Accounting policies of Maruti Suzuki India as on 31 March 2019:

1. Depreciation:
 The treatment of depreciation charge is consistent across three firms and
industry as per Ind AS
 Property, Plant and Equipment: Depreciation is on a straight-line basis over
the estimated useful lives of each part of an item of property, plant and
equipment.
 Depreciation methods, estimated useful lives and assets residual values are
verified at the end of each reporting period.
 Any asset with individual written down value, if at the beginning of the year is
Rs 5000 or less is depreciated at the rate of 100%
 Assets purchased during the year costing 5000 or less are also depreciated at
the rate of 100%
 Loss and gain on disposal are calculated by comparing carrying amount with
proceeds and is credited/ debited to loss or profit
 Leasehold and freehold land in the nature of perpetual lease is not amortised
 Following table shows the estimated life of regulated and non-regulated
assets

Type of asset Useful life

Building 3-60 years
Plant & machinery other than Dies and Jigs 5 to 25 years
Dies and Jigs 5 years
Electronic data processing equipment 3 years
Furniture and fixtures 10 years
Office appliances 3 to 6 years
Vehicles 3 to 8 years

2. Revenue recognition

The revenue recognition across industry is similar with few difference

I. Maruti Suzuki:

 The Company adopted Ind AS 115 ''Revenue from Contracts with Customers''
effective from April 1, 2018,
 Revenue is measured at the fair value of the consideration received or
receivable.
 Amounts disclosed as revenue are inclusive of excise duty (till 30th June,
2017) and net of returns, discounts, sales incentives, goods & service tax and
value added taxes.
 Various categories of identifying revenue:
 Sale of goods:
 Revenue is recognised for domestic and export sales of vehicles, spare parts,
and accessories when the Company transfers control over such products to
the customer on dispatch from the factory and the port respectively.
Income from services:
 Revenue from engineering services are recognised as the related services are
performed.
 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 Company.
Income from royalty
 Revenue from royalty is recognised on an accrual basis in accordance with
the substance of the relevant arrangements.

II. Tata motors:

The Company generates revenue principally from

Sale of products:
 Sale of commercial and passenger vehicles and spare parts.
 The Company recognizes revenues on the sale of products, net of discounts,
sales incentives, customer bonuses and rebates granted, when products are
delivered to dealers or when delivered to a carrier for export sales, which is
when control including risks and rewards and title of ownership pass to the
customer.
 The consideration received in respect of transport arrangements for
delivering of vehicles to the customers are recognized net of their costs
within revenues in the income statement.
 Revenues are recognized when collectability of the resulting receivable is
reasonably assured.
Sale of services:

 Maintenance service and extended warranties for commercial and

passenger vehicles.
 Income from sale of maintenance and extended warranties are
recognized as income over the relevant period of service or extended
warranty.
 Sale of services include certain performance obligations that are satisfied
over a period of time.
III. Mahindra and Mahindra:
 Revenue is recognized to the extent that it is probable that the economic
benefits will flow to the Company.
 Revenue can be reliably measured, regardless of when the payment is being
made.
 Revenue is measured at the fair value of the consideration received or
receivable.
 As the recovery of excise duty flows to the Company on its own account,
revenue includes excise duty.
 However, Goods and Services Tax effective from 1st July 2017 and sales tax/
value added tax (VAT) before 1st July 2017 is not received by the Company on
its own account.
 Rather, it is tax collected on value added to the commodity by the seller on
behalf of the government.
 Accordingly, it is excluded from revenue.
 The specific recognition criteria described below must also be met before
revenue is recognized.
 Sale of goods Revenue from the sale of goods is recognized when the
significant risks and rewards of ownership of the goods have passed to the
buyer.
 Revenue from the sale of goods is measured at the fair value of the
consideration received or receivable, net of returns and allowances, trade
discounts and volume rebates.

3. Property, plant and equipment:

 Across industry, PPE are stated at cost of acquisition or construction less

accumulated depreciation less accumulated impairment, if any.
 Freehold land is measured at cost and is not depreciated.
 Cost includes purchase price, taxes and duties, labour cost and direct
overheads for self-constructed assets and other direct costs incurred up to
the date the asset is ready for its intended use.
 Interest cost incurred for constructed assets is capitalized up to the date the
asset is ready for its intended use, based on borrowings incurred specifically
for financing the asset or the weighted average rate of all other borrowings,
if no specific borrowings have been incurred for the asset.
 The useful lives are reviewed at least at each year end.
 An item of property, plant and equipment is derecognised upon disposal or
when no future economic benefits are expected to arise from continued use
of asset.
  Any gain or loss arising on the disposal or retirement of an item of property,
plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of asset and recognised in profit or loss.
 Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets or, where shorter, the term of the
relevant lease.
 Depreciation is not recorded on capital work-in-progress until construction
and installation are complete and the asset is ready for its intended use.

4. Foreign Currency Transactions:

 Across industry, financial statements are presented in Indian rupees, which is
the functional currency.
 Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction.
 Foreign currency denominated monetary assets and liabilities are re-
measured into the functional currency at the exchange rate prevailing on the
balance sheet date.
 Exchange differences arising on settlement of transactions and translation of
monetary items are recognized in the statement of Profit and Loss.
 Exceptions to the above statement are exchange differences which are
regarded as an adjustment to interest costs on foreign currency borrowings,
are capitalized as part of borrowing costs.

5. Impairment:
 The treatment of impairment of tangible and intangible assets was found
consistent across the industry.
 At the end of each reporting period, the Company reviews the carrying
amounts of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss.
 If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any).
 Recoverable amount is the higher of fair value less costs of disposal and value
in use.