Shareholding Pattern

Shareholding Pattern
6.48% 20.73% Promoter & Promoter Group Mutual Funds / UTI 54.21% 15.83% 2.75% Financial Institutions / Banks Foreign Institutional Investors Non-Instituions

Company Overview

Companys Financial Performance

The year 2008-09 witnessed a multiplicity of challenges, coming together at the same time. In most economic cycles, commodity prices generally move in tandem with the demand growth scenario. This year, inflation control measures by the government and lack of retail financing impacted the revenues of vehicle manufacturers, even when the commodity prices were at their lifetime high. Adverse foreign exchange movements also had a substantial impact on the company as the yen appreciated by almost 30% against the rupee in a years time and this raised the cost of the companys imports. The measures taken by the Government of India for providing the liquidity and improving the customer sentiments through the policy cuts, cenvat rate reduction in the later part of the year helped in mitigating the adverse impact of these factors. With the focused efforts in the market and cost and operational efficiencies, the company managed to generate net sales of Rs 203,583 million in FY 0809 as compared with Rs 178,603 million in FY 0708 showing growth of 14.0% Sales of vehicles in the domestic market increased to 722,144 as compared to 711,818 in the previous year showing a growth of 1.5%. Exports of vehicles grew at an impressive rate of 32% from 53,024 to 70,023 in the current year. The overall growth was 3.6% which was achieved in spite of the difficult economic and market conditions prevailing particularly in the latter half of the year due to the global financial and economic crisis which did not spare the Indian economy. The Company made all out efforts to mitigate this impact undertaking measures to curtail cost in various areas of its business operations. Earnings before depreciation, interest, tax and amortization (EBDITA) stood at Rs. 24,333 million against Rs. 31,308 million in the previous year. Market share went up from 45.9% to 46.5% in passenger vehicles overall.

Highlights FY 09
Parameters Net Sales Other Income EBIDTA PBT PAT FY 09 203,583 9,985 24,334 16,759 12,187 FY 08 178,603 8,371 31,30 25,030 17,308 Change 13.99% 19.28% (22.03)% (33)% (29.6)%

(Rs in Mn)

Annual Performance Ratios (As a Percentage of Net Sales)

Parameters FY 09 FY 08 Change

Material cost Manufacturing & Admin Expense Power & Fuel Royalty

79.78%

76.41%

3.37%

7.70% 0.95% 3.3%

6.0% 0.82% 2.8%

1.37% 0.13% 0.50%

Selling and Distribution Expenses Transportation costs Employee cost EBIDTA Depreciation PBT PAT Other Income

3.63% 1.44% 2.31% 11.95% 3.47% 8.23% 5.99% 4.90%

3.14% 0.91% 1.99% 17.53% 3.18% 14% 9.69% 4.69%

0.49% 0.53% 0.32% (5.58)% 0.29% (5.77)% (3.70)% 0.21%

Analysis Key Points

1. Net Sales : up by 13.99 %: increase in volumes 2. Average Realization: up by 9.4 %: Higher product mix, higher market share in A3. 3. Income from Services: up by 27.8%: Increase in sales of extended warranty packages and pre-owned cars. 4. Other Income: up by 19.3%: Higher returns on liquid surplus, sale of scrap due to increase in steel prices. 5. Material Cost up 337 bps a. Forex Impact on direct & indirect imports b. Commodity price increase 6. Mfg Admin & other expenses up by 170bps a. Running Royalty: Higher by Rs 1900 Mn( product mix), forex b. Power & Fuel: Higher by Rs 460 Mn, product mix shift towards Manesar facility: runs on High Speed Diesel c. Exchange Variation: Rs 1338 Mn loss on forward contract 7. Selling & Distribution Costs up by 49 bps a. Transportation cost up by Rs.1300 Mn 8. Employee Costs up by 32 bps

a. Increase in R&D manpower 9. Depreciation Costs up by 30 bps a. K Series engine plant One million vehicle production capacity

Akshay Pal

Table of Contents
Introduction......................................................................................... Error! Bookmark not defined. Brief History ........................................................................................ Error! Bookmark not defined. Products and Services...................................................................... Error! Bookmark not defined. Management Team ........................................................................... Error! Bookmark not defined. Shareholding Pattern ....................................................................................................................... 1 Achievements .................................................................................... Error! Bookmark not defined. Performance Overview (2008 2009) .......................................................................................... 8 Industry Overview......................................................................................................................... 8 Company Overview ...................................................................................................................... 1 Companys Financial Performance............................................................................................ 3 Analysis Key Points .......................................................................................................................... 4 Auditors Report ................................................................................. Error! Bookmark not defined. Directors report for the year ended 2008-09 ...................................... Error! Bookmark not defined. Ratio Analysis .................................................................................... Error! Bookmark not defined. Comparative Balance Sheet and Profit and loss account........................................................ 18 Common size Balance sheet and Profit and loss...................................................................... 28 INTERPRETATION ........................................................................................................................ 32

Annexure..57 Individual contribution..62

Shareholding Pattern
Shareholding Pattern
6.48% 20.73% Promoter & Promoter Group Mutual Funds / UTI 54.21% 15.83% 2.75% Financial Institutions / Banks Foreign Institutional Investors Non-Instituions

Performance Overview (2008 2009)

Industry Overview
The financial year 2008-09 witnessed unprecedented fluctuation in the macroeconomic environment both globally and in India. The Indian economy was less affected and managed to grow well above 6%. Within the year, there was a huge swing in business and consumption sentiment with the growth rates steeply declining in the second and third quarters and then showing some recovery in the fourth quarter. Car loans, which are a critical growth driver for the industry, saw a major curtailment by banks and finance companies, owing to a liquidity crunch and court directives against forced repossession of financed assets during default. Most commodity prices went up and this hurt the profits of manufacturing businesses and disposable incomes of households alike. The news of gloom and doom in the global economy also depressed consumer sentiment and customers adopted a 'wait and watch' approach before making discretionary purchases. All these factors hit the passenger vehicle industry severely and it could barely manage to remain flat after six years of robust growth. Table1: Industry Growth - The flatness in growth was actually an aggregate of huge quarterly swings

