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BackgroundThis Information Memorandum is being issued in respect of the Debentures to be issued and allottedby ESAF Microfinance and Investments Private Limited (the "Issuer" or "Company") on a privateplacement basis and contains relevant information and disclosures required for the purpose of issuingand allotting the Debentures. The issue of the Debentures comprised in the Issue and described underthis Information Memorandum has been authorised by the Issuer through a resolution passed by theshareholders of the Issuer on 28th September 2015 and the Board of Directors of the Issuer on 09*Nov 2015 and the memorandum of association and articles of association of the Company. Pursuant
to the resolution passed by the Company's shareholders dated March 21, 2014 in accordance withprovisions of the Companies Act,2013, the Company has been authorised to borrow, upon such terms
and conditions as the board of directors of the Company may think fit for amounts up to Rs. 1,500crore/-(Rupees (One Thousand and Five Hundred Crore Only)[every financial year financial yearsubject to a maximum borrowing outstanding often times of the aggregate of the paid-up capital andfree reserves at that point of time]1. The present Issue in terms of this Information Memorandum is
within the overall powers of the board of directors of the Company and in accordance with theabovementioned shareholder resolution(s).
Credit RatingThe Debentures proposed to be issued by the Issuerhave been rated by [Brickwork Ratings IndiaPrivate Limitedjf'Rating Agency"). The Rating Agencyhas vide its letter dated Nov 4,2015assigned a rating of BWR [A-] in respect of the Debentures. The above rating is not arecommendation to buy, sell or hold securities and investors should take their own decision. The
ratings may be subject to revision or withdrawal at any time by the rating agency and should beevaluated independently of any other ratings. Please refer to Annexure II of this Information
Memorandum for the letter dated Nov 10, 2015 from the Rating Agency assigning the credit rating
Issue of 1000 Secured, Rated, Listed, Redeemable, Non-convertible Debentures of face value
of Rs. 583 695 (Rupees Five Hundred Eighty Three Thousand Six Hundred Ninety Fiveonly) each, aggregating up to Rs. 583695000 (Rupees Five Hundred Eighty Three Million SixHundred Ninety Five Thousand Only) on a private placement basis (the "Issue")
No. 001Addressed to: AAV Sari (Luxembourg), through its Indian custodian Deutsche Bank AG, Mumbai branch
INFORMATION MEMORANDUM
ESAF Microfinance and Investments Private LimitedA private limited company incorporated under the Companies Act, 1956
Date of Incorporation: September 27, 1996Registered Office:NO 8/9, MANSUK BUILDINGS, FLATNO.3A, 3RD FLOOR,
Gangadeeswara Koil Street,
Purusawalkatn, Chennai 600 084, Tamil NaduTelephone No.: +91-44 0487 2373813
Website: www.esafmicrofin.com
Information Memorandum for issue of Debentures on a Private Placement Basis
Dated: November 16, 2015This Information Memorandum is prepared as per SEBI (Issue and Listing of Debt Securities)
Regulation, 2008, SEBI (Issue and Listing of Debt Securities) (Amendment) Regulation, 2012 andSection 42 of the Companies Act 2013 read with the Companies (Prospectus and Allotment of
Securities) Rules, 2014
GDA Trusteeship Ltd.Office No. 1,2 & 3,4th Floor,Rahimtoola House,7 Homji StreetFort,Mumbai-400 001, Maharashtra, IndiaTel:+ 22-4922 0555Fax: + 022-4922 0505Email: gdamumbai@gdatrustee.com
Debenture Trustee
Link Intime India Pvt LimitedC-13, Pannaial Silk Mills CompoundL.B.S. Marg, Bhandup (West)Mumbai 400 078
Registrar & Transfer Agent
Brickwork Ratings India Pvt. Ltd.Bengaluru
3rd Floor, Raj Alkaa Park, 29/3 &32/2 Kalena Agrahara, Bannerghatta
Road, Bengaluru - 560 076
Rating Agency
Information MemorandumPrivate & ConfidentialDate: November 16,2015 •For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
abovementioned and the letter dated Nov 10, 2015 issued by the Rating Agency disclosing the ratingrationale adopted for the aforesaid rating.
Issue Schedule
Issue Opening Date:November 16,2015Issue Closing Date: November 17,2015Pay-in Dates: November 16-17,2015
Deemed Date of Allotment: November 17,2015The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment atits sole discretion, without giving any reasons. The Issue shall be open for subscription during the
banking hours on each day during the period covered by the Issue Schedule.The Debentures are proposed to be listed on the wholesale debt market segment of BSELimited("BSE").
41317232457859495
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SECTION 1: DEFINITIONS AND ABBREVIATIONSSECTION 2: NOTICE TO INVESTORS AND DISCLAIMERSSECTION 3: RISK FACTORSSECTION 4: FINANCIAL STATEMENTSSECTION 5: REGULATORY DISCLOSURESSECTION 6: TRANSACTION DOCUMENTS AND KEY TERMSSECTION 7: OTHER INFORMATION AND APPLICATION PROCESSSECTION 8: DECLARATIONANNEXURE I: TERM SHEETANNEXUREILRATING LETTER & RATING RATIONALEANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEEANNEXURE IV: APPLICATION FORMANNEXURE V: LAST AUDITED FINANCIAL STATEMENTSANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
TABLE OF CONTENTS
Means each loan made by the Company as a lender
Means the ratio of such name as defined by Reserve Bank of India fromtime to time
Central Depository Services (India) Limited
Means the Convention on International Trade in Endangered Species or
Wild Fauna and Flora, including the protected flora and faunae asdemonstrated on the website: www.cites.ore
Means any day, other than a public holiday under Section 25 of theNegotiable Instruments Act, 1881 or a Sunday, on which banks are openfor businessin Mumbai, India.
The board of directors of the Issuer
means the Debenture Holder(s) of the Debentures in dematerializedform whose name is recorded as such with the Depository
Means the requirements as applicable to the Company on wage, workinghours, labour contracts and occupational health & safety issues,
stemming from ILO conventions 26 and 131 (on remuneration), 1 (onworking hours) and 155 (on health & safety)
Means the institution which formulates broad supervisory standards andguidelines and recommends statements of best practice in banking
supervision as further described at the following link:httn://www.bis.ore/bcbs/index.htm
Means the ratio of the aggregate of amounts payable to the Company inrelation to the Hypothecated Assets to the Outstanding PrincipalAmounts.
Means, for any date of determination, the assets of the Company on such
date as the same would be determined in accordance with GAAP at suchdate
Means the subscription monies paid by the Applicants at the time ofsubmitting the Application Form
Includes all applicable statutes, enactments or acts of any legislativebody in India, laws, ordinances, rules, bye-laws, regulations,notifications, guidelines, policies, directions, directives and orders ofany Governmental Authority and any modifications or re-enactmentsthereof.
The form used by the recipient of this Information Memorandum, toapply for subscription to the Debentures, which is in the form annexedto this Information Memorandum and marked as Annexure IV.
Means a person who has submitted a completed Application Form to theCompany
The allotment of the Debentures pursuant to this Issue.
Means the Companies Act, 2013 ("2013 Act"), and for any matters oraffairs prior to the notification of the relevant provisions of theCompanies Act, 2013, the Companies Act, 1956 ("1956 Act"), and shallinclude any re-enactment, amendment or modification of the CompaniesAct, 2013, as in effect from time to time.
Client Loan
Capital Adequacy Ratio
CDSL
CITES
Business Day(s)
Board/Board ofDirectors
Beneficial Owner(s)
Basic Terms and
Conditions ofEmployment
Basel Committee onBanking Supervision
Asset Cover
Assets
Application Money
Applicable Law
Application Form
ApplicantAllot/Allotment/Allotted
Act
Unless the context otherwise indicates or requires, the following terms shall have the meaningsgiven below in this Information Memorandum.
DEFINITIONS AND ABBREVIATIONSSECTION 1:
Information MemorandumPrivate & ConfidentialDate: November 16, 2015-For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The holders of the Debentures issued by the Issuer including the initialsubscribers to the Debentures and for the time being, holders of theDebentures and for the subsequent Debenture Holder(s), each of whomfulfils the following requirements:-i) Persons who are registered as Beneficial Owners; andii) Persons who are registered as debenture holder(s) in the Register
of Debenture Holder(s);Subaraiandii) above shall include registered transferees of the
1000 Secured, Rated, Listed, Redeemable, Non-convertible Debenturesof face value of Rs. 583 695 (Rupees Five Hundred Eighty ThreeThousand Six Hundred Ninety Five only) each, aggregating up to Rs.583695000 (Rupees Five Hundred Eighty Three Million Six HundredNinety Five Thousand Only)
Ten Million
Shall mean 13.50% (Thirteen Decimal Five Percent) per annum.
Means.each payment date on which Coupon is required to be paid asspecified in Annexure VI of this Information Memorandum.
means the coupon payable on the Debentures on the Coupon PaymentDates, at the Coupon Rate.
Means the requirements as applicable to the Company on child andforced labour, discrimination and freedom of association and collectivebargaining, stemming from the ILO Declaration on FundamentalPrinciples and Rights at Work, adopted in 1998 and covering: (i)freedom of association and the right to collective bargaining, (ii) theelimination of forced and compulsory labour, (iii) the abolition of childlabour and (iv) the elimination of discrimination in the workplace.
Means the requirements as applicable to the Company on child andforced labour, discrimination and freedom of association and collectivebargaining, stemming from the ILO Declaration on FundamentalPrinciples and Rights at Work, adopted in 1998 and covering: (i)freedom of association and the right to collective bargaining, (ii) theelimination of forced and compulsory labour, (iii) the abolition of childlabour and (iv) the elimination of discrimination in the workplace.
Means the memorandum of association and the articles of association of
the Company
Means, in relation to the Company and the Group, taken as a whole, thetermination, for economic or operational reasons, by the Company or
any member of the Groupof the employment of more than 10% of thetotal permanent workforce of the Company and the Group, taken as a
whole or more than 50 full time equivalent positions of the Companyand the Group, taken as a whole within a period of 6 months, if beingunderstood that individual dismissals on grounds of capability orconduct shall be excluded for the purpose of this definition.
microfinance-and-the-cIient-protection-princiDles
Means the Client Protection Principles as set forth by the SMARTCampaign, as may be updated from time to time, and currently madeavailable at http://www.smartcamDaign.ors/about-the-camDaign/smart-
Mean any law, rule or regulation (including microfinance & branchlessbanking laws and regulations) applicable in the Republic of Indiaconcerning consumer protection matters.
Means any claim, proceeding or investigation by a person in respect ofany Client Protection Laws.
Debenture Holders /Investors
Debentures/NCDs
Crore
Coupon Rate
Coupon Payment Date
Coupon
Corrupt Practice
Core Labour Standards
ConstitutionalDocuments
Collective Dismissal
Client ProtectionPrinciples
Client ProtectionsLaws
Client Protection Claim
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Shall mean any claim, proceeding or investigation by a person in respectof an Environmental Law, a Social Law or an environmental or social
agreement between the Company and another person.
Means any law, rule or regulation (including international treatyobligations) as applicable in the Republic of India concerningenvironmental matters and natural resource management.
Means the total equity of the Company, including shareholders' equity,preference shares, reserves, retained earnings or losses , current yearcumulated net income or loss and Subordinated Debt.
Electronic Fund Transfer
Means the date on which any interest or liquidated damages, theRedemption Amount or premature redemption amount and all othermonies payable, are due and payable. If the due date in respect of any
interest or liquidated damages and all other monies payable under theDebenture Trust cum Mortgage Deed falls on a day which is not aBusiness Day, then the immediately succeeding Business Day shall bethe due date for such payment. Further, if the due date in respect of theRedemption Amount or premature redemption amount falls on a day
which is not a Business Day, then the immediately preceding BusinessDay shall be the due date for such payment
Depository Participant Identification Number.
This document which sets out the information regarding the Debenturesbeing issued on a private placement basis.
Director(s) of the Issuer.
A depository participant as defined under the Depositories Act
A Depository registered with SEBI under the SEBI (Depositories andParticipant) Regulations, 1996, as amended from time to time, withwhom the Company has made arrangements for dematerialising theDebentures, being CDSL and NSDL.
The Depositories Act, 1996, as amended from time to time
Dematerialized securities which are securities that are in electronicform, and not in physical form, with the entries noted by the Depository.
Means the deed of hypothecation to be executed by the Company infavour of the Debenture Trustee to evidence the creation of a firstranking exclusive charge by the Company in favour of the DebentureTrustee for the benefit of the Debenture Holders over the HypothecatedAssets, both present and future.
Means the debenture trust cum mortgage deed to be executed by theCompany in favour of the Debenture Trustee in relation to the terms andconditions of the Debentures.
Agreement executed/to be executed by and between the DebentureTrustee and the Company for the purposes of appointment of theDebenture Trustee to act as debenture trustee in connection with theissuance of the Debentures.
J3DA Trusteeship Limited
November 17,2015
Debentures from time to time with the Company and the Depository)and in the event of any inconsistency between sub paragraph (i) and (ii)above, sub paragraph (i) shall prevail
Environmental and
Social Claim
Environmental Law
Equity
EFT
Due DateDP ID
Disclosure Document /
InformationMemorandum
Directo^s)
Depository Participant /DP
DepositoryDepositories Act
Demat
Deed of Hypothecation
Debenture Trust cum
Mortgage Deed
Debenture TrusteeAgreement
Debenture Trustee
Deemed Date ofAllotment
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Shall mean the generally accepted accounting principles as prescribed^fe^he Institute of Chartered Accountants of India from time to time and•if^SjJStentlalied by the Company.
Means any action or omission including misrepresentation, that
knowingly or recklessly misleads, or attempts to mislead, a party toobtain a financial benefit or to avoid an obligation.
Means the date occurring after the Maturity Date when all theobligations of the Company under theDebenture Trust cum MortgageDeed and the other Transaction Documents are discharged to the
satisfaction of the Debenture Holders.
Each twelvemonths period commencing from April 1 of a particularcalendar year and ending on March 31 of the subsequent calendar year
Means the period commencing on the day after one Quarter Date andending on the next Quarter Date.
Means any activity including (a) production or trade in any product oractivity deemed illegal under host country laws or regulations orinternational conventions and agreements, or subject to international
bans, such as Pharmaceuticals, pesticides/herbicides, ozone depletingsubstances, PCBs, wildlife or products regulated under CITES, (b)production or trade in weapons and munitions, (c) production or trade inalcoholic beverages (excluding beer and wine), (d) production or tradein tobacco, (e) gambling, casinos and equivalent enterprises, (f)production or trade in radioactive materials (this does not apply to thepurchase of medical equipment, quality control (measurement)equipment), (g) production or trade in unbonded asbestos fibers (thisdoes not apply to purchase and use of bonded asbestos cement sheetingwhere the asbestos content is less than 20%), (h) drift net fishing in themarine environment using nets in excess of 2.5 km. in length, (i)production or activities involving harmful or exploitative forms offorced labor, or harmful child labor, (j) production, trade, storage, ortransport of significant volumes of hazardous chemicals, or commercial
scale usage of hazardous chemicals (hazardous chemicals includegasoline, kerosene, and other petroleum products), (k) production or
activities that impinge on the lands owned, or claimed underadjudication, by indigenous peoples, without full documented consent ofsuch peoples, (1) which may result in fimding or supporting anyindividual or organization designated as: (i) terrorists or terroristorganizations by the United Nations, the European Union and any otherapplicable country; (ii) persons, groups or entities which are subject toUnited Nations, European Union and the US Office of Foreign AssetControl (OFAC) sanctions'.
Means any event as described in Section 6.4 of this InformationMemorandum
Means the stricter of (i) Environmental Law, (ii) Social Law, (iii)Environmental and Social Permits, (iv) Basic Terms and Conditions ofEmployment, (v) Core Labour Standards, (vi) with respect to theCompany IFC Performance Standard 2 (Labor and WorkingConditions).
means any environmental and/or social permit, license, consent,
approval or other authorisation required by the Company or any memberof the Group to conduct its business
Means the environmental and social monitoring report in the form set
out in Schedule X (Form of Environmental and Social MonitoringReport) of the Debenture Trust cum Mortgage Deed.
GAAP^^^^^
Fraudulent Practice
Final Settlement Date
Financial Year/ FY
Financial Quarter
Exclusion List
Event of Default
Environmental and
Social Requirements
Environmental andSocial Permit
Environmental andSocial MonitoringReport
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Means the effect or consequence of an event, circumstance, occurrence
Means resolution approved by such number of Debenture Holders thatrepresent more than 66% (sixty six percent) of the value of theOutstanding Principal Amounts of the Debentures held by the DebentureHolders who are present and voting or if a poll is demanded, by suchnumber of Debenture Holders that represent more than 66% (sixty sixpercent) of the value of the Outstanding Principal Amounts of theDebentures held by the Debenture Holders who are present and votingin such poll.
Means Debenture Holder(s) holding an aggregate amount representingnot less than 66% (Sixty Six Percent) of the value of the OutstandingPrincipal Amounts of the Debentures
Means the total reserve established to cover potential losses in theCompany's outstanding loans or other credit facilities.
Means, for any date of determination, the liabilities of the Company onsuch date as the same would be determined in accordance with theGAAP at such date.
ESAF Microfinance and Investments Private LimitedNovember 17,2015November 16,2015
Shall mean all that hereditaments and premises more particularlydescribed in Schedule XI of the Debenture Trust Cum Mortgage Deed isbeing mortgaged in favour of the Debenture Trustee to secure theDebenetures.
Means any origin which is illicit, criminal or fraudulent, includingwithout limitation, corruption, Terrorist Financing, and tax evasion
Means the International Labour Organisation, the tripartite UnitedNations agency which brings together governments, employers andworkers of its member states in common action to promote decent workthroughout the world.
Means any obligation of the Company (whether incurred as principal,independent guarantor or as a surety) for the payment or repayment ofborrowed money, whether present or future, actual or contingent.
The assets more particularly identified in the Deed of Hypothecationover which security by way of hypothecation is to be created to securethe Debentures
Shall mean such Persons having an arrangement involving two or moreentities related to each other through any of the following relationshipsi.e subsidiary-parent, joint venture, associate, affiliate or a related party,
as identified in Schedule IX of the Debenture Trust cum MortgageDeed.
Shall mean financing products that have or produce less harmful impactto the environment and/or help conserve energy. The loan products
complying with this definition are loans used to finance efficientcooking stoves, water purifiers and solar lanterns and any others
_products as approved by the Debenture Holder(s) from time to time.
Shall include the President of India, the Government of India, theGovernor and the Government of any State in India, any Ministry orDepartment of the same, any municipal or local government authority,
any authority or private body exercising powers conferred by applicablelaw and any court, tribunal or other judicial or quasi-judicial body, andshall include, without limitation, a stock exchange and any regulatorybody.
Material Aji^ers^-Efi^ct
Majority Resolution
Majority DebentureHolders
Loan Loss Reserves
LiabilityIssuer/ CompanyIssue Opening DateIssue Closing Date
ImmovableProperty/MortgagedProperty
Illicit Origin
ILO
Indebtedness
Hypothecated Assets
Group
Green Microfinance
Governmental Authority
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Means, at any date, the principal amount outstanding under the
Means the outstanding principal balance of all of the Company'soutstanding Client Loans including current, delinquent and restructuredClient Loans, but not Client Loans that have been charged off. It doesnot include interest receivables and accrued interest.
Means in respect of any Relevant Period, the following items in respectof that Relevant Period. The Company's:(i) personnel costs; plus(ii) administrative costs; plus(iii) overhead costs; plus(iv) depreciation; plus(v) any other operational costs in accordance with the acceptableaccounting standards but excluding any loan loss provisions or loanloss impairment charges.
Means (i) deliberately destroying, falsifying, altering or concealingevidence material to the assessment or the making of false statements to
those performing the assessment, in order to materially impede anassessment of allegations of a Corrupt Practice, Fraudulent Practice,Money Laundering Activities, or Terrorist Financing and/or threatening,
harassing or intimidating any party to prevent it from disclosing itsknowledge of matters relevant to the assessment or from pursuing the
assessment, or (ii) acts intended to materially impede the exercise of theDebenture Holder(s)'s access to contractually required information inconnection with an assessment of allegations of a Corrupt Practice,
Fraudulent Practice, Money Laundering Activities, or TerroristFinancing.
Means any Corrupt Practice, Fraudulent Practice, Money Laundering
Activities, Obstructive Practice, Sanctionable Practice or TerroristFinancing
Shall mean, for any particular period and with respect to the Company,all revenue (including donations and grants) less all expenses (includingtaxes, if any for such period).
Means Total Assets excluding any securitized assets or managed (non-
owned) loan portfolio of the Company
Non-banking financial company
Not Applicable
Means the process of moving funds of Illicit Origin through a cycle oftransformation in order to create the end appearance of legitimatelyearned funds. The process of moving funds consists of providing,receiving or assisting in transfer of funds.
November 18 , 2018, the date falling on the expiry of 36 (Thirty Six)months from the Deemed Date of Allotment.on which the RedemptionAmount is due to be paid to the Debenture Holders as specified inAnnexure VI.
or condition which has caused, as of any date of determination, or couldreasonably be expected to cause a material and adverse effect on (a) the
financial condition, business or operation of the Company,environmental, social or otherwise or prospects of the Company; (b) theability of the Company to perform its obligations under the TransactionDocuments; or (c) the validity or enforceability of any of theTransaction Documents (including the ability of any party to enforceany of its remedies thereunder).
Outstanding.Principal
Outstanding Portfolio
Operational Costs
Obstructive Practice
Objectionable Practice
Net Income
Net AssetsNBFC
N.A
Money Laundering
Activities
Maturity Date
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Reserve Bank of India.Brickwork Ratings India Private Limited
The offer letter prepared in compliance with Section 42 of the 2013 Actread with the Companies (Prospectus and Allotment of Securities)Rules, 2014.
Permanent Account Number
National Securities Depository Limited
The guidelines issued by the RBI on November 27, 2014 forlicensing of "Small Finance Banks" in the private sector
Small Finance BankMeans Indian rupees, the lawful currency of IndiaReserve Bank of India
Means the aggregate of all loans, bonds, leases and other credit facilitiesprovided by the Company that, are not classified as non-performingloans but that have been restructured by amending or rescheduling anyof the (rejpayment terms as agreed between the Company and its clientsunder the relevant agreements due to a deterioration of the financial
condition or repayment capacity of these clients; with the date ofrestructuring or rescheduling falling less than or equal to one (1) yearprior to the date of computation.
Means each period from the first day of each financial year of theCompany to the last day of each Financial Quarter of the Company'sfinancial year
Mans the register maintained by the Company containing the name(s) ofthe Debenture Holder(s) in the form and manner as prescribed under theCompanies (Management and Administration Rules), 2014, whichregister shall be maintained at the registered office of the Company.
Means the Outstanding Principal Amount of the Debentures due to paidto the Debenture Holders in accordance with Annexure VI.
Shall mean in relation to any date on which any payments are scheduledto be made by the Company to the Debenture Holders, the day falling 15(Fifteen) calendar days prior to such date.
Shall have the meaning ascribed to it in the Deed of HypothecationMeans each of 31 March, 30 June, 30 September and 31 December
Raising debt to meet its funding requirements for the ongoing businessoperations of the Company.
Shall include an individual, natural person, corporation, partnership,joint venture, incorporated or unincorporated body or association,
company, Government Authority and in case of a company and a bodycorporate shall include their respective successors and assigns and in
case of any individual his/her respective legal representative,administrators, executors and heirs and in case of trust shall include thetrustee(s) for the time being and from time to time. The term "Persons"shall be construed accordingly.
Means all payments to be made by the Company in relation to the Issueincluding payment of Coupon, Redemption Amount, Default Interest,remuneration of the Debenture Trustee, and all fees, costs, charges,
expenses and other monies.
Debentures (in Indian rupee).
RBIRating Agency
Private Placement OfferLetter
PAN
NSDL
SFB Guidelines
SFBRs. / RupeesRBI
Restructured Assets
Relevant Period
Register of DebentureHolders
Redemption Amount
Record DateReceivablesQuarter Date
Purpose
Person
Payments
Amounts
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Means any law, rule or regulation (including international treaty
obligations) applicable in the Republic of India concerning (i) labour,(ii) social security, (iii) the regulation of industrial relations (betweengovernment, employers and employees), (iv) the protection ofoccupational as well as public health and safety, (v) the regulation ofpublic participation, (vi) the protection and regulation of ownership ofland rights (both formal and traditional), immovable goods and
^intellectual and cultural property rights, (vii) the protection and
Means all funds received by the Company on un-secured basis that rank
lower in repayment to other debts, but is senior to equity and that maybe accounted for as "Tier II Capital".
Means resolution approved by such number of Debenture Holders that
represent more than 75% (seventy five percent) of the value of theOutstanding Principal Amounts of the Debentures held by the DebentureHolders who are present and voting or if a poll is demanded, by suchnumber of Debenture Holders that represent more than 75% (seventy
five percent) of the value of the Outstanding Principal Amounts of theDebentures held by the Debenture Holders who are present and votingin such poll.
Means such number of Debenture Holders collectively holding morethan 75% (seventy five percent) of the value of the OutstandingPrincipal Amounts of the Debentures
Shall mean the Debenture Trust cum Mortgage Deed, the Deed ofHypothecation, necessary powers of attorney, and all such other
documents as may be required for perfecting the Security in favour ofthe Debenture Trustee for the benefit of the Debenture Holders (andtheir successors and assigns from time to time).
Means the security to be created in favour of the Debenture Trustee tosecure this Issue.
Means all present and future obligations (whether actual or contingentand whether owed jointly or severally or in any capacity whatsoever)obligations of the Company to the Debenture Holders or the DebentureTrustee under theDebenture Trust cum Mortgage Deed
Means any business activity or transaction with any entity, individual orcountry which at or during the time of such business activity ortransaction is included on the lists of sanctioned entities, individuals orcountries published and updated from time to time by the Office ofForeign Assets Control of the US Department of Treasury (OFAC), theEuropean Union or the United Nations
The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulation, 2008 issued by SEBI, as amended from time totime.
Securities and Exchange Board of India constituted under the Securitiesand Exchange Board of India Act, 1992 (as amended from time to time).
Real Time Gross Settlement.Indian National Rupee.Registrar of Companies.
Registrar and Transfer Agent to the Issue, in this case being Link IntimePrivate Limited
The date which will be used for determining the Debenture Holders whoshall be entitled to receive the amounts due on any Due Date, whichshall be the date falling 15 (Fifteen) calendar days prior to any DueDate.
Social Law
Subordinated Debt
Special Resolution
Special MajorityDebenture Holders
Security
Secured Obligations
Sanctionable Practice
SEBI Debt ListingRegulations
SEBIRTGSINRROC
R&T Agent
Record Date
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Wholesale Debt Market segment of BSE
The documents executed or to be executed in relation to the issuance ofthe Debentures as more particularly set out in Annexure I.
Means, for any date of determination, the total Liabilities of theCompany on such date.
Means, for any date of determination, the total Assets of the Companyon such date, including owned, securitised and managed (non-owned)portfolio.
Means that amount that is, as on the date of determination, equal to 5%
of the Equity.
The terms and conditions pertaining to the Issue as outlined in theTransaction Documents.
The day on which the Company hypothecates such additional or newreceivables in accordance with the Deed of Hypothecation.
Means financing terrorists, terrorist acts and terrorist organisations.
Means a deduction or withholding for or on account of Tax frompayment under a Transaction Document
Shall include any and all present or future, direct or indirect, claims fortax, levy, impost, duty, cess, statutory dues or other charge of a similar
nature (including any penalty or interest payable in connection with anyfailure to pay or any delay in paying any of the same) including on grossreceipts, sales, turn-over, value addition, use, consumption, property,service, income, franchise, capital, occupation, license, excise,documents (such as stamp duties) and customs and other taxes, duties,
assessments, or fees, however imposed, withheld, levied, or assessed byany Government, but shall not include tax on the income of any party.
Tax Deducted at Source.
empowerment of indigenous peoples or ethnic groups, (viii) theprotection, restoration and promotion of cultural heritage, (ix) all otherlaws, rules and regulations providing for the protection of employeesand citizens
WDM
Transaction Documents
Total Liabilities
Total Assets
Threshold Amount
Terms & Conditions
Top Up DateTerrorist Financing
Tax Deduction
TaxTDS
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS
2.1 ISSUER'S DISCLAIMER
This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus and
should not be construed to be a prospectus or a statement in lieu of a prospectus under theCompanies Act. The issue of the Debenturesto be listed on the WDM segment of the BSE is beingmade strictly on a private placement basis.Multiple copies hereof given to the same entity shall bedeemed to be given to the same person and shall be treated as such. This Information Memorandumdoes not constitute and shall not be deemed to constitute an offer or invitation to subscribe to theDebentures to the public in general.
As per the applicable provisions, it is not necessary for a copy of this Information Memorandum tobe filed or submitted to the SEBI for its review and/or approval. However pursuant to theprovisions of Section 42 of the Companies Act 2013 read with the Companies (Prospectus andAllotment of Securities) Rules, 2014, the Company undertakes to file the Private Placement OfferLetter with SEBI and the. Registrar of Companies (through the online portal provided by theMinistry of Corporate Affairs)within 30 days from the Deemed Date of Allotment as per theprovisions of the 2013 Act and the applicable rules thereunder.
This Information Memorandum has been prepared in conformity with the SEBI Debt ListingRegulations as amended from time to time and applicable RBI regulations governing privateplacements of debentures by NBFCs. This Information Memorandum has been prepared solely toprovide general information about the Issuerto Eligible Investors (as defined below) to whom it isaddressed and who are willing and eligible to subscribe to the Debentures. This InformationMemorandum does not purport to contain all the information that any Eligible Investor may require.Further, this Information Memorandum has been prepared for informational purposes relating to
this transaction only and upon the express understanding that it will be used only for the purposesset forth herein.
Neither this Information Memorandum nor any other information supplied in connection with theDebentures is intended to provide the basis of any credit or other evaluation and any recipient ofthis Information Memorandum should not consider such receipt as a recommendation to subscribeto any Debentures. Each potential Investor contemplating subscription to any Debentures shouldmake its own independent investigation of the financial condition and affairs of the Issuer, and itsown appraisal of the creditworthiness of the Issuer. Potential investors should consult their ownfinancial, legal, tax and other professional advisors as to the risks and investment considerationsarising from an investment in the Debentures and should possess the appropriate resources toanalyze such investment and the suitability of such investment to such Investor's particularcircumstances.
