IMPORTANT FINANCIAL INFORMATION EXTRACTED FROM THE REPORT

1. Share Capital: The Share Capital of the company as at 31.03.2013 stands at Rs. 151 Crores, up
from Rs. 144.5 Crores as at 31.03.2012. The increase in capital is attributable to issue of equity
to shareholders of Suzuki Powertrain India Ltd, in lieu of a controlling stake.

2. Capital Work in Progress: There was a steep increase in the capital work in progress from
Rupees 7,101 million in FY’12 to Rupees 18,019 – an increase of 154%.

3. Long term loans: There was no long term loan in FY’12. But as of 31.03.2013, the company
has total long term borrowings of Rupees 5,429 million. This suggests that the company may be
planning for an expansion, using outsiders’ funds.

4. Analysis of Profitability: ROCE value has increased from 10.77% to 12.51%. net increment of
16.16%, this implies that the company is making judicious use of the capital employed. ROE
has increased from 10.77% to 12.88%. Gross Profit ratio has increased from 18.09% to 22.00%.
Net profit ratio has also increased from 4.71 to 9.61%. All the major profitability ratios has
increased Y-O-Y basis. This implies that the company is working efficiently to convert every
rupee earned in revenue to profit. Invariably company is enjoying good financial health.

5. Some important financial parameters over the last 5 financial years:

All figures are in million Rupees (Except Book Value, EPS, and percentages)

Parameter 2008-09 2009-10 2010-11 2011-12 2012-13

Net Sales 203583 289585 358490 347059 426126
Net Worth 93449 118351 138675 151874 185789
Book Value 323 410 480 525 615
EPS 42 86 79 57 79
PAT 12187 24976 22886 16352 23921
EBITDA Margin
(%) 9.0 13.7 10.1 7.2 10.0
PAT Margin (%) 6.0 8.6 6.3 4.7 5.6

6. Interest Paid: The interest paid during the year has increased from Rupees 490 in FY’12 to
Rupees 2083 million in FY’13.

7. Solvency Position Analysis: The Share Capital of the company as on 31.03.2013 stands at Rs.
1510 million, up from Rs. 1445 million as on 31.03.2012. The increase in capital is attributable
to issue of equity to shareholders of Suzuki Powertrain India Ltd, in lieu of a controlling stake.
 The company’s long term liabilities increased by about 125%. Maruti increased its long term
borrowings to Rs. 5420 million in the FY ’13 while there was none in the previous year. The
interest and installment impact of this will be felt in FY’14 only. The company’s solvency
position more or less remained the same with current ratio being 1.6:1, Quick ratio being
1.167:1, Debt-equity ratio being 0.1. The Cash and Bank Balance reduced by 68%.

8. Liquidity Analysis: The company’s current ratio has slightly reduced from 1.6923 in FY 2013
to 1.6 in FY 2012 showing a better utilization of its current assets and a healthy position of its
levels of its net working capital of Rs.40968 million in FY 2013 from Rs.45324 million in FY
2012. The Cash and Bank balance has reduced from Rs.24361 million in FY 2012 to Rs.7750
million in FY 2013, showing effective utilization of the firm’s resources. At the same time the
company has also decreased its Short term borrowings from Rs.10783 million in FY 2012 to
Rs.8463 million in FY 2013. All of this has had a combined effect on the Quick Ratio of the
company. It has decreased a bit from 1.299 in FY 2012 to 1.167 in FY2013 which is because of
both, a decrease in the amount of current assets and an increase in the amount of current
liabilities. The Inventory Holding Period has also remained stable, not changing much from
20.61 days in FY12 to 19.97 days in FY12.

9. Depreciation: The Company has also charged a higher depreciation amount in FY’13 (63%
more as compared to FY’12). This could be attributable to two reasons:

 The increase in the amount of fixed assets (by over 25%) over FY’12
 To show lower levels of profit so as to attract less tax

10. Debt Service Coverage Ratio: The DSCR has drastically reduced to 1.73 in FY’13 from
10.22 in FY’12. This was primarily because the company had to repay large amount of short
term borrowings amounting to Rupees 10,783 million.
SPECIFIC AREAS OF STRENGTHS

1. Strong Y-o-Y Growth in Sales and Net Worth: Despite the tough macroeconomic scenario and
the labor unrest incident, the company registered a strong Y-o-Y growth in Net Sales and Net
Worth, each in excess of 22%. PAT grew by 46.3%. The net sales increased from 347059
million Rs to 426126 million Rs in the given period of 2012-2013.
2. The company saved Rupees 2164 million by localization and Rupees 2090 million from
implementation of value analysis and value engineering proposals.
3. Material cost as a percentage of net sales reduced from 80.9% to 76.3%, which is a very
significant reduction considering the highly competitive automobile industry in which the
company operates.
4. Total passenger vehicle industry grew by only 2.2% whereas Maruti Suzuki’s passenger
vehicles sales grew at 4.4% that is twice the rate of the industry.
5. The Gross Profit Margin has increased from 18.09 in FY 2012 to 22 in FY 2013. This is an
increased amount of rupees that Maruti is able to save at the end of the day.
6. The book value per share has increased from 525 in FY 2012 to 615 in FY 2013. This shows a
favorable condition for an investor in case the company is liquidated in the future.
7. The Return on Total Assets has increased from 8.03% in FY 2012 to 9.76% in FY 2013. This
shows that the company is in a better situation to generate earnings by using its assets.
8. The Return on Equity has increased from 10.77% FY 2012 to 12.88% FY 2013. The increase of
RoE is shows the strength of the company. It shows the ability of the company to generate more
profit with the money that shareholders have invested in it.
9. Usually the ideal proprietary ratio for automobile sector should be 0.7. For Maruti Suzuki it
turned out to be 0.6961 which is very close to the ideal figure.
10. Altman Z score: The Z score for Maruti for the FY 2012-13 is 3.835, indicating this is a healthy
firm. The Altman Z Score was designed as a way to rank a manufacturing company's risk of
going bankrupt. A Z score above 2.99 is safe; 1.81 to 2.99 means there is a chance the company
will declare bankruptcy in the next two years; and less than 1.81 means the company is severely
distressed.
SPECIFIC AREAS OF WEAKNESS

1. Decline in Exports to Eurozone countries: There was a 35% decline in exports to Eurozone
countries from 43,000 vehicles in FY’12 to 28,000 in FY’13.

2. Appreciation of the Yen: From an average of 0.61 in FY’12, the Yen appreciated to 0.66 with
respect to the rupee in FY’13. The total imports of the company in FY’13 amounted to Rupees
42,344 million, a significant amount out of which is from Japan. Thus, exposure to the
appreciating Yen is a significant business risk for the company.

3. Labour Unrest Situation: The Manesar facility of the company saw a severe labour unrest
situation during the financial year and was locked down for 1 month. This led to loss of
production and other adverse impacts. Thus, labour unrest is a significant business risk for the
company in the future.

4. The company has a disputed outstanding amount of Rupees 20,100 million under different
statutes like Income Tax Act,1961, The Central Excise Act,1944 and The Finance Act, 1994.
The said amount is being disputed in different courts of law. If the said amount is proven
payable, it would be a significant impact on the company’s financial health.

5. Long Term Borrowings designated in foreign currency: After acquiring Suzuki Powertrain
India Limited during the FY’13, the company has taken upon outstanding foreign currency
loans amounting to Rupees 3920 million. Also, the company has outstanding loans of Rupees
1,509 million from the holding company (Suzuki Japan). The company engages in hedging
activities to protect this exposure, but the hedge reserve- the reserve created to settle hedging
losses if required- stands at (402) million Rupees (negative) as at 31.03.2013. The company has
estimated unrealized foreign currency losses amounting to Rupees 1425 million in FY’13. Thus,
the foreign currency denominated loans are a significant financial risk.

6. High Interest Costs in FY’13: Interest paid in FY’13 was an increase of 370% over interest
paid in FY’12 (Rupees 2167 million v/s Rupees 426 million).

7. Cash and Bank Balances: Cash and Bank Balances came down from 24,361 million Rupees in
FY’12 to 7,750 million Rupees in FY’13- a steep fall of 68%.
RECOMMENDATIONS TO THE COMPANY

1. Loans in foreign currency: Given the highly volatile currency rate scenario and depreciation
of the rupee against all major global currencies, including the Japanese Yen, the company
should try to minimize its long term borrowings designated in foreign currency. This can be
achieved through possible early repayment of some loans as and when the rupee appreciates.

