mas financial services limitedprivate placement basis to certain identified investors. issue closing...

Information Memorandum

Date: July 21, 2020 For Private Circulation Only

(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)

No.1/2020

Addressed to: Union Bank of India

INFORMATION MEMORANDUM

Private & Confidential – For Private Circulation Only

(This Disclosure Document is neither a Prospectus nor a Statement in Lieu of a Prospectus and has

been prepared in accordance with the Securities and Exchange Board of India (Issue and Listing of

Debt Securities) Regulations, 2008)

MAS Financial Services Limited

CIN: L65910GJ1995PLC026064

A public limited company incorporated under the Companies Act, 1956

Date of Incorporation: 25/05/1995

Registered Office: 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel, Ashram Road, Ahmedabad –

380009, Gujarat, India.

Corporate Office: 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel, Ashram Road, Ahmedabad –


Tel No.: 079-41106501/638

Contact Person: Mr. Ankit Jain, Chief Financial Officer

Ms. Riddhi Bhayani, Company Secretary & Compliance Officer

Website: www.mas.co.in

Email ID: [email protected] ; [email protected]

Information Memorandum for issue of Debentures on a Private Placement Basis

Dated: July 21, 2020

ISSUE OF 1000 (ONE THOUSAND) RATED, SENIOR, REDEEMABLE, TAXABLE,

TRANSFERABLE, LISTED, NON-CONVERTIBLE DEBENTURES EACH WITH A FACE

VALUE OF RS. 10,00,000 (RUPEES TEN LAKHS) AND AGGREGATING UP TO RS. 100

CRORES (RUPEES ONE HUNDRED CRORES), AT PAR ON A PRIVATE PLACEMENT

BASIS (“ISSUE”).

Background

This Information Memorandum prepared under the Companies Act, 2013, the Companies (Prospectus

and Allotment of Securities) Rules, 2014 (as amended from time to time), the Securities and

Exchange Board of India (Issue and Listing of Debt) Regulations, 2008 (as amended from time to

time), for private placement of the Debentures (as defined below) is neither a prospectus nor a

statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for

or otherwise acquire the Debentures to be issued by MAS Financial Services Limited (the “Issuer” or

“Company”). This is only an information brochure intended for private use.

This Information Memorandum contains relevant information and disclosures required for the purpose

of issuing and allotting the Debentures. The issue of the Debentures comprised in the Issue and

described under this Information Memorandum has been authorised by the Issuer through a resolution

passed by the shareholders of the Issuer pursuant to Section 180(1)(c) of the Companies Act, 2013, on

27th June, 2018, the resolution of the board of directors of the Issuer dated 16

th June, 2020 read with

the resolution of the finance committee of the board of directors dated 20th July, 2020 and the

Memorandum and Articles of Association of the Company. Pursuant to the resolution passed by the

Company’s shareholders dated 27th June, 2018, in accordance with provisions of the Companies Act,

2013, the Company has been authorised to borrow, upon such terms and conditions as the Board may

think fit for amounts up to Rs. 5000 crores (Rupees Five Thousand Crores only). The present issue of

mailto:[email protected]





Debentures in terms of this Information Memorandum is within the overall powers of the Board as per

the above shareholder resolution(s).

General Risks

Investment in debt and debt related securities involve a degree of risk and investors should not invest

any funds in the debt instruments, unless they can afford to take the risks attached to such investments

and only after reading the information carefully. For taking an investment decision, the investors must

rely on their own examination of the Company and the Issue including the risks involved. The

Debentures have not been recommended or approved by Securities and Exchange Board of India

(“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of

Investors is invited to the statement of Risk Factors under Section 3 of this memorandum of private

placement for issue of Debentures on a private placement basis (“Information Memorandum” or

“Disclosure Document”). This Information Memorandum has not been submitted, cleared or

approved by SEBI.

Issuer’s Absolute Responsibility

The Issuer, having made all reasonable inquiries, confirms and represents that the information

contained in this Information Memorandum/ Disclosure Document is true and correct in all material

respects and is not misleading in any material respect, that the opinions and intentions expressed

herein are honestly held and that there are no other facts, the omission of which makes this document

as a whole or any of such information or the expression of any such opinions or intentions misleading

in any material respect. The Issuer is solely responsible for the correctness, adequacy and disclosure

of all relevant information herein.

Listing

The Debentures are proposed to be listed on the wholesale debt market of the BSE.

Credit Rating

The Debentures proposed to be issued by the Issuer have been rated by CARE Ratings Ltd. (“Credit

Rating Agency”). The Credit Rating Agency has vide its letter dated 22nd

May, 2020, assigned a

rating of CARE A+; Stable, in respect of the Debentures. The above rating is not a recommendation 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 Credit Rating Agency and should be evaluated

independently of any other ratings. Please refer to Annexure II (Rating Letter and Rating Rationale)

of this Information Memorandum for the letter dated 22nd

May, 2020 from the Credit Rating Agency

assigning the credit rating abovementioned and disclosing the rating rationale adopted for the

aforesaid rating.

Issue Schedule

Heads Debentures

Issue Opening Date 23rd

July 2020

Issue Closing Date 23rd

July 2020

Pay-In Date 24th July 2020

Deemed Date of Allotment 24th July 2020

The Issuer reserves the right to change the issue schedule including the Deemed Date of Allotment at

its 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.




Debenture Trustee to the Issue Registrar and Transfer Agent to the Issue

Catalyst Trusteeship Limited

(Erstwhile GDA Trusteeship Limited)

Windsor, 6th floor, Office No.604,

C.S.T Road, Kalina, Santacruz (East)

Mumbai 400098

Link Intime India Pvt. Ltd.

C-101, 1 st Floor, 247 Park, L.B.S. Marg,

Vikhroli (West),

Mumbai - 400083




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TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 2 SECTION 2: DISCLAIMERS 11 SECTION 3: RISK FACTORS 14 SECTION 4: FINANCIALSTATEMENTS 24 SECTION 5: REGULATORY DISCLOSURES 25 SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT 66 SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS 67 SECTION 8: OTHER INFORMATION AND ISSUE PROCEDURE 85 DECLARATION 95 ANNEXURE I - TERM SHEET 96 ANNEXURE II - RATING LETTER AND RATING RATIONALE 105 ANNEXURE III - CONSENT LETTER FROM THE DEBENTURE TRUSTEE 106 ANNEXURE IV - APPLICATION FORM 107 ANNEXURE V - ILLUSTRATION OF DEBENTURE CASH FLOWS 111 ANNEXURE VI - RELATED PARTY TRANSACTIONS 112 ANNEXURE VII - AUDITED FINANCIAL STATEMENTS 113 ANNEXURE VIII - CORPORATE STRUCTURE/ ORGANISATION STRUCTURE 129 ANNEXURE IX - MATERIAL CONTRACTS 131 ANNEXURE X – BOARD RESOLUTION AND SHAREHOLDERS RESOLUTION 132




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SECTION 1: DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings

given below in this Information Memorandum. All capitalised terms used but not defined herein

shall have the meaning ascribed to such term under the Debenture Trust Deed.

Act / Companies Act means the Companies Act, 2013, and shall include any re-enactment,

amendment or modification of the Companies Act, 2013, as in effect

from time to time.

Allot/Allotment/Allotted The allotment of the Debentures pursuant to this Issue.

Applicable Law(s) includes all applicable statutes, enactments or acts of any legislative

body in India, laws, ordinances, rules, bye-laws, regulations,

notifications, guidelines, policies, directions, directives and orders of

any Governmental Authority and any modifications or re-enactments

thereof..

Applicant means a person who has submitted a completed Application Form to

the Issuer.

Application Form The form used by the recipients of this Information Memorandum, to

apply for subscription to the Debentures, which is in the form

annexed to this Information Memorandum and marked as Annexure

IV (Application Form).

Application Money means the subscription amounts paid by the Debenture Holders at the

time of submitting the Application Form.

Assets means, for any date of determination, the assets of the Issuer on such

date as the same would be determined in accordance with Indian

GAAP.

Beneficial Owner(s)

means the holder(s) of the Debentures in dematerialised form whose

name is recorded as such with the Depository in the Register of

Beneficial Owners.

Board/Board of Directors The Board of Directors of the Issuer.

BSE means BSE Limited.

Business Day means any day (other than a Saturday or Sunday or a public holiday

under Section 25 of the Negotiable Instruments Act, 1881) on which

banks are open for general business in Mumbai, India

Capital Adequacy Ratio means the capital adequacy ratio determined in accordance with the

NBFC Directions

CDSL Central Depository Services Limited

CERSAI means the Central Registry of Securitisation Asset Reconstruction

and Security Interest of India.

Change of Control means the Promoters of the Issuer (as on the Effective Date) ceasing

to:

(a) have the power (whether by way of ownership of shares,

proxy, contract, agency or otherwise) to:

(i) cast, or control the casting of, more than 20%

(twenty percent) of the shareholding (on a fully

diluted basis) of the Issuer; or

(ii) appoint or remove all or majority of the directors or

the "key managerial personnel" (as defined in the

Act) of the Issuer,




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OR

(b) hold at least 51% (fifty one percent) of the shareholding (on a

fully diluted basis) of the Issuer.

Change of Control Event means any event, including without limitation, the issuance of any

shares (whether equity or convertible into equity), or any transfer,

sale, creation of security interest (including pledge) or encumbrance

over any shares (whether equity or convertible into equity), which by

itself, or together with other actions (including the conversion of any

convertible instruments into equity shares) may result in a Change of

Control.

CITES means the Convention on International Trade in Endangered Species

or Wild Fauna and Flora, including the protected flora and faunae as

demonstrated on the website: www.cites.org.

Client Loan means each loan made by the Issuer as a lender.

Company/Issuer MAS Financial Services Limited

Conditions Precedent means the conditions precedent set out in Section 5.23 of this

Information Memorandum.

Conditions Subsequent means the conditions subsequent set out in Section 5.23 of this


Constitutional Documents means the certificate of incorporation of the Issuer, the memorandum

of association and articles of association of the Issuer and the

certificate of registration issued by the RBI to the Issuer.

Control has the meaning given to it in the Act.

Debenture Holder(s) /

Investors

each person who is:

(a) registered as a Beneficial Owner; and

(b) registered as a debenture holder in the Register of Debenture

Holders.

(a) and (b) above shall be deemed to include transferees of the

Debentures registered with the Issuer and the Depository from time to

time, and in the event of any inconsistency between (a) and (b)

above, (a) shall prevail.

Debenture Trustee/Trustee Catalyst Trusteeship Limited

Debenture Trustee

Agreement

means the debenture trustee agreement executed/to be executed by

and between the Debenture Trustee and the Issuer for the purposes of

appointment of the Debenture Trustee to act as debenture trustee in

connection with the issuance of the Debentures.

Debenture Trustees

Regulations

means the Securities and Exchange Board of India (Debenture

Trustees) Regulations, 1993

Debenture Trust Deed means the debenture trust deed executed/to be executed by and

between the Debenture Trustee and the Issuer which will set out the

terms upon which the Debentures are being issued and shall include

the representations and warranties and the covenants to be provided

by the Issuer.

Debentures / NCDs 1,000 (one thousand) rated, senior, redeemable, taxable, transferable,

listed, non-convertible debentures, each having a face value of INR

10,00,000 (Indian Rupees Ten Lakh) and aggregating to a face value

http://www.cites.org/




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of INR 100,00,00,000 (Indian Rupees One Hundred Crore).

Debt Disclosure

Documents

means collectively the PPOA and this Information

Memorandum/Disclosure Document, and "Debt Disclosure

Document" means any one of them.

Deed of Hypothecation has the meaning given to it in Section 5.23 of this Information

Memorandum.

Deemed Date of

Allotment

24th July 2020

Demat Dematerialized securities which are securities that are in electronic

form, and not in physical form, with the entries noted by the

Depository.

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depository means the depository with whom the Issuer has made arrangements

for dematerialising the Debentures, being NSDL and/or CDSL.

Depository Participant /

DP

A depository participant as defined under the Depositories Act.

Director(s) Director(s) of the Issuer.

DP ID Depository Participant Identification Number.

DRR has the meaning given to it in Section 5.19 of this Information

Memorandum.

Due Date means the date on which any interest or liquidated damages, any

Redemption Payment or premature redemption amount and/or any

other amounts payable, are due and payable.

EBP Guidelines means the guidelines issued by SEBI with respect to electronic

book mechanism pursuant to the SEBI circular dated January 5,

2018 (bearing reference number SEBI/HO/DDHS/CIR/P/2018/05)

on "Electronic book mechanism for issuance of securities on

private placement basis" read with the SEBI Circular dated

August 16, 2018 (bearing reference number

SEBI/HO/DDHS/CIR/P/2018/122) on "Electronic book

mechanism for issuance of securities on private placement basis -

Clarifications" and the operational guidelines issued by the

relevant Electronic Book Provider, as may be restated, amended,

modified or updated from time to time.

EBP Platform has the meaning given to it under the EBP Guidelines.

Effective Date means the date of execution of the DTD.

EFT Electronic Fund Transfer.

Electronic Book Provider

/ EBP

has the meaning given to it under the EBP Guidelines.

Eligible Investors Shall have the meaning specified in Section 8.15 of this Information

Memorandum.

Event of Default means the events set out in Section 5.23 of this Information

Memorandum.

Exclusion List (a) production or trade in any product or activity deemed illegal

under host country laws or regulations or international

conventions and agreements, or subject to international bans,

such as pharmaceuticals, pesticides/herbicides, ozone

depleting substances, PCBs, wildlife or products regulated

under CITES;




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(b) production or trade in weapons and munitions;

(c) production or trade in alcoholic beverages (excluding beer

and wine);

(d) production or trade in tobacco;

(e) gambling, casinos and equivalent enterprises;

(f) production or trade in radioactive materials (this does not

apply to the purchase of medical equipment, quality control

(measurement) equipment);

(g) production or trade in unbonded asbestos fibers (this does not

apply to purchase and use of bonded asbestos cement

sheeting where the asbestos content is less than 20% (twenty

percent));

(h) drift net fishing in the marine environment using nets in

excess of 2.5 km. in length;

(i) production or activities involving harmful or exploitative

forms of forced labor, or harmful child labor;

(j) production, trade, storage, or transport of significant volumes

of hazardous chemicals, or commercial scale usage of

hazardous chemicals (hazardous chemicals include gasoline,

kerosene, and other petroleum products); and/or

(k) production or activities that impinge on the lands owned, or

claimed under adjudication, by indigenous peoples, without

full documented consent of such peoples,

which may result in funding or supporting any individual or

organisation designated as:

(i) terrorists or terrorist organisations by the United

Nations, the European Union and any other

applicable country; and

(ii) persons, groups or entities which are subject to

United Nations, European Union and the US Office

of Foreign Asset Control (OFAC) sanctions.

Final Settlement Date means the date on which all Secured Obligations have been

irrevocably and unconditionally paid and discharged in full to the

satisfaction of the Debenture Holders.

Financial Indebtedness means any indebtedness for or in respect of:

(a) moneys borrowed;

(b) any amount raised by acceptance under any acceptance

credit, bill acceptance or bill endorsement facility or




6

dematerialised equivalent;

(c) any amount raised pursuant to any note purchase facility

or the issue of bonds, notes, loan stock or any similar

instrument;

(d) the amount of any liability in respect of any lease or hire

purchase contract which would, in accordance with the

Indian GAAP, be treated as a finance or capital lease;

(e) receivables sold or discounted (other than any receivables

to the extent they are sold on a non-recourse basis);

(f) any amount raised under any other transaction (including

any forward sale or purchase agreement) having the

commercial effect of a borrowing;

(g) any derivative transaction entered into in connection with

protection against or benefit from fluctuation in any rate

or price (and, when calculating the value of any derivative

transaction, only the marked to market value shall be

taken into account);

(h) shares which are expressed to be redeemable or shares

which are the subject of a put option or any form of

guarantee;

(i) any obligation under any put option in respect of any

securities;

(j) any counter-indemnity obligation in respect of a

guarantee, indemnity, bond, standby or documentary letter

of credit or any other instrument issued by a bank or

financial institution;

(k) any corporate/personal guarantee, a letter of comfort or

any other similar contractual comfort issued or incurred in

respect of a liability incurred by any other third person;

and

(l) the amount of any liability in respect of any guarantee or

indemnity for any of the items referred to in paragraphs

(a) to (k) above.

Financial Year/ FY means each period of 12 (twelve) months commencing on April 1 of

any calendar year and ending on March 31 of the subsequent calendar

year

GFR has the meaning given to it in Section 5.18 of this Information

Memorandum.

GOI Guarantee means the partial credit guarantee to be provided by the Guarantor in

accordance with the terms of the GOI Guidelines in respect of the

Debentures.

GOI Guidelines means the scheme dated May 20, 2020 titled "Extended Partial Credit




7

Guarantee Scheme" offered by Government of India (GoI) to Public

Sector Banks (PSBs) for (i) purchase of pooled assets having a rating

of BBB+ or above from financially sound Non-Banking Financial

Companies (NBFCs)/Housing Finance Companies (HFCs) and (ii)

Portfolio Guarantee for purchase by PSBs of Bonds or Commercial

Papers (CPs) with a rating of AA and below (including unrated paper

with original/initial maturity of up to one year issued by

NBFCs/HFCs/MFIs (in case of MFIs, Bonds/CPs with MFR rating

equivalent), bearing reference number F. no. 17/36/2019-IF-I issued

by the Department of Financial Services, Ministry of Finance,

Government of India, read together with "Frequently Asked

Questions" issued thereto, as may be amended, modified or restated

from time to time.

Guarantee Fee means the guarantee fee payable to the Guarantor in accordance with

the terms of the GOI Guidelines.

Guarantor means the Government of India (acting through the Small Industrial

Development Bank of India or any other person in accordance with

the GOI Guidelines and Applicable Law).

Governmental Authority means any government (central, state or otherwise) or any

governmental agency, semi-governmental or judicial or quasi-judicial

or administrative entity, department or authority, agency or authority

including any stock exchange or any self-regulatory organization,

established under any Applicable Law.

Gross Loan Portfolio means the outstanding principal amount of all Client Loans

originated by the Issuer on its own books and the Off Balance Sheet

Portfolio.

Hypothecated Assets has the meaning given to it in Section 5.23 of this Information

Memorandum.

ICCL means the Indian Clearing Corporation Limited.

Increased Costs means: (a) a reduction in the rate of return from the Debentures or in a

Debenture Holder's overall capital (including as a result of

any reduction in the rate of return on capital brought about by

more capital being required to be allocated by the Debenture

Holder);

(b) an additional or increased cost; or

(c) a reduction of any amount due and payable under any

Transaction Document,

which is incurred or suffered by a Debenture Holder to the

extent that it is attributable to the undertaking, funding or

performance by the Debenture Holder of any of its

obligations under any Transaction Document or any

subscription by the Debenture Holder of the Debentures.

Indian GAAP means the generally accepted accounting principles as prescribed by

the Institute of Chartered Accountants of India from time to time and




8

consistently applied by the Issuer, and include, to the extent

applicable, Ind-AS.

Information

Memorandum/Disclosure

Document

This information memorandum issued by the Issuer for the issue of

the Debentures on a private placement basis in accordance with

Applicable Laws (including the SEBI Debt Listing Regulations).

Initial Security Creation

Date

means the date occurring on the expiry of a period of 90 (ninety)

calendar days from the Deemed Date of Allotment

Interest Payment Date means the payment dates as specified in Annexure V, unless such day

is not a Business Day, in which case the payment date will be the

next Business Day

Interest Rate means 9% (nine percent) per annum payable annually

Issue means the issue of the Debentures at par, in dematerialized form on a

private placement basis to certain identified investors.

Issue Closing Date 23rd

July 2020

Issue Opening Date 23rd

July 2020

Listing Period has the meaning given to it in Section 5.23 of this Information

Memorandum.

LODR Regulations means the Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations, 2015.

Majority Debenture

Holder

means such number of Debenture Holders collectively holding more

than 50% (fifty percent) of the value of the Outstanding Principal

Amounts of the Debentures.

Majority Resolution means a resolution approved by the Majority Debenture Holders who

are present and voting or if a poll is demanded, by the Majority

Debenture Holders who are present and voting in such poll.

Material Adverse Effect means the effect or consequence of an event, circumstance,

occurrence or condition which has caused or could reasonably be

expected to cause, as of any date of determination, a material and

adverse effect:

(a) on the rights or remedies of the Debenture Trustee acting for

the benefit of the Debenture Holders hereunder or under any

other Transaction Document; or

(b) on the ability of the Issuer to perform its obligations under

the Transaction Documents; or

(c) on the validity or enforceability of any of the Transaction

Documents (including the ability of any party to enforce any

of its remedies thereunder).

Moratorium Directions

(COVID-19)

means, collectively, the RBI's circular no.

DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27, 2020 on

"COVID-19 – Regulatory Package (Revised)", the RBI circular no.

DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 on

"COVID19 Regulatory Package - Asset Classification and

Provisioning", the RBI circular no.

DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020 on

"COVID-19 – Regulatory Package", and the RBI circular no.

DOR.No.BP.BC.72/21.04.048/2019-20 dated May 23, 2020 on

"COVID19 Regulatory Package – Review of Resolution Timelines

under the Prudential Framework on Resolution of Stressed Assets"

(each as amended, modified or restated from time to time)




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NBFC Directions means the Non-Banking Financial Company - Systemically

Important Non-Deposit taking Company and Deposit taking Issuer

(Reserve Bank) Directions, 2016 dated September 1, 2016 and/or the

Non-Banking Financial Company - Non-Systemically Important

Non-Deposit taking Company (Reserve Bank) Directions, 2016 dated

September 1, 2016 (each as amended, modified or restated from time

to time) as may be applicable.

Net Worth has the meaning given to it in the Act

NSDL National Securities Depository Limited.

Off Balance Sheet

Portfolio

means the outstanding principal balance of all Client Loans

securitized, assigned, originated on behalf of other institutions

otherwise sold off in respect of which the Issuer has provided credit

enhancements in any form or manner whatsoever including Client

Loans originated on behalf of other entities by entering into

partnership agreements but not included on the Issuer's own book,

excluding interest receivables and accrued interest

Outstanding Amounts means, at any date, the Outstanding Principal Amounts together with

any interest, additional interest, costs, fees, charges, and other

amounts payable by the Issuer in respect of the Debentures

Outstanding Principal

Amounts

means, at any date, the principal amounts outstanding under the

Debentures

PAN Permanent Account Number.

Payment Default means any event, act or condition which, with notice or lapse of time,

or both, would constitute an Event of Default under paragraph (a)

under the section named "Events of Default" in Section 5.23 of this


PPOA/Private Placement

Offer and Application

Letter

means the private placement offer and application letter prepared in

accordance with Section 42 of the Act read with the Companies

(Prospectus and Allotment of Securities) Rules, 2014

Promoters means, collectively, all the persons designated as "Promoters" in the

filings made by the Issuer on BSE Limited as of June 30, 2020

Purpose means the general corporate purposes of the Issuer and for the

ordinary course of business of the Issuer including repayments and/or

refinancing of existing debt.

Quarterly Date means each of January 31, April 30, July 31 and October 31 and

Quarterly Dates shall be construed accordingly

Rating Agency means CARE Ratings Limited, having its registered office at 4th

Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern

Express Highway, Sion (East), Mumbai - 400 022.

RBI Reserve Bank of India.

Record Date The date falling 15 (fifteen) calendar days prior to the date on which

interest is due and payable on the Debentures, or the date of

redemption of such Debentures (as applicable).

Redemption Date means January 24, 2022

Redemption Payment means the payment of the Outstanding Principal Amounts of the

Debentures on the Redemption Date

Register of Beneficial

Owners

means the register of beneficial owners of the Debentures maintained

in the records of the relevant Depository.

Register of Debenture

Holders

means the register of debenture holders maintained by the Issuer in

accordance with Section 88 of the Act

Registrar/R&T Agent means the registrar and transfer agent appointed for the issue of

Debentures, being Link Intime India Private Limited.




10

ROC means the jurisdictional registrar of companies.

Rs. / INR Indian National Rupee.

RTGS Real Time Gross Settlement.

SEBI Securities and Exchange Board of India constituted under the

Securities and Exchange Board of India Act, 1992 (as amended from

time to time).

SEBI Debt Listing

Regulations/ Debt Listing

Regulations

The Securities and Exchange Board of India (Issue and Listing of

Debt Securities) Regulations, 2008, as amended, varied or modified

from time to time.

Secured Obligations means all present and future obligations (whether actual or contingent

and whether owed jointly or severally or in any capacity whatsoever)

of the Issuer to the Debenture Holders or the Debenture Trustee under

the Transaction Documents, including without limitation, the making

of payment of any interest, redemption of principal amounts, default

interest, additional interest, liquidated damages and all costs, charges,

expenses and other amounts payable by the Issuer in respect of the

Debentures

Security has the meaning given to it in Section Error! Reference source not

ound.3 of this Information Memorandum.

Security Cover has the meaning given to it in Section 5.23 of this Information

Memorandum.

Special Majority

Debenture Holders

means such number of Debenture Holders collectively holding more

than 75% (seventy five percent) of the value of the Outstanding

Principal Amounts of the Debentures

Special Resolution means resolution approved by the Special Majority Debenture

Holders who are present and voting or if a poll is demanded, by the

Special Majority Debenture Holders who are present and voting in

such poll

Tax means any present or future tax, levy, duty, charge, fees, deductions,

withholdings, surcharges, cess, turnover tax, transaction tax, stamp

tax or other charge of a similar nature (including any penalty or

interest payable on account of any failure to pay or delay in paying

the same), now or hereafter imposed by Applicable Law by any

Governmental Authority and as maybe applicable in relation to the

payment obligations of the Issuer under the DTD.

Tax Deduction means a deduction or withholding for or on account of Tax from a

payment under a Transaction Document pursuant to Applicable Law

TDS Tax Deducted at Source.

Total Assets means, for any date of determination, the total Assets of the Issuer on

such date

Transaction Documents means, collectively, the DTD, the Deed of Hypothecation, the

Debenture Trustee Agreement, the Debt Disclosure Documents, the

GOI Guarantee, the letters issued by the Debenture Trustee, the

Rating Agency and the Registrar and all other documents in relation

to the issuance of the Debentures, and any other document designated

as such by the Debenture Trustee (acting on the instructions of the

Debenture Holders).

WDM Wholesale Debt Market

Wilful Defaulter means an issuer who is categorized as a wilful defaulter by any Bank

or financial institution or consortium thereof, in accordance with the

guidelines on wilful defaulters issued by the Reserve Bank of India

and includes an issuer whose director or promoter is categorized as

such.




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SECTION 2: DISCLAIMERS

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 the

Companies Act. The issue of the Debentures to be listed on the WDM segment of the BSE is being

made strictly on a private placement basis through the EBP Platform. Multiple copies hereof given

to the same entity shall be deemed to be given to the same person and shall be treated as such. This

Information Memorandum does not constitute and shall not be deemed to constitute an offer or

invitation to subscribe to the Debentures to the public in general.

As per Debt Listing Regulations and Companies Act and the Rules and Regulations prescribed

thereunder, it is not necessary for a copy of this Information Memorandum to be filed or submitted

to the SEBI for its review and/or approval.

This Information Memorandum has been prepared in conformity with the SEBI Debt Listing

Regulations as amended from time to time and applicable RBI Regulations governing private

placements of Debentures. This Information Memorandum has been prepared solely to provide

general information about the Issuer to Eligible Investors (as defined below) to whom it is

addressed and who are willing and eligible to subscribe to the Debentures. This Information

Memorandum 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

purposes set forth herein.

Neither this Information Memorandum nor any other information supplied in connection with the

Debentures is intended to provide the basis of any credit decision or other evaluation and any

recipient of this Information Memorandum should not consider such receipt as a recommendation

to subscribe to any Debenture. Each potential Debenture Holder contemplating subscription to any

Debenture should make its own independent assessment of the financial condition and affairs of

the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential Debenture Holders

should consult their own financial, legal, tax and other professional advisors as to the risks and

investment considerations arising from an investment in the Debentures and should possess the

appropriate resources to analyze such investment and the suitability of such investment to such

Debenture Holder’s particular circumstances.

The Issuer confirms that, as of the date hereof, this Information Memorandum (including the

documents incorporated by reference herein, if any) contains all the information that is material in

the context of the Issue and regulatory requirements in relation to the Issue and is accurate in all

such 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 Debenture Holder pursuant hereto and, if

given or made, such information or representation must not be relied upon as having being

authorized by the Issuer. The Issuer certifies that the disclosures made in this Information

Memorandum are adequate and in conformity with the SEBI Debt Listing Regulations and the

Companies (Prospectus and Allotment of Securities) Rules, 2014. Further, the Issuer accepts no

responsibility for statements made otherwise than in the Information Memorandum or any other

material issued by or at the instance of the Issuer and anyone placing reliance on any source of

information other than this Information Memorandum would be doing so at 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 communication

by the Issuer and only such recipients are eligible to apply for the Debentures. All Debenture




12

Holders are required to comply with the relevant regulations/guidelines applicable to them for

investing in this Issue. The contents of this Information Memorandum are intended to be used only

by those Debenture Holders to whom it is distributed. It is not intended for distribution to any other

person and should not be reproduced by the recipient.

No invitation is being made to any persons other than those to whom Application Forms along

with this Information Memorandum being issued have been sent. Any application by a person to

whom the Information Memorandum has not been sent by the Issuer shall be rejected without

assigning any reason.

The person who is in receipt of this Information Memorandum shall not reproduce or distribute in

whole or in part or make any announcement in public or to a third party regarding the contents

hereof without the consent of the Issuer.

The Issuer does not undertake to update the Information Memorandum to reflect subsequent events

after the date of Information Memorandum and thus it should not be relied upon with respect to

such subsequent events without first confirming its accuracy with the Issuer other than as required

under Law.

Neither the delivery of this Information Memorandum nor any sale of Debentures made hereafter

shall, 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 Memorandum does 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 not

authorized 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 Information

Memorandum in any jurisdiction where such action is required. Persons into whose possession this

Information Memorandum comes are required to inform themselves of, and to observe, any such

restrictions. The Information Memorandum is made available to potential Debenture Holders in the

Issue on the strict understanding that it is confidential.

DISCLAIMER CLAUSE OF STOCK EXCHANGES

As required, a copy of this Information Memorandum has been filed with the BSE in terms of the

SEBI Debt Listing Regulations.

It is to be distinctly understood that submission of this Information Memorandum to the BSE

should not in any way be deemed or construed to mean that this Information Memorandum has

been reviewed, cleared, or approved by the BSE; nor does the BSE in any manner warrant, certify

or endorse the correctness or completeness of any of the contents of this Information

Memorandum, nor does the BSE warrant that the Issuer’s Debentures will be listed or will

continue to be listed on the BSE; nor does the BSE take any responsibility for the soundness of the

financial and other conditions of the Issuer, its promoters, its management or any scheme or project

of the Issuer.

DISCLAIMER CLAUSE OF RBI

The Debentures have not been recommended or approved by the RBI nor does RBI guarantee the

accuracy or adequacy of this document. It is to be distinctly understood that this document should

not, in any way, be deemed or construed that the securities have been recommended for investment

by the RBI. It does not take any responsibility either for the financial soundness of the Issuer, or

the securities being issued by the Issuer or for the correctness of the statements made or opinions

expressed in this document. Potential investors may make investment decision in the securities




13

offered in terms of this Information Memorandum solely on the basis of their own analysis and

RBI does not accept any responsibility about servicing/ repayment of such investment.

DISCLAIMER CLAUSE OF SEBI

As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of this

Information Memorandum has to be filed with or submitted to the SEBI for its review/approval. It

is to be distinctly understood that this Information Memorandum should not in any way be deemed

or construed to have been approved or vetted by SEBI and that this Issue is not recommended or

approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any

proposal for which the Debentures are issued/ proposed to be issued, or for the correctness of the

statements made or opinions expressed in this Information Memorandum.

DISCLAIMER 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. This

Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the

Debentures offered hereby to any person to whom it is not specifically addressed. Any disputes

arising out of this Issue will be subject to the exclusive jurisdiction of the courts and tribunals at

Mumbai, India, subject to terms of the Debenture Trust Deed. 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 unlawful to make an offer or invitation in such jurisdiction.

DISCLAIMER IN RESPECT OF RATING AGENCIES

Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or

recall the concerned bank facilities or to buy, sell or hold any security. The Credit Rating Agency

has based its ratings on information obtained from sources believed by it to be accurate and

reliable. The Credit Rating Agency does not, however, guarantee the accuracy, adequacy or

completeness of any information 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 by the Credit Rating Agency have paid a credit rating fee, based on the amount and type

of bank facilities/instruments.




14

SECTION 3: RISK FACTORS

The following are the risks relating to the Company, the Debentures and the market in general

envisaged by the management of the Company. Potential Debenture Holders should carefully

consider all the risk factors stated in this Information Memorandum for evaluating the Company

and its business and the Debentures before making any investment decision relating to the

Debentures. The Company believes that the factors described below represent the principal risks

inherent in investing in the Debentures, but does not represent that the statements below regarding

risks of holding the Debentures are exhaustive. The ordering of the risk factors is intended to

facilitate ease of reading and reference and does not in any manner indicate the 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 to making any

investment decision.

The Company is subject to risks relating to the economic, political, legal or social environments of

the locations in which it operates.

REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER.

Potential Investors should be aware that receipt of the principal amount, (i.e. the

redemption amount) and any other amounts that may be due in respect of the Debentures

is subject to the credit risk of the Issuer. Potential Investors assume the risk that the Issuer

will not be able to satisfy their obligations 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, the payment of sums due on the

Debentures may not be made or may be substantially reduced or delayed.

THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID.

The Debentures may be very illiquid and no secondary market may develop in respect

thereof. Even if there is a secondary market for the Debentures, it is not likely to provide

significant liquidity. Potential Investors may have to hold the Debentures until

redemption to realize any value.

CREDIT RISK & RATING DOWNGRADE RISK.

The Rating Agency has assigned the credit ratings to the Debentures. In the event of

deterioration in the financial health of the Issuer, there is a possibility that the rating

agency may downgrade the rating of the Debentures. In such cases, potential Investors

may incur losses on revaluation of their investment or make provisions towards sub-

standard/ non-performing investment as per their usual norms.

CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OF DEBENTURES.

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 prices increase. The extent of fall or rise in the prices is a function

of the existing coupon, days to maturity and 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 negative effect on the pricing of the

Debentures.




15

TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS

Special tax considerations and legal considerations may apply to certain types of

investors. Potential Investors are urged to consult with their own financial, legal, tax and

other advisors to determine any financial, legal, tax and other implications of this

investment.

ACCOUNTING 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.

SECURITY MAY BE INSUFFICIENT TO REDEEM THE DEBENTURES.

In the event that the Company is unable to meet its payment and other obligations

towards Investors under the terms of the Debentures, the Debenture Trustee may enforce

the Security as per 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 secured property, (ii) finding willing buyers for the Security at a

price sufficient to repay the Debenture Holder(s)’ amounts outstanding under the

Debentures. The value realised from the enforcement of the Security may be insufficient

to redeem the Debentures.

MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT

COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT OR OTHER

OBLIGATIONS.

The Issuer is subject generally to changes in Indian law, as well as to changes in

government regulations and policies and accounting principles. Any changes in the

regulatory framework could adversely affect the profitability of the Issuer or its future

financial performance, by requiring a restructuring of its activities, increasing costs or

otherwise.

LEGALITY OF PURCHASE

Potential Investors in the Debentures will be responsible for the lawfulness of the

acquisition of the Debentures, whether under the laws of the jurisdiction of their

incorporation or the jurisdiction in which they operate or for compliance by that potential

Investor with any law, regulation or regulatory policy applicable to it.

POLITICAL 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 and its results of operations are significantly affected by factors

influencing the Indian economy. An uncertain economic situation, in India and globally,

could result in a further slowdown in economic growth, 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 higher defaults. Any slowdown in the

growth or negative growth of sectors where the Issuer has a relatively higher exposure

could adversely impact its performance. Any such slowdown could adversely affect its

business, prospects, results of operations and financial condition




16

RISKS RELATED TO THE BUSINESS OF THE ISSUER

a) Our business operations involve transactions with relatively high risk borrowers.

Any default from our customers could adversely affect our business, results of

operations and financial condition.

We offer a wide range of financial products and services that address the specific

financing requirements of low and middle income individuals as well as micro, small, and

medium enterprises. Similarly, two-wheeler loans are principally focused on first time

users with limited access to capital through formal banking channels. A significant

portion of our customer base is typically less economically stable than large corporates,

and as a result, is usually adversely affected by declining economic conditions. Earning

capacity of customers in these segments depends on various macro and micro economic

factors that affect them from time to time. We have a greater risk of loan defaults and

losses in the event there are adverse economic conditions which may have a negative

effect on the ability of our borrowers to make timely payments of their loans.

A significant portion of our target customers typically have limited access to credit with

limited to no prior credit history. As a result, we are more vulnerable to customer default

risks including delay in repayment of principal or interest on our loans. Although we have

our own customised due diligence and credit analysis procedures, there can be no

assurance that we will be able to ensure a lower delinquency rate. Our profitability

depends on our ability to evaluate the right income levels of our customers, assess the

credit risks and to price our loans accordingly. Our customers may default on their

obligations as a result of various factors including bankruptcy, insolvency, lack of

liquidity and/or failure of the business or commercial venture in relation to which such

borrowings were sanctioned. Certain product segments and micro-enterprise loans in

particular, are mostly unsecured and are susceptible to higher levels of credit risks.

Additionally, although our SME, two-wheeler and Commercial Vehicle segments involve

certain collateral, we may still be exposed to defaults in payment, which we may not be

able to fully recover. If our borrowers fail to repay loans in a timely manner or at all, our

business prospects, financial condition and results of operations will be adversely

impacted. The company

b) Our inability to maintain relationships with our sourcing intermediaries could have an

adverse effect on our business, prospects, results of operations and financial condition.

In addition to our sales team, we have entered into commercial arrangements with a large

number of sourcing intermediaries, which include commission based DSAs, as well as

revenue sharing arrangements with various dealers and distributors where part of loan

default is guaranteed, by the sourcing partner. However, there can be no assurance that

the guarantee provided by such sourcing partners would be sufficient to cover the loan

defaults. If we are unable to provide services required by these sourcing intermediaries on

a timely basis or offer products that meet the needs of their customers, the number of such

arrangements and amount of loans originated by them, could decrease and adversely

affect our business, prospects, financial condition and results of operations.

These are non-exclusive arrangements and our loan origination is dependent to an extent

on continuing such relationships on commercially reasonable terms. There can be no

assurance that we will be successful in maintaining our relationships with these sourcing

intermediaries or increasing the number of sourcing intermediaries we work with. These

sourcing intermediaries could originate loans for our competitors thereby adversely

affecting our business prospects. In addition, sourcing intermediaries may not be able to

effectively market our loan products, and any misbehaviour or misrepresentation by these




17

sourcing intermediaries to the customers may impair or harm our reputation. If our

relationships with these sourcing intermediaries are discontinued or such arrangements

are affected or modified, our ability to originate loans may be affected which may in turn

adversely affect our business, prospects, financial condition and results of operations.

c) The quality of our portfolio may be impacted due to higher levels of NPAs and our

business may be adversely affected if we are unable to provide for such higher levels of

NPAs.

