Resurgence
Resolve
Resilience
Maruti Suzuki India Limited Annual Report 2012-13
what’s inside
Corporate Overview
Financial Statements
Maruti Suzuki at a Glance
2
Standalone
Corporate Highlights
4
Independent Auditors’ Report
74
Business Highlights
6
Balance Sheet
78
6WDWHPHQW RI 3URˉW DQG /RVV
79
Cash Flow Statement
80
Notes
82
Resilience Resurgence
Resolve
Resilience against headwinds
10
Resolve to hold our ground and push forward
12
Resurgence and a new era of sustainable growth
14
Management Review
Statement Pursuant to Section 212
134
Financial Statement of Subsidiary Companies
135
Consolidated
Chairman’s Message
16
From the MD’s Desk
18
Board of Directors
20
Executive Management Team
22
Statutory Reports Directors’ Report
24
Corporate Governance Report
32
Management Discussion & Analysis
48
Business Responsibility Report
58
Auditors’ Report
136
Balance Sheet
138
6WDWHPHQW RI 3URˉW DQG /RVV
139
Cash Flow Statement
140
Notes
142
,Q OLIH DV LQ EXVLQHVV LW LV RIWHQ GLIˉFXOW WR SUHGLFW URDGEORFNV %XW WKH\ UHJXODUO\ LPSHGH RXU SDWK DQG ˉOO WKH MRXUQH\ ZLWK FKDOOHQJHV DQG JURZWK At Maruti Suzuki, 2012-13 tested our ability to withstand challenges and bounce back. We saw one of the worst car demand slowdowns in a decade, market distortion between petrol and diesel cars, and continued adverse impact of foreign currency movement. The violence at our Manesar plant, and the tragic death of a General Manager, cast a shadow.
+RZ GR ZH UHVSRQG WR VXFK D situation? The most obvious response would be: shock, disbelief, denial, blame, withdrawal or even rationalisation. At Maruti Suzuki, however, we didn’t do the obvious thing.
Rather than being overwhelmed by the external adversity, we looked inwards for LQWHUQDO VWUHQJWKV WR ˉJKW EDFN Our collective resolve helped us stay together, think positive, display composure and focus on the future rather than just the present. We operated with agility and consistent focus and pulled off the not-so-obvious: we stayed close to our people and their families, made the Manesar plant operational within a month after disruption, launched an exciting new model, increased our market VKDUH DQG SURˉWV DQG DOVR NHSW RXU IXWXUH LQYHVWPHQW SODQV RQ VFKHGXOH Most importantly, we continued our transparent communication with investors, media and all other stakeholders. Leadership is not just about highest market share for decades; it is also about
Resilience
Resolve
Resurgence
Momentum Across Rough and Smooth Territories Business Highlights
NET SALES
` MN
203,583
289,585
358,490
347,059
426,126 Y- O -Y GROWTH
22.7% 2008-09
2009-10
6-7
NET WORTH
2010-11
2011-12
2012-13
` MN
138,675
118,351
185,789
151,874
93,449
Y- O -Y GROWTH
22.3% 2008-09
2009-10
BOOK VALUE & EPS
2010-11
2011-12
2012-13
`
Y- O -Y GROWTH
17.1% 615 Y- O -Y GROWTH
525
480
38.6%
410 86
323
79
79 57
42 Book Value
EPS
2008-09
2009-10
2010-11
2011-12
2012-13
Numbers paint a credible picture than words. Every time we encountered a roadblock, it made us determined to perform with more resolve and persistence.
` MN
24,976
12,187
22,886
16,352
23,921 Y- O -Y GROWTH
CORPORATE OVERVIEW
PROFIT AFTER TAX
46.3% 2009-10
2010-11
TOTAL UNIT SALES
1,133,695
2009-10
J.D. Power Customer Satisfaction Index
2010-11
MSIL Industry Avg.
2012
Look around. You will find us close by.