Table 2: Industry Growth - How did car sales move across India over time

Table 4: Domestic Market Share for 2008-09

Category-Wise Market Share in 2008-2009

15.96% 3.95% 3.60% 76.49% Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers

Company Overview

Companys Financial Performance

The year 2008-09 witnessed a multiplicity of challenges, coming together at the same time. In most economic cycles, commodity prices generally move in tandem with the demand growth scenario. This year, inflation control measures by the government and lack of retail financing impacted the revenues of vehicle manufacturers, even when the commodity prices were at their lifetime high. Adverse foreign exchange movements also had a substantial impact on the company as the yen appreciated by almost 30% against the rupee in a years time and this raised the cost of the companys imports. The measures taken by the Government of India for providing the liquidity and improving the customer sentiments through the policy cuts, cenvat rate reduction in the later part of the year helped in mitigating the adverse impact of these factors. With the focused efforts in the market and cost and operational efficiencies, the company managed to generate net sales of Rs 203,583 million in FY 0809 as compared with Rs 178,603 million in FY 0708 showing growth of 14.0% Sales of vehicles in the domestic market increased to 722,144 as compared to 711,818 in the previous year showing a growth of 1.5%. Exports of vehicles grew at an impressive rate of 32% from 53,024 to 70,023 in the current year. The overall growth was 3.6% which was achieved in spite of the difficult economic and market conditions prevailing particularly in the latter half of the year due to the global financial and economic crisis which did not spare the Indian economy. The Company made all out efforts to mitigate this impact undertaking measures to curtail cost in various areas of its business operations. Earnings before depreciation, interest, tax and amortization (EBDITA) stood at Rs. 24,333 million against Rs. 31,308 million in the previous year. Market share went up from 45.9% to 46.5% in passenger vehicles overall.

Highlights FY 09
Parameters Net Sales Other Income EBIDTA PBT PAT FY 09 203,583 9,985 24,334 16,759 12,187 FY 08 178,603 8,371 31,30 25,030 17,308 Change 13.99% 19.28% (22.03)% (33)% (29.6)%

(Rs in Mn)

Annual Performance Ratios (As a Percentage of Net Sales)

Parameters FY 09 FY 08 Change

Material cost Manufacturing & Admin Expense Power & Fuel Royalty

79.78%

76.41%

3.37%

7.70% 0.95% 3.3%

6.0% 0.82% 2.8%

1.37% 0.13% 0.50%

Selling and Distribution Expenses Transportation costs Employee cost EBIDTA Depreciation PBT PAT Other Income

3.63% 1.44% 2.31% 11.95% 3.47% 8.23% 5.99% 4.90%

3.14% 0.91% 1.99% 17.53% 3.18% 14% 9.69% 4.69%

0.49% 0.53% 0.32% (5.58)% 0.29% (5.77)% (3.70)% 0.21%

Analysis Key Points

10. Net Sales : up by 13.99 %: increase in volumes 11. Average Realization: up by 9.4 %: Higher product mix, higher market share in A3. 12. Income from Services: up by 27.8%: Increase in sales of extended warranty packages and pre-owned cars. 13. Other Income: up by 19.3%: Higher returns on liquid surplus, sale of scrap due to increase in steel prices. 14. Material Cost up 337 bps a. Forex Impact on direct & indirect imports b. Commodity price increase 15. Mfg Admin & other expenses up by 170bps a. Running Royalty: Higher by Rs 1900 Mn( product mix), forex b. Power & Fuel: Higher by Rs 460 Mn, product mix shift towards Manesar facility: runs on High Speed Diesel c. Exchange Variation: Rs 1338 Mn loss on forward contract 16. Selling & Distribution Costs up by 49 bps a. Transportation cost up by Rs.1300 Mn 17. Employee Costs up by 32 bps

a. Increase in R&D manpower 18. Depreciation Costs up by 30 bps a. K Series engine plant b. One million vehicle production capacity

Ratio Earning Per Share(EPS)* Dividend PerShare(DPS)

Formula Earnings available /No of shares

31 03-09

31 03-08

31-03-07

42.18

59.89

54.07

Dividend Paid/No of Shares

3.5

4.5

MARKET BASED RATIOS

Pay out Ratio

DPS/EPS

0.12

0.083

.09

*EPS and DPS is taken as per the annual reports of the company.

INTERPRETATION OF RATIOS

1. EARNING PER SHARE The Earning per Share measures the overall profitability in terms of per equity share of capital contributed. 2009: 42.18 2008: 59.89 The earning per share has fallen since last year from 59.89 to 42.18. This shows that the investment in shares in future might be lesser.

Earning Per Share

2008-09 2007-08 2006-07 0 50 100 Earning Per Share

2. DIVIDEND PER SHARE Dividend per Share indicates the extent to which some part of EPS is distributed to share holders and some is retained. 2009: 3.5 2008: 5 This shows that dividend per share has fallen since previous year. It indicates that more amount of profits have been retained in the business as less is being paid in the form of dividends.

Dividend per share

2008-09 2007-08 2006-07 0 2 4 6 Dividend per share

3. PAYOUT RATIO Dividend payout ratio indicates the extent of the net profits distributed to the shareholders as dividend. 2009: 0.12 2008: 0.083 The dividend payout ratio has increased since last year. This shows that more amount of net profit has been given as dividend since last year.

