social Responsibility (CSR) initiative to train 500,000 people in safe driving in three years. The network of Maruti Driving Schools further expanded and crossed 50 schools.

Accolades
During the year, the company, its products and services received many awards and accolades instituted by independent expert groups, media houses and research agencies.

These include: A star as the "Car of the year" A star as the "Best small car of the year" K10B Engine as the "Automotive technology of the year" Maruti Suzuki as the "Manufacturer of the year" The company was rated No. 1 for a record 9th consecutive year in the JD Power Customer Satisfaction Index Study. Maruti Suzuki India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on April 26, 2010, inter alia, to consider and approve the audited financial results for the year ended on March 31, 2010 and to recommend dividend if any, on equity shares of the Company for the financial year 2009-10.

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 MEANING OF ANALYSIS AND OBJECTIVE OF STUDY : Financial statement namely the statement of the profit & loss account and the balance sheet are indication of two signify-cant factors profitability and financial soundness analysis of statements means such a treatment of the information contained to afford a diagnosis of the profitability and financial statements analysis as the process of methodical classification comparison with other co-rising question and then seeking answer for them. Finance is the very typical aspect in course of management. The main objective behind the study is to get precisely. It also helps us to study the present finance scenario. The objective is such that companys profitability, liquidity and capacity by such analysis we can interpret the position of the company. So it is very important to study.

Profit Trend for 7 years:

PROFIT COMPARISION (IN x10M Rs) Particulars Operating Profit (EBDIT) Gross Profit (EBDT) Profit Before Tax (EBT) Adjusted Net Profit (EAT) 2009 2433.3 2382.3 1675.8 1072.63 2008 3130.8 3071.2 2503 1669.71 2007 2588.8 2551.2 2279.8 1535.29 2006 2055.8 2035.4 1750 1197.07 2005 1797.7 1761.7 1304.9 860.1 2004 1308.1 1264.7 769.8 621.82 2003 656.9 604.2 282.1 129.72

IMPORTANCE OF CASH PROFIT THEORY: MEANING Cash flow means inflows that is, sources of cash which are at the disposable at the firm and outflows of the fire that is the use of the firm. The difference between inflows and outflows is either net inflow or net outflow. A cash outflow statement deals with the cash fund flow, which excludes working capital movements. The Accounting standard (A53) classifies cash flows as under: 1) Cash from operating activities 2) Cash from investing activities 3) Cash from financing activities The operating activities include receipts from sale of goods or Rendering of services receipts from royalty, fees, commission etc. Outflow is the resulting from payment to creditors for goods and services, payment for expenses such as lighting, power, rent, wages salaries etc. Only cash from operating activities is included in this report.

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IMPORTANCE OF CASH PROFIT: The cash profit is an important measure of profitability as well as liquidity. When the cash profit differs from the profit is shown in the profit and loss account or profit and loss statement. Adjusting depreciation arrives at the cash profit; amortize action of capital expenses etc. The cash profit is much less or negative compared to the profit declared in the profit and loss account. It indicates liquidity and signals for appropriate cash management. The net cash from operations can be calculated through adjustment of non-cash items like depreciation, changes in inventory and receivable and payables, and or other items for which cash offers the investing and financing activities.

MEANING & IMPORTANCE OF RATIO: The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business. Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting. Ratio analysis may provide the allimportant early warning indications that allow you to solve your business problems before your business is destroyed by them. Ratio is a figure showing, logical relationship between any two items taken from financial statement as prepared and presented annually are of little use for guidance of prospective investors, creditors and even management. If relationships between various related items in these financial statements are established, they can provide useful dues to garage accurately the financial health and ability of business to make profit. The relation between in two related items of financial statements is known ratio. UTILITY OF RATIO ANALYSIS: It is very important to find the ratio of liquidity, profitability etc. Because the ratio analysis provides useful data to the management, important uses of it are given as below: PROFITABLITY : Useful information about the trend of profitability is from profitability ratio. The gross profit ratio, net profit ratio and ratio of return on investment give a good idea of the profitability of the business. On the basic of this ratio, investors get an idea about overall efficiency of managers and bank as well as other creditors draw useful conclusion about repaying capacity of the borrowers.

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 LIQUIDITY : In fact the use of ratio was made initially to ascertain the Liquidity of business. The current ratio, acid test ratio will tell whether the firm will be able to meet its current liabilities and when they nature. Banks and other leaders will be able to conclude from these ratios whether the firm will be able to pay regularly the interest and loan installments. EFFCIENCY : The turnover ratios are excellent guide to measure the efficiency of managers. All such ratio related to sales present a good picture of the success on the business. INTER FIRM COMPARION : The absolute ratios of a firm are not of much use, unless they are compared with similar ratios of other firms belonging to the same industry. This is a inter firm compared to other firms comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective measures. INDICATE TREND : The ratio of the last 3 to 5 years will indicate the trend in the respective fields. A particular ratio of a company, for one year may compare favorably with industry average, but its trend shows a deteriorating position, it is not desirable only ratio analysis will provide this information. USEFUL FOR BUDGETARY CONTROL : Regular budgetary reports are prepared in a business where the system of budgetary control is in use. If various ratios are presented these reports, it will give a fairly good idea about various aspects of financial position. USEFUL FOR DECISION MAKING : Ratio guide the management in making some of the important decision, suppose, the liquidity ratios shows an unsatisfactory position, the management may decide to get additional liquid funds. Even for capital expenditure decision, the ratio of investment. The efficiency of each department a thus be deter minded. Thus, the ratio are the most useful I financial statement.

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6. Classification of ratio
6.1Profitability ratio

[6.1.1] Gross Profit Ratio:

Meaning: It is expresses relationship between Gross Profit earned to net sales. It is a significant indicator of the profitability of business. It expresses in percent. For example, a ratio shows that for a sale of every Rs. 1000 a margin of 250 rupees is available from which operating expenses of business are recovered. The ratio shows whether the mark up obtained on cost of production is sufficient or not. There is no calibration against reasonability of gross profit ratio. However it must be enough to cover its operating expenses. In many industries, there are more or less recognized gross profit ratios and the business should strive to maintain this standard. If this ratio is low, it indicates that the cost of sales is high or that the purchasing is inefficient. Alternatively, it may also mean that due to depression, the selling price is reduced but there are may be no corresponding reduction, the selling price is reduced but there may be no corresponding reduction in cost of sales. In such a case, the management must investigate the causes and try to bring up this ratio.

Implementation: Gross profit is result of the relation between price, sales volume and costs. A change in the gross margin can be brought about by changes in any of these factors. The gross profit ratio can also be used in determining the extent of loss caused by theft, spoilage, damage and so on in the case of those firms which follow the policy of fixed gross profit margin in pricing their product. The gross margin represents the limit beyond which fall in sales price are outside the tolerance limit.

Formula: Gross profit Sales X 100

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FOR GROSS PROFIT RATIO Particulars Gross Profit (EBDT) (In x10M Rs) Net Sales (In x10M Rs) Gross Profit Ratio 2009 2382.3 20530.1 11.603937 2008 3071.2 17891.6 17.165597 2007 2551.2 14696.3 17.359471 2006 1761.7 12015.9 16.939222 10923.8 16.1271 719 2005 2004 1264.7 9104.4 13.891 0856 2003 604.2 7180.1 8.4149 2458

INTERPRETATION: As mentioned above the gross profit ratio indicates the relationship between gross profit and net sales. Here from the table we can judge the financial position of Maruti Suzuki year wise. Here 6 consecutive years from 2004 to 2009 are taken into consideration. The changes in the gross profit ratio in percent are as follows. Here, negative sign indicates that the percent is decreased compare to immediate previous year, while positive sign indicates that the percent is decreased in the gross profit compare to immediate previous year. For consecutive four years the gross profit ratio is positive. It indicates better financial position of the company.