1,204
2011
2011-12 1,100
824
801 849
2010
Cities
874 879
2010-11 933 668
812 824
2009
Outlets
2012-13
834
2009-10 802
785
555 820
780
2012-13
2008-09 681 454 ANNUAL REPORT 2012-13
FINANCIAL STATEMENTS
879
2011-12
1,171,434
STATUTORY REPORTS
2008-09
2012-13
1,271,005 1,018,365
792,167
2008
2011-12
MANAGEMENT REVIEW
2008-09
8-9
Resilience against headwinds. Resolve to hold our ground and push forward. Resurgence and a new era of sustainable growth. That’s our story in a nutshell. The full narrative follows...
1,171,434
4/5
Vehicles sold in 2012-13
)RXU RXW RI WRS ˉYH VHOOLQJ PRGHOV LQ WKH FRXQWU\ DUH IURP Maruti Suzuki
1st
62%
393,000
Growth of diesel vehicle sales over 2011-12
Total diesel vehicle sales in 2012-13
291,000
7,150
Growth of rural sales over 2011-12
Total rural sales in 2012-13
Total Resident Dealer Sales Executives (RDSEs) by 2012-13
640
240,000
Number of E-outlets (smaller format outlets) across India in 2012-13
Number of new cars sold through exchange in 2012-13
Market share in utility vehicle segment in 2012-13
79,000
41%
Zero
Number of utility vehicles sold in 2012-13
Of the total water need met through recycled water at both plants in 2012-13
Waste water discharged status at factories
In J. D. Power Customer Satisfaction Index (CSI) study for the 13th consecutive year
Rounded off to nearest ‘000
Tough Challenges. Tougher Resilience. Challenges have a EULJKWHU VLGH 7KH\ test the extent of our UHVLOLHQFH
GDP GROWTH
(%)
9.5
9.6
9.3
6.7
8.6
9.3
6.2
5.0
FY’06
FY’07
FY’08
FY’09
FY’10
FY’11
FY’12
FY’13
Challenge ,QGLDȠV *'3 JURZWK KLWV D GHFDGH ORZ DFFRPSDQLHG E\ KLJK LQWHUHVW UDWHV ULVLQJ LQˊDWLRQ DQG D EOHDN LQYHVWPHQW VFHQDULR
PETROL PRICES IN DELHI
MSIL PETROL VEHICLE SALES
(` / litre)
893,000 43.9 FY’10
52.7 FY’11
64.5 FY’12
(in units)
701,000
598,000
68.2 FY’13
FY’11
FY’12
FY’13
Challenge 3HWURO SULFH GHUHJXODWLRQ DQG D GHSUHFLDWLQJ UXSHH DJDLQVW WKH GROODU LQFUHDVHG SHWURO SULFHV OHDGLQJ WR DQ LPSDFW RQ SHWURO YHKLFOH VDOHV
FY’10
43,000
FY’11
Challenge
28,000
FY’12
:HDNQHVV LQ WKH (XUR]RQH DQG ZLWKGUDZDO RI VFUDSSDJH LQFHQWLYH VFKHPH LPSDFWHG WKH &RPSDQ\ȠV H[SRUW VDOHV WR WKH (XURSHDQ FRXQWULHV
FY’13
| (Rounded off to nearest ‘000)
59,000
114,000
(in units)
YEN vs RUPEE 0.51
0.53
0.61
0.66
Challenge <HQ DSSUHFLDWLRQ LQ WKH ODVW IHZ \HDUV LPSDFWHG SURˉW PDUJLQV E\ VLJQLˉFDQWO\ LQFUHDVLQJ WKH FRVW RI LPSRUWV
FY’10
FY’11
FY’12
FY’13
Source: Economic Survey, Economic Outlook, Company
(Graphs not to scale)
EXPORTS TO EUROPEAN COUNTRIES