Dividend Payout Ratio

2008-09 2007-08 2006-07 0 0.1 0.2 Dividend Payout Ratio

Comparative Balance Sheet and Profit and loss account

COMPARATIVE BALANCE SHEET for year ending 2007 and 2008

SOURCES OF FUNDS SHAREHOLDERS FUNDS Capital Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans Total DEFERRED TAX Deferred tax liabilities Deferred tax assets Total TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Total Capital work in Progress TOTAL INVESTMENT CURRENT ASSETS,LOANS & ADVANCES Inventory Sundry Debtors Cash & Bank Balance Other current Assets Loans & Advances Total LESS CURRENT LIABILITIES & PROVISION

SCHEDULE

As on 31.03.08

As on 31.03.07

Absolute Difference

Percentage Difference

1 2

1445 82709 84154

1445 67094 68539 635 5673 6308 2776 (1101) 1675 76522

0 15615 15615 -634 3328 2694 -79 -105 26 18335

0 23.27% 22.78% 99.84% 58.66% 42.70% -2.84% -9.53% 1.55% 23.96%

3 4

1 9001 9002 2697 (996) 1701 94857

5 72853 (39888) 32965 6 7363 40328 7 51807 61468 (34871) 26597 2507 29104 34092 11385 5017 6368 4856 11224 17715 18.52% 143.87% 23.94% 193.69% 38.56% 51.96%

8 9 10 11 12

10380 6555 3305 331 10408 30979

7014 7474 14228 384 9241 38341

3366 -919 -10923 -53 1167 -7362

47.99% 12.29% 76.77% -13.80% 12.62% 19.20%

Current liabilities Provisions Total Net Current Assets TOTAL

13 14

24562 3695 28257 2722 94875

20110 4905 25015 13326 76522 -400 3242 -10604 18353 8.15% 12.96% 79.57% 23.98%

COMPARATIVE BALANCE SHEET FOR YEAR ENDING 2008 AND 2009

SCHEDULE SOURCES OF FUNDS SHAREHOLDERS FUNDS Capital Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans Total DEFERRED TAX Deferred tax liabilities Deferred tax assets Total TOTAL As on 31.03.09 As on 31.03.08 Absolute Difference Percentage Difference

1 2

1445 92004 93449 1 6988 6989 2340 (789) 1551 101989

1445 82709 84154 1 9001 9002 2697 (996) 1701 94857

0 9295 9295 0 -2013 -2013 -357 207 -150 7132

0 11.24% 11.045% 0 -22.36% -22.36% -13.23% -20.78% -8.81% 7.51%

3 4

APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Total Capital work in Progress TOTAL INVESTMENT CURRENT ASSETS,LOANS & ADVANCES Inventory Sundry Debtors Cash & Bank Balance Other current Assets Loans & Advances Total LESS CURRENT LIABILITIES & PROVISION Current liabilities Provisions Total Net Current Assets TOTAL

5 87206 (46498) 40708 8613 49321 31733 72853 (39888) 32965 7363 40328 51807 14353 -6610 7743 1250 8993 -20074 19.70% 16.57% 23.48% 16.97% 22.29% 38.74%

8 9 10 11 12

9023 9189 19390 981 16328 54911

10380 6555 3305 331 10408 30979

-1357 2634 16085 650 5920 23932

-13.07% 40.18% 486.68% 196.37% 56.87% 77.2%

13 14

30169 3807 33976 20935 101989

24562 3695 28257 2722 94875

5607 112 5719 18213 7114

22.8% 3.03% 20.23% 669.10% 7.5%

INTERPRETATION

COMPARATIVE BALANCE SHEET ANALYSIS 1. Shareholders funds have increased by 11.045% as reserves and surplus have increased by 11.24% but no change occurs in share capital. 2. Secured loans have not changed and unsecured loans have decreased by 22.36% but deferred tax liability has decreased by 13.23%. 3. Fixed assets have increased by 22.29% which shows that productivity has declined. 4. Investments have decreased by 38.74%.

5. Sundry debtors have increased by 40.18%, inventories have decreased by 13.07%,cash and bank balance have increased by 486.68% and loans and advances have increased by 56.87% but current liabilities have increased by 22.8% and provisions have increased by 3.03%,as a result, net current assets have increased by 669.10%.

COMPARATIVE PROFIT & LOSS ACCOUNT for year ending 2007

and 2008
SCHEDULE As on 31.03.08 As on 31.03.07 Absolute Difference Percentage Difference

INCOME Gross Sales Less Excise Duty Net Sales Income from Services 15 209493 30890 178603 759 171442 25520 145922 617 38051 5370 32681 142 22.19% 21.04% 22.40% 23.01%

Other Income Total

16

8371 187733

5984 152523

2387 35210

39.89% 23.09%

EXPENDITURE Consumption of raw materials and components 130342 101374 28968 28.58%

Purchases or traded goods

7771

6159

1612

26.17%

Consumption or stores Employee Remuneration Selling and Distribution expenses Total less vehicles for own use add Increase/decrease in work in progress Finished goods and spare parts Total 21 17 19

1470 3562 5602

1097 2884 4999

373 678 603

34.00% 23.51% 12.06%

159540 198

124771 143

34769 55

27.87% 38.46%

-2917

2007

-4924

-245.34

156425

126635

126635

23.52%

Earnings before Interest, Tax, Depreciation and Amortization Interest Depreciation Profit Before Tax less cash expenses-current tax Deferred tax Fringe benefit tax Previous Years Profit After Tax Add braught forward from previous year account Profit available for appropriation General reserve Proposed Dividend Corporate dividend tax Balances carried forward to balance sheet Basic Diluted Earning per share in Rs 20 5

31308

25888

5420

20.94%

593 5682 25030 7509 26 98 89 25030 56373 73681 1731 1445 248 70257 59.91

376 2714 22798 6089 67 125 125 22798 43939 59471 1562 1300 219 56373 54.06

217 2968 2232 1420 -41 -27 -36 2232 12434 14210 169 145 29 13884 5.85

57.71% 109.36% 9.79% 23.32% -61.19% -21.60% -28.80% 9.79% 28.30% 23.89% 10.82% 11.15% 13.24% 24.63% 10.82%

COMPARATIVE PROFIT & LOSS ACCOUNT for year ending 2008 and 2009
SCHEDULE INCOME Gross Sales Less Excise Duty Net Sales EXPENDITURE As on 31.03.09 230852 27260 203583 As on 31.03.08 209493 209493 178603 Absolute Difference 21359 -3621 24980 Percentage Difference 10.20% -11.72% 13.99%

