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

376 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 37. Significant acquisitions and changes in ownership (contd.) (b) Reduction in shareholding resulting in loss of control (i) Mahindra Susten Private Limited During the year, Mahindra Holdings Limited (MHL), a wholly owned subsidiary of the Company, divested 30% equity interest in Mahindra Susten Private Limited (MSPL), as a result of which the shareholding and voting rights of MHL has reduced from 100% to 70%. Further, consequent to the rights given to the investor, MSPL and its subsidiaries are accounted as joint ventures w.e.f. 23 rd December, 2022. In the consolidated financial statement, retained interest in MSPL has been remeasured at fair value in accordance with Ind AS 110-`Consolidated Financial Statements’. The gain on equity interest sold and remeasurement of retained interest at fair value have been recognised as exceptional items in the consolidated financial statement. (ii) Peugeot Motocycles S.A.S. During the year, Mahindra Two Wheelers Europe Holdings S.a.r.l. (MTWEH) a wholly owned subsidiary of the Company, entered and executed an agreement whereby the existing 100% shareholding and voting rights of MTWEH in Peugeot Motocycles S.A.S. (PMTC) stands reduced to 50% in terms of shareholding and 19.99% in terms of voting rights. Consequently, PMTC and the subsidiaries of PMTC ceased to be subsidiaries of MTWEH. (c) Partial disposal of investments in associates Mahindra CIE Automotive Limited During the year ended 31 st March, 2023, Mahindra & Mahindra Limited (the Company) sold 3,12,22,444 shares of Mahindra CIE Automotive Limited (MCIE). Following this sale, the Company’s shareholding in MCIE has decreased from 11.44% to 3.20%. (d) Held for sale During the year, investment in Sanyo Special Steel Manufacturing India Private Limited (Formerly known as Mahindra Sanyo Special Steel Private Limited) has been classified as held for sale. The sale has been completed subsequent to 31 st March, 2023 and before the financial statements have been approved for issue by the Board. 38. During the year ended 31 st March, 2023, the Company formed a wholly-owned subsidiary, Mahindra Electric Automobile Limited (MEAL) to undertake the four-wheel passenger electric business and transferred certain existing assets to MEAL. Further, in accordance with and subject to the terms and conditions stipulated in the Securities Subscription Agreement and Shareholders’ Agreement entered with British International Investment Plc (BII), wherein the Company and BII each agreed to invest Rs. 1925.00 crores in MEAL in tranches, both the Company and BII have invested Rs. 400.00 crores each till 31 st March, 2023. The investment by the Company is in Equity shares of MEAL whereas investment by BII is in Compulsory Convertible Preference Shares (CCPS) of MEAL. Unless agreed to in writing for an early conversion, each CCPS is compulsorily and automatically convertible into such number of equity shares as determined as per a pre-determined formula at the conversion date, as per terms and conditions of the agreement (s) entered between the Company and BII. Since the CCPS is convertible into variable number of equity shares of MEAL, it has been classified as financial liability at fair value through profit or loss in the financial statements of MEAL and in the consolidated financial statements of the Company. Further, in accordance with the shareholders’ agreement, the Company shall take best efforts to provide BII with a complete exit between 1 st November, 2027 and 1 st November, 2030 through certain exit options (or a combination thereof), as may be determined by the Company in its sole discretion. In case exit has not been provided to BII by such time, BII shall have the right upto 31 st October, 2031 to require full exit to be provided by the Company or by its affiliates and/or a third party at the higher of fair market value and the amount invested by the BII. 39. Disclosure of interest in Subsidiaries and interest of Non Controlling Interest (a) Details of the Group’s subsidiaries at the end of the reporting period are as follows: Name of the Subsidiary Place of Incorporation and Place of Operation Proportion of ownership interest * As at 31 st March, 2023 2022 Mahindra Heavy Engines Limited.................................................................................................................................................................... India 100.00% 100.00% Mahindra Electric Mobility Limited #........................................................................................................................................................... India — 98.98% NBS International Limited.................................................................................................................................................................................... India 100.00% 100.00% Mahindra Automotive Australia Pty. Limited........................................................................................................................................... Australia 100.00% 100.00% Mahindra Europe s.r.l. ............................................................................................................................................................................................. Italy 100.00% 100.00% Mahindra and Mahindra South Africa (Proprietary) Limited........................................................................................................ South Africa 100.00% 100.00% Mahindra West Africa Limited (Liquidated w.e.f. 4 th January, 2023)...................................................................................... Nigeria — 100.00% Mahindra Two Wheelers Limited..................................................................................................................................................................... India 100.00% 100.00% Automobili Pininfarina GmbH............................................................................................................................................................................ Germany 100.00% 100.00% Automobili Pininfarina Americas Inc............................................................................................................................................................. U.S.A. 100.00% 100.00% Mahindra Automotive North America Inc.................................................................................................................................................. U.S.A. 100.00% 100.00%