There can be no assurance that our future NPA ratios will be consistent with our past

experience or at levels that will maintain our profitability. Also, there can be no assurance

that we will be able to maintain our NPA ratios at levels with the credit performance of

our customers, or at which our credit and our underwriting analysis, servicing and

collection systems and controls will be adequate. We may not be successful in our efforts

to improve collections and/or recover existing NPAs. In addition, we may experience

greater defaults in principal and/or interest repayments in future. Thus, if we are unable to

maintain our level of NPAs, the overall quality of our loan portfolio may deteriorate and

our results of operations may be adversely affected.

Moreover, there can also be no assurance that there will be no deterioration in our

provisioning coverage as a percentage of gross NPAs or otherwise, or that the percentage

of NPAs that we will be able to recover will be similar to our past experience of

recoveries of NPAs. In the event of any further deterioration in our NPA portfolio, or if

our provisioning coverage is insufficient to cover our existing or future levels of NPAs,

our ability to raise additional capital and debt funds as well as our business prospects,

financial condition and results of operations could be adversely affected.

In addition, any adverse regulatory developments relating to the assessment and

recognition of NPAs and provisioning therefore may have an adverse effect on our

financial performance.




18

d) Our business requires substantial funds, and any disruption in funding sources would

have a material adverse effect on our liquidity and financial condition.

Our liquidity and profitability are, in large part, dependent upon our timely access to, and

costs associated with raising capital. Our funding requirements historically have been met

from a combination of term loans, working capital facilities and assignment or

securitization of our portfolio to banks and financial institutions to meet their priority

sector and retail lending commitments, commercial paper, cash credit, convertible and

non-convertible debentures, as well as equity contributions. On account of priority sector

lending, we believe we have access to funds at relatively lower costs. Any change in RBI

regulations on priority sector lending, or our inability to maintain relationships with such

banks, could adversely affect our results of operations and financial condition. Our

business depends and will continue to depend on our ability to access diversified low cost

funding sources. As a financial services company, we face certain additional regulatory

restrictions on our ability to obtain financing from banks.

Pursuing our growth strategy and introducing new product offerings to our customers will

have an impact on our long-term capital requirements. With the growth of our business,

we may be increasingly reliant on funding from debt capital markets. The market for such

funds is competitive and our ability to obtain funds at competitive rates will depend on

various factors. If we are unable to access funds at an effective cost that is comparable to

or lower than our competitors, we may not be able to offer competitive interest rates for

our loans. Our ability to raise funds on acceptable terms and at competitive rates

continues to depend on various factors, including the regulatory environment and policy

initiatives in India, lack of liquidity in the market, developments in the international

markets affecting the Indian economy, investors’ and/or lenders’ perception of demand

for debt and equity securities of NBFCs, and our current and future results of operations

and financial condition. If we are unable to obtain adequate financing or financing on

terms satisfactory to us and in a timely manner, our ability to grow or support our

business and to respond to business challenges could be limited and our business

prospects, financial condition and results of operations would be materially and adversely

affected.

e) As part of our business strategy, we have assigned or securitized a significant portion of

the receivables from our loan portfolio to banks and other financial institutions. Any

deterioration in the performance of any portfolio of receivables assigned to banks and

other institutions may affect our ability to conduct further assignment and

securitization and thus adversely impacting our business prospects, financial condition

and results of operations.

We have assigned or securitized a significant portion of the receivables from our loan

portfolio (typically fixed interest loans that are standard assets) to banks and other

institutions to obtain funding and minimise our risk. The banks purchase our portfolio to

meet their priority sector and retail lending commitments. These securitization and

assignment transactions are conducted on the basis of our internal estimates of our

funding requirements, and may vary from time to time. Any deterioration in the

performance of any batch of receivables assigned to banks could adversely affect our

credibility and hence our ability to conduct further assignments and securitizations. We

may also be named as a co-plaintiff in legal proceedings initiated by an assignee in

relation to the securitized assets. Also, there can be no assurance that our future NPA

ratios will be consistent with prior experience or at levels that will enable us to maintain

our current quality of loan portfolio. This could have an adverse impact on our business

prospects, financial condition and results of operations and our assignment and




19

securitization plans in the future.

f) Our financial performance is subject to interest rate risk, and an inability to manage

our interest rate risk may have a material adverse effect on our interest income from

financing activities, thereby adversely affecting our business prospects and financial

performance.

Our results of operations, including our interest income from financing activities are

dependent on our ability to manage our interest rate risk. Our various financing products

provide a range of loans at fixed or floating rates of interest. Our funding arrangements

also include both fixed and floating rate borrowings.

Since our financing products involve both floating and fixed rates, an inability to match

our borrowing profile with our loan product portfolio may lead to various risks such as,

increase in interest rate. Our net interest income from financing activities and net interest

margin would be adversely impacted in case of an increase in interest rate, if the yield on

our interest-earning assets does not increase simultaneously with or to the same extent as

our cost of funds. In the event of a declining interest rate environment, if our cost of funds

does not decline simultaneously or to the same extent as the yield on our interest-earning

assets, it could adversely impact our interest income from financing activities and net

interest margin. Additional risks arising from increasing interest rates, among others,

include:

increase in the rates of interest charged (where floating rates are typically used) on certain

financing products in our product portfolio, which could result in the extension of loan

maturities and higher monthly instalments due from borrowers which, in turn, could result

in higher rates of default;

increase in defaults resulting from extension of loan maturities and higher monthly

instalments due from borrowers;

reduction in the volume of loan disbursements as a result of a customer’s inability to

service high interest rate payments;

inability to raise low cost funds as compared to some of our competitors, who may have

access to lower cost deposits; and

inability to collect anticipated interest amount in case of prepayment of loans by our

customers.

Interest rates are highly sensitive and fluctuations thereof are dependent upon many

factors which are beyond our control, including the monetary policies of the RBI, de-

regulation of the financial services sector in India, domestic as well as international

economic and political conditions, inflation and other factors. Interest rates in India have

been volatile in the past. There can be no assurance that we will be able to adequately

manage our interest rate risk. If we are unable to effectively manage our interest rate

risks, it could have an adverse effect on our net interest margin, thereby adversely

affecting our business prospects, financial condition and results of operations.

g) The success of our business operations is dependent on our senior management team

and key management personnel as well as our ability to attract, train and retain

employees.

The continued success of our business operations is attributable to our senior management

team and key management personnel. We believe that the experience of our senior

management team has enabled us to experience consistent growth and profitability as well

as maintain a robust liquidity and capital position. Our ability to sustain our growth

depends upon our ability to attract and retain key personnel, developing managerial




20

experience to address emerging business and operating challenges and ensuring a high

standard of customer service. Hiring and retaining such personnel who are qualified and

experienced in credit-appraisal and asset valuation, in the vehicle finance sector and

affordable housing segment, may be difficult. We may also face attrition of our existing

workforce as a result of increased competition or other factors relating to our businesses.

If we cannot hire additional qualified personnel or retain them, our ability to expand our

business will be impaired and our revenue could decline.

We will need to recruit new employees, who will have to be trained and integrated into

our operations. We will also have to train existing employees to adhere properly to

internal controls and risk management procedures. Failure to train and motivate our

employees properly may result in an increase in employee attrition rates, require

additional hiring, erode the quality of customer service, divert management resources,

increase our exposure to high-risk credit and impose significant costs on us. We also have

temporary sales, marketing and recovery personnel (including proprietorships) who work

for us on a commission basis. However, a change in law or regulations which may result

in these employees being regarded as a part of our work force, hence making us liable for

social welfare payments. Any inability to attract and retain talented employees, or the

resignation or loss of key management personnel, or retain our temporary personnel at

commercially viable terms, may have an adverse impact on our business, future financial

performance and the price of our Equity Shares.

h) Our risk management measures may not be fully effective in mitigating our risks in all

market environments or against all types of risks, which may adversely affect our

business and financial performance.

We are exposed to a variety of risks, including liquidity risk, interest rate risk, credit risk,

operational risk and legal risk. The effectiveness of our risk management is limited by the

quality and timeliness of available data. Our hedging strategies and other risk

management techniques may not be fully effective in mitigating our risks in all market

environments or against all types of risk, including risks that are unidentified or

unanticipated. Some methods of managing risks are based upon observed historical

market behaviour. As a result, these methods may not predict future risk exposures, which

could be greater than the historical measures indicated. Other risk management methods

depend upon an evaluation of information regarding markets, customers or other matters.

This information may not in all cases be accurate, complete, current, or properly

evaluated. Management of operational, legal or regulatory risk requires, among other

things, policies and procedures to properly record and verify a number of transactions and

events.

Many of our customers may not have any credit history supported by tax returns, bank or

credit card statements, statements of previous loan exposures, or other related documents,

have limited formal education, and may only be able to furnish limited information for us

to assess their creditworthiness accurately. In addition, we may not receive updated

information regarding any change in their financial condition or may receive inaccurate or

incomplete information as a result of any fraudulent misrepresentation. It is therefore,

difficult to carry out credit risk analyses on our customers. Although we have established

stringent policies and procedures, they may not be fully effective.

i) Our business may be affected by seasonal trends in the Indian economy. Any

significant event such as unforeseen floods, earthquakes, epidemics or economic

slowdowns during peak seasons would materially and adversely affect our results of

operations and growth strategies.




21

Our business operations and the non-banking financial services and housing finance

industries may be affected by seasonal trends in the Indian economy. We have recently

commenced extending term loans to farmers for purchase of new tractors, agricultural

equipment, related accessories and implements. We intend to expand our presence in the

agricultural value chain financing industry by offering products to cover the long term

and short term credit needs in all aspects of agriculture. Our agricultural value chain

product lending segment’s growth strategy will be significantly impacted by traditional

crop seasons in India. In India, majority of farmers depend on the monsoon for cultivation

owing to the reduced access to artificial irrigation. Generally, the period from October to

March is the peak period in India for retail economic activity. Our disbursements are

likely to be highest in this period. This increased or seasonal activity is the result of

several holiday periods, improved weather conditions, crop harvests and the business

conditions our customers operate in. We generally experience higher volumes of business

during this period. Any significant event such as unforeseen floods, earthquakes,

epidemics or economic slowdowns during this peak season would materially and

adversely affect our business prospects, financial condition and results of operations.

During these periods, we may continue to incur operating expenses, but our revenue from

operations may be delayed or reduced.

j) We have provided corporate guarantees in relation to certain loans obtained by our

Subsidiary and any default by our Subsidiary may result in invocation of the parent

guarantee.

We have provided corporate guarantees as security in relation to certain loans obtained by

MRHMFL, Any default by MRHMFL in meeting its obligations under any of these loans

may result in the invocation of the corresponding corporate guarantee against us. We may

accordingly be obligated to undertake the obligations of MRHMFL in relation to this

loan, which may affect our business prospects, financial condition, results of operations

and cash flows.

k) Insurance obtained by us may not adequately protect us against all losses and could

adversely affect our business prospects, financial condition and results of operations.

We maintain insurance coverage that we believe is in accordance with industry standards.

Our insurance policies, however, may not provide adequate coverage in certain

circumstances and are subject to certain deductibles, exclusions and limits on coverage.

We have taken a corporate cover policy including a fidelity guarantee policy which

covers all our employees. We have a money insurance policy in respect of cash in safe

and in transit. In addition, our directors are insured under a directors’ and officers’

liability insurance policy. We also maintain insurance coverage against losses occasioned

by fire, burglary for the premises and equipment in our offices, public liability insurance,

group and personal accident insurance covering our employees. There can however be no

assurance that the terms of our insurance policies will be adequate to cover any loss

suffered by us or that such coverage will continue to be available on reasonable terms or

will be available in sufficient amounts to cover one or more large claims, or that the

insurer will not disclaim coverage as to any future claim. A successful assertion of one or

more large claims against us that exceeds our available insurance coverage or changes in

our insurance policies, including premium increases or the imposition of a larger

deductible or co-insurance requirement, could adversely affect our business prospects,

financial condition and results of operations.




22

OTHER EXTERNAL RISK FACTORS

a) General economic conditions in India and globally could adversely affect our business

and results of operation.

Our results of operations and financial condition depend significantly on worldwide

economic conditions and the health of the Indian economy. Various factors may lead to a

slowdown in the Indian or world economy which in turn may adversely impact our

business, prospects, financial performance and operations.

We mainly derive revenue from our operations in India and the performance and growth

of our business is significantly dependent on the performance of the Indian economy. In

the past, the Indian economy has been affected by global economic uncertainties, liquidity

crisis, domestic policies, global political environment, volatility in interest rates, currency

exchange rates, commodity and electricity prices, volatility in inflation rates and various

other factors. Accordingly, high rates of inflation in India could increase our employee

costs and decrease our operating margins, which could have an adverse effect on our

results of operations.

Risk management initiatives undertaken by financial institutions in order to remedy the

global economic slowdown could affect the availability of funds in the future or cause the

withdrawal of our existing credit facilities. Further the Indian economy is undergoing

many changes and it is difficult to predict the impact of certain fundamental economic

changes on our business. Conditions outside India, such as a slowdown or recession in the

economic growth of other major countries, especially the United States, and emerging

market conditions in Asia also have an impact on the growth of the Indian economy.

Additionally, an increase in trade deficit could negatively affect interest rates and

liquidity, which could adversely affect the Indian economy and our business.

Any downturn in the macroeconomic environment in India could also adversely affect our

business, prospects, result of operations, financial condition and the trading price of the

Equity Shares. India’s economy could be adversely affected by a general rise in interest

rates, adverse weather conditions affecting agriculture, commodity and energy prices as

well as various other factors. A loss of investor confidence in other emerging market

economies or any worldwide financial instability may adversely affect the Indian

economy, which could materially and adversely affect our business and results of

operations and the market price of the Equity Shares.

b) Any downgrading of India’s debt rating by a domestic or international rating agency

could adversely affect our business.

India’s sovereign debt rating could be downgraded due to various factors, including

changes in tax or fiscal policy or a decline in India’s foreign exchange reserves, which

are outside our control. Any adverse revisions to India’s credit ratings for domestic and

international debt by domestic or international rating agencies may adversely impact our

ability to raise additional financing, and the interest rates and other commercial terms at

which such additional financing is available. This could have an adverse effect on our

business and financial performance, ability to obtain financing for capital expenditures

and the price of the Equity Shares.

c) Changing laws, rules and regulations and legal uncertainties, including adverse

application of corporate and tax laws, may adversely affect our business, prospects,

results of operations and, financial condition.




23

The regulatory and policy environment in which we operate is evolving and subject to

change. Such changes, including the instances mentioned below, may adversely affect our

business, prospects, results of operations and financial condition, to the extent that we are

unable to suitably respond to and comply with any such changes in applicable law and

policy. Uncertainty in the applicability, interpretation or implementation of any

amendment to, or change in, governing law, regulation or policy in the jurisdictions in

which we operate, including by reason of an absence, or a limited body, of administrative

or judicial precedent may be time consuming as well as costly for us to resolve and may

impact the viability of our current business or restrict our ability to grow our business in

the future.

d) Our Company is subject to various Indian taxes and any adverse development in the

taxation regime may have a material adverse effect on our results of operations.

Any increase in taxes and/or levies, or the imposition of new taxes and/or levies in the

future, could increase the cost of production/operating expenses. Taxes and other levies

imposed by the central or state governments in India that affect our industry include

customs duties, excise duties, sales tax, income tax and other taxes, duties or surcharges

introduced on a permanent or temporary basis from time to time. The central and state tax

scheme in India is extensive and subject to change from time to time. Any adverse

changes in any of the taxes levied by the central or state governments may adversely

affect our competitive position and profitability.




24

SECTION 4: FINANCIALSTATEMENTS

The audited financial statements (including balance sheets, profit and loss statements and cash

flow statements) of the Issuer for financial years 2016-17, 2017-18, 2018-19 and 2019-20 are

annexed as Annexure VII.




25

SECTION 5: REGULATORY DISCLOSURES

The Information Memorandum is prepared in accordance with the provisions of SEBI Debt

Listing Regulations and in this section, the Issuer has set out the details required as per Schedule I

of the SEBI Debt Listing Regulations and applicable Law.

5.1 Documents Submitted to the Exchanges

The following documents along with the listing application have been / shall be submitted

to the BSE:

(a) Memorandum and Articles of Association of the Issuer and necessary

resolution(s) for the allotment of the Debentures;

(b) Copy of the last 3 (three) years audited Annual Reports;

(c) Statement containing particulars of, dates of, and parties to all material contracts

and agreements;

(d) Certified true copy of the resolution dated June 16, 2020 of the Board of

Directors at read together with the resolution dated on July 20, 2020 of the

finance committee of the board of directors of the Company, authorizing the

borrowing and list of authorized signatories;

(e) An undertaking from the Issuer stating that the necessary documents for the

creation of the charge, where applicable, including the Debenture Trust Deed

would be executed within the time frame prescribed in the relevant

regulations/acts/rules etc. and the same would be uploaded on the website of the

BSE, where the debt securities have been listed, within 5 (five) working days of

execution of the same;

(f) Any other particulars or documents that the recognized stock exchange may call

for as it deems fit; and

(g) Where applicable, an undertaking that permission / consent from the prior

creditor for a second or pari passu charge being created, in favor of the trustees to

the proposed issue has been obtained.

5.2 Documents Submitted to Debenture Trustee

The following documents have been / shall be submitted to the Debenture Trustee in

electronic form (soft copy) at the time of allotment of the Debentures:

(a) Memorandum and Articles of Association of the Issuer and necessary

resolution(s) for the allotment of the Debentures;

(b) Copies 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) and auditor qualifications, if any;




26

(e) An undertaking to the effect that the Issuer would, until the redemption of the

debt securities, submit the details mentioned in point (D) above to the Debenture

Trustee within the timelines as mentioned in Simplified Listing Agreement issued

by SEBI vide circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015, as

amended from time to time, for furnishing / publishing its half yearly/ annual

result. Further, the Issuer shall within 180 (One Hundred and Eighty) calendar

days from the end of the financial year, submit a copy of the latest annual report

to the Debenture Trustee and the Debenture Trustee shall be obliged to share the

details submitted under this clause with all ‘Qualified Institutional Buyers’ and

other existing debenture-holders within 2 (two) working days of their specific

request.

5.3 Name and Address of Registered Office and Corporate Office of the Issuer

Name of the Issuer : MAS Financial Services Limited

Registered Office of Issuer : 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel,

Ashram Road, Ahmedabad – 380009, Gujarat,

India.

Corporate Office of Issuer : 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel,

Ashram Road, Ahmedabad – 380009, Gujarat,

India.

Compliance Officer of Issuer : Ms. Riddhi Bhayani, 4th Floor, Narayan

Chambers, B/h Patang Hotel, Ashram Road,

Ahmedabad – 380009, Gujarat, India.

Chief Financial Officer of Issuer : Mr. Mukesh Gandhi (Whole-time Director &

CFO), 5th Floor, Narayan Chambers, B/h Patang

Hotel, Ashram Road, Ahmedabad – 380009,

Gujarat, India.

Mr. Ankit Jain (CFO), 4th Floor, Narayan

Chambers, B/h Patang Hotel, Ashram Road,

Ahmedabad – 380009, Gujarat, India.

Corporate Identification Number : L65910GJ1995PLC026064

Phone No. : 079-41106501/638

Contact Person : Mr. Ankit Jain, CFO ;

Ms. Riddhi Bhayani, Company Secretary &

Compliance Officer

Email : [email protected];

[email protected]






27

Name and Address of the

Auditors of the Issuer : BSR & Co. LLP

5th Floor, Lodha Excelus, Apollo Mills

Compound N. M. Joshi Marg,Mahalaxmi

Mumbai - 400 011

Name and Address of the Debenture

Trustee : Catalyst Trusteeship Limited

Windsor, 6th Floor, Office No. 604,

C.S.T Road, Kalina, Santacruz (East)

Mumbai 400098

Name and Address of the Registrar

to the Issue : Link Intime India Pvt. Ltd.

C 101, 247 Park, L.B.S.Marg, Vikhroli

(West), Mumbai - 400083

Name and Address of the Credit

Rating Agency : CARE Ratings Ltd.

Address: 4th Floor, Godrej Coliseum, Somaiya

Hospital Road, Off Eastern Express Highway,

Sion (E), Mumbai - 400 022

Name and Address of the Arrangers,

if any, to the Issue : Not Applicable

5.4 A brief summary of business / activities of the Issuer and its line of business:

(a) Overview

MAS Financial Services Limited (“the Company” or “MAS”) has been engaged in specialized retail financing services for over two decades. The Company’s inception dates back to 1995, when it was registered with the Reserve Bank of India as an NBFC. Catering to the financial needs of lower income and middle-income groups of society, MAS offers a range of retail financing products for Micro Enterprises and Small and Medium Enterprises, Two-Wheeler Loans, Used Car Loans and Commercial Vehicle Loans. With a presence across urban, semi-urban and rural areas, the Company provides credit solutions for both the formal and informal sectors. With its network of 105 branches, as at end March 2020, MAS catering in more than 3,450 centers, in an endeavour to fulfill its quest to take top-class services to the doorstep of the people of India. These touch points are spread across the states of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Tamil Nadu, Karnataka and NCT of Delhi. Targeting a significant market share of the financial services space, MAS has been putting in place systems and processes that enable the Company to expand its distribution and assess various perspectives of credibility, in the absence of proper and systematic credit documents, including creditworthiness through other channels. It also leverages the distribution network of its partner NBFC-MFIs/NBFCs/HFCs/franchisees, thus tapping the emerging opportunity by extending financial services to underpenetrated regions and the BOP segment.

(b) Corporate Structure/Organization Structure

Refer to Annexure VIII (Corporate Structure/ Organisation Structure)




28

(c) Key Operational and Financial Parameters for the last 3 audited years on a

consolidated basis (wherever available) else on a standalone basis.

Parameters

Fiscal March

2020*

Fiscal March

2019 Fiscal March 2018

(Amount in Rs. lakhs)

Networth – Equity 1,06,586.99 93,432.11 79,154.52

Networth – FCD 0.00 0.00 0.00

Total Equity 1,06,586.99 93,432.11 79,154.52

Total Debt** 2,79,589.00 2,27,308.88 1,45,467.12

Non-Current Maturities of Long

Term Borrowing 97144.55 68603.16 32146.29

Short Term Borrowing 124294.46 120978.36 93204.75

Current Maturities of Long Term

Borrowing 58149.99 37727.36 20116.08

Net Fixed Assets 6116.05 5816.11 5778.04

Non-Current Assets 196750.64 164641.28 137359.33

Cash and Cash Equivalents 1,04,554.26 39,699.95 4,938.23

Current Investments 500.00 0.00 0.00

Current Assets 277560.04 228594.5 146815.95

Current Liabilities 245255.5 196349.79 139819.17

Assets Under Management 625282.72 560861.07 436036.87

Off Balance Sheet Assets 266747.69 208912.46 158888.47

Interest Income 59690.94 49668.65 38448.22

Total Income 72241.8 60469.66 47680.59

Interest Expense 28469.55 21558.46 17895.68

Total Finance Cost 29611.2 22366.05 18625.73

Provisioning & Write-offs 8894.53 5543.65 4351.88

Other Expenses 9875.88 8759.15 7925.98

EBITDA 53756.44 46327.22 35566.76

EBIT 53471.39 46166.86 35402.73

Profit Before Tax 23860.19 23800.81 16777.00

Profit After Tax (PAT) 18126.14 15460.65 10519.03

Dividend amounts 6340.79 2019.72 838.51

Current ratio 1.13 1.16 1.05

Interest coverage ratio 1.81 2.06 1.9

Gross debt/ equity ratio 2.62 2.43 1.84

Capital Adequacy Ratio# 31.97% 29.13% 31.89%

Tier I Capital Adequacy Ratio

(%) 29.88% 27.40% 29.46%

Tier II Capital Adequacy Ratio

(%) 2.09% 1.73% 2.43%

Gross NPA/Gross Stage 3 Assets

(% to Own Book) 1.78% 1.91% 1.78%

Net NPA/Net Stage 3 Assets (%

to Own Book) 1.24% 1.52% 1.60%

*Financials as on March, 2020 approved by the Board of Directors of the Company

at its meeting held on 03.06.2020 and to be adopted by members of the Company at

its ensuing Annual General Meeting.




29

**Security deposits received from borrowers to the tune of Rs. 499.16 Crore, Rs.

510.45 Crore and Rs, 451.34 Crore respectively for FY 2020, FY 2019 and FY 2018

has not been considered in total Debt.

# Capital Adequacy Ratio, Tier I Capital Adequacy Ratio, Tier II Capital Adequacy

Ratio has been calculated on standalone basis.

5.5 Gross Debt: Equity Ratio of the Issuer

Before the issue of Debentures(as at Mar’ 20) 2.62

After the issue of Debentures 2.72

5.6 Brief history of Issuer since its incorporation giving details of its following activities:

(a) Details of Share Capital as on the latest quarter end, i.e. June 30, 2020

Share Capital INR

Authorised

6,40,00,000 Equity Shares of Rs. 10 each 64,00,00,000

2,20,00,000, 0.01% Compulsorily Convertible Cumulative

Preference Shares of Rs. 10 each

22,00,00,000

2,20,00,000, 13.31% Compulsorily Convertible Cumulative

Preference Shares of Rs. 10 each

22,00,00,000

400, 9.75% Compulsorily Convertible Cumulative Preference

Shares of Rs. 1,00,000 each

4,00,00,000

Total Authorised Share Capital 112,00,00,000

Issued, Subscribed and Paid- up

Issued, Subscribed and Paid-up 54,66,20,430

(b) Changes in its capital structure as on last quarter end (June 30, 2020) the

last five years:-

Date of Change (AGM/EGM) Rs. Particulars

28.01.2014 600,00,000

Equity Shares

Increase in Authorized

Share Capital

(c) Equity/Preference Share Capital History of the Company as on last quarter

end, i.e. June 30, 2020 for the last 5 (five) years: -

Date of Allotment

No. of Equity /Preference Shares

Face Value (Rs)

Issue Price (Rs)

Consideration (Cash, other than cash, etc.)

Nature of Allotment

Cumulative Remarks

No. Equity /Preference Shares

Equity /Preference Share Capital (Rs.)

Equity /Preference Share Premium (in Rs.)




30

28.01.2014 6000000

Equity

Shares

10 - 60000000

Bonus Shares

59471215 594860

900

148750

Nil

13.05.2016 400

Preference

Shares

10000

0

10000

0

40000000

Cash

59471615 634860

900

148750

Nil

18.11.2016 24000188

Equity

Shares

10 - 240001880

Bonus Shares

83471803 874862

780

148750

Nil

30.03.2017 2955869

Equity

Shares

10 338.31 1000000041

Cash

86427672 187486

2821

9705901

01

Nil

19.04.2017 1034553

Equity

Shares

10 338.31 349999625

Cash

87462225 2224862

446

1310244

197

Nil

12.09.2017 25141290

Preference

Shares#

10 10 251412900

Conversion of

CCCPs

62320935 197344

9546

1310244

197

Nil

12.09.2017 18329800

Preference

Shares#

10 10 183298000

Conversion of

CCCPs

43991135 179015

1546

1310244

197

Nil

12.09.2017 400

Preference

Shares#

100000 100000 40000000

Conversion of

CCCPs

43990735

175015

1546

1310244

197

Nil

12.09.2017 1739865

Equity

Shares

10 124.93 217355450

Conversion of

CCCPs

45730600

196750

6996

1510206

881

Nil

12.09.2017 1280723

Equity

Shares

10 169.71 217355450

Conversion of

CCCPs

47011323 218486

2446

1714751

152

Nil

12.09.2017 87716

Equity

Shares

10 456 877160

Conversion of

CCCPs

47099039 222486

2446

1753872

488

Nil

21.09.2017 2470175

Equity

Shares

10 202.33 499800000

Conversion of

CCCPs

49569214 272466

2446

2228961

245

Nil

16.10.2017 4923747

Equity

Shares

10 459 2259999873

Allotment to

Public

54492961

498466

2319

4439723

648

Nil

16.10.2017 169082

Equity

Shares

10 414 69999948

Allotment to

Employees

54662043 546620

430

4508032

776

Nil

Notes: # Shares are converted




31

Complete Equity History

Date of

allotment

Type of

Security

allotted

(Equity /

Preference)

No. of

equity /

Preference

shares

Face

value

(Rs.)

Issue

price

(Rs.)

Amount of

issue (in Rs.)

Nature of

consideration

Cumulativ

e no. of

equity/

Preference

shares

Cumulative

paid-up

share

capital

(Amount in

Rs.) Incorporation Equity 700 10 10 7000 CASH 700 7000

01.11.1995 Equity 95500 10 10 955000 CASH 96200 962000 15.12.1995 Equity 232000 10 10 2320000 CASH 328200 3282000 12.01.1996 Equity 227200 10 10 2272000 CASH 555400 5554000 30.03.1996 Equity 221600 10 10 2216000 CASH 777000 7770000 31.03.1996 Equity 914800 10 10 9148000 Other than

Cash ( Issued against taking stock on hire)

1691800 16918000

02.05.1996 Equity 50500 10 10 505000 CASH 1742300 17423000 01.07.1996 Equity 601000 10 10 6010000 CASH 2343300 23433000 30.09.1996 Equity 631400 10 10 6314000 CASH 2974700 29747000 31.03.1997 Equity 454600 10 10 4546000 CASH 3429300 34293000 22.07.1997 Equity 12700 10 10 127000 CASH 3442000 34420000 31.03.1998 Equity 8800 10 10 88000 CASH 3450800 34508000 11.10.1998 Equity 3800 10 10 38000 CASH 3454600 34546000 10.10.1998 Preference 9550 100 100 955000 CASH 3464150 35501000

10.10.2000 Preference* 9550 100 100 955000 CASH 3454600 34546000

31.03.2001 Equity 250000 10 10 2500000 CASH 3704600 37046000

31.03.2004 Equity 295400 10 10 2954000 CASH 4000000 40000000

31.07.2006 Preference 650000 100 100 65000000 CASH 4650000 105000000

01.12.2006 Equity 2000000 10 - 20000000 Bonus Shares 6650000 125000000


31.03.2008 Equity 500000 10 10 5000000 CASH 10150000 160000000

23.04.2008 Preference 20000000 10 10 200000000 CASH 30150000 360000000

23.06.2008 Preference 20000000 10 10 200000000 CASH 50150000 560000000

19.08.2008 Preference 25141290 10 10 251412900 CASH 75291290 811412900

13.10.2008 Preference 18329800 10 10 183298000 CASH 93621090 994710900

14.08.2010 Preference* 650000 100 100 65000000 CASH 92971090 929710900


28.07.2012 Preference* 40000000 10 10 400000000 CASH 53471090 534710900

30.07.2012 Equity 125 10 1200 150000 CASH 53471215 534860900


13.05.2016 Preference 400 100000 100000 40000000 CASH 59471615 634860900


30.03.2017 Equity 2955869 10 338.31 1000000041 CASH 86427672 1874862821

19.04.2017 Equity 1034553 10 338.31 349999625 CASH 87462225 2224862446

12.09.2017 Preference# 25141290 10 10 251412900 Conversion of CCCPs

62320935 1973449546


43991135 1790151546


43990735

1750151546

12.09.2017 Equity 1739865 10 124.93 217355450

Conversion of CCCPs

45730600

1967506996

12.09.2017 Equity 1280723 10 169.71 217355450 Conversion of 47011323 2184862446




32

CCCPs

12.09.2017 Equity 87716 10 456 877160 Conversion of CCCPs

47099039 2224862446

21.09.2017 Equity 2470175 10 202.33 499800000 Conversion CCDs

49569214 2724662446

16.10.2017 Equity 4923747 10 459 2259999873

Allotment to Public

54492961

4984662319

16.10.2017 Equity 169082 10 414 69999948 Allotment to Employees

54662043 5054662267

Note: *Shares are redeemed

# Shares are converted

(d) Details of any Acquisition or Amalgamation in the last 1 (one) year: Nil

(e) Details of any Reorganization or Reconstruction in the last 1 (one) year: Nil

Type of Event Date of

Announcement

Date of

Completion

Details

NA NA NA NA

5.7 Details of the shareholding of the Company as on the latest quarter end, i.e. June 30,

2020

(a) Shareholding pattern of the Company as on the last quarter end i.e. June 30,

2020 :

Sr.

No.

Particulars Total No.

of Equity

Shares

No. of Shares

in demat form

Total

shareholding

as % of total

no of equity

shares

A. Promoters’ holding

1. Indian

Individual 38826770 71.03 38826770

Bodies Corporate 1405051 2.57 1405051

Sub-total 40231821 73.60 40231821

2. Foreign promoters - - -

Sub-total (A) 40231821 73.60 40231821

B. Non-promoters’ holding

1. Institutional investors 7266902 13.30 7266902

2. Non-institutional investors

Indian public 2414287 4.42 2414287

Others [including non-resident

Indians (NRIs)]

4749033 8.69 4749033

Sub-total (B) 14430222 26.40 14430222

Grand Total 54662043 100 54662043

Notes: Details of shares pledged or encumbered by the promoters (if any): Nil




33

(b) List of top 10 holders of equity shares of the Company as on the latest

quarter end, i.e. June 30, 2020 :

Sr.

No.

Particulars Total No.

of Equity

Shares

No. of Shares in

demat form

Total

shareholding

as % of total

no of equity

shares

1. Shweta Kamlesh Gandhi 16338450

16338450

29.89

2. Mukesh Chimanlal Gandhi 16155814

16155814

29.56

3. Kamlesh Chimanlal Gandhi 6285833 6285833 11.50

4. Vistra ITCL I Ltd Business

Excellence Trust III India

Business

4044579 4044579 7.40

5. Axis Mutual Fund Trustee

Limited A/C Axis Mutual

Fund A/C Axis Long Term

Equity Fund

1547805

1547805

2.83

6. Prarthna Marketing Private

Limited

1310057

1310057

2.40

7. Axis Mutual Fund Trustee

Limited A/C Axis Mutual

Fund A/C Axis Small Cap

Fund

1230686

1230686

2.25

8. IDFC Sterling Value Fund 720000 720000 1.32

9. Tata Aia Life Insurance Co

Ltd-Whole Life Mid Cap

Equity Fund-Ulif 009 04/01/07

Wle 110

607131 607131 1.11

10. Motilal Oswal Focused

Emergence Fund

530862

530862

0.97

Total 48771217 48771217 89.23

5.8 Following are the details regarding the directors of the Company:

(a) This table sets out the details regarding the Company’s Board of Directors

as on date of the Information Memorandum*:

Name Designation

Address Date of Birth, Age

Director of the

Company since

PAN No. DIN No. Occupation

Nationality

Details of other

Directorship

Mr. Kamlesh C. Gandhi

Chairman &Managi

ng Director

5/a , Kumar Society, Jivraj Park, Vejalpur, Ahmedabad -

02/02/1966, 54 years

25/05/1995

ABZPG8902H

00044852

Business Indian 1.

Swalamb

MASS

Financial

Services

Limited;

2. MAS




34

380051, Gujarat

Rural

Housing

&

Mortgage

Finance

Limited

3.

Prarthna

Marketing

Pvt. Ltd.

4.

Urmilaben

Chimanlal

Gandhi

Foundatio

n

Mr. Mukesh C. Gandhi

Whole Time

Director &CFO

A/4, Ashirvad Apartment Opp. UCO Bank, Nr. V.S. Hospital, Ellisbridge Ahmedabad 380006, Gujarat

20/10/1957, 63 years

25/05/1995

ABPPG9593C

00187086

Business Indian 1.

Swalamb

MASS

Financial

Services

Limited;

2.

Anamaya

Capital

LLP

3. MAS

Rural

Housing

&

Mortgage

Finance

Limited

4.

Prarthna

Marketing

Pvt. Ltd.

5. Finance

Industry

Developm

ent

Council

6.

Urmilaben

Chimanlal

Gandhi

Foundatio

n

Mr. Bala Bhaskaran

Non-Executive Director

A-404, Gala Marvella, South Bopal Near Safal Parisar,

15/02/1951, 69 Years

25/05/1995

AEMPB0542A

00393346

Professional

Indian 1. Swalamb MASS Financial Services Limited 2. Kesavan Chandrika




35

Bopal Daskroi Ahmedabad 380058 GJ IN

Foundation 3. MAS Rural Housing & Mortgage Finance Limited

Mr. Chetan Shah


Sadar Pole, Kakar Khad, Nadiad - 387001, Gujarat,

25/11/1954, 66 Years

06/06/2008

AGIPS3146H

02213542

Professional

Indian 1. MAS Rural Housing & Mortgage Finance Limited

Mrs. Darshana Saumil Pandya

Director &CEO

36 -

Maruti

Nandan

Kutir, Nr,

Shyam

Villa-1,

Gala Club

Road,

Bopal ,

Ahmedab

ad –

380058,

Gujarat

17/11/1972, 48 Years

23/09/2016

AGWPP4203A

076104

02

Service Indian 1. MAS Rural Housing & Mortgage Finance Limited 2. Urmilaben Chimanlal Gandhi Foundation

Mr. Umesh Rajanikant Shah


104,

Vatsraj

Appartme

nt, Opp.

Shraddha

School,

Jodhpur

Gam

Road,

Satellite,

Ahmedab

ad

380015,

Gujarat

08/06/1956, 64 Years

21/12/20

16

ACWPS4357C

076856

72

Professio

nal

Indian -

Mrs. Daksha Niranjan Shah


31, Viva

Bunglow,

B/H Ranjit

Petrol

Pump,

Bodakdev

, Thaltej,

Dascroi,

Ahmedab

ad

380059

08/05/1945, 75 Years

14/03/2019

ADAPS6942E

00376899

Professional

Indian 1.

Sadbhav

Infrastruct

ure

Project

Limited

2. Rohtak

- Panipat

Tollway

Private

Limited

http://www.mca.gov.in/mcafoportal/companyLLPMasterData.do





36

Gujarat. 3.

Sadbhav

Udaipur

Highway

Private

Limited

4. Altura

Financial

Services

Limited

5. Saline

Area

Vitalisatio

n

Enterprise

Limited

* Company to disclose name of the current directors who are appearing in the

RBI defaulter list and/or ECGC default list, if any: NIL

(b) Details of change in directors since last three years:

S.

No.

Name &

Designation

DIN Date of appointment/

Resignation

Director of

the

Company

since (in

case of

resignation)

Date of

cessation

Remarks

1. Mrs. Daksha Shah, Independent Director

00376899 Appointment, Independent Director

14/03/2019 - -

5.9 Following details regarding the auditors of the Company:

Name Address Auditor Since

B S R & Co. LLP

5th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai – 400 011, India.

01/04/2018

5.10 Details of change in auditors since last three years:

Name

Date of appointment/

resignation Address

Auditor of the

Company since (in

case of resignation)

Remar

ks

Deloitte

Haskins &

Sells

Appointed on 30/07/2008

Retired with effect from

31/03/2018

19th Floor, Shapath –

V, S.G. Highway,

Ahmedabad - 380015

01/04/2008 -

BSR & Co.

LLP

Appointed on 27/06/2018 5 Floor, Lodha

Excelus, Apollo Mills

Compound, N.M.

Joshi Marg,

N.A. -





37

Name

Date of appointment/

resignation Address

Auditor of the

Company since (in

case of resignation)

Remar

ks

Mahalaxmi, Mumbai –

400011.

5.11 Details of borrowings of the Company, as on latest quarter end i.e. 31st March,

2020*:(on a standalone basis)

* As the Issuer is a listed company, the latest published information is available only up to March 31, 2020. The Issuer will disclose all the relevant information up to June 30, 2020 to the stock exchanges within the timelines prescribed under the LODR Regulations.

