MAHINDRA & MAHINDRA LIMITED 25 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 shareholders’ approval will be valid for the period commencing from the Seventy Ninth Annual General Meeting upto the date of Eightieth Annual General Meeting of the Company to be held in the year 2026. 5. Justification for why the proposed transaction is in the interest of the Company MSPL has established itself as a cornerstone of India's renewable energy transformation, marking its 15th anniversary in the industry this year. MSPL has successfully evolved from a pioneering EPC player to become one of India's leading Independent Power Producers (IPPs). As the cleantech vertical of Mahindra Group, it has carved a niche for itself as an integrated clean-energy solution company with an uncompromising focus on quality, innovation and sustainability. MSPL has an industry-leading portfolio that spans the renewable energy value chain, with a history of 4.2 GWp of EPC capacity complemented by 1.6 GWp of developed IPP projects. The 1.6 GWp of developed projects were sold to the Sustainable Energy Infra Trust (“InVIT”) in FY24 enabling the business to free up capital for deployment into other projects. The business has since created a substantial 3.6 GWp project pipeline which are at various stages of development and execution across strategic locations nationwide. MSPL is targeting 7 GWp of projects, representing a 5X growth. As MSPL develops the projects in its pipeline as well as projects it expects to win over the next few years, it will look to sell such built assets after ensuring the operating assets are performing well. Each of the projects will be housed in respective subsidiary companies or Project SPVs (special purpose vehicles). To enable these subsidiary companies to execute these projects, financial and technical support will be provided by MSPL. The financial support will be in the form of promoter contributions, loans and providing guarantees on behalf of these subsidiary companies. MSPL will also be entering into EPC and other necessary agreements with these subsidiary companies to enable successful execution of the projects. The transactions as stated above are between MSPL and its 6 (Six) wholly owned subsidiaries representing the current pipeline of projects. As the business wins more and larger projects, the monetary limit of related party transactions for certain SPVs will rise as they develop and operate the projects. In the future, as the developed assets are sold, the capital deployed will be recouped. Given the above ambition to grow the business 5X, the quantum of transactions between MSPL and these subsidiaries will grow. It is proposed to seek approval of the Members for Related Party Transactions entered/to be entered into between MSPL and the subsidiary companies of MSPL to enable this growth. As the MSPL business realizes its ambition, it will not only enable growth of revenues and profits for the group, it will also enable the group to realize its vision of being a leader in sustainability. 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/ would infuse subordinate debt in GSPL, FSPL, IHPL, JHPL, LHPL and MHPL (“subsidiaries”) for construction of renewable power projects housed in the respective subsidiaries. This subordinate debt is a part of the overall Equity contribution by MSPL in the respective subsidiaries. MSPL would be funding this subordinate debt partly through its internal accruals and partly through 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 / would be funding the subordinate debt partly through its internal accruals and partly through Loan from the Company; • The loan from the Company is a combination of floating and fixed Rate of Interest, the current weighted average of loan is in the range of 9% per annum to 12% per annum; and • Tenure of the loans from the Company 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 already advanced/ to be advanced by MSPL to subsidiaries are unsecured loans and are considered subordinate to existing or proposed 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 Rate of Interest charged on the loan will be between 9% to 12% 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/would infuse subordinate debt in the subsidiaries for construction of renewable power projects housed in the respective subsidiaries. This subordinate debt is a part of the overall equity contribution by MSPL in the projects.
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