Firm Resolve. Seasoned Foresight. $W 0DUXWL 6X]XNL ZH EHOLHYH Ë&#x2030;UP UHVROYH is not enough to ZHDWKHU D FULVLV one needs seasoned IRUHVLJKW Firm resolve $ URXJK VNHWFK ZLWK VHQVXDO FXUYHV 6XGGHQ EUDLQZDYHV &RQYHUWLQJ WKRVH SHQFLO OLQHV LQWR DFWXDO VKDSH RYHU D FXS RI KLJK RFWDQH FRIIHH ,QWHQVH GLVFXVVLRQ DPRQJ GHVLJQ KHDGV RQ H[WHULRU DQG LQWHULRUV )LQDOLVLQJ WKH FRORXUV PDWHULDOV DQG VW\OH 0HWLFXORXV H[HFXWLRQ $QG WKHQ WKH ELJ ODXQFK
%LUWK RI WKH FRXQWU\È V Ë&#x2030;UVW /LIH 8WLOLW\ 9HKLFOH /89 (UWLJD
5HELUWK RI WKH FRXQWU\È V ODUJHVW VHOOLQJ FDU 1HZ $OWR
76,000
124
Number of Ertiga sold in just a year of its launch
DIESEL VEHICLE SALES
(in units)
199,000
163,000
FYâ&#x20AC;&#x2122;10
1XPEHU RI GD\V WDNHQ to sell 1 lakh units of New Alto 800
FYâ&#x20AC;&#x2122;11
243,000
FYâ&#x20AC;&#x2122;12
393,000
FYâ&#x20AC;&#x2122;13
,QFUHDVH LQ VDOH RI 6ZLIW GLHVHO over 2011-12
,QFUHDVH LQ VDOH RI DZire (diesel) over 2011-12
Seasoned foresight :LWQHVVLQJ WKH ZLGH JDS EHWZHHQ SHWURO DQG GLHVHO SULFHV DQG XQGHUVWDQGLQJ WKH ,QGLDQ FRQVXPHU VHQWLPHQW WKH &RPSDQ\ TXLFNO\ UDPSHG XS WKH GLHVHO HQJLQH SURGXFWLRQ DQG WLHG XS IRU PRUH HQJLQHV IURP ),$7 ,QGLD
RURAL SALES 151,000
(in units)
Sales
228,000 16.5%
FYâ&#x20AC;&#x2122;10
245,000 20.5%
FYâ&#x20AC;&#x2122;11
291,000 25%
FYâ&#x20AC;&#x2122;12
Contribution to domestic sales (%)
28% FYâ&#x20AC;&#x2122;13
Firm Resolve :H LQFUHDVHG RXU QHWZRUN SUHVHQFH LQ 7LHU ,, DQG 7LHU ,,, FLWLHV DQG DGGHG GHGLFDWHG PDQSRZHU IRU UXUDO VDOHV 7KLV UHVXOWHG LQ DQ RYHUDOO UXUDO FRQWULEXWLRQ RI SHU FHQW WR GRPHVWLF VDOHV
NEW CAR SALES THROUGH EXCHANGE 151,000 17%
194,000 17%
FY’10
(in units)
Sales
211,000 22%
FY’11
FY’12
Contribution to domestic sales (%)
240,000 23%
FY’13
Seasoned foresight
FY’11
3,200
FY’12
4,200
FY’13
EXPORTS TO NON-EUROPEAN COUNTRIES (in units) 33,000
FY’10
79,000
FY’11
84,000
FY’12
92,000
FY’13
Seasoned foresight
Firm resolve
7KH KLJK SULFHV RI SHWURO DQG GLHVHO KDYH UHVXOWHG LQ HPHUJHQFH RI &1* DV D YLDEOH DQG SUHIHUUHG IXHO RSWLRQ
The Company made strong efforts to develop the non(XURSHDQ PDUNHWV DQG WKLV FRPSHQVDWHG WR D ODUJH H[WHQW IRU WKH IDOO LQ (XURSHDQ VDOHV Source: Company
|
1,300
(average sales/ month)
(Graphs not to scale)
CNG CAR SALES
(Rounded off to nearest ‘000)
:H OHYHUDJHG RXU EUDQG VWUHQJWK DQG HQGXULQJ FXVWRPHU OR\DOW\ WR JHQHUDWH UHSODFHPHQW GHPDQG WKURXJK DWWUDFWLYH H[FKDQJH VFKHPHV
Resurgence. Hard Earned. Our industry leadership has been sustained by our IRFXVHG UHVXUJHQFH
DFUHV
/DQG DFTXLUHG for setting up an assembly capacity in Gujarat
~ ` FURUHV
~ ` FURUHV
Amount of investment in setting up the third assembly plant at Manesar
Amount of investment in setting up a diesel engine unit at Gurgaon
