annual-report-FY2020

267 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2019-20 (b) Expenditure incurred on Corporate Social Responsibility(CSR) under section 135 of the Companies Act, 2013 Rs. 126.59 crores (2019 : Rs. 93.50 crores). This includes donation of Rs. 20.00 crores (2019 : Nil) to PM CARES Fund for combating, containment and relief efforts against the COVID-19 pandemic in India which the Company has made out of the CSR spending plan of the following year ending 31 st  March, 2021 and subject to necessary approvals, the CSR spending required in the following year will be lower to that extent. (c) Donations given to New Democratic Electoral Trust Rs. 23.00 crores (2019 : Rs. 1.02 crores). (d) The foreign exchange loss (net) recognised in profit or loss is Rs. 0.12 crores (2019 : Rs. 4.62 crores). (e) Short term lease expenses recognised during the year is Rs. 75.35 crores . 30. Exceptional Items (net) The Company classifies items of income and expense within profit or loss from ordinary activities as exceptional items when they are of such size, nature or incidence that their disclosure is relevant to explain the performance for the period. Exceptional Items (net) recognised in profit or loss Rupees crores Particulars 2020 2019 Profit on transfer / sale of certain long term investments*.................................................................................. 1,367.05 598.29 Impairment loss on current investments................................................................................................................. — (160.00) Impairment loss on certain long term investments............................................................................................... (3,381.03) (468.02) Total ............................................................................................................................................................................ (2,013.98) (29.73) * includes gain received due to sale of investement held by M&M Benefit Trust Rs. 972.10 crores (2019 : Nil). The Company has long-term investments in subsidiaries, associates and joint ventures which are measured at cost less impairment or at fair value through profit or loss. The management assesses the performance of these entities including the future projections and relevant economic and market conditions in which they operate to identify if there is any indicator of impairment in the carrying value of the investments. In case indicators of impairment exist, the impairment loss is measured by estimating the recoverable amounts based on the higher of (i) ‘fair value less cost of disposal’ determined using market price information, where available, and (ii) ‘value-in-use’ estimates determined using discounted cash flow projections, where available. The fair value less costs of disposal is determined using the market approach and is categorised as Level 1 in the fair value hierarchy. The future cash flow projections are specific to the entity based on its business plan and may not be the same as those of market participants. The future cash flows consider key assumptions such as volume projections, margins, terminal growth rates, etc. with due consideration for the potential risks given the current economic environment in which the entity operates. The discount rates used are pre-tax rates based on weighted average cost of capital and reflects market’s assessment of the risks specific to the asset as well as time value of money. The recoverable amount estimates are based on judgments, estimates, assumptions and market data as on reporting date and ignore subsequent changes in the economic and market conditions. During the year ended 31 st March 2020, the performance of certain subsidiaries, associates and joint ventures along with the relevant economic and market indicators including the impact of uncertainties arising from Covid-19 and the significant fall in market price of shares of the listed entities as on reporting date resulted in indicators of impairment in respect of certain entities. Accordingly, the Company determined the recoverable amounts for these investments and recorded a provision for impairment of Rs. 3,381.03 crores (2019 : Rs. 468.02 crores) for the year ended 31 st March 2020. The fair value less cost of disposal for listed entities is based on the market price of the shares as on reporting date. The value-in-use calculation use discount rates ranging from 10.1% - 20.0% and the terminal growth rates ranging from 2.0% - 5.0%. 31. Earning Per Share (EPS) Particulars 2020 2019 Profit for the year (Rupees crores).......................................................................................................................... 1,330.55 4,796.04 Weighted average number of Ordinary (Equity) Shares used in computing basic EPS...................................... 1,19,22,28,305 1,19,04,76,415 Effect of potential Dilutive Ordinary (Equity) Shares............................................................................................ 45,90,921 47,60,035 Weighted average number of Ordinary (Equity) Shares used in computing diluted EPS.................................. 1,19,68,19,226 1,19,52,36,450 Basic Earnings per share (Rs.) (Face value of Rs. 5 per share)............................................................................... 11.16 40.29 Diluted Earnings per share (Rs.)............................................................................................................................... 11.12 40.13 29. Other Expenses (contd.)