MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

172 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS H. Committee of Independent Directors The Board at its Meeting held on 26 th March, 2021 while considering and granting an in-principle approval for consolidation of Mahindra Electric Mobility Limited, (MEML), a subsidiary of the Company, into the Company, either by way of Scheme of Merger or Demerger of a business undertaking or by such other appropriate means as may be most efficient, noted the requirement of SEBI Circular No. CFD/DIL3/CIR/2017/21 dated 10 th March, 2017 (as amended inter alia by Circular No. SEBI/HO/CFD/ DIL1/CIR/P/2020/215 dated 3 rd November, 2020) to submit with Stock Exchanges a Report from the Audit Committee and Committee of Independent Directors. Accordingly, the Board had constituted a Committee of Independent Directors constituting of Mr. T. N. Manoharan as Chairman, Ms. Shikha Sharma, Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan as Members of the Committee for the purpose of considering the Scheme, if any proposed in relation to consolidation of MEML into the Company and recommending the same, inter alia , after taking into consideration, that the Scheme is not detrimental to the shareholders of the listed entity. The Committee met once on 28 th May, 2021 and all the Members of the Committee were present at that Meeting. The Committee at the said Meeting, inter alia taking into consideration that the Scheme of Absorption of MEML with the Company and their respective shareholders (“the Scheme”) is not detrimental to the shareholders of the Company, recommended the Scheme to the Board. V. SUBSIDIARY COMPANIES Regulation 16 of the Listing Regulations defines a “material subsidiary” to mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. Under this definition, Mahindra & Mahindra Financial Services Limited (Listed) and Ssangyong Motor Company (Listed in South Korea) are material subsidiaries of the Company. The subsidiaries of the Company function independently, with an adequately empowered Board of Directors and adequate resources. For more effective governance, the minutes of Board Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company for their review at every quarterly Meeting. In addition to the above, Regulation 24 of the Listing Regulations requires that at least one Independent Director on the Board of Directors of the listed entity shall be a Director on the Board of Directors of an unlisted material subsidiary, whether incorporated in India or not. For the purpose of this provision, material subsidiary means a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. There is no Subsidiary which falls under this definition of unlisted material subsidiary for the financial year ended 31 st March, 2022. The other requirements of Regulation 24 of the Listing Regulations with regard to Corporate Governance requirements for Subsidiary Companies have been complied with. VI. DISCLOSURES A. Policy for determining ‘material’ subsidiaries Your Company has formulated a Policy for determining ‘Material’ Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been posted on the website of the Company and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings. B. Policy on Materiality of and Dealing with Related Party Transactions Your Company has formulated a Policy on Materiality of and Dealing with Related Party Transactions which specify the manner of entering into related party transactions. During the year under review, this Policy has been amended pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 effective from 1 st April, 2022. The Policy has also been posted on the website of the Company and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings. C. Disclosure of Transactions with Related Parties During the Financial Year 2021-22, there were no materially significant transactions or arrangements entered into between the Company and its Promoters, Directors or their Relatives or the Management, Subsidiaries, etc. that may have potential conflict with the interests of the Company at large. Further, details of related party transactions are presented in Note No. 39 to Annual Accounts in the Annual Report.