The Issuer confirms that, as of the date hereof, this Information Memorandum (including thedocuments incorporated by reference herein, if any) contains all the information that is material inthe context of the Issue and regulatory requirements in relation to the Issue and is accurate in allsuch material respects. No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Information Memorandum or in
any material made available by the Issuer to any potential Investor pursuant hereto and, if given ormade, such information or representation must not be relied upon as having being authorized by theIssuer. The Issuer certifies that the disclosures made in this Information Memorandum and/or thePrivate Placement Offer Letter are adequate and in conformity with the SEBI Debt ListingRegulations and the Companies (Prospectus and Allotment of Securities) Rules, 2014. Further, theIssuer accepts no responsibility for statements made otherwise than in the InformationMemorandum or another material issued by or at the instance of the Issuer and anyone placing
Infomation MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of aprospectus)
,^<.v^>—'—""-^^/^^Sy^COHPORATE OFFICE •"
2nd FLOORHEPHZIBAH COMPLEX
^^^-^ MANNUTHY
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
reliance on any source of information other than this Information Memorandum would be doing soat its own risk.
This Information Memorandum, and the respective contents hereof are restricted only for the
intended recipient(s) who have been addressed directly and specifically through a communicationby the Issuer and only such recipients are eligible to apply for the Debentures. All Investors arerequired to comply with the relevant regulations/guidelines applicable to them for investing in thisIssue. The contents of this Information Memorandum are intended to be used only by thoseInvestors to whom it is distributed. It is not intended for distribution to any other person and shouldnot be reproduced by the recipient.
No invitation is being made to any persons other than those to whom Application Forms along withthis Information Memorandumbeing issued have been sent. Any application by a person to whomthe Information Memorandumhas not been sent by the Issuershall be rejected without assigning anyreason.
The person who is in receipt of this Information Memorandumshall not reproduce or distribute inwhole or in part or make any announcement in public or to a third party regarding the contentshereof without the consent of the Issuer. The recipient agrees to keep confidential all information
provided (or made available hereafter), including, without limitation, the existence and terms of theIssue, any specific pricing information related to the Issue or the amount or terms of any fees
payable to us or other parties in connection with the Issue. This Information Memorandum Lettermay not be photocopied, reproduced, or distributed to others at any time without the prior writtenconsent of the Issuer. Upon request, the recipients will promptly return all material received from
the Issuer (including this Information Memorandum) without retaining any copies hereof. If anyrecipient of this Information Memorandum decides not to participate in the Issue, that recipientmust promptly return this Information Memorandum and all reproductions whether in whole or inpart and any other information statement, notice, opinion, memorandum, expression or forecast
made or supplied at any time in relation thereto or received in connection with the Issue to theIssuer.
The Issuer does not undertake to update the Information MemorandumLetter to reflect subsequentevents after the date of Information Memorandum and/or the Private Placement Offer Letter and
thus it should not be relied upon with respect to such subsequent events without first confirming itsaccuracy with the Issuer.
Neither the delivery of this Information Memorandum nor any sale of Debentures made hereaftershall, under any circumstances, constitute a representation or create any implication that there has
been no change in the affairs of the Issuer since the date hereof.
This Information Memorandumdoes not constitute, nor may it be used for or in connection with, an
offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is notauthorized or to any person to whom it is unlawful to make such an offer or solicitation. No action
is being taken to permit an offering of the Debentures or the distribution of this InformationMemorandumin any jurisdiction where such action is required. Persons into whose possession thisInformation Memorandum comes are required to inform themselvesof, and to observe, any suchrestrictions. The Information Memorandum is made available to potential Investors in the Issue on
the strict understanding that it is confidential.
2.4DISCLAIMER IN RESPECT OF JURISDICTION
This Issue is made in India to investors as specified under the paragraph titled "Eligible Investors"of this Information Memorandum, who shall be specifically approached by the Issuer. ThisInformation Memorandumdoes not constitute an offer to sell or an invitation to subscribe toDebentures offered hereby to any person to whom it is not specifically addressed. Any disputesarising out of this Issue will be subject to the exclusive jurisdiction of the courts and tribunals atChennai, India. This Information Memorandum does not constitute an offer to sell or an invitation
to subscribe to the Debentures herein, in any other jurisdiction to any person to whom it is unlawfulto make an offer or invitation in such jurisdiction.
2.5DISCLAIMER IN RESPECT OF RATING AGENCIES
Ratings are opinions on credit qualify and are not recommendations to sanction, renew, disburse or
recall the concerned bank facilities or to buy, sell or hold any security. The Rating Agencyhasbased its ratings on information obtained from sources believed by it to be accurate and reliable.The Rating Agencydoes not, however, guarantee the accuracy, adequacy or completeness of anyinformation and is not responsible for any errors or omissions or for the results obtained from the
use of such information. Most entities whose bank facilities/instruments are rated bythe RatingAgency have paid a credit rating fee, based on the amount and type of bank facilities/instruments.
2.6ISSUE OF DEBENTURES IN DEMATERIALISED FORM
The Debentures will be issued in dematerialised form. The Issuer has made arrangements with theDepositories for the issue of the Debentures in dematerialised form. Investors will have to hold theDebentures in dematerialised form as per the provisions of Depositories Act. The Issuer shall take
res allotted to the beneficiaryaccount maintained by the
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
2.2DISCLAIMER CLAUSE OF STOCK EXCHANGES
As required, a copy of this Information Memorandum has been filed with the BSEin terms of theSEBI Debt Listing Regulations. It is to be distinctly understood that submission of this InformationMemorandum to the BSE should not in any way be deemed or construed to mean that thisInformation Memorandum has been reviewed, cleared, or approved by the BSE; nor does theBSEin any manner warrant, certify or endorse the correctness or completeness of any of the
contents of this Information Memorandum, nor does the BSEwarrant that the Issuer's Debentureswill be listed or will continue to be listed on the BSE; nor does the BSEtake any responsibility forthe soundness of the financial and other conditions of the Issuer, its promoters, its management orany scheme or project of the Issuer.
2.3DISCLAIMER CLAUSE OF SEBI
As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of thisInformation Memorandum has to be filed with or submitted to the SEBI for its review / approval. Itis to be distinctly understood that this Information Memorandum should not in any way be deemedor construed to have been approved or vetted by SEBI and that this Issue is not recommended orapproved by SEBI. SEBI does not take any responsibility either for the financial soundness of anyproposal for which the Debentures issued thereof is proposed to be made or for the correctness ofthe statements made or opinions expressed in this Information Memorandum. However the
Company undertakes to file this Information Memorandum and/or the Private Placement OfferLetter with the Registrar of Companies (through the online portal provided by the Ministry ofCorporate Affairs) and SEBI within 30 days from the Deemed Date of Allotment as per theprovisions of the 2013 Act and the rules thereunder.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Investor with its depositary participant. The Issuer will make the Allotment to the Investors on theDeemed Date of Allotment after verification of the Application Form, the accompanyingdocuments and on realisation of the application money.
3.4CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OFDEBENTURES.
All securities where a fixed rate of interest is offered, such as this Issue, are subject to price risk.The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when
interest rates rise, prices of fixed income securities fall and when interest rates drop, the pricesincrease. The extent of fall or rise in the prices is a function of the existing coupon, days to maturityand the increase or decrease in the level of prevailing interest rates. Increased rates of interest,
which frequently accompany inflation and/or a growing economy, are likely to have a negativeeffect on the pricing of the Debentures.
3.5TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS
Special tax considerations and legal considerations may apply to certain types of investors,estors are ured to consult with their own financial, legal, tax and other advisors to
SECTION 3: RISK FACTORS
The following are the risks relating to the Company, the Debentures and the market in generalenvisaged by the management of the Company. Potential Investors should carefully consider all therisk factors stated in this Information Memorandum and/or Private Placement Offer Letterforevaluating the Company and its business and the Debentures before making any investmentdecision relating to the Debentures. The Company believes that the factors described belowrepresent the principal risks inherent in investing in the Debentures, but does not represent that thestatements below regarding risks of holding the Debentures are exhaustive. The ordering of the riskfactors is intended to facilitate ease of reading and reference and does not in any manner indicatethe importance of one risk factor over another. Potential Investors should also read the detailed
information set out elsewhere in this Information Memorandum and reach their own views prior tomaking any investment decision.
3.1REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER,
Potential Investors should be aware that receipt of the principal amount,(i.e. the redemptionamount) and any other amounts that may be due in respect of the Debentures is subject to the creditrisk of the Issuer. Potential Investors assume the risk that the Issuerwill not be able to satisfy theirobligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme
of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, thepayment of sums due on the Debentures may not be made or may be substantially reduced ordelayed.
3.2THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID.
The Debentures may be very illiquid and no secondaiy market may develop in respect thereof.Even if there is a secondary market for the Debentures, it is not likely to provide significantliquidity. Potential Investors may have to hold the Debentures until redemption to realize any value.
3.3CREDIT RISK & RATING DOWNGRADE RISK
The Rating Agency has assigned the credit ratings to the Debentures. In the event of deterioration inthe financial health of the Issuer, there is a possibility that the rating agency may downgrade therating of the Debentures. In such cases, potential Investors may incur losses on revaluation of theirinvestment or make provisions towards sub-standard/ non-performing investment as per their usual
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in iieu of a prospectus)
Potential Investors in the Debentures will be responsible for the lawfulness of the acquisition of theDebentures, whether under the laws of the jurisdiction of their incorporation or the jurisdiction inwhich they operate or for compliance by that potential Investor with any law, regulation orregulatory policy applicable to it.
3.10POLITICAL AND ECONOMIC RISK IN INDIA
The Issuer operates only within India and, accordingly, all of its revenues are derived from the
domestic market. As a result, it is highly dependent on prevailing economic conditions in India andits results of operations are significantly affected by factors influencing the Indian economy. Anuncertain economic situation, in India and globally, could result in a further slowdown in economicgrowth, investment and consumption. A slowdown in the rate of growth in the Indian economy
could result in lower demand for credit and other financial products and services and higherdefaults. Any slowdown in the growth or negative growth of sectors where thelssuer has arelatively higher exposure could adversely impact its performance. Any such slowdown couldadversely affect its business, prospects, results of operations and financial condition.
3.11RISKS RELATED TO THE BUSINESS OF THE ISSUER
(a)Majority of the Issuer's loans are unsecured and the clients of these unsecured loans are
of the high risk category and if the Issuer is unable to control the level of non-performing loans ("NPAs") in the future, or if the Issuer's loan loss reserves areinsufficient to cover future loan losses, the financial condition and results of operationsmay be materially and adversely affected.)
ns are unsecured and the clients of these unsecured loans arehere is uncertainty on the client's ability to fulfil its loan
LEGALITY OF PURCHASE3.9
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
determine any financial, legal, tax and other implications of this investment.
3.6ACCOUNTING CONSIDERATIONS
Special accounting considerations may apply to certain types of taxpayers. Potential Investors are
urged to consult with their own accounting advisors to determine implications of this investment.
3.7SECURITY MAYBE INSUFFICIENT TO REDEEM THE DEBENTURES
In the event that the Company is unable to meet its payment and other obligations towardsInvestors under the terms of the Debentures, the Debenture Trustee may enforce the Security asper the terms of security documents, and other related documents. The Debenture Holder(s)'
recovery in relation to the Debentures will be subject to (i) the market value of such securedproperty, (ii) finding willing buyers for the Security at a price sufficient to repay the DebentureHolder(s)'amounts outstanding under the Debentures. The value realised from the enforcement ofthe Security may be insufficient to redeem the Debentures.
3.8MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER ISSUBJECT COULD IMPAIR THE ISSUER'S ABILITY TO MEET PAYMENT OROTHER OBLIGATIONS.
The Issueris subject generally to changes in Indian law, as well as to changes in governmentregulations and policies and accounting principles. Any changes in the regulatory framework could
adversely affect the profitability of the Issueror its future financial performance, by requiring arestructuring of its activities, increasing costs or otherwise.
unions cuuiu ue maieuaiiy anu auveiseiy anecieu.
The Issuer's business operates through a large number of rural and semi urban
branches and is exposed to operational risks including fraud
The Issuer is exposed to operational risks, including fraud, petty theft and embezzlement, asit handle a large amount of cash due to high volume of small transactions. This could harmits operations and its financial position.
As the Issuer handle a large amount of cash through a high volume of small transactionstaking place in its network, the Issuer is exposed to the risk of fraud or other misconduct byits employees or outsiders. These risks are further compounded due to the high level ofdelegation of power and responsibilities that the Issuer's business model requires. Given thehigh volume of transactions processed by the Issuer, certain instances of fraud andmisconduct may go unnoticed before they are discovered and successfully rectified. Evenwhen the Issuer discovers such instances of fraud or theft and pursue them to the full extentof the law or with its insurance carriers, there can be no assurance that the Issuer will
recover any such amounts. In addition, the Issuer's dependence upon automated systems torecord and process transactions may further increase the risk that technical system flaws or
employee tampering or manipulation of those systems will result in losses that are difficultto detect.
The Issuer maintains an internal audit process to ensure the operations team follows thedefined procedures and reports any deviations to the operations staff and management team.
The Issuer also has a strong MIS system that has a wide range of data that can be used toerformance.
(b)
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
obligations as MFI clients typically do not have bank accounts or proper income proofverification so it can be difficult to verify all client details and assess the risk. Such non-performing or low credit quality loans can negatively impact our results of operations.
The Issuer has various procedures and process controls in place to mitigate the risk. All
group lending loans are provided under the Grameen Model and based on the joint liabilityof the group.
As of March 31, 2015, the gross NPA was Rs 4.73 crore on a gross portfolio of Rs.1016.08 crore (including managed / securitized portfolio of Rs. 288.52 crores).
The Issuer cannot assure that it will be able to effectively control and reduce the level of theNPAs of its Client Loans. The amount of its reported NPAs may increase in the future as aresult of growth of Client Loans, and also due to factors beyond its control, such as overextended member credit that it is unaware of. If the Issuer is unable to manage our NPAs oradequately recover its loans, the results of its operations will be adversely affected.
The current loan loss reserves of the Issuer may not be adequate to cover an increase in the
amount of NPAs or any future deterioration in the overall credit quality of Client Loans. Asa result, if the quality of its total loan portfolio deteriorates the Issuer may be required toincrease its loan loss reserves, which will adversely affect its financial condition and resultsof operations.
The members are poor and, as a result, might be vulnerable if economic conditions worsenor growth rates decelerate in India, or if there are natural disasters such as floods anddroughts in areas where the Issuer's members live. Moreover, there is no precise methodfor predicting loan and credit losses, and the Issuer cannot assure that it's monitoring andrisk management procedures will effectively predict such losses or that loan loss reserveswill be sufficient to cover actual losses. If the Issuer are unable to control or reduce the
level of its NPAs or poor credit quality loans, it's financial condition and results of itsoperations could be materially and adversely affected.
All of the loans the Issuer issues are due within approximately two years of disbursement.The relatively short-term nature of the Issuer's loans means that the Issuer's long-terminterest income stream is less certain than if a portion of its loans were for a longer term. Inaddition, the Issuer's customers may not obtain new loans from the Issuer upon maturity of
their existing loans, particularly if competition increases. The potential instability of theIssuer's interest income could materially and adversely affect the Issuer's results of
operations and financial position.
The loans given by the issuer are at fixed interest rate, and the tenor of the underlying assethas increase from one year to two year which has provided stability to the portfolio andinterest income and has also smoothen operating expense.
(d)The Issuer is exposed to certain political, regulatory and concentration of risks
Due to the nature of its operations, the Issuer is exposed to political, regulatoiy andconcentration risks. The Issuer believes a mitigant to this is to expand its geographicalreach and is consequently expanding operations in six states, namely, Tamil Nadu,
Maharashtra, Gujarat, Odisha, Karnataka and Rajasthan. If it is not effectively able tomanage such operations and expansion, it may lose money invested in such expansion,which could adversely affect its business and results of operations.
Large scale attrition, especially at the senior management level, can make it difficult for theIssuer to manage its business
If the Issuer is not able to attract, motivate, integrate or retain qualified personnel at levelsof experience that are necessary to maintain the Issuer's quality and reputation, it will bedifficult for the Issuer, to manage its business and growth. The Issuer depends on theservices of its executive officers and key employees for its continued operations andgrowth. In particular, the Issuer's senior management has significant experience in themicrofinance, banking and financial services industries. The loss of any of the Issuer's
executive officers, key employees or senior managers could negatively affect its ability toexecute its business strategy, including its ability to manage its rapid growth. The Issuer'sbusiness is also dependent on its team of personnel who directly manage its relationshipswith its members. The Issuer's business and profits would suffer adversely if a substantialnumber of such personnel leftthe Issuer or became ineffective in servicing its members overa period of time. The Issuer's future success will depend in large part on its ability toidentify, attract and retain highly skilled managerial and other personnel. Competition forindividuals with such specialized knowledge and experience is intense in this industiy, andthe Issuer may be unable to attract, motivate, integrate or retain qualified personnel at levelsof experience that are necessary to maintain its quality and reputation or to sustain orexpand its operations. The loss of the services of such personnel or the inability to identify,attract and retain qualified personnel in the future would make it difficult for us to managethe Issuer's business and growth and to meet key objectives.
(e)The Issuer's business and results of operations would be adversely affected by strikes,work stoppages or increased wage demands by employees
unionized. However, there can be no assurance that they. If the employees unionize, it may become difficult to
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
To mitigate the above risk, the Issuer maintains an internal audit process to ensure theoperations team follows the defined procedures and reports any deviations to the operationsstaff and management team. The Issuer also has a MIS system able to generate dataanalysis that can be used to monitor financial and operational performance.
(c)Loans due within two years account for almost all of the Issuer's interest income, and a
significant reduction in short term loans may result in a corresponding decrease in itsinterest income
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
maintain flexible labour policies, and could result in high labour costs, which wouldadversely affect the Issuer's business and results of operations.
(f)The Issuer^s insurance coverage may not adequately protect it against losses. Successful
claims that exceed its insurance coverage could harm the Issuer's results of operations
and diminish its financial position
The Issuer maintains insurance coverage of the type and in the amounts that it believes arecommensurate with its operations and other general liability insurances. The Issuer'sinsurance policies, however, may not provide adequate coverage in certain circumstances
and may be subject to certain deductibles, exclusions and limits on coverage.
In addition, there are various types of risks and losses for which the Issuer does notmaintain insurance, such as losses, due to business interruption and natural disasters,because they are either uninsurable or because insurance is not available to the Issuer on
acceptable terms. A successful assertion of one or more large claims against the Issuer thatexceeds it's available insurance coverage or results in changes in its insurance policies,
including premium increases or the imposition of a larger deductible or co-insurancerequirement, could adversely affect the Issuer's business, financial condition and results ofoperations.
(g)The Issuer requires certain statutory and regulatory approvals for conducting itsbusiness and the failure to obtain or retain them in a timely manner, or at all, mayadversely affect operations
NBFCs in India are subject to strict regulation and supervision by the RBI. Pursuant toguidelines issued by the RBI (circular dated August 3, 2012 and NBFC-MFI Directions)the Issuer is required to maintain it's status as a NBFC- MFI in order to be eligible forcategorization as priority sector advance for bank loans. See 'risk factor titled —CurrentMicrofinance Industry Challenges' for details. The Issuer requires certain approvals,
licenses, registrations and permissions for operating its business, including registration withthe RBI as a NBFC-MFI. Further, such approvals, licenses, registrations and permissionsmust be maintained/renewed over time, applicable requirements may change and the Issuermay not be aware of or comply with all requirements all of the time. Additionally, theIssuer may need additional approvals from regulators to introduce new insurance and other
fee based products to its members. In particular, the Issuer is required to obtain a certificateof registration for carrying on business as a NBFC-MFI that is subject to numerousconditions. In addition, its branches are required to be registered under the relevant shopsand establishments laws of the states in which they are located. The shops andestablishment laws regulate various employment conditions, including working hours,holidays and leave and overtime compensation. If the Issuer fails to obtain or retain any ofthese approvals or licenses, or renewals thereof, in a timely manner, or at all, its business
may be adversely affected. If the Issuer fails to comply, or a regulator claims that it has notcomplied, with any of these conditions, the Issuer's certificate of registration may besuspended or cancelled and it shall not be able to carry on such activities. If the Issuer failsto comply with the NBFC-MFI Directions and fail to maintain the status of NBFC-MFI, itwill not be eligible for priority sector loans from the Indian banking sector and may alsoattract penal provisions under the RBI Act, 1934 for non-compliance.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
3.12 RISKS RELATED TO PROPOSED SMALL FINANCE BANK (SFB)
The Company has been granted in principle approval for a Small Finance Bank license byRBI. But there might be the following operational risks associated with it
•The business model of a SFB and the regulatory framework are new in India, so
there can be no assurance that we will be able to implement the SFB modelsuccessfully in India.
•We have no operating history in the banking business and we are subject to all ofthe business risks and uncertainties associated with setting up a new business ingeneral, and with banking operations in particular.
•As an SFB, we may not be able to continue to access the same sources of funds thatour microfmance business currently accesses.
•All assets and Liabilities of ESAF Microfmance will be moved to SFB once theSFB is formed, we may not be able to continue offering receivable as a security.
The audited financial statements of the Issuer for the yearended 31.03.2015 are set out in AnnexureVhereto.
SECTION 4: FINANCIAL STATEMENTS
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
5.2 Documents Submitted.to Debenture Trustee
The following documents have been / shall be submitted to the Debenture Trustee inelectronic form (soft copy) at the time of allotment of the Debentures:
(a)Memorandum and Articles of Association of the Issuer and necessary resolutio^s) for theallotment of the Debentures;
(b)Copy of last 3 (Three) years audited Annual Reports;(c)Statement containing particulars of, dates of, and parties to all material contracts and
agreements;(d)Latest audited / limited review half yearly consolidated (wherever available) and standalone
financial information (profit & loss statement, balance sheet and cash flow statement) andauditor qualifications, if any;
(e)An undertaking to the effect that the Issuer would, until the redemption of the debtsecurities, submit the details mentioned in point (d) above to the Debenture Trustee withinthe timelines as mentioned in the Simplified Listing Agreement issued by SEBI vide
IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended from time to
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
SECTION 5: REGULATORY DISCLOSURES
The Information Memorandum is prepared in accordance with the provisions of SEBI Debt ListingRegulations and in this section, the Issuer has set out the details required as per Schedule I of theSEBI Debt Listing Regulations.
5.1 Documents Submitted to the Exchanges
The following documents have been / shall be submitted to the BSE:
(a)Memorandum and Articles of Association of the Issuer and necessary resolution(s) for theallotment of the Debentures;
(b)Copy of last 3 (Three) years audited Annual Reports;(c)Statement containing particulars of, dates of, and parties to all material contracts and
agreements;(d)Copy of the board resolutionauthorizing the borrowing and list of authorized signatories;(e)Certified true copy of the resolution passed by the Company at the extra ordinary general
meeting held on March 21, 2014authorising the Company to borrow, upon such terms asthe Board may think fit, upto an aggregate limit of INR 1,500 Crore (Rupees One Thousandand Five Hundred Crore Only);
(f)Certified true copy of the resolution passed by the Company at the extra ordinary generalmeeting held on March 21,2014 authorising the Company to create security for borrowings;
(g)Certified true copy of the resolution passed by the Company at the annual general meetingheld on September 28,2015 authorising the Company to issue non-convertible debenturesfor the current financial year to borrow, upon such terms as the Board may think fit, upto an
aggregate limit of INR 2000 Million;(h)An undertaking from the Issuer stating that the necessary documents for the creation of the
charge, where applicable, including the Debenture Trustcum MortgageDeed would beexecuted within the time frame prescribed in the relevant regulations/acts/rules etc and thesame would be uploaded on the website of the BSE, where the debt securities have beenlisted, within 5 (five) working days of execution of the same.
(i)Where applicable, an undertaking that permission / consent from the prior creditor for asecond or paripassu charge being created, in favor of the trustees to the proposed issue hasbeen obtained; and
(j)Any other particulars or documents that the recognized stock exchange may call for as itdeems fit.
Credit Rating Agency for the Issue:Brickwork Ratings India Private LimitedAddress:3ri Floor, Raj Alkaa ParkKalena Agrahara
Bannerghatta RoadBengaluru-560 076
Mr. Paul Joy Palocaren
pauliov@esaf.inwww.esafmicrofin.com
M/s. Deloitte Haskins & SellsAddress: 1" Floor, Wilmont Park Business Centre,
Warriam Road, Kochi 682 016
GDA Trusteeship LimitedAddress: Office 1,2, and3,4* Floor,
Rahimtoola House, 7 Homji St,Fort, Mumbai400001Maharashtra, India
Link Intime India Pvt LimitedAddress: C-13, Pannalal Silk Mills CompoundL.B.S. Marg, Bhandup (West)Mumbai 400 078Maharashtra, India
Registrar to the Issue:
Trustee to the Issue:
Fax No.:
Contact Person:
Email:Website of Issuer:
Auditors of the Issuer:
3RDESAF Microfinance and Investments Private LimitedNO 8/9, MANSUK BUILDINGS, FLAT NO.3A,FLOORGangadeeswara Koil St,Purusawalkam, Chennai 600084Hephzibah Complex, PB No. 12, Mannuthy PO, Thrissur680651, KeralaMr. Padmakumar K
B-07-00652U65910TN1996PTC03665O0487 2373813
Corporate Office of Issuer:
Compliance Officer of Issuer:CFO of IssuenMr. Sabu ThomasRegistration Number:Corporate Identification Number:Phone No.:
Name:
Registered Office of Issuer:
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Inhumation Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
time, for furnishing / publishing its half yearly/ annual resultsand any other information asprescribed in SEBI's circular no. CFD/CMD/6/2015 dated October 13, 2015, as amendedfrom time to time and/or any other notification, circular, press release issued by theSEBI/RBI, from time to time. Further, the Issuer shall within 180 (One Hundred andEighty) days from the end of the financial year, submit a copy of the latest annual report tothe Debenture Trustee and the Debenture Trustee shall be obliged to share the detailssubmitted under this sectionwith all 'Qualified Institutional Buyers' (QIBs) and otherexisting debenture-holders within 2 (Two) working days of their specific request.
5.3 Name and Address of Registered Office of the Issuer
5.4 A brief summary of business / activities of the Issuer and its line of business:
(a)Overview
ESAF Microfinance and Investments Pvt. Ltd. (EMFIL) is one of the oldest playersin the Micro Finance Industry and has been active since the last 23 years. EMFIL is
registered as a Non- Banking Finance Company (NBFC) with the Reserve Bank ofIndia and is working in the space of providing micro credit along with acombination of micro financial products that benefit the bottom of the pyramid.Company is spread out over 9 states, ie, Kerala, Tamil Nadu, Maharashtra,Chhattisgarh Madhya Pradesh, Jharkand, Bihar, West Bengal and Pondichery. The
company extends small tickets loans in the form of income generation loan, generalloan, micro enterprise loan and housing loan. As on 31st March 2015, EMFIL isoperational in 73 districts all over India, and has a gross loan portfolio outstandingof Rs.1016 Cr from 5.7 lakh borrowers managed through a network of 224branches.
In November 2014 the RBI introduced the "Guidelines for licensing of smallfinance banks in the private sector" guidelines. The Company had applied for anSFB license under the applicable guidelines and in October 2015, the RBI grantedthe Company SFB In-Principle Approval to establish an SFB, subject to the termsand condition of such approval.
In the light of the issue of in-principle license of a Small Finance Bank to theCompnay, the Company plans to float a new Small Finance Bank within the next 18months as stipulated by RBI. All the employees of ESAF Microfinance will betransferred to the Small Finance Bank. The Company has submitted the annualbranch expansion plans of the SFB for the initial five years to RBI for priorapproval. At least 25 per cent of our branches are planned to be in unbanked ruralcentres.
As a Small Finance Bank, ESAF will continue serving the underserved segments ofthe society through its different financial products. In addition to the currentoffering of small ticket loans to clients, ESAF plans to introduce new verticalswhich will include a full range of services (credit, deposit and transactions) whichwill further promote financial inclusion.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Nominated by Dia Vikas Capital PrivateLimited, an investor of the Company.Mr. Singhis the Executive Director, investments of DiaVikas and has over 20 years of experience inpromotion development and financing of Micro,Small and Medium Enterprises (MSME) andmicrofinance.
Worked as Assistant Director in Agriculturedepartment, Government of Kerala for 13 yearsand had also worked in Indian Social Institute,Delhi as program officer for 4 years.
The Founder and Managing Director of ESAF,holds a Masters Degree in BusinessAdministration. He has over 26 years ofexperience, of which more than 16 years is in theMicrofinance sector. He is a Board Member ofSa - Dlian and Chairman of KAMF1 (KeralaAssociation of Microfinance Institutions).
Experience
MastersDegree inSocial Work aswell as inSystemsAdministration
Master's inEnv and Eco
MBA
Qualification
51
51
Age
IndependentDirector
ExecutiveDirector
ChairmanandManagingDirector
Designation
Saneesh Singh
George Thomas
K Paul Thomas
Name
Mr.OaomeKJohn, COO
I Mr.AnandNair.CIO
Mr.BoscoJoseph. Mr. CHead-Admia'H
Mr. Paul Joy.Head - Resource Mobilization I
Mr. Paul Thomas,Chal'man and Managing Director
Board of Directors
Mr. Jacob Samuel,Soda! Performance
LJ-
Mr.AMnrA.Risfc .
Mr. Roy K. Alex,Liaison and Business
Development
Mr. Jacob Samuel,Cor^o^^te
Communication
Board of Directoi^
Corporate Structure/Organization Structure(b)
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Bosco Joseph is a seasoned Human
Mr. Joy has rich experience in bankingand fund raising space. Previously he hasworked with South Indian Bank, Suzlonand Muthoot Fincorp in middle andsenior management cadre
Mr. Sabu Thomas has over 10 years of
experience in accounts and financialmarkets. He has been serving as the
Finance Controller of Kerala FinanceCorporation- a Public Sector undertakingof Govt. of Kerala, before joining ESAFMicrofinance.
Worked as Assistant Director inAgriculture department, Government of
Kerala for 13 years and had also workedin Indian Social Institute, Delhi asprogram officer for 4 years.
Worked with IFFCO, world's largest
cooperative owned fertilizer companybefore starting ESAF.
