(i) Provisions for employee benefits
The provision for employee benefits include compensated absences, retirement allowance, post retirement medical benefit plan and gratuity.
The entire amount of the provision for compensated absences of I 11,488 million (as at March 31, 2025: I 7,878 million) is presented as current, since the Company does not have unconditional right to defer settlement of any of these obligations. However, based on past experience, the Company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within next 12 months. Leave obligation not expected to be settled with next 12 months as at March 31, 2026 is I 9,529 million (as at March 31, 2025: I 6,696 million).
(ii) Provision for warranty and product recall
Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period and is also made for estimated product recall in respect of products sold. These claims are expected to be settled as and when warranty/product recall claims will arise. Management estimates the provision based on historical warranty claims/product recall claims information and any recent trends that may suggest future claims for warranty and product recall that could differ from historical amounts.
(iii) Provision for litigation / disputes and others
I n the ordinary course of business, the Company faces litigations and claims from various authorities and parties. The Company assesses such claims and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claim where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable [refer note 38(A)].
* The Company invests its surplus funds into debt mutual funds. In compliance with Ind AS - 12 Income taxes, the Company had recorded deferred tax liabilities as per applicable law (taking cognisance of the indexation benefit) on fair value gains on these investments. The Finance (No.2) Act, 2024 withdrew the indexation benefit on long-term capital gains on debt mutual funds which were purchased prior to April 1, 2023 and the tax rate applicable on the said mutual funds was changed from 20% plus surcharge and cess (with indexation) to 12.5% plus surcharge and cess (without indexation).
Deferred tax liabilities have been remeasured at the prescribed rate on account of withdrawal of the indexation benefit and change in the tax rate, which has resulted in increase in deferred tax liabilities and corresponding deferred tax expense by I 8,376 million, which was recognised during the year ended March 31,2025. The actual payment of tax would be made at the time of redemption of this asset class. The cash outflow towards tax could be different at the time of redemption depending on the actual gain and prevailing tax regulations.
The Company is primarily in the business of manufacturing, purchase and sale of motor vehicles, components and spare parts ("automobiles"). The other activities of the Company comprise engineering and ancillary services, facilitation of pre-owned car sales, fleet management and car financing. The income from these activities is not material in financial terms but such activities contribute significantly in generating demand for the products of the Company.
a) Contribution to Gratuity Funds - Employee's Gratuity Fund
b) Leave encashment / compensated absence
c) Retirement allowance
d) Provident fund
e) Post Retirement Medical Benefit Plan
The probability or likelihood of lower returns as compared to the expected return on any particular investment.
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.
The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
The fair value of the above ULIP schemes are determined based on the Net Asset Value (NAV). Moreover, for other investments the fair value is taken as per the account statements of the insurance companies.
The weighted average duration of the defined benefit obligation of gratuity fund at March 31, 2026 is 13 years (as at March 31, 2025: 10-13 years).
The Company expects to make a contribution of 1 4,475 million (as at March 31, 2025: 1 2,179 million) to the defined benefit plan of gratuity fund during the next financial year.
Significant actuarial assumption for the determination of defined obligation are discount rate, expected salary growth rate, attrition rate and mortality rate. The sensitivity analysis below have been determined based on reasonably possible changes in respective assumption occurring at the end of reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligation would decrease by 1 1,855 million (increase by 1 1,456 million) [As at March 31, 2025: decrease by 1 1,243 million (increase by 1 1,508 million)].
If the expected salary growth rate increases (decreases) by 1%, the defined benefit obligation would increase by 1 1,669 million (decrease by 1 1,333 million) [As at March 31, 2025: increase by 1 1,328 million (decrease by 1 1,136 million)].
31.1 On November 21,2025, the Government of India notified four Labour Codes, the Code on Wages,2019; Industrial Relations Code, 2020; Code on Social Security, 2020; and Occupational Safety, Health and Working Conditions Code, 2020, consolidating 29 labour laws. The Ministry of Labour & Employment also issued draft Central Rules and FAQs to facilitate impact assessment.
Based on the best available information and guidance from the Institute of Chartered Accountants of India, the Company recognised an incremental impact in the quarter ended Mar 31, 2026 totalling 1 5,939 million, primarily due to the revised wage definition, comprising of:
a) Gratuity: 13,256 million (13,093 million in employee benefits expense; I 163 million in other expenses).
b) Long-term compensated absences: 1 2,683 million, included in employee benefits expense.