(a) Details of secured loan facilities

Lender’s

Name

Type

of

facility

Amount

Sanctioned

(Rs. crore)

Principal

Amount

Outstanding

(Rs. Crore)

Repayment

Date/Schedule Security

AU Small

Finance

Bank

Term

Loan 75.00 30.00

Repayable in 10

Quarterly

installments from

5 December 2018.

Secured by a first charge on

hypothecation of present

and future loan receivables.

Bank of India Term

Loan

40.00

2.50

Repayable in 20

Quarterly

installments from

30 September

2015.

Secured by a first ranking

and exclusive charge on

standard receivables of the

company created out of the

loan availed. Personal

Guarantee of Mr. Kamlesh

Gandhi, Mr. Mukesh

Gandhi and Mrs. Shweta

Gandhi.

Bank of India Term

Loan 1.50

Repayable in 20

Quarterly

installments from

30 September

2015.







Gandhi, Mr. Mukesh


Gandhi.

Bank of India Term

Loan 40.00 12.00

Repayable in 20

Quarterly

installments from

30 September

2016.







Gandhi, Mr. Mukesh


Gandhi.




38

HDFC Bank Term

Loan 50.00 0.12

Repayable in 36

monthly

installments from

7 April 2017.

Secured by a first and

exclusive charge on specific

receivables of the company

created out of the loan

availed.

HDFC Bank Term

Loan 50.00 23.97

Repayable in 36

monthly

installments from

7 August 2018.





availed.

HDFC Bank Term

Loan 54.00 25.37

Repayable in 36

monthly

installments from

7 September 2018.





availed.

HDFC Bank Term

Loan 50.00 22.11

Repayable in 96

monthly

installments from

7 April 2018.

First and exclusive charge

on land, property and

commercial property under

construction.

HDFC Bank Term

Loan 35.00 30.72

Repayable in 36

monthly

installments from

7 November 2019.





availed.

HDFC Bank Term

Loan 7.50 7.50

Repayable in 36

monthly

installments from

7 April 2020.





availed.

HDFC Bank Term

Loan 30.00 30.00

Repayable in 36

monthly

installments from

7 April 2020.





availed.

HDFC Bank Term

Loan 12.50 12.50

Repayable in 36

monthly

installments from

7 April 2020.





availed.

Kotak

Mahindra

Bank

Limited

Term

Loan 25.00 10.42

Repayable in 36

monthly

installments from

31 July 2018.

First and exclusive charge

by way of hypothecation on

the company's book debts

and loan installments

receivables.

Federal bank Term

Loan 25.00 10.72

Repayable in 30

monthly

installments from

27 October 2018.



book debt and future


created/to be created out of

the loan availed.




39

IDFC First

Bank

Term

Loan 150.00 104.17

Repayable in 36

monthly

installments from

30 April 2019.

First exclusive charge of

present and future book

debts and receivables of the

company.

Indian Bank Term

Loan 100.00 72.73

Repayable in 11

Quarterly

installments from

1 July 2019.

Exclusive charge by way of

hypothecation of such of the

book debts, which are

financed / to be financed by

the company out of the bank

finance.

State Bank of

India

Term

Loan 100.00 25.00

Repayable in 16

Quarterly

installments from

30 June 2017.

Secured by Hypothecation

of portfolio of the company

created out of the term loan.

Personal Guarantee of Mr.

Kamlesh Gandhi, Mr.

Mukesh Gandhi and Mrs.

Shweta Gandhi.

Shinhan

Bank

Term

Loan 25.00 3.47

Repayable in 36

monthly

installments from

1 September 2017.


hypothecation of the

specific receivables/book

debts.

Shinhan

Bank

Term

Loan 20.00 8.89

Repayable in 36

monthly

installments from

1 August 2018.


hypothecation of the

specific receivables/book

debts.

Axis Bank Term

Loan 25.00 20.83

Repayable in 12

Quarterly

installments from

30 November

2019.

Exclusive charge on

specific standard book debts

and receivables which are

financed / to be financed by


finance.

ICICI Bank Term

Loan 60.00 60.00

Repayable in 8

Quarterly

installments from

30 September

2020.


hypothecation of on


Borrower

Oriental

Bank of

Commerce

Term

Loan 100.00 100.00

Repayable in 12

Quarterly

installments from

31 March 2020.


hypothecation of such of the

book debts, which are

financed/ to be financed by


financed to the company.

State Bank of

India

Term

Loan 100.00 84.50

Repayable in 16

Quarterly

installments from

30 September

2019.

Hypothecation of standard

portfolio of the company


State Bank of

India

Term

Loan 200.00 191.25

Repayable in 16

Quarterly

installments from

29 February 2020.

Hypothecation of standard

portfolio of the company





40

Union Bank

of India

Term

Loan 200.00 200.00

Repayable in 18

Quarterly

installments from

31 December

2020.

Exclusive charge by the

way of hypothecation on

specific receivables of the

company

ICICI Bank Term

Loan 0.42 0.19

Repayable in 36

monthly

installments from

5 July 2018.

Secured by hypothecation

of the vehicle financed.

Tata Capital

Financial

Services

Limited

Term

Loan 40.00 22.03

Repayable in 36

monthly

installments from

15 March 2019.


hypothecation of specific

standard receivable of the

company.

Sundaram

Finance

Limited

Term

Loan 50.00 33.79

Repayable in 36

monthly

installments from

10 March 2019.

Secured by hypothecation

of specific book debts


availed.

Mahindra

and

Mahindra

Finance

Limited

Term

Loan 50.00 21.46

Repayable in 10

Quarterly

installments from

18 December

2018.

Exclusive hypothecation

charge over receivables/loan

assets/ book debts of the

company.

Bajaj

Finance

Limited

Term

Loan 20.00 2.00

Repayable in 10

quarterly

installments from

31 March 2018.

Secured by exclusive first

charge by way of


book debts of the company


availed.

Bajaj

Finance

Limited

Term

Loan 50.00 25.00

Repayable in 10

quarterly

installments from

31 March 2019.


charge by way of




availed.

Bajaj

Finance

Limited

Term

Loan 50.00 33.33

Repayable in 36

monthly

installments from

30 April 2019.


charge by way of




availed.

Bajaj

Finance

Limited

Term

Loan 25.00 24.31

Repayable in 36

monthly

installments from

31 March 2020.


charge by way of




availed.

MUDRA Term

Loan 50.00 8.33

Repayable in 10

quarterly

installments from

10 March 2020.

Exclusive first charge by

way of hypothecation of

book debts and receivables

of secured loans provided

by the Borrower.




41

Bank Of

Baroda

Cash

Credit 400.00 394.21

N.A.

Hypothecation of

underlying assets such as

consumer durables, office

equipment, vehicles etc.

covered under H.P.

agreements / Loan cum

Hypothecation Agreement

and relative book-

debts/receivables, loans &

Advances and entire

portfolio outstanding

ranking pari passu with

other WC consortium

banks. (Except specific

portfolio generated from

various term loans

sanctioned by various

banks/FIs on exclusive

basis). Personal Guarantee

of Mr. Kamlesh Gandhi,

Mr. Mukesh Gandhi and

Mrs. Shweta Gandhi.

State Bank

Of India

Cash

Credit 290.00 290.00

Bank Of

India

Cash

Credit 100.00 100.00

IDBI Bank

Ltd.

Cash

Credit

150.00 0.00

Central Bank

Of India

Cash

Credit 105.00 75.00

United Bank

Of India

Cash

Credit 50.00 50.01

Canara Bank Cash

Credit 50.00 0.01

Baroda

Gujarat

Gramin Bank

Cash

Credit 30.00 30.00

South Indian

Bank

Cash

Credit 20.00 0.00

Indian Bank Cash

Credit 100.00 100.00

Syndicate

Bank

Cash

Credit 50.00 0.00

Oriental

Bank Of

Commerce

Cash

Credit 100.00 70.05

Indian

Overseas

Bank

Cash

Credit 50.00 0.20

Bank Of

Maharashtra

Cash

Credit 60.00 0.00

Union Bank

Of India

Cash

Credit 70.00 70.00

Punjab

National

Bank

Cash

Credit 100.00 0.47

Andhra Bank Cash

Credit 50.00 48.00

Tamilnad

Mercantile

Bank

Cash

Credit 20.00 15.00




42

(b) Details of unsecured loan facilities

Lender's Name Type of Facility Amount

Sanctioned

(Rs. Crore)

Principal

Amount

Outstanding

(Rs. Crore)

Repayment Date/

Schedule

Bajaj Finance Limited Term Loan 25.00 25.00 Bullet Repayment on 17

August, 2026.

Details of NCDs:

Debenture Series Tenor/

Period

of

Maturit

y

Coupo

n

Amount Date of

Allotme

nt

Redem

ption

Date/

Schedul

e

Credit

Rating

Secured/

Unsecured

Securit

y

200, 13.50%

Unsecured,

Redeemable,

Non-Convertible

Debentures of

Rs. 10 lakhs each

18-09-

2021

13.50% 20,00,00,000 18-03-

2015

18-09-

2021

ICRA A Unsecured -

400, 14.00%

Unsecured,

Redeemable,

Non-Convertible

Debentures of

Rs. 10 lakhs each

22-06-

2022

13.00% 40,00,00,000 22-06-

2015

22-06-

2022

ICRA A Unsecured -

The above issued debentures are subordinate debentures.

List of Top 10 Debenture Holder(s)–as on 31st March, 2020*:

* As the Issuer is a listed company, the latest published information is available only up to March 31, 2020. The Issuer will disclose all the relevant information up to June 30, 2020 to the stock exchanges within the timelines prescribed under the LODR Regulations.

Sr.

No. Name of Debenture Holders Amount

1. IDFC First Bank Limited 40,00,00,000

2. RBL Bank Limited 18,40,00,000

3. Indian Register of Shipping Staff Provident Fund 130,00,000

4. Neela Dinesh Vyas 10,00,000

5. Vaishali Vasant Soman 10,00,000

6. Mita Debasis Mitraroy 10,00,000

Note: Top 10 holders’ (in value, on cumulative basis for all outstanding debentures issues)

details should be provided




43

(c) The amount of corporate guarantee issued by the Issuer along with the name of the

counterparty (like name of the subsidiary, JV entity, Group Company, etc.) on

behalf of whom it has been issued: As disclosed in the annexed financial Statement

(d) Details of Commercial Paper: The total Face Value of Commercial Papers

outstanding as on the latest quarter end, i.e. June 30, 2020 and its breakup in the

following table: NIL

(e) Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally

Convertible Debentures / Preference Shares) as on 31.03.2020: NIL

(f) Details of all default/s and/or delay in payments of interest and principal of any kind

of term loans, debt securities and other financial indebtedness including corporate

guarantee issued by the company, in the past 5 years: NIL

(g) 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 a

premium or discount, or (iii) in pursuance of an option: NIL

5.12 Details of Promoters of the Company (including promoter group): As set out below

(a) Details of Promoter Holding in Company as on latest quarter end: June 30, 2020

Sr.

No.

Name of the

shareholders

Total No of

Equity

Shares

No of shares in

demat form

Total

shareholding as %

of total no of

equity shares

No of

Shares

Pledged

% of Shares

pledged with

respect to

shares owned.

1. Shweta Kamlesh Gandhi

16338450

16338450

29.89 - -

2. Mukesh Chimanlal Gandhi

16155814

16155814

29.56 - -

3. Kamlesh Chimanlal Gandhi

6285833

6281583

11.50 - -

4. Dhvanil K. Gandhi 34619 34619 0.06 - -

5. Dhriti Kamlesh Gandhi

12054

12054

0.02 - -

6. Prarthana Marketing Private Limited

1310057

1310057

2.40 - -

7. Anamaya Capital LLP

94994

94994

0.17 - -

5.13 Abridged version of the Audited Consolidated and Standalone Financial

Information (like Profit and Loss statement, Balance Sheet and Cash Flow

statement) for at least last three years and auditor qualifications, if any.

Audited Consolidated financials (Amount in Rs. Lakhs):

Balance Sheet March 2020 March 2019 March 2018

EQUITY & LIABILITIES

Shareholders Fund 104597.84 91554.79 77918.88




44

Non-Controlling Interest 1989.15 1877.32 1235.64

Non-Current Liabilities 128584.24 109269.99 70979.63


ASSETS


Current Assets 277560.04 228594.50 146815.95

Profit & Loss Account March 2020 March 2019 March 2018

Income 72241.80 60469.66 47680.59

Expenses 48381.61 36668.85 30903.59

Profit / (Loss) before Tax 23860.19 23800.81 16777.00

Profit / (Loss) for the year 18126.14 15460.65 10519.03

Audited Standalone financials (Amount in Rs. Lakhs):




Non-Current Liabilities 1,13,219.99 91,083.12 58,284.24

Current Liabilities 2,38,587.98 1,88,290.34 1,34,098.01

ASSETS

Non-Current Assets 1,85,247.73 1,51,860.60 1,28,002.53

Current Assets 2,70,431.64 2,18,494.56 1,41,765.78


Income 68311.53 57258.02 45089.62

Expenses 44863.77 33865.07 28573.9



Financials as on March, 2020 approved by the Board of Directors of the Company at its

meeting held on 03.06.2020 and to be adopted by members of the Company at its ensuing

Annual General Meeting.

5.14 Abridged version of the Latest Audited/Limited Review Half Yearly consolidated

(wherever available) and Standalone Financial Information (like Profit & Loss

statement, and Balance Sheet) and auditor’s qualifications, if any.

Audited Consolidated financials (Amount in Rs. Lakhs):




Non-Controlling Interest 1989.15 1877.32 1235.64

Non-Current Liabilities 128584.24 109269.99 70979.63


ASSETS





45

Current Assets 277560.04 228594.50 146815.95


Income 72241.80 60469.66 47680.59

Expenses 48381.61 36668.85 30903.59



Audited Standalone financials (Amount in Rs. Lakhs):




Non-Current Liabilities 1,13,219.99 91,083.12 58,284.24

Current Liabilities 2,38,587.98 1,88,290.34 1,34,098.01

ASSETS

Non-Current Assets 1,85,247.73 1,51,860.60 1,28,002.53

Current Assets 2,70,431.64 2,18,494.56 1,41,765.78


Income 68311.53 57258.02 45089.62

Expenses 44863.77 33865.07 28573.9



Financials as on March, 2020 approved by the Board of Directors of the Company at

its meeting held on 03.06.2020 and to be adopted by members of the Company at its

ensuing Annual General Meeting.

5.15 Any material event/ development or change having implications on the

financials/credit quality (e.g. any material regulatory proceedings against the

Issuer/promoters, tax litigations resulting in material liabilities, corporate

restructuring event etc.) at the time of Issue which may affect the Issue or the

investor’s decision to invest / continue to invest in the debt securities.

NIL

5.16 Name of the Debenture Trustee shall be mentioned with statement to the effect that

the debenture trustee has given its consent to the Issuer for its appointment under

regulation 4(4) and in all the subsequent periodical communications sent to the

holders of the Debentures. Copy of consent letter from the Debenture Trustee to be

disclosed.

The Debenture Trustee of the proposed Debentures is Catalyst Trusteeship Limited.

Catalyst Trusteeship Limited has given its written consent for its appointment as

debenture trustee to the Issue and inclusion of its name in the form and context in which it

appears in this Information Memorandum and in all the subsequent periodical

communications sent to the Debenture Holders. The consent letter from Debenture

Trustee is provided in Annexure III of this Information Memorandum.




46

5.17 Detailed Rating Rationale(s) adopted (not older than one year on the date of opening

of the Issue)/ credit rating letter issued (not older than one month on the date of

opening of the Issue) by the rating agencies shall be disclosed.

The rating letter from the Rating Agency is provided in Annexure II of this Information

Memorandum.

5.18 If 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 such

document does not contain detailed payment structure (procedure of invocation of

guarantee and receipt of payment by the investor along with timelines), the same

shall be disclosed in the offer document.

(a) The Debentures are proposed to be guaranteed by the Guarantor by way of the

GOI Guarantee. The GOI Guarantee will be issued in accordance with Rule 280

of the General Financial Rules as published by the Ministry of Finance

(Department of Expenditure), Government of India from time to time (hereinafter

referred to as "GFR") within the timelines that are agreed between the Guarantor

and the Debenture Holders, in accordance with the terms of GOI Guidelines and

other Applicable Law.

(b) The GOI Guarantee may be invoked by the Debenture Holders upon occurrence

of the any event for invocation set out under the GOI Guidelines (including the

inability of the Issuer to repay/pay any part of the Outstanding Amounts in

respect of the Debentures) in accordance with the procedure set out in the GOI

Guidelines.

(c) Subject to the terms of the GOI Guidelines, the GOI Guarantee is a continuing

guarantee and may be reviewed on an annual basis in accordance with Rule 281

of the GFR.

(d) Any claims under the GOI Guarantee and/or other reporting requirements in

respect of the GOI Guarantee will be done in accordance with the GOI

Guidelines.

5.19 Names of all the recognized stock exchanges where the Debentures are proposed to

be listed clearly indicating the designated stock exchange:

The Debentures are proposed to be listed on the WDM segment of the BSE. The Issuer

shall comply with the requirements of the listing agreement for debt securities to the

extent applicable to it on a continuous basis.

5.20 Other details:

(a) DRR Creation:

(i) As per the Companies (Share Capital & Debentures) Rules, 2014 non-

banking financial companies registered with the RBI are exempted from

the requirement to maintain a debenture redemption reserve ("DRR") in

case of privately placed debentures.

(ii) The Issuer hereby agrees and undertakes that, if required under

Applicable Law, it will create a DRR in accordance with the provisions of




47

the Act (and the rules and regulations made thereunder) and the

guidelines issued by the relevant Governmental Authorities.

(iii) If during the tenor of the Debentures, any guidelines are formulated (or

modified or revised) by any Governmental Authority in respect of

creation of the DRR, the Company shall abide by such guidelines and

shall do all deeds, acts and things as may be required by the Debenture

Trustee.

(iv) Where applicable, the Issuer shall submit to the Debenture Trustee a

certificate duly certified by a chartered accountant certifying that the

Issuer has transferred the required amount to the DRR at the end of each

Financial Year.

(v) In addition to the foregoing, to the extent required by Applicable Law, the

Issuer shall invest or deposit amounts up to such thresholds, and in such

form and manner and within the time periods, as may be prescribed by

Applicable Law, in respect of any amounts of the Debentures maturing in

any Financial Year.

(b) Issue / instrument specific regulations – relevant details (Companies Act,

RBI guidelines, etc.):

The issue of Debentures shall be in conformity with the applicable provisions of

the Companies Act, 2013 including the relevant notified rules thereunder and, the

SEBI Debt Listing Regulations, the Debenture Trustees Regulations, the LODR

Regulations, the NBFC Directions, the GOI Guidelines (to the extent applicable)

and the applicable guidelines and/or directions issued by the RBI and the SEBI.

(c) Application process:

The application process for the Issue is as provided in SECTION 7: Other

Information and Issue Procedure of this Information Memorandum.

5.21 A statement containing particulars of the dates of, and parties to all material

contracts, agreements:

Refer to Annexure IX

5.22 Utilization of the Issue Proceeds

(a) The Company shall utilise the amounts received towards subscription of the

Debentures for the Purpose and procure and furnish to the Debenture Trustee a

certificate from the Company's auditors in respect of the utilisation of funds

raised by the issue of the Debentures.

(b) The Debenture Trustee shall provide a copy of the aforementioned certificate to

the Debenture Holders within the time period prescribed by the Debenture

Trustee.

(c) The proceeds of the Debentures will be utilized solely for the Purpose and will

not be utilised for:

(i) any capital market instrument such as equity, debt, debt linked and equity




48

linked instruments or any other capital market related activities; or

(ii) any speculative purposes;

(iii) any activities mentioned in the Exclusion List;

(iii) investment in the real estate sector;

(iv) any purpose, that is prohibited for bank finance to non-banking financial

companies, or, which results in a breach of the RBI's master circular no.

DBR.BP.BC.No.5/21.04.172/2015-16 dated July 1, 2015 on "Bank

Finance to Non-Banking Financial Companies (NBFCs)"; or

(v) in contravention of any Applicable Law (including but not limited to the

guidelines, rules or regulations of the RBI applicable to non-banking

financial companies).

5.23 Issue Details

Summary term sheet shall be provided which shall include at least the following

information (where relevant) pertaining to the secured/ unsecured debt securities:

Security Name 9% MAS Financial Services Limited 2022

Issuer MAS Financial Services Limited

Type of Instrument Rated, senior, redeemable, taxable transferable, listed, non-

convertible debentures

Nature of Instrument Senior

Seniority Senior

Mode of Issue Private placement

Eligible/Identified Investors As provided in Section Error! Reference source not found.

REF _Ref341279617 \p \h \* MERGEFORMAT below

Listing (including name of

stock Exchange(s) where it

will be listed and timeline

for listing)

The Debentures are proposed to be listed on the WDM segment of

the BSE.

(a) Within 15 (fifteen) calendar days of the Deemed Date of

Allotment, the Issuer shall submit all duly completed

documents to the BSE, SEBI, ROC or any other

Governmental Authority, as are required under

Applicable Law and obtain the listing of the Debentures

within 20 (twenty) calendar days from the Deemed Date

of Allotment ("Listing Period").

(b) The Issuer shall ensure that the Debentures continue to be

listed on the wholesale debt market segment of the BSE.

(c) The Issuer shall ensure that the Debentures at all times

are rated in accordance with the provisions of the

Transaction Documents and that the rating of the

Debentures is not downgraded or withdrawn throughout

the tenor of the Debentures.




49

(d) In the event there is any delay in listing of the Debentures

within the Listing Period, the Issuer will pay to the

Debenture Holders, penal interest of 2% (two percent)

per annum over the Interest Rate, from the expiry of 30

(thirty) calendar days from the Deemed Date of

Allotment till the listing of the Debentures is completed.

Rating of Instrument CARE A+ as assigned by the Rating Agency

Issue Size INR 100,00,00,000 (Indian Rupees One Hundred Crore).

Option to retain

oversubscription (Amount)

N.A.

Objects of the Issue To raise debt to the extent of up to INR 100,00,00,000 (Indian

Rupees One Hundred Crore) for the general corporate purposes of

the Issuer and for the ordinary course of business of the Issuer

including repayments and/or refinancing of existing debt.

Details of the utilization of

the Proceeds

The Issuer shall use the proceeds from the Issue for the general

corporate purposes of the Issuer and for the ordinary course of

business of the Issuer including repayments and/or refinancing of

existing debt.

The proceeds of the Debentures will be utilized solely for the

Purpose and will not be utilised for:

(a) any capital market instrument such as equity, debt, debt

linked and equity linked instruments or any other capital

market related activities; or

(b) any speculative purposes;

(c) any activities mentioned in the Exclusion List;

(c) investment in the real estate sector;

(d) any purpose, that is prohibited for bank finance to non-

banking financial companies, or, which results in a breach

of the RBI's master circular no.

DBR.BP.BC.No.5/21.04.172/2015-16 dated July 1, 2015

on "Bank Finance to Non-Banking Financial Companies

(NBFCs)"; or

(e) in contravention of any Applicable Law (including but not

limited to the guidelines, rules or regulations of the RBI

applicable to non-banking financial companies).

Coupon Rate 9% (nine percent) per annum

Step Up/ Step Down

Coupon Rate

N.A.

Coupon Payment

Frequency

Annual and on maturity

Coupon Payment Dates Annual as per Annexure V (Illustrations of Debenture Cash Flows)

in this Information Memorandum




50

Coupon Type Fixed

Coupon Reset Process

(Including rates, spread,

effective date, interest rate

cap and floor, etc.)

N.A.

Day Count Basis Actual/Actual

Interest on Application

Money

(a) Interest at the Interest Rate per annum will be paid on the

Application Money to the Applicants from the date of

receipt of such Application Money in the account of the

ICCL (in accordance with the terms of the EBP

Guidelines) up to 1 (one) day prior to the Deemed Date of

Allotment for all valid applications, within 7 (seven)

Business Days from the Deemed Date of Allotment.

(b) Where the entire subscription amount has been refunded,

the interest on Application Money will be paid along with

the refunded amount.

(c) Where an Applicant is allotted a lesser number of

Debentures than applied for, the excess amount paid on

application will be refunded to the Applicant in the bank

account of the Applicant as described in the Application

Form towards interest on the refunded money by electronic

mode of transfer like RTGS/NEFT/direct credit. Details of

allotment will be sent to every successful Applicant.

Default Interest Rate (a) The Issuer agrees to pay an additional interest rate of 2% (two

percent) per annum above the applicable Interest Rate on the

Outstanding Principal Amounts from the date of the

occurrence of a Payment Default until such Payment Default is

cured, on each Interest Payment Date occurring during the

aforementioned period.

(b) The Issuer agrees to pay an additional interest rate of 2% (two


Outstanding Principal Amounts from the date of the

occurrence of any breach of its obligations set out under the

Transaction Documents until such breach is cured, on each

Interest Payment Date occurring during the aforementioned

period.

(c) If the Issuer fails to create and perfect security on the

Hypothecated Assets on or prior to the Initial Security Creation

Date in accordance with the provisions of the Transaction

Documents, the Issuer will either refund the subscription

amounts with interest at the Interest Rate, or the Issuer will pay

default interest at the rate of 2% (two percent) per annum

above the Interest Rate on the Outstanding Principal Amounts

until the security is created in accordance with the DTD and

the security is perfected in accordance with Applicable Law.

Tenor 18 (eighteen) months from the Deemed Date of Allotment

Redemption Date January 24, 2022, being 18 (eighteen) months from the Deemed




51

Date of Allotment

Redemption Amount The sum of the principal amounts outstanding under the

Debentures. Each Debenture shall be redeemed at par.

Redemption Premium/

Discount

N.A.

Issue Price INR 10, 00,000 (Indian Rupees Ten Lakh) per Debenture

Discount at which security

is issued and the effective

yield as a result of such

discount

N.A.

Put Date N.A.

Put Price N.A.

Call Date N.A.

Call Price N.A.

Put Notification Time N.A.

Call Notification Time N.A.

Face Value INR 10, 00,000 (Indian Rupees Ten Lakh) per Debenture

Minimum Application size

and in multiples of 10

Debentures thereafter

1,000 Debentures and in multiples of 10 Debentures thereafter.

Issue Timing Issue/ Bid Opening Date: 23rd

July, 2020

Issue/ Bid Closing Date: 23rd

July, 2020

Pay-in Date: 24th July, 2020

Deemed Date of Allotment: 24th July, 2020

Issuance mode of the

Instrument

Demat only

Trading mode of the

Instrument

Demat only

Settlement mode of the

Instrument

The pay-in of the Application Money for the Debentures shall be

made by way of transfer of funds from the bank account(s) of the

Eligible Investors (whose bids have been accepted) as registered

with the Electronic Book Provider into the account of the ICCL, as

specified in this regard below:

Name of the Bank: HDFC Bank

IFSC Code: HDFC0000060

Account Number: ICCLEB

Name of the beneficiary:

INDIAN CLEARING CORPORATION LIMITED

Depository NSDL and/or CDSL

Business Day Convention (a) If any Due Date on which any interest or additional

interest is payable falls on a day which is not a Business

Day, the payment to be made on such Due Date shall be

made on the succeeding Business Day and to the extent not

contrary to Applicable Law, the Issuer shall be liable to the

pay the interest or additional interest till such succeeding

Business Day.

(b) If any Due Date on which any Outstanding Principal




52

Amounts are payable falls on a day which is not a Business

Day, the payment to be made on such Due Date shall be

made on the preceding Business Day.

(c) If the Redemption Date falls on a day which is not a

Business Day, the payment of any amounts in respect of

any interest and the Outstanding Principal Amounts to be

made shall be made on the preceding Business Day.

Record Date The date which will be used for determining the Debenture

Holder(s) who shall be entitled to receive the amounts due on any

Due Date, which shall be the date falling 15 (fifteen) calendar days

prior to any Due Date.

Security (where applicable)

(Including description, type

of security, type of charge,

likely date of creation of

security, minimum security

cover, revaluation,

replacement of security,

interest to the debenture

holder over and above the

coupon rate specified in the

Trust Deed and disclosed in

the Offer Document)

Security

(a) The Debentures shall be collateralised on or prior to the

Initial Security Creation Date by way of a first ranking

exclusive and continuing charge (the "Security") to be

created pursuant to an unattested deed of hypothecation,

dated on or about the Deemed Date of Allotment, executed

or to be executed and delivered by the Issuer in a form

acceptable to the Debenture Trustee ("Deed of

Hypothecation") over the book debts/loan receivables of

the Issuer as described therein (the "Hypothecated

Assets").

(b) The charge over the Hypothecated Assets shall at all times

be at least 1.10 (one decimal one zero) times the value of

the Outstanding Amounts ("Security Cover") and shall be

maintained at all times from the Initial Security Creation

Date until the Final Settlement Date. The value of the

Hypothecated Assets for this purpose (for both initial and

subsequent valuations) shall be the amount reflected as the

value thereof in the books of accounts of the Issuer.

(c) The Issuer shall create the charge by way of hypothecation

over the Hypothecated Assets on or prior to the Initial

Security Creation Date and perfect such security by filing

Form CHG-9 with the ROC and ensuring and procuring

that the Debenture Trustee files the prescribed Form I with

CERSAI reporting the charge created to the CERSAI, in

respect thereof, each within 30 (thirty) calendar days from

the date on which such security over the Hypothecated

Assets is created in accordance with the Deed of

Hypothecation.

GOI Guarantee

(d) The Debentures are proposed to be guaranteed by the

Guarantor by way of the GOI Guarantee. The GOI

Guarantee will be issued in accordance with Rule 280 of

the General Financial Rules as published by the Ministry

of Finance (Department of Expenditure), Government of




53

India from time to time (hereinafter referred to as "GFR")

within the timelines that are agreed between the Guarantor

and the Debenture Holders, in accordance with the terms

of GOI Guidelines and other Applicable Law.

(e) The GOI Guarantee may be invoked by the Debenture

Holders upon occurrence of the any event for invocation

set out under the GOI Guidelines (including the inability of

the Issuer to repay/pay any part of the Outstanding

Amounts in respect of the Debentures) in accordance with

the procedure set out in the GOI Guidelines.

(f) Subject to the terms of the GOI Guidelines, the GOI

Guarantee is a continuing guarantee and may be reviewed

on an annual basis in accordance with Rule 281 of the

GFR.

(g) Any claims under the GOI Guarantee and/or other

reporting requirements in respect of the GOI Guarantee

will be done in accordance with the GOI Guidelines.

Guarantee Fee

(h) The Issuer shall procure that the applicable Guarantee Fee

is paid to the Guarantor in accordance with the procedure

set out in the GOI Guidelines.

Others

(i) The Issuer further agrees, declares and covenants as

follows;

(i) all the Hypothecated Assets that will be charged to

the Debenture Trustee under the Deed of

Hypothecation shall always be kept

distinguishable and held as the exclusive property

of the Issuer specifically appropriated to the

Security and be dealt with only under the

directions of the Debenture Trustee;

(ii) the Debentures shall be supported by the GOI

Guarantee to be provided by the Guarantor in

accordance with the GOI Guidelines;

(iii) the Issuer shall not create any charge, lien or other

encumbrance upon or over the Hypothecated

Assets or any part thereof except in favour of the

Debenture Trustee nor will it do or allow anything

that may prejudice the Security;

(iv) to create the security over the Hypothecated Assets

as contemplated in the Transaction Documents on

or prior to the Initial Security Creation Date by

executing the duly stamped Deed of




54

Hypothecation;

(v) to register and perfect the security interest created

thereunder by filing Form CHG-9 with the

concerned ROC and ensuring and procuring that

the Debenture Trustee files the prescribed Form I

with CERSAI reporting the charge created to the

CERSAI in relation thereto, as soon as practicable

and in any case no later than 30 (thirty) calendar

days from the date on which such security over the

Hypothecated Assets is created in accordance with

the Deed of Hypothecation;

(vi) commencing from the Initial Security Creation

Date until the Final Settlement Date, the Issuer

shall, at the time periods set out in the Deed of

Hypothecation, provide a list of specific loan

receivables/identified book debts to the Debenture

Trustee over which charge is created and

subsisting by way of hypothecation in favour of

the Debenture Trustee (for the benefit of the

Debenture Holders) and sufficient to maintain the

Security Cover ("Hypothecated Assets Report");

(vii) the Issuer shall, on each Top-up Date (as defined

in the Deed of Hypothecation), add fresh

receivables to the Hypothecated Assets so as to

ensure that the Security Cover is maintained or to

replace such Hypothecated Assets that do not

satisfy the eligibility criteria prescribed in the

Transaction Documents;

(viii) the Issuer shall, on a half yearly basis, as and when

required by the Debenture Trustee, give full

particulars to the Debenture Trustee of all the

Hypothecated Assets from time to time;

(ix) furnish and verify all statements, reports, returns,

certificates and information from time to time and

as required by the Debenture Trustee in respect of

the Hypothecated Assets;

(x) the security interest created on the Hypothecated

Assets shall be a continuing security; and

(xi) The Hypothecated Assets shall fulfil the eligibility

criteria set out in the Deed of Hypothecation.

Transaction Documents Shall be as set out in Section 7.1 belowbelow

Conditions Precedent to

Disbursement

The Issuer shall fulfil the following conditions precedent, to the

satisfaction of the Debenture Trustee/the Applicants, prior to the

Deemed Date of Allotment, by submitting and providing to the




55

Debenture Trustee/the Applicants:

(a) a copy of resolution of the board of directors of the Issuer

and any resolution of any committee of the board of

directors authorizing the execution, delivery and

performance of the Transaction Documents certified as

correct, complete and in full force and effect by an

appropriate officer of the Issuer;

(b) copies of the resolution of the shareholders of the Issuer

under Sections 180(1)(c) and 180(1)(a) of the Act, certified

as correct, complete and in full force and effect by an

appropriate officer of the Issuer;

(c) copies of the Issuer's Constitutional Documents certified as

correct, complete and in full force and effect by the

appropriate officer;

(d) execution, delivery and stamping of the Transaction

Documents in a form and manner satisfactory to the

Debenture Trustee;

(e) a copy of the rating letter and the rating rationale issued by

the Rating Agency in relation to the Debentures;

(f) a copy of the consent from the Debenture Trustee to act as

the debenture trustee for the Issue;

(g) a copy of the consent from the Registrar to act as the

registrar and transfer agent for the Issue;

(h) evidence that all 'know your customer' requirements to the

satisfaction of the Debenture Trustee/the Applicants has

been provided;

(i) the audited financial statements of the Issuer for the

Financial Year ended March 31, 2020;

(j) a certificate from the authorised signatories of the Issuer

addressed to the Debenture Trustee confirming that:

(i) the persons authorised to sign the Transaction

Documents and any document to be delivered

under or in connection therewith, on behalf of the

Issuer, together with the names, titles and

specimen signatures of such authorised

signatories;

(ii) the Issuer has the necessary power under the

Constitutional Documents to borrow monies by

way of the issuance of the Debentures and create

security on the assets of the Issuer to secure such

Debentures;




56

(iii) the issuance of the Debentures and the creation of

security over the Hypothecated Assets will not

cause any limit, including any borrowing or

security providing limit binding on the Issuer to be

exceeded;

(iv) no consents and approvals are required by the

Issuer from its creditors or any Governmental

Authority or any other person for the issuance of

the Debentures and creation of security under the

Deed of Hypothecation;

(v) the representations and warranties contained in the

Transaction Documents are true and correct in all

respects as on the Deemed Date of Allotment/the

date of the certificate;

(vi) no Event of Default or potential Event of Default

has occurred or is subsisting as at the Deemed

Date of Allotment/the date of the certificate; and

(vii) no Material Adverse Effect has occurred;

(k) (if so required by the Applicants/to the extent applicable)

evidence of receipt of an "in-principle" approval from BSE

in respect of the listing of the Debentures;

(l) (if so required by the Applicants) a legal opinion in agreed

form confirming the validity and enforceability of the

Transaction Documents; and

(m) Provide such other information, documents, certificates,

opinions and instruments as the Debenture Holder may

reasonably request.

Conditions Subsequent to

Disbursement

The Issuer shall fulfil the following conditions subsequent, to the

satisfaction of the Debenture Trustee:

(a) the Issuer shall ensure that the Debentures are credited into

the demat accounts of the Debenture Holders of the

Debentures within 2 (two) Business Days from the

Deemed Date of Allotment;

(b) the Issuer shall file a return of allotment of securities under

Form PAS-3 of the Companies (Prospectus and Allotment

of Securities) Rules, 2014 with the ROC within 15

(fifteen) days of the allotment of Debentures along with a

list of the Debenture Holders and with the prescribed fee;

(c) the Issuer shall, in respect of the Deed of Hypothecation,

file a copy of Form CHG-9 with ROC and shall ensure and

procure that the Debenture Trustee files the prescribed

Form I with CERSAI, each within 30 (thirty) days from

the date of execution of the Deed of




57

Hypothecation/creation of security over the Hypothecated

Assets in accordance with the Deed of Hypothecation;

(d) (if so required by the Debenture Holders) a legal opinion

confirming the validity and enforceability of the


(e) the Issuer shall obtain listing of the Debentures within the

Listing Period; and

(f) the Issuer shall execute/provide such other information,

documents, undertakings, certificates, opinions and

instruments as the Debenture Trustee and the Applicants

may request in connection with the transactions

contemplated under the DTD and the other Transaction

Documents.

Events of Default (a) Payment Defaults

The Issuer does not pay on the Due Date any amount

payable pursuant to the DTD and the Debentures at the

place and in the currency in which it is expressed to be

payable, unless its failure to pay is caused by technical

error and payment is made within 3 (three) days of such

Due Date.

(b) Insolvency/Inability to Pay Debts

The Issuer is unable or admits inability to pay its debts as

they fall due, suspends making payments on any of its

debts or, by reason of actual or anticipated financial

difficulties, commences negotiations with one or more of

its creditors with a view to rescheduling any of its

Financial Indebtedness. PROVIDED THAT the foregoing

shall not apply to any moratorium provided to the Issuer,

or Financial Indebtedness of the Issuer rescheduled,

pursuant to the Moratorium Directions (COVID-19).

(c) Business

The Issuer without obtaining the prior consent of the

Special Majority Debenture Holders ceases to carry on its

business or gives notice of its intention to do so.

(d) Misrepresentation

Any representation or warranty made by the Issuer in any

Transaction Document or in any certificate, financial

statement or other document delivered to the Debenture

Trustee/Debenture Holders by the Issuer shall prove to

have been incorrect, false or misleading in any material

respect when made or deemed made.




58

(e) Material Adverse Effect

The occurrence of a Material Adverse Effect, in the sole

determination of the Debenture Trustee (acting on the

instructions on the Debenture Holders).

(f) Cross Default

The Issuer:

(i) defaults in any payment of any Financial

Indebtedness beyond the period of grace (not to

exceed 30 (thirty) days), if any, provided in the

instrument or agreement under which such

Financial Indebtedness was created;

(ii) defaults in the observance or performance of any

agreement or condition relating to any Financial

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 or

holders of such Financial Indebtedness to cause

(determined without regard to whether any notice

is required) any such Financial Indebtedness to

become due prior to its stated maturity; or

(iii) any Financial Indebtedness of the Issuer shall be

declared to be due and payable, or required to be

prepaid other than by a regularly scheduled

required prepayment, prior to the stated maturity

thereof.