2. Better IR practices: The unfortunate incident at the company’s Manesar plant in Fy’13 is an
indicator that there is much scope for better industrial relations. The impact of the one month
lock down of the plant was not felt to too large an extent this time because of the overall
slowdown and slack in demand. But in a year with strong demand, such an incident could have
much worse effects on the top and bottom line.

3. Maintain performance and market share: Throughout the FY’13 report, it is observed that
FY’13 has been an exceptionally good year for the company, despite certain labour challenges.
All the performance ratios have improved year on year. Hence it is recommended that the
company maintain this performance level and market share.
 STATEMENT OF PROFIT/ LOSS For the year ended For the year ended
(All amounts are in millions of ₹) 31.03.2013 31.03.2012

REVENUE FROM OPERATIONS

Gross Sale of Products 481147 386141
Less: Excise Duty 55021 39082
Net Sales of Products 426126 347059
Other Operating Revenue 9753 8812
  435879 355871
Other Income 8124 8268
Total Revenue 444003 364139
EXPENSES
Cost of Material Consumed 305741 267055
Purchase of Stock-in-Trade 19613 15325
Change in Inventories of Finished Goods, Work-in-Progress
234 (1297)
and Stock-in-Trade
Employees Benefit Expenses 10696 8013
Finance Costs 1898 522
Depreciation and Amortization Expense 18612 11384
Other Expenses 57737 42072
Vehicles/Dies for Own Use (438) (427)
Total Expense 414093 342677
Profit before Tax 29910 21462
Less: Tax Expense - Current Tax 7228 4138
- MAT Credit Awaited (904) 0
-Deferred Tax (335) 972
Profit for the Year 23921 16352
Basic / Diluted Earnings Per Share of ₹ 5 each 79.19 56.6
 BALANCE SHEET As At As at
(All amounts are in millions of ₹) 31.03.2013 31.03.2012
EQUITY AND LIABILITIES
Share Capital   1510 1445
Shareholders'
Reserves & Surpluses   184279 150429
Funds
Total 185789 151874
Long term borrowings   5429 0
Deferred Tax Liabilities (Net)   4087 3023
Non-Current
Other Long Term Liabilities   1036 966
Liabilities
Long term Liabilities   2259 1693
Total 12811 5682
Short Term Borrowings   8463 10783
Trade Payables   41674 33499
Current
Other Current Liabilities   11661 15892
Liabilities
Short Term Provisions   6482 5292
Total 68280 65466
TOTAL EQUITY AND LIABILITIES 266880 223022
ASSETS
Tangible Assets 95765 73108
Intangible Assets 2227 2099
Fixed Assets Capital Work in
19422 9419
Progress
Non-Current
TOTAL 117414 84626
Assets
Non-Current Investments   18485 13933
Long Term Loans & Advances   12787 13410
Other Non-Current Assets   8946 263
TOTAL NON-CURRENT ASSETS (a) 157632 112232
Current Investments   52298 47541
Inventories   18407 17965
Trade Receivables   14237 9376
Current Assets Cash & Bank Balances   7750 24361
Short Term Loans & advances   11153 7783
Other Current Assets   5403 3764
TOTAL CURRENT ASSETS (b) 109248 110790
TOTAL ASSETS (a+b) 266880 223022
 CASH FLOW STATEMENT For the year For the year ended
(All amounts are in millions of ?) ended 31.3.2013 31.3.2012
A. Cash Flow from Operating Activities:
Net profit before Tax 29910 21462
Adjustments for:
Depreciation and amortisation 18612 11384
Finance cost 1898 552
Interest Income (3134) (4036)
Dividend Income (417) (699)
Net loss on sale/ discarding of fixed assets 331 157
Profi t on sale of investments (Net) (4101) (2442)
Provision no longer required written back (472) (1091)
Unrealised foreign exchange(gain)/loss 1425 556
Operating Profit before Working capital changes 44,052 25843
Adjustments for changes in working capital
-increase/(decrease) in trade Paybles 6400 7416
-increase/(decrease) in Short Term Provisions 268 254
-increase/(decrease) in Long Term Provisions 996 1195
-increase/(decrease) in Other Current Liabilities (477) 2000
-increase/(decrease) in Other Long Term Liabilities 70 7
-increase/(decrease) in Trade Receivables (3693) (1131)