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[6.1.2] Net Profit Ratio:

Meaning: Net profit ratio is valuable for the purpose of ascertaining the over-all profitability of business and shows the efficiency of operating the business. Implementation: The net profit ratio is indicative of managements ability to operate the business with sufficient success not only to recover from revenue of the period the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio of net profit ratio to sales essentially expresses the cost price effectiveness of the operation. A high net profit margin would ensure adequate return to the owners as well as enable a firm to withstand adverse economic conditions when selling price is declaiming, cost of production raising and a low net profit margin has the opposite implication. It indicates the portion of sales revenue is left to the proprietors after all operating expenses are paid. The higher the ratio, the better will be the profitability. In order to have a better idea of profitability, the gross profit ratio and net profit ratio may be simultaneously considered. If the gross profitability increases over the five years but net profit is declining, it indicates that administrative expenses are slowly rising.

Formula: Net Profit X 100 Sales

FOR NET PROFIT RATIO Particulars Net Profit (In x10M Rs) Net Sales (In x10M Rs) Net Profit Ratio 2009 1072.63 20530.1 5.2246701 2008 1669.71 17891.6 9.3323682 2007 1535.29 14696.3 10.446779 2006 1197.07 12015.9 9.9623831 2005 860.1 10923.8 7.87363 372 2004 621.82 9104.4 6.8298 8445 2003 129.72 7180.1 1.8066 6007

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Interpretation: Here 6 consecutive years from 2004 to 2009 are taken into consideration. The changes in the net profit ratio in percent are as follows. Higher the net profit ratio shows better financial position of the company. Due to various reasons this ratio goes down. If the administration department is not sufficient then net profit ratio goes down or the control mechanism is not efficient at all check points then also it affects net profit of the company. Net profit is the profit that is available to the proprietors of the firm after clearing all outstanding and expenses. Thus, higher the ratio yields higher profit.

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[6.1.3] Expenses Ratio:

Meaning: This ratio shows relationship between expanses to sales. Above table shows that for the year 2004 05 it was 88.64 % the increase in 2005 06 up to 89.23% that indicates there is increase in operating expenses for the year 2006 07 it is 92.03% and it is higher than previous year which shows increase in operating expenses. For the year 2008-09 there is 2.43 increases in the net profit ratio which gives signal of better financial position of the company. This operating expense may be due to growth in the organization or it may reflect inefficacy of administrative control on expenses. Here negative sign shows decrease in operating expenses. Implementation: Some accountants calculate expenses ratio in respected of raw material consumed, direct wages and factory expenses. It is closely related to the profit margin, gross as well as net. Formula:

Expenses X 100 Sales

FOR EXPENSES RATIO Particulars Total Expenditure (In x10M Rs) Net Sales (In x10M Rs) Net Profit Ratio 2009 18738.7 20530.1 91.274275 2008 15934.2 17891.6 89.059670 2007 12462.8 14696.3 84.802297 2006 10625.3 12015.9 88.427000 2005 9671 10923.8 88.5314 634 2004 8177.1 9104.4 89.814 8148 2003 6704.8 7180.1 93.380 315

INTERPRETATION: This ratio shows relationship between expanses to sales. Above table shows that for the year 2004 05 it was 88.64 % the increase in 2005 06 up to 89.23% that indicates there is increase in operating expenses for the year 2006 07 it is 92.03% and it is higher than previous year which shows increase in operating expenses. This operating expense may be due to growth in the organization or it may reflect inefficacy of administrative control on expenses. Here negative sign shows decrease in operating expenses.

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[6.1.4] OPERATING RATIO:

Meaning: Operating Ratio is computed by dividing expenses by sales. The term operating ratio includes (1) COGS (2) administrative expenses (3) selling expenses and (4) financial expenses but excludes taxes, dividends and extraordinary losses due to theft of goods, good destroyed by fire and so on. Implementation: Some accountants calculate expenses ratio in respected of raw material consumed, direct wages and factory expenses. It is closely related to the profit margin, gross as well as net.

Formula:

C O G S + Operating expenses Net sales

X 100

OPERATION RATIO Particulars Operating Expense COGS Net Sales Operating Ratio 2009 2114.8 3498.6 20530.1 27.3423 2008 1510.4 3744.5 17891.6 29.3708 2007 1244.21 3197.01 14696.3 30.22 2006 900.15 2506.35 12015.9 28.3499 2005 801.54 2160.04 10923.8 27.1113 2004 786.54 1673.64 9104.4 27.0219 2003 840.88 1168.58 7180.1 27.9865

INTERPRETATION: This ratio shows relationship between COGS + operating expanses to sales. Above table shows that for the year 2004 05 it was 87.33 % the increase in 2005 06 up to 86.90 % that indicates there is increase in operating expenses for the year 2006 07 it is 83.89 % and it is lower than previous year which shows increase in operating expenses. In the year 2008-09 there is 28% increase in the operating expenses. This is may be due to inefficient operation management and also there may be some other expenses for sales or promotion may incur during this year.

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[6.1.5] Return on investment / Capital employed:

Meaning: The profitability ratio can be computed by relating the profits of a firm to its investment. Implementation: Return on investment indicates the profitability of business and is very much in use among financial analysis. The ratio is an indicator of the measure of the success of a business from the owners point of view. The ultimate interest of any business is the rate of return on invested capital. It may be measured by the ratio of income to equality capital. It determines whether a certain goal has been achieved or whether an alternative use of capital is justified. It is an index of profitability of business and is obtained by comparing net profit with capital employed. Capital includes share capital, reserves and long term loans such as debentures. Formula:

EBIT Capital employed

X 100

FOR RETURN ON INVESTMENT / CAPITAL EMPLOYED Particulars Gross Profit (EBIT) (In x10M Rs) Capital Employed ( Share capital + Reserves and surplus) (In x10M Rs) Return on Investment 2009 2382.3 2008 3071.2 2007 2551.2 2006 2035.4 2005 1761.7 2004 1264.7 2003 604.2

9344.9

8415.4 36.49499 73

6853.9 37.222 6032

5452.6 37.3289 807

4378.8 40.232 4838

3591.2 35.216 6407

3098 19.502 9051

25.4930497

INTERPRETATION: This ratio shows relationship between E B I T to CAPITAL EMPLOYED. Higher the ratio, it is better for the company. In the year 2008- 09 there is decrease of 43.15 percent in the gross profit of the company. This show slow- down in companys sale. It is due to recession during that period where an overall sale was affected.

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[6.1.6] Return on shareholders fund:

Meaning: It is carries the relationship of return to the sources of funds yet another step further. In order to judge the efficiency with which the proprietors funds are employed in business, this ratio is ascertained. Proprietors equity or Proprietors funds include share capital and reserves. It is of great practical importance to the perspective of investors, as it enables the profitability of a company to be compared with that of other. It also indicates whether the return on proprietors fund is enough in relation to the risk that they undertake. This ratio shows what amount of dividend is likely to be received on shares. Implementation:

It expresses the profitability of a firm in relation to the funds supplied by the creditors and owners taken to gather, the return on shareholders equity measures exclusively the return on the owners funds. Formula: Net profit X 100 Share holders fund
FOR RETURN ON SHAREHOLDER'S FUND Particulars Net Profit (In x10M Rs) Capital Employed ( Share capital + Reserves and surplus) (In x10M Rs) Return on Investment 2009 1072.63 9344.9 11.4782 395 2008 1669.71 8415.4 19.84112 46 2007 1535.29 6853.9 22.4002 393 2006 1197.07 5452.6 21.9541 136 2005 860.1 4378.8 19.642 3678 2004 621.82 3591.2 17.315 1036 2003 129.72 3098 4.18721 756

INTERPRETATION: The ratio indicates relationship between Net profits to share holders fund therefore higher the returns to shareholders. For the year 2004 05 it is 21.90 % that increase in the year 2005 06 up to 23.70. This ratio shows downward trend in the ratio in return on shareholders fund for this company. During the year 2008-09 there is 72.97% decrease in the ROI. This ratio shows upward trend for that financial year for the company.

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[6.1.7] Return on Equity share capital:

Meaning: It is obtained by dividing net profit after tax deduction of performance dividing by his amount of ordinary share capital plus free reserve. Implementation: This is probably the single most important ratio to judge whether the firm has earned a satisfactory return for its equity holders or not. Its adequacy can be judge by: (1) comparing it with the past record of the same form, (2) comparisons with the overall industry average.