(g) Liquidation, Insolvency or Dissolution of the Issuer /

Appointment of Receiver, Resolution Professional 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

Financial Indebtedness, winding-up, dissolution,

administration or re-organisation (by way of

voluntary arrangement, scheme of arrangement or

otherwise) of the Issuer. PROVIDED THAT the

foregoing shall not apply to any moratorium

provided to the Issuer pursuant to the Moratorium

Directions (COVID-19);

(ii) a composition, compromise, assignment or

arrangement with any creditor of the Issuer;

(iii) the appointment of a liquidator, receiver,




59

administrative receiver, administrator, compulsory

manager or other similar officer in respect of the

Issuer;

(iv) the Issuer, in respect of any reference or enquiry or

proceedings commenced, before the National

Companies Law Tribunal or under any mechanism

or prescription of the RBI in respect of

resolution/restructuring of stressed assets

(including without limitation, under the RBI's

circular no. DBR.No.BP.BC.45/21.04.048/2018-

19 dated June 7, 2019 on "Prudential Framework

for Resolution of Stressed Assets");

(v) the commencement of an insolvency resolution

process under the (Indian) Insolvency and

Bankruptcy Code, 2016 read together with the

Insolvency and Bankruptcy (Insolvency and

Liquidation Proceedings of Financial Service

Providers and Application to Adjudicating

Authority) Rules, 2019, and any other rules and

regulations made thereunder from time to time, or

under any other Applicable Law, in respect of the

Issuer;

(vi) enforcement of any security over any Assets of the

Issuer or any analogous procedure or step is taken

in any jurisdiction; or

(vii) any other event occurs or proceeding instituted

under any Applicable Law that would have an

effect analogous to any of the events listed in (i) to

(vi) above.

(h) Creditors' Process and Expropriation

Any expropriation, attachment, garnishee, sequestration,

distress or execution affects any material Assets of the

Issuer and is not discharged within 30 (thirty) calendar

days or as otherwise provided in any order of any

competent court or tribunal relating to the aforementioned

actions.

(i) Judgment Defaults

One or more judgments or decrees entered against the

Issuer involving a liability (not paid or not covered by a

reputable and solvent insurance company), individually or

in the aggregate, exceeding 10% (ten percent) of the Total

Assets of the Issuer provided such judgments or decrees

are either final and non-appealable or have not been

vacated, discharged or stayed pending appeal for any

period of 30 (thirty) calendar days.




60

(j) Transaction Documents

The DTD or any other Transaction Document (in whole or

in part), is terminated or ceases to be effective or ceases to

be in full force or no longer constitutes valid, binding and

enforceable obligations of the Issuer.

(k) Unlawfulness

It is or becomes unlawful for the Issuer to perform any of

its obligations under the Transaction Documents and/or

any obligation or obligations of the Issuer under any

Transaction Document are not or cease to be valid, binding

or enforceable.

(l) Repudiation

The Issuer repudiates any of the Transaction Documents,

or evidences an intention to repudiate any of the

Transaction Documents.

(m) Security in Jeopardy

In the opinion of the Debenture Trustee any Hypothecated

Asset(s) are in jeopardy.

(n) Security and GOI Guarantee

(i) The Issuer fails to create and perfect security

within the timelines prescribed in the Transaction

Documents and/or in the manner prescribed in the


(ii) The value of the Hypothecated Assets is

insufficient to maintain the Security Cover or the

Issuer fails to maintain the Security Cover

(including by way of providing additional/alternate

security to the satisfaction of the Debenture

Trustee) within the timelines prescribed in the

relevant Transaction Documents.

(iii) The GOI Guarantee is not issued in favour of the

Debenture Holders and/or the Debenture Trustee

(acting on behalf of and for the benefit of the

Debenture Holders), as the case may be, within the

timelines prescribed under Applicable Law

(including the GOI Guidelines), and/or the

Guarantor refuses, due to any reason whatsoever,

to issue the GOI Guarantee.

(iv) Any of the Transaction Documents fails to provide

the security interests, rights, title, remedies,

powers or privileges intended to be created thereby

(including the priority intended to be created




61

thereby), or such security interests fail to have the

priority contemplated under the Transaction

Documents, or the security interests become

unlawful, invalid or unenforceable.

(v) The Issuer creates or attempts to create any

mortgage, charge, pledge, lien or other security

interest securing any obligation of any person or

any other agreement or arrangement having

similar effect, over the Hypothecated Assets,

without the prior consent of the Debenture

Trustee.

(o) Authorisations

The withdrawal, failure of renewal, or failure to obtain all

approvals, authorizations, consents, permits (third party,

statutory or otherwise) required in any relevant jurisdiction

for the Debentures or the Security.

(p) Breach of Other Covenants

Any breach of any covenant or undertaking of the Issuer in

the Transaction Documents (other than (a) to (o) above)

which is not cured within 30 (thirty) days of occurrence or

such other time period as may be prescribed by the

Debenture Holders in their sole discretion.

Provisions related to Cross

Default Clause

The Issuer:

(a) defaults in any payment of any Financial Indebtedness

beyond the period of grace (not to exceed 30 (thirty) days),

if any, provided in the instrument or agreement under

which such Financial Indebtedness was created;

(b) defaults in the observance or performance of any

agreement or condition relating to any Financial

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

or holders of such Financial Indebtedness to cause

(determined without regard to whether any notice is

required) any such Financial Indebtedness to become due

prior to its stated maturity; or

(c) any Financial Indebtedness of the Issuer shall be declared

to be due and payable, or required to be prepaid other than

by a regularly scheduled required prepayment, prior to the

stated maturity thereof.

Role and Responsibilities of In addition to the powers conferred on the Debenture Trustee in the




62

Debenture Trustee DTD and Applicable Law, and without limiting the liability of the

Debenture Trustee:

(a) the Debenture Trustee may, in relation to the DTD and the

other Transaction Documents, act on the opinion or advice

of or any information obtained from any solicitor, counsel,

advocate, valuer, surveyor, broker, auctioneer, qualified

accountant or other expert whether obtained by the Issuer

or by the Debenture Trustee or otherwise;

(b) the Debenture Trustee shall be the attorney of the Issuer

and shall have the right to execute, sign and do any deeds,

documents, assurances, acts and things in the name and on

behalf of the Issuer, which shall in the opinion of the

Debenture Trustee be necessary or expedient that the

Issuer should execute, sign and do for the purpose of

carrying out any of the trusts or obligations declared or

imposed upon the Debenture Trustee;

(c) subject to the approval of the Debenture Holders by way of

Special Resolution passed at a meeting of Debenture

Holders held for determining the liability of the Debenture

Trustee, the Debenture Trustee shall, as regards all trusts,

powers, authorities and discretions, have the discretion as

to the exercise thereof and to the mode and time of

exercise thereof. In the absence of any fraud, gross

negligence, willful misconduct or breach of trust the

Debenture Trustee shall not be responsible for any loss,

costs, charges, expenses or inconvenience that may result

from the aforementioned exercise or non-exercise thereof.

The Debenture Trustee shall not be bound to act at the

request or direction of the Debenture Holders under any

provisions of the Transaction Documents unless sufficient

amounts shall have been provided or provision to the

satisfaction of the Debenture Trustee has been made for

providing such amounts and the Debenture Trustee is

indemnified to its satisfaction against all further costs,

charges, expenses and liability which may be incurred in

complying with such request or direction;

(d) with a view to facilitating any dealing under any

provisions of the DTD or the other Transaction

Documents, subject to the Debenture Trustee obtaining the

consent of the Special Majority Debenture Holders, the

Debenture Trustee shall have (i) the power to consent

(where such consent is required) to a specified transaction

or class of transactions (with or without specifying

additional conditions); and (ii) to determine all questions

and doubts arising in relation to the interpretation or

construction any of the provisions of the DTD;

(e) the Debenture Trustee shall not be responsible for the

amounts paid by the Applicants for the Debentures;




63

(f) the Debenture Trustee shall not be responsible for acting

upon any resolution purporting to have been passed at any

meeting of the Debenture Holders in respect whereof

minutes have been made and signed even though it may

subsequently be found that there was some defect in the

constitution of the meeting or the passing of the resolution

or that for any reason the resolution was not valid or

binding upon the Debenture Holders;

(g) the Debenture Trustee and every receiver, attorney,

manager, agent or other person appointed by them shall,

subject to the provisions of the Act, be entitled to be

indemnified by the Issuer in respect of all liabilities and

expenses incurred by them or him in the execution or

purported execution of the powers and trusts thereof;

(h) subject to the approval of the Debenture Holder(s) by way

of Special Resolution passed at a meeting of Debenture

Holder(s) held for determining the liability of the

Debenture Trustee and in the absence of fraud, gross

negligence, willful misconduct or breach of trust, the

Debenture Trustee shall not be liable for any of its actions

or deed in relation to the Transaction Documents;

(i) subject to the approval of the Debenture Holder(s) by way

of Special Resolution passed at a meeting of Debenture

Holders held for determining the liability of the Debenture

Trustee and in the absence of fraud, gross negligence,

willful misconduct or breach of trust, the Debenture

Trustee, shall not be liable for any default, omission or

delay in performing or exercising any of the powers or

trusts herein expressed or contained herein or in enforcing

the covenants contained herein or in giving notice to any

person of the execution hereof or in taking any other steps

which may be necessary, expedient or desirable or for any

loss or injury which may be occasioned by reason thereof

unless the Debenture Trustee shall have been previously

requested by notice in writing to perform, exercise or do

any of such steps as aforesaid given in writing by the

Majority Debenture Holder(s) or by a Majority Resolution

duly passed at a meeting of the Debenture Holders. The

Debenture Trustee shall not be bound to act at the request

or direction of the Debenture Holders under any provisions

of the Transaction Documents unless sufficient amounts

shall have been provided or provision to the satisfaction of

the Debenture Trustee has been made for providing such

amounts and the Debenture Trustee is indemnified to its

satisfaction against all further costs, charges, expenses and

liability which may be incurred in complying with such

request or direction;

(j) notwithstanding anything contained to the contrary in the

DTD, the Debenture Trustee shall before taking any action

on behalf of the Debenture Holders or providing any




64

consent on behalf of the Debenture Holders, obtain the

written consent of the Majority Debenture Holders; and

(k) the Debenture Trustee shall forward to the Debenture

Holders copies of any information or documents from the

Issuer pursuant to the DTD within 2 (two) Business Days

of receiving such information or document from the Issuer.

PROVIDED THAT nothing contained herein shall exempt

the Debenture Trustee or any receiver, attorney, manager,

agent or other person appointed by the Debenture Trustee

from or indemnify them against any liability for breach of

trust nor any liability which by virtue of any rule or

Applicable Law would otherwise attach to them in respect

of any negligence, default or breach of trust which they

may be guilty of in relation to their duties hereunder.

Covenants Financial Covenants

Please refer Section 7.3 of this Information Memorandum.

Reporting Covenants


Affirmative Covenants


Negative Covenants


Representation and

warranties


Illustration of Bond Cash

flows

Please refer to Annexure V of this Information Memorandum

Governing Law and

Jurisdiction

The Debentures and documentation will be governed by and

construed in accordance with the laws of India and the parties

submit to the exclusive jurisdiction of the courts and tribunals at

Mumbai, India.

Additional Disclosures

(Security Creation)

In the event of any delay in the execution of the Deed of

Hypothecation or the creation of security in terms thereof, the

Issuer will, at the option of the Debenture Holders, either refund

the Application Money together with interest at the Interest

Rate/discharge the Secured Obligations, or pay to the Debenture

Holders additional interest at the rate of 2% (two percent) per

annum charged on the Outstanding Principal Amounts in addition

to the Interest Rate until the Deed of Hypothecation is duly

executed or the security is duly created in terms thereof.


(Default in Payment)

The Issuer agrees to pay an additional interest rate of 2% (two





65

Outstanding Principal Amounts from the date of the occurrence of

a Payment Default until such Payment Default, on each Interest

Payment Date occurring during the aforementioned period.


(Delay in Listing)

In the event there is any delay in listing of the Debentures within

the Listing Period, the Issuer will pay to the Debenture Holders,

penal interest of 2% (two percent) per annum over the Interest

Rate, from the expiry of 30 (thirty) calendar days from the Deemed

Date of Allotment till the listing of the Debentures is completed.

Notes:

1. The list of documents which has been executed or will be executed in connection with the

Issue and subscription of the Debentures shall be annexed.

2. The additional interest rates mentioned above as payable by the Issuer are independent of

each other.




66

SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT

In case of listing of debt securities made on private placement, the following disclosures are

required to be made in accordance with the SEBI Debt Listing Regulations.

6.1 Name of the Bank declaring the entity as a Wilful Defaulter: NIL

6.2 The year in which the entity is declared as a Wilful Defaulter: NIL

6.3 Outstanding amount when the entity is declared as a Wilful Defaulter: NIL

6.4 Name of the entity declared as a Wilful Defaulter: NIL

6.5 Steps taken, if any, for the removal from the list of wilful defaulters: NIL

6.6 Other disclosures, as deemed fit by the Issuer in order to enable investors to take

informed decisions: NIL

6.7 Any other disclosure as specified by SEBI: NIL




67

SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS

7.1 Transaction Documents

The following documents shall be executed in relation to the Issue (“Transaction

Documents”):

(a) Debenture Trustee Agreement, which will confirm the appointment of Catalyst

Trusteeship Limited as the Debenture Trustee;

(b) Debenture Trust Deed, which will set out the terms upon which the Debentures

are being issued and shall include the representations and warranties and the

covenants to be provided by the Issuer;

(c) Deed of Hypothecation pursuant to which the Issuer will create a first ranking

exclusive and continuing charge by way of hypothecation over the Hypothecated

Assets in favour of the Debenture Trustee to secure its obligations in respect of

the Debentures; and

(d) Such other documents as agreed between the Issuer and the Debenture Trustee.

7.2 Representations and Warranties of the Issuer

The Issuer makes the representations and warranties set out in Section 7.2 to the

Debenture Trustee for the benefit of the Debenture Holders as on the Effective Date,

which representations shall be true and valid until the Final Settlement Date.

(a) Status

(i) It is a company, duly incorporated, registered and validly existing under

Applicable Law.

(ii) It is a non-deposit accepting or holding non-banking financial company

registered with the RBI.

(iii) It has the power to own its Assets and carry on its business as it is being

conducted.

(b) Binding obligations

The obligations expressed to be assumed by it under the Transaction Documents

are legal, valid, binding and enforceable obligations.

(c) Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by the

Transaction Documents do not and will not conflict with:

(i) any Applicable Law, including but not limited to laws and regulations

regarding anti-money laundering or terrorism financing and similar

financial sanctions;

(ii) its Constitutional Documents; or




68

(iii) any agreement or instrument binding upon it or any of its Assets,

including but not limited to any terms and conditions of the existing

Financial Indebtedness of the Issuer.

(d) Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary

action to authorize its entry into, performance and delivery of, the Transaction

Documents to which it is a party and the transactions contemplated by such


(e) Validity and admissibility in evidence

All approvals, authorizations, consents, permits (third party, statutory or

otherwise) required or desirable:

(i) to enable it lawfully to enter into, exercise its rights and comply with its

obligations under the Transaction Documents to which it is a party;

(ii) to make the Transaction Documents to which it is a party admissible in

evidence in its 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

(i) No Event of Default or potential event of default has occurred and is

continuing or would reasonably be expected to result from the execution

or performance of any Transaction Documents or the issuance of the

Debentures.

(ii) To the best of the Issuer's knowledge, 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 the foregoing, constitute) a default or

termination event (however described) under any other agreement or

instrument which is binding on the Issuer or any of its Assets or which

might have a Material Adverse Effect.

(g) Pari passu ranking

Commencing from the Initial Security Creation Date, its payment obligations

under the Transaction Documents shall rank at least pari passu with the claims of

all of its other senior secured creditors, except for obligations mandatorily

preferred by Applicable Law applying to companies generally. Commencing

from the Deemed Date of Allotment until the Initial Security Creation Date, its

payment obligations under the Transaction Documents rank at least pari passu

with the claims of all of its other unsecured creditors, except for obligations

mandatorily preferred by Applicable Law applying to companies generally.




69

(h) No proceedings pending

No litigation, arbitration or administrative proceedings of or before any court,

arbitral body or agency have been commenced against the Issuer, which if

determined adversely, may have a Material Adverse Effect.

(i) No misleading information

All information provided by the Issuer to the Debenture Trustee/Debenture

Holders is true and accurate in all material respects as at the date it was provided

or as at the date (if any) at which it is stated and is not misleading due to omission

of material fact or otherwise.

(j) Compliance

(i) The Issuer has complied with Applicable Law (including but not limited

to environmental, social and taxation related laws for the Issuer to carry

on its business, all directions issued by the RBI to non-banking financial

companies and the GOI Guidelines).

(ii) There has not been and there is no investigation or enquiry by, or order,

decree, decision or judgment of any Governmental Authority issued or

outstanding or to the best of the Issuer's knowledge (after making due and

careful enquiry), anticipated against the Issuer which would have a

Material Adverse Effect.

(iii) No notice or other communication (official or otherwise) from any

Governmental Authority has been issued or is outstanding or to the best

of the Issuer's knowledge (after making due and careful enquiry),

anticipated with respect to an alleged, actual or potential violation and/or

failure to comply with any such Applicable Law or requiring them to take

or omit any action.

(iv) The Issuer shall complete all necessary formalities including all filings

with the relevant regulatory authorities, including but not limited to the

SEBI, the BSE, CERSAI and the ROC and obtain all consents and

approvals required for the completion of the Issue.

(k) Assets

Except for the security interests and encumbrances created and recorded with the

ROC (available using CIN: L65910GJ1995PLC026064 on the website

http://www.mca.gov.in/mcafoportal/showIndexOfCharges.do under the heading

"Index of Charges"), the Issuer 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 necessary for the conduct of its business as it is being,

and is proposed to be, conducted.

(l) Financial statements

(i) Its financial statements most recently supplied to the Debenture Trustee

as of March 31, 2020 were prepared in accordance with Indian GAAP

consistently applied save to the extent expressly disclosed in such




70

financial statements.

(ii) Its financial statements as of March 31, 2020 provided to the Debenture

Trustee, give a true and fair view and represent its financial condition and

operations during the Financial Year save to the extent expressly

disclosed in such financial statements.

(m) Solvency

(i) The Issuer is able to, and has not admitted its inability to, pay its debts as

they mature and has not suspended making payment on any of its debts

and it has not been deemed by a court to be unable to pay its debts for the

purposes of Applicable Law, nor will it become unable to pay its debts

for the purposes of Applicable Law as a consequence of entering into the

DTD or any other Transaction Document. PROVIDED THAT the

foregoing shall not apply to any moratorium provided to the Issuer or re-

scheduling pursuant to the Moratorium Directions (COVID-19).

(ii) The Issuer, by reason of actual or anticipated financial difficulties, has

not commenced, and does not intend to commence, negotiations with one

or more of its creditors with a view to rescheduling its Financial

Indebtedness. PROVIDED THAT the foregoing shall not apply to any

moratorium provided to the Issuer or re-scheduling pursuant to the

Moratorium Directions (COVID-19).

(iii) The value of the Assets of the Issuer is more than its liabilities (taking

into account contingent and prospective liabilities) and it has sufficient

capital to carry on its business.

(iv) The Issuer has not taken any corporate action nor has it taken any legal

proceedings or other procedure or steps in relation to any bankruptcy

proceedings.

(v) No insolvency or bankruptcy process has commenced under Applicable

Law in respect of the Issuer (including pursuant to the (Indian)

Insolvency and Bankruptcy Code, 2016, the Insolvency and Bankruptcy

(Insolvency and Liquidation Proceedings of Financial Service Providers

and Application to Adjudicating Authority) Rules, 2019, and any other

rules and regulations made thereunder from time to time).

(vi) No reference has been made, or enquiry or proceedings commenced, in

respect of the Issuer, before the National Companies Law Tribunal or

under any mechanism or prescription of the RBI in respect of

resolution/restructuring of stressed assets (including without limitation,

under the RBI's circular no. DBR.No.BP.BC.45/21.04.048/2018-19 dated

June 7, 2019 on "Prudential Framework for Resolution of Stressed

Assets").

(n) Hypothecated Assets

(i) The Hypothecated Assets are the sole and absolute property of the Issuer

and are free from any other mortgage, charge or encumbrance and are not

subject to any lis pendens, attachment, or other order or process issued by

any Governmental Authority.




71

(ii) None of the Client Loans comprising the Hypothecated Assets have been

previously hypothecated, sold, transferred or assigned to any other bank

or financial institution.

(iii) The Transaction Documents executed or to be executed constitute legal,

valid and enforceable security interest in favour of the Debenture Trustee

and for the benefit of the Debenture Holders on all the assets thereby

secured and all necessary and appropriate consents for the creation,

effectiveness, priority and enforcement of such security have been

obtained.

(o) GOI Guarantee and GOI Guidelines

(i) The credit rating (being the Rating) assigned to the Debentures by the

Rating Agency complies with the requirements prescribed under the GOI

Guidelines.

(ii) The tenor in respect of the Debentures is more than 9 (nine) months, but

does not exceed 18 (eighteen) months.

(iii) The aggregate amount of debt securities (in form of bonds, non-

convertible debentures and/or commercial papers) issued by the Issuer

pursuant to the GOI Guidelines does not exceed 1.25 (one decimal two

five) times of the Issuer's aggregate debt liability maturing over a period

of 6 (six) months from the Deemed Date of Allotment.

(iv) The Issuer has made a profit in at least one of the Financial Years ending

on March 31, 2018 (FY 2017-18), March 31, 2019 (FY 2018-19), and/or

March 31, 2020 (FY 2019-20).

(v) The Issuer has been classified as "regular" or "SMA-0" by its lenders for

the period that is 1 (one) year prior to August 1, 2018.

(vi) Without prejudice to (a) above, the Issuer is in compliance with the

eligibility criteria applicable to it as set out in the GOI Guidelines.

(p) Nature of representations and warranties

The Issuer hereby expressly represents and warrants that each of the

representations and warranties set out in this Section 7.2 is true and accurate as

on the Effective Date and shall continue to be true and accurate on each day until

the Final Settlement Date, and nothing contained in this Section 7.2 is/will be

misleading or designed to create an inaccurate, incomplete or false picture.

7.3 Financial Covenants

(a) maintain such Capital Adequacy Ratio as may be prescribed by the RBI from

time to time; and

(b) comply with such financial covenants as may be agreed between the Issuer and

the Debenture Holders from time to time.




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7.4 Reporting Covenants

The Issuer shall provide or cause to be provided to the Debenture Trustee and to the

Debenture Holders (including on any online reporting platform notified by the Debenture

Trustee or any Debenture Holder), in form and substance reasonably satisfactory to the

Debenture Trustee, each of the following items:

(a) prior to the Deemed Date of Allotment, all documents and information and

confirmations comprising the Conditions Precedent;

(b) as soon as available, and in any event within 180 (one hundred and eighty)

calendar days after the end of each Financial Year of the Issuer:

(i) certified copies of its audited consolidated and non-consolidated (if any)

financial statements for its most recently completed fiscal year, prepared

in accordance with Indian GAAP including its balance sheet, income

statement and statement of cash flow.

All such information shall be complete and correct in all material respects

and shall fairly represent the financial condition, results of operation and

changes in cash flow and a list comprising all material financial liabilities

of the Issuer whether absolute or contingent as of the date thereof; and

(ii) a certificate from an authorized officer of the Issuer confirming that there

is no existing potential Event of Default or Event of Default;

(c) within 60 (sixty) calendar days after each Quarterly Date:

(i) certified copies of its un-audited consolidated and non-consolidated (if

any) quarterly financial statements for the preceding fiscal quarter,

prepared in accordance with Indian GAAP including its balance sheet,

income statement and statement of cash flow;

(ii) details of operations, portfolio growth and asset quality (including static

portfolio cuts, collection efficiency and portfolio at risk data), funding

data, and asset liability management (ALM) data, in such form and

manner as may be acceptable to the Debenture Holders;

(iii) copies of the quarterly returns filed with the RBI and SEBI; and

(iv) a certificate signed by a director or the chief financial officer of the Issuer

stating that the Issuer is in compliance with all the covenants prescribed

in Section 7.3;

(d) as soon as practicable, and in any event within 30 (thirty) Business Days after the

Issuer obtains or reasonably should have obtained actual knowledge thereof,

notice of the occurrence of any event or circumstance that could reasonably be

expected to result in a Material Adverse Effect;

(e) as soon as practicable, and in any event within 30 (thirty) Business Days after the

Issuer obtains or reasonably should have obtained actual knowledge thereof,

notice of any dispute, litigation, investigation or other proceeding affecting the

Issuer or its property or operations, which, if adversely determined, could result

in a Material Adverse Effect;




73

(f) as soon as practicable, and in any event within 30 (thirty) Business Days after the

Issuer obtains or reasonably should have obtained actual knowledge thereof

obtains or reasonably, notice of the occurrence of any Event of Default or

potential Event of Default including any steps taken to cure such event;

(g) as soon as practicable, and in any event within 30 (thirty) Business Days, any

prepayment, or the receipt of notice of any Financial Indebtedness of the Issuer

declared to be due and payable or required to be prepaid other than by a regularly

scheduled required prepayment, prior to the stated maturity thereof;

(h) as soon as practicable, and in any event within 30 (thirty) Business Days after

such default, notice of any default in the observance or performance of any

agreement or condition relating to any Financial Indebtedness by the Issuer 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 or holders of such

Financial Indebtedness to cause (determined without regard to whether any notice

is required) any such Financial Indebtedness to become due prior to its stated

maturity in respect of the Issuer;

(i) as soon as practicable, and in any event within 30 (thirty) Business Days of

receiving any notice of any application for winding up/insolvency having been

made or any notice of winding up or insolvency under the provisions of the Act

or the (Indian) Insolvency and Bankruptcy Code, 2016 or any other statute

relating to winding up/insolvency or otherwise of any suit or other legal process

intended to be filed or initiated against the Issuer;

(j) as soon as practicable and in any event within 30 (thirty) Business Days of the

occurrence of:

(i) any change in the board of directors of the Issuer;

(ii) any change in the accounting policy of the Issuer;

(iii) any change in senior management officials of the Issuer being the chief

executive officer or any other official discharging similar functions and

responsibilities;

(iv) approval by the board of directors of the annual business plan of the

Issuer, a snapshot (in a form acceptable to the Debenture Trustee and the

Debenture Holders) of the approved annual business plan;

(v) details of the occurrence of any fraud amounting to more than 1% (one

percent) of the Gross Loan Portfolio;

(vi) any change in the Constitutional Documents of the Issuer other than in

respect of an increase in its authorized capital for any equity raise by the

Issuer in the ordinary course of business which does not result in a

Change of Control;

(vii) new products introduced or change in existing product features by the

Issuer;

(viii) new business correspondent relationships or discontinuance of existing




74

relationships by the Issuer;

(ix) geographical expansion to any new state/city/district/location by the

Issuer;

(x) material changes to any information technology system or monthly

reporting/information systems used by the Issuer;

(xi) any change in credit bureaus used by the Issuer; and

(xii) any revisions in business plans of the Issuer;

(k) without prejudice to Section 7.4(c), within 60 (sixty) calendar days from each

Quarterly Date, a certification from an authorized signatory or director or the

Chief Financial Officer confirming compliance with the financial covenants set

out in Section 7.3;

(l) within such timelines as may be prescribed by the Debenture Trustee, provide all

relevant information required by the Debenture Trustee for the effective

discharge of its duties and obligations under the Transaction Document, including

but not limited to the copies of all reports, balance sheets and the profit and loss

account of the Issuer;

(m) on a quarterly basis (and within such days from each Quarterly Date as may be

prescribed by the Debenture Trustee), provide to the Debenture Trustee:

(i) a certificate from the Issuer's director or the managing director certifying

the value of the book debts/receivables; and

(ii) a certificate from an independent chartered accountant

providing/confirming the value of the book debts/receivables;

(n) (if so required by the Debenture Trustee and within the timelines agreed with the

Debenture Trustee) provide to the Debenture Trustee a certificate from the

statutory auditor of the Issuer providing/confirming the value of the book

debts/receivables and/or the utilisation of the proceeds of the Debentures

(together with such details and information as may be required by the Debenture

Trustee);

(o) without prejudice of (l) above and (o) below, as soon as practicable and in any

event within 30 (thirty) calendar days of receipt of a request, such additional

documents or information as the Debenture Trustee or the Debenture Holders,

may reasonably request from time to time; and

(p) as soon as practicable and in any event within the timelines prescribed by the

Debenture Trustee (and Applicable Law), such other information, notifications,

details, documents, reports, statements and certificates (including from chartered

accountants, auditors and/or directors of the Issuer) as may be required by the

Debenture Trustee from time to time, to ensure compliance with the provisions of

the Applicable Law, including but not limited to the Debenture Trustees

Regulations and the Companies (Share Capital and Debentures) Rules, 2014.

(q) as soon as practicable and in any event within 7 (seven) calendar days of receipt

of a request such documents, statements or information that may be required:




75

(i) by the Debenture Holders for obtaining and procuring the GOI Guarantee

from the Guarantor;

(ii) for evidencing eligibility of the Issuer under the GOI Guidelines;

(iii) for ensuring compliance of the Debentures (and the Debenture Holders,

to the extent required) with Applicable Law (including but not limited to

the GOI Guidelines and the GFR); and

(iv) for complying with any other reporting requirement in respect of the GOI

Guarantee.

The Issuer hereby agrees, confirms and authorizes the Debenture

Holders/Debenture Trustee to submit and disclose the required

information in respect of the Issuer and the Debentures to the Guarantor

(or any other authorized entity/department) to ensure that the GOI

Guarantee is obtained to the satisfaction of the Debenture Holders.

7.5 Affirmative Covenants

The Issuer shall:

(a) Use of Proceeds

use the proceeds of the Issue only for the Purpose and in accordance with


(b) Notice of Winding up or other Legal Process

promptly, and in any case not later than 10 (ten) Business Days of occurrence,

inform the Debenture Trustee if it has received:

(i) any notice of any application for winding up or insolvency process or any

statutory notice of winding up or insolvency process under the provisions

of the Act or any other Applicable Law (including the (Indian)

Insolvency and Bankruptcy Code, 2016, the Insolvency and Bankruptcy

(Insolvency and Liquidation Proceedings of Financial Service Providers

and Application to Adjudicating Authority) Rules, 2019, and any other

rules and regulations made thereunder from time to time); or

(ii) any other notice under any other statute relating to the

commencement/initiation of winding up or insolvency process or

otherwise of any suit or other legal process against the Issuer;

(c) Loss or Damage by Uncovered Risks

promptly inform the Debenture Trustee and the Debenture Holders of any

material loss or significant damage which the Issuer may suffer due to any force

majeure circumstances or act of God, such as earthquake, flood, tempest or

typhoon, etc. against which the Issuer may not have insured its properties;

(d) Costs and Expenses

pay all reasonable costs, charges and expenses in any way incurred by the




76

Debenture Trustee towards protection of the Debenture Holders' interests,

including traveling and other allowances and such taxes, duties, costs, charges

and expenses in connection with or relating to the Debentures subject to such

expenses, costs or charges being approved in writing by the Issuer before they are

incurred and shall not include any foreign travel costs;

(e) Payment of Rents, etc.

punctually pay all rents, royalties, taxes, rates, levies, cesses, assessments,

impositions and outgoings, governmental, municipal or otherwise imposed upon

or payable by the Issuer as and when such amounts are payable;

(f) Preserve Corporate Status

(i) diligently preserve and maintain its corporate existence and status and all

rights, privileges, and concessions now held or hereafter acquired by it in

the conduct of its business;

(ii) comply with all acts, authorizations, consents, permissions, rules,

regulations, orders and directions of any Governmental Authority; and

(iii) not do or voluntarily suffer or permit to be done any act or thing whereby

its right to transact its business might or could be terminated or whereby

payment of the Outstanding Amounts might or would be hindered or

delayed;

(g) Pay Stamp Duty

pay all such stamp duty (including any additional stamp duty), other duties, taxes,

charges and penalties, if and when the Issuer may be required to pay according to

the applicable state laws. In the event the Issuer fails to pay such stamp duty,

other duties, taxes and penalties as aforesaid, the Debenture Trustee shall be at

liberty (but shall not be bound) to pay such amounts and the Issuer shall

reimburse the aforementioned amounts to the Debenture Trustee on demand;

(h) Furnish Information to Debenture Trustee

(i) provide to the Debenture Trustee or its nominee(s)/ agent(s) such

information/copies of relevant extracts as they may require on any

matters relating to the business of the Issuer or to investigate the affairs

of the Issuer;

(ii) allow the Debenture Trustee to make such examination and investigation

as and when deemed necessary and shall furnish the Debenture Trustee

with all such information as they may require and shall pay all reasonable

costs, charges and expenses incidental to such examination and

investigation;

(iii) provide to the Debenture Trustee or its nominee(s)/agent(s) such

information/copies of relevant extracts as they may require for the

purpose of filing any relevant forms with any Governmental Authority

(including but not limited to the CERSAI) in relation to the Debentures

and the Hypothecated Assets;




77

(iv) furnish quarterly reports to the Debenture Trustee (as may be required in

accordance with Applicable Law) containing the following particulars:

(A) updated list of the names and addresses of the Debenture

Holders;

(B) details of the interest due, but unpaid and reasons thereof;

(C) the number and nature of grievances received from the Debenture

Holders and resolved and unresolved by the Issuer along with the

reasons for the same; and

(D) a statement that the Hypothecated Assets are sufficient to

discharge the claims of the Debenture Holders as and when they

become due; and

(v) inform and provide the Debenture Trustee with applicable documents in

respect of the following:

(A) notice of any Event of Default or potential Event of Default; and

(B) any and all information required to be provided to the Debenture

Holders under Applicable Law and the listing agreement to be

entered into between the Issuer and the BSE;

(i) Redressal of Grievances

promptly and expeditiously attend to and redress the grievances, if any, of the

Debenture Holders. The Issuer further undertakes that it shall promptly comply

with the suggestions and directions that may be given in this regard, from time to

time, by the Debenture Trustee and shall advise the Debenture Trustee

periodically of the compliance;

(j) Comply with Investor Education and Protection Fund Requirements

comply with the provisions of the Act relating to transfer of unclaimed/ unpaid

amounts of interest on Debentures and redemption of Debentures to Investor

Education and Protection Fund ("IEPF"), if applicable to it. The Issuer hereby

further agrees and undertakes that until the Final Settlement Date it shall abide by

the regulations, rules or guidelines/listing requirements if any, issued from time

to time by the Ministry of Corporate Affairs, RBI, SEBI or any other competent

Governmental Authority;

(k) Corporate Governance; Fair Practices Code

comply with any corporate governance requirements applicable to the Issuer (as

may be prescribed by the RBI, SEBI, any stock exchange, or any Governmental

Authority) and the fair practices code prescribed by the RBI;

(l) Further Assurances

(i) provide details of any litigation, arbitration or administrative proceedings

that if determined adversely could have a Material Adverse Effect on the

Issuer;




78

(ii) comply with any monitoring and/or servicing requests from Debenture

Holders;

(iii) execute and/or do, at its own expense, all such deeds, assurances,

documents, instruments, acts, matters and things, in such form and

otherwise as the Debenture Trustee may reasonably or by Applicable

Law require or consider necessary in relation to enforcing or exercising

any of the rights and authorities of the Debenture Trustee;

(iv) obtain, comply with the terms of and do all that is necessary to maintain

in full force and effect all authorisations necessary to enable it to lawfully

enter into and perform its obligations under the DTD or to ensure the

legality, validity, enforceability or admissibility in evidence in India of

the DTD;

(v) comply with:

(A) all Applicable Law (including but not limited to environmental,

social and taxation related laws, all directions issued by the RBI

to non-banking financial companies and the GOI Guidelines), as

applicable in respect of the Debentures and obtain such

regulatory approvals as may be required from time to time;

(B) the Debenture Trustees Regulations as in force from time to time,

in so far as they are applicable to the Debentures and furnish to

the Debenture Trustee such data, information, statements and

reports as may be deemed necessary by the Debenture Trustee in

order to enable them to comply with the provisions of Regulation

15 of the Debenture Trustees Regulations thereof in performance

of their duties in accordance therewith to the extent applicable to

the Debentures;

(C) the provisions of the Act in relation to the Issue;

(D) procure that the Debentures are rated and continue to be rated

until the Final Settlement Date; and

(E) ensure that, at time of making any payment of interest or

repayment of the principal amount of the Debentures in full or in

part, the Issuer shall do so in the manner that is most tax efficient

for the Debenture Holders but without, in any way requiring the

Issuer to incur any additional costs, expenses or taxes and the

Issuer shall avail of all the benefits available under any treaty

applicable to the Issuer and/or the Debenture Holders;

(m) Collateral and GOI Guarantee

the Issuer hereby further agrees, declares and covenants with the Debenture

Trustee that:

(i) the Debentures shall be collateralised by a first ranking exclusive

continuing security by way of a first ranking exclusive charge on the

Hypothecated Assets in favour of the Debenture Trustee for the benefit of

the Debenture Holders;




79

(ii) the Debentures shall be supported by the GOI Guarantee to be provided

by the Guarantor in accordance with the GOI Guidelines;

(iii) all the Hypothecated Assets that will be charged to the Debenture Trustee

under the Deed of Hypothecation shall always be kept distinguishable

and held as the exclusive property of the Issuer specifically appropriated

to this Security and be dealt with only under the directions of the

Debenture Trustee;

(iv) the Issuer shall not create any charge, lien or other encumbrance upon or

over the Hypothecated Assets or any part thereof except in favour of the

Debenture Trustee nor will it do or allow anything that may prejudice this

Security;

(v) the Debenture Trustee shall be at liberty to incur all costs and expenses as

may be necessary to preserve this Security and to maintain the Security

undiminished and claim reimbursement thereof;

(vi) to create the security over the Hypothecated Assets as contemplated in

the Transaction Documents on or prior to the Initial Security Creation

Date by executing the duly stamped Deed of Hypothecation;

(vii) to register and perfect the security interest created thereunder by filing

Form CHG-9 with the concerned ROC and ensuring and procuring that

the Debenture Trustee files the prescribed Form I with CERSAI reporting

the charge created to the CERSAI in relation thereto, as soon as

practicable and in any case no later than 30 (thirty) calendar days from

the date on which such security over the Hypothecated Assets is created

in accordance with the Deed of Hypothecation;

(viii) commencing from the Initial Security Creation Date until the Final

Settlement Date, the Issuer shall, at the time periods set out in the Deed

of Hypothecation, provide a list of specific loan receivables/identified

book debts to the Debenture Trustee over which charge is created and

subsisting by way of hypothecation in favour of the Debenture Trustee

(for the benefit of the Debenture Holders) and sufficient to maintain the

Security Cover ("Hypothecated Assets Report");

(ix) to keep the Application Money in a separate bank account in the event

the DTD and the other Transaction Documents are not executed on or

before the Deemed Date of Allotment;

(x) the Issuer shall, on each Top-up Date (as defined in the Deed of

Hypothecation), add fresh receivables to the Hypothecated Assets so as to

ensure that the Security Cover is maintained or to replace such

Hypothecated Assets that do not satisfy the eligibility criteria prescribed

in the Transaction Documents;

(xi) the Issuer shall, on a half yearly basis, as and when required by the

Debenture Trustee, give full particulars to the Debenture Trustee of all

the Hypothecated Assets from time to time;

(xii) furnish and verify all statements, reports, returns, certificates and

information from time to time and as required by the Debenture Trustee




80

in respect of the Hypothecated Assets;

(xiii) furnish and execute all necessary documents to give effect to the

Hypothecated Assets;

(xiv) the security interest created on the Hypothecated Assets shall be a

continuing security;

(xv) the Hypothecated Assets shall fulfil the eligibility criteria set out in the

Deed of Hypothecation;

(xvi) nothing contained herein shall prejudice the rights or remedies of the

Debenture Trustee and/ or the Debenture Holders in respect of any

present or future security, guarantee obligation or decree for any

indebtedness or liability of the Issuer to the Debenture Trustee and/ or the

Debenture Holders;

(xvii) the Debenture Holders shall have a beneficial interest in the

Hypothecated Assets of the Issuer which have been charged to the

Debenture Trustee to the extent of the Outstanding Amounts of the

Debentures under the DTD; and

(xviii) to forthwith upon demand by the Debenture Trustee, reimburse to 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 by the Hypothecated Assets;

(n) Filings; Compliance with BSE Requirements

the Issuer hereby further agrees, declares and covenants with the Debenture

Trustee that:

(i) while submitting half yearly/annual financial results in accordance with

Regulation 52 of the LODR Regulations, the Issuer shall file with the

BSE for dissemination, along with a noting certificate of the Debenture

Trustee, containing, inter alia, the following information:

(A) credit rating (and any change thereto);

(B) asset cover, if required, accompanied with a half yearly

certificate regarding maintenance of 100% asset cover in respect

of the Debentures, by either a practicing Issuer secretary or a

practicing chartered accountant, within one month from the end

of the half year;

(C) debt to equity ratio accompanied with a certificate of a practicing

chartered accountant confirming such debt to equity ratio;

(D) previous Due Date for the payment of interest/principal and

whether the same has been paid or not;

(E) next Due Date for the payment of interest/principal;

(F) debt service coverage ratio (if required);




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(G) interest service coverage ratio (if required);

(H) outstanding redeemable preference shares (quantity and value);

(I) debenture redemption reserve;

(J) net worth;

(K) net profit after tax; and

(L) earnings per share;

(ii) in accordance with Regulation 52 of the LODR Regulations, the Issuer

shall file with the BSE the prescribed statements, financial statements and

noting certificate of the Debenture Trustee within the timelines

prescribed therein;

(iii) in accordance with Regulation 56 of the LODR Regulations, the Issuer

shall submit the following to the Debenture Trustee:

(A) a copy of the annual report at the same time as it is issued and a

copy of the certificate from the Issuer's auditors in respect of

utilisation of funds raised by the issue of the Debentures, at the

same time or at the end of each Financial Year until such funds

have been fully utilized or the purpose for which such funds were

intended has been achieved;

(B) a copy of all notices, resolutions and circulars relating to any new

issue of non-convertible debt securities (at the same time as they

are sent to shareholders/holders of non-convertible debt

securities), the meetings of holders of non-convertible debt

securities (at the same time as they are sent to the holders of non-

convertible debt securities or advertised in the media including

those relating to proceedings of the meetings);

(C) intimations regarding any revision in the rating or any default in

timely payment of interest or redemption or both in respect of the

non-convertible debt securities issued by the Issuer or any failure

to create charge on the assets; and

(D) a copy of the statement, if any filed with the BSE in compliance

of Regulation 52(7) of the LODR Regulations indicating material

deviations, if any, in the use of funds raised by the issue of the

Debentures from the object stated in the Information

Memorandum; and

(iv) in accordance with Regulation 58 of the LODR Regulations, the Issuer

shall furnish the following to the Debenture Holders in the manner

prescribed therein:

(A) physical copies of full annual reports to those Debenture Holders

who request the same;

(B) notice of all meetings of the Debenture Holders specifically




82

stating that the provisions for appointment of proxy in

accordance with Section 105 of the Companies Act, 2013 shall

be applicable for such meeting; and

(C) proxy forms for the Debenture Holders clearly providing the

Debenture Holders to vote for each resolution in such a manner

that they may vote either for or against each resolution;

(o) Execution of Security Documents

in the event of any delay in the execution of the Deed of Hypothecation or the

creation of security in terms thereof, the Issuer will, at the option of the

Debenture Holders, either:

(i) refund the Application Money together with interest at the Interest

Rate/discharge the Secured Obligations; or

(ii) pay to the Debenture Holders penal interest at the rate of 2% p.a. (two

percent per annum) charged on the Outstanding Principal Amounts in

addition to the Interest Rate until the Deed of Hypothecation is duly

executed or the security is duly created in terms thereof;

(p) Internal Control

maintain internal control for the purpose of:

(i) preventing fraud on amounts lent by the Issuer; and

(ii) preventing money being used for money laundering or illegal purposes;

(q) Audit and Inspection

permit visits and inspection of books of records, documents and accounts to the

Debenture Trustee and representatives of Debenture Holders as and when

required by them;

(r) Books and Records

maintain its accounts and records in accordance with Applicable Law; and

(s) Access; Periodic Portfolio Monitoring

provide the Debenture Trustee and the Debenture Holders and any of their

representatives, professional advisers and contractors with access to and/or permit

them to, at the cost of the Issuer:

(i) examine and inspect the books and records, office premises, and the

premises of the Issuer;

(ii) portfolio data in the format prescribed by the Debenture Holders from

time to time; and

(iii) discuss the affairs, finances and accounts of the Issuer, and be advised as

to the same, by the relevant officers.