The Company will continue to monitor the finalisation of Central and State Rules and further Government clarifications, and will record any additional accounting impact, as required.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows below the table.
Level 1: Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market. This category consists of quoted equity shares and open ended schemes of debt mutual funds.
Level 2: Valuation techniques with observable inputs. This level of hierarchy includes items measured using inputs other than quoted prices included within Level 1 that are observable for such items, either directly or indirectly. This level of hierarchy consists of investments in close ended schemes of debt mutual fund investments and over the counter (OTC) derivative contracts.
Level 3: Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data. The main item in this category are unquoted equity instruments.
The management assessed that fair value of trade receivables, cash and cash equivalents, other bank balances, loans, security deposit, fixed deposits with banks, interest accrued, other current financial assets (except derivative financial assets), short term borrowings, trade payables, lease liabilities and other current financial liabilities (except derivative financial liabilities) approximate their carrying amounts largely due to short-term maturities of these instruments.
The fair value of the financial assets are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:
Investments in debt mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.
Derivative contracts: The Company has entered into variety of commodity forward contracts and foreign currency forward / option contracts to manage its exposure to fluctuations in commodity price risk and foreign exchange rates. These financial exposures are managed in accordance with the Company’s risk management policies and procedures. Fair value of derivative financial instruments, including forward and option contracts are determined using valuation techniques based on information derived from observable market data and using valuation provided by authorised dealers dealing in commodities and foreign exchange.
Quoted equity investments: Fair value is derived from quoted market prices in active markets.
Unquoted equity investments: Fair value is derived on the basis of income approach, in this approach the discounted cash flow method is used to capture the present value of the expected future economic benefits to be derived from the ownership of these investments.
The Company's activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities:
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
The financial risk management of the Company is carried out under the policies approved by the Board of Directors. Within these policies, the Board provides written principles for overall risk management including policies covering specific areas, such as foreign exchange risk management, commodity risk management and investment of funds.
Credit risk arises from the possibility that the counter party may not be able to settle their obligations. To manage trade receivable, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables.
Financial instruments that are subject to such risk, principally consist of trade receivables, loans and advances and derivative instruments. None of the financial instruments of the Company results in material concentration of credit risks.
The allowance for lifetime expected credit loss for the year ended March 31, 2026 was I 52 million (March 31, 2025 was I 52 million).
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure funds are available for use as per the requirements.
The Company did not have any long term borrowings and has sufficient liquidity (refer note 32.3). The Company raises short term rupee borrowings for short term cash flow mismatches and has large investments in debt mutual funds which can be redeemed on a very short notice and hence carries negligible liquidity risk. The Company has undrawn borrowing facilities of I 97,700 million as at March 31, 2026 (I 49,700 million as at March 31, 2025) to honour any liquidity requirements arising for business needs.
The Company has exposure to foreign currency risk on account of its payables and receivables in foreign currency which are mitigated through the guidelines under the foreign currency risk management policy approved by the Board of Directors. The Company enters into derivative financial instruments to mitigate the foreign currency risk.
- forward foreign exchange and options contracts for foreign currency risk mitigation.
The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance sheet as fair value through OCI.
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the year.
If the equity prices had been 5% higher / lower:
Other comprehensive income for the year ended March 31, 2026 would increase / decrease by I 1,282 million, (for the year ended March 31, 2025: increase / decrease by I 1,016 million) as a result of the change in fair value of equity investment measured at FVTOCI.
The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investments.
The sensitivity analysis below have been determined based on Mutual Fund Investment at the end of the reporting period.
If NAV has been 1% higher / lower:
Profit for year ended March 31, 2026 would increase / decrease by I 7,172 million (for the year ended March 31, 2025 by I 6,193 million) as a result of the changes in fair value of mutual fund investments.
The Company's objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The Company has large investments in debt mutual fund schemes wherein underlying portfolio is spread across securities issued by different issuers having different credit ratings. The credit risk of investments in debt mutual fund schemes is managed through investment policies and guidelines requiring adherence to stringent credit control norms based on external credit ratings. The credit quality of the entire portfolio investments is monitored on a quarterly basis. The Company's overall strategy remains unchanged from previous year.
The Company is not subject to any externally imposed capital requirements.
The Company follows a consistent policy of mitigating foreign exchange risk by entering into appropriate hedging instruments as considered necessary from time to time. Depending on the future outlook on currencies, the Company may keep the exposures unhedged or hedged only as a part of the total exposure.
The Company does not enter into a foreign exchange derivative transactions for speculative purposes.
Amounts owed to and by related parties are unsecured and interest free and settlement occurs in cash. All transactions entered into by the Company with its related parties were on arm's length basis and in ordinary course of business.
The Company’s leases primarily consists of leases for land and buildings. Generally, the contracts are made for fixed periods ranging between 3 years to 99 years and does not have a purchase option at the end of the lease term. In a case where the Company has purchase option, the option is exercisable at nominal value and the Company's obligations are secured by the lessor's title to the right-of use assets for such leases.
The total cash outflow for leases (including short term and low value leases) for the year ended March 31, 2026 were I 983 million (Previous Year I 807 million).
Extension and termination options are included in various property and equipment leases executed by the company. These are used to maximise operational flexibility in terms of managing the assets used in company's operations. Generally, these options are exercisable mutually by both the lessor and the lessee.
The Company has entered into operating lease arrangements for various land and premises. These arrangements are cancellable in nature and range between three to fifteen years. Lease rental income are recognised in the Statement of Profit and Loss on a systematic basis.
The Board of Directors at its meeting held on January 29, 2025 had approved the Scheme of Amalgamation (“The Scheme”) between the Company (the "Transferee Company"), Suzuki Motor Gujarat Private Limited (a wholly owned subsidiary of the Company) (the “Transferor Company”) and their respective shareholders and creditors as per the applicable provisions of the Companies Act, 2013 and rules framed thereunder. The Scheme was approved by the Hon’ble National Company Law Tribunal, New Delhi (“Tribunal”) vide its order dated November 06, 2025 with an appointed date of April 1, 2025. The Company had filed the certified copy of the order issued by the Hon’ble National Company Law Tribunal, with the Registrar of Companies, Delhi and accordingly, the Scheme became effective from December 01, 2025. The Scheme envisages transfer of all properties, rights, powers, liabilities and duties of the Transferor Company to the Transferee Company.
Pursuant to the Scheme, the amalgamation has been accounted in accordance with the Ind AS 103 “Business Combinations” and the assets, liabilities and reserves of the Transferor Company have been accounted for at their book value, in the books of the Transferee Company. The share capital of the Transferor Company as at April 1,2024 amounting to I 128,411 have been cancelled with the Transferee Company’s investment in the Transferor Company. The net assets and reserves taken over as at April 1, 2024 amounted to I 134,903 million and I 448 million respectively. Detailed breakup of assets and liabilities is as under:
(viii) In respect of disputed Local Area Development Tax (LADT) (upto April 15, 2008) / Entry Tax, the amounts under dispute are I 21 million (as at March 31, 2025: I 21 million) for LADT and I 20 million (as at March 31, 2025: I 20 million) for Entry Tax. The State Government of Haryana has repealed the LADT effective from April 16, 2008 and introduced the Haryana Tax on Entry of Goods into Local Area Act, 2008 with effect from the same date. After implementation of Goods & Services Act in 2017, Entry Tax Act in Haryana was repealed.
(ix) (a) The Competition Commission of India (“CCI”) had passed an order dated August 25, 2014 stating that the Company
has violated certain sections of the Competition Act, 2002 for not making diagnostic tools and genuine spare parts freely available in the open market and has imposed a penalty of I 4,712 million. The Delhi High Court, on May 16, 2019, disposed off the Company’s petition stating that the Company had alternative remedies available. Thereafter, the Company filed a Special Leave Petition before the Supreme Court of India, wherein an interim stay on CCI’s order was granted on July 1, 2019 and the stay is continuing.
(b) The Competition Commission of India (“CCI”) had initiated suo-moto proceedings in the month of February 2019 alleging that the Company has violated certain sections of the Competition Act, 2002 relating to resale price maintenance. The Company filed its response to the Director General’s investigation report against the Company before CCI on 9th April 2021 and placed its final arguments during the virtual hearing on April 15, 2021. The Company has received the order from CCI dated August 23, 2021, whereby the Commission has arrived at a decision against the Company and a penalty of I 2,000 million was imposed on the Company for imposing a discount control policy. The Company is of the view that CCI has failed to consider voluminous evidence that it has submitted in its defence. The Company has been legally advised that there are fair and reasonable grounds to contest the case. The Company has filed an appeal before the National Company Law Appellate Tribunal (“NCLAT”) to vigorously defend its position against CCI order. The NCLAT has stayed the operation of CCI order including the cease and desist direction and penalty subject to the Company depositing 10% of the penalty imposed amounting to I 200 million which has been deposited and is contesting the case.