Formula:
Net profit after tax Preference dividend X 100

Equity capital

FOR RETURN ON EQUITY SHARE CAPITAL Particulars Net Profit (In x10M Rs) Preference Dividend (In Rs) Share Capital (In x10M Rs) Return on Equity Share Capital (In Rs) 2009 1072.63 0 144.5 55.73 2008 1669.71 0 144.5 8.13 2007 1535.29 0 144.5 22.03 2006 1197.07 0 144.5 28.14 2005 860.1 0 144.5 27.73 2004 621.82 0 144.5 79.12 2003 129.72 0 144.5 11.46

INTERPRETATION: The ratio indicates relationship between Net profits to share holders fund therefore higher the returns to shareholders. For the year 2004 05 it is 19.49 % that increase in the year 2005 06 up to 21.81 %. This ratio shows downward trend in the ratio in return on shareholders fund for this company. For the financial year 2008-09 there is 85% increase in the ratio in return on shareholders fund.

Here, year 2008-09 shows marked improvement that is why it is taken into consideration.

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[6.1.8] Return on Equity share holders fund:

Meaning: It is obtained by dividing net profit after tax deduction of performance dividing by his amount of ordinary share capital plus free reserve. Implementation: This is probably the single most important ratio to judge whether the firm has earned a satisfactory return for its equity holders or not. Its adequacy can be judge by: (1) comparing it with the past record of the same form, (2) comparisons with the overall industry average.

Formula:
Net profit after tax Preference dividend X 100

Equity share holders funds

FOR RETURN ON EQUITY SHARE HOLDERS FUND Particulars Net Profit (In x10M Rs) Capital Employed ( Share capital + Reserves and surplus) (In x10M Rs) Preference Dividend (In Rs) Return on Investment (In Rs) 2009 1072.63 9344.9 0 11.4782 395 2008 1669.71 8415.4 0 19.8411 246 2007 1535.29 6853.9 0 22.4002 393 2006 1197.07 5452.6 0 21.9541 136 2005 860.1 4378.8 0 19.6423 678 2004 621.82 3591.2 0 17.315 1036 2003 129.72 3098 0 4.18721 756

INTERPRETATION: For the year 2004 05 it is 19.64 % that increase in the year 2005 06 up to 21.95%. These ratios shows downward trend in the ratio in return on shareholders fund for this company. Here in the year 2008-09 there is decrease of 69% compared to previous year in the ROI which shows upward trend in the company.

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[6.1.9] Earning per share:

Meaning: EPS measures the profit available to the equity shareholders on a per share basis, that is, the amount that they can get on every share head. This ratio shows the profitability of the firm from the owners point of view. By comparing EPS of the current year with past years the path of the trend of profitability can be ascertained. It is essential that EPS of the company should be compared with the other companies and also average of the company before giving final opinion. The limitation of EPS is that it does not show how much dividend is actually paid to shareholders and how much profit is retained in business. Implementation: Earning per share is a widely used ratio. EPS s a measure of profitability

Formula: Profit after tax preference dividend X 100 No. of equity shareholders fund
FOR RETURN ON EARNING PER SHARE Particulars Net Profit (In x10M Rs) No. of Equity Shares Preference Dividend (In Rs) Return on Investment ( In Rs) 2009 2008 2007 2006 2005 1072.63 1669.71 1535.29 1197.07 860.1 2889100 2889100 2889100 2889100 2889100 60 60 60 60 60 0 0 0 0 0 37.1267 57.7934 53.1407 41.4340 29.7705 792 185 594 02 106 2004 621.82 288910 060 0 21.522 9612 2003 129.72 2889100 60 0 44.8997 865

INTERPRETATION: This ratio indicates the earning per share for shareholders of company. In the year 2004 05 ratio is 29.77 % and 2005 06 it is 41.43 % and its increase on 2006-07 is 53.14 %.therefore it is good for company as well as shareholders.

[6.1.10] Dividend per share:

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Meaning: DPS is the dividend paid to shareholders on a per share basis. In the other words, DPS is the Net distributed profit belonging to the shareholders divided by the No. of ordinary shares outstanding. Implementation: The DPS would be a better indicator than EPS as the former shows what exactly is received by the owners. Like the EPS, the DPS is also should not be taken at its face value as the increase DPS may not be a reliable measure of profitability as the equality base may have increase due to increase relation without any change in the number of outstanding shares.

Formula: Total dividend declared No. of equity shares

FOR DIVIDEND PER SHARE Particulars No. of Equity Shares Total Dividend (In x10M Rs) Dividend per Share ( In Rs) 2009 2008 2007 2006 2005 2889100 2889100 2889100 2889100 2889100 60 60 60 60 60 101.1 3.49935 894 144.5 5.00155 654 130 4.49967 024 101.1 3.49935 894 57.8 2.00062 262 2004 288910 060 43.3 1.4987 3632 2003 2889100 60 42.7 1.47796 861

INTERPRETATION: This ratio indicates the total dividend declared to no. of shares. For the year 2004 05 it is 2 % and 2005 06 is3.50 % and increase on 4.50 % in the year 2006 07. For the year 2007-08 is 96% increased compared to previous year while for the year 2008-09 it is decreased to 26.84%. Thus for the current year it is decreased. It indicates slow-down in the financial position of the company.

[6.1.11] Price earning ratio:

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Meaning:

It is closely related to the earning yield leanings price ratio. It is actually the reciprocal of the latter. Thus ratio is computed by dividing the market price of the shares by the EPS.
Implementation: The price earning ratio reflects the price currently being paid by the market for each Rupee of currently reported EPS. In other words, the PIE ratio measures investors expectations and the market appraisal of the earnings. Therefore, only normally sustainable earning associated with the assets are taken into account.

Formula: Market value per share Earning per share

FOR PRICE EARNING RATIO Particulars Market Value of Share (In Rs) Earning Per Share (In Rs) Price Earning Ration 2009 1559.65 41.57 37.5186 433 2008 520.1 59.03 8.81077 418 2007 990.05 53.29 18.5785 326 2006 927.35 40.65 22.8130 381 2005 636.5 29.25 21.7606 838 2004 461.25 18.56 24.851 8319 2003 376.3 4.88 77.1106 557

INTERPRETATION: This ratio indicates the earning per share for shareholders of company. In the year 2004 05 ratio is 17.58% and 2005 06 it is 21.95% and its increase on 29.55%. Therefore it is good for company as well as shareholders.

[6.1.12] Dividend yield ratio:

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Meaning: Dividend yield ratio is closely related to the EPS and DPS. While the EPS and DPS are based on the book value per share, the yield is expressed in terms of the market value per share. The earnings yield may be defined as the ratio of earnings per share to the market value per ordinary share. Implementation:

The dividend yield ratio is calculated by dividing the cash dividends per share by the market value per share. Formula: Dividend per share Market value share
FOR DIVIDEND YIELD RATIO Particulars Market Value of Share (In Rs) Dividend Per Share (In Rs) Dividend Yield Ratio 2009 1559.65 3.4993589 4 0.0022436 8 2008 520.1 5.001555 65 0.009616 53 2007 990.05 4.49967 024 0.00454 489 2006 927.35 3.499358 94 0.003773 5 2005 636.5 2.00062 262 0.00314 316 2004 461.25 1.4987 3632 0.0032 4929 2003 376.3 1.4779 6861 0.0039 2763

INTERPRETATION: This ratio indicates the earning per share for shareholders of company. In the year 2004 05 ratio is 17.58% and 2005 06 it is 21.95%. For the year 2007-08 the ratio is decreased by 109.9% and for 2008-09 it is increased by 76.51%. So for current situation is good for company as well as shareholders.

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[6.1.13] Interest coverage ratio:

Meaning: It is also known as time interest earned ratio. This ratio measures the debt servicing capacity of a firm insofar as fixed interest on long term loan is concerned. It is determined by dividing the operating profit or earning before interest and taxes (EBIT) by the fixed interest changes on loans. Implementation: This ratio uses the concept of net profits before taxes because tax is calculated after paying interest on long term loan. This ratio as the name suggests, show how many times the interest changes are covered by EBIT out of which they will be paid.