5HVXUJHQFH (YHQ ZKHQ GRPHVWLF DQG JOREDO DXWRPRELOH LQGXVWU\ LV EHVHW ZLWK FKDOOHQJHV ZH FRQWLQXH WR H[SDQG DQG UHPDLQ SRVLWLYH RQ WKH ORQJ WHUP ,QGLDQ JURZWK VWRU\
EBITDA AND PAT MARGIN 9.0 6.0 FYâ&#x20AC;&#x2122;09
EBITDA
(%)
13.7 8.6
10.1 6.3
FYâ&#x20AC;&#x2122;10
FYâ&#x20AC;&#x2122;11
7.2 4.7 FYâ&#x20AC;&#x2122;12
10.0 5.6 FYâ&#x20AC;&#x2122;13
5HVXUJHQFH 'HVSLWH HVFDODWLQJ FRVWV ZH LPSURYHG RXU PDUJLQV E\ IRFXVLQJ RQ RSHUDWLRQDO HIË&#x2030;FLHQF\ DQG FRVW UDWLRQDOLVDWLRQ VWUDWHJLHV
MARUTI SUZUKI MARKET SHARE 46.5 FYâ&#x20AC;&#x2122;09
(%)
44.6 FYâ&#x20AC;&#x2122;10
45.3 FYâ&#x20AC;&#x2122;11
38.3 FYâ&#x20AC;&#x2122;12
80
39.1 FYâ&#x20AC;&#x2122;13
Basis Points 5HVXUJHQFH &RQVLVWHQW SHUIRUPDQFH LUUHVSHFWLYH RI VHYHUDO PDFUR DQG PLFUR IDFWRUV KHOSHG XV LQFUHDVH RXU PDUNHW VKDUH
PAT Margin
25.7
FYâ&#x20AC;&#x2122;10
28.2
FYâ&#x20AC;&#x2122;11
(%)
5.1
FYâ&#x20AC;&#x2122;12
2.2
FYâ&#x20AC;&#x2122;13
7RWDO JURZWK in domestic sales by Maruti Suzuki in 2012-13 (Graphs not to scale)
PASSENGER VEHICLE INDUSTRY GROWTH
5HVXUJHQFH ,Q D SDVVHQJHU YHKLFOH LQGXVWU\ JURZLQJ DW SHU FHQW ZH JUHZ E\ SHU FHQW Source: SIAM, Company
24 - 25
Directors’ Report
The Company ranked third in the list of 100 most successful and LQˊXHQWLDO FRPSDQLHV in India listed by TLG Partners, London.
Your directors have pleasure in presenting the 32nd annual report together with the audited accounts for the year ended 31st March 2013.
FINANCIAL RESULTS 7KH &RPSDQ\ȠV ˉQDQFLDO SHUIRUPDQFH GXULQJ WKH \HDU DV FRPSDUHG WR WKH SUHYLRXV \HDU LV VXPPDULVHG EHORZ (` in million) Total revenue 3URˉW EHIRUH WD[ 7D[ H[SHQVH 3URˉW DIWHU WD[ %DODQFH EURXJKW IRUZDUG Addition on amalgamation
2012-13
2011-12
444,003
364,139
29,910
21,462
5,989
5,110
23,921
16,352
130,777
118,578
3,565
158,263
134,930
General reserve
2,392
1,635
Proposed dividend
2,417
2,167
3URˉW DYDLODEOH IRU DSSURSULDWLRQ $SSURSULDWLRQV
&RUSRUDWH GLYLGHQG WD[ %DODQFH FDUULHG IRUZDUG WR EDODQFH VKHHW
411
351
153,043
130,777
FINANCIAL HIGHLIGHTS
DIVIDEND
'XULQJ WKH \HDU ,62 6XUYHLOODQFH DXGLW ZDV FDUULHG RXW E\ 0 V $9, Belgium and the auditors recommended FRQWLQXDWLRQ RI WKH ,62
Compact Sedan of the year 2013
The quality management system of WKH &RPSDQ\ LV FHUWLË&#x2030;HG DJDLQVW ,62 6WDQGDUG 5H DVVHVVPHQW RI WKH quality systems is done at regular intervals DQG UH FHUWLË&#x2030;FDWLRQ DVVHVVPHQWV DUH GRQH DW HYHU\ \HDUV E\ DQ DFFUHGLWHG WKLUG party agency. Also, the Company has an internal assessment mechanism to verify DQG HQVXUH DGKHUHQFH RI GHË&#x2030;QHG TXDOLW\ systems across the Company.
