MAHINDRA & MAHINDRA LTD. Standalone Accounts 343 45. Other information: (A) 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. 748.33 crores (2024: Rs. 728.50 crores) [excluding depreciation and amortisation of Rs. 1,707.60 crores (2024: Rs. 1,456.74 crores)]. (ii) Development expenditure incurred during the year Rs. 1,562.41 crores (2024: Rs. 1,273.53 crores). (iii) Capitalisation of assets Rs. 563.98 crores (2024: Rs. 363.18 crores). (b) In other units: (i) Expensed to Profit or Loss, including certain expenditure based on allocations made by the Company, aggregate Rs. 227.19 crores (2024: Rs. 192.19 crores) [excluding depreciation and amortisation of Rs. 84.34 crores (2024: Rs. 70.98 crores)] . (ii) Development expenditure incurred during the year Rs. 171.01 crores (2024: Rs. 135.25 crores). (iii) Capitalisation of assets Rs. 32.86 crores (2024: Rs. 30.99 crores). (B) The Scheme of Merger by Absorption of Mahindra Heavy Engines Limited (MHEL) and Mahindra Two Wheelers Limited (MTWL) and Trringo.com Limited (TCL) with Mahindra and Mahindra Limited (“Transferee Company”) and their respective Shareholders (“Scheme”) has been approved by the Mumbai Bench of National Company Law Tribunal on 7th May, 2024 and the required approvals / consent of Department of Industries, Government of Maharashtra and Maharashtra Industrial Development Corporation were also received on 30th May, 2024 and 5th June, 2024 respectively. Consequently, upon completion of other required formalities on 6th June 2024, the Scheme has become effective from the Appointed date i.e. 1st April, 2023. The merger has been accounted under ‘the pooling of interests method’ i.e. in accordance with Appendix C of Ind AS 103 – Business Combinations, read with Ind AS 10 – Events after the Reporting Period and comparatives have been restated from the beginning of the previous year i.e. 1st April, 2023. Accordingly, the financial statements of MHEL, MTWL & TCL have been included in the standalone financial statement of the company for the previous year presented. The effect of merger on the amounts of Revenue and Profit reported in the previous year are as below. Rupees crores Particulars 2024 Revenue from operations: As reported in previous year financial statement................................................................................................................................................................................................. 98,763.42 As restated for the effect of merger............................................................................................................................................................................................................................. 99,097.68 Profit / (loss) before tax: As reported in previous year financial statement................................................................................................................................................................................................. 13,482.97 As restated for the effect of merger............................................................................................................................................................................................................................. 13,457.78 46. Compulsory Convertible Preference Shares (CCPS) issued by Mahindra Electric Automobile Limited (MEAL) Mahindra Electric Automobile Limited (MEAL), a subsidiary of the Company is engaged in the business of four-wheel passenger electric vehicles. 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) [SSA and SHA] , BII invested Rs. 1,850.00 crores as at 31st March, 2025 (2024: Rs. 1,200.00 crores) in 0.001% Compulsory Convertible Preference Shares (CCPS) of MEAL. 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”) [amended and restated SSA and SHA], Temasek invested Rs. 1,200.00 crores as at 31st March, 2025 (2024: Rs. 300.00 crores) in 0.001% Series A Compulsory Convertible Preference Shares (Series A CCPS) of MEAL. Unless agreed to, in writing, for an early conversion, each CCPS and Series A 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. Since the CCPS and Series A CCPS are 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 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.
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