MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

374 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 37. Significant acquisitions and changes in ownership (a) Acquisition of Subsidiaries /Business (i) Swaraj Engines Limited On 27 th September, 2022, Mahindra & Mahindra Limited (the Company) acquired additional 17.41% of voting shares of Swaraj Engines Limited (SEL), a manufacturer of diesel engines and hi-tech engine components for fitments in tractors, based in India. Consequent to this investment, the shareholding and voting rights of the Company in SEL increased from 34.72% to 52.13% and the status of SEL changed from an associate to a subsidiary effective 28 th September, 2022. The acquisition was made with the objective of strengthening Farm Equipment Sector. In the consolidated financial statements, the existing shares of SEL have been remeasured at acquisition date fair value in accordance with Ind AS 103- ‘Business Combinations’. The gain on remeasurement of existing shares at fair value have been recognised as exceptional items in consolidated statement of profit and loss. Consequent to gaining of control, the results of SEL have been consolidated by the Group from 28 th September, 2022 on a line-by-line basis. The consideration transferred and goodwill on acquisition is as below: Rupees crores Particulars 2023 Purchase consideration..................................................................................................................................................................................................................................... 296.01 Fair value of previously held interest..................................................................................................................................................................................................... 673.11 Non Controlling interest................................................................................................................................................................................................................................... 195.33 1,164.45 Less: Fair value of net assets/(liabilities) acquired......................................................................................................................................................................... 408.04 Goodwill on acquisition ................................................................................................................................................................................................................................. 756.40 On acquisition date, the non-controlling interest has been measured at its proportionate share of identifiable assets and liabilities acquired. The goodwill has been allocated to ‘Farm Equipment’ segment. The fair values of assets and liabilities acquired in respect of the above business combination are as under: Rupees crores Particulars 2023 Property, Plant and Equipment................................................................................................................................................................................................................... 253.94 Cash and cash equivalents............................................................................................................................................................................................................................. 5.43 Other current and non-current assets/(liabilities), net............................................................................................................................................................... 188.76 Deferred tax assets/(liabilities), net.......................................................................................................................................................................................................... (40.56) Fair value of net asset/(liabilities) acquired ............................................................................................................................................................................... 407.57 (ii) Sampo Rosenlew Oy On 21 st July, 2022, Mahindra & Mahindra Limited (the Company) acquired additional 20.87% of voting shares of Sampo Rosenlew Oy (Sampo), a combine harvester company based in Finland. Consequent to this investment, the shareholding and voting rights of the Company in Sampo increased from 79.13% to 100% and the status of Sampo changed from a joint venture to a subsidiary effective 22 nd July, 2022. The Company’s scale in tractors and Sampo’s expertise in combine harvesters will allow to offer a broader product portfolio to address the needs of farmers in various countries. In the consolidated financial statements, the pre-existing shares of Sampo have been remeasured at acquisition date fair value in accordance with Ind AS 103- ‘Business Combinations’. The gain on remeasurement of existing shares at fair value have been recognised as exceptional items in consolidated statement of profit & loss. Consequent to gaining of control, the results of Sampo have been consolidated by the Group from 22 nd July, 2022 on a line-by-line basis. The consideration transferred and goodwill on acquisition is as below: Rupees crores Particulars 2023 Purchase consideration.................................................................................................................................................................................................................................. 36.51 Value of put option exercised.................................................................................................................................................................................................................... (7.29) Fair value of previously held interest.................................................................................................................................................................................................. 137.34 166.56 Less: Fair value of net assets/(liabilities) acquired...................................................................................................................................................................... (9.49) Goodwill on acquisition .............................................................................................................................................................................................................................. 176.05 The goodwill has been allocated to ‘Farm Equipment’ segment.