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7.6 Negative Covenants

The Issuer shall not take any action in relation to the items set out in this Section 7.6

without the prior written consent of the Debenture Trustee. The Debenture Trustee shall

endeavour (but is not bound to) to provide its prior written consent/dissent within 15

(fifteen) Business Days after receiving a request to provide its consent. PROVIDED

THAT such request must be accompanied by all relevant information substantiating the

request to enable the Debenture Holders to make a reasoned decision. The Debenture

Trustee reserves the right to take the consent of the Majority Debenture Holders prior to

any such approval/dissent, if it deems necessary.

(a) Change of Business/Constitutional Documents

(i) change the general nature of its business from that which is permitted as a

non-deposit accepting or holding non-banking financial company

registered with the RBI; or

(ii) any diversification of its business outside from that which is permitted as

a non-deposit accepting or holding non-banking financial company

registered with the RBI;

(b) Dividend

(i) declare or pay any dividend to its shareholders (including holders of

preference shares) during any Financial Year unless it has paid or made

arrangements to pay (to the satisfaction of the Debenture Trustee) all the

dues to the Debenture Holders/ Debenture Trustee upto the date on which

the dividend is proposed to be declared or paid or has made satisfactory

provisions thereof; or

(ii) if an Event of Default has occurred and is continuing, declare or pay any

dividend to its shareholders;

(c) Merger, Consolidation, etc.

in any Financial Year:

(i) undertake or permit any merger, acquisition, investment, re-structuring or

amalgamation in excess of 15% (fifteen percent) of the Net Worth of the

Issuer; or

(ii) enter into any merger, de-merger, consolidation, re-organization, scheme

of arrangement or compromise with its creditors or shareholders or effect

any scheme of amalgamation or reconstruction.

PROVIDED THAT the foregoing shall not apply in case where the Issuer

not entering into any such any merger, de-merger, consolidation, re-

organization, scheme of arrangement or compromise with its creditors or

shareholders or effect any scheme of amalgamation or reconstruction,

may result in an Event of Default or potential Event of Default;

(d) Change of Control

permit the occurrence of any Change of Control, or any Change of Control Event;




84

(e) Promoter Shareholding

issue any additional shares or equity interests or permit any of its existing shares

or equity interests to be transferred, sold, pledged or otherwise encumbered

which would lead to the Promoters, directly or indirectly:

(i) ceasing to maintain their current shareholding (as of the Effective Date)

in the Issuer; or

(ii) ceasing to Control the Issuer;

(f) Disposal of Assets

sell, transfer, or otherwise dispose of in any manner whatsoever any material

Assets of the Issuer (whether in a single transaction or in a series of transactions

(whether related or not) or any other transactions which cumulatively have the

same effect) other than any securitization/portfolio sale of assets undertaken by

the Issuer in its ordinary course of business that has the effect of exiting the

current business of the Issuer or re-structuring of the existing business;

(g) Anti-money Laundering

permit any of the Debenture proceeds to be used to fund 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;

(h) Change in Capital Structure

(i) permit or undertake any change in capital structure that would lead to a

reduction in the paid-up capital or authorized capital of the Issuer;

(ii) purchase, buyback, or retire any of its issued shares or reduce its share

capital or resolve to do any of the foregoing;

(i) Change in Financial Year

change its Financial Year end from March 31 of each year to any other date; or

(j) Business

undertake any new major new businesses except in relation to financial services

or diversify its business outside the financial services sector.




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SECTION 8: OTHER INFORMATION AND ISSUE PROCEDURE

The Debentures being offered as part of the Issue are subject to the provisions of the Act, the

Memorandum and Articles of Association of the Issuer, the terms of this Information

Memorandum, the PPOA, the Application Form and other terms and conditions as may be

incorporated in the Transaction Documents.

8.1 Mode of Transfer/Transmission of Debentures

The Debentures shall be transferable freely. The Debentures(s) shall be transferred and/or

transmitted in accordance with the applicable provisions of the 2013 Act and other

applicable laws. The Debentures held in dematerialized form shall be transferred subject

to and in accordance with the rules/procedures as prescribed by NSDL/CDSL and the

relevant DPs of the transferor or transferee and any other applicable Laws and rules

notified in respect thereof. The transferee(s) should ensure that the transfer 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 of

Beneficial Owners maintained by the R&T Agent as on the Record Date, under all

circumstances. In cases where the transfer formalities have not been completed by the

transferor, claims, if any, by the transferees would need to be settled with the transferor(s)

and not with the Issuer. The normal procedure followed for transfer of securities held in

dematerialized form shall be followed for transfer of these Debentures held in

dematerialised form. The seller should give delivery instructions containing details of the

buyer’s DP account to his DP.

8.2 Debentures held in Dematerialised Form

The Debentures shall be held in dematerialised form and no action is required on the part

of the Debenture Holder(s) for redemption purposes and the redemption proceeds will be

paid by cheque/EFT/RTGS to those Debenture Holder(s) whose names appear on the list

of beneficiaries maintained by the R&T Agent. The names would be as per the R&T

Agent’s records on the Record Date fixed for the purpose of redemption. All such

Debentures will be simultaneously redeemed through appropriate debit corporate action.

The list of beneficiaries as of the relevant Record Date setting out the relevant

beneficiaries’ name and account number, address, bank details and DP’s identification

number will be given by the R&T Agent to the Issuer. If permitted, the Issuer may

transfer payments required to be made in any relation by EFT/RTGS to the bank account

of the Debenture Holder(s) for redemption payments.

8.3 Market Lot

The market lot will be One Debenture (“Market Lot”). Since the Debentures are being

issued only in dematerialised form, the odd lots will not arise either at the time of

issuance or at the time of transfer of Debentures.

8.4 Debenture Trustee for the Debenture Holder(s)

The Issuer has appointed Catalyst Trusteeship Limited to act as trustee for the Debenture

Holder(s). The Issuer and the Debenture Trustee have entered/intend to enter into the

Debenture Trustee Agreement and the Debenture Trust Deed, inter 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 Debenture Trustee or any of its agents or authorized officials to




86

do all such acts, deeds, matters and things in respect of or relating to the Debentures as

the Debenture Trustee may in its absolute discretion deem necessary or require to be done

in the interest of the Debenture Holder(s). Any payment made by the Issuer to the

Debenture Trustee on behalf of the Debenture Holder(s) shall discharge the Issuer pro

tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the

Debenture Holder(s) in regard to the repayment of principal and interest thereon and they

will take necessary action, subject to and in accordance with the Debenture Trustee

Agreement and the Debenture Trust Deed, at the cost of the Issuer. No Debenture Holder

shall be entitled to proceed directly against the Issuer unless the Debenture Trustee,

having become so bound to proceed, fails to do so. The Debenture Trustee Agreement

and the Debenture Trust Deed shall more specifically set out the rights and remedies of

the Debenture Holder(s) and the manner of enforcement thereof.

8.5 Sharing 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 with the 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 and affiliates nor their agents shall be liable for use

of the aforesaid information.

8.6 Debenture Holder not a Shareholder

The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders

other than those available to them under the Act. The Debentures shall not confer upon

the Debenture Holders the right to receive notice(s) or to attend and to vote at any general

meeting(s) of the shareholders of the Issuer.

8.7 Modification of Debentures

Any Transaction Document may be modified or amended with the written consent of the

Debenture Trustee (acting on the instructions of the Majority Debenture Holders) by way

of an instrument in writing executed by the Issuer and the Debenture Trustee.

8.8 Right to accept or reject Applications

The Board of Directors/Committee of Directors reserves its full, unqualified and absolute

right to accept or reject any application for subscription to the Debentures, in part or in

full, without assigning any reason thereof.

8.9 Notices

Any notice in respect of the Debentures may be served by the Issuer upon the Debenture

Trustee/Debenture Holders in accordance with the terms of the Transaction Documents.

8.10 Issue Procedure

Only ‘Eligible Investors’ as given hereunder to whom this Information Memorandum is

addressed, may apply for the Debentures by completing the Application Form in the

prescribed format in block letters in English as per the instructions contained therein. The

minimum number of Debentures that can be applied for and the multiples thereof shall be

set out in the Application Form. No application can be made for a fraction of a Debenture.

Application forms should be duly completed in all respects and applications not




87

completed in the said manner are liable to be rejected. The name of the applicant’s bank,

type of account and account number must be duly completed by the applicant. This is

required for the applicant’s own safety and these details will be printed on the refund

orders and /or redemptions warrants.

The subscription to the Debentures shall be made by the Eligible Investors through the

electronic book mechanism as prescribed by SEBI under the EBP Guidelines by placing

bids on the EBP Platform during the Issue period. In case the Eligible Investors are not

registered on the EBP Platform, they will have to register themselves as an "investor" on

the EBP Platform (as a one time exercise) and also complete the mandatory "know your

customer" verification process. The Eligible Investors should also refer to the operational

guidelines of the relevant EBP in this respect. The disclosures required pursuant to the

EBP Guidelines are set out herein below:

Details of size of issue including green shoe

option, if any and a range within which

green shoe may be retained (if applicable)

1,000 (one thousand) rated, senior, redeemable,

taxable, transferable, listed, non-convertible

debentures of face value of INR 10,00,000

(Indian Rupees Ten Lakh) each, aggregating

up to INR 100,00,00,000 (Indian Rupees One

Hundred Crore)

Green Shoe Option: N.A.

Bid opening and closing date Bid opening date: 23rd

July, 2020

Bid closing date: 23rd

July, 2020

Minimum Bid Lot 1,000 (one thousand) Debentures (being INR

100,00,00,000 (Indian Rupees One Hundred

Crore)), and in the multiples of 10 (ten)

Debenture thereafter (being INR 1,00,00,000

(Rupees One Crore))

Manner of bidding in the Issue Closed bidding

Manner of allotment in the Issue Uniform Yield Allotment

Manner of settlement in the Issue Pay-in of funds through ICCL.

The pay-in of the Application Money for the

Debentures shall be made by way of transfer of

funds from the bank account(s) of the Eligible

Investors (whose bids have been accepted) as

registered with the Electronic Book Provider

into the account of the ICCL, as specified in

this regard below.

Settlement Cycle T+1

Settlement of the Issue will be on 24th July,

2020.

Process flow of settlement:

Eligible Investors whose bids have been accepted by the Issuer and to whom a signed

copy of this Information Memorandum along with the PPOA have been issued by the

Issuer and who have submitted/shall submit the Application Form ("Successful

Bidders"), shall make the payments in respect of the Application Money in respect of the

Debentures towards the allocation made to them, into the bank account of the ICCL, the

details of which are as set out below:




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Name of the Bank HDFC Bank

IFSC Code HDFC0000060

Account Number ICCLEB

Name of the beneficiary INDIAN CLEARING CORPORATION

LIMITED

The pay-in of the Application Money by the Successful Bidders will be made only from

the bank account(s), which have been provided / updated by them in the EBP system.

Any amount received from third party accounts or from accounts not specified in the EBP

system will be refunded and no allotment will be made against such payments. Upon the

transfer of funds into the aforesaid account of ICCL and the Issuer confirming its decision

to proceed with the allotment of the Debentures in favour of the Successful Bidders to the

ICCL, the R&T Agent and the EBP and initiating the requisite corporate action for

allotment of Debentures and credit of the demat letter of allotment into the relevant demat

account of the Successful Bidders through the R&T Agent, the R&T Agent shall provide

corporate action file along with all requisite documents to the relevant Depositories by

12:00 hours and also intimate the EBP of the aforesaid actions. Upon the Depositories

confirming the allotment of the Debentures and the credit of the Debentures into the

demat account of the Successful Bidders to EBP, the subscription monies in respect of the

Debentures from the aforesaid account of ICCL shall be released into the Issuer’s bank

account, the details of which are as set out below:

Name of the Bank IDBI BANK

IFSC Code IBKL0000009

Account Number 0009102000079709

Name of the beneficiary MAS FINANCIAL SERVICES LIMITED -

DEBENTURE APPLICATION MONEY

ACCOUNT

It must be noted that all funds pay-in obligations need to be fulfilled in totality. Partial

fund receipt against any given obligation will be treated as a default and debarment

penalties will be applicable as specified by the EBP Guidelines and other Applicable

Law.

8.11 Application Procedure

Potential Debenture Holders will be invited to subscribe by way of the Application Form

prescribed in this Information Memorandum during the period between the Issue Opening

Date and the Issue Closing Date (both dates inclusive). The Issuer reserves the right to

change the issue schedule including the Deemed Date of Allotment at its sole discretion,

without giving any reasons. The Issue will be open for subscription during the banking

hours on each day during the period covered by the issue schedule, and the procedure will

be subject to the EBP Guidelines.

8.12 Fictitious Application

All fictitious applications will be rejected.

8.13 Basis of Allotment

Notwithstanding anything stated elsewhere, the Issuer reserves the right to accept or

reject any application, in part or in full, without assigning any reason. In case of over




89

subscription, allotment shall be made on a "yield time priority basis" in accordance with

the EBP Guidelines. The investors will be required to remit the funds in the account of

the ICCL as well as submit the duly completed Application Form along with other

necessary documents to the Issuer by the Deemed Date of Allotment.

8.14 Payment Instructions

The entire amount of INR 10,00,000/- per Debenture is payable on the Pay-In Date.

Applicants can remit the application amount on the Pay-in Date in the account of ICCL

mentioned under Section 8.10 above.

8.15 Eligible Investors

Only the following categories of investors are eligible to invest in these NCDs:

a) Scheduled Commercial Banks

b) Financial Institutions including PFIs, Provident/Gratuity funds, pension funds,

NBFCs, Trusts etc.

c) Mutual Funds

d) Insurance Companies

e) FPIs registered as trust or body corporate

when specifically approached, are eligible to apply for this private placement of

Debentures subject to fulfilling their respective investment norms/rules and compliance

with laws applicable to them by submitting all the relevant documents along with the

Application Form (“Eligible Investors”).

Without prejudice to the aforesaid, where the selection of the eligible investors is required

to be done pursuant to bidding mechanism on the EBP Platform under the EBP

Guidelines or any other successive arrangement/platform mandated by SEBI, only those

persons out of the aforesaid categories of Eligible Investors, who are registered on the

EBP Platform and are eligible to make bids for the Debentures of the Issuer and to whom

allocation is to be made by Issuer pursuant to selection under the electronic book

mechanism for issuance of securities on private placement basis in terms of the EBP

Guidelines and the Electronic Book Providers shall be considered as "identified persons"

for the purposes of Section 42(2) of the Companies Act, 2013, to whom the Company

shall make private placement of the Debentures and only such "identified persons" shall

receive a direct communication from the Company with offer to subscribe to the

Debentures and only such "identified persons" shall be entitled to subscribe to the

Debentures.

Additionally, those arrangers/brokers/intermediaries etc. (as per the defined limits under

the EBP Guidelines) specifically mapped by the Company on the EBP Platform are also

eligible to bid/apply/invest for this Issue.

All Eligible Investors are required to check and comply with Applicable Law(s) including

the relevant rules / regulations / guidelines applicable to them for investing in this Issue of

Debentures and the Company, is not in any way, directly or indirectly, responsible for any

statutory or regulatory breaches by any investor, neither is the Company required to check

or confirm the same.

Hosting of the Information Memorandum on the website of the BSE should not be

construed as an offer or an invitation to offer to subscribe to the Debentures and the same

has been hosted only as it is stipulated under the SEBI Debt Listing Regulations read with




90

the EBP Guidelines. Eligible Investors should check their eligibility before making any

investment.

All potential Debenture Holders are required to comply with the relevant

regulations/guidelines applicable to them for investing in this issue of Debentures.

Note: Participation by potential Debenture Holders in the issue may be subject to

statutory and/or regulatory requirements applicable to them in connection with

subscription to Indian securities by such categories of persons or entities. Applicants are

advised to ensure that they comply with all regulatory requirements applicable to them,

including exchange controls and other requirements. Applicants ought to seek

independent legal and regulatory advice in relation to the laws applicable to them.

8.16 Procedure for Applying for Dematerialised Debentures

(a) The applicant must have at least one beneficiary account with any of the DP’s of

NSDL/CDSL prior to making the application.

(b) The applicant must necessarily fill in the details (including the beneficiary

account number and DP –ID) appearing in the Application Form under the

heading “Details for Issue of Debentures in Electronic/Dematerialised Form”.

(c) Debentures allotted to an applicant will be credited to the applicant’s respective

beneficiary account(s) with the DP.

(d) For subscribing to the Debentures, names in the Application Form should be

identical to those 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 with the DP.

(e) Non-transferable allotment advice/refund orders will be directly sent to the

applicant by the Registrar and Transfer Agent to the Issue.

(f) If incomplete/incorrect details are given under the heading “Details for Issue of

Debentures in Electronic/Dematerialised Form” in the Application Form, it will

be deemed to be an incomplete application and the same may be held liable for

rejection at the sole discretion of the Issuer.

(g) For allotment of Debentures, the address, nomination details and other details of

the applicant as registered with his/her DP shall be used for all correspondence

with the applicant. The applicant is therefore responsible for the correctness of

his/her demographic details given in the Application Form vis-à-vis those with

his/her DP. In case the information 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 whose names appear on the list of beneficial owners maintained by the

R&T Agent as on the Record 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 the payment of the redemption

amount or other benefits, until such time that the beneficial owner is identified by

the R&T Agent and conveyed to the Issuer, whereupon the redemption amount

and benefits will be paid to the beneficiaries, as identified.




91

8.17 Depository Arrangements

The Issuer shall make necessary arrangement with NSDL/ CDSL for issue and holding of

Debentures in dematerialised form.

8.18 List of Beneficiaries

The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of

each Record Date. This shall be the list, which will be used for payment or repayment of

redemption monies.

8.19 Application under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be

along with the names and specimen signature(s) of all the authorized signatories of the

potential Investor and the tax exemption certificate/document of the potential Debenture

Holder, if any, must be lodged along with the submission of the completed Application

Form. Further modifications/additions in the power of attorney or authority should be

notified to the Issuer or to its agents or to such other person(s) at such other address(es) as

may be specified by the Issuer from time to time through a suitable 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-laws along with other constitutional documents must be attached

to the Application Form at the time of making the application, failing which, the Issuer

reserves the full, unqualified and absolute right to accept or reject any application in

whole or in part and in either case without assigning any reason thereto. Names and

specimen signatures of all the authorized signatories must also be lodged along with the

submission of the completed Application Form.

8.20 Procedure for application by Mutual Funds and Multiple Applications

In case of applications by mutual funds and venture capital funds, a separate application

must be made in respect of each scheme of an Indian mutual fund/venture capital fund

registered with the SEBI and such applications will not be treated as multiple application,

provided that the application made by the asset management company/trustee/custodian

clearly indicated their intention as to the scheme for which the application has been made.

The application forms duly filled shall clearly indicate the name of the concerned scheme

for which application is being made and must be accompanied by certified true copies of:

(a) SEBI registration certificate

(e) Resolution authorizing investment and containing operating instructions

(f) Specimen signature of authorized signatories

8.21 Documents to be provided by Eligible Investors

Eligible Investors need to submit the following documents, as applicable:

(a) Memorandum and Articles of Association or other constitutional documents

(g) Resolution authorising investment




92

(h) Certified true copy of the Power of Attorney to custodian

(i) Specimen signatures of the authorised signatories

(j) SEBI registration certificate (for Mutual Funds)

(k) Copy of PAN card

(l) Application Form (including EFT/RTGS details)

8.22 Applications to be accompanied with Bank Account Details

Every application shall be required to be accompanied by the bank account details of the

applicant and the magnetic ink character reader code of the bank for the purpose of

availing direct credit of redemption amount and all other amounts payable to the

Debenture Holder(s) through cheque/EFT/RTGS.

8.23 Succession

In the event of winding up of a Debenture Holder (being a company), the Issuer will

recognise the legal 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 legal representation, in order to recognise any person as being entitled to the

Debenture(s) standing in the name of the concerned Debenture Holder on the production

of sufficient documentary proof and an indemnity.

In the event of, however, a deceased Debenture Holder having nominated any person

entitled to be registered as the Debenture Holder in the event of his death, such nominee

shall be registered as the Debenture Holder in place of the deceased Debenture Holder,

notwithstanding anything contained in any other law for the time being in force.

8.24 Effect of Holidays

(a) If any Due Date on which any interest or additional interest is payable falls on a day which is not a Business Day, the payment to be made on such Due Date shall be made on the succeeding Business Day and to the extent not contrary to Applicable Law, the Issuer shall be liable to the pay the interest or additional interest till such succeeding Business Day.

(b) If any Due Date on which any Outstanding Principal Amounts are payable falls on a day which is not a Business Day, the payment to be made on such Due Date shall be made on the preceding Business Day.

(c) If the Redemption Date falls on a day which is not a Business Day, the payment of any amounts in respect of any interest and the Outstanding Principal Amounts to be made shall be made on the preceding Business Day.

8.25 Tax Deduction at Source

(a) All payments to be made by the Company to the Debenture Holders under the

Transaction Documents shall be made free and clear of and without any Tax

Deduction unless the Company is required to make a Tax Deduction pursuant to




93

Applicable Law.

(b) The Company shall promptly upon becoming aware that it must make a Tax

Deduction (or that there is any change in the rate or the basis of a Tax Deduction)

notify the Debenture Trustee accordingly.

(c) If the Company is required to make a Tax Deduction, it shall make that Tax

Deduction and any payment required in connection with that Tax Deduction

within the time allowed and in the minimum amount required by Applicable Law.

(d) Within the earlier of (i) 60 (sixty) calendar days of making either a Tax

Deduction or any payment required in connection with that Tax Deduction or (ii)

60 (sixty) calendar days of each Due Date, the Company shall deliver to the

Debenture Trustee evidence reasonably satisfactory to the Debenture Trustee that

the Tax Deduction has been made or (as applicable) any appropriate payment

paid to the relevant Tax authority.

8.26 Letters of Allotment

The letter of allotment, indicating allotment of the Debentures, will be issues and

delivered on the Deemed Date of Allotment. The aforesaid letter of allotment shall be

replaced with the actual credit of Debentures, in dematerialised form, within 2 (two)

Business Days from the Deemed Date of Allotment or such period as is permissible under

applicable Law.

8.27 Deemed Date of Allotment

All the benefits under the Debentures, will accrue to the Debenture Holders from the

specified Deemed Date of Allotment. The Deemed Date of Allotment for the Issue is July

24, 2020 by which date the Debenture Holders would be intimated of allotment.

8.28 Record Date

The Record Date is the date falling 15 (fifteen) calendar days prior to the date on which

interest is due and payable on the Debentures, or the date of redemption of the Debentures

(as applicable).

8.29 Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will

be dispatched within 7 (Seven) days from the Deemed Date of Allotment of the

Debentures.

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 moneys to the extent of such excess, if any.




94

8.30 PAN Number

Every applicant should mention its PAN allotted under Income Tax Act, 1961, on the

Application Form and attach a self-attested copy as evidence. Application forms without

PAN will be considered incomplete and are liable to be rejected.

8.31 Payment on Redemption

Payment on redemption will be made by way of cheque(s)/redemption warrant(s)/demand

draft(s)/credit through RTGS system/funds transfer in the name of the Debenture

Holder(s) whose names appear on the list of beneficial owners given by the Depository to

the Issuer as on the Record Date.

The Debentures shall be taken as discharged on payment of the redemption amount by the

Issuer on maturity to the registered Debenture Holder(s) whose name appears in the

Register of Beneficial Owners on the Record Date. On such payment being made, the

Issuer will inform NSDL and CDSL and accordingly the account of the Debenture

Holder(s) with NSDL and CDSL will be adjusted.

On the Issuer dispatching the amount as specified above in respect of the Debentures, the

liability of the Issuer shall stand extinguished.

8.32 Governing law and jurisdiction of courts

The Debentures are governed by and shall be construed in accordance with the laws of

India. Any dispute arising out of or connected with this Issue shall be resolved by the

courts of Mumbai, India having exclusive jurisdiction.

.,

,

Information Memorandum Date: July 21, 2020 For Private Circulation Only


DECLARATION

A. The Issuer has complied with the provisions of the Companies Act, 2013 and the rules made hereunder; -

B. The compliance with the Companies Act, 2013 and the rules made thereunder do not imply that payment of dividend or interest or repayment of the Debentures, if applicable, is guaranteed by the Central Government; and

C. The monies received under the offer shall be used only for the purposes and objects indicated in this Information Memorandum.

I am authorized by the Board of Directors of the Issuer vide resolution dated June 16, 2020 read with the resolution dated July 20, 2020 of the finance committee of the Issuer, to sign this Information Memorandum and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been comp! ied with.

Whatever is stated in this Information Memorandum and in the attachments thereto is true, correct and complete and no information material to the subject matter of this Information Memorandum has been suppressed or concealed and is as per the original records maintained by the promoters subscribing to the Memorandum of Association and Articles of Association.

It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this Information Memorandum.

The Issuer declares that all the relevant provisions in the regulations/guideline issued by SEBI and other Applicable Laws have been complied with and no statement made in this Information Memorandum is contrary to the provisions of the regulations/guidelines issued by SEBI and other Applicable Laws, as., the case may be. The information contained in this Information Memorandum is as applicable to privately placed debt securities and subject to the information available with the Issuer. The extent of disclosures made in this Information Memorandum is consistent with disclosures permitted by regulatory authorities to the issue of securities made by the companies in the past.

For, !Jl.,!.J& Financial Services Limited

Name: Riddhi Bhayani Company Secretary & Compliance Officer Memb. No.: A41206 Date: July 21, 2020

,, .

95




96

ANNEXURE I - TERM SHEET

DESCRIPTION PARTICULARS

Issuer/Company MAS Financial Services Limited

Debenture Trustee Catalyst Trusteeship Limited

Rating CARE A+

Issuance Rated, Listed, Fully Paid-up, Senior, Secured, Redeemable, Non-

Convertible Debentures (“NCDs” or “Debentures”)

Issuance Size INR 100,00,00,000 (Indian Rupees One Hundred Crores)

Issue Price Rs. 10,00,000/- (Rupees Ten Lakhs only) per Debenture

Interest Rate /

Coupon

9.00% Coupon per annum payable yearly

Default Interest Rate (a) The Company agrees to pay an additional interest at the rate of

2% (two percent) per annum above the interest rate on the

outstanding principal amounts from the date of the occurrence

of a payment default until such payment default is cured, on

each interest payment date occurring during the aforementioned

period.

(b) The Company agrees to pay an additional interest at the rate of

2% (two percent) per annum above the interest rate on the

outstanding principal amounts from the date of the occurrence

of any breach of any covenants, undertakings or obligations of

the Issuer set out under the Transaction Documents until such

breach is cured, on each interest payment date occurring during

the aforementioned period.

Interest on

Application

Money

9.00% per annum, from the credit of subscription monies in respect of

the Debentures in the account of the ICCL, in accordance with the EBP

Guidelines, until the Deemed Date of Allotment and the same shall be

paid to the relevant Investors within 7 (Seven) Business Days from the

Deemed Date of Allotment.

Day count basis Actual/Actual

Depository NSDL and/or CDSL

Trading mode Dematerialized

Settlement mode RTGS / NEFT

Seniority Senior

Mode of Issue Private Placement

Registrar & Transfer

Agent

Link Intime India Pvt. Ltd

Coupon/ Interest

Payment Frequency

Yearly and at the end of 18 months

Coupon payment

date

24th July 2021 & 24

th January 2022

Principal

Amortization

Bullet

Interest Type Fixed

Tenor 18 months from Deemed Date of Allotment

Ranking Each Debenture issued by the Issuer will constitute direct, senior and

secured obligations of the Issuer. The claims of the Debenture Holders

shall be akin to the claims of senior, secured investors / lenders and shall




97

rank pari passu to all senior, secured indebtedness of the Issuer.

Each of the Debenture Holders shall inter-se rank pari passu in relation

to their rights and benefits in relation to the Debentures, without any

preference or privilege.

End Use The proceeds of the Issuance will be utilized for the following purposes:

General corporate purposes

for the ordinary course of business of the Issuer including

repayment/re-financing of existing debt

The Issuer shall not use the proceeds of the Issue towards:

any capital market instrument such as equity, debt, debt linked and

equity linked instruments or any other capital market related

activities; or

any speculative purposes; or

any activity on the Exclusion List; or

investment in the real estate sector;

Issue price PAR issuance

Security The Debentures shall be secured by way of a first ranking, exclusive and

continuing charge on identified standard receivables (“Hypothecated

Receivables”) to maintain the value of security at all times equal to

1.10x (One Decimal One Zero times) or 110.0% (One Hundred and Ten

Percent) the aggregate amount of principal outstanding (including

accrued interest) of the NCDs.

Standard Receivables are the receivables which are not overdue more

than 90 days.

Portfolio creation will be done with period not exceeding 90 (ninety)

calendar days from the deemed date of allotment.

Listing The Company shall make listing application to BSE within 15 days from

the Deemed Date of Allotment of the Bonds and seek listing permission

within 20 days from the Deemed Date of Allotment of Bonds. In case of

delay in listing of the Bonds beyond 20 days from the Deemed Date of

Allotment, the Company shall pay penal interest at the rate of 2.00% p.a.

over the Coupon Rate from the expiry of 30 days from the Deemed Date

of Allotment till the listing of Bonds to the Bondholder(s).

Deemed Date of

Allotment

24th July 2020

Redemption Date /

Maturity Date

18 months from Deemed Date of Allotment i.e. 24th January 2022

Issue Timing Issue Opening Date: 23rd

July 2020

Issue Closing Date: 23rd

July 2020

Pay-in Dates: 24th July 2020

Deemed Date of Allotment: 24h July 2020

All documentation including, but not limited to, the Information

Memorandum, Rating Letter, Appointment of Debenture Trustee to be

completed 1 (One) calendar days prior to Issue Opening Date unless

otherwise specified.

Issuance mode of

the Instrument

Demat only.

Record Date The date which will be used for determining the Debenture Holder(s)




98

who shall be entitled to receive the amounts due on any Due Date,

which shall be the date falling 15 (Fifteen) calendar days prior to any

Due Date.

Business Days A day (other than a Saturday, a Sunday or a Bank Holiday) on which

banks are open for general business in Mumbai.

Business Day

Convention

If the Coupon Payment Date falls on a day which is not a Business Day,

then the immediately succeeding Business Day shall be the due date for

such payment. If the Principal Payment Date/ Maturity Date /

Redemption Date (including the last Coupon Payment Date and the last

Principal Payment Date) or the due date in respect of liquidated damages

and all other monies payable under the Debenture Trust Deed falls on a

day which is not a Business Day, then the immediately preceding

Business Day shall be the due date for such payment.

Affirmative

Covenants

(a) To utilise the proceeds of this issue in accordance with

applicable laws and regulations

(b) To promptly inform the investor of any notice of winding up /

other legal proceedings

(c) To promptly inform the investor of any material adverse effect

(d) To provide the investor with access to data / information /

meetings with the management team for periodical portfolio

monitoring

(e) To comply with corporate governance, fair practices code

prescribed by RBI

To be set out in greater detail in the debenture trust deed.

Negative Covenants The issuer shall take the prior written permission from the debenture

holders / Debenture Trustee for the following:

(a) Any change in promoter, or control.

(b) Buyback its equity share capital or resolve to do so.

(c) Mergers, acquisitions, investment in associates, JVs and

subsidiaries including disposal of any of the above

(d) Change in nature of business of the Company

(e) Declare dividend on equity/preference shares when an event of

default is continuing

To be set out in greater detail in the debenture trust deed.

Financial Covenants Maintain the minimum capital adequacy ratio as prescribed by the

Reserve Bank of India under the NBFC Directions.

Reporting Covenants (a) Within 60 (Sixty) calendar days from the end of each financial

quarter

(i) Information such as financials, operations, portfolio ,

and asset quality (including but not limited to static

portfolio cuts, collection efficiency and portfolio at risk

data), funding data, ALM in formats acceptable to the

debenture holders

(ii) Financial covenant compliance certificate signed by a

Director or the Chief Financial Officer

(iii) Copy of returns filed with the Reserve Bank of India

(“RBI”) and the SEBI (as applicable)

(b) Audited financial statements within 180 (One Hundred and

Eighty) calendar days from the end of each financial year




99

(c) Within 30 (thirty) business days of the event occurring

(i) Change in list of Board of Directors

(ii) Changes in accounting policy

(iii) Change in senior management officials (any CXO or

equivalent)

(iv) Snapshot of Board approved annual business plan

(v) Any fraud amounting to more than 1.0% of Gross Loan

Portfolio

(vi) Change in the constitutional documents of the Company

except for authorized share capital clause and for

common seal clause

(vii) Material adverse effect

(viii) Any dispute, litigation, investigation or other

proceeding which could result in a Material Adverse

Effect.

(ix) Winding up proceedings

(x) Any event of default or potential default, and any steps

taken / proposed to remedy the same.

(xi) Any prepayment or notice of any prepayment of any

Indebtedness of the Issuer

Other Covenants Other covenants customary for transactions of this nature to be included

in the debenture trust deed and the other Transaction Documents.

Representations and

Warranties

Representations and warranties customary for transactions of this nature

to be included in the debenture trust deed and the other Transaction

Documents.

The same is enclosed with this term sheet as per Enclosure-1.

Events of Default Events of default considered appropriate for the transaction of this

nature including:

1. Default in payment of Interest/Principal for the current NCDs to be

issued.

2. Breach of any of the covenants, representations and warranties.

3. Failure to Execute the Deed of Hypothecation and Filing of the

relevant form with the Registrar of Companies for the registration of

charge over the Hypothecated Property within the stipulated time.

4. Security provided being invalid security or loss of lien on collateral

5. Unlawfulness or unenforceability of finance or security

6. Repudiation of any Transaction Document

7. Illegality for the Issuer to perform any of its obligations under the

Transaction Document

8. The withdrawal, failure of renewal, or failure to obtain any statutory

or regulatory approval in any relevant jurisdiction for the

Debentures or any Security.

9. Representations or Warranties are found to be untrue or misleading

when made or deemed to be made.

10. Cross default/ default with any other financial indebtedness of the

Issuer.

11. The security cover falls below 110% of the Outstanding Amount at

any time during the currency of the Debentures.

Governing Law and

Jurisdiction

Indian Law with jurisdiction of the courts and tribunals of

Ahmedabad/Mumbai/New Delhi.