AWARDS/RECOGNITION/ RANKINGS - ' 3RZHU $VLD 3DFLË&#x2030;F &XVWRPHU 6DWLVIDFWLRQ ,QGH[ &6, 6WXG\ UDQNHG the Company highest for the 13th time in a row.
OPERATIONAL HIGHLIGHTS
Golden Peacock Award â&#x20AC;&#x201C; 2012 for occupational health and safety in DXWRPRELOH VHFWRU
7KH RSHUDWLRQV DUH H[KDXVWLYHO\ GLVFXVVHG in the report on â&#x20AC;&#x2DC;Management Discussion and Analysisâ&#x20AC;&#x2122; which forms part of this annual report.
The Company was awarded the highest Ë&#x2030;QDQFLDO FUHGLW UDWLQJ RI $$$ VWDEOH ORQJ WHUP DQG $ VKRUW WHUP RQ LWV EDQN IDFLOLWLHV E\ &5,6,/ 7KH UDWLQJ XQGHUVFRUHV WKH Ë&#x2030;QDQFLDO VWUHQJWK RI WKH &RPSDQ\ LQ terms of the highest safety with regard WR WLPHO\ IXOË&#x2030;OOPHQW RI LWV Ë&#x2030;QDQFLDO REOLJDWLRQV
QUALITY The Company was again awarded ,62 FHUWLË&#x2030;FDWLRQ E\ 674& 'LUHFWRUDWH 6WDQGDUGLVDWLRQ 7HVWLQJ DQG 4XDOLW\ &HUWLË&#x2030;FDWH 0LQLVWU\ RI &RPPXQLFDWLRQV DQG ,QIRUPDWLRQ 7HFKQRORJ\ *RYHUQPHQW RI ,QGLD DIWHU UH DVVHVVPHQW 7KH &RPSDQ\
Some of the awards given to Ertiga ZHUH 089 RI WKH \HDU E\ &DU ,QGLD $ZDUGV 039 RI WKH \HDU E\ (7 =LJZKHHOV $XWRFDU ,QGLD DQG %6 0RWRULQJ &RPSDFW 689 IRU WKH \HDU E\ &1%& 2YHUGULYH Top Gear family car of the year Some of the awards given to Alto 800 ZHUH (QWU\ +DWFKEDFN &DU RI WKH <HDU E\ 1'79 &1%& $ZDUGV (QWU\ OHYHO +DWFKEDFN &DU RI WKH <HDU E\ (7 =LJZKHHOV $ZDUGV %HVW 9DOXH IRU 0RQH\ &DU RI WKH \HDU E\ $XWRFDU $ZDUGV &RPSDFW &DU RI WKH \HDU E\ &1%& 2YHUGULYH
The Company ranked third in the list RI PRVW VXFFHVVIXO DQG LQË&#x160;XHQWLDO FRPSDQLHV LQ ,QGLD OLVWHG E\ 7/* 3DUWQHUV /RQGRQ 0U 5 & %KDUJDYD &KDLUPDQ ZDV DZDUGHG WKH $XWRPRELOH 3HUVRQ RI WKH <HDU E\ 1'79 3URË&#x2030;W
SUBSIDIARY COMPANIES AND THEIR ACCOUNTS 7KH &RPSDQ\Č V VXEVLGLDULHV ZKLFK ZHUH HQJDJHG LQ WKH EXVLQHVV RI LQVXUDQFH GLVWULEXWLRQ LQ WKH SDVW JHQHUDWHG DQ investment income of ` 141.75 million including a dividend income of ` 8.93 million and long term capital gain of ` 132.82 million through mutual funds. 