CORPORATE GOVERNANCE REPORT

COMPANY’S PHILOSOPHY Directors is well-informed and well-equipped to fulfill its overall

Your Company has an unwavering commitment to upholding
sound corporate governance standards and highest business
conduct. Being a value-driven organization, Maruti has always
worked towards building trust with shareholders, employees,
customers, suppliers and other stakeholders based on the
principles of corporate governance- integrity, equity, transparency,
fairness, disclosure, accountability and commitment to values.
Maruti strives to foster a corporate culture in which high standards
of ethical behavior, individual accountability and transparent
disclosure are ingrained in all its business dealings and shared by
its Board of Directors, Management and Employees. Maruti has
established systems and procedures to ensure that its Board of
responsibilities and to provide the management strategic direction,
it needs to create long-term shareholder value.
In India, corporate governance standards for listed companies
are stipulated by Securities and Exchange Board of India (SEBI)
through Clause 49 of the Listing Agreement entered into with
the Stock Exchanges. Maruti had initiated good corporate
governance practices, even before Clause 49 became applicable
and these practices form an integral part of Maruti’s governance
culture.
This chapter, along with the chapters on Management Discussion
and Analysis and additional shareholders’ information, reports
Maruti’s compliance with Clause 49 of the Listing Agreement.

Table 1:
Composition of the Board of Directors as on 31st March 2007
Sr. Name of the Directors Category No. of outside No. of outside
No. Directorship Committees
Public Private Member Chairman

1. Mr. Shinzo Nakanishi Chairman, Non-executive 1 1 – –

2. Mr. Jagdish Khattar Managing Director, Executive 3 2 2 –
1
3. Mr. Tsuneo Kobayashi Senior Joint Managing Director, Executive 1 – 1 –
4. Mr. Shinichi Takeuchi Joint Managing Director, Executive 3 – – –
5. Mr. Hirofumi Nagao Joint Managing Director, Executive 3 – 2 –
2
6. Mr. Shuji Oishi Director (Mktg. & Sales), Executive 1 1 – –
7. Mr. R C. Bhargava Non-executive 10 3 6 3
8. Mr. O. Suzuki Non-executive 1 – - –
9. Mr. Amal Ganguli3 Independent 9 2 4 3
10. Mrs. Pallavi Shroff Independent 4 1 – –
11. Mr. Manvinder Singh Banga Independent – – – –
12. Mr. Davinder Singh Brar4 Independent 1 9 1 –
1. Appointed as Sr. Joint Managing Director with effect from 13th November 2006.
2. Appointed as Director (M&S) with effect from 13th April 2006.
3. Appointed with effect from 13th April 2006.
4. Appointed with effect from 27th July 2006.

Notes:

1. The Committees considered for the purpose are those prescribed under Clause 49 (I) (C) of the Listing Agreement.
2. Foreign companies, bodies corporate, private companies and companies under section 25 of the Companies Act, 1956 are excluded
for the above purpose.

Maruti Udyog Limited | ANNUAL REPORT | 2006-2007 39

 BOARD OF DIRECTORS Table 2:
Board meeting attendance record of the Directors in
Composition of the Board
2006-07
As on 31st March 2007, the Company’s Board of Directors consists Name of Director Number of Whether
of twelve members. The Chairman of the Board is a non-executive meetings attended
Director. The Board comprises of five executive Directors and attended last AGM
seven non-executive Directors, of whom four are independent. (Total meetings
The composition of the Board is in conformity with the held: 9)
requirements of Clause 49 of the Listing Agreement which
stipulates that 50 percent of the Board should comprise non- Mr. Shinzo Nakanishi 8 Yes
executive Directors and one-third of the Board should be Mr. Jagdish Khattar 9 Yes
independent, if the Chairman is non-executive. All non-executive Mr. Tsuneo Kobayashi 5 Yes
independent Directors are persons of eminence and bring a wide Mr. Hirofumi Nagao 9 Yes
range of expertise and experience to the Board. Table 1 gives the Mr. Shinichi Takeuchi 9 Yes
details of the Board as on 31st March 2007. Mr. Kinji Saito1 1 N.A.
Mr. Shuji Oishi 8 Yes
As stipulated by Clause 49 of the Listing Agreement, none of the Mr. R. C. Bhargava 9 Yes
Directors was a member of more than 10 committees or a Mr. O. Suzuki 1 Yes
Chairman of more than 5 committees across all companies in Mr. Amal Ganguli 8 No*
which he/she was a Director. Mrs. Pallavi Shroff 6 Yes
Mr. Kumar Mangalam Birla2 Nil N.A.
Apart from receiving Directors’ remuneration, independent Mr. Manvinder Singh Banga 5 No**
Directors do not have any other material pecuniary relationship Mr. Davinder Singh Brar 5 Yes
or transactions with the Company, its promoters, its management Mr. Kalyan Bose3 Nil N. A.
or its subsidiaries, which in the judgement of the Board may affect Dr. Surajit Mitra4 1 N.A.
independence of the Director. 1. Ceased to be Director with effect from 12th April 2006.
2. Ceased to be Director with effect from 27th July 2006.
Board Meetings 3. Ceased to be Director with effect from 13th April 2006.
4. Ceased to be Director with effect from 8th July 2006.
The Board met nine times during the year – on 13th April 2006,
26th April 2006, 5th July 2006, 27th July 2006, 4th September 2006, * Due to illness.
26th October 2006, 20th January 2007, 22nd January 2007 and 24th **Due to pre-occupation.
March 2007. The maximum gap between any two meetings was
less than 4 months. Table 2 gives the attendance record of the
Directors at the nine Board Meetings as well as the last Annual