Formula:

EBITD Interest
FOR INTEREST COVERING RATIO Particulars Operating Profit (EBDIT) (In x10M Rs) Interest (In x10M Rs) Interest Covering Ratio 2009 2433. 3 51 47.71 1764 7 2008 3130.8 59.6 52.53020 13 2007 2588.8 37.6 68.85106 38 2006 2055.8 20.4 100.774 51 2005 1797.7 36 49.9361 111 2004 1308.1 43.4 30.1405 53 2003 656.9 52.7 12.464 8956

INTERPRETATION: This ratio indicates the EBDIT to interest. In the year 2004 05 ratio is 49.93 and 2005 06 it is 100.8 and its decrease on 68.85.therefore it is good for company as well as shareholders. For the year 2008-09 the interest covering ratio is 47.71 while for the year 2007-08 it is 52.53.It is decreasing for the last 2 financial years due to the fluctuation in for-ex.

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7. Activity / Turn over Ratio: [7.1] Overall turnover ratio:

Meaning: The amount invested in business is invested in all capital employed and sales are affected through them to earn profits so in order to find relation between net sales to capital employed. Implementation:

The usefulness of the Du Pont analysis lies in the fact that it presents the overall picture of the
performance of a firm as also enables the management to identify the factors which have a bearing on profitability.

Formula: Net sales Capital employed

FOR OVERALL TURNOVER RATIO Particulars Net Sales (In x10M Rs) Capital Employed ( Share capital + Reserves and surplus) (In x10M Rs) OVERALL TURNOVER RATIO 2009 20530.1 2008 17891.6 2007 14696.3 2006 12015.9 2005 10923.8 2004 9104.4 2003 7180.1

9344.9 2.19693 0946

8415.4 2.126054 614

6853.9 2.1442244 56

5452.6 2.203700 987

4378.8 2.49470 174

3591.2 2.5351 97149

3098 2.31765 6553

INTERPRETATION: This ratio indicates net sales to capital employed. In the year 2004 05 ratio is 2.49 and 2005 06 it is 2.20 and its decrease on 2.14 in the year 2006 07. Therefore it is bad for company. In the year 2008-09 the ratio is 2.19 while in the year 2007-08 the ratio is decreased to 2.12 which shows slow down in the company.

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[7.2] fixed assets turn over ratio:

Meaning: It is based on the relationship between the sales and assets of the firm. A reference to this was made while working out the overall profitability of a form as reflected in its earning power. Implementation:

To ascertain efficiency and profitability of the business. The higher the turnover ratio, the more
efficiency is the management and utilization of the assets while low turnover ratios are indicative of underutilization of available resources.

Formula: Sales Fixed assets

FOR FIXED ASSETS TURNOVER RATIO Particulars Net Sales (In x10M Rs) Total Fixed Asset (In x10M Rs) Fixed Asset Turnover Ratio 2009 20530.1 7079.34 4828 2.9 2008 17891.6 5716.166 134 3.13 2007 14696.3 4740.7419 35 3.1 2006 12015.9 4073.186 441 2.95 2005 10923.8 3943.61 011 2.77 2004 9104.4 3746.6 6667 2.4299 99998 2003 7180.1 3554.50 495 2.02

INTERPRETATION: Fixed turn over ratio indicates the turnover of the company in one year. In the year 2004 05 ratio is 2.77 and 2005 06 it is 2.95 and it increase on 3.1 in the year 2006 - 07. Therefore, it is good for company. In the year 2008-09 there is decrease of 7% in the fixed turnover ratio compare to last year while during year 2007-08 there is very minor change in the ratio. Year 2007-08 and 2006-07 shows almost similar financial position of the company while year 2008-09 shows slight slow down in the financial position of the company

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[7.3] Debtor turn over ratio:

Meaning:

It is allied and closely related to this is the average collection period. It is the test of the liquidity of the debtors of a firm.
Implementation: This figure should be measured, as in the case of average inventory, on the basis of the monthly average. It suggests that number of times the amount of credit sale is collected during the year.

Formula: Credit sales Avg. Debtors

FOR DEBTOR TURN OVER RATIO Particulars Net Sales (In x10M Rs) Sundry Debtors (In x10M Rs) Debtor Turnover Ratio 2009 20530.1 697.117 1477 29.45 2008 17891.6 596.9836 503 29.97 2007 14696.3 595.23288 78 24.69 2006 12015.9 507.2140 144 23.69 2005 10923.8 527.974 867 20.69 2004 9104.4 560.61 57635 16.24 2003 7180.1 603.877 2077 11.89

INTERPRETATION:

Debtor turnover ratio indicates credit sales to avg. debtors. In the year 2004 05 ratio is 20.69 and 2005 06 it is 23.69 and its increase on 24.69 in the year 2006 07. Therefore, it is good position for company. In the year 2008-09 there is 1% decrease in the Debtors turnover ratio compare to previous year and 2007-08 there is 17.91% increase in the debtors turn over ratio. How efficiently the amount is collected from the customers from the credit sales. As compare to previous year the no. of days collection period increase which indicate inefficiency of collection department. Lower the collection period and higher debtor turnover ratio is advisable.

[7.4] Creditor ratio:

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Meaning: It is the no. of days within which we make payment to our creditors for credit purchases it obtained from creditor ratio. Implementation: The generally the longer credit period achieved means the operation of the payment being financial interest feels by supper funds.

Formula: Creditor + B / P Credit Purchases X 365

FOR CREDITOR RATIO Particulars Creditor (In x10M Rs) Bills Payable (In x10M Rs) Credit Purchase (In x10M Rs) Creditor Ratio 2008 854.9 0 13938.8 22.3863245 2007 909.6 0 10836.4 30.63785021 2006 555.1 0 9392.8 21.57093731 2005 463.7 0 8621.3 19.6316681

INTERPRETATION: Creditor ratio indicates creditor to credit purchase. In the year 2004 05 ratio is 19.63 and 2005 06 it is 21.57 and its increase on 30.63 in the year 2006 07. In the year 2007-08 there is decrease on 22.38 times i.e. decrease of 36.36% in the creditor ratio compare to previous year. Thus it indicates slight slow down in the financial condition of the company.

[7.5] creditor turns over ratio:

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Meaning: It is the no. of days within which we make payment to our creditors for credit purchases it obtained from creditor ratio. Implementation:

The generally the longer credit period achieved means the operation of the payment being financial interest feels by supper funds. Formula: No. of days in a year Creditors ratio
FOR CREDITOR TURN OVER RATIO Particulars NO. Of Days in Year Creditor's Ratio Creditors Turnover Ratio 2008 365 22.3863245 16.30459703 2007 365 30.63785021 11.91336851 2006 365 21.57093731 16.92091515 2005 365 19.6316681 18.5924089

INTERPRETATION:

Creditor ratio indicates creditor to credit purchase. In the year 2004 05 ratio is 18.59 and 2005 06 it is 16.92 and its increase on 11.91 in the year 2006 07. Therefore, it is good position for company. During the year 2007-08 ratio is 16.30. It increases in compare to previous financial year thus it indicates good position of the company.

[7.6] Stock Turnover Ratio:

Meaning:

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 It is the no. of times the average stock is turned over during the year is known as stock turnover ratio. It measures the relationship between COGS and inventory level. Higher the turnover ratio, the more profitable business would be. Such firms will be able to trade on a smaller margin of a gross profit. Lower stock turn over ratio indicates accumulation of slow moving, obsolete and low quality goods, which is a danger signal for management. Implementation: This approach has the advantage of being free from bias as it smoothens out the fluctuations in the inventory level at different period. It is measures how quickly inventory is sold. It is a test of efficient inventory management. To judge whether the ratio of a firm is satisfactory or not.

Formula: Cost of good sold Average stock

FOR STOCK TURN OVER RATIO Particulars Sales Turnover (In x10M Rs) Gross Profit (EBDT) (In x10M Rs) Cost Of Good Sold (COGS) (In x10M Rs) Inventories (In x10M Rs) Stock Turn over Ratio 2009 23182.2 2382.3 20799.9 902.3 23.052089 11 2008 21025.2 3071.2 17954 1038 17.29672 447 2007 17205.9 2551.2 14654.7 701.4 20.893498 72 2006 14753.1 2035.4 12717.7 881.2 14.4322514 8 2005 13335.7 1761.7 11574 666.6 17.362736 3 2004 11047.4 1264.7 9782.7 439.8 22.243519 78 2003 8981.5 604.2 8377.3 487 17.201848 05

INTERPRETATION: Stock turnover ratio indicates cost of goods sold to average stock. In the year 2004 05 ratio is 17.36 times and 2005 06 it is 14.43 times and its increase on 20.80 times in the year 2006 07. For the year 2008-09 and 2007-08 the ratio are 23.05 times and 17.3 times respectively. It is more in 2008-09 compare to 2007-08. It indicates better position of the company. Therefore, it is good for company. How efficiently stock rate in the year Higher the ratio, better position of the company as well as efficiency.