Past job & Experience
LLB
MBA
CharteredAccountant
Master's in
Env and Eco
MBAQualifications
GM, Admin
Head-Resource
Mobilization
Chief FinancialOfficer
Director,
Operations
ManagingDirector
Designation
Mr. Bosco Joseph
Mr. Paul Joy
Mr. Sabu Thomas
Mr. George Thomas
Mr. K. Paul Thomas
Name
Senior Management
Non - executive Director and a nominee ofESCCO. She has experience at field level as asangam member and a cluster leader.
Mr. Christopher Jebakumar is the nomineedirector of IDBI. He is currently working asDeputy General Manager, Retail Banking Group,IDBI Bank heading the Credit Processing Centreat Chennai.
Former CGM, SIDB1 and currently IndependentDirector of ESAF Microfinance. He also servesin the Board of Muthoot Fincorp Ltd., UjjivanFinancial Services (P) Ltd. and Kerala FinancialCorporation (Nominee of SIDB1).
He is a former General Manager of Canara bank,having more than 3 decades of experience inbanking and financial sectors. He is also aconsultant to Sa - Dhan and is in the Boards ofvarious MF1 forums and bodies. He was theChairman of South Malabar Grameen Bank andalso holds a Masters Degree in agriculture.
MBA, CAIIB,PGinHorticulture
Bachelorsdegree inScience
PGinAgriculture
45
42
67
64
Non-ExecutiveDirector
IndependentDirector
IndependentDirector
IndependentDirector
Ms. UshaSivaraman
ChristopherJebakumar
VikramanAmpalakkat
PrabhaRaveendranathan
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Company Secretary with more than 3 •
years of experience working in NBFC-MFI, working with ESAF Microfinancefor the last 1 and half years
Ms. Mereena is the co-founder of ESAFand was actively involved in theformation of ESAF and the operations inthe initial years. She heads the HumanResource grievance cell, a department
which is responsible for redressing thegrievance of customers and employees.
Mr. Sibu is heading the non creditproduct groups, and has been working
with ESAF for the last 9 years. He hasgot wide exposure in finance, internal
audit and other operations of ESAF. Hehas worked at various levels in thefinance department of differentorganizations.
Mr. Padmakumar is the CompanySecretary of EMFIL, heading the
corporate governance and business
planning department. He has 6 years ofexperience in capital structuring,business planning, accounting, corporate
governance and secretarial practice in
both Central Government and StateGovernment PSUs.
Mr. George K. John is a post graduate insocial works and started working inESAF in 1993 as a field officer and wasthe manager operations, Kerala before
relocating to Nagpur in 2004 to head theCentral Zone Operations. He has 15years of experience in communitydevelopment and grass root leveloperations of microfinance. Currently, heis working as the GM Pan IndiaOperations and overseeing the IT sectionof the Company
Resources Management &Administrationprofessional and HealthcareAdministrator. He has over 20 years'experience in various capacities inHuman Resources Management,
Administration, Industrial Relations andHealthcare Administration in diverseindustries.
CS
MA
BCom
B Com, ACS
B Com, MSW
CompanySecretary
GM HR,Grievance cell
Head ofProductgroups, NonCredit
ChiefComplianceOfficer
GM,Operations andIT
Mr. Ranjith Raj
Mrs. Mereena P
Mr. SibuKA
Mr. Padmakumar K
Mr. George K John
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
0.69%'
544.9661.75
3617.788069.44
11012.54
42286.45
23902.01
31872.32
13281.72
17809.221063.72
19980.16
1352.60
20445.75
6255.96
f 2013FY
0.99%1026.75
83.50
5812.4412070.7313673.07
60408.92
33562.69
44178.33
11857.06
21380.511452.29
30369.36
958.15
20443.37
13003.77
2014 •
' FY
0.47%
2249.97524.66
9191.98
20123.1728852.74
101608.68
50935.83
72780.51
11614.38
24252.04
2337.8339232.18
2057.09
32812.52
14755.92
.•2015
. FY
Gross NPAPATProvisioning & Write-offs
Interest Expense
Interest Income
Off Balance Sheet Assets
Assets Under Management(including managed portfolio)
Current Liabilities andProvisions
Current Assets
Current Investments
Cash and Cash EquivalentsNon Current AssetsNet Fixed Assets
Current Maturities of LongTerm Borrowing
Short Term Borrowing
Non-Current Maturities of Loan
Term Borrowing
Total Debt (Including ManagedPortfolio)
Net worth
Parameters'
Key Operational and Financial Parameters for the last 3 audited ycarson aconsolidated basis (wherever available) else on a standalone basis.
Rs. Lakhs
(d)
Mr. Christudas KV has got 30 years ofwork experience in Government
industries out of these 23 years in KeralaMinerals and Mines Ltd, the largestGovernment owned enterprise in
Kerala.He was an internal auditor for
ISO management systems: ISO14001:2004 and OHSAS 18001:1999and trainer for ISO Management System.
PG in Appliedindustrialchemistry, PGDiploma inindustrialpollution andcontrol
GMLivelihoodSupportServices
Mr. Christudas KV
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
1,14,48,35,15047,38,02,00067,10,33,150
1,300,000,000
700,000,000600,000,000
TOTAL47,38,020 Preference shares of Rs. 100 each6,71,03,315 Equity shares of 10 eachIssued, Subscribed and Fully Paid- upTotal
Authorised7,00,00,000 Equity shares of 10 each6,00,000 Preference shares of Rs. 100 each
Share Capital
(a)Details of Share Capital as on last quarter end, i.e.,30-9-2015: Details of Share Capitalas on last quarter end, i.e.,30-9-2015:
(e)Project cost and means of financing, in case of funding new projects:Not Applicable.
5.5 Brief history of Issuer since its incorporation giving details of its following activities:
ESAF Microfinance & Investments (P) Ltd (EMFIL) is a an NBFC-MFI having presence in 9 statesin India with 566872 borrowers with loan outstanding of Rs 1016.09 Crore as on March31, 2015. Ithas disbursed Rs 4176.26 Crore till March 2015 since it started Microfinance programme in 1995.
EMFIL is promoted by the promoters of ESAF Society which is a leading NGO established in 1992with the objective of working for the poor and the marginalized sections of the society. ESAFstarted its Micro Enterprise Development programmes in 1995 in three villages of Thrissur district.The programme expanded to the coastal areas of Thrissur in 1998 after receiving a seed capitalproject from Grameen Trust - Dhaka. Within a short span of time, the Society became a majormicrofinance institution in the country.ESAF acquired a Non Banking Finance Company "Pinnai Finance & Investments Private Limited",(registered as an NBFC with RBI in 1996) in February. 2006. It was renamed as ESAFMicrofinance & Investments (P) Ltd and transferred its microfinance operations to NBFC in 2008.The Company has been converted to an NBFC-MFI with effect from January 7, 2014.
In November 2014 the RBI introduced the "Guidelines for licensing of small finance banksin the private sector" guidelines. The Company had applied for an SFB license under theapplicable guidelines and on October 7, 2015, the RBI granted the Company SFB In-Principle Approval to establish an SFB, subject to the terms and condition of suchapproval.
3.07%
17.38%
0.53%
0.00%
25.20%
0.16%
1.52%
16.70%
0.00%
Tier II Capital Adequacy Ratio
(%)
Tier I Capital Adequacy Ratio(%)
NetNPA(%)
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
8588115 equity shares of Rs. 10 each were issued toSIDBI Trustee Company Ltd on private Placementbasis at a premium of Rs.19.11 per share
541260 Sweat Equity shares of Rs.10/- each wereissued to Mr K Paul Thomas, Chairman andManaging Director at a premium of Rs.12 per shares
761980 Compulsorily Convertible Preference sharesof Rs.100 each were converted-into equity shares ofRs. 10 each at a premium of Rs.5 per share
The Authorized Capital of the Company wasincreased from Rs. 120 cr to Rs. 130cr
The paid up capital was increased to Rs1,082,107,400 in the board meeting dated 22-1-2015
Authorized Capital of the Company was restructuredby converting 10,000,000 nos of equity shares topreference shares and enhancing authorized capital toRs. 120,00,00,000/- divided into 60000000 equityshares of Rs. 10/- each and 6000000 preferenceshares Rs. 100/each
Authorized Capital of the Company was increasedfrom Rs. 55,00,00,000/- divided into 50000000equity shares of Rs. 10/- each and 500000preference shares Rs. 100/ each to Rs.
75,00,00,000shares of divided into 50000000 equityshares of Rs. 10/- each and 500000 preference
shares Rs. 100/each
The paid up capital was increased to Rs.500,000,000/- in the board meeting dated 21.3.2012.No AGM/EGM as authorised capital remained atRs.50,00,00,000/-
The paid up capital was increased to Rs.437,050,000/- in the board meeting dated29.12.2010, and it was again increased to
483,020,000 in the board meeting dated 31.3.2011.No AGM/EGM as authorised capital remained atRs.50,00,00,000/-
The paid up capital was increased to Rs.313,050,000/- in the board meeting dated 31/3/2010.No AGM/EGM as authorised capital remained atRs.50,00,00,000/-
Particulars
1,144,835,150
1,058,954,000
1,053,541,400(2015-16)
1,082,107,400(2015-16)
1,082,107,400(2014-15)
1,072,107,400(2013-14)
500,000,000(2012-13)
500,000,000(2011-12)
48,302,0000(2010-11)
313,050,000(2009-10)
Issued and Paidup Capital
(Face Value)
Grand Total
29.09.2015
28.09.2015
26-09-2015
29-07-2015
22-1-2015
21-03-14
27-09-12
Date of change (AGM/EGM)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(b)Changes in its capital structure as on last quarter end i.e., for the last five years:
e Company as on the latest year end, i.e, 30-9-.2015:
(d)Details of any Acquisition or Amalgamation in the last 1 (one) year: N.A.
(e)Details of any Reorganization or Reconstruction in the last 1 (one) year: N.A.
Nil
Nil
Nil
Nil
Nil
Nil
3,920,000
32,486,000
38,981,120
203,099,970
Equity SharePremium
(Rs.)
157,670,000
3,130,500,000
437,050,000
483,020,000
500,000,000
512,607,400
522,607,400
57,973,940
58,515,200
67,103,315
Equity ShareCapital (Rs.)
Cumulative paid-up capital(Rs.)
157,670,00
313,050,00
437,05,000
483,020,00
50,000,000
51,260,740
52,260,740
5,713,200
541260
8588115
No. ofequityshares
Cash
Cash
Cash
Cash
Issue ofshares foreonsideration otherwise thanin cash
sweatequity
sweatequity
Conversion of
Preference Shares
SweatEquityShares
PrivatePlacemen
t
Nature ofAllotmcn
t
527,000
155,380,000
124,000,000
45,970,000
Otherwise thanin cash
Otherwise thanin cash
Otherwisethanin cash
Conversion ofPrefere
neeShares
Otherwise thanin cash
Cash
Consuleration
10
10
10
10
10
10
13.92
15.00
22.00
29.11
IssuePrice(Rs.)
10
10
10
10
10
10
10
10
10
10
FaceValue(Us.)
52,700
15,538,000
12,400,000
4,597,000
1,698,000
1,260,740
1,000,000
5,713,200
541260
8588115
No of EquityShares
2/1/2010
31/03/2010
29.12.2010
31.03.2011
21.03.2012
04.12.2014
22-1-2015
26.09.2015
28.09.2015
29.09.2015
Date ofAllotment
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Infoimafion Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(c)Equity Share Capital History of the Company as on last quarter end30-9-2015 for thelast five years:
Equity51.00%34,224,300
ESAF SWASRYA MULTI-STATE CO-OPERATIVECREDIT SOCEITY LTD
No. of
Sharesheld inDcmat. form
Ai. 'holdingNo of SharesClass"
"Sr No*
Notes: Details of shares pledged or encumbered by the promoters (if any): N.A.
List of top 10 holders of equity shares of the Company as on the latest quarter end,30-9-2015:
100%
2.01%
57.19%
41.11%"..of Molding
4,738,020
95,000
2,800,505
1,842,515
Niimhri ntsluies
NA
NA
NA
Total CCPS
ESAF Retail Pvt Ltd
Dia Vikas Capital Private Limited
ESAF Swasraya Multi-State Co-Operative CreditSociety Ltd
''. ^ ^^" "• ."
Muieholdei
3
2
1
VNo.
Compulsorily Convertible Preference Share Capital100.00%Total
67,103,3156.03%4,043,700Individuals
NA
4.47%30,00,000Manaveeya Development Finance Pvt. Ltd.
NA
4.70%31,54,900ESAF Staff Welfare Trust
NA12.80%8,588,115NASIDBI Trustee Company Ltd
21.00%Dia Vikas Capital Pvt. Ltd.
14,092,300NA
51.00%34,224,300ESAF Swasrya Multi-State Co-OperativeCredit SocietyLtd.
NA% of Holding
' No.oL,_.shares^Class'
Shareholding pattern of the Company as on last quarter end, i.e.30-9-2015 :(a)
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
LIMITEDPRIVATE
7. SANMAGARMENTS
LIMITEDPRIVATEPRODUCTS INDIA
6. RHEMA DAIRYSERVICESDEVELOPMENT
5. PRACHODHANLimited
3. ESAF Homes &Infrastructure
Private Limited4. ESAF Retail Private
LIMITEDCOMPANYPRODUCERS
2. ESAFSWASRAYALIMITEDPRIVATECARE SERVICES
I. ESAF HEALTH
DirectorshipDetails of Other
Kerala, INDIATRICHUR, 680651,
TC 14/750,KADAMBELILHOUSE,MANNUTHY(P.O),
Address
10/10/2005
appointmentDate of
Age
'.' t-S f-ic^^v
00199925DIRECTORMANAGINGCHAIRMAN &K PAUL THOMAS
Designation, DIN
'Name of Director,
No.
s.
5.7 Following details regarding the directors of the Company*:(a)Details of the current directors of the Company: (As on September 30,2015)
This table sets out the details regarding the Company's Board of Directors as on date of theInformation Memorandum:
NilNilNilNil
Nil
Nil
Nil
Nil
Nil
0.13%
0.14%
0.15%
0.15%
4.47%
4.70%
4.81%
12.80%
21.00%
87,200
95,000100000100000
3000000
3154900
3,225,000
8,588,115
14,092,300
EquityEquity
Equity
Equity
Equity
Equity
Equity
Equity
Equity
MR. GEORGE THOMASMRS. MEREENA PAULTHOMAS JOSEPHRAPHAEL PARAMBI
MANAVEEYADEVELOPMENT ANDFINANCE P LTD
ESAF STAFF WELFARETRUST (held in the name of Mr.George Thomas)
MR. K PAUL THOMAS
SIDBI Trustee Company Ltd
DIA VIKAS CAPITALPRIVATE LIMITED
10987
6
5
4
3
2
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
1. GENERACIONEOLICA INDIALIMITED
18/1065, THINKAL,P.O. ARAMADA,TRIVANDRUM,
28/02/2011PRABHARAVEENDRN
ESAFMICROFINANCEANDINVESTMENTSPRIVATELIMITEDESAF SWASRAYAPRODUCERSCOMPANYLIMITEDESAF Homes &Infrastructure
Private LimitedESAF Retail PrivateLimitedESAF HEALTHCARE SERVICESPRIVATELIMITEDPRACHODHANDEVELOPMENTSERVICESRHEMA DAIRYPRODUCTS INDIAPRIVATELIMITEDRHEMA MILKPRODUCERCOMPANYLIMITEDBARUGUR HIREPURCHASE ANDLEASINGCOMPANYLIMITED
AYRUKUZHIYILHOUSE, MUDICODE,PATTIKADU, 680652,Kerala, INDIA
2.
1.
GEORGETHOMAS
EXECUTIVEDIRECTOR01334307
02/09/2006
RHEMA MILKPRODUCERCOMPANYLIMITEDESAFENTERPRISEDEVELOPMENTFINANCELIMITED
10.ESAFNIDHIKERALA LTD
11. CEDAR AGRISOLUTIONSPRIVATELIMITED
9.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
{This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
MICROCREDIT •6. CASHPOR
LimitedEast) Microfmance
5. RGVN (NorthLimitedInvestment Private
4. Mi India Capital &LIMITEDPRIVATEMICROFINANCE
3. SHIKHARLIMITEDSERVICES
2. MARGDARSHAKFINANCIAL
LIMITEDPRIVATEMICROFINANCE
1. ADHIKAR
NTT
LIMITEDMICROFINANCE
3. SAMASTA
INVESTMENTSPRIVATELIMITED
ANDMICROFINANCE
2. ESAFLIMITEDFINCORP
1. MUTHOOT
LIMITEDPRIVATEINVESTMENTSANDMICROFINANCE
3. ESAFLIMITEDPRIVATESERVICESFINANCIAL
2. GRAMEEN
56, GURGAON,122011, Haryana,INDIA
GURGAON SECTORCITY PHASE-5, -PARK PLACE, DLFFLAT NO. 224, DLF
Tamil NaduChennai, 600090,Street,, Besant Nagar,H 124/4,33rd Cross
ROAD,EDAPPALLY,KOCHI, 682024,Kerala, INDIA
ELAMAKKARAAPARTMENTS,G-3 V B ROYAL
INDIA695032, Kerala,
29/05/2015
29/09/2014
ju/uy/^uuo^n/AQ/^nno
I!!VE.S7/V7^?SS^ r\
SANEESH SINGH
JebakumarMr. Christopher
01978341DIRECTOR
VIKRAMANAMPALAKKAT
01828812DIRECTOR
g
7
6
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
APPOINTMENT
20/06/2009(Appointment of
Mr. Saneesh
Singh in place ofMs. KolasserilChandramohan
Ranjani)
30.09.2008(ResignationO
05.11.2014(Appointment ofUsha sivaraman
in place ofSrikumari)
Director of the
company since(in case of
resignation)
05/11/2014
29.05.2015
31.07.2015
28.09.2015
Date ofAppointment/Resignation
07010877
02254868
00707735
07300158
DIN
Nominee Director
Nominee Director
Independent Director
Nominee Director
Designation
Srikumari
Ms. KolasserilChandramohan Ranjani
(Mr. Saneesh Singh)
Cherian Thomas
Usha Sivaraman
(Srikumari)
Name
^Company to disclose name of the current directors who are appearing in the RBIdefaulter list and/or ECGC default list, if any: Nil
Details of change in directors since last three years:(b)
NIL
7. GROWINGOPPORTUNITYFINANCE(INDIA)PRIVATELIMITED
8. ESAFMICROFINANCEANDDIVESTMENTSPRIVATELIMITED
42 ANNAI INDIRANAGAR,KAVUNDAMPALAYAM COIMBATORENORTH,KAVUNDAMPALAYAM, COIMBATORE -641030
28.09.2015
USHAS0730015810
Information Memorandum•Private & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
hypothecationBook debthypothecationBook debtSecurity
7
16
ntslimeinstaofNo
24
51
n
Loaofor
Ten
6.43
2.81
1531.03.20on
ding asOutstan
15.00
5.00
ntAmou
sementDisbur
5.00
5.00
ntAmouon
Sancti
TermLoanTermFacility
AXTS Rank
Andhra Bank
Bank/FI Name
(Rs. Crores)
5.9 Details of borrowings of the Company, as on latest year end 31-3-2015
(a)Details of Secured Loan Facilities:
Details of change in auditors since last three years: N.A.(b)
2013Auditor since :
682016Warriam Road, Kochi-
Business Centre,First Floor, Wilmont Park
Address
SellsM/s Deloitte Haskins &
Name
^Company to disclose name of the current directors who are appearing in the RBI defaulter listand/or ECGC default list, if any: Nil
5.8 Following details regarding the auditors of the Company:
(a)Details of the auditor of the Company:
APPOINTMENTAPPOINTMENT
24/09/2011RESIGNATION
APPOINTMENT
31/10/2011RESIGNATION
APPOINTMENTRESIGNATION
31/03/2010RESIGNATION
07/10/2008RESIGNATION
01/04/2008RESIGNATION
APPOINTMENT
24/09/201124/09/2011
31/10/201131/10/2011
15/12/201218/03/201304/12/2013
29/09/2014
29/09/2014
29/09/2014
29/09/2014
0352526001828812
0352526005116307
051163070649030906490309
02586490
02361501
00492524
06956160
Non Executive DirectorNon Executive Director
Non Executive DirectorNon Executive Director
Non Executive Director
Non Executive DirectorNon Executive Director
Non Executive Director
Non Executive Director
Non Executive Director
Nominee Director
Suja SajiPrabha Raveendranathan
Suja SajiSreedevi Venugopal
Sreedevi VenugopalEngadiyoor Vasu LathaEngadiyoor Vasu Latha
Sundarrao AnandaJohnvivekasugunaNamala
Idicheria Ninan
Rajan Samuel
Mr. ChristopherJebakumar
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
12
12
12
12
27
27
27
19
19
19
19
37
37
36
36
36
36
.35
35
35
8
8
36
7
7
36
36
12
12
27
27
27
19
19
19
19
37
37
36
36
36
36
35
35
35
24
25
36
24
24
11.25
11.25
7.00
0.00
10.00
3.83
0.00
7.11
3.89
3.79
0.22
6.00
3.75
3.47
3.33
2.57
1.50
10.00
3.80
2.61
10.00
0.94
12.75
15.00
17.14
15.00
15.00
7.00
14.00
10.00
4.00
5.00
8.00
7.00
9.75
4.00
9.00
15.00
5.00
10.00
5.00
5.00
10.00
10.00
10.00
10.00
7.50
15.00
15.00
20.00
15.00
15.00
7.00
14.00
10.00
4.00
5.00
8.00
7.00
9.75
4.00
9.00
15.00
5.00
10.00
5.00
5.00
10.00
10.00
10.00
10.00
7.50
15.00
15.00
20.00
TermLoa
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
Term
Loan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLLoan
FederaUJank
Federal Bank
ESCCO
ESCCO
Dhanlaxmi Bank
Dhanlaxmi Bank
Dhanlaxmi Bank
DevelopmentCredit Bank
DevelopmentCredit Bank
DevelopmentCredit Bank
DevelopmentCredit Bank
Dena Bank
Dena Bank
Corporation Bank
Corporation Bank
Central Bank ofIndia
Central Bank ofIndia
Canara Bank
Canara Bank
Canara Bank
BNP Paribas
BNP Paribas
Bank ofMaharashtra
AXIS Bank
AXIS Bank
Private & Confidential
For Private Circulation Onlyirandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumDate; November 16,2015
(This Information Memoi
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
18
18
18
18
12
12
24
15
24
33
33
24
8
60
24
24
24
8
8
48
66
36
12
12
18
18
18
18
36
36
27
15
24
36
36
27
30
60
27
27
27
24
24
48
66
36
36
36
1.67
5.00
2.92
3.33
18.00
2.50
4.38
3.75
8.13
4.44
13.94
64.17
5.00
3.06
8.75
14.58
9.17
10.00
4.42
0.03
0.50
0.80
9.17
9.17
3.00
10.00
7.50
10.00
18.00
10.00
5.00
5.00
15.00
10.00
20.00
15.00
40.00
25.00
15.00
25.00
20.00
10.00
15.00
0.05
0.50
1.25
10.00
10.00
00
10.00
7.50
10.00
18.00
10.00
5.00
5.00
15.00
10.00
20.00
15.00
40.00
25.00
15.00
25.00
20.00
30.00
15.00
0.05
0.50
1.25
10.00
10.00
Term
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
Term
Loan
TermLoan
TermLoan
TermLoan
TermLoan
Term
Loan
Term
Loan
TermLoan
TermLoan
Term
Loan
TermLoan
TermLoan
VehicleLoan
TermLoan
TermLoan
TermLoan
TermLoan
Mas FinancialServie
Mas FinancialServices Limited
Mas FinancialServices Limited
Mas FinancialServices Limited
Manaveeya
Development &Finance Pvt Ltd
ManaveeyaDevelopment &Finance Pvt Ltd
ING Vysya Bank
ING Vysya Bank
Indusind Bank
Indian OverseasBank
Indian OverseasBank
IDBI Bank
IDBI Bank
IDBI Bank
IDBI Bank
IDBI Bank
IDBI Bank
ICICI Bank
ICICI Bank
HDFCBank
Habitate Housing
Habitate Housing
Federal Bank
Federal Bank
For Private Circulation Onlylieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015
(This Information Memorandum is neither a prospectus nor a statement in
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
36
36
36
36
33
33
18
18
8
4
84
84
60
60
12
84
85
84
85
30
12
18
18
18
18
42
42
42
42
36
36
18
18
27
30
84
84
66
66
12
84
85
84
85
36
36
18
18
18
18
11.25
7.22
8.33
0.55
7.00
8.00
18.25
4.51
12.86
1.75
0.07
0.11
5.00
5.09
2.90
0.09
0.13
0.10
0.07
7.67
2.75
10.00
10.00
6.67
3.89
15.00
10.00
25.00
10.00
7.00
8.00
34.50
15.00
30.00
3.50
0.07
0.11
5.00
20.00
2.90
0.09
0.16
0.13
0.11
10.00
3.00
10.00
10.00
10.00
7.00
15.00
10.00
25.00
10.00
7.00
8.00
34.50
15.00
30.00
3.50
0.07
0.11
10.00
20.00
2.90
0.09
0.16
0.13
0.11
10.00
3.00
10.00
10.00
10.00
7.00
TermLoan
Term
Loan
Term
Loan
Term
Loan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
TermLoan
vehicle
vehicle
Term
Loan
TermLoan
OD
VehicleLoan
VehicleLoan
VehicleLoan
VehicleLoan
TermLoan
TermLoan
TermLoan
Term
Loan
TermLoan
TermLoan
South Indian Bank
South Indian Bank
South Indian Bank
South Indian Bank
SIDBI
SIDBI
Reliance Capital
Reliance Capital
RBLBank
Rabo Bank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Punjab NationalBank
Oriental Bank ofCommerce
NABKISAN
Mas FinancialServices Limited
Mas FinancialServices Limited
Mas FinancialServices Limited
Mas FinancialServices Limited
For Private Circulation Onlylieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16,2015
(This Information Memorandum is neither a prospectus nor a statement in
201531,
MarchOn
O/s.as
(Rs. Cr)Disbursed
Amt.'
(Rs. Cr)Sanctioned
Amt.
—:—~..
Institution
Details of Unsecured Loan Facilities:(b)
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
Book debthypothecation
24
17
12
16
22
22
22
22
16
16
33
12
11
11
36
36
36
36
36
36
12
24
51
12
50
24
24
24
24
48
48
36
12
36
34
36
42
42
42
42
42
12
741.5420.00
10.00
5.00
8.13
10.00
9.55
4.09
5.45
9.38
6.25
5.22
10.00
32.00
9.12
5.00
4.80
5.00
5.00
5.00
0.20
5.00
20.00
10.00
5.00
10.00
10.00
10.00
L 15.00
10.00
10.00
10.00
15.00
10.00
35.00
27.00
5.00
4.80
5.00
5.00
• 5.00
0.20
5.00
20.00
10.00
5.00
10.00
15.00
10.00
15.00
10.00
10.00
10.00
15.00
10.00
35.00
27.00
25.00
4.80
5.00
5.00
5.00
0.20
5.00
TermLoan
Term
Loan
CC
TermLoan
TermLoan
TermLoan
Term
Loan
TermLoan
TermLoan
TermLoan
TermLoan
CC
TermLoan
TermLoan
Term
Loan
Term
Loan
TermLoan
TermLoan
Term^Loan
TermLoan
CC
Yes Bank
Vijaya Bank
Vijaya Bank
Vijaya Bank
Union Bank ofIndia
Union Bank ofIndia
Union Bank ofIndia
Union Bank ofIndia
UCO Bank
UCO Bank
State Bank ofTravancore
State Bank ofIndia
State Bank ofIndia
State Bank ofIndia
State Bank ofHyderabad
South Indian Bank
South Indian Bank
South Indian Bank
South Indian Bank
South Indian Bank
South Indian Bank
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
BookDebts
Nil
Security
Secured
Secured
Secured
Secured
Secured
Secured
Secured
Secured
Secured
Secured
Unsecured
Secured
Unsecured
Secured/Unsecured
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
BWRA-
BWRBBB
CreditRating
0.06
0.12
0.05
0.04
0.12
0.02
0.14
0.03
0.06
0.12
0.28
47.5
17
Issuesize
(Rs.Cr)
13.25%
13.25%
13.25%
13.50%
13.50%
13.50%
12.50%
12.50%
12.50%
12.50%
16
13.90%
16.50%
Coupon
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
1-5 years
66 Months
72 Months
72 months
Tenor/
Period ofMaturity
SERIES 10
SERIES 9
SERIES 8
SERIES 7
SERIES 6
SERIES 5
SERIES 4
SERIES 3
SERIES 2
SERIES 1
Retail Sub-debt-2014
13.90% EMFIL 2020
16.50% EMFIL 2021
Debenture Series ,
13
12
11
10
9
8
7
6
5
4
3
2
1
S. No.Details of Non-Convertible Debentures/sub-debt:(c)
24.36
17.28
7.08
(Rs.Crj
17.28
21
17.28
21
••'
Total UnsecuredLoans
Sub Ordinated Debt
ESCCO
2
1
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Note: Top 10 holders' (in value terms, on cumulative basis for all outstanding debentures issues)details should be provided
(e)The amount of corporate guarantee issued by the Issuer along with the name of thecounterparty (like name of the subsidiary, JV entity, group company, etc) on behalf ofwhom it has been issued, (if any):.
The Company out of its funds has issued a corporate guarantee to M/s MaanaveeyaDevelopment and Finance Ltd, Hyderabad, limited to a maximum liability amount of Rs.2Crore (Rupees Two Crore Only) towards the repayment of Term Loan amounting to Rs.7.5 Crore (Rupees Seven Crore and Fifty Thousand only) issued to ESAF Society by M/sMaanaveeya Development and Finance Pvt Ltd.
The Company stands as guarantor for transactions between M/s ESAF Retail Pvt Ltd andM/s Hindustan Unilever Ltd(HUL) towards credit sales of water purifier from HUL for theclients of ESAF Microfinance The guarantee amount is for the outstanding amount thatESAF retail is due to HUL on the given date, and hence varies. As on March31,2015, theguarantee amount is for Rs. 1.55 Crore.
(f)Details of Commercial Paper:
The total Face Value of Commercial Papers Outstanding as on the latest quarter endto be provided and its breakup in the following table: (if any):NIL.