Any materially significant effluent or pollution problems;
General Meeting (AGM).

Any materially relevant default in financial obligations to and
by the Company or substantial non-payment for goods sold
Information supplied to the Board
by the Company;
The Board has complete access to all information with the
Any issue which involves possible public or product liability
Company. Inter-alia, the following information is provided to the claims of a substantial nature;
Board and the agenda papers for the meetings are circulated in

Details of any joint venture or collaboration agreement;
advance of each meeting or is tabled in the course of such meeting:-

Transactions that involve substantial payment towards

Annual operating plans and budgets, capital budgets and goodwill, brand equity or intellectual property;
updates;
Significant labour problems and their proposed solutions;

Quarterly results of the Company and its operating divisions
Any significant development in the human resources and
or business segments; industrial relations fronts;

Minutes of meetings of Audit Committee and other
Sale of material nature of investments, subsidiaries, assets,
committees of the Board; which is not in the normal course of business;

Information on recruitment and remuneration of senior
Quarterly details of foreign exchange exposure and the steps
officers just below the Board level including appointment or taken by management to limit the risks of adverse exchange
removal of Chief Financial Officer and Company Secretary; rate movement, and

Materially important show cause, demand, prosecution and
Non-compliance of any regulatory, statutory nature or listing
penalty notices; requirements and shareholder services such as non-payment

Fatal or serious accidents or dangerous occurrences; of dividend, delay in share transfer etc.

40 Maruti Udyog Limited | ANNUAL REPORT | 2006-2007

 CORPORATE GOVERNANCE REPORT

Remuneration paid / payable to Directors

Table 3 gives details of the remuneration paid to Directors during the year 2006-07. The Company did not advance any loans to any
of its Directors in the year under review.
Table 3:
Remuneration paid or payable to Directors during 2006 – 07
Name of director Relationship with Salary and Performance Sitting fees Commission* Total
other Directors Perquisites linked bonus
(Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Mr. Shinzo Nakanishi None - - 1,30,000 - 1,30,000
Mr. Jagdish Khattar None 1,45,35,600 65,41,667 - - 2,10,77,267
Mr. Tsuneo Kobayashi** None 38,09,379 18,26,668 30,000 - 56,66,047
Mr. Shinichi Takeuchi None 94,30,000 43,75,000 - - 1,38,05,000
Mr. Hirofumi Nagao None 94,30,000 43,75,000 - - 1,38,05,000
Mr. Kinji Saito None 2,63,539 - - - 2,63,539
Mr. Shuji Oishi None 88,68,990 36,85,110 - - 1,25,54,100
Mr. R. C. Bhargava None - - 1,30,000 - 1,30,000
Mr. O. Suzuki None - - 10,000 - 10,000
Mr. Amal Ganguli None - - 1,60,000 - 1,60,000
Mrs. Pallavi Shroff None - - 1,20,000 - 1,20,000
Mr. Manvinder Singh Banga None - - 50,000 - 50,000
Dr. Surajit Mitra None - - 10,000 - 10,000
Mr. Davinder Singh Brar None - - 1,10,000 - 1,10,000

* A proposal for increase in overall slab/limit of commission to Rs. 1 Crore is being put up before the shareholders in the ensuing
Annual General Meeting. The Board shall decide the quantum of commission to be paid to eligible Directors, for the year 2006-07,
after the said approval of shareholders. The same shall, then, be disclosed in the Corporate Governance Report of 2007-08.
** Subject to approval of shareholders in ensuing Annual General Meeting.

