annual-report-FY2021

67 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 of MEML would be transferred to and recorded by the Company as per applicable accounting standards. The Scheme provides for issue of Ordinary (Equity) Shares by the Company to the shareholders of MEML (other than the Company or subsidiary(ies) of the Company holding shares directly and jointly with its nominee shareholders). The share exchange Ratio is 480 (Four Hundred and Eighty) Ordinary (Equity) Shares of Rs. 5 each fully paid-up of the Company for every 10,000 (Ten Thousand) Equity Shares of Rs. 10 each fully paid-up held in MEML as on Record Date. Fractional entitlements to be rounded off to the next higher whole number. The shares held in MEML by the Company or its subsidiary(ies) directly and jointly with its nominee shareholders, shall be cancelled upon the Scheme becoming effective. Additionally, the stock options held by the eligible ESOP holders of MEML as on the Record Date shall be substituted with ESOPs of the Company in accordance with the Scheme. Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited with the Company and their respective Shareholders Subsequent to the year end, the Board of Directors of the Company at its Meeting held on 28 th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited (“First Transferor Company” or “MECPL”), Retail Initiative Holdings Limited (“Second Transferor Company” or “RIHL”) and Mahindra Retail Limited (“Third Transferor Company” or “MRL”) (together referred to as ‘Transferor Companies’), direct/indirect wholly owned subsidiaries of the Company, with the Company and their respective Shareholders (“Scheme”) under sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Appointed Date of the Scheme would be 1 st April, 2021 or such other date as may be directed or approved by the National Company Law Tribunal or any other appropriate authority. The entire assets and liabilities of MECPL, RIHL and MRL are to be transferred to and recorded by the Company at their carrying values. All inter-company balances and investments amongst MECPL, RIHL, MRL and the Company will stand cancelled as a result of the proposed merger. The entire share capital of the Transferor Companies is held directly/indirectly by the Company. Upon the Scheme becoming effective, no shares of the Company shall be allotted in lieu or exchange of the holding of the Company in the First Transferor Company or one Transferor Company in another Transferor Company (held directly and jointly with its nominee shareholders) and accordingly, equity shares held in the Transferor Companies shall stand cancelled on the Effective Date without any further act, instrument or deed. Investment in Carnot Technologies Private Limited During the year, your Company increased its shareholding in Carnot Technologies Private Limited (“Carnot”), from 22.9% to 48.05% on a fully diluted basis, for an aggregate consideration of Rs. 12 crores comprising of primary infusion in the Company of Rs. 3 crores and secondary purchase from its shareholders of Rs. 9 crores. Carnot is an Indian Company engaged in the business of research and development, related to IOT based products and services. Carnot is expected to support the Company’s strategy by developing information technology solutions for its products, customers and businesses, especially for the Farm Equipment Sector. Increase of stake in Sampo Rosenlew Oy, Finland (‘’Sampo”) During the year, the Company’s voting rights in Sampo increased from 49.04% to 79.13%, through conversion of Compulsorily Convertible Preference Shares, acquisition of shares from other shareholders, and primary infusion of capital in Sampo, with a total incremental outlay of Euro 8.5 million (approximately Rs. 72.9 crores). On account of the increase in stake, Sampo ceased to be an Associate and became a Subsidiary of the Company. Harvesting machinery is the second largest category in the global farm equipment industry. The Company’s scale in tractors and Sampo’s expertise in combine harvesters allows both companies to offer a broader product portfolio to address the needs of farmers in various countries. In India, the combine harvester market is currently much smaller than tractors but is growing rapidly with the penetration of mechanisation. Your Company is building a strong position in this product line for India and other export markets.