302 Maruti Suzuki India Limited
Annual Integrated Report 2021-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
tax assessments. A tax assessment can involve complex
issues, which can only be resolved over extended time
periods.
Other litigations: Litigations often involve complex legal/
regulatory issues and are connected with a high degree
of uncertainty. Accordingly, the assessment of whether an
obligation exists on the balance sheet date as a result of
an event in the past, and whether a future cash outflow is
likely and the obligation can be reliably estimated, largely
depends on estimations by the management.
2.6 Revenue Recognition
Note 18 : Provision for Warranty and Product Recall
The Group creates provision based on historical warranty
claim experience. In addition, assumptions on the amounts
of potential costs are also included while creating the
provisions. The provisions are regularly adjusted to reflect
new information.
Note 4 : Property, Plant and Equipment - Useful
Economic Life
Property, plant and equipment represent a significant
proportion of the asset base of the Group. The charge in
respect of periodic depreciation is derived after determining
an estimate of an asset’s expected useful life and the
expected residual value at the end of its life. The useful
lives and residual values of Group's assets are determined
by the management at the time the asset is acquired and
reviewed periodically, including at each financial year end.
Note 37 : Leases
Ind AS 116 requires lessees to determine the lease term as the
non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option
is reasonably certain. The Group makes an assessment
on the expected lease term on a lease-by-lease basis. In
evaluating the lease term, the Group considers factors such
as any significant lease hold improvements undertaken over
the lease term, costs relating to the termination of the lease
and the importance of the underlying asset to the Group’s
operations taking into account the location of the underlying
asset and the availability of suitable alternatives. The lease
term in future periods is reassessed to ensure that the lease
term reflects the current economic circumstances.
Estimation of Uncertainties Relating to the Global
Health Pandemic from COVID-19:
The Group has considered the possible effects that may
result from the pandemic relating to COVID-19 on the carrying
amounts of property, plant and equipment, investments,
inventories, receivables and other current assets. In
developing the assumptions relating to the possible future
(All amounts in ` million, unless otherwise stated)
uncertainties in the global economic conditions because of
this pandemic, the Group, as at the date of approval of these
financial statements has used internal and external sources
of information on the expected future performance of the
Group. The Group has performed sensitivity analysis on the
assumptions used and based on current estimates expects
the carrying amount of these assets will be recovered. The
impact of COVID-19 on the Group's financial statements
may differ from that estimated as at the date of approval of
these financial statements
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are
net of returns, discounts, sales incentives, goods & service
tax and value added taxes.
The Group recognises revenue when the amount of revenue
and its related cost can be reliably measured and it is
probable that future economic benefits will flow to the entity
and degree of managerial involvement associated with
ownership or effective control have been met for each of the
Group's activities as described below. The Group bases its
estimates on historical results, taking into consideration the
type of customer, the type of transactions and the specifics
of each arrangement.
2.6.1 Sale of Goods
Revenue is recognised for domestic and export sales of
vehicles, spare parts, and accessories when the Group
transfers control over such products to the customer on
dispatch from the factory and the port respectively.
2.6.2 Income from Services
Revenue from engineering services are recognised
as the related ser vices are per formed. Revenue
from extended warranty is recognised on time
proportion basis. Income from other services are
accounted over the period of rendering of services.
Invoicing in excess of revenues are classified as contract
liabilities. Contract liabilities pertains to advance
consideration received towards sale of extended warranty
and other services by the Group.
2.6.3 Income from Royalty
Revenue from royalty is recognised on an accrual
basis in accordance with the substance of the relevant
arrangements.
Corporate
Overview
Value Creation
Approach
Sustainability
Performance
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.7 Other Income
Dividend income from investments is recognised when
the shareholders' right to receive payment has been
established.
Interest income from a financial asset is recognised when it
is probable that the economic benefits will flow to the Group
and the amount of income can be measured reliably.
2.8 Leases
2.8.1 The Group as Lessor
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
Amounts due from lessees under finance leases are
recognised as receivables at the amount of the Group's net
investment in the leases. Finance lease income is allocated
to accounting periods so as to reflect a constant periodic
rate of return on the Group's net investment outstanding in
respect of the leases. When the Group is an intermediate
lessor, it accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a finance
or operating lease by reference to the right of-use asset
arising from the head lease.
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease. Where
the rentals are structured solely to increase in line with
expected general inflation to compensate for the Group's
expected inflationary cost increases, such increases are
recognised in the period in which such benefits accrue.
The Group did not make any adjustments to the accounting
for assets held as a lessor as a result of adopting the new
lease standard.
2.8.2 The Group as Lessee
The Group assesses whether a contract contains a lease,
at inception of a contract. At the date of commencement of
the lease, the Group recognises a 'right-of-use' asset and a
corresponding liability for all lease arrangements in which it
is a lessee, except for leases with a term of twelve months
or less (short-term leases) and low value leases. For these
short-term and low value leases, the Group recognizes the
lease payments as an operating expense on a straight-line
basis over the term of the lease
Right-of-use asset are measured at cost comprising the
following:
Statutory
Reports
Financial
Statements 303
(All amounts in ` million, unless otherwise stated)
- the amount of initial measurement of liability
- any lease payments made at or before the
commencement date less the incentives received
- any initial direct costs, and
- restoration costs
They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use asset are depreciated over the shorter of
asset's useful life and the lease term on a straight-line
basis. Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable.
Lease liabilities measured at amortised cost include the net
present value of the following lease payments:
- fixed payments (including in-substance fixed
payments), less any lease incentives receivable
- variable lease payment that are based on an index or
a rate, initially measured using the index or rate as at
the commencement date
- amounts expected to be payable by the Group under
residual value guarantees
- the exercise price of purchase option if the Group is
reasonably certain to exercise that option, and
- payments of penalties for terminating the lease, if the
lease term reflects the Group exercising the option.
Lease payments to be made under reasonably certain
extension options are also included in the measurement
of the liability. The lease payments are discounted using
the rate interest implicit in the lease. If that rate cannot be
readily determined, which is generally the case for leases in
the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in the similar economic
environment with similar terms, security and conditions.
The Group accounts for each lease component within the
contract as a lease separately from non-lease components
of the contract in accordance with Ind AS 116 and allocates
the consideration in the contract to each lease component
334 Maruti Suzuki India Limited
Annual Integrated Report 2021-22
Corporate
Overview
Value Creation
Approach
Sustainability
Performance
Statutory
Reports
Financial
Statements 335