8. Liquidity Ratio:

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[8.1] Current Ratio:

Meaning: The current ratio is the ratio of total current assets to total current liability. It is calculated by dividing current assets by current liability. It is also known as a working capital ratio, as it is measure of working capital available at a particular time. It is a measure of short term financial strength of the business and shows whether the business will be able to meet its current liabilities, as and when they mature. Implementation: The current ratio of a firm measures its short term solvency. That is a measure of margin of safety to the creditors. The fact that a firm can rarely count on such an even flow requires that the size of the C.A. should be sufficiently larger than C.L. so that the firm would be assured of being able to pay its current maturing debts as and when it becomes due.

Formula: Current Assets Current liability

FOR CURRENT RATIO Particulars Total Current Assets (In x10M Rs) Total Current Liabilities (In x10M Rs) Current Ratio 2009 5491.1 2008 3097.9 2007 4405 2006 3740.9 2005 2972 2004 2018.9 2003 2782.8

3397.6 1.6162

2825.7 1.096330

3072.4 1.433732

1977.1 1.892114

1608 1.848258

1531.8 1.31799

1478.6 1.882050

INTERPRETATION: Current ratio indicates current assets to current liability. In the year 2004 05 ratio is 1.84: 1 and 2005 06 it is 1.89: 1 and its decrease on 1.43: 1 in the year 2006 07. Therefore, it is good for company. For the year 2008-09 the ratio is 1.61:1 and for the year 2007-08 it is 1.61:1. So for the year 2008-09 it is good as ideal is 2:1 and 1.61:1 closer to ideal one. Mainly 2: 1 is good. It indicates, repaying condition of the company to the current liabilities. The standard current ratio must be 2:1.

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[8.2] Liquid Ratio:

Meaning: It is obtained by dividing the liquid assets by liquid liabilities. It liquid ratio is designed to show the amount of cash available to meet immediate payments. If the liquid assets are equal to or more than liquid liabilities, the condition may be considered as satisfactory. Implementation: The importance of adequate liquidity in the sense of the ability of a firm to meet short term obligations when they become due for payment can hardly be overstressed. In fact liquidity is a prerequisite for the very survival of a firm. It measures ability of a firm to meet its short term obligations and reflect the short term finance strength of a firm.

Formula: Liquid assets Liquid liability

FOR LIQUIDITY RATIO Particulars Total Current Assets (In x10M Rs) Inventories (In x10M Rs) Prepaid Expenses (In x10M Rs) Quick Asset (In x10M Rs) Total Current Liabilities (In x10M Rs) Bank Over Draff (In x10M Rs) Liquidity Ratio 2009 5491.1 902.3 0 4588.8 3397.6 2008 3097.9 1038 0 2059.9 2825.7 2007 4405 701.4 0 3703.6 3072.4 2006 3740.9 881.2 0 2859.7 1977.1 2005 2972 666.6 0 2305.4 1608 2004 2018.9 439.8 0 1579.1 1531.8 2003 2782.8 487 0 2295.8 1478.6

1.35060042 0.72898751 1.205442 1.44641141 1.43370647 1.0308787 1.55268497

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INTERPRETATION:

Liquid ratio indicates liquid assets to liquid liability. In the year 2004 05 ratio is 1.43: 1 and 2005 06 it is 1.44: 1 and its decrease on 1.21: 1 in the year 2006 07. Therefore, it is good for company. How effectively the liability paid off. For the year 2008-09 the ratio is 1.35:1 which shows slight better condition compare to FY 2004-05. The standard liquidation must be 1:1.

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[8.3] Quick / acid test ratio:

Meaning: The measure of absolute liquidity may be obtain by comparing only cash and bank balance as well as readily marketable securities with liquid liabilities. This is exacting standard of liquidity and it is satisfactory if the ratio is 0.5:1. Quick assets here do not include both stock and debtors, because payment from debtors would not generally be received immediately when liquid liabilities are to be paid. Implementation: This ratio is the most rigorous and conservative test of a firms liquidity position. Further, it is suggested that it would be useful for the management.

Formula: Quick assets Liquid liability

FOR QUICK ACID TEST RATIO Particulars Quick Assets (In x10M Rs) Current Liability (In x10M Rs) Quick Acid Test Ratio 2009 5491.1 3397.6 2008 3097.9 2825.7 2007 4405 3072.4 2006 3740.9 1977.1 2005 2972 1608 2004 2018.9 1531.8 2003 2782.8 1478.6

1.61617024 1.09633011 1.43373259 1.89211471 1.84825871 1.3179919 1.88205059

INTERPRETATION: Quick acid test ratio is indicates quick assets and liquid liability. In the year 2004 05 ratio is 1.84: 1 and 2005 06 it is 1.89: 1 and its decrease on 1.4: 1 in the year 2006 07. Therefore, it is good for company.

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9. Leverage Ratio: [9.1] Proprietary ratio:

Meaning: The ratio shows the proportion of proprietors funds to the total assets employed in known in the proprietary ratio. Implementation: Proprietary ratio helps to known how many proprietary funds to total assets. The higher the ratio, the stronger the financial position of the enterprise, as it signifies that the proprietors have provided larger funds to purchase assets. This ratio can not exceed 100%; it means that the business does not use any outside funds. There are no outside liabilities. Purchases are made for cash only and firm carries business entirely from own funs only. A very high ratio therefore is not desired as it shows insufficient use of out side fund is made. Generally it is said that proprietors fund should be enough to cover fixed assets. And also reasonable proportion must be maintained between owned funds and borrowed funds, so the benefit of trading on equity is obtained. Which inture increase the rate of equity dividend.

Formula: Proprietary fund Net asset

FOR PROPEIETARY RATIO Particulars Total Proprietary Funds (In x10M Rs) Total Assets (In x10M Rs) Proprietary Ratio 2009 9344.9 10043.8 93.041478 32 2008 8415.4 9315.6 90.3366 3962 2007 6853.9 7484.7 91.57214 05 2006 5452.6 5524.3 98.702098 2005 4378.8 4686.4 93.43632 639 2004 3591.2 3903.1 92.0089 1599 2003 3098 3554 87.169 38661

INTERPRETATION: This ratio indicates the proprietary funds to total assets. For the year 2006 07 it is 91.57 % and 2007 08 is 90.33 % and increase in 2008 09 it is 93.04 %. This is a good for company.

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[9.2] Debt equity ratio:

Meaning: The relationship between borrowed funds and owners capital is a popular measure of the long term financial solvency of a firm. This relationship is shown by the debt equity ratio. Implementation: This ratio reflects the relative claims of creditors and shareholders against the assets of the firm. Alternatively this ratio indicates the relative proportions of debts and equity in financing the assets of a firm. The D/E ratio is an important tool of financial analysis to appraise the financial structure of a firm. It has important implication from view point of the creditors, owners and the firm itself. A higher ratio means that outside creditors have a larger claim than the owners of business. The pressure from creditors would increase and their interference will also increase. The company with high debt position will have to accept strict conditions from the lenders, while borrowing money. A lower ratio is not profitable from the view point of equity share holders, as benefit of trading on equity is not availed of and the rate of equity dividend will be comparatively lower.