(g)Details of rest of the borrowing (if any including hybrid debt like FCCB, OptionallyConvertible Debentures / Preference Shares) as on 31.03.2015: NIL
(h)Details of all default/s and/or delay in payments of interest and principal of any kindof term loans, debt securities and other financial indebtedness including corporate
guarantee issued by the company, in the past 5 years:NIL
0.02
0.020.02
0.03
0.040.04
0.05
0.28
- 17
23.75
23.75
Amount
(Rs. Cr)
AYAREES K TMARTHA GRACEMARTHA GRACESUNITHAINDIRAMARIYAMMAK GOVINDANKV SIMONFMO - SUB DEBT
TRIODOS CUSTODY B.V. AS A CUSTODIAN OFTRIODOS FAIR SHARE FUND
TRIODOS SICAV - II - TRIODOS MICROFINANCEFUND
Name of Debenture Holders
111098765432
1
S.No.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
1)List of Top 10 Debenture/Sub Debt llohler(s)
5,000.00
31 March2013
10,721.07
31 March2014
10821.07
31 March 2015
Share capital
Shareholders' funds
EQUITY AND LIABILITIESBalance Sheet (in INR Lakhs)
544.96
273.25
818.21
7,251.22
974.03
259.62
3,617.782,399.79
8,069.44257.09
7,812.35
31 March2013
1,026.75
665.14
1,691.89
10,378.84.
1,554.48
108.13
5,812.44
2,903.79
12,070.73451.57
11,619.10
31 March2014
2249.97
1113.50
3363.47
16759.702595.06
272.00
9191.98
4700.66
1349.8018773.37
31 March 2015
Profit for the year after Tax
(2) Deferred tax(1) Current tax
Tax expense:
Profit for the year before Tax
Total expenses
Other expenses
Depreciation and amortization expense
Finance costs
Employee benefits expense
Total Revenue
Other income
Revenue from operations
Profit & Loss Statement (in Rs. lakhs)
5.11 Abridged version of the Audited Consolidated and Standalone FinancialInformation (like Profit and Loss statement, Balance Sheet and Cash Flowstatement) for at least last three years and auditor qualifications, if any.
Note: Financial Information submitted must be in line with the timelines specified in the SimplifiedListing Agreement, issuedvide Circular no. SEBI/IMD/BOND/1/2009/U/05, datedMay 11, 2009
Nil
% of shares
pledged withrespect to
.. shares owned .
Nil
No. ofshares
pledged
4.81%
%of'Holding
Nil
No.of •shares held
in Dcmatform
3225000
Numberof shares
Equity
Class
MR. K. PAULTHOMAS
Shareholder
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Infotmation Memorandum is neither a prospectus nor a statement in lieu of aprospectus)
(i)Details of any outstanding borrowings taken / debt securities issued where taken /issued (i) for consideration other than cash, whether in whole or part, (ii) at apremium or discount, or (iii) in pursuance of an option:NIL
5.10 Details of Promoters of the Company:
(a)Details of Promoter Holding in Company as on latest quarter end, i.e.30.09.2015:
0
7.99
259.62
818.21
31-Mar-13
11.46
74.72
108.141691.89
31-Mar-14
43.5011.16
167.63
302.32
272.00
3363.47
3I-Mar-15
Provision others
Add: Provision/(Reversal) for creditenhancement
Add: Provision/(Reversal) for nonperforming assets
Add: Provision in respect of standardassets
Add: Depreciation and amortizationNet Profit before taxCash flow from Operating activities
Cash Flow Statement (in INR Lakhs)
11012.54
50,745.261,624.63
16,965.9713,281.72
18,872.94
2738.6114,593.88
6.23
470.5
01,063.72
50,745.2623,902.01
574.88
1,994.3721,332.76
20,587.29
141.54
20445.75
6,255.961,255.96
13673.07
67,118.001,681.06
30,640.2111,857.06
22,939.675,279.86
16,095.64
5
106.881,452.29
67,118.0133,562.69
732.07
1,503.1131,327.51
20,551.5572.7735.41
20443.37
13,003.772,282.70
28,852.74
99472.19
2,226.52
58,939.62
11,614.38
26,691.687,872.27
16,026.17348.61
5.0079.69
,_ 101.80
2,258.14
99472.19
50867.191886.167691.76
41289.27
33849.08862.85173.71
32812.52
14755.92
3934.85
Managed Portfolio (Asset)
Off- Balance Sheet:TOTAL Assets
Other current assets
Short-term loans and advances
Cash and cash equivalents
Current investments
Current assets
Total
Other non-current assets
Long-term loans and advances
Deferred tax asset
Non-current investments
Capital Work in progressIntangible assets
Tangible assetsFixed Assets
Non-current assets
ASSETSTOTAL Equity & LiabilityTotal
Short term provisionsOther current liabilities
Short term borrowingsCurrent liabilitiesTotal
Other Long Term Liabilities
Long term provisions
Long term borrowings
Non-current liabilities
Total
Reserves and surplus
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
10902.011839.56
9062.45
16791.49
131.68
-3508.04
-14234.4234402.27
0
-4172.94
1.31
-3680.26
64.83
-460.5
2.9
-101.22
-3556.1
306.86.
-3862.96
-8400.96
4537.96
0
0
-1.31
-218.2
53.76
3617.780.11
9713.4910902.01
-1188.52
9733.58
394.46
-5853.78
-32109.2
41707.1
5595
-1247.56
76.25
. -1833.13
326.59594.16
17.17
-428.6
-9674.55
-480.08
-9194.47
-16241.8
7047.31
126.07
-133.65
-76.25
-577.36
8.78
5812.441.07
8289.319713.49
-1424.18
22318.47
-12.45
1098.95
-34232.6655464.63
-4009.24
8.09
-3337.73
592.7010.160.38
-1282.85
-19733.41
-10010.40
-9723.01-22481.03
12758.02
18.58
3.54
139.20
-10.16
-8.09
-736.98
9191.98
-0.13
d of
Cash and cash equivalents at thebeginning of the year
Net Increase/(Decrease) in cash andcash equivalents during the year
Net cash from / (used in) financingactivities
Dividend paid on CompulsarilyConvertible Debenture
Proceeds of short term borrowings
Finance Costs(Repayment) of long term borrowings
Proceeds from long term borrowings
Share issue expenses
Share premium receivedProceeds from issue of share capital
Cash flow from financing activities
Net cash from / (used in) investingactivities
Dividend from mutual fund
Bank balance not considered cash andcash equivalents
Earnings from bank interestOther InvestmentsSale of fixed assets
Purchase of fixed assets
Purchase of portfolioCash flow from investing activities
Net cash from / (used in) operatingactivities
Direct taxes paid / (refund received)
Cash generated from operations
Net change in working capital
Operating profit before working capitalchanges
Provision for employee advances
Advances written off
Employee stock optioncompensation(Sweat equity)
Gain on sale of investments
Less: Profit from sale of mutual funds
Less: Dividend from mutual funds
Less: Earnings from bank interest
Less: Interest Income
Loan Asset Write off
Add: Finance CostsAdd: (profityLoss on sale of asset
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Infonnation MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Infonnation Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
1 the year||j|
5.12Any material event/ development or change having implications on theltnancials/credit quality (e.g. any material regulatory proceedings against theIssuer/promoters, tax litigations resulting in material liabilities, corporaterestructuring event etc) at the time of Issue which may affect the Issue or theinvestor's decision to invest / continue to invest in the debt securities.
In November 2014 the RBI introduced the "Guidelines for licensing of smallfinance banks in the private sector" guidelines. The Company had applied for anSFB license under the applicable guidelines and on October 7, 2015, the RBIgranted the Company SFB In-Principle Approval to establish an SFB within atime period of 18 months, subject to the terms and condition of such approval.
5.13Names of the Debentures Trustees and Consents thereof.
The debenture trustee of the proposed Debentures is GDA Trusteeship Limited. GDATrusteeship Limited has given its written consent for its appointment as debenture trustee tothe Issue and inclusion of its name in the form and context in which it appears in thisInformation Memorandum. The consent letter from Debenture Trustee is provided inAnnexure III of this Information Memorandum.
5.14Rating Rationale(s) adopted (not older than one year on the date of opening of theIssue)/ credit rating letter issued (not older than one month on the date of openingofthe Issue).
The Rating Agency has assigned a rating of "BWR A-" to the Debentures. Instrumentswith this rating are considered to have adequate degree of safety regarding timely servicingof financial obligations. Such instruments cany moderate credit risk. The rating letter andrationale from the Rating Agency is provided in Annexure II of this InformationMemorandum.
5.15If the security is backed by a guarantee or letter of comfort or any other document /letter with similar intent, a copy of the same shall be disclosed. In case suchdocument does not contain detailed payment structure (procedure of invocation ofguarantee and receipt of payment by the investor along with timelines), the sameshall be disclosed in the offer document.
Not Applicable.
5.16Names of all the recognized stock exchanges where the debt securities are proposedto be listed:
The Debentures are proposed to be listed on the WDM segment of the BSE. The Issuershall comply with the requirements ofthe listing agreement for debt securities to the extentapplicable to it on a continuous basis. The in-principle approvaldated November 10,2015 ofthe BSE has been obtained in this regard.
5.17Other details:
(a) DRR Creation:
Certified true copy of the certificate of incorporation of the CompanyLetter of Register and Transfer Agent
Letter from GDA Trusteeship Limited giving its consent to act as DebentureTrustee
Credit rating letter from the Rating AgencyCopies of Annual Reports of our Company for the last three financial years
Shareholder resolutions dated March 21,2014 authorizing the borrowing limitsand creation of security by the Company.
Shareholder resolution dated September 28,2015 authorizing the issue of non-convertible debentures by the Company.
Shareholder Resolution dated March 21,2014authorizing the borrowing by theCompany and the creation of security.
Board resolution dated November 9,2015 authorizing issue of Debentures offeredunder the terms of this Information Memorandum
Certified true copy of the memorandumof association and articles of associationofthe Issuer
... ".•_,,= "Nature of Contract,
109
8
765
4
3
2
1
: S.No.,...:
Infoimation MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
As per Section 71 of the 2013 Act, any company that intends to issue debentures mustcreate a debenture redemption reserve to which adequate amounts shall be credited out ofthe profits of the company until the redemption of the debentures. However, under theCompanies (Issuance of Share Capital and Debentures) Rules, 2014, non-banking financialcompanies are exempt from this requirement in respect of privately placed debentures.Pursuant to this exemption, the Company does not intend to create any reserve funds for the
redemption of the Debentures.
The Company hereby agrees and undertakes that, if required to do so as per ApplicableLaw, it will create a debenture redemption reserve ("DRR") as per the provisions of the Act(and/or the rules under the Act) and the guidelines/regulations issued by the SEBI, and ifduring the currency of the Debentures, any guidelines and/or regulations and/or rules areformulated (or modified or revised) by any Governmental Agency or corporation havingauthority under Applicable Law in respect of creation of DRR, the Company shall abide bysuch guidelines and execute all such supplemental letters, agreements and deeds ofmodifications as may be required by the Debenture Trustee. Where applicable, theCompany shall submit to the Debenture Trustee a certificate duly certified by a charteredaccountant certifying that the Company has transferred a suitable sum to DRR at the end ofeach financial year
(b)Issue / instrument specific regulations:
The Issue of Debentures shall be in conformity with the applicable provisions of theCompanies Actand the SEBI Debt Listing Regulations.
(c)Application process:
The application process for the Issue is as provided in Section SECTION 7: of thisInformation Memorandum.
5.18 A statement containing particulars of the dates of, and parties to all materialcontracts, agreements:
The contracts and documents referred to hereunder are material to the Issue, may be
inspected at the Registered Office of the Company between 10.00 am to 4.00 pm onworking days.
Non-Convertible Debentures
ESAF Microfinance and Investments Private Limited.
13.5%EMIPL2018
Type of Instrument
Issuer
Security Name
5.19Details of Debt Securities Sought to be Issued
Under the purview of current document, the Issuer intends to raise an amount of Rs. 583695000(Rupees Five Hundred Eighty Three Million Six Hundred Ninety Five Thousand Only) by issue ofSecured Rated Listed Redeemable Non-Convertible Debentures, on a private placement basis.
For further details of the Debentures, please refer to the terms and conditions of the debentures setout in SECTION 6:of this Information Memorandum.
5.20Issue Size
The aggregate issue size for the Debentures isof Rs 583695000 (Rupees Five Hundred EightyThree Million Six Hundred Ninety Five Thousand Only)
5.21Utilization of the Issue Proceeds
The Company shall utilise the moneys received towards subscription of the Debentures forraisingdebt to meet its funding requirements for the ongoing business operations of the Company.
The Issuer undertakes that the proceeds of this Issue shall be utilized for the deployment of fundson its own balance sheet and not to facilitate resource requests of its group entities/parentcompany/associates.
The Company undertakes that proceeds of this Issue shall not be utilized for the following purposesas specified in the RBI Master Circular No. RBI/2015-16/36DBR.BP.BC.NO.5/21.04.172/2015-16dated July 1,2015:
1)Bills discounted / rediscounted by NBFCs, except for rediscounting of bills discounted byNBFCs arising out of: Commercial vehicles (including light commercial vehicles) and twowheeler and three wheeler vehicles, subject to the following conditions: The bills should havebeen drawn by the manufacturer on dealers, only; The bills should represent genuine saletransactions as may be ascertained from the chassis / engine number and; Before rediscounting
the bills, the bona fides and track record of NBFCs which have discounted the bills would beverified.
2)Investments of NBFCs both of current and long-term nature, in any company / entity by way ofshares, debentures, etcHowever, Stock Broking Companies may be provided need-based creditagainst shares and debentures held by them as stock-in-trade.
3)Unsecured loans / inter-corporate deposits by NBFCs to / in any company.4)All types of loans and advances by NBFCs to their subsidiaries, group companies / entities.5)Finance to NBFCs for further lending to individuals for subscribing to Initial Public Offerings
(IPO) and for purchase of shares from secondary market.
5.22Issue Details
Memorandum and Articles of Association
Copy of application made to BSE for grant of in-principle approval for listing ofDebentures.
Certified true copy of the tripartite agreement between the Company, the Registrar& Transfer Agent and the National Securities Depository Limited/CDSL
13
12
11
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Half Yearly on November 13 and May 13 of every year, with the first couponpayable on May 13,2016 until the final Redemption Dateas more particularly
^ illustrated in Annexure VI
Half Yearly
Not Applicable
13.5% (Thirteen Decimal Point FivePercent) per annum
The issue proceeds will be to meet funding requirements of the Issuer forraisingdebt to finance its ongoing business operations.
To raise senior secured debt to the extent upto Rs. Rs. 583695000 (Rupees FiveHundred Eighty Three Million Six Hundred Ninety Five Thousand Only)
N.A.
Issue of 1000 Secured, Rated, Listed, Redeemable, Non-convertible Debenturesofface value of Rs. 583 695 (Rupees Five Hundred Eighty Three Thousand SixHundred Ninety Five only) each, aggregating up to Rs. 583695000 (Rupees FiveHundred Eighty Three Million Six Hundred Ninety Five Thousand Only) on aprivate placement basis (the "Issue").
BWR A- from Brickwork Ratings India Private Limited
Debentures areto be listed on the WDM of the BSE within a maximum period of15 (Fifteen) calendar days from the Deemed Date of Allotment.All expenses,costs and charges incurred for the purpose of listing of the Debentures shall beborne and paid by the Company.
In the event of the Issuer's failure to do so, to the extent that any DebentureHolder(s)are foreign portfolio investors, foreign institutional investors or sub-accounts of foreign institutional investors, or qualified foreign investors, theIssuer shall immediately redeem and/or buyback any and all Debentures whichare held by such Foreign Institutional Investo^s) or such sub-account(s) ofForeign Institutional Investor(s) or Qualified Foreign Investors.lt is clarified thatif the Company fails to redeem or buyback the Debentures then it will be a breachof its obligations and a Debenture Holder, at its option, may sell the Debenturesto a third party as per Applicable Law and the Company shall indemnify suchDebenture Holder for any loss, damage, costs, charges, expenses and liability that
the Debenture Holder may incur in relation to such sale to a third party and alsoco-operate in such sale by taking all necessary corporate actions and other actions
required by Applicable Law.In case of delay in listing of the debt securities beyond 20 (Twenty) calendar daysfrom the Deemed Date of Allotment, the Issuer will pay penal interest of at least1 % p.a. over the Coupon Rate from the expiry of 30 (Thirty) calendar days fromthe Deemed Date of Allotment till the listing of such Debentures is completed.
As provided in Seetion7.14 below
Private placement
Senior
Secured Rated Listed Redeemable Non-Convertible Debentures
Coupon payment
Coupon PaymentFrequency
Step Up/ Step DownCoupon Rate
Coupon Rate
Details of theutilization of theProceeds
Objects of the Issue
Option to retainoversubscription
Issue Size
Rating of Instrument
Listing
Eligible Investors
Mode of Issue
Seniority
Nature of Instrument
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
lication size for the Issue shall be 1000 Debentures and infter.
Rs. 583 695 (Rupees Five Hundred Eighty Three Thousand Six HundredNinety Five only) each per Debenture
Face Value
Not ApplicableCall NotificationTime
Not Applicable.Put NotificationTime
Not ApplicableCall Option Price
Not ApplicableCall Option Date
Not ApplicablePut Option Price
Not ApplicablePut Option Date
Not ApplicableDiscount at whichsecurity is issued andthe effective yield asa result of suchdiscount
Rs. 583 695 (Rupees Five Hundred Eighty Three Thousand Six HundredNinety Five only) each per Debenture
Issue Price
Not ApplicableRedemptionPremium/ Discount
100% of the outstanding principal amountRedemptionAmount(s)
Shall mean the dates falling at the end of the 36 (Thirty Six) months,from theDeemed Date of Allotment being November 18,2018
Redemption Date(s)
36(Thirty Six) months from the Deemed Date of AllotmentTenor
Subject to Applicable Law, on any Coupon Payment Date (and not on any otherdate) and subject to the consent of the Majority Debenture Holders beingobtained by the Company, through the Debenture Tmstee, at least 25 (twentyfive) Business Days prior to such Coupon Payment Date, the Company mayredeem the Debentures pro rata, in part but not in full, before the Due Dates, bypaying a premature redemption premium of 2% (two percent) on the OutstandingPrincipal Amounts of the Debentures. PROVIDED THAT the amount ofpremature redemption shall not be less than INR 583695000 (Rupees FiveHundred Eighty Three Million Six Hundred Ninety Five Thousand Only).* Early Redemption Clause is not applicable for FII and FPI Clients
Early Redemption*
The Company shall be liable to pay the Debenture Holder(s) interest onapplication money at the rate of 13.5% (Thirteen decimal point Five percent)per annum for the period commencingffom the dateon which the DebentureHolder(s) have made payment of the application monies in respect of theDebentures to the Company and ending on the Deemed Date of Allotment. Theinterest on application monies shall be paid by the Company to the DebentureHolder(s) within 7 (Seven) Business Days from the Deemed Date ofAllotment.
Interest on
Application Money
Actual / ActualDay Count Basis
FixedCoupon Type
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The Debentures will be secured pursuant to the security created by theCompany under the Deed of Hypothecation which shall be an exclusiveand first ranking security created solely for the benefit of the DebentureHolders and by way of a first pari passu mortgage created over theImmovable Property.
The obligations of the Issuer under the Debentureswill be secured by ahypothecation of assets of the Company, whereas the value of the hypothecatedassets shall be sufficient to maintain the Asset Cover.
Eligibility Criteria for Hypothecated Assets
(a) Each Hypothecated Asset must be a Receivable, cash deposit, or moneymarket fund;
(b) If the whole or any part of the Hypothecated Assets consists of ClientLoans, then there must be no arrears in relation to such Client Loans; and
(c) The maximum notional amount of a Client Loan should not be more than1% of total balance outstanding portfolio of the Company
The charge created on the Hypothecated Assets in favour of the DebentureTrustee hereunder shall rank as a first and exclusive charge.
The Company shall until the fulfilment of all Secured Obligations (to thesatisfaction of the Debenture Trustee) maintain an Asset Cover of at least 1
(One).
The date which will be used for determining the Debenture Holder(s) who shallbe entitled to receive the amounts due on any Due Date, which shall be the datefalling 15 (fifteen) calendar days prior to any Due Date.
If any Due Date falls on a day which is not a Business Day, the payment to bemade on such Due Date shall be made on the immediately succeeding BusinessDay, except if such Due Date is for the payment of any principal amount under
the Debentures, in which case the payment to be made on such Due Date shall bemade on the immediately preceding Business Day.
NSDL/CDSL
RTGS
Demat only
Demat only
Issue Opening Date: November 16,2015Issue Closing Date: November 17,2015Pay-in Dates: November 16-17,2015
Deemed Date of Allotment: November 17, 2015
Security
•T"—-—
Record Date
Business DayConvention
Depositories
Settlement mode ofthe Instrument
Trading mode of theInstrument
Issuance mode of the
Instrument
Issue Timing
_Debt
Securitythereafter
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of aprospectus)
The Debentures and documentation will be governed by and construed inaccordance with the laws of India.
As per Annexure VI
As per Section 6.2 below
As per Section 6.3 below
To oversee and monitor the overall transaction for and on behalf of the DebentureHolder(s).
As per Section 6.4below
No event or potential Event Of DefaultCompliance with all representations and warrantiesAll governmental and third party approvals or consents
Execution of all relevant transaction documentsAll financial documentation and reporting as reasonably requested by theCompanyA rating shall have been assigned to the NCD of not less than BBB by
aSEBI approved rating agency.
Shall be as set out inSection6.1 below
If the value of the Hypothecated Assets is diminished and the Company is unableto maintain the Asset Cover as stipulated in the Deed of Hypothecation, theCompany shall, within 5 (Five) Business Days from providing the monthlyhypothecated asset report (in accordance with the Deed of Hypothecation) to theDebenture Trustee, ensure that the value of the Hypothecated Assets equals orexceeds the stipulated Asset Cover by hypothecating additional or newReceivables. It is clarified that such Receivables need not be either Client Loansby way of on-lending the proceeds of the Issue or by way of on-lending theproceeds of any repayment or prepayment or redemption in any other manner of
Client Loans originated by way of on-lending the proceeds of the Issue. The dayon which the Company hypothecates such additional or new Receivables will bereferred to as "Top-up Date".
It is clarified that any additional or new security so provided will constitute andshall be deemed always to have constituted a part of the Hypothecated Assets.The description of the Assets comprising the additional or new security specifiedby the Company to the Debenture Trustee in the monthly hypothecated assetreport addressed to the Debenture Trustee shall be deemed to be the descriptionof the Assets which are to form part of the Hypothecated and all monthlyhypothecated asset reports issued by the Company to the Debenture Trustee andthe relevant schedule of the Deed of Hypothecation.
Pursuant to the creation of security and/or additional security as providedhereinabove, the Company will do all acts, deeds and things as may be necessary(including the filing of a duly completed from CHG-9 with the ROC) to registerand perfect such security by no later than 20 (Twenty) calendar days from thedate of creation of such security.
Governing Law
Illustration of BondCashflows
Representation andwarranties
Covenants
Role andResponsibilities ofDebenture Trustee
Events of Default
ConditionsPrecedent to
Disbursement
TransactionDocuments
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The courts and tribunals at Theni, Tamil Nadu shall have exclusive jurisdiction tosettle any disputes in relation to the Mortgaged Property. The courts and tribunalsat Mumbai, India shall have exclusive jurisdiction to settle all disputes other thanthose related to the Mortgaged Property which may arise out of or in connectionwith the Debentures.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The entry into, and performance by it of, and the transactions contemplated by theTransaction Documents do not and will not conflict with:
i.any Applicable Laws including but not limited to laws and regulations regardinganti-money laundering or terrorism financing and similar financial sanctions; or
ii. its constitutional documents; or
iii. any agreement or instrument binding upon it or any of its assets.
AUTHORITY:
NON-CONFLICT WITH OTHER OBLIGATIONS:(c)
The obligations expressed to be assumed by it under the Transaction Documents are legal,valid, binding and enforceable obligations.
BINDING OBLIGATIONS:(b)
Such other documents as agreed between the Issuer and the Debenture Trustee.
The Transaction Documents shall be/have been executed on or prior to the Issue Closing Date.
6.2 Representations and Warranties of the Issuer
The Company makes the representations and warranties set out in below:
. (a) STATUS:
It is a company, duly incorporated, registered and validly existing under the ApplicableLaw of India.
It has the power to own its assets and carry on its business in substantially the same manneras it is being conducted.
Debenture Trustee Agreement, which confirms the appointment of GDA TrusteeshipLimited as the Debenture Trustee ("Debenture Trustee Agreement");
Debenture Trustcum MortgageDeed, which (i) sets out the terms upon which theDebentures are being issued, (ii) creates mortgage over Immovable Property to secure theDebentures and (iii) includes the representations and warranties and the covenants to beprovided by the Issuer ("Debenture Trust Deed");
Deed of Hypothecation whereby the Issuer will create an exclusive first charge by way ofhypothecation over Hypothecated Assets ,in favour of the Debenture Trustee to secure its
obligations in respect of the Debentures ("Deed of Hypothecation"); and
(a)
(b)
(c)
(d)
The following documents shall be/have been executed in relation to the Issue ("TransactionDocuments"):
SECTION 6: TRANSACTION DOCUMENTS AND KEY TERMS
Transaction Documents6.1
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ITH LAW, ANTI-CORRUPTION:
All information provided by the Company to the Debenture Holders for the purposes of thisIssue is true and accurate in all respects as at the date it was provided or as at the date (ifany) on which it is stated.
NO MISLEADING INFORMATION:(0
It has the power to enter into, perform and deliver, and has taken all necessary action toauthorise its entry into, performance and delivery of, the Transaction Documents to which
it is a party and the transactions contemplated by those Transaction Documents.
(e)VALIDITY AND ADMISSIBILITY IN EVIDENCE:
All approvals, authorizations, consents, permits (third party, statutoty or otherwise)required or desirable:
i. to enable it lawfully to enter into, exercise its rights and comply with its obligationsin the Transaction Documents to which it is a party;
ii. to make the Transaction Documents to which it is a party admissible in evidence inits jurisdiction of incorporation; and
iii. for it to carry on its business, and which are material
have been obtained or effected and are in full force and effect.
(f)NO DEFAULT:
No Event of Default has currently occurred and is continuing as of the date hereof or wouldreasonably be expected to result from the execution or performance of any TransactionDocuments or the issuance of the Debentures. No other event or circumstance is
outstanding which constitutes (or which would, with the lapse of time, the giving of notice,the making of any determination under the relevant document or any combination of theforegoing, constitute) a default or termination event (however described) under any otheragreement or instrument which is binding on the Company or any of its assets or whichmight have a Material Adverse Effect as on the date hereof.
(g)PARI PASSU RANKING:
Its payment obligations under the Transaction Documents rank at least pari passu with theclaims of all of its other secured creditors, except for obligations mandatorily preferred bylaw applying to companies generally.
(h) NO PROCEEDINGS PENDING:
Subject to sub-section (n) below, there are no litigation, arbitration or administrativeproceedings of or before any court, arbitral body or agency, which if adversely determinedmay have a Material Adverse Effect, which have been started against it except as disclosedby the Company in its annual reports, financial statements, the Information Memorandumand as provided in Schedule VII (Disclosure of material litigation/proceedings)of theDebenture Trust cum Mortgage Deed.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
i.It is in compliance in all respects with all Applicable Law for the performance ofits obligations with respect to this Issue, including but not limited to EnvironmentalLaw, Social Law, and Client Protection Laws for them to carry on their businessand shall take all reasonable steps in anticipation of known or expected futurechanges under the same.
ii. Notwithstanding anything stated in sub-para (i) above, the Company and itsofficers, directors and employees has not engaged in any Objectionable Practice.
(k) ASSETS:
Except for the security interests and encumbrances created and recorded with the Ministry
of Corporate Affairs (available using CIN U65923KA2006PTC040028 on the websitehttp://www.mca.gov.in/MCA21/index.htmI under the heading Index of Charges), theCompany has, free from any security interest or encumbrance, the absolute legal and
beneficial title to, or valid leases or licenses of, or is otherwise entitled to use (in each case,where relevant, on arm's length terms), all material assets (including the Immovable
Property) necessary for the conduct of its business as it is being, and is proposed to be,conducted.
(I) FINANCIAL STATEMENTS:
i.Its financial statements most recently supplied to the Trustee were prepared inaccordance with GAAP consistently applied save to the extent expressly disclosedin such financial statements.
ii. Its financial statements most recently supplied to the Trustee as of March 31, 2015give a true and fair view and represent its financial condition and operations duringthe relevant financial year save to the extent expressly disclosed in such financialstatements.
(m) SOLVENCY:
i. The Company is able to, and has not admitted its inability to, pay its debts as theymature and has not suspended making payment on any of its debts and it will notbe deemed by a court to be unable to pay its debts within the meaning ofApplicable Laws, nor in any such case, will it become so in consequence ofentering into the Transaction Documents.
ii. The value of the assets of the Company is more than its respective liabilities(taking into account contingent and prospective liabilities) and it has sufficientcapital to carry on its business.
iii. As on the date hereof, the Company has not taken any corporate action nor hastaken any legal proceedings or other procedure or steps in relation to anybankruptcy proceedings.
(n) TAXATION MATTERS
i.The Company has complied with all the requirements as specified under therespective tax laws as applicable to it in relation to returns, computations, noticesand information which are or are required to be made or given by the Company toany tax authority for taxation and for any other tax or duty purposes, have beenmade and are correct.
The Company hereby represents that there is no Material Adverse Effect existing and thatthere are no circumstances existing which could give rise, with the passage of time orotherwise, to a Material Adverse Effect on the Debentures (or on the Debenture Holder(s))or on the ability of the Company to make the scheduled Payments in relation to theDebentures.
(p) NO IMMUNITY
Neither the Company, nor any of its assets are entitled to any immunity from suit,execution, attachment or other legal process in its jurisdiction of incorporation. This Issue
(and the documents to be executed in relation thereto) constitutes, and the exercise of itsrights and performance of and compliance with its obligations in relation thereto, willconstitute, private and commercial acts done and performed for private and commercialpurposes.
