MAHINDRA & MAHINDRA LTD. Board’s Report 85 by Absorption stands completed and MHEL, MTWL and TCL ceased to be the subsidiaries of the Company from 6th June, 2024 upon the Scheme becoming effective. Divestment of Stake in New Delhi Centre for Sight Limited (“NDCFS”) During the year, Mahindra Holdings Limited (“MHL”), a wholly owned subsidiary of the Company, has sold its entire stake i.e. 30.83% of paid-up capital of NDCFS on a fully diluted basis, to Space Investments Limited, Defati Investments Holdings BV and Infinity Partners. Following the completion of the aforementioned sale, the shareholding of MHL in NDCFS has become ‘Nil’ and NDCFS has ceased to be an Associate Company of MHL under the Companies Act, 2013, and a Joint Venture of MHL and that of the Company under IND AS. Gamaya SA, Switzerland During the year, Gamaya SA, Switzerland reorganized its capital structure and issued shares to a new investor as part of a business combination and against convertible loans received from its other investors. Even though your Company was not a party to the transaction, issuance of shares resulted in reduction of your Company’s shareholding in Gamaya from 15.04% to 4.33% on a fully diluted basis. D. I NTERNAL FINANCIAL CONTROLS The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineate the roles, responsibilities and authorities at each level of its Governance Structure and Key Functionaries involved in Governance. The Code of Conduct for Senior Management and Employees of your Company (the Code of Conduct) commits Management to financial and accounting policies, systems and processes. The Corporate Governance Policies and the Code of Conduct stand widely communicated across your Company at all times. Your Company’s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time. Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP Systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Policies related to the Information Management reinforce the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are subjected to Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation. Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company’s Internal Financial Controls were deployed through Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company’s operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis. E. M ANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. F. RELATED PARTY TRANSACTIONS The Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties. As per the process, necessary details for each of the Related Party Transactions as applicable along with
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