15

Consumption of raw materials and components Purchases or traded goods Consumption or stores Employee Remuneration Manufacturing,Administrative and other expenses Selling and Distribution expenses Total Finished goods and spare parts Earnings before Interest, Tax, Depreciation and Amortization Interest Depreciation Profit Before Tax less cash expenses-current tax Deferred tax Fringe benefit tax Previous Years Profit After Tax Add braught forward from previous year account Profit available for appropriation Proposed Dividend Corporate dividend tax Balances carried forward to balance sheet Basic Diluted Earning per share in Rs 20 5 21 17 18

150598

130342

20256

15.54%

7256 1978 4711 15685

7771 1470 3562 10793

-515 508 1149 4892

-6.63% 34.56% 32.26% 45.33%

19

7382

5602

1780

31.77%

187610 2818

159540 2917

28070 5735

17.59% -196.61

24333

31308

-6975

-22.28%

510 7065 16758 4592 -118 97 0 12187 70257 82444 1011 172 80042

593 5682 25030 7509 26 98 89 17308 56373 73681 1445 248 70257 59.91

-83 1383 -8272 -2917 -144 -1 -89 -5121 13884 8763 -434 -76 9785 -17.73

-14.00% 24.34% -33.05% -38.85% -553.85% -1.02% -100.00% -29.59% 24.63% 11.89% -30.03% -30.65% 12.29% -29.59%

10

42.18

INTERPRETATION

A comparative income statement shows the operating results for a number of accounting periods so that changes in data in terms of money and percentage from one period to another may be known. Comparative income statement is prepared with the objective to analyse the income and expenditure for two or more years. And to review the business operations of the last year and its likely effect on the current years operations. Now having a look at the comparative income statement of the company for the year 2008 -2009 we note that the gross sales of the company increased by Rs 21359 which accounted for a rise by 10.20%. A decrease in the value of excise duty was observed for 2008 to 2009 which accounted for 11.72%. this caused net sales to increase to Rs 203583 ie 13.99% increase. The income from services recorded an increase of Rs 211 in absolute terms whereas it was 27.80% in percentage terms. Other incomes also rose by 19.28%. Thus the overall change in incomes was found to be 14.28%. Coming up to the expenditure side it was seen that the consumption of raw materials and components rose by Rs 20256 which was a 15.54% increase. Whereas the purchases fell by 6.63% from year 2008 to 2009. Employee remuneration saw an increase by Rs 1149 which might have been because of promotions or employment of more no of people at work. Manufacturing, administrative and other expenses also rose by 45.33% which certainly shows that the scale of operations might have increased. Other expenses like selling and distribution also saw a rise of Rs 1780. After taking into consideration the vehicles for own use, work in progress, finished goods and spare parts the earnings before interests, taxes and depreciation came out to be24333 for the year 2009 which was a 22.28% decrease from Rs 31308 in 2008. Finally the profit after tax for the company was also seen to fall to Rs 12187 maybe because of high tax rates imposed. The profit available for appropriation was found to be Rs 82444. Both the general reserve and proposed dividend experienced a fall

29.58% and 30.03% respectively. And the basic diluted earnings per share was recorded as Rs 42.18 which was a 29.59% decrease from the year 2008.

Common size Balance sheet and Profit and loss

COMMON SIZE BALANCE SHEET FOR YEAR ENDING 2007 AND 2008
SCHEDULE SOURCES OF FUNDS SHAREHOLDERS FUNDS Capital Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans Total DEFERRED TAX Deferred tax liabilities Deferred tax assets Total TOTAL As on 31.03.08 As on 31.03.07 Percentage OF Total As on 31.03.08 Percentage OF Total As on 31.03.07

1 2

1445 82709 84154 1 9001 9002 2697 (996) 1701 94857

1445 67094 68539 635 5673 6308 2776 (1101) 1675 76522

1.52% 87.19% 88.71% 0.00% 9.49% 9.49% 2.84% (1.05)% 1.79% 100%

1.89% 87.68% 89.56% 0.83% 7.41% 8.24% 3.64% (1.44)% 2.2% 100%

3 4

APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Total Capital work in Progress TOTAL INVESTMENT CURRENT ASSETS,LOANS & ADVANCES

5 72853 (39888) 32965 7363 40328 7 51807 61468 (34871) 26597 2507 29104 34092 76.80% (42.05)% 34.75 7.76% 42.51% 54.62% 80.33% (45.57%) 34.76% 3.28% 38.03% 44.55%

Inventory Sundry Debtors

8 9

10380 6555

7014 7474

10.94% 6.91%

9.17% 9.77%

Cash & Bank Balance Other current Assets Loans & Advances Total LESS CURRENT LIABILITIES & PROVISION

10 11 12

3305 331 10408 30979

14228 384 9241 38341

3.48% 0.35% 10.97% 32.65%

18.59% 0.50% 12.08% 50.10%

Current liabilities Provisions Total Net Current Assets TOTAL

13 14

24562 3695 28257 2722 94875

20110 4905 25015 13326 76522

25.89% 3.90%

26.28% 6.41%

2.87% 100.00%

17.41% 100.00%

COMMON SIZE BALANCE SHEET AS ON 2008 AND 2009

SCHEDULE SOURCES OF FUNDS SHAREHOLDERS FUNDS Capital Reserves and surplus Total LOAN FUNDS Secured Loans Unsecured Loans Total DEFERRED TAX Deferred tax As on 31.03.09 As on 31.03.08 Percentage of Total As on 31.03.09 Percentage of Total As on 31.03.08

1 2

1445 92004 93449 1 6988 6989 2340

1445 82709 84154 1 9001 9002 2697

1.42% 90.21% 91.62% 0.00% 6.85% 6.85% 2.29%

1.52% 87.19% 88.71% 0.00% 9.49% 9.49% 2.84%

3 4

liabilities Deferred tax assets Total TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Total Capital work in Progress TOTAL INVESTMENT CURRENT ASSETS,LOANS & ADVANCES