-increase/(decrease) in Inventories 3485 (3815)
-increase/(decrease) in Long Term Loans and Advances 2358 (863)
-increase/(decrease) in Short Term Loans and Advances (2215) (947)
-increase/(decrease) in Other current Assets (1930) (1970)
-increase/(decrease) in Other Non current Assets (139) 119
Cash generated from Operating Activities 49175 28108
-Taxes(Paid) (Net of Tax Deducted at Source) (5333) (2509)
Net Cash from Operating Activities 43842 25599
B. Cash Flow from investing activities
Purchase of Fixed Assets (38549) (29697)
Sale of Fixed Assets 449 67
Sale of Investments 118332 159780
Purchase of Investments (127492) (167598)
Investments in Deposits with Banks (15000) (22600)
Maturities of Deposits with Banks 22600 24130
Interest Received 3502 4261
Dividend Received 417 699
Net Cash from Investing Activities (35741) (30958)
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Short Term borrowings 8,463 10,783
Repayment of Short Term borrwings -10,783 -312
Proceeds from Long Term borrowings 1688 0
Repayment of Long Term borrwings -4,510 (1,362)
Interest Paid -2,003 (426)
Dividend Paid -2,167 (2,167)
Corporate Dividend tax Paid -351 (351)
Net Cash from Financing Activities -9,663 6,165
Net Increase/(Decrease) in Cash & Cash Equivalents -1,562 806
Cash and Cash Equivalent as at 1st April (Opening Balance) 1,761 955
Cash & Cash Equivalents as at 1st April 2012 [acquired pursuant
1,051 0
to a scheme of amalgamation (refer note 37)]
Cash and Cash Equivalent as at 31st March (Closing Balance) 1,250 1,761
Cash & Cash Equivalents comprise 1,250 1,761
Cash & Cheques in Hand 1,031 696
Balance with Banks 219 65
Balance with Scheduled Banks in Deposit Accounts 0 1,000
ANNEXURE (SUPPORTING CALCULATIONS) Financial Ratios
Ratio Definition 2013 2012
Gross Profit Ratio Gross Profit/Sales 93737/426126 * 100 = 22 62770/347059 = 18.09
Net Profit Ratio PAT/Sales 23921/426126 = 5.61 16352/347059 = 4.71
Capital turnover Net Sales/Capital
386142/191218 = 2.02 323029/151874 = 2.13
Ratio Employed
Return on
EBIT-Taxes)/Net Assets 23921/158382 = 0.1510 16352/129950 = 0.1258
Investment (ROI)
Return on Equity
PAT/Equity 23921/185789 = 0.1288 16352/151874 = 0.1077
(ROE)
Return on Net
PAT/Net Worth 23921/185789 = 0.1288 16352/151874 = 0.1077
Worth (RONW)
Return on Common Net Income/ Common
23921/185769 = 12.87 16352/151874 = 10.76
Equity Equity
Return on Total
Return on Total Assets 23921/244951 = 9.76 16352/203636.5 = 8.03
Assets
Return on Capital Net Profit/Capital
23921/191218 = 0.1251 16352/151874 = 0.1077
Employed (ROCE) Employed
Earnings per PAT/Number of equity
23921/302080060 = 79.19 16352/288910060 = 56.6
Share (EPS) shares
Earning Power EBIT/Total Assets 29910/266880 = 0.11 16352/223022 = 0.073
(Current Assets –
Prepaid
Quick Ratio Expenses)/(Current 79688/68280 = 1.167 85042/65466 = 1.3
Liabilities – Short Term
Bank Overdraft)
Current Assets / Current
Current Ratio 109248/68280 = 1.6 110790/65466 = 1.692
Liabilities
Debt Equity Ratio Debts/Equity 21274/185789 = 0.1145 16465/151874 = 0.1084
Stockholder's Equity/Total
Proprietary Ratio Assets
185789/266880 = 0.6962 151874/223022 = 0.681
(Profit after tax - Dividend
paid on Irredeemable
Dividend
Preference 23921/2167 = 11.04 16352/2167 = 7.55
Coverage Ratio Shares)/Dividend paid to
Ordinary Shareholders
Interest Coverage EBIT/Interest Expense NA NA
Debt Service
Net Operating
Coverage Ratio Income/Total Debt Service
29910/17296 = 1.729 21462/2100 = 10.22
(DSCR)
Inventory COGS/Average
332389/18186 = 18.28 284282/16057.5 = 17.7
Turnover Inventory
Total Asset
Sales/Average 426126/244951 = 1.74 347059/203636.5 = 1.7
Turnover
Net Working Current Assets-Current
40968 45324
Capital Liabilities
Fixed asset
turnover
Net Sales/Fixed Assets 386142/117414 = 3.29 323029/84626 = 3.82
Inventory Holding 365*(Avg.
19.97 days 20.62 days
Period Inventory/COGS)
 Annexures ROE DuPont