The performance criteria defined by the Board is as under:
a) Actual achievement in terms of growth in sales, profit etc. as
compared to the previous year;
b) Actual achievement of growth as compared to the budget
approved at the beginning of the year; and
c) Growth of market share of Company’s products as compared
to key competitors in the Industry.
No employee of the Company is related to any Director of the
Company.
Non-Executive Directors’ remuneration
Section 309 of the Companies Act, 1956 provides that a Director
who is neither in the whole time employment of the Company
nor a Managing Director may be paid remuneration by way of
commission, if the Company by special resolution authorizes such
payment. Members of the Company at the Annual General Meeting
held on 29th July 2004, approved payment of remuneration by
way of commission to independent Directors at a sum not
exceeding 1% of the net profits of the Company subject to a
ceiling of Rs. 40 Lac per annum. It is proposed to enhance the
said limit to Rs. 1 Crore after the approval of shareholders in the
ensuing Annual General Meeting with effect from 1st April 2006.
The commission for the year 2006-07 shall, then, be decided and
paid to the non executive Directors. The payment of commission
is based on certain criteria such as attendance at the Board/ Board
level committee meetings, time devoted, current trends prevailing
in the industry etc.
Committees of the Board
1. Audit Committee
As on 31st March 2007, the Audit Committee consists of
four non-executive members, of whom three are
independent. Mr. Amal Ganguli, the Chairman of the Audit
Committee has expertise in accounting and financial
management. The Director responsible for the finance
function, the head of internal audit and the representative of
the Auditors and Cost Auditors are permanent invitees to
the Audit Committee. Mr. Anil Rustgi, Company Secretary
& Chief Legal Officer acts as the Secretary of the committee.
The Audit Committee met six times in the year under review
– on 26th April 2006, 27th July 2006, 1st September 2006, 26th
October 2006, 22nd January 2007 and 22nd February 2007.
Table 4 gives the attendance record.

Maruti Udyog Limited | ANNUAL REPORT | 2006-2007 41

 Table 4: 7. Discussion with Internal Auditors any significant findings and
Attendance record of Audit Committee members follow up thereon.

Name of member/ Status Meetings Attended 8. Reviewing the findings of any internal investigations by the
Director in 2006-07 Internal Auditors into matters where there is suspected fraud
(Total Meetings or irregularity or a failure of internal control systems of a
held: 6) material nature and reporting the matter to the Board.
Mr. Amal Ganguli1 Chairman 6
Mr. Kalyan Bose2 Chariman Nil 9. Discussion with Statutory Auditors before the audit
Mr. Davinder Singh Brar3 Member 4 commences, about the nature and scope of audit as well as
Mr. Shinzo Nakanishi Member 3 post audit discussion to ascertain any area of concern.
Mrs. Pallavi Shroff Member 4
10. Looking into the reasons for substantial defaults, if any, in the
Notes: payment to the depositors, debenture holders, shareholders
1. Appointed with effect from 13th April 2006. (in case of non-payment of declared dividends) and creditors.

2. Ceased to be member with effect from 13th April 2006. 11. Reviewing the functioning of the Whistle Blower mechanism,
th in case the same is existing.
3. Appointed with effect from 27 July 2006.

The role of the Audit Committee includes the following: 12. Carrying out any other function as is mentioned in the terms
of reference of the Audit Committee.
1. Oversight of the Company’s financial reporting process and
the disclosure of its financial information to ensure that the 13. Reviewing any other matter which may be specified as role of
financial statement is correct, sufficient and credible. the Audit Committee under the amendments, if any, from
time to time, to the Listing Agreement, Companies Act and
2. Recommending the appointment and removal of Statutory other statutes.
Auditors, fixation of audit fee and also approval for payment
for any other services. II. Shareholders’ / Investors’ Grievance Committee
The Shareholders’ / Investors’ Grievance Committee was set up
3. Reviewing, with the management, the annual financial by the Board of Directors on 7th July 2003. The Committee consists
statements before submission to the Board for approval, with of two whole-time executive Directors and three non-executive
particular reference to: Directors, one of whom is independent. The Company Secretary
a) Matters required to be included in the Directors’ & Chief Legal Officer acts as the Secretary to the Committee and
Responsibility Statement to be included in the Board’s is the Compliance Officer.
report in terms of Clause (2AA) of section 217 of the
Companies Act, 1956. During the financial year ended 31st March 2007, the Shareholders’/
b) Changes, if any, in accounting policies and practices and Investors’ Grievance Committee met twice on 26th October 2006
reasons for the same. and 20th January 2007. Table 5 gives the attendance record.
c) Major accounting entries involving estimates based on the
exercise of judgment by the management. Table 5:
d) Significant adjustments made in the financial statements Attendance record of Shareholders’ / Investors’ Grievance
arising out of audit findings. Committee members
e) Compliance with listing and other legal requirements Name of Director Status Meetings attended
relating to financial statements. in 2006–07
f) Disclosure of any related party transactions. (Total Meetings held: 2)
g) Qualifications in the draft audit report. Mr. Shinzo Nakanishi Chairman 2
Mr. Jagdish Khattar Member 2
4. Reviewing, with the management, the quarterly financial
Mr. Hirofumi Nagao Member 2
statements before submission to the Board for approval.
Mr. R. C. Bhargava Member 2
Mr. Davinder Singh Brar1 Member 2
5. Reviewing with the management, performance of Statutory
Mr. Kumar Manglam Birla2 Member N.A.
and Internal Auditors, the adequacy of internal control system.
1. Appointed with effect from 27th July 2006.
6. Reviewing the adequacy of internal audit function including 2. Ceased to be member with effect from 27th July 2006.
the structure of the internal audit department, staffing and The Committee oversees redressal of shareholder and investor
seniority of the official heading the department, reporting grievances, transfer of shares, non - receipt of balance sheet, non
structure coverage and frequency of internal audit. - receipt of declared dividends and related matters. The committee

