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

MAHINDRA & MAHINDRA LIMITED 33 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; The financial assistance / investment would be from own funds / internal accruals of the Company. The Company would not be incurring indebtedness solely for the purpose of providing financial assistance / making investment. ii) where any financial indebtedness is incurred to make or give loans, inter- corporate deposits, advances or investments, • nature of indebtedness; • cost of funds; and • tenure Not applicable, since the Company would not be incurring financial indebtedness specially for giving financial assistance or making investments. iii) Applicable terms, including covenants, tenure, interest rate and repayment schedule, whether secured or unsecured; if secured, the nature of security; Investments by way of subscription, purchase or otherwise in securities / debt instruments and / or providing of loans, advances, and guarantees in relation to above mentioned subsidiaries/associate would be in accordance with the provisions of the Companies Act, 2013. The interest charged will be in compliance with the provisions of section 186 of the Companies Act, 2013. The financial assistance in the form of loan / inter-corporate deposit, if any provided, will be on an arm’s length basis considering the following:- i) The nature and tenor of loan/ICD, ii) The opportunity cost for the Company from investment in alternative options, and iii) The cost of availing funds for the Company and for the related party. iv) The purpose for which the funds will be utilised by the ultimate beneficiary of such funds pursuant to the related party transaction The funds shall be used for operational activities and other business requirements of the company to whom funds are provided and/or for making investment(s) in and/or providing financial assistance to any of its subsidiaries / associates / joint ventures. 7. Details of the Valuation or other external party report (if any) The related party transactions will be in line with the Company's Policy on Materiality of and Dealing with Related Party Transactions. These transactions are on arm’s length basis and in the ordinary course of business. The related party transactions will be supported by the Valuation Report of an Independent valuer, wherever necessary. 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 related party transaction involving a subsidiary, such percentage calculated on the basis of the subsidiary’s annual turnover on a standalone basis shall be additionally provided) Rs. 5,000 crores constitute 4.08% of the Consolidated Turnover* of the Company and Rs. 3,000 crores constitute 2.45% of the Consolidated Turnover* of the Company for the financial year ended 31 st March, 2023. Name of the Subsidiary Rs. 5,000 Crores as a % of Subsidiary’s Annual Turnover* on a Standalone Basis Swaraj Engines Limited 349% Name of the Subsidiary Rs. 3,000 Crores as a % of the Subsidiary’s Annual Turnover* on a Standalone Basis Classic Legends Private Limited 422% * 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 2026-27. 9. Transactions undertaken in previous Financial Year ended 31 st March 2023 and 31 st March, 2022 Rs. in crores Sr. No. Name of the Company Nature of Transactions FY22 FY23 a. Swaraj Engines Limited Purchase and Sale of goods, Sale of property, plant and equipment, availing and rendering of services, dividend income, deputation of personnel, reimbursements paid and received, other income and expenses, etc. 1,380.14 1,751.98 b. Classic Legends Private Limited Purchase and sale of goods, rendering and availing of services, inter- corporate deposits given, interest and other income, investments, deputation / sharing of personnel, reimbursements paid and received, etc. 1,010.51 1,227.51 c. CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited)("CIE") & Purchase of goods, property, plant & equipment and other intangible assets, sale of goods, other income and expenses, royalty received for usage of 'Mahindra' Brand / Trade Name, availing and rendering of services, dividend received, reimbursement paid, etc. 1,389.26 1,998.81 & The royalty received from CIE for usage of ‘Mahindra’ Brand/ trade name was Rs. 1.12 lacs in FY22 and Rs. 0.89 lacs in FY23. The royalty receivable from CIE during each of the financial years 2024-2027, would be well below the permitted statutory ceiling as prescribed under Regulation 23 (1A) of Listing Regulations i.e. 5% of the annual consolidated turnover of the Company.