FOR DEBT EQUITY RATIO Particulars Long term Liabilities (In x10M Rs) Total Shareholders Funds (In x10M Rs) Debt-Equity Ratio 2009 841.041 9344.9 9% 2008 841.54 8415.4 10% 2007 411.234 6853.9 6% 2006 218.104 5452.6 4% 2005 350.304 4378.8 8% 2004 395.032 3591.2 11% 2003 588.62 3098 19%

INTERPRETATION: This ratio indicates the debt to equity ratio. For the year 2004 05 it is 8 %and 2005 06 is 4 % and increase in 2006 07 it is 6%. This is a bad for company as compare to 2005-06 year is more debt ratio which indicate the more realize on debt fund rather owned fund. The good impact is interest burden will be more indirectly. For the year 2008-09 and 2007-08 the debt equity ratio is 9% and 10% respectively. As the higher debt equity ratio it shows the weaker financial condition of the company. But, still it again varies for company to company.

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Accounting Policy 2009

1) BASIS FOR PREPARATION OF ACCOUNTS These financial statements have been prepared to comply in all material respects with all the applicable accounting principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956. 2) REVENUE RECOGNITION Domestic and export sales are recognized 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. 3) FIXED ASSETS Fixed assets (except freehold land which is carried at cost) are carried at cost of acquisition or construction or at manufacturing cost (in case of own manufactured assets) in the year of capitalization 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. 4) BORROWING COSTS Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized till the month in which each asset is put to use as part of the cost of that asset. 5) DEPRECIATION a) Fixed assets except leasehold assets viz land and vehicles are depreciated on the straight line method on a pro-rata basis from the month in which each asset 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 managements estimate of the useful life of the assets, higher depreciation has been provided on the straight line method over the following useful lives: 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 unamortized depreciable amount is charged over the revised remaining useful life of the assets. b) Leasehold assets viz land & vehicles are amortized over the period of lease.

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c) All assets, the individual written down value of which at the beginning of the year is Rs. 5,000 or less, are depreciated at the rate of 100%. Assets purchased during the year costing Rs 5,000 or less are depreciated at the rate of 100%. 6) INVENTORIES a) Inventories are valued at the lower of cost, determined on the weighted average basis, and net realizable 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. 7) INVESTMENTS 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 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. 9) EMPLOYEE BENEFIT COSTS The Company has Defined Contribution Plans for post employment benefits namely Provident Fund and Superannuation Fund which are recognized by the income tax authorities. These Funds are administered through Trusts and the Companies contributions thereto are charged to revenue every year. The Company also maintains an 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 Companies 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 recognized by the income tax authorities and is administered through a Trust.

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Termination benefits are recognized as an expense immediately. Gains and losses arising out of actuarial valuations are recognized immediately in the Profit and Loss Account as income or expense. 10) CUSTOMS DUTY Custom duty available as drawback is initially recognized as purchase cost and is credited to consumption on export of vehicles. 11) GOVERNMENT GRANTS Government grants are recognized in the profit and loss account in accordance with the related scheme and in the period in which these are accrued. 12) TAXES 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 recognized 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. 13) DIVIDEND INCOME Dividend from investments is recognized when the right to receive the payment is established and when no significant uncertainty as to measurability or collectability exits. 14) INTEREST INCOME Interest income is recognized on the time basis determined by the amount outstanding and the rate applicable and where no significant uncertainty as to measurability or collectability exists. 15) IMPAIRMENT OF ASSETS

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At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds the recoverable amount. 16) PROVISIONS AND CONTINGENCIES The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the 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.

48

Notes to Accounts Year End: Mar '09

1) Contingent Liabilities: 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. 4,799 million (Previous year Rs. 3,130 million). Against this, the Company has deposited a sum of Rs. 23 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. 4,466 million (Previous year Rs. 9,905 million). Against this, the Company has deposited a sum of Rs. 3,802 million under protest (Previous year Rs. 4,745 million). v. Service-tax demands of Rs. 1234 million (Previous year Rs. 253 million). vi. Claims against the Company for recovery of Rs 606 million (Previous year Rs. 639 million) lodged by various parties. b) 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). c) 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. Nil (Previous year Rs. 2,000 million). Against this, the balance outstanding as at the year-end is Rs. Nil (Previous year Rs. 194 million). d) A guarantee given to HSBC Limited against Non-Fund based facilitiesgranted by the bank to a group company Suzuki Powertrain India Limited of Rs. Nil (Previous year Rs. 3,000 million). Against this, the balance outstanding as at the year-end is Rs. Nil (Previous year Rs. 1,543 Million). e) 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.

49

The amount shown in items (b) to (d) represent guarantees given in the normal course of the Companies 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 2,255 million (Previous year Rs. 2,764 million). 3) Estimated value of contracts on capital account, excluding capital advances, remaining to be executed and not provided for, amount to Rs.11,593 million (Previous year Rs. 12,692 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. 9 million (Previous year Rs. 26 million) on account of estimated reversal of tax benefit on quantity differences on inputs. 2) 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 2009, the Company has availed of sales tax benefit amounting to Rs. 1,675 million (Previous year Rs. 1,605 million). 3) With effect from April 1, 2008, the company has adopted Accounting Standard 30 - Financial Instruments Recognition and Measurement issued by The Institute of Chartered Accountants of India to the extent it does not contradict with any other Accounting Standard notified u/s 211(3C) of the Companies Act. Accordingly, during the current year, in respect of derivative instruments which qualify for hedge accounting, the net unrealized loss aggregating Rs. 1,709 million has been accounted for as a Hedging Reserve to be ultimately recognized in the profit and loss account when the underlying transaction arises, as against the earlier practice of recognizing the same in the profit and loss account, on valuation at the end of each period. Other derivative instruments that do not qualify for hedge accounting have been recorded at fair value at the reporting date and the resultant loss/ gain has been accounted in the profit and loss account. 4) Previous Years figures have been recast regrouped where considered necessary to make them comparable with the current years figures.

50

Auditor's Report

Year End: Mar '09

1. We have audited the attached Balance Sheet of Maruti Suzuki India Limited, as at 31st March, 2009, 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 Companies 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 (Auditors Report) Order, 2003, as amended by the Companies (Auditors 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 programmed designed to cover all the items, except furniture and fixtures, office appliances and certain other assets having an aggregate net book value of Rs. 367 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 programmed, a portion of 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.

51

(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 in the register required to be maintained under that section. (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 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.

52

(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 cuss as at March 31, 2009 which have not been deposited on Account of any dispute are as follows: (Rs. in Million) Name of the statute (Nature of Dues) Income Tax Act, 1961 (Tax & Interest) Amount Amount deposited under protest amount Period to which the amount is pending Forum where the dispute is pending

5,271

3,799

1992 to 2006

Income Tax

Tribunal/ High Court Appellate Commissioner Income Tax (Appeals) Wealth Tax Act, 1957 (Tax) Haryana General Sales Tax Act (Tax & Interest) Dlhi Sales Tax Act (Tax) The Central Excise Act, 1944 (Duty, Interest & Penalty) 1 1 1998 to 1999 High Court

1984 to 1989

Assessing Authority

47

1988 to 1992

Additional Commissioner Customs Excise & Service

1774

51

April 1986 to January 2008

Tax Appellate Tribunal/ High Court/ Supreme Court/ Commissioner Appeals The Finance Act, 1994 (Service Tax, Interest & Service Penalty) 370 July 1997 to September 2004 Tax Appellate Tribunal

Customs Excise & Service

53

Customs Act, 1962 (Duty & Interest)

27

22

February 2003 to August 2003

Customs Excise & Service Tax Appellate Tribunal

Or detailed listing refer Note 30 on Schedule 23 x) The Company has no accumulated losses as at March 31, 2009 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.

54

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 and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard 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 2009 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2009 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 2009; (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 Dhawan, Membership Number- F084451, Partner, For and on behalf of Price Waterhouse Chartered Accountants.

Place: New Delhi Date: April 24, 2009

55

Conclusion

Maruti was listed in 2003, and has been a consistent and strong performer on the stock exchange, giving handsome returns to investors. They are practically debt free and have a healthy cash balance. They have financed all growth from internal resources. Their continuous efforts at cost cutting and improving productivity, even in good times, have helped them in making reasonable profits despite the impact of higher commodity prices and weaker rupee.