ROE= Net income / Equity

Net PBT/EBIT EBIT/Sales Sales/Assets Assets/Equity

Income /PBT
X X X X

Net PBT EBIT Sales Assets Equity

Income

PBT EBIT Sales Assets

Share Reserves
Capital &
Surpluses

Current Non -
Assets current
Assets

2013 2012
Current Assets 109248 Current Assets 110790
Non-current assets 157632 Non-current assets 112232
Assets 266880 Assets 223022
Share capital 1510 Share capital 1445
Reserves and surpluses 194279 Reserves and surpluses 150429
Equity 185789 Equity 151874
Sales 426126 Sales 347059
EBIT 29910 EBIT 21462
PBT 29910 PBT 21462
Net Income 23921 Net Income 16352
Assets/ Equity 1.4365 Assets/ Equity 1.4685
Sales/Assets 1.5967 Sales/Assets 1.5561
EBIT/Sales 0.0702 EBIT/Sales 0.0681
PBT/EBIT 1 PBT/EBIT 1
Net income/PBT 0.7998 Net income/PBT 0.7619
ROE 0.1288 ROE 0.1077
 Common Size Statements
Note 19- Inventories

As at 31.3.2013 (%) As at 31.3.2012

(%)
Components and Raw Materials 53.41 55.18
Work in Progress 6.12 3.30
Finished Goods Manufactured
Vehicles 26.12 29.69
Vehicle Spares and Components 1.69 0.96
Traded Goods
Vehicles 0.03 1.65
Vehicle Spares and Components 7.30 6.62
Stores and Spares 2.97 1.53
Tools 2.37 1.06
Total 100.00 100.00

Note 21- Cash and Bank Balances

As at 31.3.2013 (%) As at 31.3.2012

(%)
Cash on hand 0.08 0.02
Cheques and drafts on hand 13.23 2.84
Bank balances in Current Accounts 2.75 0.25
Deposits less than 3 months original maturity period 0.00 4.10
Deposits more than 3 months and upto 12 months original 38.71 22.99
maturity period
Deposits more than 12 months original maturity period 45.16 69.78
Unclaimed Dividend Accounts 0.08 0.02
Total 100.00 100.00

Note 28- Employee Benefit Expenses

As at 31.3.2013 (%) As at 31.3.2012 (%)

Salaries, Wages, Allowances and Other Benefits 85.56 83.11
Contribution to provident and other funds 6.25 10.65
Staff welfare expenses 8.18 6.24
Total 100.00 100.00

Altman Z Score
The Altman Z Score was designed as a way to rank a manufacturing company's risk of going bankrupt. A
Z Score above 2.99 is safe; 1.81 to 2.99 means there is a chance the company will declare bankruptcy in
the next two years; and less than 1.81 means the company is severely distressed. It is given by:

Z = 1.2 * [(Current Assets – Current liabilities)/Total Assets] + 1.4 * [Retained Earnings/Total Assets] +
3.3 * [EBIT/Total Assets] + 0.6 * [Equity Value/Total Liabilities] + 1 * [Sales/Total Assets]

The z score for Maruti for the FY 2012-13 is 3.835, indicating this is a healthy firm.