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

MAHINDRA & MAHINDRA LIMITED 30 3. Any advance paid or received for the contract or arrangement, if any Based on the nature of transaction, advance for part or full amount of the transaction / arrangement could be paid / received in the ordinary course of business. 4. Tenure The tenure is 5 years i.e. upto 31 st March, 2028. 5. Justification for why the proposed transaction is in the interest of the Company Setting up of the InvIT is part of the larger partnership between Mahindra Group and Ontario Teachers’ in the renewables energy sector. The partnership will enable the Company to unlock value in the Renewable Energy Business, significantly scale up the platform by continuing to invest along with Ontario Teach - ers' and achieve the twin objectives of accelerated growth and leadership in ESG. The InvIT also enables additional value unlocking by creating the InvIT platform for monetization to a wider set of like-minded investors. Further, the InvIT aids in deleveraging by reducing the consolidated debt of M&M. 6. If the transaction relates to any loans, inter-corporate deposits, advances or investments made or given by the listed entity or its subsidiary: i) details of the source of funds in connection with the proposed transaction; MSPL has infused subordinate debt in certain subsidiaries for construction of solar power projects housed in the respective subsidiaries. This subordinate debt is part of the overall Equity contribution which MSPL is supposed to infuse in the Projects. MSPL has funded this subordinate debt partly via its internal accruals and partly via Loan from the Company. ii) where any financial indebtedness is incurred to make or give loans, intercorporate deposits, advances or investments, • nature of indebtedness; • cost of funds; and • tenure • MSPL has funded this subordinate debt partly via its internal accruals and partly via Loan from the Company; • The loan from the Company is a combination of floating and fixed Rate, the current weighted aver - age of loan is in the range of 6.75% per annum to 8.5% per annum; • Tenure of the Company loans varies from 1 to 2 years. iii) Applicable terms, including covenants, tenure, interest rate and repayment schedule, whether secured or unsecured; if secured, the nature of security; Subordinate loans advanced by MSPL to its certain subsidiaries are unsecured loans and are considered subordinate to existing bank debt. There is no fixed tenure of these loans as repayment will depend on meeting of secured loan covenants and approvals of Project secured lenders. The ROI charged on the loan is 11.5% per annum. iv) The purpose for which the funds will be utilised by the ultimate beneficiary of such funds pursuant to the related party transaction MSPL has infused subordinate debt in certain subsidiaries for construction of solar power projects housed in the respective subsidiaries, this subordinate debt is part of the overall equity contribution which MSPL is supposed to infuse in the projects. 7. Details of the Valuation or other external party report (if any) In case of SEIT, the external non-related party investors shall determine the value and the quantum of the InvIT units and will be supported by the valuation report which will be made available as per InvIT regulations at the time of filing of the final placement memorandum of SEIT with SEBI. 8. Percentage of the Company’s annual consolidated turnover, for the immediately preceding financial year, that is represented by the value of the proposed transaction (and for a RPT involving a subsidiary, such percentage calculated on the basis of the subsidiary’s annual turnover on a standalone basis shall be additionally provided) Rs. 3,500 crores constitute 2.86% of the Consolidated Turnover* of the Company for the financial year ended 31 st March, 2023. Name of the Subsidiary Value of the proposed transaction p.a. as a % of the annual turnover* of the Subsidiary on standalone basis MSPL 883% * Turnover includes Revenue from Operations and Other Income. Note: The percentage above is based on the Company’s Consolidated Turnover / Subsidiary’s Standalone Turnover for the FY 2022-23 and the actual percentage shall depend upon the turnover of the Company/ Subsidiary as the case may be for the above referred respective financial years from 2023-24 to 2027- 28 if the transaction is completed in such year. 9. Transactions undertaken in previous 2 years with certain related parties Not Applicable 3) For Item No. 13 Material Modification in earlier approved Material Related Party Transactions between the Company and its Subsidiaries/Associate The Members of the Company at the Seventy-Sixth Annual General Meeting of the Company held on 5 th August, 2022 (“76 th AGM”), had approved Material Related Party Transactions of the Company with certain Related Parties viz. Swaraj Engines Limited, Classic Legends Private Limited and CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited), on such material terms and conditions as mentioned in the explanatory statement attached to Resolution No. 9 of the Notice of Seventy-Sixth AGM and at monetary value not exceeding 2% of the Annual Consolidated Turnover of the Company or Rs. 2,000 Crores whichever is higher, per annum for each of the financial years (FY) from FY 2022-23 to FY 2026-27 i.e., five financial years. However, the estimated value of the contract(s)/ arrangement(s)/ agreement(s)/ transaction(s) of the Company with the aforesaid Related Parties is anticipated to exceed the aforesaid monetary limit approved by the Members at the 76 th AGM. Considering the Company’s current transactions with the above mentioned Related Parties and future business projections, it is now proposed to increase the monetary value of related party transactions with the said Related Parties. This increment in the monetary value of related party transactions with Related Parties will be on same material terms and conditions as approved earlier by the Members at the 76 th AGM. The approval of Members is sought as per the requirement of Regulation 23(4) of the Listing Regulations read with SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2022/40 dated 30 th March, 2022, for revision in the monetary limit of the Material Related Party Transactions, details of which are mentioned herein in accordance with SEBI Circular No. SEBI/HO/CFD/CMD1/ CIR/P/2021/662 dated 22 nd November, 2021: