MAHINDRA & MAHINDRA LIMITED 32 Upon incorporation of MEAL, the Company entered into an Asset Transfer Agreement with MEAL for transfer of certain identified assets pertaining to the 4 (Four) Wheel Passenger Electric Vehicles to MEAL. The transactions involving transfer of business assets, technology, etc. with MEAL are in furtherance of the business, operational in nature, in line with the past transactions and will help ensure continuity of business and as such, are in ordinary course of business. Considering all of the above and the ambitious plans of the Group in the EV space, there would be a significant surge in the overall transactions between the Company and MEAL. 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. d etails 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. w here 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 subsidiary 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 MEAL and/or for making investment(s) in and/or providing financial assistance to any of its subsidiaries / associates / joint ventures, if any. 7. Details of the Valuation Report 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 an 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. Arms' Length Basis: The Company ensures that the related party transactions are done on arms’ length basis which are established taking into account various factors including comparable with unrelated parties or on cost plus reasonable margin basis or market price basis, where available, or certified by any independent agency. In case of inter corporate fund based/ non fund based transaction(s), the interest charged will be in compliance with the provisions of section 186 of the Companies Act, 2013. The reimbursements / recoveries would be basis actual cost incurred. Compliance with arm’s length principles is ensured based on the applicable transfer pricing regulations.
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