100

Transaction

documents

The Issuer has executed/ shall execute the documents including but not

limited to the following, as required, in connection with the Issue as per

latest SEBI guidelines/Companies Act 2013 (as applicable) for issuance

of the Debentures ("Transaction Documents"):

1. Letter appointing Trustees to the Debenture Holders;

2. Debenture Trusteeship Agreement;

3. Debenture Trust Deed;

4. Deed of Hypothecation;

5. Information Memorandum;

6. Private Placement Offer Letter (Form PAS 4);

7. Board Resolution authorizing this Issuance;

8. Applicable Shareholder Resolutions under the Companies Act 2013;

9. Rating Agreement with the aforesaid Rating Agency(ies) with

respect to this Issuance;

10. Tripartite Agreements with the Depository(ies) and Registrar &

Transfer Agent; and

11. Any other documents as may be agreed between the Parties.

Conditions

Precedent to

Disbursement

1. The Issuer has delivered to the Debenture Holders, a certified true

copy of the Issuer’s constitutional documents and Certificate of

Incorporation, as amended up-to-date;


copy of the resolution of the Board of Directors of the Issuer

authorizing the issue of Debentures as also execution of the

necessary documents in that behalf;


copy of the resolution of the shareholders of the Issuer under

section 42 of the

Companies Act, 2013;


copy of the resolution of the shareholders of the Issuer under

section 180(1)(a) and section 180(1)(c) of the Companies Act,

2013;

5. Execution of Debenture Trustee Agreement and the Debenture

Trust Deed.

6. A near final version of the legal opinion on the capacity of the

Company to enter into the Transaction Documents and the

enforceability of the Transaction Documents to be provided to the

Debenture Holders, and

7. Such other undertaking as may be required from the Company.

Conditions

Subsequent to

Disbursement

1. Filing of the relevant documents inter alia, returns of allotment etc.

with the Registrar of Companies within the timelines specified

under the rules under the Companies Act, 2013.

2. Completion of the listing of Debentures on BSE within 20

(Twenty) calendar days from the Deemed Date of Allotment.

3. Execution of Debenture the Deed of Hypothecation and Filing of

the relevant form with the Registrar of Companies for the

registration of charge over the Hypothecated Property.

4. Execution of any other documents as customary for transaction of a

similar nature and size.

5. The Issuer shall also obtain a legal opinion on the enforceability of




101

the Transaction Documents.

Transaction Cost The Issuer shall bear all transaction related costs incurred by the

Debenture Holder with respect to legal counsel, valuers and auditors/

consultants. Such costs include:

fees

Documents

Any other reasonable transaction related expense incurred by the

Debenture Holders

The charges/ fees and any amounts payable under this Debentures by the

Issuer as mentioned herein do not include any applicable taxes, levies

including service tax etc. and all such impositions shall be borne by the

Issuer additionally.

Enclosure-1:

Representations and Warranties of the Issuer

The Issuer hereby makes the following representations and warranties and the same shall also be

set out in the Transaction Documents.

The Company makes the representations and warranties set out in this Clause to the Debenture

Trustee on behalf of the Debenture Holder(s) and the same shall also be set out in the Transaction

Documents:

1) STATUS:

a) It is a company, duly incorporated, registered and validly existing under the Applicable Law

of India.

b) It has the power to own its assets and carry on its business in substantially the same manner

as it is being conducted.

2) BINDING OBLIGATIONS:

The obligations expressed to be assumed by it under the Transaction Documents are legal, valid,

binding and enforceable obligations.

3) NON-CONFLICT WITH OTHER OBLIGATIONS:

The entry into, and performance by it of, and the transactions contemplated by the Transaction

Documents do not and will not conflict with:

a) any Applicable Law including but not limited to laws and regulations regarding anti-money

laundering or terrorism financing and similar financial sanctions; or

b) its constitutional documents; or




102

c) Any agreement or instrument binding upon it or any of its assets, including but not limited to

any terms and conditions of the existing Financial Indebtedness of the Company.

4) POWER AND AUTHORITY:

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise

its entry into, performance and delivery of, the Transaction Documents to which it is a party and

the transactions contemplated by those Transaction Documents.

5) VALIDITY AND ADMISSIBILITY IN EVIDENCE:

All approvals, authorizations, consents, permits (third party, statutory or otherwise) required or

desirable:

a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the

Transaction Documents to which it is a party;

b) to make the Transaction Documents to which it is a party admissible in evidence in its

jurisdiction of incorporation; and

c) For it to carry on its business, and which are material, have been obtained or effected and are

in full force and effect.

6) NO DEFAULT:

No Event of Default or potential Event of Default has currently occurred and is continuing as of

the date hereof or would reasonably be expected to result from the execution or performance of

any Transaction Documents or the issuance of the Debentures. To the best of the Company’s

knowledge, 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 the foregoing, constitute) a default or termination event

(however described) under any other agreement or instrument which is binding on the Company

or any of its assets or which might have a Material Adverse Effect as on the date hereof.

7) PARI PASSU RANKING:

Its payment obligations under the Transaction Documents rank at least pari passu with the claims

of all of its other unsecured creditors, except for obligations mandatorily preferred by law

applying to companies generally.

8) NO PROCEEDINGS PENDING:

There is no litigation, arbitration or administrative proceedings of or before any court, arbitral

body or agency, which if adversely determined may have a Material Adverse Effect.

9) NO MISLEADING INFORMATION:




103

All information provided by the Company to the Debenture Holder(s) for the purposes of this

Issue is true and accurate in all material respects as at the date it was provided or as at the date

(If any) on which it is stated.

10) COMPLIANCE:

It is in compliance in all respects with all Applicable Law for the performance of its obligations

with respect to this Issue, including but not limited to environmental, social and taxation related

laws, for them to carry on their business.

11) ASSETS:

Except for the security interests and encumbrances created and recorded with the Ministry of

Corporate Affairs (available using CIN: L65910GJ1995PLC026064 on the website

http://www.mca.gov.in/mcafoportal/showIndexOfCharges.do under the heading Index of

Charges), the Company 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 necessary for the conduct of its

business as it is being, and is proposed to be, conducted.

12) FINANCIAL STATEMENTS:

a) Its financial statements most recently supplied to the Debenture Trustee were prepared in

accordance with IND AS consistently applied save to the extent expressly disclosed in such

financial statements.

b) Its financial statements most recently supplied to the Debenture Trustee as of March 31, 2020

give a true and fair view and represent its financial condition and operations during the

relevant financial year save to the extent expressly disclosed in such financial statements.

13) SOLVENCY:

a) The Company is able to, and has not admitted its inability to, pay its debts as they mature and

has not suspended making payment on any of its debts and it will not be deemed by a court to

be unable to pay its debts within the meaning of Applicable Law, nor in any such case, will it

become so in consequence of entering into the Debenture Trust Deed.

b) The value of the Assets of the Company is more than its respective Liabilities (taking into

account contingent and prospective liabilities) and it has sufficient capital to carry on its

business.

c) As on the date hereof, the Company has not taken any corporate action nor has taken any

legal proceedings or other procedure or steps in relation to any bankruptcy proceedings.

14) NATURE OF REPRESENTATIONS AND WARRANTIES




104

The Company hereby expressly represents and warrants that each of the representations and

warranties set out hereinabove is true and accurate as on the date of the Debenture Trust Deed and

shall continue to be true and accurate on each day until the Maturity Date, and nothing contained

in the said representations and warranties is / will be misleading or designed to create an

inaccurate, incomplete or false picture.




105

ANNEXURE II - RATING LETTER AND RATING RATIONALE

AS PER ENCLOSURE 2




106

ANNEXURE III - CONSENT LETTER FROM THE DEBENTURE TRUSTEE

AS PER ENCLOSURE 3




107

ANNEXURE IV - APPLICATION FORM


CIN: L65910GJ1995PLC026064

Date of Incorporation: 25/05/1995

Registered Office: 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel, Ashram Road, Ahmedabad –


Telephone No.: 079-41106501

Website: www.mas.co.in

DEBENTURE APPLICATION FORM SERIAL NO. - - - - - - - -

Issue of 1,000 (one Thousand) rated, senior, redeemable, taxable, transferable, listed, non-

convertible debentures Rs. 10,00,000/- (Rupees Ten Lakh Only) each, aggregating upto Rs.

100,00,00,000/- (Indian Rupees One Hundred Crores Only), fully paid-up for cash at par to

the face value on a private placement basis (the “Issue”).

Debentures applied for:

Number of Debentures: _________________In words ______________

Amount Rs. ________________/-in words (Rupees __________________ Only)

DETAILS OF PAYMENT:

NEFT/ RTGS

No. _____________ Drawn on_____________________ Bank

Funds transferred to INDIAN CLEARING CORPORATION LTD

Dated ____________

Total Amount Enclosed

(In Figures) Rs. __________________________/- (In words) Indian Rupees

_____________________ Only

APPLICANT’S NAME IN FULL (CAPITALS)

SPECIMEN SIGNATURE




108

APPLICANT’S ADDRESS:

ADDRESS

STREET

CITY

PIN PHONE FAX

APPLICANT’S PAN/GIR NO. ________________ IT CIRCLE/WARD/DISTRICT ____

I AM / WE ARE ( ) COMPANY ( ) OTHERS ( ) SPECIFY __________

We have read and understood the terms and conditions of the issue of Debentures including the

risk factors described in the information memorandum dated July 21, 2020 ("IM") and the

private placement offer cum application letter dated July 21, 2020 ("PPOA") issued by the Issuer

(collectively, the "Debt Disclosure Documents") and have considered these in making our

decision to apply. We bind ourselves to the terms and conditions of the Debt Disclosure

Documents and wish to apply for allotment of the Debentures. We request you to please place our

name(s) on the register of holders.

Name of the Authorised

Signatory(ies)

Designation Signature

_______________________

Applicant’s Signature

We the undersigned, are agreeable to holding the Debentures of the Company in dematerialised

form. Details of my/our Beneficial Owner Account are given below:

DEPOSITORY NSDL ( ) CDSL ( )

Depository Participant Name

DP-Id

Beneficiary Account Number

Name of the Applicant(s)

Applicant Bank Account:

NEFT/ RTGS

(Settlement by way of Cheque / Demand Draft /

Pay Order / Direct Credit / ECS /

NEFT/RTGS/other permitted mechanisms)




109

FOR OFFICE USE ONLY

DATE OF RECEIPT ________________ DATE OF CLEARANCE

________________

(Note: Cheque and Drafts are subject to realisation)

We understand and confirm that the information provided in the Debt Disclosure Documents is

provided by the Issuer and the same has not been verified by any legal advisors to the Issuer, and

other intermediaries and their agents and advisors associated with this Issue. We confirm that we

have, for the purpose of investing in these Debentures, carried out our own due diligence and

made our own decisions with respect to investment in these Debentures and have not relied on

any representations made by anyone other than the Issuer, if any.

We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account as

mentioned above would get credited to the extent of allotted Debentures, ii) the Applicant must

ensure that the sequence of names as mentioned in the Application Form matches the sequence of

name held with our Depository Participant, iii) if the names of the Applicant in this application

are not identical and also not in the same order as the Beneficiary Account details with the above

mentioned Depository Participant or if the Debentures cannot be credited to our Beneficiary

Account for any reason whatsoever, the Company shall be entitled at its sole discretion to reject

the application or issue the Debentures in physical form.

_________________

Applicant’s Signature

FOR OFFICE USE ONLY

DATE OF RECEIPT ______________________ DATE OF CLEARANCE _________________

(Note: Cheque and Drafts are subject to realisation)

-------------------------------------------------(TEAR HERE)--------------------------------------------

- ACKNOWLEDGMENT SLIP -

(To be filled in by Applicant) SERIAL NO.

Received from _______________________________________________

Address________________________________________________________________

______________________________________________________________________

Cheque/Draft/UTR # ____________________Drawn on__________________________ for Rs.

_____________________ on account of application of Debenture

_____________________

___________________

Initial of the Officer of MAS Financial Services Limited designated to keep the record




110

INSTRUCTIONS

1. Application form must be completed in full, IN ENGLISH.

2. Signatures must be made in English or in any of the Indian languages. Thumb

Impressions must be attested by an authorized official of the Bank or by a

Magistrate/Notary Public under his/her official seal.

3. Application form, duly completed in all respects, must be submitted with the respective

Collecting Bankers. The payment is required to be made only to the following account of

ICCL, in accordance with the terms of the EBP Guidelines:

Beneficiary A/C Name: INDIAN CLEARING CORPORATION LTD

Bank Account No. ICCLEB

IFSC CODE: HDFC0000060

Bank Name HDFC Bank

Branch Address: Fort-400001

The Company undertakes that the application money deposited in the above-mentioned

bank account shall not be utilized for any purpose other than

a) for adjustment against allotment of securities; or

b) for the repayment of monies where the company is unable to allot securities.

4. Receipt of applicants will be acknowledged by the Company in the “Acknowledgement

Slip” appearing below the application form. No separate receipt will be issued.

5. All applicants should mention their Permanent Account No. or their GIR No. allotted

under Income Tax Act, 1961 and the Income Tax Circle/Ward/District. In case where

neither the PAN nor the GIR No. has been allotted, the fact of non-allotment should be

mentioned in the application form in the space provided. Income Tax as applicable will

be deducted at source at the time of payment of interest including interest payable on

application money.

6. The application would be accepted as per the terms of the manner outlined in the

transaction documents for the private placement.




111

ANNEXURE V - ILLUSTRATION OF DEBENTURE CASH FLOWS

Illustration of Bond Cash Flows

Company MAS Financial Services Limited

Face Value (per security) Rs. 10,00,000/- (Rupees Ten Lakhs only)

Issue Date / Date of Allotment Issue Opening Date: July 23, 2020 Deemed Date of Allotment: July 24, 2020

Redemption Date / Maturity Date Redemption Date / Maturity Date: January 24,2022

Coupon Rate 9.00% payable annually

Frequency of the Coupon Payment with specified dates

Coupon payable Annually. (Subject to Business Day Convention).

Day Count Convention Actual/Actual

Cash Flow

Coupon Payment Date

Principal O/s

Principal

Payment Date

Interest Payment

Date

Cash flow

July 24, 2020 - (100,00,00,000) July 24, 2021 100,00,00,000 - 9,00,00,000 9,00,00,000

Jan 24,2022 50,00,00,000 100,00,00,000 4,53,69,863 104,53,69,863




112

ANNEXURE VI - RELATED PARTY TRANSACTIONS

(Amount in Rs. Lakhs)

Entity Particulars

Transactions during the

Year

Balances outstanding at the

end Year

31-

Mar-20

31-

Mar-19

31-

Mar-18

31-

Mar-20

31-

Mar-19

31-

Mar-18

M Power Micro

Finance Private

Limited

Loans and

Advances 2250 2600 3250 1300 500 4791.67

Paras Capfin

Company Private

Limited (till 11 May

2018)

Loans and

Advances - - 1400 - - 1105.56

Prarthna Marketing

Private Limited

Dividend

paid 151.97 - - -

Anamaya Capital

LLP

Dividend

paid 7.21 - - -




113

ANNEXURE VII - AUDITED FINANCIAL STATEMENTS

The audited financial statements (including balance sheets, profit and loss statements and cash flow statements) of the Issuer for financial years 2017-18,

2018-19 and 2019-20 are:

Standalone Financial Statement and Cash Flow:

(Rs. in Lakhs)

STANDALONE BALANCE SHEET

As at

31 March

2020

As at

31 March

2019

As at

31 March

2018

ASSETS

Financial assets

Cash and cash equivalents 1,02,446.81 35,577.06 3,795.95

Bank balance other than cash and cash equivalents 190.55 1,278.75 1,021.66

Loans 3,33,776.56 3,21,853.69 2,54,628.00

Investments 3,750.03 2,227.05 1,336.54

Other financial assets 8,900.09 3,411.10 2,924.49

Total financial assets 4,49,064.04 3,64,347.65 2,63,706.64

Non-financial assets

Income tax assets (net) 221.38 95.16 172.04

Deferred tax assets (net) - - -

Property, plant and equipment 1,198.56 1,140.92 5,636.66

Capital work-in-progress 4,821.34 4,564.43 -

Right-of-use asset 128.44 - -

Other intangible assets 11.07 10.95 17.40

Other non-financial assets 234.54 196.05 235.57

Total non-financial assets 6,615.33 6,007.51 6,061.67

Total assets 4,55,679.37 3,70,355.16 2,69,768.31

LIABILITIES AND EQUITY

LIABILITIES




114

Financial liabilities

Payables

(I)Trade payables

(i) total outstanding dues of micro enterprises and

small enterprises

- -

(ii) total outstanding dues of creditors other than micro

enterprises and small enterprises 753.08 553.36 321.95

(II) Other payables

(i) total outstanding dues of micro enterprises and

small enterprises

- -


enterprises and small enterprises - -

Debt securities 5,989.18 5,981.78 5,974.41

Borrowings (other than debt securities) 2,52,021.34 1,95,982.99 1,22,517.72

Other financial liabilities 90,693.87 72,419.32 60,216.46

Total financial liabilities 3,49,457.47 2,74,937.45 1,89,030.54

Non-financial liabilities

Current tax liabilities (net) - 1,621.04 565.95

Provisions 45.65 15.84 75.57

Deferred tax liabilities (net) 446.12 860.55 1,267.20

Other non-financial liabilities 1,858.73 1,938.58 1,442.99

Total non-financial

liabilities 2,350.50 4,436.01 3,351.71

Total liabilities 3,51,807.97 2,79,373.46 1,92,382.25

EQUITY

Equity share capital 5,466.20 5,466.20 5,466.20

Other equity 98,405.20 85,515.50 71,919.86

Total equity 1,03,871.40 90,981.70 77,386.06

Total liabilities and equity 4,55,679.37 3,70,355.16 2,69,768.31




115

(Rs. in Lakhs)

STANDALONE STATEMENT OF PROFIT AND LOSS Year ended

31 March

2020

Year ended

31 March

2019

Year ended

31 March

2018

I. Revenue from operations

Interest income 55,917.14 46,452.03 35,935.41

Gain on assignment of financial assets 10,748.75 9,414.46 8,005.67

Fees and commission income 1,573.89 1,366.85 1128.09

Total revenue from operations 68,239.78 57,233.34 45,069.17

Other income 71.75 24.68 20.45

Total income 68,311.53 57,258.02 45,089.62

II. Expenses

Finance costs 27,201.70 20,413.33 17,047.14

Fees and commission expense 601.88 404.35 506.03

Impairment on financial assets 8,675.65 5,452.73 4,275.05

Employee benefits expenses 5,240.79 4,714.63 3,796.71

Depreciation and amortization 231.51 128.70 120.24

Others expenses 2,912.24 2,751.33 2,828.73

Total expenses 44,863.77 33,865.07 28,573.90

Profit before exceptional items and tax (I - II) 23,447.76 23,392.95 16,515.72

Exceptional items - - -

III. Profit before tax 23,447.76 23,392.95 16,515.72

IV. Tax expense:

Current tax 6,291.68 8,226.41 5,727.00

Short / (excess) provision for tax relating to prior years -96.10 8.93 -0.12

Net current tax expense 6,195.58 8,235.34 5,726.88

Deferred tax (credit) / charge -569.13 -53.90 445.69

Net tax expense 5,626.45 8,181.44 6,172.57




116

V. Profit for the year (III - IV) 17,821.31 15,211.51 10,343.15

VI. Other comprehensive income

(A) Items that will not be reclassified to profit or loss:

Remeasurement of the defined benefit liabilities -29.68 -14.62 -

Income tax impact on above 7.47 5.11 -

Net gain on equity instruments measured through other comprehensive income - -1.10 0.77

Income tax impact on above - 0.38 -0.27

Total (A) (22.21) (10.23) 0.50

(B) Items that will be reclassified to profit or loss: -

Loans and advances through other comprehensive Income 658.09 (994) 2,471.74

Income tax relating to items that will be reclassified to profit or loss -165.64 347 -863.72

Total (B) 492.45 (646.51) 1,608.02

-

Other comprehensive income (A+B) 470.24 -656.74 1,608.52

VII. Total comprehensive income (V + VI) 18,291.55 14,554.77 11,951.67

VIII. Earnings per equity share (of Rs. 10 each): -

Basic (Rs.) 32.60 27.83 21.42

Diluted (Rs.) 32.60 27.83 21.42




117

STANDALONE STATEMENT OF CASH FLOWS Year ended 31 March 2020

Year ended 31 March 2019

Year ended 31 March 2018

A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax 23,447.76 23,392.95 16,515.72

Adjustments for :

Depreciation and amortisation 231.50 128.70 120.24

Finance cost 27,201.70 20,413.33 17,047.14

Provision for impairment on financial assets 2,256.51 1,448.85 558.67

Loss assets written off (net) 6,419.14 4,003.88 3,716.38

(Profit) / loss on sale of property, plant and equipment 0.82 (1.76) 0.37

Loss on sale of repossessed assets 327.03 200.44 184.97

Dividend distribution tax on preference dividend -

-

8.57

Interest income (52,821.75) (44,425.83) (34,742.38)

Interest income from bank deposits (1,155.47) (654.11) (150.92)

Income received in advance (19.12) (19.61) (6.57)

Income from debt component of OCPS investment in subsidiary (32.78) - -

Interest income from NCD measured at amortised cost (8.26) -

Financial guarantee commission income (4.69) (13.50) (26.19)

Dividend income (6.33) (2.59) (5.39)

Gain on derecognition of leased asset (0.83) - -

IPO discount on shares issued to employees of subsidiary - - (6.80)

Net gain on equity instruments measured through other comprehensive income - (1.10) 0.77

(17,612.53) (18,923.30) (13,301.14)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 5,835.23 4,469.65 3,214.58

Changes in working capital:

Adjustments for (increase)/decrease in operating assets:

Loans (17,683.92) (72,223.33) (62,451.38)

Deposits given as collateral (13.51) 296.92 (306.03)

Bank balance other than cash and cash equivalents 1,001.28 (989.22) (14.95)

Other non-financial asset (395.21) (175.54) 40.00

Adjustments for increase/(decrease) in operating liabilities: -

Trade payables 199.75 231.41 66.07




118

Security deposits from borrowers (1,161.95) 7,458.79 8,784.66

Other financial and non-financial liabilities 18,185.38 5,168.69 1,825.13

Provisions 29.81 161.63 (60.20) (60,292.48) 13.14 (52,043.36)

CASH GENERATED FROM / (USED IN) OPERATIONS 5,996.86 (55,822.83) (48,828.78)

Interest income received 47,331.77 43,531.92 34,089.11

Finance cost paid (26,489.73) (20,584.23) (16,400.01)

B. Income tax paid (net) (7,942.84) 12,899.20 (7,103.37) 15,844.32 (5,465.55) 12,223.55

CASH FLOW GENERATED FROM / (USED IN) OPERATING ACTIVITIES (A) 18,896.06 (39,978.51) (36,605.23)

CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipments and intangible assets, including capital advances

(453.77) (192.93) (4,844.66)

Proceeds from sale of property, plant and equipments and intangible assets 0.53 3.75 0.13

Change in Earmarked balances with banks 86.92 732.13 (162.13)

Interest income from bank deposits 1,172.74 764.49 89.07

Purchase of investments at amortised cost (500.00) (900.00) -

Purchase of optionally convertible preference shares ("OCPS") in subsidiary (1,000.00) - -

Dividend received 6.33 2.59 5.39

Interest income on Investment measured at amortised cost 5.49 - -

Interest income from investments and deposits

Purchase of investments (0.77)

C. Proceeds from redemption of equity instruments - 9.96 -

CASH FLOW GENERATED FROM / (USED IN) INVESTING ACTIVITIES (B) (681.76) 419.99 (4,912.97)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares (net) - - 28,071.01

Shares issue expenses - - (2,399.91)

Proceeds from debt securities and borrowings 95,425.00 67,490.00 18,696.98

Repayments of borrowings (42,349.22) (21,522.21) (18,052.75)

Net increase in working capital borrowings 3,316.41 27,779.82 16,408.52

Repayment of lease liabilities (88.69) - -




119

Dividends paid including dividend distribution tax (7,648.05) (2,407.98) (995.45)

CASH FLOW GENERATED FROM / (USED IN) FINANCING ACTIVITIES (C) 48,655.45 71,339.63 41,728.40

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C)

66,869.75 31,781.11 210.20

Cash and cash equivalents at the beginning of the year 35,577.06 3,795.95 3,585.75

Cash and cash equivalents at the end of the year (refer note 1 below) 1,02,446.81 35,577.06 3,795.95




120

Consolidated Financial Statement and Cash Flow:

CONSOLIDATED BALANCE SHEET FOR FY 2019-20, FY 2018-19, FY 2017-18

(Rs. in Lakhs)

As at

31 March 2020

As at

31 March 2019

As at

31 March

2018

ASSETS

Financial assets

Cash and cash equivalents 1,04,554.26 39,699.95 4,938.23

Bank balance other than cash and cash equivalents 192.60 1,280.68 1,024.89

Loans 3,59,222.60 3,48,267.74 2,74,567.03

Investments 500.00 - 9.49

Other financial assets 9,072.40 3,577.58 3,059.38

Total financial

assets 4,73,541.86 3,92,825.95 2,83,599.02

Non-financial assets

Inventories - - -

Income tax assets (net) 223.22 95.16 189.03

Deferred tax assets (net) 60.13 69.41 116.60

Investment Property -

Biological assets other than bearer plants -

Property, plant and equipment 1,282.91 1,239.67 5,758.96

Capital work-in-progress 4,821.34 4,564.43 -

Right-of-use asset 167.65 - -

Other intangible assets 11.80 12.01 19.08




121

Intangible assets under development -

Goodwill - - -

Other non-financial assets 317.82 245.26 270.63

Total non-

financial

assets

6,884.87 6,225.94 6,354.30

Total assets 4,80,426.73 3,99,051.89 2,89,953.32


LIABILITIES

Financial liabilities

Derivative financial instruments - - -

Payables -

(I)Trade payables -

(i) total outstanding dues of micro enterprises and small

enterprises

- - -


enterprises and small enterprises

-

812.78 600.10 360.75

(II) Other payables -

(i) total outstanding dues of micro enterprises and small

enterprises

- - -


enterprises and small enterprises

- - -

-

Debt securities 5,989.18 5,981.78 5,974.41

Borrowings (other than debt securities) 2,73,599.82 2,21,327.10 1,39,492.71

Other financial liabilities 91,066.88 73,275.78 61,628.69

Total financial 3,71,468.66 3,01,184.76 2,07,456.56




122

liabilities

Non-financial liabilities

Current tax liabilities (net) - 1,621.96 566.00

Provisions 47.22 17.19 84.09

Deferred tax liabilities (net) 444.41 860.55 1,267.20

Other non-financial liabilities 1,879.45 1,935.32 1,424.95

Total non-

financial

liabilities

2,371.08 4,435.02 3,342.24

Total

liabilities 3,73,839.74 3,05,619.78 2,10,798.80

EQUITY

Equity share capital 5,466.20 5,466.20 5,466.20

Other equity 99,131.64 86,088.59 72,452.68

Equity

attributable to

the owners of

the Holding

Company

1,04,597.84 91,554.79 77,918.88

Non-controlling interest 1,989.15 1,877.32 1,235.64

Total equity 1,06,586.99 93,432.11 79,154.52

Total

liabilities and

equity

4,80,426.73 3,99,051.89 2,89,953.32




123

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED 31 MARCH 2020, 31 MARCH 2019, 31 MARCH 2018

(Rs. in Lakhs)

Year ended

31 March 2020

Year ended

31 March 2019

Year ended

31 March 2018

I. Revenue from operations

Interest income 59,690.94 49,668.65 38,448.22

Gain on assignment of financial assets 10,930.43 9,414.46 8,005.67

Fees and commission income 1,584.52 1,374.54 1,223.64

Total revenue from operations 72,205.89 60,457.65 47,677.53

Other income 35.91 12.01 3.06

Total income 72,241.80 60,469.66 47,680.59

II. Expenses

Finance costs 29,611.20 22,366.05 18,625.73

Fees and commission expense 601.88 404.35 506.03

Impairment on financial assets 8,894.53 5,543.65 4,351.88

Employee benefits expenses 5,869.00 5,204.63 4,226.33

Depreciation and amortization 285.05 160.36 164.03

Others expenses 3,119.95 2,989.81 3,029.59

Total expenses 48,381.61 36,668.85 30,903.59

Profit before exceptional items and tax (I - II) 23,860.19 23,800.81 16,777.00

Exceptional items - - -

III. Profit before tax 23,860.19 23,800.81 16,777.00

IV. Tax expense:

Current tax 6,391.18 8,340.61 5,813.40




124

Short / (excess) provision for tax relating to prior years (95.99) 7.12 (0.69)

Net current tax expense 6,295.19 8,347.73 5,812.71

Deferred tax (credit) / charge (561.14) (7.57) 445.26

Net tax expense 5,734.05 8,340.16 6,257.97

V. Profit for the year (III - IV) 18,126.14 15,460.65 10,519.03

Less: Share of profit attributable to non-controlling interest (130.38) (106.96) (81.06)

Profit for the year attributable to the owners of the Holding Company 17,995.76 15,353.69 10,437.97

VI. Other comprehensive income

(A) Items that will not be reclassified to profit or loss:

Remeasurement of the defined benefit liabilities (33.82) (11.54) 2.53

Income tax impact on above 8.51 4.25 (0.70)

Net gain on equity instruments measured through other comprehensive income - (1.10) 0.77

Income tax impact on above - 0.38 (0.70)

Total (A) (25.31) (8.01) 2.33

(B) Items that will be reclassified to profit or loss:

Loans and advances through other comprehensive Income 665.35 (993.77) 2,471.74

Income tax relating to items that will be reclassified to profit or loss (167.47) 347.26 (863.72)

Total (B) 497.88 (646.51) 1,608.02

Other comprehensive income (A+B) 472.57 (654.52) 1,610.35

VII. Total comprehensive income (V + VI) 18,598.71 14,806.13 12,129.38

Less: Share of other comprehensive income attributable to non-controlling interest (0.94) (0.90) (0.74)

Other comprehensive income for the year attributable to the owners of the Holding

Company

471.63 (655.41) 1,609.61




125

VIII. Profit for the year attributable to

Owners of the Holding Company 17,995.76 15,353.69 10,437.97

Non-controlling interest 130.38 106.96 81.06

IX. Other comprehensive income attributable to

Owners of the Holding Company 471.63 (655.42) 10,437.97


X. Total comprehensive income attributable to

- - -

Owners of the Holding Company 18,467.39 14,698.27 10,437.97


XI. Earnings per equity share (of Rs. 10 each):

Basic (Rs.) 32.92 28.28 21.74

Diluted (Rs.) 32.92 28.28 21.74




126

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2020, 31 MARCH 2019, 31 MARCH 2018

(Rs. in Lakhs)

Year ended

31 March 2020

Year ended

31 March 2019

Year ended

31 March 2018


Net profit before tax 23,860.19 23,800.81 16,777.00

Adjustments for :

Depreciation and amortisation 285.05 160.36 164.03

Finance cost 29,611.20 22,366.05 18,625.73

Provision for impairment on financial assets 2,448.57 1,465.00 571.62

Loss assets written off (net) 6,445.96 4,078.65 3,780.26

(Profit) / loss on sale of property, plant and equipment 0.82 (1.77) 0.37

Loss on sale of repossessed assets 327.03 200.44 184.97

Dividend distribution tax on preference dividend - - 8.57

Interest income (56,478.17) (47,416.64) (37,211.97)

Interest income from investments and deposits (1,272.86) (729.36) (192.65)

Income received in advance (19.12) (19.61) (6.57)

Interest income from NCD measured at amortised cost (8.26) - -

Gain on derecognition of leased asset (0.95) - -

Net gain on equity instruments measured through other

comprehensive income - (1.10) 0.77

(18,660.73) (19,897.98) (14,074.87)

OPERATING PROFIT BEFORE WORKING

CAPITAL CHANGES 5,199.46 3,902.83 2,702.13



Loans and advances (16,921.09) (78,789.28) (65,300.55)

Deposits given as collateral (14.01) 297.08 (308.56)




127

Bank balance other than cash and cash equivalents 1,001.16 (987.92) (16.62)

Other financial and non-financial asset (435.65) (186.61) 15.80

Adjustments for increase/(decrease) in operating liabilities: -

Trade payables 212.68 239.35 84.82

Security deposits from borrowers (1,142.45) 6,339.82 9,297.51

Advance from borrowers - - -

Other financial and non-financial liabilities 17,627.08 5,410.21 1,843.55

Provisions 30.03 357.75 (67.37) (67,744.72) 14.29 (54,369.76)

CASH GENERATED FROM / (USED IN)

OPERATIONS 5,557.21 (63,841.89) (51,667.63)

Interest income received 50,985.09 46,490.98 36,553.73

Finance cost paid (28,863.68) (22,251.58) (17,925.06)

Income tax paid (net) (8,045.21) 14,076.20 (7,197.87) 17,041.53 (5,559.25) 13,069.42

CASH FLOW FROM / (USED IN) OPERATING

ACTIVITIES (A) 19,633.41 (46,800.36) (38,598.21)

B. CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure on property, plant and equipment and

intangible assets, including capital advances (461.41) (200.45) (4,854.23)

Proceeds from sale of property, plant and equipment and

intangible assets 0.53 3.79 0.13

Change in Earmarked balances with banks 86.92 732.13 (162.13)

- Fixed deposits matured

- Fixed deposits placed

Interest income from bank deposits 1,290.14 839.74 130.80

Interest income on investments measured at amortised cost 5.49

Purchase of investments measured at amortised cost (500.00) - (0.77)

Profit on redemption of long term investment - - -

Income on distribution on PTC held as non-current

investments - - -




128

Proceeds from redemption of investments - 9.96 -

CASH FLOW (USED IN) INVESTING ACTIVITIES

(B) 421.67 1,385.17 (4,886.20)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares (net) - - 28,064.21

Proceeds from issue of shares of subsidiary - 200.00 -

Shares issue expenses - - (2,399.91)

Proceeds from Issue of convertible cumulative preference

shares - - -

Proceeds from debt securities and borrowings 99,825.00 84,790.01 31,600.97

Proceeds from issue of commercial papers - - -

Redemption of compulsorily convertible debentures - - -

Redemption of convertible cumulative preference shares - - -

Redemption of Commercial Papers - - -

Repayments of borrowings (20,230.21) (27,137.42) (22,263.64)

Net increase / (decrease) in working capital borrowings (26,983.91) 24,773.61 9,805.84

Repayment of principal component of lease liability (118.78) - -

Dividends paid including dividend distribution tax (7,692.87) (2,449.29) (1,038.07)

CASH FLOW FROM / (USED IN) FINANCING

ACTIVITIES (C) 44,799.23 80,176.91 43,769.40

NET INCREASE / (DECREASE) IN CASH AND

CASH EQUIVALENTS (A+B+C) 64,854.31 34,761.72 284.99

Cash and cash equivalents at the beginning of the year 39,699.95 4,938.23 4,653.24

Cash and cash equivalents at the end of the year (refer

note 1 below) 1,04,554.26 39,699.95 4,938.23




129

ANNEXURE VIII - CORPORATE STRUCTURE/ ORGANISATION STRUCTURE

Board of Directors

Mr. Kamlesh C. Gandhi - Founder, Chairman & Managing Director

He manages the Company with the guidance and support of the Board. He is a proficient and

experienced industry practitioner with a brilliant track record. He has over two decades managed

and propelled the Company’s growth. His understanding and vision is among the key enablers for

the consistent performance of the Company.

Mr. Mukesh C. Gandhi - Co-Founder, Whole-Time Director & CFO

He is actively involved in the strategic decisions of the Company. He is a well known industry

expert and a popular public speaker on various issues in Finance. He is an academician and

Chairman of Gujarat Finance Company Association and also the Committee Member of Finance

Industry Development Council (FIDC).

Mrs. Darshana S. Pandya - Director & CEO

She is responsible for leading the operations at MAS and also the relationship of the Company

with its more than 100 NBFC-MFI & NBFC Partners. She is a commerce graduate who joined the

Company in 1996 as a junior executive and through her hard work, immaculate working and

determination to excel, accompanied by enabling support from the management; rose to the level

of Director & CEO.




130

Mr. Balabhaskaran N. Nair - Independent Director

He is a management graduate with two decades of experience in the consultancy and financial

sector. He has a number of management consultancy inputs from his rich experience. He has done

his engineering from IIT-Madras, MBA from IIM-Bangalore and CFA from ICFAI.

Mr. Chetan R. Shah - Independent Director

He holds bachelor’s degrees in commerce and law (general) from Gujarat University. He is also a

qualified chartered accountant registered with the Institute of Chartered Accountants of India. He

has over 34 years of experience in the financial services sector and has in the past worked with the

Natpur Co-operative Bank as the Manager – Finance.

Mr. Umesh R. Shah - Independent Director

He is a Chartered Accountant. He has more than three decades of experience in the diverse fields

connected with Finance, Accounting, Auditing and Taxation. He also has 5 years hands-on

experience of working in an NBFC.

Mrs. Daksha Niranjan Shah- Independent Director

She is a business graduate from Indian Institute of Management (IIM), Ahmedabad, specialising

in Finance and Marketing and also a student of Economics and Statistics. She has rich experience

of more than three decades in diversified fields of Textile, Chemical and Financial services. She

has undergone various courses such as the course in Microfinance at the Economic Institute,

Boulder, Colorado, USA.

MAS Financial Services Limited is holding Company of MAS Rural Housing & Mortgage

Finance Limited.

Brief details of subsidiary company:

MAS Rural Housing & Mortgage Finance Limited (MRHMFL) is the housing finance company

registered with National Housing Bank. MRHMFL (MAS Rural Housing & Mortgage Finance

Ltd. – subsidiary of MFSL) aims at serving the middle income and the lower income sector of the

economy, especially in the semi urban and rural areas, which are reckoned to be the key drivers of

the sector in the coming decades. Full-fledged efforts are on to execute efficiently, as per the

detail planning. Being aware of the challenges involved in serving this class of the society, a very

cautious approach is adopted in building up volumes. Nevertheless, Company is quite confident

of building substantial volumes in the near future. The Company’s rural initiative will also start

yielding results shortly.

The Company has 69 branches Pan India as on March 31, 2020. It is worth mentioning that

despite of credit worthy customer class, ascertaining the title of the property remains a

challenging job. The Company is actively involved with all the stake holders to smoothen the

process and is assertive in getting the right set of documents.




131

ANNEXURE IX - MATERIAL CONTRACTS

The contracts and documents referred to hereunder are material to the Issue, and may be

inspected at the registered office of the Company between 10.00 am to 4.00 pm on

working days.

Sr. No. Nature of Contract

1 Certified true copy of the Memorandum & Articles of Association of the Issuer.

2

Resolution dated June 16, 2020 passed by the Board of Directors read together

with the resolution dated July 20, 2020 passed by the finance committee of the

Board of Directors, authorizing issue of Debentures offered under terms of this


3

Resolutions each dated June 27, 2018 passed by the shareholders of the

Company authorizing the borrowing by the Company and the creation of

security, respectively.

4 Copies of Annual Reports of the Company for the last three financial years.

5 Letter from the Rating Agency assigning the credit rating for the Issue.

6 Letter from the Debenture Trustee giving its consent to act as Debenture Trustee.

7 Letter from Registrar and Transfer Agent.

8 Certified true copy of the certificate of incorporation of the Company.

9 Certified true copy of the tripartite agreement between the Company, the

Registrar and NSDL/CDSL.

11 (If so required by the Applicants/to the extent applicable) Evidence of receipt of

an "in-principle" approval from BSE in respect of the listing of the Debentures.