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in ` million, unless otherwise stated) (All amounts in ` million, unless otherwise stated)

21 TRADE PAYABLES Trade Payables ageing schedule as at March 31, 2021

As at As at Outstanding for following periods from due date of payment

31.03.2022 31.03.2021
Less than 1-2 2-3 More than
Not Due Total
1 years years years 3 years
Total outstanding dues of micro and small enterprises 1,087 698
Total outstanding dues of creditors other than micro and small enterprises 96,565 100,983 MSME 658 39 1 - - 698
97,652 101,681 Others 69,137 2,248 55 36 75 71,551
Disputed dues - Others - - 1 - 4 5
21.1 Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) Unbilled 29,427 - - - - 29,427
Total 99,222 2,287 57 36 79 101,681
As at As at
31.03.2022 31.03.2021
22 TAX ASSETS / LIABILITIES
a. Amounts payable to suppliers under MSME Development Act, 2006 (suppliers) as at year end
- Principal 1,087 698 As at As at
31.03.2022 31.03.2021
- Interest due thereon 4 1
b. Payments made to suppliers beyond the appointed day during the year Non-Current tax assets
- Principal 227 717 Taxes Paid (Net) 5,446 5,407
- Interest paid 1 1 Current tax liabilities
Amount of Interest due and payable for delay in payment (which have been paid but beyond the Income tax payable (Net) 11,113 8,547
c. - 7
appointed day during the year) but without adding the interest under MSME Development Act, 2006
d. Amount of interest accrued and remaining unpaid as at year end 4 8 23 REVENUE FROM OPERATIONS

Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of intimation Year ended Year ended
31.03.2022 31.03.2021
received from the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006.
Sale of products
Trade Payables ageing schedule as at March 31, 2022
Vehicles 737,912 590,059

Outstanding for following periods from due date of payment Spare parts / dies and moulds / components 100,086 75,659
Particulars Less than 1-2 2-3 More than 837,998 665,718
Not Due Total
1 years years years 3 years
Other operating revenues
MSME 1,000 84 2 - 1 1,087 Income from services 13,690 12,171
Others 59,648 2,084 16 13 106 61,867 Sale of scrap 6,419 4,208
Disputed dues - Others - - - 1 4 5 Recovery of freight & service charges 21,475 19,096
Unbilled 34,693 - - - - 34,693 Rental Income 437 405
Total 95,341 2,168 18 14 111 97,652 Others 3,279 2,122
45,300 38,002
883,298 703,720

Refer to note 8.1 for payment terms with customers.

Revenue from contract with customers is disaggregated by geographical region and presented. (Refer to note 31)
336 Maruti Suzuki India Limited
Annual Integrated Report 2021-22
Corporate
Overview
Value Creation
Approach
Sustainability
Performance
Statutory
Reports
Financial
Statements 337

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in ` million, unless otherwise stated) (All amounts in ` million, unless otherwise stated)

Reconciliation of revenue recognised with contract price: 25.2 Changes in inventories of finished goods, work-in-progress and stock-in-trade

Year ended Year ended Year ended Year ended

31.03.2022 31.03.2021 31.03.2022 31.03.2021

Contract price (Gross) 915,559 738,647 Opening balances

Adjustments for: Work in progress 1,483 1,218

Discount & Incentives as per contract/scheme bulletins (32,261) (34,927) Finished goods manufactured

Revenue From Operations 883,298 703,720 Vehicle 5,376 9,236

Vehicle spares and components 364 376
24 OTHER INCOME Traded goods
Vehicle 1,439 852
Year ended Year ended
31.03.2022 31.03.2021
Vehicle spares and components 3,579 3,295
12,241 14,977
Interest income on Closing balances
Bank deposits 1,283 96 Work in progress 2,299 1,483
Receivables from dealers 459 628 Finished goods manufactured
Others 5 4 Vehicle 5,509 5,376
1,747 728 Vehicle spares and components 344 364
Dividend income Traded goods
Dividend from equity investments 29 32 Vehicle 909 1,439

29 32 Vehicle spares and components 4,111 3,579

13,172 12,241
Others
(931) 2,736
Net gain on sale of investments in debt mutual funds 2,046 411
Fair valuation gain on investment in debt mutual funds 13,625 27,713 26 EMPLOYEE BENEFITS EXPENSES
Exchange variations on transactions and translation (net) - 479
15,671 28,603 Year ended Year ended
31.03.2022 31.03.2021
17,447 29,363
Salaries and wages 35,297 30,424
25 MATERIAL CONSUMED Contribution to provident and other funds 2,122 1,741
25.1 Cost of materials consumed
Staff welfare expenses 3,095 2,151

Year ended Year ended 40,514 34,316

31.03.2022 31.03.2021
27 FINANCE COSTS
Raw material Inventory at the beginning of year 14,703 13,761
Add: Purchases during the year 400,720 333,906 Year ended Year ended
31.03.2022 31.03.2021
Less: Raw material at the end of year 18,027 14,703
397,396 332,964 Interest costs:
Cash credit and overdrafts 120 253
Deposits from dealers, contractors and others 577 587
Others 569 178
1,266 1,018