42 Maruti Udyog Limited | ANNUAL REPORT | 2006-2007

 CORPORATE GOVERNANCE REPORT

also oversees the performance of the Registrar and Transfer
Agents, recommends measures for overall improvement in the
quality of investors’ services, approves issue of duplicate/split/
consolidation of share certificates and reviews all matters
connected with the securities transfers.
In order to provide efficient and timely services to investors, the
Board has delegated the power of approval of issue of duplicate/
split/consolidation of share certificate, transfer of shares,
transmission of shares, dematerialisation/rematerialisation of
shares not exceeding 2000 equity shares of Rs. 5 each per
transaction to the Managing Director, Sr. Joint Managing Director,
Joint Managing Director and Company Secretary & Chief Legal
Officer severally.
subsidiaries or relatives etc. that had potential conflict with the
interest of the Company. All disclosures related to financial and
commercial transactions where Directors may have a potential
interest are provided to the Board, and the interested Directors
do not participate in the discussion nor do they vote on such
matters. However, none of these transactions have potential
conflict with the interest of the Company at large.
Related Party Transactions
None of the transactions with any of the related parties were in
conflict with the interest of the Company. Details of transactions
between the Company and its subsidiaries, fellow subsidiaries,
joint ventures, associates during 2006–07 are given in Note no.
26 in Schedule 23 to the annual accounts.

During the year, 915 letters/complaints were received and all All related party transactions are negotiated on arm’s length basis
were responded to/resolved. No transfer of shares was pending and are only intended to further the interest of the Company.
as on 31st March 2007.
Code of Conduct for the Board of Directors and Senior
III. Committee for Merger Management Personnel
Your Company has laid down a Code of Conduct for all the Board
During the year, the Board constituted a Committee of Directors
members and identified senior management personnel of the
comprising Mr. J. Khattar, Mr. R. C. Bhargava, Mr. H. Nagao,
Company. The Code of Conduct has been posted on the website
Mr. A. Ganguli and Mrs. P. Shroff as members with following terms
of the Company. All the Board members and the senior
of reference with regard to the merger of Maruti Suzuki
management personnel have affirmed their compliance with the
Automobiles India Limited (MSAIL) with the Company:
said Code of Conduct for the financial year ended 31st March
2007. A declaration to this effect signed by Mr. Jagdish Khattar,
i. to appoint valuer(s), legal counsel and other consultants
Managing Director & CEO of the Company forms part of this
(if any);
report as Annexure - A.
ii. to recommend the purchase price of an MSAIL equity share
from Suzuki Motor Corporation;
CEO/ CFO Certification
iii. to review and recommend the scheme of merger/
amalgamation. Your Company has introduced for the first time a Control Self
Assessment mechanism to evaluate the effectiveness of internal
The Committee met two times. Table 6 gives the attendance controls over financial reporting. Key internal controls over
record of its members. financial reporting were identified and put to self assessment by
control owners in the form of Self Assessment Questionnaires
Table 6: through a web based online tool called “Controls Manager”. The
Attendance record of members of Committee for Merger self assessment submitted by control owners were further
Name of Director Status Meetings attended reviewed and approved by their superiors.
in 2006–07
(Total Meetings held: 2) Enabling controls self-assessments through the Controls Manager
Mr. R.C.Bhargava Chairman 2 Key Steps Process for reporting
Mr. Jagdish Khattar Member 2 Risks & Controls Map