(789) 1551 101989

(996) 1701 94857

(0.77)% 1.52% 100%

(1.05)% 1.79% 100%

5 87206 (46498) 40708 8613 49321 31733 72853 (39888) 32965 7363 40328 51807 85.51% (45.59)% 39.92% 8.45% 48.35% 31.11% 76.80% (42.05)% 34.75% 7.76% 42.51% 54.62%

Inventory Sundry Debtors Cash & Bank Balance Other current Assets Loans & Advances Total LESS CURRENT LIABILITIES & PROVISION

8 9 10 11 12

9023 9189 19390 981 16328 54911

10380 6555 3305 331 10408 30979

8.85% 9.01% 19.01% 0.96% 16.01% 53.84%

10.94% 6.91% 3.48% 0.35% 10.97% 32.65%

Current liabilities Provisions

13 14

30169 3807

24562 3695

29.58% 3.73%

25.89% 3.90%

Total Net Current Assets TOTAL

33976 20935 101989

28257 2722 94875

33.31% 20.53% 100.00%

29.78% 2.87% 100.00%

INTERPRETATION
COMMON SIZE BALANCE SHEET ANALYSIS
Current assets as a percentage of total assets have increased to 53.84% in 2009 as compared to 32.65% in 2008.Net current assets in 2009 were only 20.53% ,which were 2.87% in 2008.This increase was shared by cash and debtors while inventories showed a decrease implying the sales were high, even though the current liabilities rose. The value of net assets has risen substantially indicating a high liquidity. The total long term debt has fallen by 2.64% which shows the repayment. Reserves have shown an increase in the current year.

COMMON SIZE PROFIT & LOSS ACCOUNT for year ending 2007 and 2008
SCHEDULE INCOME Gross Sales Less Excise Duty Net Sales Income from Services Other Income Total EXPENDITURE Consumption of raw materials and components Purchases or traded goods Consumption or stores Employee Remuneration Manufacturing,Administrative and other expenses Selling and Distribution expenses 17 18 150598 130342 72.98% 69.47% 16 As on 31.03.09 230852 27260 203583 970 9985 214538 As on 31.03.08 209493 209493 178603 759 8371 187733 Common Size on 31.03.08 117.30% 17.30% 100.00% 0.42% 4.69% 105.11% Common Size on 31.03.07 117.49% 17.49% 100.00% 0.42% 4.10% 104.52%

15

7256 1978 4711 15685

7771 1470 3562 10793

4.35% 0.82% 1.99% 6.04%

4.22% 0.75% 1.98% 5.66%

19

7382

5602

3.14%

3.43%

Total less vehicles for own use add Increase/decrease in work in progress

187610 223

159540 198

89.33% 0.11%

85.51% 0.10%

Finished goods and spare parts Earnings before Interest, Tax, Depreciation and Amortization Interest Depreciation Profit Before Tax less cash expenses-current tax Deferred tax Fringe benefit tax Previous Years

21

2818

2917

-1.63%

1.38%

24333

31308

17.53%

17.74%

20 5

510 7065 16758 4592 -118 97 0

593 5682 25030 7509 26 98 89

0.33% 3.18% 14.01% 4.20% 0.01% 0.05% 0.05%

0.26% 1.86% 15.62% 4.17% 0.05% 0.09% 0.09%

Profit After Tax

12187

17308

9.69%

10.70%

Add braught forward from previous year account

70257

56373

31.56%

30.11%

Profit available for appropriation

82444

73681

41.25%

40.76%

General Reserve Proposed Dividend

1219 1011

1731 1445

0.97% 0.81%

1.07% 0.89%

Corporate dividend tax

172

248

0.14%

0.15%

Balances carried forward to balance sheet

80042

70257

39.34%

38.63%

Basic Diluted Earning per share in Rs

10

42.18

59.91

0.03%

0.04%

COMMON SIZE PROFIT & LOSS ACCOUNT for year ending 2008 and 2009
SCHEDULE INCOME Gross Sales Less Excise Duty Net Sales Income from Services Other Income Total EXPENDITURE Consumption of raw materials and components Purchases or traded goods 150598 130342 73.97% 72.98% 16 As on 31.03.09 230852 27260 203583 970 9985 214538 As on 31.03.08 209493 209493 178603 759 8371 187733 Common Size on 31.03.09 113.39% 13.39% 100.00% 0.48% 4.90% 105.38% Common Size on 31.03.08 117.30% 17.30% 100.00% 0.42% 4.69% 105.11%

15

7256

7771

3.56%

4.35%

Consumption or stores Employee Remuneration Manufacturing,Administrative and other expenses Selling and Distribution expenses Total less vehicles for own use add Increase/decrease in work in progress 17 18

1978 4711 15685

1470 3562 10793

0.97% 2.31% 7.70%

0.82% 1.99% 6.04%

19

7382

5602

3.63%

3.14%

187610 223

159540 198

92.15% 0.11%

89.33% 0.11%

Finished goods and spare parts Total Earnings before Interest, Tax, Depreciation and Amortization Interest Depreciation Profit Before Tax less cash expenses-current tax Deferred tax Fringe benefit tax Previous Years Profit After Tax Add braught forward from previous year account Profit available for appropriation General Reserve Proposed Dividend Corporate dividend tax Balances carried forward to balance sheet

21

2818 190205 24333

2917 156425 31308

1.38% 99.43% 11.95%

-1.63% 87.58% 17.53%

20 5

510 7065 16758 4592 -118 97 0 12187 70257 82444 1219 1011 172 80042

593 5682 25030 7509 26 98 89 17308 56373 73681 1731 1445 248 70257

0.25% 3.47% 8.23% 2.26% -0.06% 0.05% 0.00% 5.99% 34.51% 40.50% 0.60% 0.50% 0.08% 39.32%

0.33% 3.18% 14.01% 4.20% 0.01% 0.05% 0.05% 9.69% 31.56% 41.25% 0.97% 0.81% 0.14% 39.34%

