Post on 30-Jul-2020
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 –
380009, Gujarat, India.
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: ankit_jain@mas.co.in ; riddhi_bhayani@mas.co.in
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
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)
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.
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)
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
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)
1
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
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)
2
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,
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)
3
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
Information Memorandum.
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
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)
4
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;
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)
5
(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
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)
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
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)
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
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)
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)
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)
9
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
Information Memorandum.
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.
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)
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.
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)
11
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
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)
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
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)
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.
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)
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.
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)
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
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)
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
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)
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.
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)
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
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)
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
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)
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.
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)
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.
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)
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.
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)
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.
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)
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.
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)
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;
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)
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 : ankit_jain@mas.co.in;
riddhi_bhayani@mas.co.in
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)
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)
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)
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.
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)
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.)
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)
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
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)
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
16.08.2007 Equity 3000000 10 - 30000000 Bonus Shares 9650000 155000000
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
28.12.2011 Equity 500000 10 - 5000000 Bonus Shares 93471090 934710900
28.07.2012 Preference* 40000000 10 10 400000000 CASH 53471090 534710900
30.07.2012 Equity 125 10 1200 150000 CASH 53471215 534860900
28.01.2014 Equity 6000000 10 - 60000000 Bonus Shares 59471215 594860900
13.05.2016 Preference 400 100000 100000 40000000 CASH 59471615 634860900
18.11.2016 Equity 24000188 10 - 240001880 Bonus Shares 83471803 874862780
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
12.09.2017 Preference# 18329800 10 10 183298000 Conversion of CCCPs
43991135 1790151546
12.09.2017 Preference# 400 100000 100000 40000000 Conversion of CCCPs
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
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)
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
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)
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
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)
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
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)
35
Bopal Daskroi Ahmedabad 380058 GJ IN
Foundation 3. MAS Rural Housing & Mortgage Finance Limited
Mr. Chetan Shah
Non-Executive Director
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
Non-Executive Director
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
Non-Executive Director
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
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)
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. -
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)
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.
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 40.00 12.00
Repayable in 20
Quarterly
installments from
30 September
2016.
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.
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)
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.
Secured by a first and
exclusive charge on specific
receivables of the company
created out of the loan
availed.
HDFC Bank Term
Loan 54.00 25.37
Repayable in 36
monthly
installments from
7 September 2018.
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 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.
Secured by a first and
exclusive charge on specific
receivables of the company
created out of the loan
availed.
HDFC Bank Term
Loan 7.50 7.50
Repayable in 36
monthly
installments from
7 April 2020.
Secured by a first and
exclusive charge on specific
receivables of the company
created out of the loan
availed.
HDFC Bank Term
Loan 30.00 30.00
Repayable in 36
monthly
installments from
7 April 2020.
Secured by a first and
exclusive charge on specific
receivables of the company
created out of the loan
availed.
HDFC Bank Term
Loan 12.50 12.50
Repayable in 36
monthly
installments from
7 April 2020.
Secured by a first and
exclusive charge on specific
receivables of the company
created out of the loan
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.
Secured by a first and
exclusive charge on specific
book debt and future
receivables of the company
created/to be created out of
the loan availed.
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)
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.
Exclusive charge by way of
hypothecation of the
specific receivables/book
debts.
Shinhan
Bank
Term
Loan 20.00 8.89
Repayable in 36
monthly
installments from
1 August 2018.
Exclusive charge by way of
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
the company out of the bank
finance.
ICICI Bank Term
Loan 60.00 60.00
Repayable in 8
Quarterly
installments from
30 September
2020.
Exclusive charge by way of
hypothecation of on
standard receivables of the
Borrower
Oriental
Bank of
Commerce
Term
Loan 100.00 100.00
Repayable in 12
Quarterly
installments from
31 March 2020.
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
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
created out of the term loan.
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
created out of the term loan.
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)
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.
Exclusive charge by way of
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
created out of the loan
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
hypothecation of specific
book debts of the company
created out of the loan
availed.
Bajaj
Finance
Limited
Term
Loan 50.00 25.00
Repayable in 10
quarterly
installments from
31 March 2019.
Secured by exclusive first
charge by way of
hypothecation of specific
book debts of the company
created out of the loan
availed.
Bajaj
Finance
Limited
Term
Loan 50.00 33.33
Repayable in 36
monthly
installments from
30 April 2019.
Secured by exclusive first
charge by way of
hypothecation of specific
book debts of the company
created out of the loan
availed.
Bajaj
Finance
Limited
Term
Loan 25.00 24.31
Repayable in 36
monthly
installments from
31 March 2020.
Secured by exclusive first
charge by way of
hypothecation of specific
book debts of the company
created out of the loan
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.
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)
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
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)
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
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)
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
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)
44
Non-Controlling Interest 1989.15 1877.32 1235.64
Non-Current Liabilities 128584.24 109269.99 70979.63
Current Liabilities 245255.50 196349.79 139819.17
ASSETS
Non-Current Assets 202866.69 170457.39 143137.37
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):
Balance Sheet March 2020 March 2019 March 2018
EQUITY & LIABILITIES
Shareholders Fund 103871.6 90981.7 71392.15
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
Profit & Loss Account March 2020 March 2019 March 2018
Income 68311.53 57258.02 45089.62
Expenses 44863.77 33865.07 28573.9
Profit / (Loss) before Tax 23447.76 23392.95 16515.72
Profit / (Loss) for the year 17821.31 15211.51 10343.15
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):
Balance Sheet March 2020 March 2019 March 2018
EQUITY & LIABILITIES
Shareholders Fund 104597.84 91554.79 77918.88
Non-Controlling Interest 1989.15 1877.32 1235.64
Non-Current Liabilities 128584.24 109269.99 70979.63
Current Liabilities 245255.50 196349.79 139819.17
ASSETS
Non-Current Assets 202866.69 170457.39 143137.37
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)
45
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):
Balance Sheet March 2020 March 2019 March 2018
EQUITY & LIABILITIES
Shareholders Fund 103871.6 90981.7 71392.15
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
Profit & Loss Account March 2020 March 2019 March 2018
Income 68311.53 57258.02 45089.62
Expenses 44863.77 33865.07 28573.9
Profit / (Loss) before Tax 23447.76 23392.95 16515.72
Profit / (Loss) for the year 17821.31 15211.51 10343.15
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.
