Maruti Suzuki India

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 facilities
 granted 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.
 
 The amount shown in items (b) to (d) represent guarantees given in the
 normal course of the Companys 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 unrealised 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.