12 Debenture Trustee Agreement to be executed by the Issuer and the Debenture

Trustee.

13 Debenture Trust Deed to be executed by the Issuer and the Debenture Trustee.

14 Deed of Hypothecation to be executed by the Issuer and the Debenture Trustee.




132

ANNEXURE X – BOARD RESOLUTION AND SHAREHOLDERS RESOLUTION

As Per Enclosure 5

BSR&Co. LLPChartered Accountants

Independent Auditor's Report

To the Members ofMAS Financial Services LimitedReport on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial staternents of MAS Financial Services Limited(hereinafter referred to as the 'Holding Cornpany') and its subsidiary - MAS Rural Housing &Mortgage Finance Limited (the Holding Company and its subsidiary together referred to as the'Group'), which cornprise the consolidated balance sheet as at 3l March 2020, and the consolidatedstatement of profit and Ioss (including other comprelrensive inconre), the consolidated statentent ofchanges in equity and the consolidated statement of cash flows for the year then ended, and notes tothe consolidated financial statements, including a surnmary of significant accounting policies andother explanatory infornration (hereinafter ref-erred to as the 'consolidated financial statements').

In our opinion and to the best of our infonnatiorr and according to the explanations given to us, andbased on the consideration of repofi of other ar"rditor on separate financial statements of a subsidiary, as

were audited by the other auditor, the afbresaid consolidated financial staternents give the informationrequired by the Companies Act,2013 (the 'Act') in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India, of the consolidated state ofaffairs of the Group as at 3l Marclr 2020, ol its consolidated profit and other comprehensive income,consolidated changes in equity and consolidated cash florvs for the year then ended.

Basis for Opinion

We conducted our audit in accordance rvith the Standards on Auditing ('SAs') specified under section

143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Auclit of the Consolieluted Financial Statements section of our report. We are

independent of the Group in accordance lvith the ethical requirements that are relevant to our audit ofthe consolidated financial statements in terms of the Code of Ethics issued by the Institute of CharteredAccountants of India and the relevant provisions of the Act, and we have fulfilled our other ethicalresponsibilities in accordance rvith these requirements. We believe that the audit evidence obtained byus along with the consideration of audit repo( of the other auditor referred to in the 'Other Matter'paragraph belor.v. is sLrfficient and appropriate to provide a basis for our opinion on the consolidatedfinancial statenrents.

Emphasis of matter

As described in Note 7.1 to the consolidated financial statements, in respect of accour.rts overdue butstandard as at 29 Februan' 2020 u'here rloratoriun.r beneflt has been granted. the staging of thoseaccounts as at 3l March 2020 is based on the days past due status as on 29 FebrLrary 2020. inaccordance with Reserve Bank of lndia ('RBI') COVID-19 Regulatory Package.Ilcq

5th Floor, Lodha Excelus.Apollo Mills CompoundN. M. Joshi Marg,MahalaxmiMumbai - 400 01 1

lndia

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Telephone +91 Q2\ 4345 5300Fax +91 l22l 4345 5399

Begistered Office:5lh Floor, Lodha Excelus

Apollo Mills CompoundN. M. JoshiMarg, l/al]alaxmiMumbai 400 011 . lndia

BSR&Co.LLP

Independent Auditor's Report (Continued)

MAS Financial Services LimitedEmphasis of matter (Conlinued)

As described in Note 40.1 (iv) to the consolidated financial statements, the extent to which the COVID-l9 pandemic will impact the Group's financial performance is dependent on future developments,which are highly unceftain.

Our opinion is not rnodified in respect of the above matters

Key Audit Nlatters

Key audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in fonring our opinionthereon, and we do not provide a separate opinion on these matters.

Key audit matterlmpairment of loans

How the matter was addressed in our audit

Charge: INR 2,448.57 for the year ended 3l March 2020Provision: INR 6,173.43 as at 3l March 2020Re/'er to lhe accountingpolicies in the consolidatedfinancial statements: Note 3.6 to lhe consolidatedfinancialstatemenls: 'Significant accounting policies' and Note 7 to the consolidatedfinancial slolements: 'Loans'Subjective estimate Our key audit procedures included:

Recognition and rneasurement of impairment ofloans and advances involve significant management

-judgement.

Design / controls

Evaluated the appropriateness of the irnpairmentprinciples based on the requirements of Ind AS 109,our business understanding and industry practice.Under Ind AS 109, Financial Instruments,

allowance for loan losses are determined usingexpected credit loss ('ECL') model. The Group'sirnpairment allowance is derived from estimatesincluding the historical default and loss ratios.Management exercises judgement in determiningthe quantum ofloss based on a range offactors.

The most significant areas are

Understood management's revised processes, systemsand controls implemented in relation to impainnentallowance process, parlicularly in view of COVID-19regulatory package.

Evaluated management's controls over collation ofrelevant information used for determining estimatesfor management overlays on account of COVID- 19.

Tested the controls over 'Governance Framework' inline with RBI guidance.

Assessed the design and irnplementation of keyinternal financial controls over loan irnpairrnentprocess used to calculate the irnpairment charge.

Tested review controls over measllrement ofimpairment allowances and disclosures in standalonefinancial statements.

Segmentation of loan bookDetermination of exposure at defaultLoan staging criteriaAssigning internal rating to Retail AssetChannelCalculation of probability of default / Lossgiven defaultConsideration of probability weightedscenarios and fonvard looking macro-economic factors

The application ol ECL rrodel requires several datainputs. This increases the risk of conrpleteness andaccuracv of the data that has been used to createassumptions in the model. In sonre cases. data isunavailable and leasonable alternatives have beenapplied to allou calculations to be perfonned.

^,.

BSR&Co.LLP


MAS Financial Services LimitedKey Audit Matters (Continued)

,l$

Key audit matterlmpact of COVID-19

On I I March 2020, the World Health Organisationdeclared the Novel Coronavirus (COVID- l9)outbreak to be a pandemic.

We have identified the irnpact of, and uncertaintyrelated to the COVID l9 pandemic as a key elementand consideration for recognition and measurementof impairment of loans and advances on account of:

Short-term and long-term macroeconomiceffect on businesses in the country and globallyand its consequential first order and cascadingnegative impact on revenue and employmentgeneration opportunities;

impact of the pandemic on the Group'scustomers and their ability to repay dues; and

application of regulatory package announcedby RBI on asset classification and provisioning.

Management has conducted a qualitativeassessment of significant increase in credit risk('SICR') of the loan portfolio with respect to themoratorium benefit to borrowers prescribed by RBIand considered updated macroeconomic scenariosand the use of management overlays to reflectpotential impact of COVID-19 on expected creditlosses on its loan portfolio.

How the matter was addressed in our auditSubstantive tests

Assessed the appropriateness of management'srationale for determination of criteria for SICRconsidering both: adverse effects of COVID 19 andmitigants in the form of RBI / Government financialrelief package.

Assessed the appropriateness of changes made inmacroeconomic factors and management overlays tocalibrate the risks that are not yet fully captured by theexisting model.

Corroborated through independent check and enquiriesthe reasonableness of management's assessment ofgrading of severity of impact of COVID-I9 onsegments of its loan portfolio and the resultantimpairment provision computed.

We used our modelling specialist to test the modelmethodology and reasonableness of assumptions used.

Focused on appropriate application of accountingprinciples and reasonableness of assumptions used inthe model.

Performed test of details over of calculation ofimpairment allowance for assessing the completeness,accuracy and relevance ofdata.

Model calculations testing through re-performancewhere possible.

Appropriateness of management's judgments was alsoindependently reconsidered in respect of calculationmethodologies. segmentation, economic factors, theperiod ofhistorical loss rates used and the valuation ofrecover] assets and collateral.

Assessed the appropriateness of the additionalflnancial statements disclosures rrrade by the Groupresarding inrpact of COVID- 19.

BSR&Co.LLP


MAS Financial Services LimitedKey Audit Matters (Continued)

Key audit matterInformation technologyInformation Technology ('lT') systenrs and controls

The Group's key financial accounting and reportingprocesses are highly dependent on the automatedcontrols in information systems, such that there existsa risk that gaps in the IT control environrnent couldresult in the financial accounting and reportingrecords being materially m isstated.

We have focused on user access management,change management, interface controls and systemapplication controls over key financial accountingand repofting systems.

Horv the matter was addressed in our audit

Our audit procedures to assess the lT system accessmanagement included the following:

General IT controls / application controls anduser access management. We tested a sample of key controls operating over

the information technology in relation to financialaccounting and reporting systems, includingsystem access to program and data, programchange, and system change management,program development and computer operations.

We tested the design and operating effectivenessof key controls over user access managementwhich includes granting access rights, new usercreation, removal of user rights, user accessreview and preventative controls designed toenforce segregation of duties.

For a selected group of key controls overfinancial and reporting system, we independentlyperformed procedures to determine that thesecontrols remained unchanged during the year orwere changed following the standard changemanagement process.

We evaluated the design, implementation andoperating effectiveness of the significant accountsrelated IT automated controls which are relevantto the accuracy of system calculation, and theconsistency of data transmission.

Other areas that were independently assessed

included password policies, program changemanagement procedures, system configurations,system interface controls, controls over changesto applications and that business users anddevelopers did not have access to rnigratechanges in the production environrnent and theprivileged access to applications, operatingsystem or databases is restricted to authorized

rsonnel

Other Information

The Holding Cornpany's tnanagernent and the Board of Directors are responsible for the otherinformation. The other irtfornration cornprises tlre infbrmation included in the Holding Cornpany'sannltal repoft, but does not include Ihe consolidated financial statemetrts and our auditor's reportthereon. The other infonnatiott is expected to be nrade available to us after the date of this auditor'sreport.

Our opinion ott the consolidated t-inartcial statelrents does not cover the other inforrnation and rve do notexpress any fbrrn of assurance conclusion thereon.

h,\

BSR&Co.LLP


MAS Financial Services LimitedOther Information (Contin ue d)

In connection with our audit of the consolidated financial statements, our responsibility is to read theother information identified above when it becomes available and, in doing so, consider whether theother information is materially inconsistent with the consolidated financial statements or our knowledgeobtained irr the audit, or otherwise appears to be materially misstated. When we read the annual repoft,if we conclude that there is a material misstatement therein, we are required to communicate the matterto those charged with governance.

Management's and Board of Directors' Responsibilities for the Consolidated FinancialStatements

The Holding Company's Managernent and the Board of Directors are responsible for the preparation andpresentation of these consolidated financial statements in term of the requirements of the Act that give a

true and fair view of the consolidated state of affairs, consolidated profit and other comprehensiveincome, consolidated statement of changes in equity and consolidated cash flows of the Group includingits accordance with the accounting principles generally accepted in India, including the IndianAccounting Standards ('Ind AS') specified under section 133 of the Act. The respective Managementand the Board of Directors of the companies included in the Group are responsible for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguarding the assets ofeach company and for preventing and detecting frauds and other irregularities: the selection and

application of appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design, implementation and maintenance of adequate internal financial controls, thatwere operating effectively forensuring accuracy and completeness of the accounting records, relevant tothe preparation and presentation of the consolidated financial statements that give a true and fair viewand are free from material misstatement, whether due to fraud or error, which have been used fbr thepurpose of preparation of the consolidated financial statements by Managernent and Directors of the

Holding Conrpany, as aforesaid.

In preparing the consolidated financial statements, the respective Managernent and tlre Board ofDirectors of the companies included in the Group are responsible for assessirrg the ability of each

company to continue as a going concern, disclosing, as applicable, matters related to going concern and

using the going concern basis of accounting unless the respective Board of Directors either intends toliquidate the company or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the cornpanies included in the Group is responsible for overseeingthe financial reporting process of each company.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statenrents as

a lvhole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Reasonable assurarrce is a high level of assurance. but is not a

guarantee that an audit conducted in accordance rvith SAs rvill ahvays detect a material misstaternentwhen it exists. Misstatements can arise from fraud or error arrd are corrsider-ed nraterial i1. individuallyor in the a-q-sre-qate. they could reasonably be expected to influence the econorric decisions of users

taken on the basis of these consoliclated financial stater.nelrts.

{,\

BSR&Co.LLP



Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (Corrtinued)

As part of an audit in accordance with SAs, rve exercise professional judgrnent and maintainprofessional skepticism throughor:t the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk ofnot detecting a material misstatement resultirrg from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissiorrs, nrisrepresentations, or the override ofinternal control.

Obtain an understarrding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143 (3) (i) of the Act, we arealso responsible for expressing our opinion on the internal financial controls with reference to theconsolidated financial statements and the operating effectiveness of such controls based on ouraudit.

a

a

a

Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by Management and the Board of Directors.

Conclude on the appropriateness of Management and the Board of Directors use of the goingconcern basis of accounting in preparation of the consolidated financial statemeuts and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the appropriateness of this assumption. If we conclude that a

material uncertainty exists, we are required to drarv attention in our auditor's report to the relateddisclosures in the consolidated financial statements or, if such disclosr-rres are inadequate, tomodifu our opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.

Evaluate the overall presentation, stnrcture and content of the consolidated financial statements,including the disclosures, and whether the consolidated finarrcial statements represent theunderlying transactions and events in a rnanner that achieves fair presentation.

o Obtain sufficient appropriate audit evidence regarding the financial information of such entities orbusiness activities within the Group to express an opinion on the consolidated financialstaternents. We are responsible for the direction, supervision and perfonnance of the audit offinancial information of sr,rch entities included in the consolidated financial statements of whichwe are the independent auditors. For the other entities included in the consolidated financialstatements, which have been audited by other auditor, such other auditor rernain responsible forthe direction, supervision and perfonnance of the audits carried out by them. We remain solelyresponsible for our audit opiniorr. Our responsibilities in this regard are further described in thesection titled 'Other Matter' in this audit reporl.

We believe that the audit evidertce obtained by Lrs along rvith the consideration of audit reports of theother auditor referred to in the Other Matter paragraph belou,. is sufllcient and appropriate to provide a

basis for our audit opinion on the consolidated firrancial statenteltts.

We comnrunicate with those clrarged with governance of the Holding Cornpany and such other entitiesincluded in the consolidated financial statenrerits of u,hich we are the independent auditors regarding,among otlrer rnaftet's. the planned scope and tirring of the audit and si-snificant audit findings. includingany significant deficiencies in internal controlthat lve identifr. durin-u our audit.

I,fOn

a

BSR&Co.LLP

Independent Auditor's Repo rt (Co nti n ued)


Auditor's Responsibilities for the Autlit of the Consolidated Financial Statements (Continued)

We also provide those charged with governance with a statement that we have cornplied with relevantethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thoLrght to bear on our independence, and where applicable, relatedsafeguards.

From the matters cornmunicated rvith those charged with governance, we deternrirre those matters thatwere of rnost significance irr the audit of the consolidated financial statements of the current period andare therefore the key audit nratter"s. We describe these matters in our auditor's repoft unless law orregulation precludes public disclosLrre about the matter or when, in extremely rare circumstances, wedetermine that a matter shoLrld not be coml.nunicated in our report because the adverse consequerrces ofdoing so would reasonably be expected to outweigh tlie public interest benefits of such cornmurrication.

Other Matter

We did not audit the finarrcial statenrents of a subsidiary whose financial statements reflect total assets

of Rs. 21,937.27 lac as at 3l March 2020, total revenues of Rs. 3,970.81 lac and net cash outflowsamounting to Rs.2,015.44 lac for tlte year ended on that date, as considered in the consolidatedfinancial statements. These financial statements have been audited by other auditor whose report havebeen furnished to us by Managelnent and our opinion on the consolidated financial statements, in so faras it relates to the amounts and disclosures inclLrded in respect of this subsidiary and our report in termsof sub-section (3)of Section 143 of tlre Act, in so far as it relates to the aforesaid subsidiary is based

solely on the ar:dit reports of the other ar-rditor.

Our opinion on the consolidated financial statements, and our Reporl on Other Legal and RegulatoryRequirements belolv, is not nrodified in respect of the above matter with respect to our reliance on thework done and the report of the other auditor.

Report on Other Legal antl Regulatory'Requirements

As required by Section 143 (3 ) of the Act, based on our audit and on the consideration of report ofthe other auditor on separate financial slatements of a subsidiary as were audited by other auditor,as noted in the 'Other Matter' paragraph. we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of ourkrrowledge and belief were necessary for the purposes of our audit of the aforesaidconsolidated fi nancial statenrents.

b) In our opinion, proper books of accolnrt as required by law relating to preparation of thealoresaid consolidated flnancial statelrents have been kept so far as it appears frorn ourexarnination of those books and the reporl of the other auditor.

c) The consolidatecl balarrce sheet. the corrsolidated statement of profit and loss (inclLrding otherconrprelrensive incorne). the consolidated staternent of changes in equity and the consolidatedstatenrent olcash florvs dealt with by this Repo( are in agreement with the relevant books ofaccor.nrt rnaintained fbr the purpose of preparation of the consolidated financial staternents.

d) Irr our opirrion. the afbresaid consolidated financial statements cornply with the Ind ASspecified uncler section 133 of the Act.

A

4..

BSR&Co.LLP

Independent Auditor's Repo rt (Contin ued)


Report on Other Legal and Regulatory Requirements (Continued)

e) On the basis of the written representations received from the directors of the HoldingCompany as on 31 March 2020 taken on record by the Board of Directors of the HoldingCompany and the reports of the statutory auditor of its subsidiary company incorporated inIndia, none of the directors of the Group companies incorporated in India is disqualified as on3 I March 2020 from being appointed as a director in terms of Section 1 64 (2) of the Act.

0 With respect to the adequacy of the internal financial controls with reference to consolidatedfinancial statements of the Holding Company and its subsidiary company incorporated inIndia and the operating effectiveness of such controls, refer to our separate Report in'Annexure A'.

B. With respect to the other matters to be included in the Auditor's Report in accordance with RuleI I of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of ourinforn-ration and according to the explanations given to us and based on the consideration of therepofts of the other auditor on the separate financial statements of the subsidiary as noted in the'Other Matter' paragraph:

i. Tlrere were no pending litigations as at 31 March 2020 which would impact theconsolidated financial position of the Group:-

ii. The Group did not have any material foreseeable losses on long-term contracts includingderivative contracts during the year ended 31 March 2020;

iii. There are no amounts which are required to be transferred to the Investor Education andProtection Fund by the Holding Company or its subsidiary company incorporated in Indiadrrring the year ended 31 March 2020; and

iv. The disclosures in the consolidated financial statements regarding holdings as well as

dealings in specified bank notes during the period from 8 November 2016to 30 December2016 have not been made in the consolidated financial statements since they do not pertainto the financial year ended 31 March 2020.

C. With respect to the matter to be included in the Auditor's report under section 197 (16)

In our opinion and according to the information and explanations given to us and based on thereport of the statutory auditor of a subsidiary company incorporated in India which was r.rot

audited by us, the remuneration paid during the current year by the Holding Company and itssubsid iary company to its directors is in accordance with the provisions of Section 197 of the Act.The remuneration paid to any director by the Holding Company and its subsidiary company is rrot

in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairshas not prescribed other details under Section 197 (16) which are required to be commented uponby us.

FoTBSR&Co.LLP

Fin.n'sRegistration"t,'i';:;:i;;1i';";;;Z;';

ffi^((.r{'tL"'

MLrr-nbai

3 .lLrne 2020

Sameer MotaPorlner

Membership No.109928UDIN : 20 I 09928AAAADN85 B7

BSR&Co.LLP

Annexure A to the Independent Auditor's report on the consolidated financialstatements of MAS Financial Services Limited for the year ended 3l March2020

Report on the internal financial controls rvith reference to the aforesaid consolidated financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

(Referred to in paragraph A (f) under 'Report on Other Legal and Regulatory Requirements'section ofour report ofeven date)

Opinion

In conjunction with our audit of the consolidated financial statements of the Company and its subsidiary(collectively referred as 'Group') as of and for the year ended 3 I March 2020,we have audited the internalfinancial controls with reference to the consolidated financial staternents of MAS Financial ServicesLimited (hereinafter referred to as the 'Holding Conrpany') and a company incorporated in India underthe Companies Act,20l3 (the'Act') which is its subsidiary company, as of that date.

In our opinion, the Holding Company and a company incorporated in India which is its subsidiarycompany, have, in all material respects, adequate internal financial controls with reference to theconsolidated financial statements and such internal financial controls were operating effectively as at 31

March 2020, based on the internal financial controls with refereuce to the consolidated financialstatements criteria established by such companies considering the essential components of such internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Repoftingissued by the Institute of Charlered Accountants of India (the 'Guidance Note').

Management's Responsibility for Internal Financial Controls

The respective company's mattagement and the Board of Directors are respolrsible for establishing andmaintaining internal financial controls with reference to the consolidated financial statements based onthe criteria established by the respective company considering the essential components of internal controlstated in the Guidance Note. These responsibilities include the design, irnplementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring the orderly and efficientconduct of its business, including adherence to the respective conrpany's policies, the safeguarding of itsassets, the prevention and detection offrauds and errors, the accuracy and cornpleteness ofthe accountingrecords, and thetirnely preparation of reliable frnancial infonnation, as reqr.rired underthe Act.

Emphasis of Matter

As described in Ernphasis of Matter paragraph of our reporl to the consolidated financial statements, theextent to wlrich the COVID l9 pandemic will have impact on the Cornpany's internal financial controlswith reference to the consolidated financial staterrents is dependent on luture developrnents, which arehighly unceftain.

Our opinion is not modified in respect of this nratter.

Auditor's Responsibility

Our responsibility is to express an opirrion on the internal financial controls with refererrce to theconsolidated financial staterxents based on our audit. We conducted our audit in accordance witlr theGuidance Note and the Standards on Auditing. prescribed under section 143 ( l0) of the Act, to the extentapplicable to an aLrdit of internal financial corrtrols rvith reference to the consolidated finarrcial staterrents.Those Standards and the Guidance Note require that u,e cornply rvith ethical requirerrents and plan andperform the audit to obtain reasonable assurance about rvhether adequate internal financial controls withreference to the consolidated financial statenrer.lts rvere established and ntaintained arrd if such controlsoperated effectively in all material respects.

Our audit involves perfornrin-u procedures to obtaiu audit eviderrce about the adequaci, of the ilrternalflnancial controls r'vith ref-erence to the consoliclated financial staternents and their operatirrg ef'lectiveness.

h

BSR&Co.LLP

Annexure A to the Independent Auditor's report on the consolidatedfinancial statements of MAS Financial Services Limited for the year ended31 March 2020 (Continued)

Auditor's Responsibility (Co rrti n ued)

Our audit of internal financial controls with reference to the consolidated financial statemeltts includedobtaining an understanding of internal finarrcial controls with reference to the consolidated financialstatements, assessirtg the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness ofthe internal controls based on the assessed risk. The procedures selected dependon the auditor's judgement, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditorof the relevant subsidiary cornpany in tenns of their reports referred to in the Other Matters paragraphbelow, is sufficient and appropriate to provide a basis for our audit opinion on the internal financialcontrols with reference to the consolidated financial statements.

Meaning of Internal Financial controls with Reference to the Consolidated Financial Statements

A company's internal financial controls with reference to the consolidated financial statements is a processdesigned to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of the consolidated financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial controls with reference to the consolidatedfinancial statemetrts includes those policies and procedures that (1) perlain to the maintenance of recordsthat, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of thecompany, (2) provide reasonable assurance that transactions are recorded as necessary to pernritpreparation of the consolidated financial statements in accordance with generally accepted accountingprinciples, and that receipts arrd expenditures of the company are being made only in accordance withauthorisations of managernent and directors of the company; and (3) provide reasonable assuranceregarding prevention or tinrely detection of unauthorised acquisition, use, or disposition of the cornparry'sassets that could have a nraterial ef'fect on the consolidated financial statements.

Inherent Limitations of Internal Financial controls with Reference to the Consolidated FinancialStatements

Because of the inherent limitations of intenral financial controls with reference to the consolidatedfinancial statements, inclr,rding the possibility of collusion or improper management override of controls,material misstaternents due to error or fraud may occur and not be detected. Also, projections of anyevaluation of the internal financial controls with reference to the consolidated financial statements tofuture periods are subject to the risk that the internal financial controls with reference to the consolidatedfinancial staternents may become inadequate because of changes in conditions, or that the degree olcompliance with the policies or procedures may deteriorate.

Other Matter

Our aforesaid report under Section 143 (3) (i) of the Act on the adeqr.racy and operating effectiveness ofthe internal financial controls with reference to the consolidated financial statements insofar as it relatesto a subsidiary cornpany. ivhich is a cornpany incorporated in India, is based on tlre corresponding reportof the aLrditor of sLrch conrpany irrcorporated in India.

FoTBSR&Co.LLPC herrl ere el Ac c oun I utl / s

Firnr's Registration No: I 01248W lW -100022

Crrvtcr'z 'W -'

Sameer MotaPurtrtcr

Membership No.109928UDIN : 20 I 0992BAAAADN8587

,@Murrbai3 June 2020

JruTF FINANCIAL SERVICES LIMITED

CONSOLIDATED BALANCE SHEETAS AT 31 MARCH 2O2O

({ in I-akhs)

ASSETS

Financial assets

Cash md cash equivalents

Bank balmce other than cash and cash equivalents

Loans

Investments

Other financial assets

Non-Iinancial assets

Income ta,\ assets (net)

Defered tax assets (net)

hoperty, plant and equipment

Capital work-in-progress

Right-of-use asset

Other intangble assets

Other non-finmcial assets

EQUITYEquity shae capital

Other equity

Non-controlling interest

See accompmfng notes to the flnancial statements

ln tems of our report of even date attached

FoTBSR&Co.LLPChartered Accountants

Fim's Regishation No: l01248WIV-100022

Total {inancial assets

Total non-Iinancial assets

Total assets

Total financial liabilities

Total non-financial liabilities

Total liabilities

Equity attributable to the ownem ofthe Holding Company

Total equity

Total liabilities and equity

Darshana S. Pandya(Director & Chief Executive fficer)(DrN - 07610402)

4ryRiddhi B. Bhayani(Company Secretary & Compliance fficer1(Membership No: A41206)

Ahmedabad

3 June 2020

Note no.

26

26

10(a)

10(d)

I 0(c)

I o(b)

11

As at3l March 2020

As at3l March 2019

5

67

8

9

26

15

26

16

1,04,554.26192.60

3,59,222.60

500.00

9,072.40

tq 6qq 95

1,280.68

3,48,267.74

3,577 .58

4,73,541.86 3,92,825.95

1)? ))60.13

1,282.91

4,821.34

167.65

11.80

317.82

95.16

69.41

r,239.67

4,564.43

12.01

245.26

6,884.87 6,225.94


LIABILITIES

Financial liatrilitiesPayables

(I)Trade payables

(i) total outstmding dues ofmicro enterpnses and small enterprises

(ii) total outstmding dues ofcreditors other than micro enterprises ald small enterprises

(II) Other payables

(i) total outstanding dues ofmicro enterprises md small enterprises

(ii) total outstanding dues ofcreditors other thm micro enterprises and small enterprises

Debt securities

Bonowings (other thm debt secunties)

Other financial liabilities

Non-fi nancial liabilitiesCunent ta liabilities (net)

Provisions

Defened tax liabilities (net)

Other non-financial liabilities

4,80,426.73 _____l,ex91q2_

812.78 600.1 0

12

13

11

s,989.r82,73,599.82

91,066.88

5,981.78

2,21,327.10

73,27 5.78

3,71,468.66 3,01,184.7 6

47.22

444.41

1,879.4s

1,621 .96

t7 .19

860.55

1,935.32

2,371.08 4,435.02

3,7J,839.74 3,05,6 I 9.78

17

18

s,466.20

99,t31.64s,466.20

86,088.59

1,04,597.84 91,554.79

1,989.1s 1,877.32

1,06,586.99 93,432.11

1,80,426.73 3,99,051.89

MMembership No: 109928

Samcr MotaParlner

For and on behalf ofthe

8AFof

Kamlesh C. GandhiDireclor)

(DrN - 00044852)

I

Mukesh C. GandhiChief Finmcial OJficel

(DrN - 00187086)

Cttyt(cll-\ '-'

Mumbai3 June 2020

qlthole I'ime

lfrCAF FINANCIAL SERVICES LIMITED

CONSOLIDATED STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED 3I MAR(:H 2O2O

(t in Lakhs)

I. Rwenue from operationsInterest income

Gain on msigmmt of filmcial msets

Fees md commission income

Total reenue from operationgOthq income

Total income

IL ExpenseFimce costs

Fes md commission expmse

Impaimflt on fimcial 6setsEmployee beneflits expemes

Depreciation md mortiationOthos expmes

Total expen36

Profit before exceptional items and tat (I - [)Exceptional itms

m. Profit before tax

fV. Tax expen*:Cuent tax

Short / (excess) provision for ta\ relating to prior yesNet curretrt tax expensDefened tax (credit) / chage

Net tax erperre

V. Prolit for the yer (Itr - IY)

VI. Other compreheasive income

(A) Itms that will not be recldsfied to profit or loss:

Rmecumat of the defmed bmefit tiabilities

lnmme tax impact on above

Net gain on equity immmflts mesued through otha comprehmive income

lncome tax impact on above

Total (A)(B) Items that will be reclosified to profit or loss:

Loas md advmces through other comprehmsive llcome

lncome tax relatlng to items that will be recl$sified to profit or loss

Total (B)

Other comprehensive itrcome (A+B)

VII. Total comprehersive income (V + Vf)

VItr. Profit for the y€r attributable to

Ownss of the Holdmg CompmyNon-controlling intsest

DL Other comprehensive income attributgble to

Ownas of the Holdng CompmyNon-contolling interest

)(. Total comprehensive income attributable to

Ownere of the Holding CompmyNon-contolling inttrest

XI. Earnings per equity share (of { 10 €ch):Buic (t)Diluted Ct)

Se aoompmying notes to the flmcial statments

ln tems of ou report of even date attached

FoTBSR&Co.LLP(-hdrtered Accountdnls

Fim's Regrstration No: 101248WM-100022

27

59,690.9,1

10,930..13

1,58,1.52

49,668 65

9,414.46

t,374.54

Year ended3l March 2020

Yer ended

3l Mach 2019

t9

20

7220s,89 60,457.65

35.91

7r24L8/0

29,611.2O

60t.888,894.53

5,869.00

285.05

3,1r9.95

12.01

60,469 66

2t

22

23

21

25

22.366.05

404.35

5,543.65

5,204.63

I 60.36

2,989.81

,l8J8l.6l 36,668.85

23,860.19 23,800.8 I

6391.18(e5.99)

629s.19(s61.14)

23,800.8 I

8,340.61

7.12

f.J4rn(7.s1)

23.860.19

26

26

26

5,734.05 8,340 I 6

r 8,126. l.l t546065

(33.82) (l r 54)

4258.5r(r.r0)0.38

(2s31) (8 0r)

(993 77)347.26

t97.88 (s6.51)

172.57 (654 52\

I 4.806 I 3I 8,598.71

For and on behalf

r 5,353.69

I 06.96

(655.42)

0.90

14,698 2'7

107 86

of Directors ofSericd LiFited

Krml6h C, G8ndhi& Mdndging Direclor)

(DIN - 00044852)

t7,995.16130.38

17t.63

18,467.39

131.32

0.94

32.92

32.92

28.28

2828

Mdfv)t0("tL - -.

MmbenhipNo: 109928

Samer MotaPar'tner

Da6hana S, Pandya(Director & Chief Exeantive Ofrcer)(DrN - 07610402)

,$ryRiddhi B. Bhayani(Company Secretary & Compliance Offcer)(Membership No: A41206)

Qm4^'t \ Muksh c. Gandhi

Mhok l ma l\tilt ,1 ( hk,l l:tnoniul t )fi, tt)(DIN - 00187086)

Mmbai3 Jue 2020

A}tmedabad

3 Jue 2020

665.3S(167.47'l

&cA5 FTNANCIAL SERVICES LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 3 I MARCH 2O2O

(t in Lakhs)

(A) Equity share capital

shffe of{ 10 each issued, subscribed snd fully paid

at 31 M.rch 2018

in equity shm capibl during the yea

at 31 March 2019

in equity shm capial during the )etr

5,466.20

5,466.20

at 31 March 2020

(B) Other equity

In terms ofour report ofeven date afiached

FoTBSR&Co.LLPCharlered Accountants

For and on behalf Directors of

Fim's Registration No: l0t248WAV-100022

Limited

I

MO)W|( Lry.h" - -

Sameer MotaPqrlnerMembership No: 109928

Mumbai

3 June 2020

Damhana(Director & Chief Executive Oficer)(DrN - 07610402)

Gandhi& Mqnaging Direclor)

(DrN - 00044852)

I

Mukesh C. Gandhi& C hief Financial Offi cer)

(DrN - 00187086)

,r,y t

Riddhi B. Bhayani(Comryny Secretary & Compliance Ofiicer)(Membership No: A.41206)

Ahmedabad

3 June 2020

lthole I'ime

2,756.04

7,915.45

(76.45)

3.042.29

r0,957.14

(22.89)

3.J64.26

53 04

0.50 3,?59.1r

Resewes and surplus

0.11

20r).44

0.20

(986.88)

(2,377.

109.95at 3l March 2018

in@me (net of Ees)of OCPS @nveftd inb equi0 she capie.l

dividend on equity sh{es iacluding dividend distribution(,DDI)

during the lear in sccurities premium

at 31 March 2019

61.28

261.92

(3.9i)

12,695.4E

(5.27 t

impact of lnd AS I 16 (net of hes)Prcfit for the ted

omprchensive income (net ofa\es)Interim dividend on equit] shaes including DDT

dividend on prefcr€ne shms including DDT

Final dividend on cquiq shdcs including DDT

Securitiespremium

Retainedearnings

(12.72)

72,452.64

15,353.69

0.76

193.44

42,699.41

002

Other comprehensiv€ in(ome Total

Resewe u/s. 45. Reserue fund EquityIC of RBI Act, u/s. 29-C of component of

1934 NHB Act, compoundl9a7 financial

instruments

17,755. l015,353.69

13. l5(8.19)

(1,42r.66)

Q3.04\(3-042.29\

(61.28)

(2,377.5t)

(3,564.26)

(53.04)

(0.221 4,561.,16 86,088.5927,578.60

(12.45)

t7.995.76

(24.06)

(5,27 1.84)

Capilal

for the yea

: of cheges in Grcup's interest

dividend on equity shass including DDT

dividend on preferene shtres including DDT

b resetre u/s. 45-IC ofRBl Act, 1934

to resefte u/s. r/s. 29-C ofNHB Act.1987

17.995.76

2.73 t.98

to resewe u/s- 45JC ofthe RBI AcL 1934

b resefle ils. u/s. 29-C ofNHB Act.19E7

at 3l March 2020

Eqsityinstruments

through OCI

Loans andadvances

through OCI

(0.12\ 802.35

SCA' FINANCIAL SERVICES LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 3 I MARCH 2O2O

(t in Lakhs)


Net prolit before taxAdjutmens for:Depreciation md mortisationFinmce cost

Provision for impaiment on finmcial sselsLoss assets writtetr off(net)(Profit) / loss on sale ofproperty, plmt and equipment

Loss on sale ofrepossessed assets

lnterest income

Interest income from investsnents md deposits

lncome received in advmceInterest income from NCD measwd at mortised cost

Gain on derccognition ofleased asset

Net gain on equity instrwents medued through other comprehemive income

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES

Chmges in working capital:

Adjutments for (increase/decrease in operating assets:

Loms md advmces

Deposits given as collateral

Bank balmce other thm cash md cash equivalents

Other finmcial and non-finmcial asset

AdjEtments for increue/(decrease) in operating liabilities:

Tmde payables

Secuity deposits fi-om borowersOther finmcial md non-finmcial liabilities

hovisionsCASH GENERATED FROM / (USED IN) OPERATIONS

Interest income received

Finmce cost paid

Income tu paid (net)

CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (A)

B. CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditue on property, plmt md equipment md inungible assets, including capital advaces

koceeds from sale of property, plmt md equipment md intangible msets

Chmge in Emaked balmces with burks

Interest income from bmk deposits

lnterest income on investnents measued at morlised cost

Purchase ofinvestments memued at amortised cost

Proceeds from redemption of investrnents

CASH FLOW (USED IN) INVESTING ACTIVITIES (B)


Proceeds from issue of shres of subsidiary

Proceeds from debt secuities md borowingsRepalments of bonowings

Net increase / (decrease) in working caprtal bonowings

Repalment of principal component of lease liabilityDividends paid including dividend distribution tuCASH FLOW FROM / (USED IN) FINANCING ACTIVITIES (C)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C)

Cash md cash equivalents at the begiming of &e yea

Cash and cash equivalents at the end of the yur (refer note I below)

(16,921.09)

(14.01)

1,001. I 6

(43s.6s)

212.68

(1,142.4s)

17,627.08

30.03 357.75

5,557.21

Yer ended

3l Mdch 2019

23,860.1 9 23.800.8 I

160.36

22.366.05

1,465.00

4,078.65

(r.77)200.44

(47,416.64)(729.36)

(1e.61)

( l. r0)(18,660.73) (19,897.98)

5,199.46 3,902.83

(78,789.28)

291.08

(987.92)

(186.61)

Year ended

31 March 2020

2E5.05

29,611.20

2,148.576,445.96

0.E2

327.03

(s6,47t.r7)(r,272.86)

(19.12)(8.26)(0.es)

239.35

6,339.82

5,410.21

(67.3'7) (67,744.12)

s0,985.09(28,863.68)

(8,04s.2 l) 14,076.20

46,490.98

(22,25t.s8)(7,t97 .87)

(63,84 1.89)

t7,041.53

19,633.,11 (46,800.36)

(200 45)

3.79

732.t3

839.74

9.96

1.385.r

(461.41)

0.s3

86.92

1,290.14

5.49

(s00.00)

421.67

99,82s.00(20,230.21)

(26,983.9r)(r rE.78)

(7,692.87)

200.00

84,790.01

(2',7,131 .42)24,773.61

(2.449.2e)

44,799.23

64,854.31

39,699.95

80.176.91

tmS-1,^S

_____.!,q85!2!_ 39,699.9s

34,',|61.72

4.938.23

dECAF FINANCIAL SER\{CES LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWSFoR l'HE YEAR ENDED 3 1 MARCH 2O2O

({ in Lakhs)

Nots;

Cash md bank baluces at the end ofthe yeil comprises:

(a) Cash on hmd(b) Balmces with bmksTotal

Bank deposits with original mnuity of 3 months or less

Cash and cash equivalents as per the balance sheet

As at3l March 2020

As at

3l Mach 2019

21.19

78,532.77

25.01

-1 1.024.91

78,554.26

26,000.00

31,049.95

8,650.00

1.04.ss4.26 39.699.9s

2 The above cash flow statement has been prepued wdo the "lndirect method" as set out in the Ind AS - 7 on statement ofcash flows specified mder section 133 ofthe Compmies

Act,2013.

3 TheGroupappliedlndASl16atlApril 20lg,uingthemodifiedretrospectiveapproach.Underthisapproach,compmtiveinfomtionisnotrestatedmdthecmulativeeffectofinitially applying Ind AS I 16 is recognised in retained emings at the date of initial application.

4 The Group ro at 3l Mach 2020 hm mdmm bonowing ficilities momting to t 77,880.55 lakhs that my be available for futue opemting activities ud to s€ule caPital

comitnents.

5 Change in liabilities arising from financing activities

I April 2019 Cash flows Non cash changes*

'7.40

(838 07)

3l March 2020

securities 5,981.78

2,21,327 10

5,989.1 8

2,"13,599.82other thm debt securities 53.1 I 0 79

liabilities from fi nancing activities

* Non-cash chmges reprcsents the effect of mortiztion of trmsaction cost.