No. Risks / WCGWs Control Description

RACM
Cycle (Level 1): Accounting Major Process (level Process (level 3):
Business Unit: Finance Department - Corporate Process Owner: Idris Kaboglu (Finance Controller)
Notes reference: Information & Communication:

P)
Detect(D) IT***
Frequency:
Prevent( Manual Daily,Weekl
(M) or y, Monthly,
Quarterly
Annually
Key
Contr
ol:
Y/N
Control
performed
by
Control
Document
Sub Process

Activity
Pages: 18

Monitoring Preliminary

Rating****
Version: Final

Control Effectiveness Rating Justification

Testing:
Y/N
Desired
Effectiveness
Rating
Risks & Controls Map

No. Risks / WCGWs Control Description

RACM
Cycle (Level 1): Accounting Major Process (level Process (level 3):
Business Unit: Finance Department - Corporate Process Owner: Idris Kaboglu (Finance Controller)
Notes reference: Information & Communication:

P)
Frequency:
Prevent( Manual Daily,Weekl
(M) or y, Monthly,
Detect(D) IT*** Quarterly
Annually
Key
Contr
ol:
Y/N
Control
performed
by
Control
Document
Sub Process
Pages: 18

Monitoring Preliminary
Version: Final

Control Effectiveness Rating Justification

Activity Rating****
Testing:
Y/N
Desired
Effectiveness
Rating
Risks & Controls Map

Notes reference:

No. Risks / WCGWs Control Description

RACM
Cycle (Level 1): Accounting Major Process (level Process (level 3):
Business Unit: Finance Department - Corporate Process Owner: Idris Kaboglu (Finance Controller)
Information & Communication:

Frequency:
Prevent( Manual Daily,Weekl
P) (M) or y, Monthly,
Detect(D) IT*** Quarterly
Key
Contr
ol:
Y/N
Control
performed
by
Control
Document
Sub Process
Pages: 18

Monitoring Preliminary
Version: Final

Control Effectiveness Rating Justification

Activity Rating****
Testing:
Y/N
Desired
Effectiveness
Rating

Control
Identify
A Allowances/Reserv A Allowances/Reserv Annually
A1 Provision for A1 Provision for
A Allowances/Reserv

Mr. Hirofumi Nagao Member 2

Obsolete and Slow Obsolete and Slow
A1 Provision for
1 Key factors, Provision for inventory P M NA Y Finance NA N Informal The provision N Standardised 1 Key factors, Provision for inventory P M NA Y Finance NA N Informal The provision N Standardised
assumption or obsolescence is Controller methodology and assumption or obsolescence is Controller methodology and Obsolete and Slow
1 Key factors, Provision for inventory P M NA Y Finance NA N Informal The provision N Standardised

Questionnaires
techniques used to based on the last policy has not been techniques used to based on the last policy has not been
assumption or obsolescence is Controller methodology and
determine excess & known movement of formally documented determine excess & known movement of formally documented
obsolete inventory stock and is assessed obsolete inventory stock and is assessed techniques used to based on the last policy has not been
determine excess & known movement of formally documented
reserves are by the logistics team Additionally, it seems reserves are by the logistics team Additionally, it seems

Controls
inappropriate or not that the current inappropriate or not that the current obsolete inventory stock and is assessed
reserves are by the logistics team Additionally, it seems
identified. Note: From Q1 2004, accrual is being made identified. Note: From Q1 2004, accrual is being made
inappropriate or not that the current
the logistics team has for parts and the logistics team has for parts and
equipment to be equipment to be identified. Note: From Q1 2004, accrual is being made
upgraded the SAP upgraded the SAP
the logistics team has for parts and
reports to provide scrapped/cannabilised reports to provide scrapped/cannabilised
. It seems that an . It seems that an upgraded the SAP equipment to be
information about information about
reports to provide scrapped/cannabilised
average consumption assessment of NRV average consumption assessment of NRV
information about . It seems that an
of stock of spares and value for old of stock of spares and value for old
equipment & spares equipment & spares average consumption assessment of NRV
equipment, thereby equipment, thereby
of stock of spares and value for old
enabling a more and End of Life enabling a more and End of Life
equipment, thereby equipment & spares
informed judgement products has not been informed judgement products has not been
enabling a more and End of Life
made made
informed judgement products has not been
made

Mrs. Pallavi Shroff Member 2

Mr. Amal Ganguli Member 2
Circulate online
control
MANAGEMENT feedback

Management Discussion and Analysis report Surveys inputs

This Annual Report has a detailed chapter on Management Seek and report
inputs from

Discussion and Analysis. control owners

Control owners

Disclosures made by the management to the Board

During the year, there were no transactions of material nature The whole exercise was carried out in a transparent and objective
with the promoters, the Directors or the management, their manner to assess the status of internal controls in the Company

Maruti Udyog Limited | ANNUAL REPORT | 2006-2007 43

 over financial reporting. As a result of this exercise, a
comprehensive framework for Self Assessment of controls has
been laid down for evaluating the effectiveness of internal controls
over financial reporting. With the successful implementation of
the online Controls Self Assessment framework, your Company
has become one of the few companies in India to have a transparent
framework for evaluating the effectiveness of internal controls
over financial reporting. This exercise further reinforced the
commitment of your Company to adopt best corporate
governance practices.
As required by the revised clause 49 of the listing agreement, the
certificate duly signed by Mr. Jagdish Khattar, Managing Director
& CEO and Mr. Hirofumi Nagao, Joint Managing Director (in
charge of finance function) was placed before the Board of
directors at its meeting held on 24th April 2007.
Risk Assessment and Minimization Procedure
Your company has established appropriate risk assessment and
minimization procedure under the revised clause 49 of the listing
agreement executed with the stock exchanges dealing with the
code of corporate governance. The process for formulating a
defined risk assessment framework encompassed, inter-alia,
methodology for assessing/ identifying risk on an ongoing basis,
risk prioritization, risk mitigation, monitoring plan and a
comprehensive reporting system on risk management.
An Executive Risk Management Committee (ERMC) has been
formed to review the risk management activities of the Company
on a regular basis. Risks have been categorized into A, B & C
categories based on their nature and significance. The ERMC met
several times during the year to review the risk management
activities. The audit committee and the Board of Directors have
also reviewed the status of the risk management activities.
Legal Compliance Reporting
As required under Clause 49 (C ) (iii) of the Listing Agreement,
the Board periodically reviews compliance reports of all laws
applicable to the Company, prepared by the Company as well as
steps taken by the Company to rectify instances of non-
compliances.
Code for Prevention of Insider Trading Practices
The Company has instituted a comprehensive Code of Conduct
for its management staff and relevant business associates in
compliance with the SEBI regulation on prevention of insider
trading.
Details of Non–Compliance
No penalties or strictures were imposed on the Company by
stock exchanges or SEBI or any statutory authority on any matter
related to capital market since the listing of the Company’s shares
on 9th July, 2003.
Subsidiary Companies Information
Considering the requirement of the Clause 49 of the Listing
44 Maruti Udyog Limited | ANNUAL REPORT | 2006-2007
Agreement about the disclosure of all significant transactions and
arrangements entered by the unlisted subsidiary companies to
the Board of the listed Company, a statement, wherever applicable,
of all significant transactions and arrangements entered by the
Company’s subsidiaries had been prepared and presented to its
Board in its meetings.
SHAREHOLDERS
Re–appointment / appointment of Directors
As per the Articles of Association of the Company and relevant
provisions of the Companies Act, 1956, Mr. R.C. Bhargava,
Mrs. Pallavi Shroff and Mr. Shuji Oishi would retire by rotation
and being eligible, offer themselves for re-appointment in the
ensuing Annual General Meeting (AGM).
Mr. Tsuneo Kobayashi was appointed as a Whole-time Director
designated as Senior Joint Managing Director by the Board with
effect from 13th November 2006.
All the above appointment / re-appointments are subject to the
approval of the members in the ensuing AGM. A brief resume of
the above Directors recommended for appointment/re-
appointments at the AGM are furnished in the explanatory
statement of the Notice of AGM being sent along with this Report.
Means of Communication
Quarterly and annual financial results are normally published in
one English and one Hindi newspaper i.e. Times of India and/or
Economic Times and Nav Bharat Times. These are also displayed
on the Company’s web-site www.marutiudyog.com. In addition
to the financial results, the Company’s web site also displays
transcription of earnings calls and presentations made to
institutional investors / analysts.
Pursuant to Clause 51 of the Listing Agreement, related to the
Electronic Data Information Filing and Retrieval (EDIFAR), the
Company has filed the requisite information, statements and
reports on-line on www.sebiedifar.nic.in
General Body Meetings
Table 7 gives the details of the last three AGMs of the Company.
The Company had passed certain special resolutions in the
previous three AGMs. No special resolutions were required to
be put through postal ballot last year. No special resolutions on
Table 7:
Last three Annual General Meetings of the Company.
Financial Location Date Time
year
2003-04 Airforce Auditorium, 27.07.2004 10.00 A.M.
Subroto Park, New Delhi
2004-05 Airforce Auditorium, 9.09.2005 10:00 A.M.
Subroto Park, New Delhi
2005-06 Airforce Auditorium, 5.09.2006 10:00 A.M.
Subroto Park, New Delhi
matters requiring postal ballot are placed for shareholders’
approval in the ensuing Annual General Meeting. During the year,
meeting of members and creditors was held on 22nd August 2006
as per the directions of Hon’ble High Court of Delhi to approve
the scheme of amalgamation of Maruti Suzuki Automobiles India
Limited with the Company.
ADDITIONAL SHAREHOLDERS’ INFORMATION
Annual General Meeting
Date: 6th September 2007
Time: 10:00 a.m.
Venue: Airforce Auditorium, Subroto Park,
New Delhi – 110010
Financial Year
Financial year: 1st April to 31st March. For the year ending 31st
March 2008, results will be announced on:
By end of July 2007: First quarter results
By end of October 2007: Second quarter results
By end of January 2008: Third quarter results
By middle of May 2008: Fourth quarter and Annual results.
Listing on Stock Exchanges
The equity shares of the Company are listed on Bombay Stock
Exchange Limited, Mumbai (BSE) and The National Stock Exchange
of India Limited (NSE). The annual listing fees for the year 2007–
08 have been paid to both these Stock Exchanges. Table 8 lists
the Company’s Stock Exchange codes. The Company has also
paid the annual custodial fee for the year 2007–08 to both the
depositories namely, National Securities Depository Limited
(NSDL) and Central Depository Services (India) Limited (CDSL).
Table 8:
Stock Code
Bombay Stock Exchange Limited, Mumbai (BSE) 532500
National Stock Exchange of India Limited (NSE) MARUTI
ISIN No. INE 585B01010
Stock Market Data
Table 9 gives the monthly high and low prices of the Company’s
equity shares at the BSE and the NSE for the year 2006–07. Chart
A plots the movement of Maruti’s share prices with BSE Sensex
for the year 2006–07.
Chart A:

Book Closure
The period of book closure is from 24 th August 2007 to
6th September 2007 (both days inclusive).

Dividend payment
A dividend payment of Rs. 4.5 per equity share of Rs. 5 each will
be paid on or after 6th September 2007, subject to the approval of
the members in the Annual General Meeting.

Table 9:
Monthly high & low of quotation of the Company’s equity share
Bombay Stock Exchange National Stock Exchange
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April 2006 939.65 814.00 942.00 810.50
May 2006 974.00 698.60 974.95 655.00
June 2006 803.00 670.00 819.40 668.10
July 2006 821.40 691.00 831.20 691.00
August 2006 867.50 762.00 869.00 759.90
September 2006 986.60 852.00 987.80 811.00
October 2006 991.40 930.00 990.70 911.25
November 2006 989.00 865.00 988.90 865.10
December 2006 973.00 859.00 973.75 860.00
January 2007 985.00 875.55 984.90 872.20
February 2007 970.00 830.00 972.85 825.50
March 2007 870.00 755.00 870.40 755.05

Maruti Udyog Limited | ANNUAL REPORT | 2006-2007 45

 CORPORATE GOVERNANCE REPORT

Registrar and Transfer Agent Share Transfer System

Karvy Computershare Pvt. Ltd., The Company’s shares are transferred from the selling shareholder
Plot No. 17-24 Vittalrao Nagar to the new holders only in dematerialised form and are traded on
Madhapur the stock exchanges compulsorily in the demat mode. Any request
Hyderabad – 500 081 for rematerialisation and / or transfer of shares is attended to
Ph No.: 040 – 23420815 – 818 within the stipulated time.
Fax No.: 040 – 23420814
Email mailmanager@karvy.com Shareholding Pattern
Website : www.karvy.com
Tables 10 and 11 lists the distribution of the shareholding of the
equity shares of the Company by size and class as on 31st March
2007.
Table 10:
Pattern of shareholding by ownership as on 31st March 2007
Category Shareholding
Number of shares held Shareholding %
Promoter’s holding
Promoters
- Indian Promoters 2,96,79,729 10.27
- Foreign Promoters 15,66,18,440 54.21
Persons acting in concert - -
Sub-Total (A) 18,62,98,169 64.48
Non-Promoters Holding
Institutional Investors
Mutual Funds and UTI 1,48,31,621 5.13
Banks, Financial Institutions, Insurance Companies
(Central / State Govt. Institutions / Non-government Institutions) 3,49,73,390 12.10
FIIs 3,63,75,279 12.59
Sub-Total (B) 8,61,80,290 29.82
Others
Private Corporate Bodies 85,81,736 2.97
Indian Public (including NSDL & CDSL) 74,97,414 2.60
NRIs / OCBs 2,18,121 0.08
Trust & Clearing Members 1,34,330 0.05
Sub-Total (C) 1,64,31,601 5.70
GRAND TOTAL (A+B+C) 28,89,10,060 100.00

