STANDALONE ACCOUNTS 363 47. Other information: Research and Development expenditure (a) In recognised Research and Development units: (i) Expensed to Profit or Loss, including certain expenditure based on allocations made by the Company, aggregate Rs. 728.50 crores (2023: Rs. 705.06 crores) [excluding depreciation and amortisation of Rs. 1,456.74 crores (2023: Rs. 1,274.99 crores)]. (ii) Development expenditure incurred during the year Rs. 1,273.53 crores (2023: Rs. 1,413.09 crores). (iii) Capitalisation of assets Rs. 363.18 crores (2023: Rs. 251.15 crores). (b) In other units: (i) Expensed to Profit or Loss, including certain expenditure based on allocations made by the Company, aggregate Rs. 192.19 crores (2023: Rs. 134.56 crores) [excluding depreciation and amortisation of Rs. 70.98 crores (2023: Rs. 169.85 crores)] . (ii) Development expenditure incurred during the year Rs. 135.25 crores (2023: Rs. 137.17 crores). (iii) Capitalisation of assets Rs. 30.99 crores (2023: Rs. 51.35 crores). 48. Compulsory Convertible Preference Shares (CCPS) issued by Mahindra Electric Automobile Limited (MEAL) During the year ended 31 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 for cash consideration of Rs 796.42 crores. 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. 1,200.00 crores each till 31st March 2024. The investment by the Company is in equity shares of MEAL whereas investment by BII is in Compulsory Convertible Preference Shares (CCPS) of MEAL. The total investment by the Company in MEAL amounted to Rs. 3,199.49 crores as at 31st March 2024 (2023: Rs 1469.49 crores). Further, during the year ended 31st March 2024, in accordance with and subject to the terms and conditions stipulated in the amended and restated Securities Subscription Agreement and Shareholders’ Agreement entered with British International Investment Plc (BII) and Jongsong Investments Pte Ltd (“Temasek”) wherein the Temasek agreed to invest Rs. 1,200.00 crores in Compulsory Convertible Preference Shares (CCPS) of MEAL in one or more tranches, Temasek has invested Rs. 300.00 crores till 31st March 2024. 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, BII and Temasek. Further, in accordance with the shareholders’ agreement, the Company shall take best efforts to provide BII and Temasek with a complete exit between 1st November 2027 and 1st 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 prior to 1st November 2030, BII shall have the right upto 31st 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 BII. In case exit has not been provided to Temasek prior to 1st November 2030, Temasek shall have the right up to 31st October 2031 to require full exit to be provided by the Company by way of share swap if the fair market value of the Temasek interest is higher than the amount invested by it. However, the Company shall have the right, at its sole discretion, to provide cash exit to Temasek at the higher of fair market value of the Temasek interest and the amount invested by it. Further, if the Fair market value of the Temasek interest is lower than its investment amount, neither the Company nor Temasek shall be obligated to undertake their respective obligations with respect to the share swap. 49. Additional regulatory information: a. Ratios: Particulars 2024 2023 Debt-Equity Ratio (times) (Long term Borrowings + Short term Borrowings) / (Total Equity)................................................................................... 0.03 0.11 Debt Service Coverage Ratio (times) (Profit before interest, tax, depreciation, amortisation, impairments and exceptional items) / (Gross interest for the period + Principal repayments within a year)............................................................................. 47.87 4.69 Return on Equity (%) (Net Profit for the period / Average Total Equity for the period)...................................................................................... 22.41% 16.06% Inventory Turnover (times) (Cost of materials consumed / Average Inventories for the period)................................................................................ 8.05 8.69 Trade Receivables Turnover (times) (Revenue from sale of goods and services) / (Average Trade Receivable for the period)............................... 22.56 23.52 Trade Payables Turnover (times) (Purchase of goods and services + Other Expenses) / (Average Trade Payable for the period)................. 4.58 4.91
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