Basic Diluted Earning per share in Rs

10

42.18

59.91

0.02%

0.03%

INTERPRETATION
An income statement in which each account is expressed as a percentage of the value of sales. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company. Common size income statement analysis allows an analyst to determine how the various components of the income statement affect a company's profit. Now the income statement of the company shows that the gross sales have increased by 113.39% from year 2008 to 2009. As far as the excise duty is concerned it was Rs 27260 in 2009 which was comparatively less than Rs 30890 in 2008. Thus the observed figure for net sales in 2009 was Rs 203583. The income from services saw a gradual increase from 0.42% to 0.48% over the whole financial year. Other incomes also rose by around 4.90% which in absolute terms was close to Rs 9985. Coming up to expenditures column it is seen that the consumption of raw materials and components increased by 73.97%. Overall expenses increased b y 92.15%.at this point after taking into consideration vehicles for own use, change in work in progress, finished goods and spare parts etc the net expenditure changed from 16425 to 190205. The reason can be somewhat increase in the scale of operations of the business firm. Earnings before interests, taxes and depreciation was 24333 for year 2009 which was comparatively lower than the increase from 2007 to 2008. Similarly the profit after tax was a bit lower ie around Rs12187. Finally by taking into account also the previous years profits, general reserve, proposed dividend etc the overall figure for profits was lower than that of 2008 but still was a favorable amount depicting a clear picture of the affairs of the company.

Maruti Suzuki India Limited

Market Capitalisation: 36402.67 crores
Maruti Suzuki India Limited is a passenger car company. The company is engaged in the business of manufacturing, purchase and sale of motor vehicles and spare parts. The other activities of the company include facilitation of pre-owned car sales, fleet management and car financing. The company is a subsidiary of Suzuki Motor Corporation, Japan. The company has a portfolio of 13 brands and over 150 variants.

Interest Coverage Ratio

120 100 80 60 40 20 0 2006 2007 2008 2009 2010 105.39 90.62 61.01 40.93 40 34.21 20 0 100 80 60

Earnings Per Share

86.45 54.07 41.16 59.91 42.18

2006

2007

2008

2009

2010

Debt Equity Ratio

0.12 0.1 0.08 0.06 0.04 0.02 0 2006 0.01 2007 2008 2009 2010 0.09 0.07 0.07 0.11 15

Profit Before Intrest and Tax Margin

12.74 10 5 0 2006 2007 2008 2009 2010 7 10.7 5.62 9.73

1000 800 600 400 200 0 71.7 2006 2007 2008 2009 2010 900.2 630.8 698.9 821.4

Maruti Suzuki - Total Debts

Analysis
The gross revenue of the Company for the year (2010 2011) was Rs. 301,198 million as against Rs. 214,538 million in the previous year showing growth of 40%. Sales of vehicles in the domestic market increased to 870,790 as compared to 722,144 in the previous year showing a growth of 21%. Exports of vehicles grew at an impressive rate of 111% from 70,023 to 147,575 in the current year. The overall growth was 29%. Earnings before depreciation, interest, tax and amortization (EBDITA) stood at Rs. 44,510 million against Rs. 24,333 million in the previous year. Profit before tax (PBT) stood at Rs. 35,925 million against Rs. 16,758 million in the previous year and profit after tax (PAT) stood at Rs. 24,976 million against Rs. 12,187 million in the previous year. The board recommends a dividend of Rs. 6.00 per equity share of Rs. 5.00 each for the year ended 31st March 2010 amountingtoRs.1733 million.

Private Coporate Bodies 6%

Share Holding Pattern

Others 0%

General Public 3%

FII's 21%

Foreign Promoters 56%

Banks and Fin. Institutes 14%

Maruti Suzuki, the leader in the passenger car segment has seen volatility in the mix of debt and equity capital of company over the last 5 years. Sales of the company have increased continuously during the last decade. Its effect can be seen from the rise in Profit Before Interest and Tax Margin (PBT). There is a fall in PBT in the last year because of a rise in operating expense of the company. Most of the funding requirements of the company were done by the internal accruals which were created through continuous profits. Maruti Suzuki will maintain its strong business and financial risk profiles on the back of the healthy cash generation and good liquidity. The company is expected to sustain its dominant position in the domestic passenger car segment, given its large product portfolio. Marutis financial risk profile is a also expected to remain comfortable, with incremental capital expenditure being funded entirely through internal sources. Though the company has a history of dependence on the internal funds, it has capability of raising debt if required for funding. Seeing to its good debt equity, there is a chance for the company to acquire debt for funds required for investment opportunity. Interest coverage ratio is also to be paid on borrowed amount.

Dividend announcement

MARUTI SUZUKI INDIA LTD.

Dividend: Final Dividend of 70% Wednesday, August 23, 2006 Closing price of the share before and after final dividend announcement was August 22, 2006 Rs.836 August 23, 2006 Rs.826 August 24, 2006 Rs.830 August 25, 2006 Rs.833 Dividend: Final Dividend of 90% Wednesday, August 22, 2007 Closing price of the share before and after final dividend announcement was August 21, 2007 Rs.767 August 22, 2007 Rs.765 August 23, 2007 Rs.775 August 24, 2007 Rs.890 Dividend: Final Dividend of 100% Thursday, August 14, 2008 Closing price of the share before and after final dividend announcement was August 13, 2008 Rs.669 August 14, 2008 Rs.650 August 18, 2008 Rs.670 August 19, 2008 Rs.675 Dividend: Final Dividend of 70% Tuesday, August 18, 2009 Closing price of the share before and after final dividend announcement was August 17, 2009 Rs.1275 August 18, 2009 Rs.1300 August 19, 2009 Rs.1301

August 20, 2009 Rs.1370 Dividend: Final Dividend of 120% Tuesday, August 24, 2010 Closing price of the share before and after final dividend announcement was August 23, 2010 Rs.1220 August 24, 2010 Rs.1227 August 25, 2010 Rs.1233 August 26, 2010 Rs.1245 Maruti Suzuki comes under manufacturing companies category and this company has a policy of announcement of dividend on yearly basis i.e. only final dividend is announced. From the above data it is clearly specified that Post-announcement effect is more than the Pre-announcement effect as the socks are rising after the dividend is paid and not before it. As the company only announces final dividend the effect of Dividend announcement reflect to only that particular period which is mostly August and the share prices of the company has shown tremendous growth in past 5 years.