(q) SECURITY
i) Save and except the charge created to secure the Debentures (and any other chargesdisclosed to the Debenture Trustee), the Mortgaged Property and the HypothecatedAssets hereinbefore expressed to be charged in favour of the Debenture Trustee isthe sole and absolute property of the Company and is free from any othermortgage, charge or encumbrance and is not subject to any lis pendens, attachment,or other order or process issued by any Governmental Authority and that theCompany has a clear and marketable title to the Hypothecated Assets and theMortgaged Property. It is however, clarified that the Mortgaged Property will alsobe mortgaged by the Company in favour of various lenders / debenture trustees assecurity for the borrowings made by the Company.
ii) Notwithstanding anything done or executed or omitted to be done or executed orknowingly suffered to the contrary, by the Company, the Company now has powerto grant, convey, transfer, assure and assign unto the Debenture Trustee theImmoveable Property in the manner contemplated by these presents.
iii) It shall be lawful for the Debenture Trustee upon entering into or taking possessionunder the provisions herein contained of the Immovable Property, thenceforth tohold and enjoy the same and to receive the rents and profits thereof without anyinterruption or disturbance by the Company or any other person or persons
claiming by, through, under or in trust of the Company and that freed anddischarged from or otherwise by the Company sufficiently indemnified against allencumbrances and demands whatsoever.
iv) The Transaction Documents executed or to be executed constitute and willconstitute leald and enforceable security interests in favour of inter alios the
nd for the benefit of the Debenture Holders on all the assets
The Company has disclosed that a Tax claim in an amount of [INR 1,35,70,258/-]along with applicable interest and penalties is currently under dispute with theCustom, Central Excise and Service Tax Tribunal, .and that the same is beingdefended in good faith. The Company, however, represents and warrants that theoutcome of the Tax dispute, if adversely determined, will not have a MaterialAdverse Effect on this Issue.
MATERIAL ADVERSE EFFECT(o)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ii. It, nor any Person in the Group, nor any person acting on i
committed or is engaged in any Objectionable Practice.
iii. With respect to all such Environmental and Social Requirements, the Company andany other Person of the Group (i) has been issued and will maintain all requiredconsents and will take all reasonable steps in anticipation of known or expectedfuture changes or obligations to the same, (ii) has received no complaint, order,directive, claim, citation, or notice by any Governmental Authority, and (iii) hasreceived no complaint or claim from any Person seeking damages, contribution,indemnification, cost recovery, compensation, or injunctive relief.
(t) LEGAL AND BENEFICIAL OWNERSHIP
The Company is the legal and beneficial owner of its assets, including its assets that arepresently secured under the terms of this Issue.
(u) Nature of Representations and Warranties
The Company hereby expressly represents and warrants that each of the representations andwarranties set out hereinabove is true and accurate as on date hereof and shall continue to
be true and accurate on each day until the Final Settlement Date, and nothing contained inthe said representations and warranties is / will be misleading or designed to create aninaccurate, incomlete or false picture as on the Effective Date.
nts
its or their behalf, has
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
thereby secured, prior and superior to all other security interest (unless otherwisespecified) and all necessary and appropriate consents for the creation, effectiveness,priority and enforcement of such security have been or will be obtained.
(r) NO FILINGS OR STAMP TAXES
There are no stamp duties, registration, filings, recordings or notarizations before or with
any court or public office required to be carried out in India in relation to the execution anddelivery of the Transaction Documents by the Company other than the (a) stamping of theTransaction Documents (on or before its execution in Tamil Nadu) in accordance theapplicable provisions of the Indian Stamp Act, 1899 as applicable to Tamil Nadu, (b)stamping of the Debenture Certificate in accordance with the relevant sections, schedulesand articles of the Indian Stamp Act, 1899; (c) filing of the Private Placement Offer Letterwith the relevant registrar of companies situated in the state where the registered office ofthe Company is situated and SEBI, (d) filing of the Information Memorandum with therelevant stock exchange (e) registering theDebenture Trust cum Mortgage Deed with therelevant Sub-Registrar of Assurances, (f) filing of CHG - 9 in relation to theDebentureTrust cum Mortgage Deed and (g) filing of CHG- 9 in relation to the Deed ofHypothecation.
(s) SOCIAL AND ENVIRONMENTAL REQUIREMENTS AND/OBJECTIONABLE PRACTICE
i.The Company nor any other Person of the Group has not violated nor breached anylaw to which it may be subject, (including but not limited to Environmental Lawand Social Law) which has resulted in or could reasonably be expected to have aMaterial Adverse Effect.
(b)NOTICE OF WINDING UP OR OTHER LEGAL PROCESS
The Company shall notify the Debenture Trustee in writing, of any notice of anapplication for winding up having been made or receipt of any statutory notice ofwinding up under the provisions of the Act or any other notice under any other law orotherwise of any suit or legal process intended to be filed or initiated against theCompany and affecting or likely to affect the charged assets and the title to theproperty of the Company or if a receiver is appointed in respect of any of itsproperties (including the Immovable Property) or businesses or undertakings promptly,and no later than 5 (Five) calendar days from the occurrence of such event (unlessotherwise specifically provided).
(c)LOSS OR DAMAGE BY UNCOVERED RISKS
Promptly inform the Trustee of any material loss or significant damage which theCompany may suffer due to any force majeure circumstances such as earthquake,
flood, tempest or typhoon, etc. against which the Company may not have insured itsproperties;
(d)PRESERVE CORPORATE STATUS
Diligently preserve its corporate existence and status and its license to conduct businessas a non-banking financial company and any other rights, licenses and franchisesnecessary for its obligations under the Debentures and the Transaction Documents andcontinue to be a validly existing organization in good standing and at all times act andproceed in relation to its affairs and business in compliance with Applicable Law.
(e)COSTS AND EXPENSES
Subject to Clause 28(Costs and Expenses) of the Debenture Trust cum Mortgage Deed,pay all costs, charges and expenses in any way incurred by the Debenture Holdersand/or the Debenture Trustee towards protection of Debenture-holders' interests,
including traveling and other allowances and such taxes, duties, costs, charges andexpenses in connection with or relating to the Debentures, including:
(i) Costs, charges and expenses incurred in connection with the negotiation,execution, filing and registration of the Transaction Documents (includinglegal fees); and
(ii) travelling and other allowances and such taxes, duties, costs, charges and
expenses and legal costs incurred by the Trustee in relation to theenforcement of the rights of the Debenture Holder(s), in connection with orrelating to the role of the Debenture Trustee in respect of the Debentures
actual basis.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The Company covenants with the Debenture Holders and the Debenture Trustee asfollows (except as may otherwise be previously agreed in writing by the DebentureTrustee):
(a) UTILISATION OF PROCEEDS OF DEBENTURES
The Company shall utilise the moneys received only towards the Purpose in accordancewith the Transaction Documents
(f)PAY STAMP DUTY
Pay all such stamp duty (including any additional stamp duty), other duties, taxes,charges and penalties, if and when the Company may be required to pay according tothe laws for the time being in force in the State of Tamil Nadu, and in the event of theCompany failing to pay such stamp duty, other duties, taxes and penalties as aforesaid,the Debenture Trustee will be at liberty (but shall not be bound) to pay the same andthe Company shall reimburse the same to the Trustee on demand.
(g)COMPLY WITH PROVISIONS OF SECTION 205C OF THE ACT
Comply with the provisions of Section 205C of the Act relating to transfer ofunclaimed and redemption of Debentures to Investor Education and Protection Fund("IEPF"), if applicable to it.
(h) FURNISH INFORMATION TO THE DEBENTURE TRUSTEE
i. Furnish quarterly report to the Debenture Trustee containing the followingparticulars:-
•Updated list of the names and addresses of the Debenture Holder(s).
Details of the Coupon and principal payments to be made, but unpaidand reasons therefor;
•The number and nature of grievances received from the Debenture
Hoider(s) and resolved by the Company, and those grievances not yetsolved to the satisfaction of the Debenture Holder(s);
•A statement that those assets of the Company which are available by theway of Security are sufficient to discharge the claims of the DebentureHolder(s) as and when they become due.
•A statement signed by an authorized signatory of the Company(supported by the Auditor's/Chartered Accountant's certificate)confirming that the Asset Cover is being maintained as per theprovisions of the Deed of Hypothecation.
•Promptly and expeditiously attend to and redress the grievances, if any,of the Debenture Holder(s). The Company further undertakes that itshall promptly comply with the suggestions and directions that may begiven in this regard, from time to time, by the Debenture Trustee andshall advise the Debenture Trustee periodically of its compliance.
(i) Inform the Debenture Trustee of any major change in the composition of its Boardof Directors, which may amount to change in control as defined in SEBI (SubstantialAcquisition of Shares and Takeovers) Regulations, 2011.
(j) Inform and provide the Debenture Trustee with applicable documents in respect ofany and all information required to be provided to the Debenture Holders under thelisting agreement entered/to be entered into between the Company and the stockexchaebentures are proposed to be listed.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(k) FURTHER ASSURANCES
The Company shall:
(i) execute and/or do, at their own expense, all such deeds, assurances, documents,
instruments, acts, matters and things, in such form and otherwise as theDebenture Trustee may reasonably or by law require or consider necessary in
relation to enforcing or exercising any of the rights and authorities of theTrustee;
(ii) obtain, comply with the terms of and do all that is necessary to maintain in fullforce and effect all authorisations necessary to enable it lawfully to enter intoand perform its obligations under the Transaction Documents or to ensure thelegality, validity, enforceability or admissibility in evidence in India of theTransaction Documents;
(iii) comply with all Applicable Laws (including but not limited to Environmental,Social and taxation related laws), as applicable in respect of the Debenturesand obtain such regulatory approvals as may be required from time to time,including but not limited, in relation to the following (I) the Securities andExchange Board of India (Issue and Listing of Debt Securities) Regulations,2008, as may be in force from time to time during the currency of theDebentures; and (II) the provisions of the listing agreement entered into by theCompany with the Stock Exchange in relation to the Debentures.
(I) INSURANCE
i. The Company shall insure and keep insured all assets of the Company(excludingthe Immovable Property so long as it remains in vacant form), in suchamounts and of such type which is standard for companies in its business andlocation and shall duly pay all premia and other sums payable for the purpose.
ii. In the event of failure on the part of the Company to insure all assets of theCompany adequately in any manner whatsoever, the Trustee may, but shallnot be bound to, get the assets of the Company insured or pay the insurancepremia and other sums referred to above. If any such monies are paid, thesame shall be immediately reimbursed by the Company.
iii. In addition to the above, the Company is to use all reasonable endeavours toprevent the happening of an act, omission, breach or default which would bereasonably likely to render void or voidable any insurances effected by it.
(m) CORPORATE GOVERNANCE
Confirm to all mandatory recommendations on corporate governance contained in theListing Agreement for the Debentures and under the Act.
(n) ACCESS
i. The Company will permit the Debenture Trustee to examine the relevant books andrecords of the Company upon reasonable prior notice and at such reasonabletimes and intervals as the Trustee may reasonably request.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ii. Permit the Debenture Trustee and the representatives of the Debenture Holder(s),upon prior written notice, to visit and inspect any of the premises where itsbusiness is conducted and to have access to its relevant books of account and
records in relation to this Issue and to enter into or upon and to view andinspect the state and condition of all the Mortgaged Property/ HypothecatedAssets, together with all records, registers relating to the Mortgaged Property /Hypothecated Assets.
(o) VALIDITY OF TRANSACTION DOCUMENTS
Ensure that the Transaction Documents shall be validly executed and delivered and willcontinue in full force and effect and will constitute valid, enforceable and bindingobligations of the Company.
(p) FURTHER DOCUMENTS AND ACTS
Execute all such deeds, documents and assurances and do all such acts and things as theDebenture Trustee (acting on behalf of the Majority Debenture Holders) may requirefor exercising the rights under theDebenture Trust cum Mortgage Deed and theDebentures and for perfecting theDebenture Trust cum Mortgage Deed or foreffectuating and completing the Security intended to be hereby created and shall fromtime to time and at all times after the Security hereby constituted shall becomeenforceable, execute and do all such deeds, documents, assurance, acts, and things as
the Debenture Trustee may require for facilitating realisation of the MortgagedProperty and the Hypothecated Assets and in particular the Company shall execute alltransfers, conveyances, assignments and assurance of the Mortgaged Property and the
Hypothecated Assets whether to the Debenture Trustee or to their nominees and shallgive all notices and directions which the Debenture Trustee may think expedient.
(q) ASSET COVER
Maintain the Asset Cover as required under the Deed of Hypothecation as long as anyamount under the Debentures is outstanding.
(r) MAKE THE RELEVANT FILINGS WITH THE REGISTRAR OFCOMPANIES/SEBI
Pursuant to the 2013 Act and the relevant rules issued thereunder, the Companyundertakes to make the necessary filings of the documents mandated therein with theRegistrar of Companies and/or SEBI within the timelines thereunder to preserve, renewand keep in full force and effect its existence and/or its rights necessary for theoperation of its business and/or the legality and validity of any Transaction Documents.
(s) COMPLIANCE WITH LAWS AND RETRENCHMENT PLAN
The Company shall (and the Company shall ensure that any Person of the Group,including its subsidiaries shall) comply with all laws and regulations including but notlimited to:
i. Environmental and Social Requirements and Client Protection Laws.
ct and the notified rules issued thereunder, in relation toures.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
iii. All the provisions as mentioned in the Securities and Exchange Board of India(Debenture Trustee) Regulations, 1993, the Securities and Exchange Board ofIndia (Issue and Listing of Debt Securities) Regulations, 2008, the Act and therules issued thereunder, the simplified listing agreement issued in terms ofnotification bearing number SEBI/IMD/BOND/1/2009/11/05 dated May 11,2009, issued by the SEBI, as amended by notification bearing numberSEBWMD/DOF-l/BOND/Cir-5/2009 dated November 26, 2009, read togetherwith the SEBI (Listing Obligations And Disclosure Requirements)Regulations, 2015 and SEBI's circular no. CFD/CMD/6/2015 dated October13, 2015, as amended from time to time and/or any other notification, circular,press release issued by the SEBI/RBI, from time to time.
The Company shall not undertake any Collective Dismissal without first developingand implementing a retrenchment plan reasonably satisfactory to the DebentureHolder(s).
(t) FINANCIAL STATEMENTS
i. Submit to the Debenture Trustee (and to the Debenture Holder(s), if sorequested), its duly audited annual accounts certified by its chief financial officer,within 90 (Ninety) calendar days from the close of its accounting year.
ii.Submit to the Debenture Trustee (and to the Debenture Holder(s), if sorequested), its provisional/unaudited quarterly financial statements, certified byits chief financial officer, within 45 (Forty Five) calendar days from the close ofeach of its accounting quarters.
(u) SECURITY
The Company hereby further agrees, declares and covenants with the Trustee as
follows:
i. The Debentures have been secured by way of a first ranking exclusive charge onthe Hypothecated Assets;
ii. It shall create the mortgage created over the Immovable Property on or prior to
the Deemed Date of Allotment with the relevant Sub-Registrar of Assurancesand perfect the security over the Immovable Property by filing Form CHG-9with the registrar of companies in relation thereto within 20 days of theexecution of this Deed.
iii. It shall create the hypothecation over the Hypothecated Assets on or prior to theDeemed Date of Allotment and perfect the hypothecation over the HypothecatedAssets by filing Form CHG-9 with the registrar of companies in relation theretowithin 20 (Twenty) calendar days from the date of execution of the Deed ofHypothecation;
iv. that the Company is not aware of any document, judgment or legal process or
defects affecting the title, ownership of the Security which has remainedundisclosed and/or which may have Material Adverse Effect on the DebentureHolder;
The Company hereby further agrees, declares and covenants with the Debenture
a.the Debentures shall be secured with first ranking exclusive continuing securityby way of a first ranking exclusive charge on the Hypothecated Assets infavour of the Debenture Trustee for the benefit of the Debenture Holders;
b.that all the moveable Assets that will be charged to the Debenture Trusteeunder the Deed of Hypothecation shall always be kept distinguishable and heldas the exclusive property of the Company specifically appropriated to thissecurity and be dealt with only under the directions of the Debenture Trusteeand the Company shall not create any charge, lien or other encumbrance uponor over the same or any part thereof except in favour of the Debenture Trusteenor suffer any such charge, lien or other encumbrance or any part thereof nor
do or allow anything that may prejudice this security and the DebentureTrustee shall be at liberty to incur all costs and expenses as may be necessaryto preserve this security and to maintain the same undiminished and claimreimbursement thereof;
c.to create the security over the Hypothecated Assets as contemplated in the
Transaction Documents on the Deemed Date of Allotment by executing a dulystamped Deed of Hypothecation and to register and perfect the security interestcreated under the Deed of Hypothecation by filing Form CHG-9 with theconcerned ROC in relation thereto as soon as practicable and no later than 20(Twenty) calendar day after the date of execution of the Deed ofHypothecation;
d.to keep the Application Money in an escrow account (such escrow account
having been opened with a scheduled bank of the Debenture Trustee's choiceand the terms of appointment of such a bank as the escrow agent beingdetermined by the Debenture Trustee) in the event the Deed of Hypothecationis not executed within 1 (one) calendar day after the Deemed Date of Allotmentor in the event the value of the Hypothecated Assets, at the time of execution ofthe Deed of Hypothecation, is less than 1 (one) time the Outstanding PrincipalAmounts;
e.to provide a list of specific loan receivables / identified book debt to theDebenture Trustee over which charge is created and subsisting by way ofhypothecation in favour of the Debenture Trustee (for the benefit of theDebenture Holders) and sufficient to maintain the asset cover on monthly basiswithin 20th of every calendar month;
f.the Company shall, on each Top-Up Date, add fresh loan Assets to the
Hypothecated Assets (under the Deed of Hypothecation) so as to ensure thatthe value of the Hypothecated Assets is at all times equal to 1 (one) time theOutstanding Principal Amounts.
g.the Company shall, on a half yearly basis, as also whenever required by theDebenture Trustee, give full particulars to the Debenture Trustee of all the
Hypothecated Assets from time to time and shall furnish and verify allstatements, reports, returns, certificates and information from time to time andas required by the Debenture Trustee and furnish and execute all necessary
documents to give effect to the Hypothecated Assets;
h. the security interest created on the Hypothecated Assets shall be a continuingas described in the Deed of Hypothecation;
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(v) FINANCIAL TERMS AND CONDITIONS
At all times during the term of these presents comply with each of the financial termsand conditions of the Issue as prescribed in the Transaction Documents.
(w) COMPLIANCE WITH CLIENT PROTECTION REQUIREMENTS
The Company shall, and the Company shall ensure that each Person of the Group,including its subsidiaries will comply in all material respects with the Client ProtectionLaws and take all reasonable steps in anticipation of known or expected future changesto or obligations under the same.
(x) The Company shall, forthwith upon demand by the Debenture Trustee, reimburseto the Debenture Trustee all amounts paid by the Debenture Trustee to reasonably
protect the Hypothecated Assets and such amounts shall be deemed to be secured bythe Hypothecated Assets;
(y) In the event a Debenture Holder is a foreign portfolio investor, foreign institutionalinvestor or sub-account of foreign institutional investors, or qualified foreign investor,
the Company shall, in relation to each Coupon Payment Date and in relation to eachdate when any other payment is due by the Company under the Debentures(each a"Relevant Payment Date"), courier to the Debenture Holders (or their designatedagent, as confirmed by the Debenture Holders) within 1 (One) Business Day after aRelevant Payment Date, the duly completed and signed Form 15 CA/CB. A scannedcopy of such duly completed and signed Form 15 CA/CB shall be sent to the DebentureHolders on the Relevant Payment Date by e-mail.
(z) In the event of any delay in the execution of the Deed of Hypothecation, theCompany will, at the option of the Debenture Holders, either,
(i) refund the Application Money as set out in this Deed, to the DebentureHolders; or
(ii) pay to the Debenture Holders penal interest at the rate of 2% p.a. (two percent)in addition to the Coupon Rate till the Deed of Hypothecation is duly executed.
i. the Hypothecated Assets shall satisfy the eligibility criteria set out in the Deedof Hypothecation;
j. nothing contained herein shall prejudice the rights or remedies of theDebenture Trustee and/ or the Debenture Holders in respect of any present or
future security, guarantee obligation or decree for any indebtedness or liabilityof the Company to the Debenture Trustee and/ or the Debenture Holders; and
k. the Debenture Holders shall have a beneficial interest in the moveable Assets
of the Company which have been charged to the Debenture Trustee to theextent of the Outstanding Principal Amounts of the Debentures under the Deedof Hypothecation.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Inhumation Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
B. REPORTING COVENANTS
The Company shall provide or cause to be provided to the Trustee and the DebentureHolders, in form and substance reasonably satisfactory to the Trustee (and to theDebenture Holders), each of the following items:
(a)Within two days prior to the Deemed Date of Allotment and on each anniversary ofthe Deemed Date of Allotment (where applicable):
(i) audited consolidated and non-consolidated (if any) financial statements of theCompany, for the preceding 4 (four) completed Financial Years, prepared inaccordance with GAAP including its balance sheet, income statement andstatement ofcashflow;
(ii) duly certified copies of the latest business plan and financial projections of theCompany;
(iii) a duly certified copy of a detailed list of sources of funding for the Company;
(iv) duly certified copy of the rating letter or equivalent thereof, provided by arecognized Rating Agency or any other external agency;
(v) ensure that the financial position reports of the last three years (with referenceto the date thereof) are posted on the online reporting platform available atwww.syminvest.com and such other reporting platform as may be notified by
the Debenture Trustee;
(vi) the Constitutional Documents of the Company;
(vii) duly certified copies of the authorizations held by the Company to conduct itsbusiness (including any certificates of registration granted by the ROC, the RBIor any other Governmental Authority);
(viii) details of the shareholding structure and composition of the board of directorsin the Company;
(ix) duly certified copy of the rating letter, provided by a recognized RatingAgency;
(x) list of management team (including CVs and organizational chart); and
(xi) any other legal or operational document or information as the DebentureTrustee may reasonably request.
PROVIDED THAT if the Company obtains or reasonably should have obtained actualknowledge or notice of the occurrence of any event or circumstance, which wouldrender any information provided in the documents listed above, to be incorrect,inaccurate or untrue, then the Company shall as soon as practicable, provide the
relevant information to the Debenture Trustee.
(b)As soon as available and in any event within 20 (twenty) calendar days after theend of each calendar month:
(h) As soon as practicable, and in any event within 5 (five) Business Days after theCompany receives a notice of any voluntary prepayment of any Indebtedness of anamount aggregating to or exceeding 5% (five percent) of the Total Liabilities by theCompany.
(i) As soon as practicable, and in any event within 5 (five) Business Days after suchprepayment, notice of any Indebtedness of the Company declared to be due andpayable, or required to be prepaid other than by a regularly scheduled requiredprepayment, prior to the stated maturity thereof.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(i.) the monthly position report shall be posted on the online reporting platformavailable at https://my.syminvest.com/login and such other reporting platformas may be notified by the Debenture Trustee; and
(ii.)the monthly financial position report for the previous 3 (three) months of thecurrent calendar year shall be posted on the online reporting platform availableat https://my.syminvest.com/login and such other reporting platform as may benotified by the Debenture Trustee.
(c)As soon as available and in any event within 60 (sixty) calendar days after the endof each semi-annual reporting period of the Company, the semi-annual reports.
(d)As soon as available, and in any event within 90 (ninety) calendar days after theend of each Financial Year of the Company:
(i) certified copies of its audited consolidated and non-consolidated (if any)financial statements for its most recently completed fiscal year, prepared inaccordance with Indian GAAP including its balance sheet, income statementand statement of cash flow. All such information shall be complete and correctin all material respects and fairly represents the financial condition, results ofoperation and changes in cash flow and a list comprising all material financialliabilities of the Company whether absolute or contingent as of the datethereof; and
(ii) such additional information or documents as the Debenture Trustee mayreasonably request;
(e)Promptly after the Company obtains knowledge thereof, and in any event within 10(ten) Business Days after the Company obtains or reasonably should have obtainedactual knowledge thereof, notice of the occurrence of any event or circumstance that
could reasonably be expected to result in a Material Adverse Effect.
(f)Promptly after the Company obtains knowledge thereof, and in any event within 10(ten) Business Days after the Company obtains or reasonably should have obtainedactual knowledge thereof, notice of any dispute, litigation, investigation or otherproceeding affecting the Company or its property or operations, which, if adverselydetermined, could result in a Material Adverse Effect.
(g)Promptly after the Company obtains knowledge thereof, and in any event within 5(five) Business Days after the Company obtains actual knowledge thereof, notice of theoccurrence of any Event of Default or potential Event of Default specifying the natureof such event and any steps the Company is taking and proposes to take to remedy the
(q) Notwithstanding anything stated in (c) above, promptly (i) any Environmental andSocial Claim and/or any Client Protection Claim being commenced against it or anyPerson within the Group and (ii) any facts or circumstances which will or arereasonably likely to result in any Environmental and Social Claim and/or any ClientProtection Claim being commenced or threatened against it or any Person of the Group.
(r) Promptly and in any event, no later than the date it has to deliver its audited annualfinancial statements, an Environmental and Social Monitoring Report on an annualbasis.
(s) Promptly upon a request by the Debenture Trustee/ the Debenture Holder(s), theCompany shall supply to the Debenture Trustee a certificate signed by 2 (two) of itsdirectors certifying that no Event of Default is continuing or if an Event of Default iscontinuing, specifying the nature of such event and the steps, if any, being taken by theCompany to remedy it.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(j) As soon as practicable, and in any event within 5 (five) Business Days after suchdefault, notice of any default in the observance or performance of any agreement orcondition relating to any Indebtedness or contained in any instrument or agreementevidencing, securing or relating thereto or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause or to permit theholder or holders of such Indebtedness to cause (determined without regard to whetherany notice is required) any such Indebtedness to become due prior to its statedmaturity.
(k) As soon as available and in any event within 20 (twenty) calendar days after theend of each quarter, a list comprising all material financial liabilities of the Companywhether absolute or contingent as of the date thereof required and in form andsubstance satisfactory to the Debenture Trustee.
(I) On or prior to the 20th (twentieth) day of each calendar month a report certifyingthe calculation of financial covenant ratios set forth in (sub-Section D below) for theprevious calendar month.
(m) The Company will permit the Debenture Trustee to examine the books and recordsof the Company and to discuss the affairs, finances and accounts of the Company with,and be advised as to the same by, officers and independent accountants of the
Company, all upon reasonable prior notice and at such reasonable times and intervalsas the Debenture Trustee may reasonably request.
(n) The Company shall provide or cause to be provided to the Debenture Trustee, inform and substance reasonably satisfactory to the Debenture Trustee, such additionaldocuments or information as the Debenture Trustee may reasonably request from timeto time.
(o) The Debenture Trustee shall, within 5 Business Days of receipt of any information,report or document under the provisions of theDebenture Trust cum Mortgage.Deed orany other Transaction Document, forward such information, report or document to allthe Debenture Holders.
(p) As soon as practicable, and in any event within 5 (five) Business Days, informationabout any change in composition of its board of directors.
Information MemorandumPrivate & ConfidentialDate:Novemberl6,2015ForPrivateCirculationOnly
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(t) Promptly upon the request of the Debenture Holder (whether on account of achange in the Applicable Law or due to a proposed transfer of the Debentures orotherwise) supply, or procure the supply of, such documentation and other evidence asis reasonably requested by the Debenture Holder in order for the Debenture Holder tocarry out and be satisfied it has complied with all necessary "know your customer" orother similar checks under Applicable Law pursuant to the transactions contemplated inthis Issue.
(u) promptly when an Objectionable Practice has occurred and promptly upon theCompany or the Debenture Trustee/Debenture Holder becoming aware or having thereasonable suspicion that an Objectionable Practice has occurred or may occur,
accurate and complete information with respect to such Objectionable Practice and anyadditional information in relation thereto in whichever form as the DebentureTrustee/Debenture Holder may request at its sole discretion.
(v) Notification of incidents and of non-compliances to Environmental Law or SocialLaw:
The Company shall promptly, but in any event within 15 (Fifteen) calendar days afterthe occurrence of any of the events set out in this sub-paragraph, supply to theDebenture Holder(s) (i) details of any incident of an environmental nature (includingwithout limitation any explosion, spill or workplace accident which results in death,serious or multiple injuries or material environmental contamination) or any incident ofa social nature (including without limitation any violent labour unrest or dispute withlocal communities), occurring on or nearby any site, plant, equipment or facility of theCompany or any Person of the Group or any non-compliance to Environmental Law or
Social Law, which has or is reasonably likely to have a Material Adverse Effect orwhich has a material negative impact on the environment, the health, safety andsecurity situation, or the social and cultural context, together with, in each case, a
specification of the nature of the incident or accident and the on-site and off-site effectsof such events and (ii) details of any action the Company proposes to take in order toremedy the effects of these events, and shall keep the Debenture Holder (s) informedabout any progress in respect of such remedial action.
(w)The Company agrees that it shall forward to the Debenture Trustee promptly,whether a request for the same has been made or not:
i. a copy of the Statutoiy Auditors' and Directors' Annual Report, Balance Sheetand Profit & Loss Account and of all periodical and special reports at the sametime as they are issued;
ii. a copy of all notices, resolutions and circulars relating to new issue of debtsecurities at the same time as they are sent to shareholders/ holders of debtsecurities;
iii. a copy of all the notices, call letters, circulars, proceedings, etc. of the meetings
of debt security holders at the same time as they are sent to the holders of debtsecurities or advertised in the media;
(x) As soon as possible, but in any event within 45(Forty Five) calendar days aftereach Quarter Date of each of its financial year, information in respect of its Non-performing Loans and Loan Loss Reserve substantially in a form acceptable to theDebenture Trustee, which information shall be certified by a director of the Company.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(y) Such information as they shall require as to all matters relating to the business,property and affairs of the Company that materially impacts the interests of theDebenture Holders.
(z) The Company shall provide to the Debenture Trustee and/or the Debenture Holderssuch information as it may require for any filings, statements, reports that the
Debenture Trustee is required to provide to any Governmental Authority underApplicable Law.
(aa)As soon as possible, but in any event within 45 (forty five) calendar days after theend of each quarter of each of its Financial Year, a compliance certificate duly certifiedby 2 (Two) authorised signatories of the Company, one of whom shall be the chieffinancial officer and which is substantially in the form set out in Schedule VIII (Formatof Compliance Certificate) of the Debenture Trust cum Mortgage Deed setting out (inreasonable detail) computations as to compliance with sub-Section Dbelow (FinancialCovenants) as at the date as at which those financial statements were drawn up basedon standalone financial statements.