7KH &RPSDQ\Č V VXEVLGLDU\ Č&#x;7UXH 9DOXH 6ROXWLRQV /LPLWHGČ KDV FRQWULEXWHG WRZDUGV VPRRWK RSHUDWLRQV RI EXVLQHVV processes and supported the dealerships LQ HQKDQFLQJ WKH VDOH RI SUH RZQHG FDUV XQGHU WKH EUDQG 0DUXWL 7UXH 9DOXH ,W KDV FRQWULEXWHG VLJQLË&#x2030;FDQWO\ WR WKH HIIRUWV RI FXVWRPHU UHWHQWLRQ E\ IDFLOLWDWLQJ VDOH DQG UH SXUFKDVH RI QHZ FDUV WKURXJK H[FKDQJH DQG KDV PDGH VLJQLË&#x2030;FDQW FRQWULEXWLRQ WRZDUGV HQKDQFLQJ GHDOHUVČ SURË&#x2030;WDELOLW\ ,Q WHUPV RI WKH JHQHUDO FLUFXODU GDWHG 8th )HEUXDU\ LVVXHG E\ WKH *RYHUQPHQW RI ,QGLD 0LQLVWU\ RI &RUSRUDWH $IIDLUV WKH EDODQFH VKHHWV SURË&#x2030;W ORVV DFFRXQWV UHSRUWV RI WKH ERDUG RI GLUHFWRUV DQG DXGLWRUV RI WKH VXEVLGLDU\ FRPSDQLHV KDYH QRW EHHQ DWWDFKHG ZLWK WKH EDODQFH sheet of the Company. Annual accounts RI WKH VXEVLGLDU\ FRPSDQLHV DQG WKH UHODWHG GHWDLOHG LQIRUPDWLRQ VKDOO EH PDGH DYDLODEOH WR VKDUHKROGHUV RI WKH &RPSDQ\ DQG VXEVLGLDU\ FRPSDQLHV seeking such information at any point of
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ANNUAL REPORT 2012-13
FINANCIAL STATEMENTS
CRISIL RATINGS
Golden Peacock Award â&#x20AC;&#x201C; 2012 for VXVWDLQDELOLW\
0LGVL]HG &DU RI WKH \HDU E\ &1%& 2YHUGULYH
STATUTORY REPORTS
7KH ERDUG UHFRPPHQGV D GLYLGHQG RI ` 8 (eight) per equity share of ` 5 each for the year ended 31st March 2013 amounting to ` 2,417 million.
&RPSDFW 6HGDQ RI WKH \HDU E\ &DU ,QGLD
MANAGEMENT REVIEW
3URË&#x2030;W EHIRUH WD[ 3%7 ZDV ` 29,910 million against ` 21,462 million showing DQ LQFUHDVH RI SHU FHQW DQG SURË&#x2030;W DIWHU WD[ 3$7 VWRRG DW ` 23,921 million against ` 16,352 million in the previous year showing an increase of 46 per cent.
Some of the awards given to Swift '=LUH ZHUH
CORPORATE OVERVIEW
7KH WRWDO UHYHQXH QHW RI H[FLVH ZDV ` 444,003 million as against ` 364,139 million in the previous year showing an increase of 22 per cent. Sale of vehicles in the domestic market was 1,051,046 units as compared to 1,006,316 units in the previous year showing an increase of 4 SHU FHQW 7RWDO QXPEHU RI YHKLFOHV H[SRUWHG was 120,388 units as compared to 127, 379 units in the previous year.
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Maruti Suzuki India Limited
concept and design at
(info@aicl.in)
www.marutisuzuki.com