Structure :
DEC2010 Promoter and Promoter 54.21 % Group Indian -Foreign 54.21 % 45.79 % Public Institutions 38.00 % FII 21.00 % SEP2010 54.21 % -54.21 % 45.79 % 37.11 % 20.09 % 54.21 % -54.21 % 45.79 % 37.11 % 20.09 % JUN2010 54.21 % -54.21 % 45.79 % 37.79 % 21.12 % MAR2010 54.21 % -54.21 % 45.79 % 39.14 % 22.82 % DEC2009 Maruti Suzuki India ltd. is Public Limited company and listed in Bombay stock exchange and National Stock Exchange. Suzuki Motor Company(SMC) is Majority shareholder 54.21% equity stake in a company. Share holding pattern of company:-

DII Non Institutions Bodies Corporate Custodians Total

17.00 % 7.79 % 5.26 % -28,89,10,060

17.02 % 8.68 % 6.00 % -28,89,10,060

17.02 % 8.68 % 6.00 % -28,89,10,060

16.67 % 8.00 % 5.64 % -28,89,10,060

16.32 % 6.65 % 4.59 % -28,89,10,060

MARKET SHARE
Accounting to 79%, Cars rule the passenger automobile in India. The chief players in this segment are Maruti Suzuki. While Maruti Suzuki enjoys full-fledged monopoly in multipurpose automobiles sector with 52% of market share. The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the growth is expected to double in the next 10 years. Consistent growth and dedication have made the Indian automobile industry the secondlargest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating the vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda India Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have catered to the customers needs to a large extent. Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements. Besides, there are many new projects coming up in the automobile industry leading to the growth of the sector. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Indian automobile sector is now penetrating the international arena. Vehicle exports from India are at their highest levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti and Mahindra and Mahindra are leading the exports to Europe, Middle East and African and Asian markets. The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive of making India the most popular manufacturing hub for automobiles and its components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the domestic as well as international arena.

KEY END USE MARKRT SEGMENT FOCUS

Maruti Suzuki, the largest passenger car maker in the Indian market, has regained the crucial 50 % market share in the Indian passenger car market during month of October. It is to be mentioned here that Marutis market share had slipped to 43.62 percent in the month of June, due to launch of a series of cars by leading automakers like Volkswagen, Ford, Nissan and GM in the country. As per the data released by the SIAM (Society of Indian Automobile Manufacturers), Maruti Suzuki India managed to sell 91,754 units of its passenger cars as compared to the total market sales of 1,82,992 units, accounting for about 50.14 percent market share during the period. Sales of companys starting range models including Alto, Wagon R, Zen Estilo, Swift, Ritz and A-Star stood at 77, 502 units during the month. Achieving a new mile stone, the company registered over 39 percent increase its sales to 1,18,908 units (inclusive of exports) during the month of October, which was its highest ever monthly sales in its over 27 years of operations in the Indian market.

The company has been planning aggressively for regaining its over 50 percent market share ever since it dipped below this crucial mark. The company had launched CNG versions of as many as five of its portfolio vehicles like Alto, Zen-Estilo, Wagon R and SX4 in the month of August 2010, which has met with an overwhelming response from the Indian buyers. Meanwhile, the company has geared up to launch its much awaited and first ever premium sedan model Maruti Kizashi in the Indian market by the first quarter of next year. Kizashi will be competing with the like of Toyota Corolla Altis, Chevrolet Cruze, Skoda Laura and Mitsubishi Lancer in the Indian market.

DETAILED RESULT OF MARUTI SUZUKI

Type Date Begin Date End Description

Audited 01-Apr-09 31-Mar-10 Amount(Rs.

Net Sales / Income from Operations Net Sales Other Operating Income Income from Services Expenditure (Increase) / Decrease In Stock In Trade & WIP Consumption of Raw Materials Depreciation Employees Cost Other Expenditure Purchase of Traded Goods Profit from Operations before Other Income, Interest and Exceptional Items Other Income Profit before Interest and Exceptional Items Interest Profit after Interest but before Exceptional Items Exceptional Items Profit (+)/ Loss (-) from Ordinary Activities before Tax Tax Net Profit (+)/ Loss (-) from Ordinary Activities after Tax Extraordinary Items Net Profit Equity Capital Face Value (in Rs) Reserves EPS before Extraordinary items (in Rs) EPS after Extraordinary items (in Rs) Basic & Diluted EPS after Extraordinary items Number of Public Shareholding Percentage of Public Shareholding Promoters and Promoter Group Shareholding Pledged / Encumbered

million) 296,230.10 289,584.70 5,241.60 1,403.80 -264,937.40 1,933.10 -217,017.30 -8,250.20 -5,456.40 -27,096.70 -9,049.90 31,292.70 4,967.60 36,260.30 -335.00 35,925.30 0.00 35,925.30 -10,949.10 24,976.20 0.00 24,976.20 1,444.60 5.00 116,906.00

86.45 132,291,620 45.79

Number of Shares Percentage of Shares (as a % of the total shareholding of promoter and promoter group) Percentage of Shares (as a% of the total share capital of the company) Non-encumbered Number of Shares Percentage of Shares (as a% of the total shareholding of promoter & prom group) Percentage of Shares (as a % of the total share capital of the company)

0 0.00 0.00

156,618,440 100.00 54.21

KEY DRIVERS FOR GROWTH

With a 14 per cent return over the past year, the Maruti Suzuki stock has outperformed the BSE Auto index (17 per cent decline) and has turned out to be one of the best defensive picks. At Rs 848, the stock discounts its four quarter earnings by 19 times. Strong performance has pushed its valuation to a premium over the entire auto pack (about 17 times), limiting possible upside over the medium term. However, shareholders of the company can remain invested for its strong earnings visibility. With value-for-money offerings in the sedan segment and price increases to offset input costs, the companys top-line for 2008-09 registered a growth of 13 per cent, beating the automobile slowdown. However, net profits have disappointed, declining by 30 per cent due to higher material costs, a change in depreciation policy and forex losses. With sustained sales growth in April 2009, planned launches and good export prospects, the company appears well-placed to deliver continued sales growth this year. Easing margin pressures, as commodity price declines filter in, suggest that the company is on track to deliver better earnings performance.