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)
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
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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.
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
percent) per annum above the applicable Interest Rate on the
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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)
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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;
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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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
Transaction Documents;
(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.
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(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,
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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.
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(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
Transaction Documents.
(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
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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
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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;
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(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
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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
Please refer Section 7.4 of this Information Memorandum.
Affirmative Covenants
Please refer Section 7.5 of this Information Memorandum.
Negative Covenants
Please refer Section 7.6 of this Information Memorandum.
Representation and
warranties
Please refer Section 7.2 of this Information Memorandum.
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.
Additional Disclosures
(Default in Payment)
The Issuer agrees to pay an additional interest rate of 2% (two
percent) per annum above the applicable Interest Rate on the
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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.
Additional Disclosures
(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.
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Date: July 21, 2020 For Private Circulation Only
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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
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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
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(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
Transaction Documents.
(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.
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(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
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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.
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(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;
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(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
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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:
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(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
Transaction Documents;
(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
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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;
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(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;
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(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;
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(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
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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
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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;
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(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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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
85
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
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Date: July 21, 2020 For Private Circulation Only
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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
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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:
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)
88
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
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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)
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.
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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)
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
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)
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.
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)
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
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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)
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
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)
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)
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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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.
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)
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;
2. The Issuer has delivered to the Debenture Holders, a certified true
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;
3. The Issuer has delivered to the Debenture Holders, a certified true
copy of the resolution of the shareholders of the Issuer under
section 42 of the
Companies Act, 2013;
4. The Issuer has delivered to the Debenture Holders, a certified true
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
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Date: July 21, 2020 For Private Circulation Only
(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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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:
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Date: July 21, 2020 For Private Circulation Only
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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
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)
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.
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)
105
ANNEXURE II - RATING LETTER AND RATING RATIONALE
AS PER ENCLOSURE 2
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)
106
ANNEXURE III - CONSENT LETTER FROM THE DEBENTURE TRUSTEE
AS PER ENCLOSURE 3
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)
107
ANNEXURE IV - APPLICATION FORM
MAS Financial Services Limited
CIN: L65910GJ1995PLC026064
Date of Incorporation: 25/05/1995
Registered Office: 6 Narayan Chambers, Gr. Flr., B/h Patang Hotel, Ashram Road, Ahmedabad –
380009, Gujarat, India.
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
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)
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)
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)
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
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)
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.
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)
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
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)
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 - - -
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)
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
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)
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
- -
(ii) total outstanding dues of creditors other than micro
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
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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
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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
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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) - -
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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
Information Memorandum
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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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
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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 AND EQUITY
LIABILITIES
Financial liabilities
Derivative financial instruments - - -
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
-
812.78 600.10 360.75
(II) Other payables -
(i) total outstanding dues of micro enterprises and small
enterprises
- - -
(ii) total outstanding dues of creditors other than micro
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
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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
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)
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
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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
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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
Non-controlling interest 0.94 0.90 81.06
X. Total comprehensive income attributable to
- - -
Owners of the Holding Company 18,467.39 14,698.27 10,437.97
Non-controlling interest 131.32 107.86 81.06
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
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(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)
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
A. CASH FLOW FROM OPERATING ACTIVITIES
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
Changes in working capital:
Adjustments for (increase)/decrease in operating assets:
Loans and advances (16,921.09) (78,789.28) (65,300.55)
Deposits given as collateral (14.01) 297.08 (308.56)
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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 - - -
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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
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Date: July 21, 2020 For Private Circulation Only
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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.
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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.
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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
Information Memorandum.
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.
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)
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
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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
Independent Auditor's Report (Continued)
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
Independent Auditor's Report (Continued)
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
Independent Auditor's Report (Continued)
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
Independent Auditor's Report (Continued)
MAS Financial Services Limited
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)
MAS Financial Services Limited
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)
MAS Financial Services Limited
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 AND EQUITY
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)
A. CASH FLOW FROM OPERATING ACTIVITIES
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)
C. CASH FLOW FROM FINANCING ACTIVITIES
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)
MAS Financial Services Limited
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
Independent Auditor's Report (Continued)
MAS Financial Services Limited
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
Independent Auditor's Report (Continued)
MAS Financial Services Limited
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
Independent Auditor's Report (Continued)
MAS Financial Services Limited
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)
MAS Financial Services Limited
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.
FoTBSR&Co.LLPChartered Accountants
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
lncome tax impact on above
Net gain on equity instruments measured through other comprehensive income
lncome tax impact on above
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
ln terms of our report of even date attached
FoTBSR&Co.LLPChaftercd Accountants
Firm's Registration No: 101 248W/VV-100022
iroreno.
19
26
26
26
Year ended31 March 2020
Year ended31 March 2019
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
Balance at 31 March 2019
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
Balance at 31 March 2020
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
ln terms of our report of even date attached
FoTBSR&Co.LLPChartered Accountants
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)
A. CASH FLOW FROM OPERATING ACTIVITIES
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
Changes in working capital:
Adjustments for (increase)/decrease in operating assets:
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)
C. CASH FLOW FROM FINANCING ACTIVITIES
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 March 2020
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
ln terms of our report of even date attached
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,#