See acmmpmying notes to the fimcia.l statements

In tem ofou report ofeven date attached

FoTBSR&Co.LLPChartered AccowtantsFim's Registmtion No: 101248W,4V-100022

A/rt]a Cl-rL .

Sameer MotaPartner

Memberhip No: 109928

Mmbai3 Jue 2020

(Direcror & Chief Execurive Oficer)(DrN - 076r0402)

*y

For and on the Directors of

6bF Limited

,

Kamlsh C. Gandhi& Manoging Direclor)

(DrN - 000,14852)

I

(ll/hole l'imeMukesh C. Gandhi

Chief Financial Ofrcer)(DrN - 00187086)

I

Riddhi B. Bhayani(Company Secretary & Compliance Oficer)(Membenhip No: ,A41206)

Ahmedabad

3 Jue 2020

M

BSR&Co. LLPChartered Accountants

Independent Auditor's Report

To the Members ofMAS Financial Services LimitedReport on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of MAS Financial Services Limited (the'Company'), which comprise the standalone balance sheet as at 3l Marcll 2020, and the standalonestatement of profit and loss (including otlrer comprehensive income), the standalone statement ofchanges in equity and the standalone statement of cash flows for the year then ended, and notes tothe standalone financial statements, including a summary of the significant accounting policies andother explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, theaforesaid standalone financial statements give tlre infonnation required by the Companies Act, 2013(the 'Act') in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India, of the state of affairs of the Company as at 3l March 2020,andprofit and other comprehensive income, changes in equity and its cash florvs for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ('SAs') specified under section143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Slatements sectiorr of our repoft. We are

independent of the Company in accordance with the Code of Ethics issued by the Institute of Cha(eredAccountants of India together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunder, and we havefulfilled our other ethicalresponsibilities in accordance rvith these requirernents and the Code of Ethics.We believe that the audit eviderlce we have obtained is sLrfficient and appropriate to provide a basis forour opirrion on the standalone financial statemerlts.

Bmphasis of matter

As described in Note 7.1 to the standalone financial statelnents, in respect of accourrts overdue butstarrdard as at 29 February 2020 where rnoratoriurn benefit has been granted, the staging of thoseaccounts as at 3 I March 2020 is based on the days past due status as on 29 February 2020, inaccordance r.vith Reserve Bank of India ('RBI') COVID-19 RegLrlatory Package.

As described in Note 42.1 (iv) to the standalone financial statements, the exterrt to which the COVID-19pandenric will irnpact the Conrpany's financial performance is dependent on future developments,which are highly unce(ain.

Our opinion is not rnodified in respect of the above nratters.

5th Floor, Lodha Excelus,Apollo Mills CompoundN. M. Joshi Marg,MahalaxmiMumbai - 400 011lndia

B S R & Co (a partnership firm withReqistration No. 8461223) @nverled intoB S R & Co. LLP (a Limited Liability, Partnershipwith LLP Begistration No. AAB-8181)with elfect f rom October 'l4, 20'l 3

Telephone +91 (221 4345 5300Fax +91 (22\ 4345 5399

Registered Office:5th Floor, Lodha Excelus

Apollo Mills CompoundN. M. Joshi Marg, MahalaxmiMumbai ' 400 011 . lndia

4\

BSR&Co.LLP

Independent Auditor's Report (Contin ued)


Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in ouraudit of the standalone financial statements of the current period. These matters were addressed in thecontext of our audit of the standalone financial statements as a whole, and in forming our opinionthereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

Charge: INR 2,256.51 for the year ended 31 March 2020Provision: INR 5,856.44 as at 3l March 2020Refer to the accountingpolicies in the standalonefinancial statentents: Note 3.6 to the standalonefinancialstatements: 'Significant accounting policies' and Note 7 to the standalonefinancial statements: 'Loans'Subjective estimate Our key audit procedures included:

Recognition and measurement of impairrnent ofloans and advances involve significant managementjudgement.

Design / controls

Evaluated the appropriateness of the impairmentprinciples based on the requirements of Ind AS109, our business understanding and industrypractice.

Key audit matterImpairment of loans

Under Ind AS 109, Financial Instruments, allowancefor loan losses are determined using expected creditloss ('ECL') model. The Cornpany's impairmentallowance is derived frorn estimates including thehistorical default and loss ratios. Managementexercises judgernent in detemining the quantum ofloss based on a range of factors.

The rnost significant areas are:

Segmentation of loan bookDetermination of exposure at defaultLoan staging criteriaAssigning internal rating to Retail AssetChannelCalculation of probability of defhult / Lossgiven defaultConsideration of probability weiehtedscenarios and forrvard lookinc macro-economic factors

The application of ECL model requires several datainputs. This increases the risk of completeness and

accuracy of the data that has been used to create

assumptions in the model. In sorne cases, data isunavailable and reasonable alternatives have beenapplied to allow calculations to be performed.

How the matter was addressed in our audit

Understood management's revised processes,

systerns and controls implernented in relation toimpairment allowance process, particularly in viewof COVID-19 regulatory package.

Evaluated management's controls over collation ofrelevant information used for determining estimatesfor management overlays on account of COVID-t9.

Tested the controls over 'Governance Framework'in line with RBI guidance.

Assessed the design and irnplementation of keyinternal financial controls over loan irnpairrnentprocess used to calculate the impainnent charge.

Tested review controls overimpairment allowances andstandalone fi nancial statements.

measurement ofdisclosures in

/,,\

BSR&Co.LLP



Key Audit Matters (Continued)

Key audit matterImpact of COVID-19

On I I March 2020, lhe World Health Organisationdeclared the Novel Coronavirus (COVID-19)outbreak to be a pandernic.

We have identified the impact of, and uncerlaintyrelated to the COVID l9 pandemic as a key elementand consideration for recognition and measurementof impairment of loans and advances on account of:

Shoft-term and long-term macroeconomiceffect on businesses in the country and globallyand its consequential first order and cascadingnegative irnpact on revenue and employmentgeneration opportun ities;

impact of the pandernic on the Company'scustomers and their ability to repay dues; and

application ofregulatory package announced byRBI on asset classification and provisioning.

Management has conducted a qualitative assessment

of significant increase in credit risk ('SICR') of theloan portfolio with respect to the moratorium benefitto borrowers prescribed by RBI and consideredupdated macroeconomic scenarios and the use ofmanagement overlays to reflect potential impact ofCOVID-I9 on expected credit losses on its loanportfolio.

How the matter was addressed in our auditSubstantive tests

Assessed the appropriateness of management'srationale for determination of criteria for SICRconsidering both: adverse effects of COVID l9and mitigants in the form of RBI / Governmentfi nancial rel ief package.

Assessed the appropriateness of changes made inmacroeconomic factors and management overlaysto calibrate the risks that are not yet fully capturedby the existing model.

Corroborated through independent check and

enquiries the reasonableness of management'sassessment of grading of severity of impact ofCOVID-19 on segments of its loan portfolio and

the resultant impairment provision cornputed.

We used our modelling specialist to test the rrodelmethodology and reasonableness of assumptionsused.

Focused on appropriate application of accountingprinciples and reasonableness of asstrrrptions usedin the model.

Performed test of details over of calculation ofimpairment allowance for assessing thecompleteness, accuracy and relevance ofdata.

Model calculations testing through re-performancewhere possible.

Appropriateness of management's judgments was

also independently reconsidered in respect ofcalculation methodologies, segmentation,economic factors, the period of historical lossrates used and the valuation ofrecovery assets andcollateral.

Assessed the appropriateness of the additionalfinancial statements disclosures made by theCompany reqarding impact ol COVID- I 9.

IV

BSR&Co.LLP



Key Audit Matters (Continued)

Other Information

The Company's matragement and the Board of Directors are responsible for the other inforrnation. Theother infonnation comprises the information included in the Comparry's annual report. but does notinclude the standalone financial staterrents and our anditor's report thereon. The other infonnation isexpected to be rnade available to us after the date of this auditor's repoft.

Our opinion on the standalone financial staternents does not cover the other infbrrlation and we do notexpress any fonl ofassurance conclusion thereon.

4\

Key audit matterInform ation technology

Information Technology ('lT') systems and controls

The Company's key financial accounting andreporting processes are highly dependent on theautomated controls in information systems, such thatthere exists a risk that gaps in the IT controlenvironment could result in the financial accountingand reporting records being materially misstated.

We have focused on user access management,change management, interface controls and systemapplication controls over key financial accountingand reporting systems.

How the matter rvas addressed in our audit

Our audit procedures to assess the IT system accessmanagement included the following:

General lT controls / application controls and useraccess management

We tested a sample of key controls operating over theinformation technology in relation to financialaccounting and reporting systems, including systemaccess to program and data, program change, andsystem change management, program developmentand computer operations.

We tested the design and operating effectiveness ofkey controls over user access management whichincludes granting access rights, new user creation,removal of user rights, user access review andpreventative controls designed to enforce segregationof duties.

For a selected group of key controls over financialand reporting system, we independently performedprocedures to deterrnine that these controls remainedunchanged during the year or were changed followingthe standard change management process.

We evaluated the design, implementation andoperating effectiveness of the significant accountsrelated lT automated controls which are relevant tothe accuracy of system calculation, and thecorrsistencr of data transrnission.

Other areas that were independently assessed

included password policies, program changemanagernent procedures, system configurations,system interface controls, controls over changes toapplications and that business users and developersdid not have access to migrate changes in theproduction environment and the privileged access toapplications, operating system or databases isrestricted to authorized personnel.

BSR&Co.LLP



Other Information (Contin ued)

In connection with our audit of tlre standalone financial statements, our responsibility is to read theother information identified above when it becomes available and, in doing so, consider whether theother information is materially inconsistent with the statement standalone financial staternents or ourknowledge obtained in the audit, or otherwise appears to be materially misstated. When we read theannual report, if we conclLrde that there is a rnaterial misstatement therein, we are required tocommunicate the matter to those charged with governance.

Management's and the Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and the Board of Directors are responsible for the matters stated insection 134 (5) of the Act with respect to the preparation of these standalone financial statements thatgive a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes inequity and cash flows of the Corr-rpany in accordance with the accounting principles generallyaccepted in India, including the Indian Accounting Standards ('Ind AS') specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for saf-eguarding of the assets of the Company and for preventingand detecting frauds and other irregularities, selection and application of appropriate accountingpolicies; rnaking judgrnents and estimates that are reasonable and prudent; and design,implementation and mairttenarrce of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness ofthe accounting records, relevant to the preparationand presentation of the standalone financial statements that give a true and fair view and are free fromrnaterial misstatement. whether due to fraud or error.

In preparing the standalone financial statenrelrts, Management and the Board of Directors are responsiblefor assessing the Company's ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and Lrsing the going concern basis of accounting unless the Board of Directorseither intends to liquidate the Compatty or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtairr reasonable assurance about whether the standalone financial statements as awhole are free from material nrisstatenrent, rvhether due to fraud or error, and to issue an auditor,sreport that includes our opittion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit condr.rcted in accordance with SAs will always detect a material misstatementwhen it exists. Misstatetnetlts can arise frotn fi'aud or error and are considered rrraterial if, individuallyor in the aggregate. they cottld reasonably be expected to influence the econornic decisions of userstaken on the basis of these standalone financial statements.

As parl of an audit irt accordarrce rvitlr SAs, we exercise professional jLrdgrnent and maintainprofessional skepticisrn throu_uhout the audit. We also:

o ldentify and assess the risks of nraterial rnisstatement of the standalone financial statements,whether due to fi'aud or error. design and perform audit procedures responsive to those risks, andobtain audit evidence that is sulficient and appropriate to provide a basis for our opinion. The riskof not detecting a Illaterial t.t'tisstatetrertt resulting from fraud is higher than for one resulting frorlerror. as fraud tnar'' ittvolve collLtsion. forgery. intentional ornissions, misrepresentations, or theoverride of internal control.

4^

a

BSR&Co.LLP

Independent Auditor's Repo rt (Conti n ued)

MAS Financial Services LimitedAuditor's Responsibilities for the Audit of the Standalone Financial Statements (Continued)

Obtain an urrderstanding of internal control relevant to tlre audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143 (3) (i) of the Act, we are

also respolrsible for expressing our opinion on whether the company has adequate intenralfirrancial controls with reference to standalone financial statements in place and the operatirrgeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures in the standalone financial statements made by Management andthe Board of Directors.

Conclude on the appropriateness of Management and the Board of Directors use of the goingconcern basis of accounting and, based on the audit evidence obtained, whetlrer a materialtncertainty exists related to events or conditions that may cast significant doubt on theCornpany's ability to continue as a going concern. If we conclude that a material unceftaintyexists, we are required to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or, if such disclosures are inadequate, to modif, our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor's report.However, future events or conditions may cause the Company to cease to corrtinue as a goingconcern.

. Evaluate the overall presentation, structure and content of the standalone financial statements,including the disclosures, and whether the standalone financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We comrnunicate with those charged with governance regarding, arnong other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We also provide those charged with govemance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and otherrnatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

From the matters communicated with those charged with governance, we determine those matters thatwere of rnost significance in the audit of the standalone financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor's report unless law orregtrlation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetemine that a matter should not be communicated in our repoft because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

l. As reqLrired by the Companies (Auditor's Reporl) Order,20l6 (the'Order') issued by the CentralGovernntettt in tenns of section 143 (1 l) of the Act, r.ve give in the'Annexure A' a staternent onthe matters specified in paragraphs 3 and 4 of the Order. tothe extent applicable.

(A) As required by Section 143 (3) of the Act, we report that:

a) We have sor-rght and obtained all the infornration and explanations which to the best ofour knowledge and belief rvere necessary for the purposes of or-rr ar-rdit.

b) ltr ottr opinion. proper books of account as required by larv have been kept by the

. Colnpany so far as it appears frorn our exart.rinatiotr of those books.I

4r\

a

a

BSR&Co.LLP

Independent Auditor's Repo rt (Co nti n ued)


Report on Other Legal and Regulatory Requirements (Cotttinued)

c) The standalone balance sheet, the standalone statement of profit and loss (incltrding othercomprehensive income), the standalone statement of changes in equity and the standalonestatement of cash flows dealt with by this Report are in agreement with the books ofaccount.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 3l March2020taken on record by the Board of Directors, none of the directors is disqualified as on3l March2020from beingappointedasadirectorintermsof Section 164(2) oftheAct.

0 With respect to the adequacy of the internal financial controls with reference to thestandalone financial statements of the Company and the operating effectiveness of suchcontrols, refer to our separate Report in 'Annexure B'.

(B) With respect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules, 2014,in our opinion and to the best ofour information and according to the explanations given to us:

i. The Company does not have any pendirrg litigations which would impact its financialposition;

ii. The Company did not have any long-terrn contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Cornpany; and

iv. The disclosures in the standalone financial statements regarding holdings as well as

dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made in these standalone financial statements since theydo not pertain to the financial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditor's Report under section 197 (16):

Itr our opinion and according to the information and explanations given to us, theremuneration paid by the Company to its directors during the current year is in accordancewitli the provisions of Section 191 of the Act. Rernuneration paid to any director is not inexcess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairshas not prescribed other details under Sectiot-t 197 (16) which are requirecl to be commentedr"rpon by us.

FoTBSR&Co.LLp

Firrr'sRegistrarionti!r';:i;';{ti;;:i:i'{;;;

aNlcw ' lt--Sameer Mota

ParlnerMenrbership No. 10992g

UDIN : 20 1 09928 AAAADe343 0

MMurnbai3 June 2020

BSR&Co.LLP

MAS Financial Services LimitedAnnexure 'A' to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year ended 31 March2020

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' sectionofour report ofeven date)

iv

ill

VI

vii. (a)

(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of property, plant and equipment.

(b) The Company has a regular programme of physical verification of its property, plant andequipment by which all property, plant and equipment are verified every year. Inaccordance with this programme, all property, plant and equipment were physicallyverified by managernent during the year. In our opinion, the frequency of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed upon such verification.

(c) According to the information and explanations given to us and the records examined byus, the title deeds of imrnovable propefties included in property, plant and equipment areheld in the name of the Company.

The Company is a non-banking finance company ('NBFC') and does not hold any inventories.Accordingly, reporting under clause (ii) of the Order is not applicable.

According to the inforrnation and explanation given to us, the Company has granted secured andtunsecured loans to a company covered in the register maintained under Section 189 of theCompanies Act, 2013 (the 'Act').

(a) In respect of the aforesaid loan, the terms and conditions under which such loans weregranted are not prejudicial to the Company's interest.

(b) The Company has stipulated schedule of repayment of principal and payment of interestand repayment of principal amount and receipt of interest is regular.

(c) There is no overdue amount in respect of the aforesaid loans.

According to the information and explanations given to us, the Company has not granted anyloans, made investments or provided guarantees under Section 185 of the Act and has compliedwith the provisions of Section I 86 ( I ) of the Act. The Company being a NBFC, nothing containedin Section 186 is applicable, except subsection (l) of that Section.

According to the inforrnation and explanations given to us, the Company has not accepted anydeposits from the public to which the directives issued by Reserve Bank of India and theprovisions of Section 13 to76 or any otherrelevant provisions of the Act and the rules framedthereunder apply. Accordingly, the provision of clause 3 (v) of the Order is not applicable to theCompany.

According the infornlation and explanation given to us, maintenance of cost records has not beenspecified for the Cornpany by the Central Covernmenr urrder section 148 (l) of the Act.

According to the inforrnation and explanations given to us and on the basis of ourexamination of the records of the company, the ctrnpany has generally been regular indepositing undisputed statlrtory dues, incluaing pioviaent

"fund, ernployees-' state

insurance, it.tcot.tle tax, goods and services tax, cess and other material statutory duesapplicable to it to the appropriate authorities except instances of delay in payment ofprofessional tax of Rs. 7.754 due to delay in registrztion of two branches. As explaineclto tts' the Compan.v did not have any d,,es on account of sales tax. rvealth tax, duty ofcttstotlts. duty of excise and value added tax.

l,n

BSR&Co.LLP

MAS Financial Services LimitedAnnexure 'A' to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year ended 3l March2020 (Continued)

There were no undisputed arnounts payable in respect of provident fund, employees' stateinsurance, incorne tax, goods and services tax, cess and other nraterial statutory duesexcept for professional tax which were in arrears as at 31 March 2020 for a period ofmore than six months from the date they became payable. The extent of arrears ofoutstanding statutory dues has been given below:

Name of the Statute

Department of Commercial Taxes

Department of Commercial Taxes

Department ol Commercial Ta,res

Nature of thedues

Professional tax

Professional tax

Professional tax

Amount(Rs.)

Period towhich theamountrelates

June 20 I 9

July 2019

Au_sust 2019

Due Dlte

l5 July 2019

I 5 August 201 9

l5 September 2019

80.00

400.00

680.00

(b) According to the information and explanations given to us, there are no dues of incometax, service tax and goods and service tax which have not been deposited with theappropriate authorities on account of any dispute except as below:

Name of Statute Nature ofdues

Income-tax Act,l96l

Income-tax

Period to whichthe amountrelates

AssessmentY ear: 2017 -

20t8

Amountd isputed(Rs. in Lac)

59.53

Amountu n paid(Rs. in Lac)

59 53

Forum wherethe dispute is

pending

Deputl'commissionerof Income tax

VIII In our opinion and according to the information and explanations given to us, the Company hasnot defaulted in the repayment of loans or borrowings to financial institutions, banks or dues todebenture holders. There are no loans or borrowings from governrnent.

The Cornpany did not raise any money by way of initial public offer or fufther public offer(including debt instruments) in current year. In our opinion and according to the infornratiorr andexplanations given to us, term loans have been applied for the purposes fbr which they wereraised.

During the course of our examination of the books and records of the Company. carried out inaccordance with the generally accepted auditing practices in India, and according to theinformatiott and explanations given to us, there are no material fraud by the Company or anyfraud on the Company by its officers or employees has been noticed or reported durirrg the year.

Irr ottr opinion and accorditrg to the information and explanations given to us, the Cornpany haspaid / provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of Section l9r read with Schedule v to the Act.

Itr ottr opinion and accordirtg to the infonration and explanations given to us, the Conrpany is pota nidhi company as prescribed under Section 406 of the Act. Accordingly. paragraph 3(xii) of theOrder is not applicable to the Company.

According to the informatiorr and explanations given to us and based orr our exarriration of therecords of the compally, transactions with the related parlies are in cornpliarrce r.vitlr Section 177a.d Sectiotl 188 of the Act, where applicable. The details of such related partv trarsactiors have

nilj.::]"ted in the standalone financial staternents as required by,the ap[ticabte accounring

According to tlte inforrnation attd explanations give to us and based on our exarninatiorr of.therecords of the cornpany- dle Conrpany has not nrade any pref-erential allotrnent or privateplacetnent of shares or-ful11' or parlly-conveftible debentures during the vear. Accorclin-ulv,paragraph 3 (xiv) of the order is not applicable to th" cnnrprnlr.

lx

xt

x.

xtv

4"

xil.

xiii.

BSR&Co.LLP

MAS Financial Services LimitedAnnexure 'A' to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year ended 31 March2020 (Continued)

xv. According to the information and explanations given to us and based on our examination of therecords of the Company, the Company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order is notapplicable to the Company.

xvi. The Company is required to be registered under Section 45-IA of the Reserve Bank of India Act,1934 and it has obtained the registration.


Firrn's Registration No: 101248W/W-100022

AffvLtw . ,L- -'

Sameer MotaPartner

Membership No: 109928UDIN : 20 I 09928 AAAADQ3430

"ffiMumbai3 June 2020

BSR&Co.LLP

Annexure B to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year ended 31 March2020

Report on the internal financial controls with reference to the aforesaid standalone financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

(Referred to in paragraph I (A) (f) under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Opinion

We have audited the internal financial controls with reference to the standalone financial statements ofMAS Financial Services Lirnited (the 'Company') as of 3 I March 2020 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all rnaterial respects, adequate internal financial controls withreference to the standalone financial statements and such internal financial controls were operatingeffectively as at 3l March 2020 based on the internal financial controls with reference to the standalonefinancial statements criteria established by the Cornpany considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the 'Guidance Note').

Management's Responsibility for Internal Financial Controls

The Company's managernent arrd the Board of Directors are responsible for establishing and nraintaininginternal financial controls based on the internal financial controls with reference to the standalonefinancial statements criteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note. These responsibilities include the design, implementation andmaintenance of adequate internal financial controls that were operating effectively for ensuring theorderly and efficient cortduct of its busirress, including adherence to company's policies, the safeguardingof its assets, the prevention and detection of frauds and errors, the accuracy and completeness of theaccounting records, and the tirnely preparation of reliable financial inforrnation, as required under theCompanies Act. 20l3 (hereinafter referred to as the 'Act').

Emphasis of Matter

As described in Emphasis of Matter paragraph of our repofi to the standalone financial statements, theextent to which the COVID l9 pandemic rvill have irnpact on the Company's internal financial controlswith reference to the standalone financial statements is dependent on future developments, which arehighly unceftain.

Our opinion is not rnodifled in respect ol.this rnatter.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference tothe standalone financial staterrents based on our audit. We conducted our audit in accordance with theGuidance Note and the Standards on Auditing. prescribed under section 143 ( l0) of the Act, to the extentapplicable to an audit of irtternal financial controls r'vith reference to the standalone financial statements.Those Standards and the Guidattce Note require that we comply with ethical requirenrents and plan andperfornl the audit to obtain reasoltable assurance about rvhether:adequate internal financial controls withreference to the starlclalolte fillarrcial staternents u'ere established and rnaintained and whether suchcontrols operated ef fectively in all nraterial respects.

our audit ittvolves perfbrnling procedures to obtain audit evidence about the adequacy of the internalfiltancial controls \vith ref-erence to tlte standalone financial statements and their operating effectiveness.

l,n

BSR&Co.LLP

Annexure B to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year ended 3l March2020 (Continued)

Auditor's Responsibility (Cont in ued)

Our audit of internal financial controls with reference to the standalone financial statements includedobtaining an understanding of such internal financial controls, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgernent, including the assessment ofthe risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls with reference to the standalone financialstatements.

Meaning of Internal Financial controls with Reference to the Standalone Financial Statements

A cornpany's internal financial controls with reference to the standalone financial statements is a process

designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of the standalone financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's ir-rternal financial controls with reference to the standalonefinancial staternents include those policies and procedures that (l) pertain to the maintenance of recordsthat, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of thecor.npany; (2) provide reasonable assurance that transactions are recorded as necessary to perrnitpreparation of the standalone financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the cornpany are being made only in accordarrce withauthorisations of management and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company'sassets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to the Standalone FinancialStatements

Because of the inherent limitations of internalfinancialcontrols with reference to the standalone financialstatentertts, including the possibility of collusion or improper management override of controls, materialmisstatetlertts due to error or fraud may occur and not be detected. Also, projections of any evaluation ofthe internal financial controls with reference to the standalone financial statements to future periods aresubject to the risk that the internal financial controls with reference to the standalone financial statementsnlay become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

FoTBSR&Co.LLP

F i rnr's Reg i strat i o n -:! t'; i;;{i;;:itr;;;;

(ttw\ c uv' w- .-

Sameer MotaPurlner

Membership No. 109928UDIN : 20 I 09928 AAAADe343 0

ffiMurlbai3 June 2020

.dlAs F|NANCIAL SERVTCES LIM|TED

STANDALONE BALANCE SHEETASAT37 MARCH 2O2O

C{ in Lakhs)

ASSETS

Financial assetaCash and cash equivalents

Bank balance other than cash and cash equivalents

Loans

lnvestments

Other financial assets

lncome tax assets (net)

Property, plant and equipment

Capital work-in-progress

Right-of-use asset

Other intangible assets

Other non-financial assets

LIABILITIES ANO EQUITY

LIABILITIES

Financial liabilitiesPayables

(l)Trade payables

(i) total outstanding dues of micro enterprises and small enterprises

(ii) total outstanding dues of credilors other than micro enterprises and small enterprises

(ll) Other payables

(i) total outstanding dues of micro enterprises and small enterprises

(ii) total outstanding dues ofcreditors otherthan micro enterprises and small enterprises

Debt securities

Bonowings (other than debt securities)

Other financial liabilities

Non-fi nancial liabilitiesCunent tax liabilities (net)

Provisions

Defened tax liabilities (net)

Other non-financial liabilities

EQUITY

Equity share capital

Other equity

See accompanying notes to the flnancial statements

ln terms of our report of even date attached

FoTBSR&CO.LLPChaftered Accountants

Firm's Registration No: '101 248WM-100022

Note As at31 March 2020

As al31 March 2019no.

6

7

I9

't,04446.8',1't 90.55

3,33,776.56

3,750.03

8,900.09

35,577.06

1,278.75

3,21 ,853.692,227.O5

3,4'l 1.10

Total financial assets 4,49,064.04 3,64,347.65

26

10(a)

10(d)

10(c)

10(b)

221.38

1 ,198.564,82'1.34

128.44

1'1.07

234.54

95.1 6

1,140.92

4,564.43

10.95

196.05

Total non-fi nancial assets

Total assets

6,615.33 6,007.51

4,55,679.37 3,70,355.16

753.08

5,989.18

2,52,021.34

90,693.87

553.36

5,981.78

1,95,982.99

72,419.32

Tolel fi nancial liabilities

Total non-fi nancial liabilities

Total liabilities

Total equity

Total liabilities and equity

3,49,457.47 2,74,937.45

12

13

14

26

15

26

16

45.65

446.12'1,858.73

't,621.U15.84

860.55

1 ,938.582,350.50 4,436.01

3,51,807.97 2,79,373.46

5,466.20

98,405.20

5,466.20

85.515.50

1,03,871.40 90,981.70

4,55,679.37 3,70,355.16

For and on behalf of the of Directors of

SAF Limited

\

Kamlesh C. Gandhi

17

18

,w A/A{L( l/v - VL' "

Sameer Mota

Paftner

MembershiP No: '109928

Mumbai

3 June 2020

Darshana S. Pandya(Director & Chief Executive Officer)

(DlN - 0761 0402)wRiddhi B. Bhayani(Company Secretary & Compliance Ofrcer)

(MembershiP No: A41 206)

Ahmedabad

3 June 2020

(Chaiman & Managing Dircctor)

,rr"M;;;(DlN - 001 87086)

IW

$CA' FINANCIAL SERVICES LIMITED

STANDALONE STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED 31 MARCH 2O2O

C< in Lakhs)

L Revenue frcm operationslnterest income

Gain on assignment of financial assets

Fees and commission income

Total revenue from operations

Other income

Total income

ll. ExpensesFinance costs

Fees and commission expense

lmpairment on financial assets

Employee benefits expenses

Depreciation and amortization

Others expenses

Total expenses

Profit before exceptional items and tax (l - ll)

Exceptional items

lll. Profit before tax

M. Tax expense:Cunent tax

Short / (excess) provision for tax relating to prior years

Net current tax expenseDefened tax (credit) / charge

Net tax expense

V. Profit for the year (lll - lV)

Vl. Other comprehensive income(A) ltems that will not be reclassified to profit or loss:

Remeasurement of the defined benefit liabilities


Net gain on equity instruments measured through other comprehensive income


Toral (A)

(B) ltems that will be reclassmed to proJit or loss:

Loans and advances through other comprehensive Income

lncome tax relating to items that will be reclassmed to profit or loss

Total (B)

Other comprehensive income (A+B)

Vll. Total comprehensive income (V + VD

Vlll. Eamings perequity share (of t 10 each):Basic C<)

Diluted (<)

See accompanying notes to the financial statemenls


FoTBSR&Co.LLPChaftercd Accountants

Firm's Registration No: 101 248W/VV-100022

iroreno.

19

26

26

26

Year ended31 March 2020


55,917.14

10,74E.75

1,573.89

71.7 5

46,452.O3

9,4',t4.46'1,366.85

24.68)n

21

22

23

24

25

68,311.53 57,258.02

27,201 .70

601.88

8,675.65

5,240.79

23'.1.51.

2,9't2.24

20,413.33

404.35

5,452.73

4,714.63

128.70

2,751.33

44,863.77 33,865.07

23,447.76 23,392.95

23,447.76

6,291.68

(e6.10)

23,392.95

8,226.41

8.93

6,1 95.58

(s69.1 3)

8,235.34(53.90)

5,626.45 8,18'1 .44

17,621.3',1 15,211.51

(2e.68)

7.47

(14.62)-

5.11

(1.10)

0.38

(22.2',t1

658.09

(1 65.64)

(1 0 23)

(993.77)

347.26

492.45 (646.51)

470.24 (6s6.74)

r 8,291 .55 4,554.77

27

32.60

32.60

27.83

27.83

For and on behalf of

d.8F ial mitedl

,@ A/f(l ( c/v -Yr - ^.

Sameer Mota

PartnerMembership No: '109928

Danshana S. Pandya(Director & Chief Executive Officer)

(DtN - 07610402)

C. GandhiDirector)

(DrN - 00044852)

kesh C. Gandhi& Chief Financial Olficer)

(DrN - 00187086)

4#Riddhi B. Bhayani(Company Secetary & Compliance Ottice0

([/embership No: 441 206)

Ahmedabad

3 June 2020

Mumbai

3 June 2020

(Whole Time

I

diry*

cfcA, FTNANCtAL SERVTCES LTMTTED

STANDALONE STATEMENT OF CHANGES IN EOUITYFOR THE YEAR ENDED 31 MARCH 2O2O

(< in Lakhs)

(A) Equity share capital

(B) Other equity

at 31 March 2018

in equity share capital during the year

at 31 March 2019

in equity share capital during the year

at 31 March 2020

each issued, subscribed and fully paid

5,466.20

5,/166.20

Reserues and surplus Other comprehensive income TotalReserue u/s. 45-

lC of RBI Act,1934

SecuritiesPremium

Retainedeamings

Equityinstru mentsthrough OCI

Loans andadvances

through OCI

Balance at 31 March 2018

Profit for the year

Other comprehensive income (net of taxes)

Final dividend on equity shares

lnterim dividend on equity shares

DDT on equity dividend

Transfer to reserve u/s. 45-lC of the RBI Act, '1934


Transilion impact of lnd AS 1 16 (net of taxes)

Prolit for the year

Other comprehensive income (net of taxes)

Final dividend on equity shares

lnterim dividend on equity shares

DDT on equity dividend

Transfer to reserue u/s. 45-lC of the RBI Act. 1 934


7,915.45 42,687.43 1 7,557.38

15.211.51

(s.51)

(1,1 80.70)

(81 9.93)

(407.35)

(3,042.30)

0.50 3,759.1 0

802.34

71,919.86

15,211.51

792.'.t1

(1,180.70)

(819.93)

(407.35)

(0.72)

3,042.30

1 0,957.75 42,687.43 27,309.'l 0

(10.31)

17 ,821.31

(22.21\

(1 ,967.83)

(4,372.96)

(1,307.26)

(3,564.26)

l'0.221 4,561.44 85,5't5.50

(10.31)

't7,82't.31

2,726.75

(1,967.83)

(4,372.96)

(1,307.26)

2,748.96

3,564.26

14,522.01 42,687.43 33,885.58 (0.22') 7,310.40 98,405.20



Firm's Registration No: 101248WW-100022

Riddhi B. Bhayani(Company Secretary & Compliance Officer)

(Membership No: 441206)

For and on behalf of the Board of of

4AF

C. Gandhi

Diector)N - 00044852)

C. Gandhi

Whole Time Director Financial Officer)(DrN - 00187086)

1i

WSameer Mota

Paftner

Membership No: '109928

Mumbai

3 June 2020

Darshana S. Pandya(Dircctor & Chief Executive Officer)

(DrN - 07610402)

*vAhmedabad

3 June 2020

cfiLtw. h- ..

a t

lfrAF FTNANCtAL SERVTCES LTMITED

STANDALONE STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2O2O

({ in Lakhs)


Net profit before taxAdjustments for :

Depreciation and amortisation

Finance costProvision for impairment on financial assets

Loss assets Mitten off (net)

(Profit) / loss on sale of property, plant and equipment

Loss on sale of repossessed assels

lnterest income

lnterest in6me from bank deposits

lncome received in advance

lncome from debt component of OCPS investment in subsidiary

lnterest income from NCD measured at amortised cost

Financial guarante commission income

Dividend income

Gain on derecognition of leased asset

Net gain on equity iretruments measured through other comprehensive income

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES



Loans

Deposits given as collateral

Bank balance other than cash and cash equivalents

Other non-flnancial assetAdjustments for increase/(decrease) in operating liabilities:

Trade payables

Security deposits from borrourers

Other financial and non-financial Iiabilities

Provisions

CASH GENERATEO FROM / (USED IN) OPERANONS

lnterest income received

Finance cost paid

lncome tax paid (net)

CASH FLOW GENERATED FROM / (USED IN) OPERANNG ACNMNES (A)

B. CASH FLOW FROM INVESTINGACTIVITIES

Capital expenditure on property, plant and equipments and intangible assets,

including capital advances

Proceeds from sale of property, plant and equipments and intangible assets

Change in Earmarked balances with banks

lnterest income from bank deposits

Purchase of investments at amortised mstPurchase of optionally convertible preference shares ("OCPS") in subsidiary

Dividend received

lnterest income on lnvestmenl measured at amortised cost

Proceeds from redemption of equity instruments

CASH FLOW GENERATED FROM / (USED IN} INVESTING ACNUIES (B)


Proeeds from debt securities and bonowings

Repayments of borrowings

Net increase in working capital borowings

Repayment of lease liabilities

Dividends paid including dividend distribution tax

CASH FLOW GENERATED FROM / (USED IN) FINANCING ACNUTES (C)

NET INCREASE / (DECREASE) lN CASH ANO CASH EQUIVALENTS (A+B+C)Cash and Gsh equivalents at the beginning of the year

Cash and cash equivalents at the end of the year (refer note I below)


Year ended31 Nrlarch 2019

231.50

27,201.70

2,256.51

6,419.14

o.82

327.03

(52,821.751

l't,155.47].(1e.12)

(32.78)

(E.26)

(4.6e)

(6.33)

(0.E3)

23,447.76

(17,612.s31

't28.70

20,413.33

1,448.85

4,003.88(1.76)

200.44

(44,425.83)(654.1 1 )

( 19.61)

(1 3.50)

(2.5e)

(1.1 0)

23,392.95

(1 8,923.30)

(1 7,683.92)(13.s1)

1,OO1.28

(395.21 )

199.75(1,1 61.95)18, t85.38

29.81

5,835.23

161.63

(72.223.33)296.92

(989.22)

('t75.54)

231.41

7,458.79

5,'168.69

(60.20)

4,469.65

(60,292.48\

47,331.77(26,489.73)

17,s42.841

5,996.86

12,899.20

43,531.92(20,584.23)

(7,1 03.37)

(55,822.83)

15,844.32

18,896.06 (39,978.s1)

(4s3.77l,

0.53

86.92

1,172.74

(s00.00)

(1,000.00)

6.335.49

(1 92.93)

3.75

732.13

764.49

(900 00)

2.59

9.96

(681.76) 419.99

95,425.00

142,349.2213,3'16.4r

(88.69)

(7,648.0s)

67,490.00(21,522.21)

27,779.82

48,65s.45 7 1,339.63

66369?535,577.06

_-92,446.9L

31,781.113,795.95

+A

.{flAFq

(2,407.98)

.06

JfA' FINANCIAL SERVICES LIMITEO

STANDALONE STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2O2O

(a in Lakhs)

Notes:

1 Cash and bank balances at the end of the year comprises:(a) Cash on hand

(b) Balances with banks

TotalBank deposits with original maturity of 3 months or less

Cash and cash equivalents as per the balance sheet

As at31 lvlarch 2020

As at31 March 2019

7.43

76,439.38

14.46

26,9'12.60

76,/t46.81

26,000.0026.927.06

8,650.00

1,02,446.81 35.577.06

2 The above cash flow statement has been prepared under the "indirect method" as set out in the lnd AS - 7 on stalement of cash flows specitied under seclion 1 33 of theCompanies Act, 2013.

3 The Company applied lnd AS 116 at 1 April 2019, using the modified retrospective approach. Under this approach, comparative information is not restated and thecumulative efiect of initially applyng lnd AS 1 16 is recognised in retained earnings at the date of initial application.

4 The Company as at 3'l March 2020 has undrawl bonowing facilities amounting to < 74,280.55 lakhs that may be available for tuture operating activities and to settlecapital commitments.

5 Change in liabilities arising from financing activities

* Non-cash changes represents the efiect of amortization of transaction cost.

See accompanying notes to the financial statements


FoTBSR&Co.LLPChadercd Accountants

For and on behalf of the A

Firm's Registration No:'101248WM-100022$.A,ji Financial

C. Gandhi(Chairnan & Director)

(Dt 00044852)

-WA/$((^'' h- .,

Membership No: 109928

Sameer Mota

Paftner

Mumbai

3 June 2020

4,ry

Darshana S. Pandya(DirecTor & Chief Executive Officer)

(DlN - 07610402)

Riddhi B. Bhayani(Conpany Secretary & Compliance Office) (Whole Time

(Membership No: A41 206)

br#"".:oireaor a@[t rinanciat Offi@O

(DrN - 00187086)

Ahmedabad

3 June 2020

56,392.19

Total liabilities from financing activities

Debt securities

other than debt securities

7.40

(353.84)

5,981.78

1,95,982.99

5,989.18

2,52,021.34

"y,#