Note: The amounts shown in 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 or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.
(B) The Ministry of Environment, Forest and Climate Change has notified the Environment Protection (End-of-Life Vehicles) Rules, 2025 ("the Rules") on January 6, 2025, which came into effect from April 1, 2025. In accordance with the Rules, Extended Producer Responsibility (EPR) obligations are imposed on producers ("vehicle manufacturers/Importers") for the scrapping of End-of-Life Vehicles. As per the Rules, such obligations are to be fulfilled through the purchase of EPR certificates from Registered Vehicle Scrapping Facilities via Centralised Online Portal, which has been made partially operational. However, the pricing mechanism for EPR certificates, and measurement framework for determining financial obligations are not yet made available.
Consequently, the Company is currently unable to reliably estimate a range of possible outcomes and the impact will be evaluated once the implementation framework for determining the reliable estimate is established.
39.1 As per the requirements of proviso to Rule 3(1) of the Companies (Accounts) Rules, 2024, accounting software used by the Company should have a feature of recording audit trail of each and every transaction. The Company's IT environment is adequately governed with information technology general controls (ITGCs) for financial reporting process and the Company has assessed all of its IT applications that are relevant for maintaining books of account.
The Company has used accounting software for maintaining its books of account for the year ended March 31, 2026. In respect of the one of the core accounting software used until December 31, 2025, the audit trail feature was not enabled both at application and database level. For another core accounting software used throughout the year and a new core accounting software which the Company has migrated to w.e.f. January 1,2026, these have the feature of recording audit trail (edit log) facility enabled, except that at the application level, the audit trail is not maintained for changes to certain records and changes made by certain users with specific access and not enabled to capture all direct changes at the database level during the year.
The Company has also used multiple other accounting software in use, the same do not have the feature of recording audit trail at the application level; and at the database level, audit trail is not enabled for all relevant transactions.
In respect of third-party accounting software used by the Company for maintaining and processing certain transactions, the independent service auditor’s report does not cover whether the audit trail was enabled or not, as per the requirements of the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014.
39.2 During the current year, the Company successfully migrated key business applications to a new ERP system, completing program development, configuration, and data migration per the implementation plan. Post-migration testing confirmed full functionality with no material operational disruptions.
a) The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.
b) The Company was not holding any benami property and no proceedings were initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
c) The Company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
d) The Company did not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
e) The Company has not traded or invested in Crypto currency or Virtual Currency during year ended 31 March, 2026.
f) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) any funds to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
g) The Company has not received any funds from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
h) The Company did not have any transaction which had not been recorded in the books of account that had been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
Export Promotion Capital Goods (EPCG) scheme allows import of capital goods including spares for pre-production, production and post production at zero customs duty subject to an export obligation of upto 6 times of customs duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from authorisation issue date.
The Company has been availing the benefit and have been importing capital goods under the scheme at zero customs duty. The Company has accounted for the benefits received in accordance with Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance. Accordingly, the Company has accounted for EPCG income amounting to I 2,919 million (March 31, 2025: I 227 million). Deferred government grant balance as on March 31, 2026 is I 315 million (March 31, 2025: I 1,924 million).
The benefit (savings of customs duty equivalent to non-creditable portion) obtained from the Government has been treated as a Government grant, which has been accounted for as deferred benefit under other current liabilities in note 19 and recognised as a cost of property, plant and equipment. As per the EPCG scheme, the Company has an export obligation equivalent to 6 times of total duty saved (refer note 37). The deferred benefit accounted for, shall be credited to Statement of Profit and Loss on a systematic basis.
The Company has entered into a state support agreement with the Government of Gujarat for setting manufacturing plant at Hansalpur. Further, company has also received approval for incentive package from Government of Haryana for setting up manufacturing plant at Kharkhoda.
The Company is eligible to receive goods and services tax benefit in accordance with the abovesaid agreement / approval, on satisfaction of certain conditions. Based on the assessment performed that the company shall satisfy all the conditions, I 4,415 million (March 31, 2025 was I 4,062 million) has been accrued during the year as per Ind AS 20 - Accounting for Government Grants and Disclosure of Government assistance. Accordingly, Fiscal Incentive receivable balance as on March 31,2026 is I 6,330 million (March 31, 2025: I 3,549 million).
47 The standalone financial statements were approved by the Board of Directors and authorised for issue on April 28, 2026.