Maruti Suzuki India LTD. company has a trend of growth from 2003 to 2007.During the financial year 2008-09 the there is downfall in the growth of the company. The main reason behind this downfall is because of the global recession and the price of commodities of Maruti was quite high in the commodity market. The downfall of net profit during the financial year 2008-09 is 29.6% over the financial year 2007-2008.The total sales numbers in 2009-10 mark a growth of 29% over last financial year. The export sales of 147,575 units in the year2009-10 are the highest ever annual export by the company. Maruti has crossed sale of 1million cars and by achieving this now it has become landmark for Maruti where other companies will take time to reach and of course they have raise their bar for themselves also.

From above facts and figures we reach to the conclusion that the future is exciting and full of promise.

56

Appendix 1 Balance Sheet of Maruti Suzuki

Balance Sheet(2009-2000) of Maruti Suzuki
*All numbers are in INR and in x10M

200903 200803 200703 200603 200503 200403 200303 200203 200103 200003 SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities 144.5 144.5 144.5 144.5 144.5 144.5 144.5 132.3 132.3 132.3 9200.4 8270.9 6709.4 5308.1 4234.3 3446.7 2953.5 2575 2510.2 2779.8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9344.9 8415.4 6853.9 5452.6 4378.8 3591.2 3098 2707.3 2642.5 2912.1 0.1 0.1 63.5 71.7 307.6 311.9 300 395.1 561.5 86.4 698.8 900.1 567.3 0 0 0 156 260.9 550.6 459.7 698.9 900.2 630.8 71.7 307.6 311.9 456 656 1112.1 546.1 10043.8 9315.6 7484.7 5524.3 4686.4 3903.1 3554 3363.3 3754.6 3458.2

8720.6 4649.8 0 4070.8 0 861.3 3173.3

7285.3 3988.8 0 3296.5 0 736.3 5180.7

6146.8 3487.1 0 2659.7 0 250.7 3409.2

4954.6 3259.4 0 1695.2 0 92 2051.2

5053.1 3179.4 0 1873.7 0 42.1 1516.6

4566.7 4513.8 4384.7 3866.7 3499.9 2735.9 2258.1 1954.6 1619.6 1324.2 0 0 0 0 0 1830.8 2255.7 2430.1 2247.1 2175.7 0 0 0 0 0 74.9 9.3 72.4 368.4 234.2 1677.3 103.2 96.8 95.5 397.4 681.1 839.3 71.9 517.7 2110 865.5 990.2 675.5 466.3 87.6 31.7 622.4 526.4 2251 2014.6

902.3 1038 701.4 881.2 666.6 439.8 487 918.9 655.5 747.4 646.1 599.5 689.4 671.1 1939 330.5 1422.8 1401.6 1029.4 240.2 989.4 1730.9 1073.9 1533.4 812 676.5 649.5 635.3 5491.1 3097.9 4405 3740.9 2972 2018.9 2782.8

3016.9 2456.2 2011 1505.8 1218.8 1211.4 1135.9 1201.7 1026.7 1090.2 380.7 369.5 1061.4 471.3 389.2 320.4 342.7 263.5 239.4 325.8 3397.6 2825.7 3072.4 1977.1 1608 1531.8 1478.6 1465.2 1266.1 1416 2093.5 272.2 1332.6 1763.8 1364 487.1 1304.2 644.8 984.9 598.6 0 0 0 0 0 16.3 88.7 119.2 58.7 52.3 78.9 99.6 110.1 121.1 125.4 125.5 231.7 0 0 0 234 269.7 277.6 199 235.4 308.8 438.8 0 0 0 -155.1 -170.1 -167.5 -77.9 -110 -183.3 -207.1 0 0 0 10043.8 9315.6 7484.7 5524.3 4686.4 3903.1 1353 2186.1 1684.4 3554 3363.3 3754.6 3458.2 793.2

57

881.4 1051.4 1297.3 1754.1 2018.2 1314.2

Appendix 2 Income Statement

Income Statement (2009-2003) of Maruti Suzuki
*All numbers are in INR and in x10M

200903 (12) 200803 (12) 200703 (12) 200603 (12) 200503 (12) 200403 (12) 200303 (12) 200203 (12) 200103 (12) 200003 (12) INCOME : Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income EXPENDITURE : Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit Adjst. below Net Profit P & L Balance brought forward Statutory Appropriations Appropriations P & L Balance carried down Dividend Preference Dividend Equity Dividend % Earnings Per Share(Adj)-Unit Curr Earnings Per Share-Unit Curr Earnings Per Share(Adj)-Unit Curr Book Value-Unit Curr 23182.2 2652.1 20530.1 998.5 -356.6 21172 21025.2 3133.6 17891.6 837.1 336.3 19065 17205.9 2509.6 14696.3 598.4 -243.1 15051.6 14753.1 2737.2 12015.9 429.2 236 12681.1 13335.7 2411.9 10923.8 403.2 141.7 11468.7 11047.4 1943 9104.4 377.6 3.2 9485.2 8981.5 1801.4 7180.1 276.5 -94.9 7361.7 9087.8 2013.2 7074.6 318 141.9 7534.5 8928.7 2211.8 6716.9 324.6 -20.3 7021.2 9315.1 2325.6 6989.5 357.5 51.3 7398.3

15763.1 193.6 463.5 254.7 1486.96 576.84 0 18738.7 2433.3 51 2382.3 706.5 1675.8 459.2 9.7 -11.8 1218.7 146.07 1072.63 0 7025.7 0 240.2 8004.2 101.1 0 70 41.57 41.57 41.57 323.35

13791.5 147.3 346.8 197.8 1110.4 340.4 0 15934.2 3130.8 59.6 3071.2 568.2 2503 759.8 9.8 2.6 1730.8 61.09 1669.71 0 5637.3 0 342.4 7025.7 144.5 0 100 59.03 59.03 59.03 291.19

10739 97.4 266.29 153.5 941.67 264.94 0 12462.8 2588.8 37.6 2551.2 271.4 2279.8 621.4 6.7 89.7 1562 26.71 1535.29 -8.8 4393.9 0 309.8 5637.3 130 0 90 53.29 53.29 53.29 237.16

9335.6 57.2 211.45 141.3 668.56 211.19 0 10625.3 2055.8 20.4 2035.4 285.4 1750 587.3 5.7 -32.1 1189.1 -7.97 1197.07 0 3442.1 0 237.3 4393.9 101.1 0 70 40.65 40.65 40.65 188.67

8563.2 58.1 191.46 92.7 580.01 185.53 0 9671 1797.7 36 1761.7 456.8 1304.9 524.6 0 -73.3 853.6 -6.5 860.1 0 2757.4 0 168.9 3442.1 57.8 0 40 29.25 29.25 29.25 151.52

6973.3 95.8 293.76 71.1 536.44 206.7 0 8177.1 1308.1 43.4 1264.7 494.9 769.8 251.5 0 -23.8 542.1 -79.72 621.82 0 2335.9 0 120.6 2757.4 43.3 0 30 18.56 18.56 18.56 124.26

5563.4 78.1 217.82 57.3 621.29 166.89 0 6704.8 656.9 52.7 604.2 322.1 282.1 35.1 0 100.6 146.4 16.68 129.72 0 2269.9 0 80.4 2335.9 42.7 0 30 4.88 107.2

5839.6 49.4 227.25 60.2 635.02 184.83 0 6996.3 538.2 77 461.2 342.9 118.3 13.8 0 0 104.5 -0.71 105.21 0 2233.2 0 67.8 2269.9 39.7 0 30 78.99 2046.33

5889.8 51.4 199.22 82.1 551.8 117.88 0 6892.2 129 75.9 53.1 322.3 -269.2 0.2 0 0 -269.4 18.29 -287.69 0 2502.8 0 0.2 2233.2 0 0 0 0 1997.35

5616.1 37.5 185.71 94.9 588.15 167.54 0 6689.9 708.4 60.2 648.2 263.1 385.1 55 0 0 330.1 5.83 324.27 0 2245 0 72.3 2502.8 33.1 0 25

58
243.99 2201.13

Appendix 3 Cash Flow Statement

Cash Flow Statement (2009-2001) - Maruti Suzuki

*All numbers are in INR and in x10M

200903 Cash Flow Summary Cash and Cash Equivalents at Beginning of the year Net Cash from Operating Activities Cash Flow From Operating Activities Net Profit before Tax & Extraordinary Items Adjustment For Depreciation Interest (Net) Dividend Received P/L on Sales of Assets P/L on Sales of Invest Prov. & W/O (Net) P/L in Forex Fin. Lease & Rental Chrgs Others Total Adjustments (PBT & Extraordinary Items) Op. Profit before Working Capital Changes Adjustment For Trade & 0th receivables Inventories Trade Payables Loans & Advances Investments Net Stock on Hire Leased Assets Net of Sale Trade Bill(s) Purchased Change in Borrowing Change in Deposits Others Total (OP before Working Capital Changes) Cash Generated from/(used in) Operations Interest Paid(Net) Direct Taxes Paid Advance Tax Paid Others Total-others Cash Flow before Extraordinary Items Extraordinary Items Excess Depreciation W/b 330.5 1193.3 1675.8 706.5 -192.6 -144 12.5 -213.7 -37.9 -61 0 0 69.8 1745.6 -265 135.7 645.5 -616.1 0 0 0 0 0 0 0 -99.9 1645.7 0 -452.4 0 0 -452.4 1193.3 0

200803 1422.8 1822.8 2503 568.2 -81.2 -166.8 2.4 -89.8 -85.5 44.3 0 0 191.6 2694.6 92 -336.6 356.6 -119.1 0 0 0 0 0 0 0 -7.1 2687.5 0 -864.7 0 0 -864.7 1822.8 0

200703 200603 200503 200403 200303 200203 1401.6 1029.4 240.2 989.4 2028 1222.6 1074.7 1035.9 2279.8 1750 1304.9 769.8 71.9 770.5 282.1 322.1 -48.9 -3 5.4 -35 43.6 0 0 0 284.2 566.3 87.6 653.9 118.3 342.9 -18.6 -3.9 0.8 0 -42.3 -0.2 0 0.3 279 397.3

200103 31.7 -244.8 -269.2 322.3 4.6 -3.7 0.7 -19 19.2 0 0 -26.1 298 28.8 -333.8 124.7 -74 0 0 0 0 0 0 0 0 -283.1 -254.3 0 9.5 0 0 9.5 -244.8 0

271.4 285.4 456.8 494.9 -73.3 -86.5 -29.4 -30.4 -152.8 -72 -79.2 -72.3 0.4 22 11.9 2.2 -38.9 -10 -1.1 -3.4 -43.7 -4.4 -36.7 -8.1 0 0 0 0 0 0 0 0 -8.9 0 0 0 -45.8 134.5 322.3 382.9 2234 1884.5 1627.2 1152.7 -103.5 -55.3 89.9 -20.4 168 -214.6 -226.7 47.3 517 318.5 105.2 113 -152.3 -130.1 -21.5 -23.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 429.2 -81.5 -53.1 116.7 2663.2 1803 1574.1 1269.4 0 0 0 0 -635.2 -580.4 -499.4 -233.5 0 0 0 0 0 0 0 0 -635.2 -580.4 -499.4 -233.5 2028 1222.6 1074.7 1035.9 0 0 0 0

167.3 -184.1 194.1 175 -20.3 172.7 -124.6 105.6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 216.5 269.2 782.8 666.5 0 0 -12.3 -12.3 0 0 0 -0.3 -12.3 -12.6 770.5 653.9 0 0

59

Premium on Lease of land Payment Towards VRS Prior Year 's Taxation Gain on Forex Exch. Tran Others Net Cash Used in Investing Activities Cash Flow from Investing Activities Investment in Assets : Purchased of Fixed Assets Sale of Fixed Assets capital WIP Capital Subsidy Recd Financial/Capital Investment : Purchase of Investments Sale of Investments Investment Income Interest Received Dividend Received Invest.In Subsidiaires Loans to Subsidiaires Investment in Group Cos Issue of Sh. on Acqu. of Cos Canc. of Invest. in Cos Acq. Acquisition of Companies Inter Corporate Deposits Others Net Cash Used in Financing Activities Cash Flow From Financing Activities Proceeds: Proceeds from Issue of shares (incl share premium) Proceed from Issue of Debentures Proceed from 0ther Long Term Borrowings Proceed from Bank Borrowings Proceed from Short Tem Borrowings Proceed from Deposits Share Application Money Cash/Capital Investment Subsidy Loans from a Corporate Body Payments: Share Application Money Refund On Redemption of Debenture Of the Long Tem Borrowings Of the short term Borrowings Of financial Liabilities Dividend Paid Shelter Assistance Reserve Interest Paid Others

0 0 0 0 0 951.4

0 0 0 0 0 -3047.4

0 0 0 0 0 -2436.8

0 0 0 0 0 -530.7

0 0 0 0 0 0 0 0 0 0 -193.7 -1551.1

0 0 0 0 0 0 0 0 0 0 37 -128.1

0 0 0 0 0 -193.5

-1620.7 7.1 0 0

-1685.8 6.9 0 0

-1395.5 12.3 0 0

-210.3 31.5 0 0

-482.5 3.7 0 0

-140.1 2.3 0 0

-101.7 -222.9 8.6 9.4 0 0 0 0

-603.6 16.8 0 0 -11 331.9 0 68.7 3.7 0 0 0 0 0 0 0 0 494.2

-17019.1 -18696.6 -12244.4 -9346.9 -5224.3 -5416.3 -2290.5 -1.3 19237.2 17012.3 10925.3 8822.2 5375.7 3845.5 2319.1 0 0 0 0 0 0 0 0 0 202.9 149 112.7 100.8 54.5 85.2 98.5 82.8 144 166.8 152.8 72 79.2 72.3 3 3.9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -536.2 132.3 430 -319.7 -91.8 -234 110 -541.5

0 0 0 0 454.8 0 0 0 0 0 0 0 -788.7 0 -144.4 0 -57.9 0

0 0 0 0 399.9 0 0 0 0 0 0 0 -63.4 0 -129.9 0 -74.3 0

0 0 567.5 0 23.3 0 0 0 0 0 0 0 -31.7 0 -101.1 0 -28 0

0 0 0 0 1.7 0 0 0 0 0 0 0 -237.6 0 -57.8 0 -26 0

0 0 0 0 7.6 0 0 0 0 0 0 0 -11.9 0 -43.2 0 -44.3 0

0 0 0 0 11.9 0 0 0 0 0 0 -142.7 -13.3 0 -42.7 0 -47.2 0

399 0 0 0 13.3 0 0 0 0

0 0 0 0 41.5 0 0 0 0

0 0 435.6 0 126.1 0 0 0 0 0 0 0 0 0 0 0 -67.5 0

0 0 0 0 0 0 -209.6 -504.1 0 0 -39.7 0 0 0 -53 -78.9 0 0

60

Appendix 4

Ratio
Key Ratios for Maruti Suzuki 200903 200803 200703 200603 200503 200403 200303 200203 200103 200003 Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio Profitability Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) Return on Capital Ratio ROCE (%) RONW (%) 9% 6% 1.22 2.9 23.9 29.45 29.91 9.63 6.58 9.41 7.67 4.63 15.76 12.08 10% 7% 1.13 3.13 24.18 29.97 43 14.89 12.19 14.61 10.93 8.23 30.51 22.67 6% 6% 1.52 3.1 21.74 24.69 61.63 15.05 13.47 14.83 10.66 9.08 35.63 25.38 4% 4% 1.73 2.95 19.06 23.69 86.78 13.93 12 13.8 9.99 8.06 34.68 24.19 8% 8% 1.42 2.77 24.11 20.69 37.25 13.48 10.05 13.21 9.83 6.4 31.28 21.42 11% 11% 1.37 2.43 23.84 16.24 21.47 12.91 8.43 12.52 10.11 5.63 25.34 18.59 19% 18% 1.47 2.02 15.38 11.89 5.79 6.98 3.4 6.4 5.03 1.44 9.1 4.47 33% 24% 1.35 2.2 11.75 12 2.54 5.92 2.15 5.07 4.92 1.15 5.63 3.91 30% 15% 1.22 2.42 9.62 15.64 -2.55 1.44 -2.16 0.59 0.59 -3.02 -5.44 -9.7 12% 2% 1.25 3.18 11.88 25.08 7.4 7.6 4.78 6.96 6.37 3.54 14.6 11.93

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