(bb) Upon the request of the Debenture Holder(s), a copy of all reporting it has tosubmit to RBI or any other governmental authority in accordance with the ApplicableLaws;
(cc)Promptly upon its publication, any material changes in the relevant regulationsaffecting the Company from the RBI;
(dd)As soon as possible after the date of this Deed, and if applicable itsassigned Value Added Tax (VAT) number and any other details in respect thereof;
(ee) The Company agrees to send to the Debenture Holder(s) and also to the stockexchange, within 1 (One) month from the end of half year(s) September and March, fordissemination a half-yearly communication, countersigned by the Debenture Trustee
containing the following information:
•credit rating of the issue•asset cover available
•debt- equity ratio of the company•previous due date for the payment of coupon/principal and whether the
same has been paid or not, and•next due date of payment and whether the same would be paid or not.
(If) Notify the Debenture Trustee
The Company shall provide / cause to be provided information in respect of thefollowing promptly and no later than 7 (Seven) calendar days from the occurrence ofsuch event (unless otherwise specifically provided):
i. Notify the Debenture Trustee in writing, if it becomes aware of any fact, matter
or circumstance which would cause any of the representations and warrantiesunder any of the Transaction Documents to become untrue or inaccurate ormisleading in any material respect.
ii. Notify the Debenture Trustee in writing, of any of any proposed change in thebusiness or operations of the Company or the enteringarrangement by any person other than in the normal
C. NEGATIVE COVENANTS
The Company covenants with the Debenture Holders and/or the Debenture Trustee thatthe Company shall not for so long as any amount remains outstanding under theDebentures, take any action in relation to the items set out below (except as mayotherwise be previously agreed to in writing by the Debenture Trustee (acting upon thereceipt of the prior written approval of the Majority Debenture Holder(s)). Providedthat the Debenture Trustee shall after consultation with the Majority DebentureHolder(s) provide its approval or dissent as the case may be, as soon as reasonablypracticable on receipt of any such request for approval received by the Company:
(a) NEGATIVE PLEDGE
subsist any Security over any of its assets other than in the ordinaryof the Company.
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
course of business that may materially affect the assets and liabilities of theCompany, at least 3 (Three) Business Days prior to the date on which suchaction is proposed to be given effect.
iii. Provide to the Debenture Trustee such further information regarding thefinancial condition, business and operations of the Company as the DebentureTrustee may reasonably request in relation to the Payments due to be made onthe Debentures.
iv. Forward the details on utilisation of funds raised through the issue ofDebentures duly certified by the Company's statutory auditors/charteredaccountant, to the Debenture Trustee within 30 (Thirty) Business Days fromthe Deemed Date of Allotment and at the end of each financial year.
v. Notify the Debenture Trustee of any revision or downgrade in the ratingprovided by the Rating Agency in the Issue.
vi. Notify the Debenture Trustee of any change in the GAAP followed in thefinancial statements and accordingly vide the Company's auditor's deliver tothe Debenture Trustee a description of the changes sought to be made in thefinancial statements pursuant to the change in the GAAP.
vii. Notify the Debenture Trustee of any change in the authorized signatories of theCompany in relation to this Issue.
viii.Forward to the Debenture Trustee all material documents dispatched by theCompany to (i) its shareholders and (ii) its creditors generally at the same timeas they are dispatched.
ix. Inform the Debenture Trustee about all orders, directions, and notices ofcourt/tribunal affecting the Security.
x. Any security interest being granted or established or becoming enforceableover any of the Hypothecated Assets and Immovable Property.
xi. The Company shall inform the Debenture Trustee before declaring anydividend.
(b)DISPOSAL OF ASSETS
•Sell, lease, transfer, or otherwise dispose of in any manner whatsoever any
assets of the Company (whether in a single transaction or in a series oftransactions (whether related or not) or any other transactions whichcumulatively have the same effect) other than any securitization/portfolio saleof assets undertaken by the Company in its ordinary course of business;
•Sell, transfer or otherwise dispose of any receivables on recourse terms; or
•enter into any arrangement under which money or the benefit of a bank or otheraccount may be applied, set-off or made subject to a combination of accounts,
save and except bankers' statutory right to lien and set-off arising underApplicable Law; or
•the Borrower shall not enter into any preferential arrangement which would
have the effect of placing any creditor in preference over the Lender withregards to the assets of the Borrower, except in relation to the security createdover those assets subsequently acquired to secure its purchase price.
(c)CHANGE OF BUSINESS
Change the general nature and conduct of its present scope of its business.
(d)MERGER
Engage in or undertake any corporate restructuring, re-organisation and / or re
capitalisation of any sort including but not limited to merger, spin-offs, demerger,consolidation, reorganisation, amalgamation, reconstruction, capital reduction and
liquidation.
(e)ACQUISITIONS
Acquire any company, business, assets or undertaking if the amount of the acquisitioncost, when aggregated with the aggregate acquisition cost of any other companies,business, assets or undertaking acquired by the Company during that financial yearexceeds 10% (Ten Percent) of the Company's Tier 1 Capital.
(f)ARM'S LENGTH TRANSACTIONS
Enter into any transactions with any related entity other than any which are on termsand conditions that are substantially as favorable to the Company as it would obtain ina comparable arm's-length transaction with a person that is not a related entity.
(g)LOANS AND GUARANTEES
Shall not raise any loan, secured or unsecured, issue any debentures, accept any
deposits from the public or otherwise issue any equity or preference capital, create anycharge on its assets or give any guarantee, other than those in the Company's ordinarycourse of business.
(h) OBJECTIONABLE PRACTICES AND EXCLUSION LIST
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Permit any of the Debenture proceeds to be used to fund:(i) any form of violent political activity, terrorists or terrorist organizations, nor
any money laundering process or scheme to disguise illegally obtained funds,nor any other criminal activity including arms sales, drug trafficking, robbery,fraud or racketeering; or
(ii) any activity on the Exclusion List; or(iii)The Company shall not (and the Company shall ensure that no other Person of
the Group) will engage in any Objectionable Practice nor authorise or permitany other person acting on its behalf to do so.
(i) CONSTITUTIONAL DOCUMENTS
Make any amendments to the main object clause of its Memorandum of Association ina manner which would prejudicially affect the interests of the Debenture Holder(s),without the prior written consent of the Debenture Trustee.
(j) ARRANGEMENT WITH CREDITORS
Enter into any material compromise or arrangement or settlement with any of itssecured creditors that would prejudicially affect the interests of the DebentureHolder(s), without the prior written consent of the Debenture Trustee.
(k) DIVIDEND
Declare or pay any dividend to its shareholders during any financial year unless (i) ithas paid the amounts then due and payable on the Debentures, or has made provisionssatisfactoiy to the Debenture Trustee for making such payments (ii) the CapitalAdequacy Ratio of 18% is maintained, and (iii) no Event of Default is outstanding.
(1) WINDING UP, ETC.
Wind-up, liquidate or dissolve its affairs.
(m) JOINT VENTURES
•Acquire (or agree to acquire) any shares, stocks, securities or other interest inany Joint Venture; and
•Transfer any assets or lend to or guarantee or indemnify or give security for theobligations of a Joint Venture (or agree to transfer, lend, guarantee, indemnifyor give security for the obligations of a Joint Venture).
For the purposes of this sub-paragraph {Joint Ventures), "Joint Venture" means anyjoint venture entity, whether a company, unincorporated firm, undertaking, association,
joint venture or partnership or any other entity, any business arrangement in which theparties agree to develop, for a finite or infinite period of time, a new entity or newassets by contributing equity for common control over revenues, expenses, or otherassets, whether in a company, unincorporated firm, undertaking.
(n) PROFIT SHARING ARRANGEMENT
Enter into or establish any partnership, profit sharing, royalty agreement or othert whereby the Company's income or profits are, or might be, sharedson; or enter into any management contract or similar arrangement
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
whereby its business or operations are managed by (other than for specific activitiesoutsourced by the Company in the ordinary course of business) any other Person, otherthan any partnerships, tie-ups or other arrangements entered into by the Company withthird parties for the promotion of various products/services of such third parties for thebenefit of the Company's underlying clients, provided however that any sucharrangement shall not give rise to any monetary liabilities imposed on the Company
(o) CHANGE OF OWNERSHIP/CONTROL
(i) take any action resulting in the change of ownership of 10% (Ten Percent) ormore of the existing share capital of the Company during a given financialyear.
(ii) issue any additional shares or equity interests and shall not have its existingshares or equity interests transferred, sold, pledged or otherwise encumbered, ifsuch action results in the owners or holders of such existing shares and equityinterests (as of the Deemed Date of Allotment) having less than 67% (sixtyseven percent) of the total voting power and economic interests in theCompany.
D. FINANCIAL COVENANTS
The Company shall:'
(a)at all times until the redemption of all outstanding Debentures maintain a ratio ofA:B is less than 15%, (fifteen percent) where A is the aggregate of (i) Portfolio At Riskover 90 (ninety) days, and (ii) loans restructured reduced by loan loss provisions, and B isthe Equity;
(b)at all times until the redemption of all outstanding Debentures maintain capitaladequacy ratio calculated according to the capital adequacy standards as established bythe RBI of at least 15% (fifteen percent) or such higher level as may be prescribed by theRBI;
(c)at all times until the redemption of all outstanding Debentures maintain not morethan 5% (five percent) of its Total Liabilities in non-Indian Rupee denominated currency.For the purpose of this sub-paragraph, any liabilities of the Company which are in non-Indian Rupee denominated currency but are subject to full currency hedge shall be treatedas Indian Rupee denominated liabilities;
(d)at all times until the redemption of all outstanding Debentures maintain not moyethan 5% (five percent) of its Net Assets in non-Indian Rupee denominated currency. Forthe purpose of this Clause any assets of the Company which are in non-Indian Rupeedenominated currency but are subject to full currency hedge shall be treated as IndianRupee denominated assets;
(e)at all times until the redemption of all outstanding Debentures maintain a ratio ofTotal Debt to Equity not higher than 7.5;
(f)at all times until the redemption of all outstanding Debentures, maintain a ratio oftotal outstanding amount of Debentures to Net Assets, of not greater than 7% (sevenpercent), and shall ensure that the ratio mentioned in this sub-Section D does not increase
. mrom one month to the immediately forthcoming month; and
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(g) maintain a ratio of outstanding off-balance sheet portfolio (including Assetssecuritized) to Net Assets, of less than 40% (forty percent).E.DEFAULT INTEREST RATE
Any payment obligations due on the Debentures including any Coupon and/or principalamounts and/or any other payment to be made by the Company in connection with theDebentures shall, in case the same be not paid on the respective due dates, carry furtherdefault interest of 2% (Two Percent) per annum over the Coupon Rate computed on theentire unpaid amounts, for the period commencing from the respective due dates for suchamounts and expiring on the date on which such payment is actually made (the defaultinterest payable in terms of this paragraph is hereinafter referred to as the "DefaultInterest").
In case of any delay in execution of the Debenture Trust cum Mortgage Deed and thesecurity documents, the Company will refund the subscription monies with agreed rate ofinterest or will pay interest of 2% (Two percent) per annum over and above the CouponRate till these conditions are complied with at the option of the Debenture Holder.
F.SECURITY
The Debentures shall be secured by way of a first pari passu mortgage created over theImmovable Property and by way of a first ranking exclusive and continuing charge to becreated pursuant to the Deed of Hypothecation to be executed between the Company andthe Trustee over the Hypothecated Assets which shall be at least 1 (One) time to the valueof the Outstanding Principal Amount being maintained at all times until all the SecuredObligations in relation to the Debentures are satisfied by the Company as moreparticularly described in the Deed of Hypothecation. It is clarified that the asset covershall be sufficient to cover the principal and coupon amounts outstanding under theDebentures at all times.
G.ALLOTMENT OF DEBENTURES
The Debentures will be deemed to be allotted to the applicants on November 17,2015("Deemed Date of Allotment"). All benefits relating to the Debentures will be available tothe Debenture Holders from the Deemed Date of Allotment. In the event the Companyfails to allot the Debentures to the Applicants within 60 (sixty) days from the date ofreceipt of the Application Money ("Allotment Period"), it shall repay the ApplicationMoney to the Applicants within 15 (fifteen) days from the expiry of the Allotment Period("Repayment Period"). In the event the Company fails to repay the Application Moneywithin the Repayment Period, then Company shall be liable to repay the ApplicationMoney along with interest at the rate of 13.50% (thirteen decimal five percent) per annumfrom the expiry of the Allotment Period. Notwithstanding the above, no interest shall bepayable if the Company is paying applicable coupon on the debentures as per sub-sectionI (COUPON) below.
H. APPLICATION MONEY
The Application Money received by the Company shall be kept in a separate bankaccount maintained by the Company with a scheduled bank and shall not be utilised forany purpose other than:
(a) for adustment aainst allotment of Debentures; orication Money in case the Company is unable to allot the
I. COUPON
The Company covenants with the Debenture Trustee that it shall pay to the DebentureHolder(s) the applicable Coupon on the Outstanding Principal Amounts semi-annually onthe Coupon Payment Date, the Redemption Amount in respect of the Debentures on theMaturity Date mentioned herein or earlier (in case of any default or prepayment inaccordance with the terms of this Deed) and shall also pay all other amounts due inrespect of the Debentures as stipulated and in accordance with the Financial Terms andConditions. The Company shall make / release all Payments due by the Company interms of the Transaction Documents to the Debenture Holders in proportion to their dues.
The Company shall make all Payments due by the Company in terms of the TransactionDocuments in accordance with the terms of the Transaction Documents and in the eventthat the Transaction Documentsdo not provide for the same, as per the instructions of theDebenture Trustee.
J. REDEMPTION
The Outstanding Principal Amount of the Debentures, together with accrued but unpaidCoupon and additional interest, if any, will be redeemed at par on the Maturity Date.
K. LISITNGThe Debentures shall be listed on the wholesale debt market segment of the BSE within15 (Fifteen) calendar days from the Deemed Date of Allotment ("Listing Period"). TheCompany shall at all times comply with all applicable RBIregulations, SEBIregulations and other Applicable Law in relation to the issuance of the Debenturesand the listing of the Debentures on the BSE and shall further ensure that allgovernment approvals and resolutions required to issue or list the Debentures arein place. The Company does hereby agree and undertake that it shall (if the samehas not already been completed) execute the applicable listing agreements andother agreements, documents and other writings as may be stipulated by theconcerned stock exchange for listing of the Debentures on such stock exchangeand further agrees and undertakes that it shall furnish all such information anddocuments as may be required by a stock exchange for the continuous listing ofthe Debentures. All expenses, costs and charges incurred for the purpose of listingof the Debentures shall be borne and paid by the Company.
In the event that the Debentures are not listed within the Listing Period for anyreason whatsoever, then the Company undertakes to immediately redeem and/orbuyback the Debentures immediately upon the expiry of the Listing Period fromthe Debenture Holders who are foreign portfolio investors, foreign institutionalinvestors or sub-accounts of foreign institutional investors, or qualified foreigninvestors, and are not permitted to hold to-be listed debt securities if listing is notdone within 15 (Fifteen) days.
It is clarified that if the Company fails to redeem or buyback the Debentures then itwill be a breach of its obligations and a Debenture Holder, at its option, may sellthe Debentures to a third party as per Applicable Law and the Company shallindemnify such Debenture Holder for any loss, damage, costs, charges, expenses
ebenture Holder may incur in relation to such sale to a thirdate in such sale by taking all necessary corporate actions and
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
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Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
other actions required by Applicable Law.
The Company shall obtain and ensure that the Debentures continue to be listed onthe wholesale debt marketsegment of the BSE.
The Company shall ensure that the Debentures at all times are rated in accordancewith the provisions of the Transaction Documents and the Company will ensurethat the rating of the Debentures is not downgraded throughout the tenor of theDebentures vis-a-vis the rating of the Debentures on the Deemed Date ofAllotment and/or the rating of the Debentures is not withdrawn for any reason.
In the event there is any delay in listing of the Debentures beyond 20 (twenty)calendar days from the Deemed Date of Allotment, the Company will pay to theDebenture Holders, a penal interest of 1 % per annum over the Coupon Rate, fromthe expiry of 30 (thirty) calendar days from the Deemed Date of Allotment till thelisting of the Debentures is completed.
L. SECURITY
The security to be provided by the Company as security for the discharge of the SecuredObligations shall consist of:
(I)a first ranking exclusive and continuing charge created by way of hypothecationover the Hypothecated Assets, both present and future, which shall be equal to at least thevalue of the Outstanding Principal Amounts of the Debentures, in favour of the DebentureTrustee under or pursuant to the Deed of Hypothecation The charge over the HypothecatedAssets shall be 1.0 (One Decimal Point Zero) times the value of the Outstanding PrincipalAmount and shall be maintained at all times until all the Secured Obligations in relation tothe Debentures are satisfied by the Company as more particularly described in the Deed ofHypothecation;(II)a first paripassu mortgage created over the Immovable Property by and under thEDebenture Trust cum Mortgage Deed,(collectively referred to as the "Security").
The Company shall register and perfect the security interest created under the Deed ofHypothecation by filing Form CHG-9 with the concerned registrar of companies inrelation thereto as soon as practicable and no later than 20 (Twenty) calendar day after thedate of execution of the Deed of Hypothecation.
The Company shall create the mortgage over the Immovable Property and register theDeed with the jurisdictional sub-registrar of assurances on or before the Deemed Date ofAllotment and shall file form CHG-9 in respect of the mortgage over the ImmovableProperty within 20 (Twenty) days of the Deemed Date of Allotment, (parripassu chargeonly)
M. CHANGE OF TDS
(i) If the applicable rate of Tax deducted at source is modified and results in areduction of the net interest received by the Debenture Holders, the Company must
give written notice to the Debenture Holders (with a copy to the Debentureecomes aware of such change.
(a)Payment Defaults
The Company does not pay on the Due Date any amount payable pursuant totheDebenture Trust cum Mortgage Deed and the Debentures at the place at and in thecurrency in which it is expressed to be payable, unless its failure to pay is caused byadministrative or technical error and payment is made within 5 (five) calendar daysof its Due Date.
(b)Insolvency / Inability to Pay Debts
The Company is unable or admits inability to pay its debts as they fall due, suspendsmaking payments on any of its debts or, by reason of actual or anticipated financialdifficulties, commences negotiations with one or more of its creditors with a view torescheduling any of its Indebtedness.
(c)Charge over Hypothecated Assets
The Company creates or attempts to create any charge on the Hypothecated Assets orany part thereof, in addition to the charge created under the Deed of Hypothecationwithout the consent of the Special Majority Debenture Holders.
(d)Business
The Company without obtaining the prior consent of the Special Majority DebentureHolders ceases to carry on its business or gives notice of its intentionto do so.
(e)Security in Jeopardy
6.4 Events of DefaultIf one or more of the events specified in this Section 6.4 below happen(s), the DebentureTrustee may, in their discretion, and shall, upon request in writing of the DebentureHolders of an amount representing not less than three-fourths in value of the nominalamount of the Debentures for the time being outstanding or by a Special Resolution by anotice in writing to the Company take all such action, expressly or impliedly permittedunder the Transaction Documents or in law.
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(ii)If the applicable rate of Tax deducted at source is .modified and results in areduction of amounts received as net interest by the Debenture Holders, theCompany shall, on each Coupon Payment Date, pay to the Debenture Holders anadditional amount so that the net amount received by the Debenture Holders shallequal the amount which it would have received had the rate of the Tax deducted atsource remained unchanged, as on the date of the Debenture Trust cum MortgageDeed.
(iii) If the applicable rate of Tax deducted at source is modified and results in anincrease of amounts received as net interest by the Debenture Holders, theCompany shall, on each Coupon Payment Date, pay to the Debenture Holders areduced amount so that the net amount received by the Debenture Holders shallequal the amount which it would have received had the rate of the Tax deducted atsource remained unchanged, as on the date of the Debenture Trust cum MortgageDeed.
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In the opinion of the Debenture Trustee any Hypothecated Asset(s) or the Security(or any part thereof) is in jeopardy.
(f)Misrepresentation
Any representation or warranty made by the Company in any Transaction Documentor in any certificate, financial statement or other document delivered to the Debenture
Trustee/Debenture Holders by the Company shall prove to have been incorrect, falseor misleading in any material respect when made or deemed made.
(g)Material Adverse Change
There shall have occurred a change in the business, operations, property, Assets,
liabilities, condition (financial or otherwise) or prospects of the Company since thedate hereof that has resulted in a Material Adverse Effect.
(h) Liquidation or Dissolution of the Company/Appointment of Receiver or Liquidator
Any corporate action, legal proceedings or other procedure or step is taken in relation
to:
(i) the suspension of payments, a moratorium of any indebtedness, winding-up,dissolution, administration or re-organisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of the Company;
(ii) a composition, compromise, assignment or arrangement with any creditor of theCompany;
(iii)the appointment of a liquidator, receiver, administrative receiver, administrator,compulsory manager or other similar officer in respect of the Company; or
(iv) enforcement of any security over any Assets of the Company or any analogousprocedure or step is taken in any jurisdiction.
Any other event occurs or proceeding under any Applicable Law that would have aneffect analogous to any of the events listed in sub-paragraphs (i), (ii), (iii) and (iv)above.
(i) Cross Default
The Company (i) defaults in any payment of any Indebtedness beyond the period ofgrace (not to exceed 30 days), if any, provided in the instrument or agreement underwhich such Indebtedness was created; (ii) defaults in any payment obligation (apartfrom payment obligations arising under any Indebtedness) in excess of the ThresholdAmount (or its equivalent local currency amount); (iii) defaults in any paymentobligation under any contract (apart from payment obligations arising under anyIndebtedness) in excess of the Threshold Amount (or its equivalent local currencyamount); (iv) defaults in the observance or performance of any agreement or conditionrelating to any Indebtedness or contained in any instrument or agreement evidencing,securing or relating thereto or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause or to permit the holder orholders of such Indebtedness to cause (determined without regard to whether anynotice is required) any such Indebtedness to become due prior to its stated maturity; or
^51^—iTte^jaa^^^ndebtedness of the Company shall be declared to be due and payable, or
Any expropriation, attachment, garnishing, sequestration, distress or execution affects any Asset or Assets
of the Company having an aggregate value of the Threshold Amount and is notdischarged within 30 (thirty) calendar days or as otherwise provided in any order ofany competent court or tribunal relating to the aforementioned actions.
(k) Judgments Defaults
One or more judgments or decrees entered against the Company involving a liability (not paidor not covered by a reputable and solvent insurance company), individually or in theaggregate, exceeding the Threshold Amount (or its equivalent local currency amount)provided such judgments or decrees are either final and non-appealable or have notbeen vacated, discharged or stayed pending appeal for any period of 30 (thirty)consecutive calendar days.
(1) Transaction Documents
Any Transaction Document in whole or in part, are terminated or cease to be effective or cease
to be a legally valid, binding and enforceable obligation of the Company.
(m) UnlawfulnessIt is or becomes unlawful for the Company to perform any of its obligations under the
Transaction Documents and/or any' obligation or obligations of the Company underany Transaction Document are not or cease to be valid, binding or enforceable.
(n) Repudiation
The Company repudiates any of the Transaction Documents, or evidences an intentionto repudiate any of the Transaction Documents.
(o) Breach of Terms of the Transaction Documents
A breach by the Company of any of its representations, obligations and covenantsprovided in terms of theDebenture Trust cum Mortgage Deed or other TransactionDocuments.
(p)Delisting Of Debentures
The listing of the Debentures ceases or is suspended at any point of time prior to theFinal Settlement Date, except if the Debentures are delisted in accordance withApplicable Law and the consent of the Majority Debenture Holder(s).
(q) Expropriation, Nationalization Etc.
Any Governmental Authority condemns, nationalizes, seizes, expropriates or otherwise
assumes custody or control of all or any substantial part of the business, operations,
property or other assets (including assets forming part of the Security) of the Companyor of its share capital, or takes any action for the dissolution of the Company or anyaction that would prevent the Company or its officers from carrying on all or a
f its business or operations.
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required to be prepaid other than by a regularly scheduled required prepayment, priorto the stated maturity thereof.
Creditors' Process0)
(ix.) authority to execute documents including re-conveyance and re-transfer of
Mortgaged Property or the conveyance in case of sale, assignment or transfer of
the Mortgaged Property in exercise of the Power of Sale contained in theDebenture Trust cum Mortgage Deedor transfer of mortgage or other assurance
reuired to be executed by the Debenture Trustee shall if executed by anye Debenture Trustee be deemed as good and effectual as if
had authorized such person to execute the same; and/or
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6.5 Consequences of Events of Default
On and at any time after the occurrence of an Event of Default, unless such Event of
Default at the request of the Company is expressly waived by the Debenture Trustee actingon the instructions of the Majority Debenture Holder(s), the Debenture Trustee shall if sodirected by the Majority Debenture Holder(s):
(i.) subject to Applicable Law, require the Company to mandatorily redeem theDebentures and repay the principal amount on the Debentures, along with accruedbut unpaid interest, and other costs, charges and expenses incurred under or inconnection with theDebenture Trust cum Mortgage Deed and other TransactionDocuments;
(ii.) subject to Applicable Law, declare all or any part of the Debentures to beimmediately (or on such dates as the Debenture Trustee may specify) due andpayable, whereupon it shall become so due and payable;
(iii.) enforce any security created pursuant to the Debenture Trust cum Mortgage Deedand/or the Deed of Hypothecation in accordance with its terms, as may be set outherein or therein, towards repayment of the Debentures;
(iv.) appoint any independent agency to inspect and examine the working of theCompany and give a report to Debenture Holders/ the Debenture Trustee. TheCompany shall give full co-operation and provide necessary assistance to suchagency and bear all costs and expenses of the examination including theprofessional fees and travelling and other expenses;
(v.) take all such other action expressly permitted under theDebenture Trust cumMortgage Deed or in the other Transaction Documents or permitted under theApplicable Law;
(vi.) exercise such other rights as the Debenture Trustee may deem fit under applicableLaw to protect the interest of the Debenture Holders;
(vii.) subject to Section 69 of the Transfer of Property Act, 1882, to sell, assign orotherwise liquidate or direct the Company to sell, assign or otherwise liquidate anyor all of the Mortgaged Property, in such manner, at such time, at such place orplaces and on such terms as the Debenture Trustee may, in compliance with the
requirements of law, determine in its absolute discretion and to take possession ofthe proceeds of any such sale or liquidation;
(viii.) to receive all rents and profits thereof without any disturbance or hindrance fromthe Company and to retain all cash proceeds received or receivable by theCompany in respect of the Mortgaged Property and to use such funds, in whole orpart, towards repayment of the Company's obligations to the Debenture Holdersand/or the Debenture Trustee under these presents;
Mode of Transfer/Transmission of Debentures
SECTION 7: OTHER INFORMATION AND APPLICATION PROCESS
The Debentures being offered as part of the Issue are subject to the provisions of the Act, thememorandum of association and articles of associationof the Issuer, the terms of this InformationMemorandum, Application Form and other terms and conditions as may be incorporated in theTransaction Documents.
6.6 APPLICATION FOR THE 'SMALL FINANCE BANK' LICENSE
Without prejudice to the decision of the Debenture Holder to provide consent to anyamendment or modification of the Transaction Documents:
(a)The Company confirms that it has received approval on September 16, 2015 from theRBI to establish a small finance bank within 18 (eighteen) months of receipt of approval.As of the date hereof, the Company proposes to establish a separate legal entity whichwill, subject to applicable law and in accordance with the directions of the RBI,commence business as a small finance bank ("SFB"). The Company further proposes that
the Company will transfer, and the SFB will assume, the assets and liabilities of theCompany in the manner prescribed by Applicable Law, including by way of seeking therequired approval from the RBI, the jurisdictional high court(s), and any othergovernment authority (collectively, the "Transfer of Business").
(b)The Company will seek the prior written consent of the Debenture Holders prior to (i)the submission of any scheme or any proposal or any document or submission similar tothe aforementioned, to the RBI, the jurisdictional high court(s), or any other governmentauthority, in relation to the Transfer of Business, and/or (ii) the entering into of any termsheet, deeds, instruments or agreemen^s) in relation to the Transfer of Business. The
Company and the Debenture Trustee (acting on instructions of Debenture Holders) willdiscuss in good faith, and incorporate, any modifications that the Debenture Holders mayrequire to the documents mentioned in (i) and/or (ii) above. Further, if any changes arerequired to the Transaction Documents because of the foregoing, then the parties to theTransaction Documents will mutually discuss in good faith and to agree to suchmodifications as may be required to the Transaction Documents. If the Debenture Holdersand the Company are unable to agree on the modifications to the Transaction Documentsand/or the documents mentioned in (i) and/or (ii) above, then the parties will mutuallydiscuss in good faith to find a commercially acceptable solution for the parties, includingwithout limitation, applying to the RBI and any other government authority and obtainingtheir approval for any such solution arrived at by the parties.
(x.) exercise any other right that the Debenture Trustee and /or Debenture Holder(s)may have under the Transaction Documents or under Applicable Law.
Until the happening of any of the Event(s) of Default set out in Section 6.4 above, theDebenture Trustee shall not be in any manner required, bound or concerned to interfere
with the management of the affairs of the Company or its business thereof. The DebentureTrustee shall, on being informed by the Company of the happening of any of the Event(s)of Default set out in Section 6.4 above or upon the happening of any of such Event(s) ofDefault coming to its notice, forthwith give written notice to the Debenture Holder(s) of the
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Infoimation Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The Debentures shall be transferable freely and transmittable by the Debenture Holder(s) in wholeor in part without the prior consent of the Company. The Debenture Holder(s) shall also have theright to novate, transfer or assign its rights and/or the benefits under the Transaction Documentsupon such transfer/transmission of the Debentures; however, it is clarified that no Investor shall beentitled to transfer the Debentures to a person who is not entitled to subscribe to the Debentures.The Debenture(s) shall be transferred and/or transmitted in accordance with the applicableprovisions of the Act, the Depositories Act and other applicable laws. The Debentures held indematerialized form shall be transferred subject to and in accordance with the rules/procedures asprescribed by NSDL/CDSL and the relevant DPs of the transferor or transferee and any otherapplicable laws and rules notified in respect thereof. The transferee(s) should ensure that thetransfer formalities are completed prior to the Record Date. In the absence of the same, amounts
due will be paid/redemption will be made to the person, whose name appears in the register ofdebenture holders maintained by the R&T Agent as on the Record Date, under all circumstances. Incases where the transfer formalities have not been completed by the transferor, claims, if any, bythe transferees would need to be settled with the transfero^s) and not with the Issuer. The normalprocedure followed for transfer of securities held in dematerialized form shall be followed fortransfer of these Debentures held in dematerialised form. The seller should give deliveryinstructions containing details of the buyer's DP account to his DP.
