annual-report-FY2020

64 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS For reference, FIPL has been engaged in the automotive business in India since 1995. Currently, it is the sixth largest player in the four wheeled passenger vehicle market in India. As one of the largest exporters of vehicles from India, FIPL manufactures and exports vehicles and engines from its facilities in Chengalpattu, Tamil Nadu and Sanand, Gujarat. For the year ended 31 st March, 2019, the total revenue of FIPL’s Automotive business was Rs. 26,324 crores. The formation of this joint venture is the next step in the strategic alliance forged between Ford and your Company in September, 2017. This joint venture will further strengthen your Company’s presence in the Automotive business. It will help your Company’s growth in key emerging markets. The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Using the strengths of both shareholders, MFAPL would be focused to deliver operational excellence and value to stakeholders. The partnership will allow your Company and FMC to offer new product to customers faster than before and will deliver profitable growth to both entities. The joint venture will drive enhanced competitiveness through greater economies of scale across the automotive value chain, including optimised sourcing, product development and use of relevant technologies. In addition, the joint venture will be a catalyst for growth for the Ford and Mahindra brands in emerging markets, which are growing at double the rate of the global industry. Your Company has since received approval from the Competition Commission of India as well as the required anti-trust approvals from the European Commission, Korean Fair Trade Commission and Competition Commission at South Africa and expects to complete the transaction within the current financial year. Acquisition of controlling stake in Meru In December, 2019, your Company acquired 36.63% of the equity share capital of Meru Travel Solutions Private Limited (“Meru”), holding company of the Meru Group and has the right to appoint majority of the directors on the Board of Meru. Therefore, Meru along with its three wholly owned operating subsidiaries became subsidiaries of your Company. Your Company is committed to enhancing its equity stake in Meru up to 55%. Further, your Company has call option to acquire shares from certain existing investors of Meru and these existing investors of Meru have a put option to sell shares to your Company. In the aggregate your Company is committed to invest an amount not exceeding Rs. 201.5 crores in Meru. Currently, Meru through its subsidiaries operates in the ride hail segment and also has a presence in the corporate transportation space. Meru was one of the first radio taxi operators in the ride hail segment and currently Meru has presence in Mumbai, Delhi, Bengaluru and Hyderabad. On the corporate transportation side, Meru has been providing transportation solutions to companies in various sectors such as BPOs, Banking, IT and ITES. Given your Company’s intent to grow its presence in various segments of Mobility Services, the investment in Meru would enable your Company to increase its presence in the corporate shared mobility segment which is an area of strategic interest to your Company. Investment in Eurl LD Azouaou, Algeria In March, 2020, your Company entered into an agreement to subscribe to around 5% of the share capital of Eurl LD Azouaou, Algeria (“LDA”) for an amount equivalent to US$ 1,50,000 (approximately Rs. 1.1 crores). LDA is engaged in the business of tractor assembly and distribution in Algeria. In the past, Algeria has been an important export market for the farm equipment business of your Company. To that extent this investment would enable your Company to re-enter the Algerian Agricultural Machinery Market. Investment in Porter Earlier, your Company had merged a step down subsidiary named Orizonte Business Solutions Limited which operated a technology enabled load exchange marketplace platform for matching the needs of cargo owners with transporters with Smartshift Logistics Solutions Private Limited (“Porter”) (formerly known as Resfeber Labs Private Limited). Consequently, the shareholding of your Company and its subsidiaries in Porter taken on a fully diluted basis stood at 30.8% for the Company, 2.5% for Mahindra & Mahindra Financial Services Limited and 6.9% for Mahindra Trucks and Buses Limited. Your Company has been keen to grow its presence in the shared mobility logistics solutions space which is an identified area of strategic interest for your Company. During the year, your Company along with the key financial investors of Porter invested Rs. 69 crores in Porter, of which your Company invested Rs. 37.5 crores. Further to this in April, 2020, Lightstone Fund SA, a private equity investor invested Rs. 140 crores in Porter. As a result of the aforesaid equity investments in Porter, the shareholding of your Company and its subsidiaries