STRONG PRODUCT PORTFOLIO

Marutis key advantage lies in its focus on the passenger vehicle segment, which has weathered the slowdown better than commercial vehicles. Products at almost every price point Alto, WagonR, Zen Estilo, Swift and A-Star make the company a market leader in the hatchbacks (A2) segment. Intense competition and tight credit availability that prevailed for most of last year muted its sales growth in this space to 2.4 per cent. But with credit crunch easing out, this segment has shown better growth since the beginning of 2009 (10 per cent increase in sales between December 2008 and April

2009). Maruti has enlarged its market share in this segment to 59 per cent this year as against 53 per cent last year. Swift and the recently launched A-Star have helped these gains. The launch of Ritz this week may strengthen Marutis position in the hatchback market, as it occupies a price point between Swift and A-Star. While the hatchback segment witnessed a slowdown last year, it is the sedan or the A3 segment that has delivered surprising growth for Maruti. Driven by launches of SX4 and Swift DZire (the sedan version of Swift), this segment has grown by 53.9 per cent. The sedans have been less vulnerable to the credit crunch, given that a higher proportion of purchases is funded by cash. The Sixth Pay Commission revision has also aided cash purchases in this segment. Concerns however remain on Marutis entry-level models such as Maruti 800 and Alto. Preferred by the urban middle-class, these cars may face challenges in 11 cities, including Delhi, Mumbai Kolkata and Chennai, after a change in emission norms to Bharat Stage IV mandated by October 2009. The company may have to either re-engineer these versions or phase them out in these cities to meet the new norms. As of now, there is not much clarity about what it plans to do in this regard. The Tatas Rs 1 lakh car, the Nano, has also been perceived as a threat to Marutis entry level models. About 50 per cent of the bookings for the Nano are estimated to be for its high-end variants which are relatively close to Maruti 800 and Alto in terms of performance. With the on-road price differential (in Delhi) of about Rs 35,000-Rs 50,000 between Marutis entry-level models and Nanos high-end version, competition from this source cannot be ruled out.

MIGHTY EXPORT GROUND

Domestic sales apart, exports too are seen as a key growth driver for Maruti over the next couple of years. Engineered to suit European standards, A-Star has lifted Marutis exports by 32 per cent for FY09. Exports accounted for 10 per cent of the companys sales volumes in the last fiscal. Maruti has a contract with Nissan to manufacture 50,000 of A-Star under the Pixo label in Europe and a tie-up with Suzuki to ship 10,000 units of the car to Latin America, Algeria, Australia and some African nations. Favourable incentives offered by the European countries, for fuel-efficient small cars to replace the older ones, give ample room for the company to expand its export volumes. Maruti has reached 38 per cent of its export target (two lakh units by fiscal year 2010-11) so far. The launch of Ritz (another model that may suit European requirements), could also hold potential.

FINANCIAL SCORECARD
The year 2008-09 ended with a sales growth of 13 per cent, while total volumes grew by 3.6 per cent. Excise duty cuts aided sales margins.

High-cost pressures from some raw materials such as steel, aluminium alloys and rubber, and a change in product mix in favour of diesel variants (particularly in Swift and DZire), resulted in the operating profits declining by 48 per cent on a year-on-year basis. The net profits shrank by 30 per cent.
Forex losses incurred in FY-09 may be viewed as a one-off profits dampener since they were on account of import contracts for raw materials. The company has been slow to benefit from softened commodity prices since it has entered into long-term agreements for raw materials.

The effect of lower input costs will trickle in by the first quarter of this fiscal. With initiatives to localise vendors, operating profits are expected to grow by 20-30 per cent in 2010-11. On a sequential basis, the company has seen 33 per cent increase in sales volume and a 19 per cent increase in net profits for the March 2009 quarter.

Try to enter in diesel segment

Maruti Suzuki is now looking to be an aggressive player in the diesel segment, a category which is dominated by Tata Motors. After the success of the Swift hatchback and the Dzire sedan in the diesel variant, the company is hoping to replicate this success in its upcoming model Ritz. To meet the growing demand for the diesel variants in its models, it is increasing the engine capacity by one lakh units as part of its Rs 9,000-crore expansion plan. This will then take its total production capacity for diesel engines to 3 lakh units by March 2010. The capacity expansion is to reduce the long waiting period on its diesel models. Maruti also hopes to divert some of its export capacity in diesel engines for the domestic market. These engines used to earlier be exported to Hungary, but the demand in that market has decreased now. Currently, the Swift petrol model has a waiting period of 2-3 weeks. But the diesel variants of both Swift and Dzire have a waiting period of 3-5 months. The Swift hatchback sells about 9,00010,000 units a month and Dzire too sells about 6,000-8,000 units. Of this, the ratio of diesel sales versus petrol is 70:30. The Ritz, set to be launched later this week, and built on the Swift platform, will sport a 1.3-litre diesel engine. We are trying to further increase capacity of diesel engines. We can tweak production based on demand, said Mr Shashank Srivastava, Chief General Manager, Marketing, Maruti Suzuki. Last year, the company exported 20,000 units of engines to Hungary. But with demand in the European market low, we will be able to use some of that capacity for the domestic market, said Mr I.V. Rao, Executive Officer, Research and Development at Maruti Suzuki. When asked how many units of Ritz diesel variant the company intends to sell, Mr Srivastava said, We would like the ratio of 70 and 30 between diesel and petrol like we have had for the Swift.

The company did not specify by how much it will be able to lower the waiting period of its diesel variants with the increased capacity expansion