46 Maruti Udyog Limited | ANNUAL REPORT | 2006-2007

Table 11:
Distribution of shareholding as on 31st March 2007
Shareholding Class Shareholders Shareholding
Number of % Number of %
shareholders shares
Up to 5,000 98,010 99.61 79,48,158 2.75
5,001 to 10,000 69 0.07 5,18,356 0.18
10,001 to 20,000 68 0.07 1,00,0048 0.35
20,001 to 30,000 20 0.02 4,86,308 0.17
30,001 to 40,000 21 0.02 7,39,734 0.26
40,001 to 50,000 19 0.02 8,67,468 0.30
50,001 to 1,00,000 60 0.06 44,52,877 1.54
1,00,001 and Above 126 0.13 27,28,97,111 94.46
TOTAL 83,837 100.00 28,89,10,060 100.00

Dematerialisation of Shares and Liquidity
As on 31 March 2007, 45.79% of the Company’s total paid up
capital representing 132,284,253 shares was held in dematerialised
form and the balance 54.21% representing 156,625,807 shares
were held in physical form. The equity shares of the Company
are listed under ‘specified category’ in BSE and are part of Nifty in
NSE.
by the Company at its expense, for use by its non-executive
chairman.
Plant Location
The Company has four plants, three located in Palam Gurgaon
Road, Gurgaon – 122 015, Haryana and one located at Manesar
Industrial Town, Gurgaon.

Secretarial Audit Address for correspondence

As stipulated by the Securities and Exchange Board of India (SEBI), (i) Investor Correspondence
a qualified practicing Company secretary carries out the secretarial For transfer/split/dematerialisation/rematerialisation of
audit and provides a report to reconcile the total admitted capital shares, payment of dividend on shares and any other query
with the National Securities Depository Limited (NSDL) and relating to shares of the Company:
Central Depository Services (India) Limited (CDSL) and the total
issued and listed capital. This audit is carried out every quarter For Shares held in dematerialized form
and the report thereon is submitted to the stock exchanges and
is also placed before the Board of Directors. The audit, inter-alia, To the investor’s Depository Participant(s) and/ or
confirms that the total listed and paid up capital of the Company Karvy Computershare Pvt. Ltd.,
is in agreement with the aggregate of the total number of shares Unit: Maruti Udyog Ltd.
in dematerialized form (held with NSDL and CDSL) and total Plot No. 17-24 Vittalrao Nagar
number of shares in physical form. Madhapur
Hyderabad – 500 081
Outstanding GDRs / ADRs / Warrants or any Convertible Ph No.: 040 – 23420815 – 818
Instruments, conversion date and likely impact on equity: Fax No.: 040 – 23420814
The Company had no outstanding GDRs / ADRs / Warrants or Email mailmanager@karvy.com
any Convertible instruments. Website : www.karvy.com

Details of Public funding obtained in the last three years

For Shares held in physical form
The Company has not obtained any public funding in the last three Karvy Computershare Pvt. Ltd.
years. (at the above given address)

Adoption of Non-mandatory requirements

The Chairman’s office with required facilities is being maintained

Maruti Udyog Limited | ANNUAL REPORT | 2006-2007 47

 CORPORATE GOVERNANCE REPORT

ANNEXURE-A
Declaration of the Managing Director & CEO

This is to certify that the Company has laid down Code of Conduct for all the Board members and senior management personnel of
the Company and the copies of the same are uploaded on the website of the Company – www.marutiudyog.com

Further, certified that the members of the Board of Directors and senior management personnel have affirmed the compliance with
the Code applicable to them during the year ended March 31, 2007.

Date: 14th July 2007 Jagdish Khattar

Place: New Delhi Managing Director & CEO

Auditors’ Certificate on compliance with the conditions of Corporate Governance under

Clause 49 of the Listing Agreement(s)

To the Members of Maruti Udyog Limited

1. We have reviewed the implementation of Corporate Governance procedures by Maruti Udyog Limited (the Company) during
the year ended March 31, 2007, with the relevant records and documents maintained by the Company, furnished to us for our
review and the report on Corporate Governance as approved by the Board of Directors.

2. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.

3. On the basis of review and according to the information and explanations given to us, the conditions of Corporate Governance
as stipulated in Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) have been complied with in all material respect
by the Company.

Anupam Dhawan
Partner
Membership No: F084451
For and on behalf of
Place: New Delhi Price Waterhouse
th
Date: 26 July 2007 Chartered Accountants

48 Maruti Udyog Limited | ANNUAL REPORT | 2006-2007