7.2Debentures held in Dematerialised Form
The Debentures shall be held in dematerialised form and no action is required on the part of theDebenture Holder(s) for redemption purposes and the redemption proceeds will be paid bycheque/EFT/RTGS to those Debenture Holder(s) whose names appear on the list of beneficiariesmaintained by the R&T Agent. The names would be as per the R&T Agent's records on the RecordDate fixed for the purpose of redemption. All such Debentures will be simultaneously redeemedthrough appropriate debit corporate action.
The list of beneficiaries as of the relevantRecord Date setting out the relevant beneficiaries' nameand account number, address, bank details and DP's identification number will be given by theR&T Agent to the Issuer. If permitted, the Issuer may transfer payments required to be made in anyrelation by EFT/RTGS to the bank account of the Debenture Holder(s) for redemption payments.
7.3Trustee for the Debenture Holder(s)
The Issuer has appointed GDA Trusteeship Limitedto act as trustee for the Debenture Holder(s).The Issuer and the Debenture Trustee have entered/intend to enter into the Debenture TrusteeAgreement and the Debenture Trust cum Mortgage Deedinter alia, specifying the powers,authorities and obligations of the Debenture Trustee and the Issuer. The Debenture Holder(s) shall,without further act or deed, be deemed to have irrevocably given their consent to the DebentureTrustee or any of its agents or authorized officials to do all such acts, deeds, matters and things inrespect of or relating to the Debentures as the Debenture Trustee may in its absolute discretiondeem necessary or require to be done in the interest of the Debenture Holder(s) subject to the termsof the Debenture Trust cum Mortgage Deed. Any payment made by the Issuer to the DebentureTrustee on behalf of the Debenture Holder(s) in accordance with the Debenture Trust cumMortgage Deed shall discharge the Issuer pro tanto to the Debenture Holder(s). The DebentureTrustee will protect the interest of the Debenture Holder(s) in regard to the repayment of principaland coupon thereon and they will take necessary action, subject to and in accordance with theDebenture Trustee Agreement and the Debenture Trust cum Mortgage Deed, at the cost of theIssuer. No Debenture Holder shall be entitled to proceed directly against the Issuer unless theDebenture Trustee, having become so bound to proceed, fails to do so. The Debenture Trustee
Agreement and the Debenture Trustcum MortgageDeed shall more specifically set out the rightsand remedies of the Debenture Holders) and the manner of enforcement thereof.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lien of a prospectus)
7.4Sharing of Information
The Issuer may, at its option, but subject to applicable laws, use on its own, as well as exchange,
share or part with any financial or other information about the Debenture Holder(s) available withthe Issuer, with its subsidiaries and affiliates and other banks, financial institutions, credit bureaus,agencies, statutory bodies, as may be required and neither the Issuer nor its subsidiaries andaffiliates nor their agents shall be liable for use of the aforesaid information.
7.5Debenture Holder not a Shareholder
The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders other thanthose available to them under the Act. The Debentures shall not confer upon the Debenture Holdersthe right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholdersof the Issuer.
7.6Modification of Debentures
The Debenture Trustee and the Issuer will agree to make any modifications in the InformationMemorandum which, in the opinion of the Debenture Trustee, is of a formal, minor or technicalnature or is to correct a manifest error.
The rights, privileges and conditions attached to the Debentures may be varied, modified orabrogated with the consent in writing of all the Debenture Holder(s).The Company shall concur with the Debenture Trustee in making any modifications to theDebenture Trust cum Mortgage Deed which in the opinion of the Debenture Trustee shall beexpedient to make provided that once a modification has been approved by consent in writing of theSpecial Majority Debenture Holder(s) for the time being outstanding, or by a Special Resolutionduly passed at a meeting of the Debenture Holder(s), the Debenture Trustee shall give effect to thesame by executing the necessary deed(s) supplemental to the Debenture Trust cum Mortgage Deed.PROVIDED THAT any terms affecting the rights of the Debenture Holders may only be variedwith the consent of all the Debenture Holders.
7.7Right to accept or reject Applications
The Board of Directors/Committee of Directors reserves its full, unqualified and absolute right toaccept or reject any application for subscription to the Debentures, in part or in full, withoutassigning any reason thereof.
7.8Notices
Any notice may be served by the Issuer/ Debenture Trustee upon the Debenture Holders throughregistered post, recognized overnight courier service, hand deliveryor by facsimile transmission
addressed to such Debenture Holder at its/his registered address or facsimile number.
All notice(s) to be given by the Debenture Holder(s) to the Issuer/ Debenture Trustee shall be sentby registered post, recognized overnight courier service, hand deliveiy or by facsimile transmissionto the Issuer or to such persons at such address/ facsimile number as may be notified by the Issuer
from time to time through suitable communication. All correspondence regarding the Debenturesshould be marked "Private Placement of Debentures".
Notice(s) shall be deemed to be effective (a)in the case of registered mail, 3 (three) Business Daysafter posting; (b)l (One) Business Day after delivery by recognized overnight courier service, ifsent for next Business Dadelivery(c) in the case of facsimile at the time when dispatched with a
sion or (d) in the case of personal delivery, at the time of delivery.
Only Eligible Investors as given hereunder may apply for the Debentures by completing theApplication Form in the prescribed format in block letters in English as per the instructionscontained therein. The minimum number of Debentures that can be applied for and the multiplesthereof shall be set out in the Application Form. No application can be made for a fraction of aDebenture. Application forms should be duly completed in all respects and applications notcompleted in the said manner are liable to be rejected. The name of the applicant's bank, type ofaccount and account number must be duly completed by the applicant. This is required for theapplicant's own safety and these details will be printed on the refund orders and /or redemptionswarrants.
The applicant should transfer payments required to be made in any relation by EFT/RTGS, to thebank account of the Issuer as per the details mentioned in the Application Form.
7.10Application Procedure
Potential Investors will be invited to subscribe by way of the Application Form prescribed in theInformation Memorandumduring the period between the Issue Opening Date and the Issue ClosingDate (both dates inclusive). The Issuer reserves the right to change the issue schedule including theDeemed Date of Allotment at its sole discretion, without giving any reasons. The Issue will be openfor subscription during the banking hours on each day during the period covered by the IssueSchedule.
7.11Fictitious Application
All fictitious applications will be rejected.
7.12Basis of Allotment
Notwithstanding anything stated elsewhere, the Issuer reserves the right to accept or reject anyapplication, in part or in full, without assigning any reason. Subject to the aforesaid, in case of oversubscription, priority will be given to potentiallnvestors on a first come first serve basis. Theinvestors will be required to remit the funds as well as submit the duly completed Application Formalong with other necessary documents to the Issuer by the Deemed Date of Allotment.
7.13Payment Instructions
The Application Form should be submitted directlyto the Company. The entire amount of Rs. 583695 (Rupees Five Hundred Eighty Three Thousand Six Hundred Ninety Five only) per Debentureis payable along with the making of an application. Applicants can remitthe application amountthrough RTGS on Pay-in Date. The RTGS details of the Issuer are as under:
Beneficiary Name:ESAF Microfinance and Investments Private LimitedBank Account No.:0059073000000631IFSCCODE: : SIBL0000059Bank Name:: South Indian BankBranch Address: South Indian Bank, Ollukkara Branch,
Hephzibah Complex, Mannuthy,Kerala 680001 INDIA
7.14Eligible Investors
Issue Procedure7.9
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
The following categories of investors," when specifically approached, are eligible to apply for thisprivate placement of Debentures subject to fulfilling their respective investment norms/rules andcompliance with laws applicable to them by submitting all the relevant documents along with theApplication Form ("Eligible Investors"):
(a)Mutual Funds(b)NBFCs(c)Provident Funds and Pension Funds(d)Corporates(e)Banks(f)Foreign Institutional Investors (FIIs)(g)Qualified Foreign Investors (QFIs)(h)Foreign Portfolio Investors (FPIs)(i)Insurance Companies(j)Any other person eligible to invest in the Debentures
All potential Investors are required to comply with the relevant regulations/guidelines applicable tothem for investing in this issue of Debentures.
Note: Participation by potential Investors in the issue may be subject to statutory and/or regulatoryrequirements applicable to them in connection with subscription to Indian securities by suchcategories of persons or entities. Applicants are advised to ensure that they comply with allregulatory requirements applicable to them, including exchange controls and other requirements.Applicants ought to seek independent legal and regulatory advice in relation to the laws applicableto them.
7.15 Procedure for Applying for Dematerialised Facility
(a)The applicant must have at least one beneficiary account with any of the DP's ofNSDL/CDSL prior to making the application.
(b)The applicant must necessarily fill in the details (including the beneficiary account numberand DP - ID) appearing in the Application Form under the heading "Details for Issue ofDebentures in Electronic/Dematerialised Form".
(c)Debentures allotted to an applicant will be credited to the applicant's respective beneficiaryaccoun^s) with the DP.
(d)For subscribing to the Debentures, names in the Application Form should be identical tothose appearing in the details in the Depository. In case of joint holders, the names should .necessarily be in the same sequence as they appear in the account details maintained withthe DP.
(e)Non-transferable allotment advice/refund orders will be directly sent to the applicant by theRegistrar and Transfer Agent to the Issue.
(f)If incomplete/incorrect details are given under the heading "Details for Issue of Debenturesin Electronic/Dematerialised Form" in the Application Form, it will be deemed to be anincomplete application and the same may be held liable for rejection at the sole discretionof the Issuer.
f Debentures, the address, nomination details and other details of theistered with his/her DP shall be used for all correspondence with theplicant is therefore responsible for the correctness of his/her demographic
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
details given in the Application Form vis-a-vis those with his/her DP. In case theinformation is incorrect or insufficient, the Issuer would not be liable for the losses, if any.
(h)The redemption amount or other benefits would be paid to those Debenture Holders whosenames appear on the list of beneficial owners maintained by the R&T Agent as on theRecord Date. In case of those Debentures for which the beneficial owner is not identified in
. the records of the R&T Agent as on the Record Date, the Issuer would keep in abeyance thepayment of the redemption amount or other benefits, until such time that the beneficialowner is identified by the R&T Agent and conveyed to the Issuer, whereupon theredemption amount and benefits will be paid to the beneficiaries, as identified.
7.16Depository Arrangements
The Issuer shall make necessary arrangement with CDSL and NSDL for issue and holding ofDebenture in dematerialised form.
7.17List of Beneficiaries
The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of eachRecord Date. This shall be the list, which will be used for payment or repayment of redemptionmonies.
7.18Application under Power Of Attorney
A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and specimen signature(s) of all the authorized signatories of the potential Investorand the tax exemption certificate/document of the potential Investor, if any, must be lodged alongwith the submission of the completed Application Form. Further modifications/additions in thepower of attorney or authority should be notified to the Issuer or to its agents or to such otherperson(s) at such other address(es) as may be specified by the Issuer from time to time through asuitable communication.
In case of an application made by companies under a power of attorney or resolution or authority, a
certified true copy thereof along with memorandum and articles of association and/or bye-lawsalong with other constitutional documents must be attached to the Application Form at the time ofmaking the application, failing which, the Issuer reserves the full, unqualified and absolute right toaccept or reject any application in whole or in part and in either case without assigning any reasonthereto. Names and specimen signatures of all the authorized signatories must also be lodged alongwith the submission of the completed Application Form.
7.19Procedure for application by Mutual Funds and Multiple Applications
In case of applications by mutual funds and venture capital funds, a separate application must bemade in respect of each scheme of an Indian mutual fund/venture capital fund registered with theSEBI and such applications will not be treated as multiple application, provided that the applicationmade by the asset management company/trustee/custodian clearly indicated their intention as to thescheme for which the application has been made.
The application forms duly filled shall clearly indicate the name of the concerned scheme for whichapplication is being made and must be accompanied by certified true copies of:
(a)SEBI registration certificate(b)Resolution authorizing investment and containing operating instructions
nature of authorized signatories
7.20Documents to be provided by potentiallnvestors
Potential Investors need to submit the following documents, as applicable:
(a)Memorandum and Articles of Association or other constitutional documents(b)Resolution authorising investment(c)Certified true copy of the Power of Attorney to custodian(d)Specimen signatures of the authorised signatories(e)SEBI registration certificate (for Mutual Funds)(f)Copy of PAN card(g)Application Form (including EFT/RTGS details)
7.21Applications to be accompanied with Bank Account Details
Every application shall be required to be accompanied by the bank account details of the applicantand the magnetic ink character reader code of the bank for the purpose of availing direct credit ofredemption amount and all other amounts payable to the Debenture Holder(s) throughcheque/EFT/RTGS.
7.22Succession
In the event of winding up of a Debenture Holder (being a company), the Issuer will recognise thelegal representative (being the liquidator) of the Debenture Holder appointed by a competent court.The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of such legalrepresentation, in order to recognise any person as being entitled to the Debenture(s) standing in thename of the concerned Debenture Holder on the production of sufficient documentary proof and anindemnity.
7.23Mode of Payment
All payments must be made through cheque(s) demand draft(s),EFT/RTGS as set out in theApplication Form.
7.24Effect of Holidays
7.25If any Due Date falls on a day which is not a Business Day, the payment to be made onsuch Due Date shall be made on the immediately succeeding Business Day, except if suchDue Date is for the payment of any principal amount under the Debentures, in which casethe payment to be made on such Due Date shall be made on the immediately precedingBusiness Day.Tax Deduction at Source
Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/lower rate of TDS,relevant certificate/document must be lodged by the Debenture Holder(s) at the office of the R&TAgent of the Issuer at least 15 (Fifteen) calendar days before the relevant payment becoming due.Tax exemption certificate / declaration of nondeduction of tax at source on interest on applicationmoney, should be submitted along with the Application Form.
If the applicable rate of Tax deducted at source is modified and results in a reduction of the netinterest received by the Debenture Holders, the Company must give written notice to the DebentureHolders (with a copy to the Debenture Trustee) as soon as it becomes aware of such change.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
If the applicable rate of Tax deducted at source is modified and results in a reduction of amountsreceived as net interest by the Debenture Holders, the Company shall, on each Coupon PaymentDate, pay to the Debenture Holders an additional amount so that the net amount received by theDebenture Holders shall equal the amount which it would have received had the rate of the Taxdeducted at source remained unchanged, as on the date of the Debenture Trust cum Mortgage Deed.
If the applicable rate of Tax deducted at source is modified and results in an increase of amountsreceived as net interest by the Debenture Holders, the Company shall, on each Coupon Payment
Date, pay to the Debenture Holders a reduced amount so that the net amount received by theDebenture Holders shall equal the amount which it would have received had the rate of the Taxdeducted at source remained unchanged, as on the date of theDebenture Trust cum Mortgage Deed.
In the event a Debenture Holder is a foreign portfolio investor, foreign institutional investor or sub-account of foreign institutional investors, or qualified foreign investor, the Company shall, inrelation to each Coupon Payment Date and in relation to each date when any other payment is dueby the Company under the Debentures(each a "Relevant Payment Date"), courier to the DebentureHolders (or their designated agent, as confirmed by the Debenture Holders) within 1 (One)Business Day after a Relevant Payment Date, the duly completed and signed Form 15 CA/CB. Ascanned copy of such duly completed and signed Form 15 CA/CB shall be sent to the DebentureHolders on the Relevant Payment Date by e-mail.
7.26Letters of Allotment
The letter of allotment, indicating allotment of the Debentures, will be credited in dematerialisedform within 2 (Two) Business Days from the Deemed Date of Allotment. The aforesaid letter ofallotment shall be replaced with the actual credit of Debentures, in dematerialised form, within amaximum of 7 (Seven) Business Days from the Deemed Date of Allotment.
7.27Deemed Date of Allotment
All the benefits under the Debentures, will accrue to the Investor from the specified Deemed Dateof Allotment. The Deemed Date of Allotment for the Issue is November 17, 2015by which date theInvestors would be intimated of allotment.
7.28Record Date
The Record Datewill be 15 (Fifteen) calendar dayspriorto any Due Date.
7.29Refunds
For applicants whose applications have been rejected or allotted in part, refund orders will bedispatched within 7 (seven) days from the Deemed Date of Allotment of the Debentures.In theevent the Company fails to allot the Debentures to the Applicants within 60 (sixty) days from thedate of receipt of the Application Money ("Allotment Period"), it shall repay the ApplicationMoney to the Applicants within 15 (fifteen) days from the expiry of the Allotment Period("Repayment Period"). In the event the Company fails to repay the Application Money within theRepayment Period, then Company shall be liable to repay the Application Money along withinterest at the rate of 13.50% (thirteen decimal five percent) per annum from the expiry of theAllotment Period.
In case the Issuer has received money from applicants for Debentures in excess of the aggregate of
the application money relating to the Debentures in respect of which allotments have been made,the R&T Agent shall upon receiving instructions in relation to the same from the Issuer repay the
to the extent of such excess, if any.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
7.30Interest on Application Money
7.31The Company shall be liable to pay the Debenture Holder(s) interest on applicationmoney at the rate of 13.5% (Thirteen decimal point Five percent) per annum for theperiod commencing from the date on which the Debenture Holder(s) have made paymentof the application monies in respect of the Debenturesto the Company and ending onthe Deemed Date of Allotment. The interest on application monies shall be paid by theCompany to the Debenture Holder(s)within 7 (Seven) Business Days from theDeemed Date of Allotment.PAN Number
Eveiy applicant should mention its Permanent Account Number ("PAN") allotted under IncomeTax Act, 1961, on the Application Form and attach a self-attested copy as evidence. Applicationforms without PAN will be considered incomplete and are liable to be rejected.
7.32Payment on Redemption
Payment on redemption will be made by way of cheque(s)/redemption warrant(s)/demanddraft(s)/credit through RTGS system/funds transfer in the name of the Debenture Holder(s) whosenames appear on the list of beneficial owners given by the Depositoiy to the Issuer as on the RecordDate.
The Debentures shall be taken as discharged on payment of the redemption amount by the Issuer onmaturity to the registered Debenture Holde^s) whose name appears in the Register of DebentureHolder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL/CDSLand accordingly the account of the Debenture Holder(s) with NSDL/CDSL will be adjusted.
On the Issuer dispatching the amount as specified above in respect of the Debentures, the liabilityof the Issuer shall stand extinguished.
Disclaimer: Please note that only those persons to whom this Information Memorandum has
been specifically addressed are eligible to apply. However, an application, even if complete inall respects, is liable to be rejected without assigning any reason for the same. The list ofdocuments provided above is only indicative, and an investor is required to provide all thosedocuments / authorizations / information, which are likely to be required by the Issuer. TheIssuer may, but is not bound to, revert to any investor for any additional documents /
information, and can accept or reject an application as it deems fit. Provisions in respect ofinvestment by investors falling in the categories mentioned above are merely indicative andthe Issuer does not warrant that they are permitted to invest as per extant laws, regulations,
etc. Each of the above categories of investors is required to check and comply with extantrules/regulations/ guidelines, etc. governing or regulating their investments as applicable tothem and the Issuer is not, in any way, directly or indirectly, responsible for any statutory orregulatory breaches by any investor, neither is the Issuer required to check or confirm thesame.
For ESAF Microftnance and Investments Private Limited
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
SECTION 8: DECLARATION
The Issuer declares that all the relevant provisions in the regulations/guideline issued by SEBI andother applicable laws have been complied with and no statement made in this InformationMemorandum is contrary to the provisions of the regulations/guidelines issued by SEBI and otherapplicable laws, as the case may be. The information contained in this Information Memorandum isas applicable to privately placed debt securities and subject to the information available with theIssuer. The extent of disclosures made in the Information Memorandum is consistent with
disclosures permitted by regulatory authorities to the issue of securities made by the companies inthe past.
.
13.5% per annum
If the Indian withholding tax is modified and increased above 5% (the "WHTIncrease"), the Issuer shall - starting on the date when such WHT Increase
becomes effective, and for as long as such WHT Increase remains effective -
pay an additional amount corresponding to the shortfall, which the debenture
holder would have incurred as a consequence of the WHT Increase had the
Issuer not paid such additional amount, so that the debenture holder receivesan amount equal to the sum it would have received had the WHT Increase not
occurred.
If the Indian withholding tax is modified and decreased below 5% (the "WHTDecrease"), the Issuer shall - starting on the date when such WHT Decrease
becomes effective, and for as long as such WHT Decrease remains effective -deduct an amount corresponding to the excess amount, which the debenture
holder would have received as a consequence of the WHT Decrease, so that thedebenture holder receives an amount equal to the sum it would have received
had the WHT Decrease not occurred.
Not ApplicableNot ApplicableNot ApplicableNot Applicable
The minimum application size for the Issue shall be 10 (Ten) Debentures and inmultiples of [1] thereafter
NA
November 18,2018
November, 2018, being Three years from the Deemed Date of Allotment, or
such other date on which the final payment of the Debentures becomes dueand payable as herein provided, whether at such stated maturity date, bydeclaration of acceleration, or otherwise
N.A.
Rs.5,83,695
N.A.
Rs.5,83,695
BWRA-
ElectronicNon-convertible
Private Placement
Secured, Rated, Listed, Redeemable, Non-convertible Debentures
Non-convertible Debenture
To raise Secured debt to the extent of Rs 583695000 (Rupees Fifty Eight CroreThirty Six Lakh Ninety Five Thousand Only)
Rs 58,36,95,000 (Rupees Fifty Eight Crore Thirty Six Lakh Ninety Five ThousandOnly)
ESAF Microfinance and Investments Pvt. Ltd.
Coupon Rate
Call Notification TimeCall Option PriceCall OptionPut Option
Minimum Application
Lock-in-Period
Redemption/ MaturityDate
Maturity
Premium/ Discount on
redemption
Issue Price
Premium/ Discount on
Issue
Face Value
Credit RatingTrading ModeConvertibilityIssuance Mode
Nature and status of
Bonds
Instrument
Objects of the Issue
Issue Size
Issuer
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Infonnation Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ANNEXURE I: TERM SHEET
on payment date falls on a day that is not a working day, theall be made on the immediately succeeding working day. If anyent (other than for the payment of interest) falls on a day that is not
RTGSSettlementLink Intime India Private LimitedRegistrarsNSDLandCDSLDepositoryGDA Trusteeship LimitedTrustees
Debentures are to be listed on the WDM of the BSE within a maximum periodof 15 (Fifteen) calendar days from the Deemed Date of Allotment.
In the event of the Issuer's failure to do so, to the extent that any DebentureHolder(s) are Foreign Institutional Investors or sub-accounts of ForeignInstitutional Investors, or Qualified Foreign Investors, the Issuer shallimmediately redeem any and all Debentures which are held by such ForeignInstitutional Investor(s) or such sub-account(s) of Foreign InstitutionalInvestor(s) or Qualified Foreign Investors.
In case of delay in listing of the debt securities beyond 20 (Twenty) calendardays from the Deemed Date of Allotment, the Issuer will pay penal interest of atleast 1 % p.a. over the Coupon Rate from the expiry of 30 (Thirty) calendar daysfrom the Deemed Date of Allotment till the listing of such Debentures
Listing
Interest shall be payable on all application monies received at the Coupon Ratepayable quarterly from the date of receipt of subscription amount in relation tothe Debentures by the Company until the Deemed Date of Allotment
Intereston
Application Money
Actual / 365 daysDay Count Basis
In the event of a payment default of the amounts due under this Issue or anyother Event of Default (whether by way of acceleration, at maturity orotherwise), the Issuer shall pay an additional 2% (Two Percent) per annum overand above the applicable Coupon Rate on the outstanding principal amount ofthe Debentures, calculated from the date of the occurrence of the default untilsuch default is cured or the Debentures are redeemed pursuant to such default,as applicable
Default Interest Rate
N.A.Coupon Reset Process
(including rates,spread, effective date,interest rate cap andfloor etc)
FixedCoupon Type
Half Yearly on 13-May-16,13-Nov-16,13-May-17,13-Nov-17,13-May-18,18-Nov-
18In relation to each Coupon Payment Date and in relation to each date when anyother payment is due by the Issuer under the NCD (each, a "Relevant PaymentDate"), the Issuer undertakes to courier to the Purchaser (or its designatedagent, as confirmed in writing by the Purchaser), within 1 Business Day after aRelevant Payment Date, the duly completed and signed Form 15 CA/CB. A scanof such duly completed and signed Form 15 CA/CB shall be sent to thePurchaser on the Relevant Payment Date by e-mail.
Coupon / InterestPayment Date
Half YearlyCoupon PaymentFrequency
Coupon Rate
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
1. Filing of the Private Placement Offer Letter (PAS - 4) and the record with
1. No event or potential event of default
2. Compliance with all representations and warranties
3. All governmental and third party approvals or consents
4. Satisfactory due diligence and internal credit scoring by the Servicer5. Successful refinancing by the Purchaser of NCD6. Execution of all relevant transaction documents
7. Satisfactory independent legal opinion regarding enforceability and
capacity of Issuer of NCD8. All financial documentation and reporting as reasonably requested by
the Servicer
9. A rating shall have been assigned to the NCD of not less than BBB byCARE Ratings or any other SEBI approved rating agency.
The documents executed in relation to the issue of the Debentures and shallinclude Debenture Trustee Agreement, Debenture Trust Deed and Such otherdocuments as agreed between the Issuer and the Debenture Trustee
All investors other than those who are not Eligible Investors.
The following categories of investors, when specifically approached, are eligibleto apply for this private placement of Debentures subject to fulfilling theirrespective investment norms/rules and compliance with laws applicable tothem by submitting all the relevant documents along with the Application Form("Eligible Investors"):(a) Mutual Funds(b) NBFCs(c) Provident Funds and Pension Funds(d) Corporates(e) Banks(f) Foreign Institutional Investors (Flls)
(g) Qualified Foreign Investors (QFIs)(h) Foreign Portfolio Investors (FPIs)(!) Insurance Companies(j) Any other person eligible to invest in the Debentures
All potential Investors are required to comply with the relevantregulations/guidelines applicable to them for investing in this issue ofDebentures.
Note: Participation by potential Investors in the issue may be subject tostatutory and/or regulatory requirements applicable to them in connection withsubscription to Indian securities by such categories of persons or entities.
Applicants are advised to ensure that they comply with all regulatoryrequirements applicable to them, including exchange controls and otherrequirements. Applicants ought to seek independent legal and regulatoryadvice in relation to the laws applicable to them
NEFT/RTGS
The date which will be used for determining the Debenture Holder(s) who shallbe entitled to receive the amounts due on any Due Date, which shall be thedate falling 15 (fifteen) calendar days prior to any Due Date
preceding working day
Conditions
Conditions precedentto subscription of
Bonds
Transaction
Documents
Non-Eligible classes ofInvestors
Eligible InvestorsPayment Mode
Record Date
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Financial CovenantsThe Issuer will at all times maintain:
- Ratio of outstanding amount of this NCD to total assets of not morethan [7%];Ratio of outstanding amount of this NCD to total assets does notincrease more than [1] percentage point from one month to theimmediately forthcoming month;Capital Adequacy ratio of not less than [15%]Ratio of total debt to total equity of not higher than [7.5]Uncovered Capital Ratio below [15%] (defined as the PAR>90days +restructured portfolio minus loan loss provisions divided by Equity).Less than [5%] of its liabilities and assets in non INR denominatedcurrencyRatio of outstanding off-balance sheet portfolio (including assetsecuritization) to total assets less than [40%]
Neative Covenants
The Debentures and documentation will be governed by and construed inaccordance with the laws of India and the parties submit to the exclusivejurisdiction of the courts as more particularly provided for in Clause 26.2 of theDebenture Trust Deed
To oversee and monitor the overall transaction for and on behalf of the
Debenture Holder(s)
Upon an event of default, the NCD can (at the discretion of the Purchaser of theNCD) be declared immediately repayable.The Events of Default include:
Failure to PayBreach of Covenant
Misrepresentation
Breach of Agreement- Cross-Default
Material Adverse Change
Liquidation / BankruptcyCreditor's Process /Court judgment
Unlawfulness
Repudiation
respect to the issuance of the Debentures in Form PAS-5 specified
pursuant to sub-rule (3) of Rule 14 of the Companies (Prospectus andAllotment of Securities) Rules, 2014 by the Company, with the registrar of
companies within [30 (thirty) days] of the date of circulation of thePrivate Placement Offer Letter.Filing of a return of allotment on the issue of the Debentures in FormPAS-3 specified pursuant to Rule 12 and 14 of the Companies (Prospectusand Allotment of Securities) Rules, 2014 by the Company, with theregistrar of companies within 30 (thirty) days from the Deemed Date ofAllotment
Additional Covenants
Governing Law and
Jurisdiction
Role andResponsibilities ofTrustees
Events of Default
subsequentto
subscription of Bonds
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum Is neither a prospectus nor a statement in lieu of a prospectus)
The Issuer will not, without prior written consent of the
Purchaser
Change its business such that it no longer remains
an NBFC-MFI;Undertake any merger, consolidation or
reorganization;
Allow for a change of control event in relation to
its shareholders (change of control event defined
as an event whereby existing shareholders are
diluted below 67% of voting rights); andEnter into a single transaction or a series of
transactions (whether related or not) to sell, lease,
transfer or otherwise dispose of all or substantiallyall of its assets, other than asset securitizations.
Reporting Covenants
The Borrower shall provide:1. Reporting documentation and due diligence
requirements prior to closing and on annual basis
as required by the Servicer, includinga.Legal and operational documents/information
Constitutional documents (Articles of Associationor bylaws)Functioning documents (registration, license, etc.)
Shareholding structureList of board of directorsList of management team including CVs andorganizational chart
Any other legal or operational document or
information as Symbiotics Research & Advisorymay reasonably request.
b.Financial documents/information
Audited accounts of the last 4 yearsLatest business plan and financial projectionsDetailed list of sources of fundingThird party rating or external evaluation, if existingFinancial position reports on the last three years to
be posted on the Symbiotics online reportingplatform at the addresshttp//www.syminvest.com.
Monthly financial position reports for the lastthree month of the current year to be posted on
Symbiotics online reporting platform at theaddress https//my.syminvest.com/login
2. Monthly reporting requirements
- Monthly position reports to be posted onSymbiotics online reporting platform at theaddress https//my.syminvest.com/login no later
than 20 days after the close of the month.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 17,2015November 16,2015 to November 17,2015November 17,2015November 16,2015
None
As applicable to all NBFC-MFIs registered with the Reserve Bank of India
of
onof
RBI
Deemed Date
Allotment
Pay in DatesIssue Closing DateIssue Opening Date
ProhibitionPurchase/ FundingBonds
ApplicableGuidelines
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
• Chandigarh. GuisaMti^ H^de^^bad- ludMana • KsIKaLa • M^mbal. NawDomf- PuUo- Rajhol- 'fedodoraBengaluru • Ctiennsi • CoimCa
nerghatta Road. Bengaluru-560076.rw.BrichVrtjrHRatInas.com • www.Finandal-Uteracy.in
Corporate Office: 3rd Floor, Re] AJkaa Path. Kalena Agrahara, Bae:*9tflO 4040 9940 • Fa^+9180 4040 9941 • 1-860-425-2742 • w
Brickwork Ratings India Pvt. Ltd.
Dear Mr. Varghese,
Sub: Rating of proposed Secured long Term Non-Convertible Debentures(NCD) issue up to USD 10 Million equivalent in INK. of ESAF Microfinanceand Investments Private Limited
Ref; Your mandate dated May 08,2014 and mail dated October 15,2015
Thank you for giving us an opportunity to undertake Rating of the proposed issue of
Secured Long Term NCD of ESAF Microfinance and Investments Private
Limited. Based on the information and clarifications provided by your company, draft
terms of issue shared with us, as well as information available in public sources,
Brickwork Ratings is pleased to inform you that ESAF Microfinance and
Investments Private Lhmted's proposed Secured Long Term NCD issue up to
USD 10 Million equivalent in INR has been assigned a rating of BWR A-
(Pronounced as BWRAMinus) with Stable Outlook.
Instruments with this rating are considered to have adequate degree of safety
regarding timely servicing of financial obligations. Such instruments carry low credit
risk. ,.
The Rating is valid for one year from the date of this letter subject to the terms and
conditions that were agreed in your mandate dated May 08, 2014 and other
correspondence, if any, and Brickwork Ratings' standard disclaimer appended below.
Mr. Joseph VargheseDeputy Chief ManagerESAF Microfinance and Investments Private Limited2nd Floor, Hepzibah ComplexManhuthy P O, Thrissur-68o65i, Kerala
DM: U67190KA2007PTCQ43591BWR/BNG/RL/2015-16/0282November 04,2015
^^***
ANNEXURE II:RATING LETTER & RATING RATIONALE
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Disclaimer; Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuerand other reliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any datadistortion; however, it does not examine the precision or completeness of the information obtained. And hence, theinformation In this report is presented "as is" without any express or implied warranty of any kind. BWR docs notmake any representation in respect to the truth or accuracy of any such information. The rating assigned by BWRshould be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWS shallnot be liable for any losses incurred by users from any use of this report or its contents. BWR has the right to change,suspend or withdraw the ratings at any time for any i
;
Note; In case of all accepted Ratings, respective Rating Rationale is published on BrickworkRatings website. Interested persons are well advised to refer to our websitewww.brick^vorkratings.com, if they are unable to view the rationale, they are requested toinform us on Idrikhlhi^^ri^^
Brickwork Ratings would conduct surveillance every year till maturity/redemption of the
instrument, Please note that Brickwork Ratings would need to be kept informed of any
information/development that may affect your Company's finances/performance
without any delay.
Please let us have your acceptance of the above Rating within two days of the date of this
letter. Kindly note that unless acceptance is received by us, the rating is not valid and
should not be used for any purpose whatsoever.
ON: U67190KA2007PIC043593ESAFMicrofinance and Investments Private Limited
[{jrickwork******.
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
{This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 201$
1 Please rifer to BWR website ^v\i .brich\!bi ati>i$s'.cdnifor. definition of the ratings assigned.
BWKBBB+Outlook; Stable^
bivrbbb:IQufloofc Stable
B\VRBBB+Qutlook: Stable
BVVRA-Outlook: Stable
(Revised)
BWRA-Outliwk: Stable.-
(Revised)
BVVJtA-Ontlool;: Stable
(Revised)
Jnue-
Februaiy2pt5:
Februetynois
47-50(Previously50)
VCPrevlQnslyUSD3
million equivalent in
INR)
.(PmiouslyUSp.4
miBion equivalent inmi)
Secured NCD,
Ibiseinii'edSiiboi'diuated
NCD
SecuredNCD
Instruments ^ith tltis rating are considered to:have adequate degvee^of safety regarding
-timely senicing of financial obligations; Sucli ihstniments.cany low credit risk.
Other outstanding Ratings reviewed and jrevised for ESAF Microfinance and Investments
Private Limited are as per the table below:
"BWRA-CPronouliced BWR AMinus)
Outlook: Stable
'Btt'RA-
(PronouncedBtVRAitinqs)
Outlook Stable
Long Term
tongTei'ni
3?
58.37
SeniredNCD
SecuredNCD
firickwoi-k Knfings assigns the 'rating of 'BWK.A-' with Stable Outlook for theProposed Secured Not^-Convertible Debenture Issues up to ? 58.37 Crores and? 30 Crores of ESAp Microflnauce and Investments Private Limited
BrickworkvRatings, (B\VR) has assigned the following Ratings1 for the proposed Secured
Non-Convertible Debenture issues of ESAF.Microfinance and Investments: Private limited
CEMFIL1 or tire Company').
RatjiigiReport
jJjrickwefR^
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor.a statement in lieu of a prospectus)
November 2015
BWR has principally relied upon the audited financial results of the Company up to FY15,
provisional financials up to H1FYT6, projected finaucials up to FY18, publicly available
information and information/clarifications provided by the Company's management and
feedback received from the Bank.
Tlie rating has factored, inter alia, the extensive experience of tile promoters and
management team hi the Microfiuance industry, ability to raise capital, improvement in loan
recovery, good processes and systems in place, consistent growth in loan portfolio, above
average asset quality and the Company's market making initiatives. The rating is, however,
constrained by the geographically concentrated portfolio, moderate gearing level and
inherent risks associated with the Microfinance industry.
Background
ESAF Microfinance and Investments Private limited (EMFIL) was initially registered as a
Non-Banking Financial Company (NBFC) with the Reserve Bank of India as a non-deposit
accepting loan company. It was registered as NBFC-MFI in January, 2014 and its Coiporate
Office is located in Thrissur, Kerala. It is working in the space of providing micro credit
along with a combination of micro financial sendees. ESAF (Evangelical Social Action
Forum), a charitable Society established in 1992 based in Kerala, is engaged in organizing
Career Counselling and Employment Guidance Programs, Promoting Income Generation
and Self-employment Schemes and creating Awareness about the Dignity7 of Labour. Mr.
Paul Thomas, founder of ESAF Society acquired a Non-Banking Finance Company Called
Piunai Finance& Investments Private Limited (Registered as NBFC with RBI in 1996) in2006 in order to cany out microfinance programme in a more professional approach which
he envisaged in 1995 and was being carried out through ESAF Society7. It was renamed as
ESAF Microfinance and Investments Private Limited and the Society transferred its
microfinance operations .to NBFC in 2008.
Promoters & Management Details
EMFIL has an eight member board comprising of experienced professionals from the
microfinance, rural banking, agriculture and operations. Mr. K Paul Thomas is tire founder
and Managing Director of EMFIL. The board includes, one Whole time Director, two
Independent Directors and Four Non-executive Directors. Apart from them, the
management team consists of professionals who are all well qualified and experienced in the
industry.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 2015
Business Operations
EMFIL is currently engaged in Microfinance activities for providing financial sendees to the
poor women in the rural, semi-urban and urban areas in 73 districts of 9 States/Union
Territory- Kerala, Tamil Nadu, Maharashtra, Chhattisgarh, Madhya Pradesh, Jharkhand,
Bihar, Pondicheny and West Bengal through 225 branches primarily for income generation
activities and also for life quality improvement activities. EMFIL follows a group based
lending programme (Joint Liability Group) - lending to group based individuals on group
recommendations and group guarantee.
As of September 30, 2015, the number of active members and active borrowers stood at
9,t5,966 and 7,04,953 respectively. The client base consists of 100^ women borrowers. For
H1FY16, the loan disbursement was ? 799 Crores and gross loan portfolio outstanding
amount was ? 1216 Crores. Kerala alone contributed around 70^ of the Gross loan portfolio
outstanding.
Asset QualityTlie Company has an adequate approval mechanism on account of its tie up with credit
bureaus like High Mark and Equifax which allows it to have a proper due diligence before
lending. The Gross NPA as a ^ of Gross Loan portfolio outstanding as of September 30,
2015 was 0.30^ which is a significant improvement from the 0.93S6 as of March 31, 2014.
Net NPA continues to be Nil due to adequate provision coverage by the Company.
Capital adequacy
EMFIL's Tangible Net worth (TNW) increased from f 128.97 Crores in FY14 to ? 146.54Crores in FY15, mainly on account of retention of profits for FVig. In H1FY16, there has been
fresh capital infusion from investors like SIDBI and TNW stood at around f 194 Crores.
With increasing loan book, EMFIL's capital adequacy in the fomi of CKAR stood at 19.52^
as of September 30, 2015 compared to 18.22% as of March 31, 2015, which is well above the
RBTs minimum stipulated requirement of 15%.
LiquidityAs of September 30, 2015, Company's borrowings are by way of loans from Banks:
f 944.82 Crores, NCD: f 77.95 Crores, Subordinated Debt: ^ 29 Crores. The Company has a
comfortable liquidity position as its tenure of lending are well matched by tenure of itsliabilities. The company charges interest for its loans at rates as per the stipulation of RBI
which are pegged to the Company's Cost of borrowings, and hence, can pass on the varying
cost of its borrowings to its customers.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Disclaimer. Brickwork Ratings (BWR) lias assigned the rating based on the information obtained from the issuer and otherreliable sources, which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion;however, it does not examine the precision or completeness of the information obtained. Aiid hence, the information inthis report is presented "as is' without any express or implied warranty of any kind. BWR. does not make anyrepresentation in respect to the truth or accuracy of any such information. The rating assigned by BWR should be treatedas an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for anylosses inclined by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw theratingsatanytin1eforanyreasons.Plea3eseeww^v.brick1v-orkratings.com for rating definitions.
bd<®brickworkratings.coin-860-425-2742
Financial Performance
As per audited financials, EMFIL reported Net Interest Income (Nil) of ^ 98.17 Crores for
FY15 compared to ? 52.92 Crores for FYi4, a growth of -86%. PAT increased from ^ 10.26
Crores for FY14 to ? 22.50 Crores for FY15.
As per the provisional financials of the Company for H1FY16, the Company has achieved a
Nil of ^ 68.76 Crores with PAT of ^ 21.16 Crores which is majorly due to significant growth
in loan book.
Key performance /financial indicators have been shown in theAnnexnres I, II & III.
Rating Outlook
The outlook is expected to be stable over the current year. Going forward, the ability of the
Company to continue portfolio growth within the applicable regulatory frame-work, manage
operational risk, maintain adequate capitalization, improve earning profile and maintain the
asset quality of the portfolio would be the key rating sensitivities.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 2015
22.50
U.13
33.63
2.72
5.25
0.00
20.70
47.01
109.31
6.39
5.81
11.72
98.17
85.53
183.70
0.32
16.38
7-37
159.63]
10.26
6.65
16.91
1.08
O-75
0.09
14.71
29.04
62.58
4-31
5-27
8.70
52.92
53-81
106.73
0.00
9-77
5-78
91.18
5-45
2.73
8.18
2.60
0.08
0.54
9.12
24.00
44-52
3-29
2.58
6.12
39-11
32.89
72.00
0.00
3-79
2.19
66.02
Profit after Tax
Tax Expenses
Profit before Tax
Depreciation & Amortization
Provision against Standard Assets
Loans Written Off
Other Expenses
Employee benefit Expenses
Total Income
Other Borrowing Cost
Other income
Loan Processing Fee
Net Interest Income
Interest and Finance Charges
Operating Income-
Bad Debts Recovered . -
Interest spread on secnritization of loans
Interest Income other than on Microloans
Interest Income on Microloans
ESAF Microfiiiance and Investments Private Limited
Annexure I; Profit & Loss Statement
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 2015
507.47I 671.18I 994.73ITotal22.27
2.41
116.14
586.99
727.81
• 78.72
3-68
156.58
3-49
0.05
0.80
1.02
22.58
266.92
5-68
1.18
118.57
316.35
441.78
49-25
3-55
160.96
0.00
0.05
0.00
1.07
14-52
229.40
14.65
1.60
132.82
169.66
318.73
27.39
4.16
141.78
0.06
4-71
0.00
0.00
10.64
188.74
•<f. -
Other Current Assets
Short-Term Loans and Advances
Cash and Bank balances
Short-Term loans under financing activity
Current Assets
Other Non-Current Assets
Long-Term Loans & Advances
Long-Term loans under financing activity
Deferred tax assets Net
Non-current investments
Capital WIP
Intangible assets Net
Tangible assets Net
Non-Current Assets
Assets (7 Cr) *994-73
18.86
67.78
914
392.32
20.57
508.67
1-74
8.63
0.00
328.13
338.5O39-35
108.2J
147.56!
671.18
732
7.26
2.74
308.73
9.58
335.63
0.35
0.24
0.49
204.43
205.52
22.83
107.21
130.04
5O7.47
5-75
18.14
1.80
199.80
1353
239.03
1.42
0.00
0.00
204.46
205.88
12.56
50.00
62.56
Total
Short Term Provisions
Other Current Liabilities
Trade Payables
Current maturities of loan/term debts
Short Term Borrowings
Current Liabilities
Long-Term Provisions
Other Long Term Liabilities
Deferred Tax Liability
Long-Term Borrowings
Non-Current Liabilities
Reserves and Surplus
Share Capital
Share Holder's Fund
ESAF Microfinance and Investments Private limited
Aitnexure-II: Balance Sheet
lnfonnation MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
November 2015\vww.l)rickworkratings.com
20.88%
2.70%
24.82%
112%
10.00%
14.82%
18.22%
6.74
7-32%
58.04%
10.66%
1.53%
23.45%
107.71%
9.05%
14.40%
25.20%
5.16
7.11%
58.60%
9.11%
1.07%
24.72%
106.64%
13.20%
11.52%
20.45%
8.11
8.23%
49.73^
ROE
ROTA
^eld on portfolio
Operational Self Sufficiency COSS)
Net Interest Margin (NIM)
Average cost of borrowings
CRAR*
BWR-Leverage
Operating Expense as a % of gross loanportfolio
^nterest Expense/Interest Income
•^Sp; Financial Ratios ^if, '
ESAF Microfmaiice and Investments Private Limited
Aiinexure-III; Key Ratios
Information MemorandumPrivate & ConfidentialDate; November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
GDA/DEB/a-MUM/2015-16/201
14th October, 2015
tSAF Micron nance and investments (PJLtd2nd Floor,Heph2ibah ComplexMannuthy,Thrissur, KeralaPIN 6SO651.
Dear Sir,
Consent to act as Trustee for Secured, Listed, Rated, Redeemable, Non-cOnvertlbleDebentures aggregating to INR equivalent amount of upto USD 20,000,000 to be issued
by your Company.
This is with reference to the discussions arid also to the mail dated 14th October 2015 inrespect of appointment of GDA Trusteeship Limited to act as Debenture Trustee for theSecured, Listed, Rated, non-convertible debentures aggregating to INR equivalent amountof upto USD 10,000,000 to be issued by your Company. In this connection, we areagreeable to act as Trustee on the terms and conditions as mutually agreed between theTrustee and the Company.
The Company and the Trustee shall enter into relevant trustee agreements and othernecessary documents for the aforesaid issue of NCDs and term loans and also agrees &undertakes to comply with the provisions of the SEBI (Debenture Trustees) Regulations,1993, 5EBI {Issue and Listing of Debt Securities) Regulations, 2008, SEBI Circular No.SEBI/IMD/DOF-i/Bond/20G9/ll/05 dated 11/05/2009 on Simplified Usting Agreement forDebt Securities read with the SESI Circular No. SEBI/iMD/DOF-l/BOND/Cir-5/2009 datedthe 26th November, 2009, the RBI Circular No. RBI/2012-13/560 dated June 27, 2013, theCompanies Act, 2013 and any other applicable statutes, regulations and provisions asamended from time to time.
We are also agreeable for Inclusion of our name as trustees In the Company's offerdocument/disclosure document/ listing application/any other document to be filed withthe Stock Exchange(s) or any other authority as required.
GDA TrusteeBetfem In yourself^ Tru^t us/
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of aprospectus)
ANNEXURE IILCONSENT LETTER FROM THE DEBENTURETRUSTEE
THERS () SPECIFY _
IT CIRCLE/WARD/DISTRICTAPPLICANT'S PAN/GIRNO.
FAX1PHONEPIN 1CITY
STREET
ADDRESS
APPLICANT'S ADDRESS
APPLICANT'S NAME IN FULL (CAPITALS)SPECIMEN SIGNATURE
Funds transferred to ESAF Microfinance and Investments Private LimitedDated
Total Amount Enclosed(In Figures) Rs._A_(In words) Only
DETAILS OF PAYMENT:
Cheque / Demand Draft / RTGSNo.Drawn on
DEBENTURE SERIES APPLIED FOR:
Number of Debentures: (1000 )In words: One Thounsand_Amount Rs. 583695000 In words Rupees Rupees Five Hundred Eighty Three Million SixHundred Ninety Five Thousand Only
Issue of 1000 Secured, Rated, Listed, Redeemable, Non-convertible Debentures of face value
of Rs. 583 695 (Rupees Five Hundred Eighty Three Thousand Six Hundred Ninety Fiveonly) each, aggregating up to Rs. 583695000 (Rupees Five Hundred Eighty Three Million SixHundred Ninety Five Thousand Only) on a private placement basis (the "Issue")
0 1DEBENTURE SERIES APPLICATION FORM SERIAL NO.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ANNEXURE IV: APPLICATION FORM
ESAF Microftnance and Investments Private LimitedA private limited company incorporated under the Companies Act, 1956
Date of Incorporation: September 27, 1996Registered Office: No.5-A, 5^ Floor, No. 8&9, Gangadeeswara Koil Street,
Purusawalkam, Chennai 600 084, Tamil NaduTelephone No.:+910487 2373813
Website: www.emfil.org
(Note: Cheque and Drafts are subject to realisation)
We understand and confirm that the information provided in the Information Memorandum isprovided by the Issuer and the same has not been verified by any legal advisors to the Issuerandother intermediaries and their agents and advisors associated with this Issue. We confirm that wehave for the purpose of investing in these Debentures carried out our own due diligence and madeour own decisions with respect to investment in these Debentures and have not relied on anyrepresentations made by anyone other than the Issuer, if any.
We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account asmentioned above would get credited to the extent of allotted Debentures, ii) we must ensure that thesequence of names as mentioned in the Application Form matches the sequence of name held withour Depository Participant, iii) if the names of the Applicantin this application are not identical andalso not in the same order as the Beneficiary Account details with the above mentioned DepositoryParticipant or if the Debentures cannot be credited to our Beneficiary Account for any reasonwhatsoever, the Company shall be entitled at its sole discretion to reject the application or issue theDebentures inhsial
FOR OFFICE USE ONLYDATE OF CLEARANCEDATE OF RECEIPT
Applicant Bank Account:
(Settlement by way of Cheque / Demand Draft /Pay Order / Direct Credit / ECS /NEFT/RTGS/otherpermitted mechanisms)
M
NAME OF THE APPLICANT(S)BENEFICIARY ACCOUNT NUMBERDP-IDDEPOSITORY PARTICIPANT NAMEDEPOSITORY
Applicant's Signature:
We the undersigned, are agreeable to holding the Debentures of the Company in demateriaiisedform. Details of my/our Beneficial Owner Account are given below:
SignatureDesignationName of the AuthorisedSignatory(ies)
We have read and understood the Terms and Conditions of the issue of Debentures including theRisk Factors described in the Memorandum and have considered these in making our decision toapply. We bind ourselves to these Terms and Conditions and wish to apply for allotment of theseDebentures. We request you to please place our name(s) on the register of debenture holders.
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
Debentureforon account of application of __Rs.
Drawn onCheque/Draft/UTR #
AddressReceived from
1 -(To be filled in by ApplicantJSEMAL NO.
(TEAR HERE)ACKNOWLEDGMENT SLIP
(Note: Cheque and Drafts are subject to realisation)
FOR OFFICE USE ONLYDATE OF CLEARANCEDATE OF RECEIPT
Applicant'sSignature
Information MemorandumPrivate & ConfidentialDate: November 16,2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
We understand that we are assuming on our own account, all risk of loss that may occur or besuffered by us including as to the returns on and/or the sale value of the Debentures. We undertakethat upon sale or transfer to subsequent investor or transferee ("Transferee"), we shall convey allthe terms and conditions contained herein and in this Information Memorandum to such Transferee.In the event of any Transferee (including any intermediate or final holder of the Debentures) suingthe Issuer (or any person acting on its or their behalf) we shall indemnify the Issuer (and all suchpersons acting on its or their behalf) and also hold the Issuerand each of such person harmless inrespect of any claim by any Transferee.
Place: TbrissurDate : 29th May 2015
In terms of our report attached.For Deloitte Haskfns a Soils
6,711,801,413
4,417,833,20856,759,65611,823,899
1,185.706,5733,163,543,080
2,13B,05O,425492,455,84335,530,622
1,609,564,060
500,000
155,917,780
10,688,157145,229,623
6,711,801,413
3,356,268,73473,206,816
3,159,889,45027,357,96593,814,503
2,055,154,6053,541,0002,385,0004,891,937
2,044,336,668
1,300,378,074228,270,674
1,072,107/400
31 March, 2014C
As at
9,947,219,168
7,278,051,469222,652,01424,072,828
1,161,437,7565,869,888,871
2,425,204,849787,226,915.36,779,315
1,565,837,87734,880.742
500,000
243,962,8507,969,124
10,179,649225,814,077
9,947,219,168
5,086,719,107188.616,193
4,600,932,43991,411,413
203,709,062
3,384,907,64017,370,92786,285,058
3,281,251,655
1,475,552.421393,485,021
1,082,107,400
31 March, 2015As at
20191817
16IS14
28.613
12
111098
76
28.65
4"3
No.
statementsSee accompanying notes forming part of the financial
TOTAL
(d) Otter current assets(c) Short-term loans and advances(b) Cash and cash e^uivalentsta) Short- term Loans under financing activity
Z Current ustU
(f) Other non-current assets(e) Long-term loam and advances(d) Long- term Lnans under financing activity(c) Deferred tax assets (net)(b) Non-current Investments
(19) Capital Worfc-fn Progress^h) Intangible assets(1) Tangible assets(a) Fixed assets
1 Non-current assets
BASS^T^TOTAL
(d) Short-term provisions(c) Otter current liabilities(b) Trade Payable!(a) Short-term borrowings
3 Current liabilities
(d) Long-term previsions(c) Other long-term liabilities(b) Deferred tax liabilities (net)(a) Leng-term borrowings
1 Nan-current (labilities
(b) Reserves and surplus(a) Share capital
1 Shareholders' Funds
A E^UITY AND LIABILITIES
Particulars
*
ESAF MKROFJNAKCE AND INVESTMENTS PRIVATE UMITEDBALAHCESHEETASAT 31 MARCH, 2015
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ANNEXURE V: LAST AUDITED FINANCIAL STATEMENTS
Place: ThrissurDate : 29thMay2015
Company SecretaryCieFinancial Officer
e Board o
In terms of cur report attached.For Delolttfl Hasldns Et SellsChartered Accountants
2.001.91
102,674,533
66,514,442
61,000,0005,514,4^2
61,000,000
169,188,975
1,037,884,995
290,379,455581,244,065
10,613,543147,097,923
8,350,009
1,207.073.970
1,096,556,744110,517,226
For the year ended31 March, 2014
g
4.312.50
224,997,174
111,349,905
146,810,757(35,460,852)
139,000,0007,810,757
336,347,079
1,675,969,787
470,065,994919,197,59727,199,764
207,040,37352,466,059
2,012,316,866
1,877,336,833134.980.033
For the year ended31 March. 2015
1
28.5
2324122526
2122
Note No.
Earnings per share (Face value of T10/- each):
(a) Basic(b) Diluted
See accompanying notes forming part of the flnandalstatements
Net tax expense
Profit for the year (5-6)
(c) Net current tax expense(d) Deferred tax
Tax expense;(e) Current tax expense(b) Short provision for Tax relating to prior years
Profit before tax (3-4)
Total expenses
Expenses(a) Employee benefits expense(b) Finance costs(c) Depredation and amortisation expense(d) Other Expenses(e) Provisions and wdte offs
Total revenue (1*2)
Revenue from operationsOther Inccune
Particulars
S
7
6
5
4
3
1
ESAF MJCROFINANCE AND INVESTMENTS PRIVATE LIMITEDSTATEMENT OF PROFT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2015
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
(124,755,914)7,625,208
32,658,553(IS3,312,995J
59,415,6961,717,170
(42,859,551)
(1,552,832,731)(48,003,126)
(585,378,012)(919,446,593)
2,385,0003,541,000
(18,898,793)(54,349,673)
9,357,339
103,143,932(13,313,717)
3,499,596(191,716,864)
(1,467,624,357)
704,729,949
-
46,377,246(39,905,673)
678,436367,706500,000278,289
12,607,400(13,365,409)
(7,625,206)(57,736,211)581,244,065
106,790
10,813,543
169,168,975
31 March, 2014 •r
For the year ended
(400,924,1231603,840
59,270,242(333,772,513)
1,016,46637,750
(128,284,928)
(1,973,340,886)(110,912,856)(890,121,263)
(972,301,227)63,900,053
6,965,000(644,345)
529,019,59560,768,448
(62,960,058)(146,002,609)
(633,733)(14,107,253)43,726,183
(2,726,134,603)
1,275,802,0904,350,0001,116,123
16,7^3,34630,232,373
4,2121,866,324
349,68813,920,000(1,016,436)
(805,840)(73,697,834)719,197,597
(13,257)27,199,764
335,3-17,079
^1 March, 2015?
For the year ended
Net Cash from Investing activities (B)Dividend receivedInterest Income co Deposits with BanksBank balance) Rot considered a) Cash and cash equivalents (Net)Investments (Net)Proceeds from sale cf fixed assetsCapital expenditure on fixed assets, Including capital advances
fl ca^i Flow from Investing Activities:Hot Cash from Operating actfvttios (A)Ket Income Tax PaidFinance costs (Paid)Cash Generated from OperationsOtter Long term LiabilitiesLong-term provisionsShort-term provisionsOt^^r current (labilitiesTrade payable^^diujfmenrt for increas^ f (decrease} in ooerdfin? (labilities:Other non-current assetsOther current assets*Long-term loans and advancesShort-term loans and advancesLong- term Loans under financing activityShort- term loans under financing activityAdimtmrnts for (increase) t decrease in op^rafin^ assets:Cttan^s in Workin^ CanHol:-Operating Profit before Working Capital Changes:Provision OthersProvision for credit enhancements on assets de-recognisedProvision for rton performing assetsContingent provision against standard assetsloans Written OffProvision for employee advancesProvision for DImunltlon In value of Investm antsAdvance) Written offIssue of Sweat Equity Shares^ot gain cm sale of investmentsDividend IncomeInterest Income.Finance Costs(Profit)/ loss cm Sale of Fixed AssetsDepredation and amortisation expenses
Profit Before Tax
A Caih Flow from Operating Activities;
PARTICULARS
ESAF MICRQf WAKCE AHD INVESTMENTS PRIVAT^ LIMITEDCASHFtOWSTA7^MEHrFORT>IEYEAREHCD31 MARCH, 2O!5
Private & Confidential
For Private Circulation Onlyneither a prospectus nor a statement in lieu of a prospectus)
Information MemorandumDate: November 16,2015
(This Information Memorandum i
Place: ThrfssurDate :29th May 2Q15
mpany Secretary
Place :*ThrissurOste : 3.1 M
Partner
In terms of our reportattached.
For Detaltte Hasklns and Sells
See accompanying notes forming Part of the financial statements971,349,702820,931,220
Cash and Cash Equivalents at the end of year (Refer Kate 18]
(118,852,272)
1,090,201,974
1,550,236,373
559,500,0004,164,594,007
(3,192,550,569)39,445,9356,116,000
(18,369.000)
(142/118,474)
971,349,702 •
2,231,846,535
4,828,663,1)00(3,^16,031,555)
105,854,555717,800,000
(7,234,000)(1.245,055)
C Cash flow from Financing Activities:Proceeds from Issue of preference sharesProceeds from long-term borrowingsRepayment of long-term borrowingsKet Increase / (decrease) In wortdng capital borrowingsProceeds from issue of Non Convertible debenturesRepayment of Non convertible DebenturesDividend paid on ComputsanTy convertible preference sharesMet Cash from Financing activities (C)
Hat Increase (Decrease) In Cash and Cash Equivalents
Cash and Cash Equivalents at the beginning of year
For the year ended31 March, 2014
F
For the year en^Jed31 March, 2015PARTICULARS
ESAFMICROHNAKCE AH0IMVESTMEHT5 PRIVATE LIMITEDCASHFLQWSTATCMEKrFORTHEYEAKENDED31 MARCH, 2015
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
624 497 67939 075 58239 723 24339 075 58239 723 24338 427 920
Total (INR)
583 695 000
Principal (INR)
40 802 67939 075 58239 723 24339 075 58239 723 24338 427 920
Interest (INR)
189181184181184
,178
Days in Period
18-Nov-18
13-May-18
13-Nov-17
13-May-17
13-Nov-16
13-May-16
Payment Date
Actual/365
Half Yearly with payment dates of• 13-May-16
• 13-Nov-16
• 13-May-17
• 13-Nov-17
• 13-May-18
• 18-Nov-18
13.50%November 18,201517-November-15583 695
ESAF Microfinance and Investments Private
Limited
Day Count Convention
Frequency of the Coupon Payment withspecified dates
Coupon RateRedemption Date(s)Issue Date / Date of AllotmentFace Value (per security)
Company
Illustration of Bond Cash Flows
Information MemorandumPrivate & ConfidentialDate: November 16, 2015For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS