INFORMATION MEMORANDUM ANNAPURNA MICROFINANCE PRIVATE LIMITED · 2016-06-24 · INFORMATION MEMORANDUM ANNAPURNA MICROFINANCE PRIVATE LIMITED A private limited company incorporated

Private & Confidential – Not for Circulation

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Serial No. ____________ Addressed to: _________

INFORMATION MEMORANDUM ANNAPURNA MICROFINANCE PRIVATE LIMITED

A private limited company incorporated under the Companies Act, 1956 Date of Incorporation: April 30, 1986

Registered Office: HIG-97, Dharma Vihar, Khandagiri Square, Bhubaneswar, Odisha - 751030

Telephone No: +91 674-2350253 Website: www.ampl.net.in

Information Memorandum for issue of Debentures on a private placement basis on,

9th June, 2016

Background

This Information Memorandum is related to the Debentures to be issued by Annapurna Microfinance Private Limited (the “Issuer” or “Company”) on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under this Information Memorandum has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on April 22, 2016 and the Board of Directors of the Issuer on May 10, 2016 and the Memorandum and Articles of Association of the Company. Pursuant to the resolution passed by the Company’s shareholders dated April 22, 2016 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 an amounts up to INR 1200,00,00,000/- (Rupees Twelve Hundred Crores only). The present issue of NCDs in terms of this Information Memorandum is within the overall powers of the Board as per the above shareholder resolution(s).

Credit Rating The Debentures proposed to be issued by the Issuer have been rated by ICRA (“Rating Agency”). The Rating Agency has vide its letter dated May 27, 2016 assigned a rating of "ICRA BBB" 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 rating agency and should be evaluated independently of any other ratings. Please refer to Annexure II of this Information Memorandum for the letter dated May 27, 2016 from the Rating Agency assigning the credit rating above mentioned and the letter dated May 27, 2016 issued by the Rating Agency disclosing the rating rationale adopted for the aforesaid rating.

Issue Schedule Issue Opens on: June 9, 2016

Issue Closing on: June 15, 2016 Deemed Date of Allotment: June 15, 2016

The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue shall be open for subscription during the banking hours on each day during the period covered by the Issue Schedule.

The Debentures are proposed to be listed on the wholesale debt market of the Bombay Stock Exchange (“BSE”). .

Registrar & Transfer Agent Karvy Computershare Private Limited 7th floor, 701, Hallmark Business Plaza Sant Dnyaneshwar Marg, Off Bandra Kurla Complex, Bandra East Mumbai - 400 051

Issue of 600 (Six Hundred), Rated, Secured, Listed, Senior, Redeemable, Taxable, Transferable, Non-convertible Debentures of face value of Rs. 10,00,000 /- (Rupees Ten Lakhs only) each, aggregating up to the INR 60,00,00,000 (Rupees Sixty Crores only) in face value on a private placement basis and listing thereof in terms of the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (the “Issue”)

Debenture Trustee

GDA Trusteeship Limited Office No. 83 – 87, 8th floor, Mittal Tower’, ‘B’ Wing, Nariman Point, Mumbai – 400021, India

http://www.ampl.net.in


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TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 3 SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 12 SECTION 3: RISK FACTORS 15 SECTION 4: FINANCIAL STATEMENTS 20 SECTION 5: REGULATORY DISCLOSURES 21 SECTION 6: TRANSACTION DOCUMENTS AND KEY TERMS 54 SECTION 7: OTHER INFORMATION AND APPLICATION PROCESS 72 SECTION 8: DIRECTOR DECLARATION 80 ANNEXURE I: TERM SHEET 81 ANNEXURE II: RATING LETTER& RATING RATIONALE 83 ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE 87 ANNEXURE IV: APPLICATION FORM 89 ANNEXURE V: LAST AUDITED FINANCIAL STATMENTS 92 ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS 94


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SECTION 1: DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Information Memorandum.

Act

Means Companies Act, 2013, and for any matters or affairs prior to the notification of the relevant portions of the Companies Act, 2013, the Companies Act, 1956 and shall include any re-enactment, amendment or modification of the Companies Act, 2013, as in effect from time to time

Accounting Principles Means generally accepted accounting principles applicable in India

Allot/Allotment/Allotted Unless the context otherwise requires or implies, the allotment of the Debentures pursuant to this Issue.

Application Form The form used by the recipient of this Disclosure Document and/or the Private Placement Offer Letter, to apply for subscription to the Debentures, which is in the form annexed to this Information Memorandum and marked as Annexure IV.

Applicant Means a person who has submitted a completed Application Form to the Company.

Applicable Law

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.

Application Money Shall mean the subscription monies paid by the Debenture Holders at the time of submitting the Application Form

Assets Shall mean, for any date of determination, the assets of the Company on such date as the same would be determined in accordance with Indian GAAP at such date.

Authorisation Means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration

Average Outstanding Loan Size

Shall mean, for a particular period, the Gross Loan Portfolio divided by the number of Client Loans outstanding during such period.

Beneficial Owner Means the holder(s) of the Debentures in dematerialized form whose name is recorded as such with the Depository in the Register of Beneficial Owners with the Depository.

Board/Board of Directors The board of directors of the Issuer

Business Day

Means any day of the week (excluding Sundays and any day which is a public holiday in Bhubaneswar, India (for the purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881)) and Amsterdam, Netherlands) and "Business Days" shall be construed accordingly.

CDSL Central Depository Services (India) Limited. CITES Shall mean the Convention on International Trade in Endangered


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Species or Wild Fauna and Flora, including the protected flora and faunae as demonstrated on the website: www.cites.org

CERSAI Central Registry of Securitisation Asset Reconstruction and Security Interest

Capital

Means the aggregate (as of the relevant date of calculation) of: (a) the amount paid up or credited as paid up on the share

capital of the Company; (b) the amount standing to the credit of the reserves of the

Company (including, without limitation, any share premium account, capital redemption reserve funds and any credit balance on the profit and loss account) but after deducting from such aggregate:

(i) all amounts set aside for dividends or taxation (including deferred taxation) or attributable to goodwill or other intangible assets;

(ii) any amount standing to the debit of the aforesaid reserves and/or share capital of the Company; and

(iii)any debit balance on the profit and loss account or any impairment of the issued share capital of the Company (except to the extent that deduction in respect of such debit balance or impairment has already been made; and

the supplementary capital of the Company, consisting of undisclosed reserves, asset revaluation reserves, general provisions and general loan loss reserves up to a maximum of 1.25 per cent (1.25%) of risk weighted assets, hybrid (quasi-equity) capital instruments and subordinated loans, as far as they are accepted by Financial Supervisory Authorities.

Capital Adequacy Ratio Means the ratio as defined by Reserve Bank of India from time to time.

Client Loan Shall mean each loan made by the Company as a lender including managed portfolio.

Constitutional Documents Means in respect of the Company, its memorandum of association, its articles of association, its certificate of incorporation, and its certificate of registration.

Controlled Entity

Shall mean, as to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through ownership of voting securities or by contract or otherwise.`

Coupon Means the coupon payable on the Debentures on the Coupon Payment Dates, at the Coupon Rate.

Coupon Payment Date Means the payment dates on which Coupon at the Coupon Rate shall be paid to the Debenture Holders as specified in Annexure VI

Coupon Rate Shall mean 13% per annum, payable semi-annually, net of withholding tax.

Crore Shall mean ten million DRR Means the debenture redemption reserve created and maintained

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by the Company in pursuance to the provisions of the Act, the guidelines issued by SEBI and any other Applicable law and subject to any future amendment in the same.

Debentures / NCDs 600 nos. (Six Hundred) of secured rated taxable listed redeemable non-convertible debentures bearing a face value of Rs.10,00,000/-(Rupees Ten Lakhs) each, aggregating to the INR 60,00,00,000 (Rupees Sixty Crores only).

Debenture Holders / Investors

Means initially the persons detailed in the Transaction Documents who are the subscribers to the Debentures and for the time being holders of the Debentures and for the subsequent Debenture Holders, each who fulfils the following requirements: (i) Persons who are registered as such as Beneficial Owners; and (ii) Persons who are registered as Debenture Holders in the Register f Debenture Holders; (and shall include registered transferees of the Debentures from time to time with the Company and the Depository and in the eent of any inconsistency between sub-clause (a) and (b), the former shall prevail.)

Deemed Date of Allotment June 15, 2016 Debenture Trustee GDA Trusteeship Limited

Debenture Trustee Agreement

Agreement to be executed by and between the Debenture Trustee and the Company for the purposes of appointment of the Debenture Trustee to act as Debenture Trustee in connection with the issuance of the Debentures.

Deed of Hypothecation Means the unattested deed of hypothecation, dated on or before the Deemed Date of Allotment, to be executed and delivered by the Company in a form acceptable to the Debenture Trustee.

DTMD Means the Debenture Trust cum Mortgage Deed to be executed by and between the Company and Debenture Trustee for recording the terms of the Debentures and security created to secure the Debentures.

Demat Refers to 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 Company has made arrangements for dematerializing the Debentures, being CDSL and NSDL.

Depository Participant / DP A depository participant as defined under the Depositories Act Director(s) Director(s) of the Issuer. Disclosure Document / Information Memorandum

This document which sets out the information regarding the Debentures being issued on a private placement basis.

DP ID Depository Participant Identification Number. Donations Shall mean the donations received the Company in relation to its

business. EFT Electronic Fund Transfer

Event(s) of Default Means any of the events more particularly identified in Section 6.6

Financial Supervisory Authorities Means the RBI. Financial Terms and Shall mean the terms and conditions on the part of the Company


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Conditions to be observed and performed as set out in the Transaction Documents including inter alia obligations more particularly specified in Sections 5 to 7

Financial Indebtedness

May be any of the following: (a) moneys borrowed; (b) any amount availed of by acceptance of any credit

facility; (c) any amount raised pursuant to the issuance of any notes,

bonds, debentures, loan stock or any other similar securities or instruments;

(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with generally accepted principles of accounting in India, be treated as a finance or capital lease;

(e) receivables sold or discounted (other than any receivables sold in the ordinary course of business or to the extent that 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 price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h) 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;

(i) the amount of any liability under an advance or deferred purchase agreement if one of the primary reasons behind the entry into such agreement is to raise finance; or

(j) any put option, guarantees, keep fit letter(s), letter of comfort, etc. by whatever name called, which gives or may give rise to any financial obligation(s);

(k) any preference shares (excluding any compulsorily convertible preference shares); and

(l) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in sub-Clauses (a) to (k) above

Financial Year/ FY Means the financial year of the Company used for the purposes of accounting

Final Settlement Date Means the date on which all obligations of the Company have been irrevocably and unconditionally paid and discharged in full to the satisfaction of the Debenture Holders.

Final Redemption Date Means the date occurring on the expiry of 60 months from the Deemed Date of Allotment

First Partial Redemption Date

Means the date occurring on the expiry of 48 months from the Deemed Date of Allotment

Foreign Exchange Assets Means the aggregate amount of all assets of the Company denominated in a currency other than the Local Currency.

Foreign Exchange Liabilities Means the aggregate amount of all liabilities of the Company denominated in a currency other than the Local Currency.


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Governmental Authority Shall mean 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 Shall mean the outstanding principal balance of all outstanding Client Loans, including current, delinquent and restricted ClientLoans, but not including Client Loans that have been charged off, or any interest.

Hypothecated Assets Means the identified assets hypothecated under the Deed of Hypothecation as more particularly defined in the Deed of Hypothecation.

Immovable Property Shall mean all that hereditaments and premises which is more particularly described in the DTMD which Immovable Property is being mortgaged in favour of the Debenture Trustee in accordance with the DTMD.

Issue Private Placement of the Debentures. Issue Opening Date June 9, 2016 Issue Closing Date June 15, 2016 Issuer/ Company Annapurna Microfinance Private Limited Leverage Ratio Means total debt divided by total equity

Listing Period Means the period of 15 days from the Deemed Date of Allotment within which the Debentures are to be listed on the BSE.

Loan Loss Reserve Shall mean a contra asset account on the balance sheet created in anticipation of losses due to default.

Local Currency Means the lawful currency of India as of date, being Indian Rupees.

Majority Debenture Holders

Shall mean such number of Debenture Holders collectively holding more than 50% (Fifty percent) of the value of nominal amount of Debentures for the time being outstanding.

Material Adverse Effect Means the effect or consequence of an event, circumstance, occurrence or condition which has caused, as of any date of determination, a material and adverse effect representing a percentage of 10% of Capital or more on (i) the business activities, operations, assets, liabilities, financial condition and credit standing of the Company; (ii) the ability of the Issuer to perform their obligations under the Transaction Documents; or (iii) the validity or enforceability of any of the Transaction Documents (including the ability of any party to enforce any of its remedies thereunder).

N.A Not Applicable.

Net Assets Means Total Assets excluding any securitized assets or managed (non-owned) loan portfolio of the Company.


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Net Operating Income Means revenues of the Company from its loan portfolio and from other financial assets less: (a) expenses, (b) Expenses related to operations, including all personnel expense, depreciation and amortization, and administrative expense, and (c) non-cash expense calculated as a percentage of the value of the loan portfolio that is at risk of default.

NSDL National Securities Depository Limited.

PAN Permanent Account Number.

Obligations

Means all present and future obligations (whether actual or contingent and whether owed jointly or severally or in any capacity whatsoever) obligations of the Company to the Debenture Holders or the Debenture Trustee under the Transaction Documents, including without limitation, all costs, charges, expenses and other monies payable by the Company in respect of the Debentures..

Off-Balance Sheet Liabilities

Shall mean (a) any repurchase obligation or liability of the Company with respect to accounts or notes receivable sold by the Company (b) any liability of the Company under any sale and leaseback transactions that do not create a liability on the balance sheet of the Company, and (c) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of the Company.

Outstanding Amounts Means, at any date, the Outstanding Principal Amounts together with any accrued Coupon, additional interests, costs, fees, charges, and other amounts payable by the Company in respect of the Debentures.

Outstanding Principal Amount

Shall mean at any date, the Local Currency principal amounts outstanding under the Debentures.

Payments Means all payments to be made by the Company in relation to the issue including payment of Coupon, Redemption Amounts, Default Interest (if any) remuneration of the Debenture Trustee, and all fees, costs, charges, expenses and other monies.

Portfolio at Risk over 1 day

Means the aggregate of (a) All Client loans including owned and managed portfolio and other credit facilities provided by the Company where one or more repayment installments are overdue by one (1) day or more, (b) All Client Loans and other credit facilities in respect of which the payment schedule have deferred, rescheduled, restructured and/or refinanced

Portfolio at Risk over 30 Days

Means the aggregate of (a) all Client Loans including owned and managed portfolio and other credit facilities provided by the Company where one or more repayment installments are overdue by thirty (30) days or more, and (b) all Client Loans and other credit facilities in respect of which


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the payment schedule have deferred, rescheduled and/or refinanced.

Portfolio at Risk over 90 Days

Means the aggregate of (a) all Client Loans including owned and managed portfolio and other credit facilities provided by the Company where one or more repayment installments are overdue by ninety (90) days or more; and (b) all Client Loans and other credit facilities in respect of which the payment schedule have deferred, rescheduled, restructured and/or refinanced

Private Placement Offer Letter

Shall mean the offer letter prepared in compliance with Section 42 of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.

PAR Ratio Over 1 Day Shall mean, the result obtained by dividing Portfolio at Risk over 1 Day by Total Loans

PAR Ratio Over 30 Days Shall mean, the result obtained by dividing Portfolio at Risk over 30 Days by Total Loans

RBI Reserve Bank of India. Rating Agency Means ICRA Limited

Record Date Shall mean, in relation to any date on which any payments are scheduled to be made by the Company to the Debenture Holders, the day falling 15 (fifteen) calendar days prior to such date.

Redemption Amount Shall mean, with reference to each Debenture, the principal amount (plus the accrued Coupon, if any) payable in installments on each of the Redemption Dates in the manner specified in the Transactional Documents as well as in Annexure VI.

Redemption Dates Shall mean, collectively, the First Partial Redemption Date, the Second Partial Redemption Date and Final Redemption Date and Redemption Date shall mean any one of them.

Register of Beneficial Owners

Means the register maintained by the Company containing the name(s) of the Debenture Holders, which register shall maintained at the registered office of the Company.

Return on Assets (net of Donations)

Means, for any period, the Net Operating Income of the Company over the preceding 12 (twelve) month period divided by its Total Assets (less Donations) over the preceding 12 (twelve) month period.

R&T Agent / Registrar Registrar and Transfer Agent to the Issue, in this case being Karvy Computershare Pvt. Ltd

ROC 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

The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulation, 2008, SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 issued by SEBI, as amended from time to time.

Second Partial Redemption Date

Means the date occurring on the expiry of a period of 54 months from the Deemed Date of Allotment.

Secured Obligations Means the Obligations, and includes the making of payment of any interest, redemption of principal amounts, default interest, liquidated damages and any other costs, charges and expenses

Security Means the security to be provided by the Company as security for


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the discharge of the Secured Obligations and shall consist of: (a) a first ranking excessive charge created over the Hypothecated Assets pursuant to the Deed of Hypothecation and (b) a first ranking pari passu mortgage created over the Immovable Property by and under the Transactional Documents.

Special Majority Debenture Holders

Shall mean such number of Debenture Holders collectively holding more than 75% (Seventy Five Percent) of the value of the Outstanding Principal Amount of the Debentures.

Special Resolution

Means a resolution passed at a duly organized meeting of the Debenture Holder held in accordance to the provisions of the Transactional Documents and carried by the Special Majority Debenture Holders in value of the votes cast on a poll held in accordance with the DTMD.

Tax

Shall mean any and all present or future, direct or indirect, claims for tax, levy, impost, duty, cess, statutory due or other charge of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) including on gross receipts, sales, turn-over, value addition, use, consumption, property, service, income, franchise, capital, occupation, license, excise, documents (such as stamp duties) and customs, any additional cess and other government levies and other taxes, duties, assessments, or fees, however imposed, withheld, levied, or assessed by any government, but shall not include tax on the income of any Party

TDS Tax Deducted at Source. Terms & Conditions Shall mean the terms and conditions pertaining to the Issue as

outlined in the Transaction Documents Total Assets Shall mean, for any date of determination, the total Assets of the

Company on such date, including owned, securitised and managed (non-owned) portfolio.

Total Liabilities Shall mean, for any date of determination, the total Liabilities of the Company on such date. This shall include, for any date of determination, the liabilities of the Company on such date as the same would be determined in accordance with the Accounting Principles at such date.

Total Loans Shall mean the outstanding aggregate principal amount of all Client Loans and other credit facilities provided by the Company, including securitised assets and managed (non-owned) portfolio.

Transaction Documents Shall mean the documents executed in relation to the issue of the Debentures and shall include the Information Memorandum, the Trustee Agreement, the Deed of Hypothecation, the Debenture Trustee-cum-Mortgage Deed and any other document that may be designated by the Debenture Trustee as a Transaction Document,

Trustee Agreement Means the debenture trustee agreement to be entered into by and between the Company and the Debenture Trustee


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Un-Hedged Open Foreign Currency Ratio

Means ratio A:B where (a) A is the Foreign Exchange Assets excluding any Foreign

Exchange Liabilities (including value added tax in each case) (whether that position is long or short) to the extent it is not hedged through a foreign exchange cover, hedging facility or any similar arrangement;

and (b) B is Capital.

Written Off Loans Means the total amount of Client Loans written off in a TTM by removing the outstanding balance of the loan from Total Loans and from the Lon Loss Reserve when these loans are recognized as uncollectable.

Write Off Ratio Means the sum of Written Off Loans in a TTM as a percentage of the average gross loan balances outstanding at any reporting date


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SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 2.1 ISSUER’S DISCLAIMER

This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus and should not be construed to be a prospectus or a statement in lieu of a prospectus under 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. 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 the applicable provisions, it is not necessary for a copy of this Information Memorandum/ Disclosure Document to be filed or submitted to the SEBI for its review and/or approval. However pursuant to the provisions of Section 42 of the Companies Act 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, the copy of this Information Memorandum/ Private Placement Offer Letter shall be filed with the ROC and SEBI within the stipulated timelines under the Companies Act, 2013. This Information Memorandum has been prepared in conformity with the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 as amended from time to time and applicable RBI Circulars governing private placements of debentures by NBFCs. This Information Memorandum has been prepared solely to provide general information about the Issuer to the 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 or other evaluation and any recipient of this Information Memorandum should not consider such receipt as a recommendation to subscribe to any Debentures. Each Investor contemplating subscription to any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential investors 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 Investor’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 Investor 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 and/or the Private Placement Offer Letter 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.


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This Information Memorandum, the Private Placement Offer Letter 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 Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of this Information Memorandum and/or the Private Placement Offer Letter are intended to be used only by those Investors 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 and the Private Placement Offer Letter being issued have been sent. Any application by a person to whom the Information Memorandum and/or the Private Placement Offer Letter has not been sent by the Issuer shall be rejected without assigning any reason. The person who is in receipt of this Information Memorandum and/or the Private Placement Offer Letter shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents hereof without the consent of the Issuer. The recipient agrees to keep confidential all information provided (or made available hereafter), including, without limitation, the existence and terms of the Issue, any specific pricing information related to the Issue or the amount or terms of any fees payable to us or other parties in connection with the Issue. This Information Memorandum and/or the Private Placement Offer Letter may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Issuer. Upon request, the recipients will promptly return all material received from the Issuer (including this Information Memorandum) without retaining any copies hereof. If any recipient of this Information Memorandum and/or the Private Placement Offer Letter decides not to participate in the Issue, that recipient must promptly return this Information Memorandum and/or the Private Placement Offer Letter and all reproductions whether in whole or in part and any other information, statement, notice, opinion, memorandum, expression or forecast made or supplied at any time in relation thereto or received in connection with the Issue to the Issuer. The Issuer does not undertake to update the Information Memorandum and/or the Private Placement Offer Letter to reflect subsequent events after the date of Information Memorandum and/or the Private Placement Offer Letter and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer. Neither the delivery of this Information Memorandum, and/or the Private Placement Offer Letter 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 and/or the Private Placement Offer Letter 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 and/or the Private Placement Offer Letter in any jurisdiction where such action is required. Persons into whose possession this Information Memorandum comes are required to inform themselves about and to observe any such restrictions. The Information Memorandum is made available to potential Investors in the Issue on the strict understanding that it is confidential.


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2.2 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. 2.3 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 issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Information Memorandum. However, the Company undertakes to file this Information Memorandum/Offer Letter with SEBI within 30 days from the Deemed Date of Allotment as per the provisions of the Companies Act, 2013 and the rules thereunder. 2.4 DISCLAIMER IN RESPECT OF JURISDICTION This Issue is made in India to Investors as specified under the clause titled “Eligible Investors” of this Information Memorandum, who shall be/have been identified upfront by the Issuer. This Information Memorandum and/or the Private Placement Offer Letter does not constitute an offer to sell or an invitation to subscribe to 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 Chennai. This Information Memorandum and/or the Private Placement Offer Letter 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. 2.5 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 Rating Agency has based its ratings on information obtained from sources believed by it to be accurate and reliable. The 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 Rating Agency have paid a credit rating fee, based on the amount and type of bank facilities/instruments. 2.6 ISSUE OF DEBENTURES IN DEMATERIALISED FORM

The Debentures will be issued in dematerialised form. The Issuer has made arrangements with the Depositories for the issue of the Debentures in dematerialised form. Investors will have to hold the Debentures in dematerialised form as per the provisions of Depositories Act. The Issuer shall take necessary steps to credit the Debentures allotted to the beneficiary account maintained by the Investor with its depositary participant. The Issuer will make the Allotment to Investors


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on the Deemed Date of Allotment after verification of the Application Form, the accompanying documents and on realisation of the application money.

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 investors should carefully consider all the risk factors in this Information Memorandum and/or the Private Placement Offer Letter 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. 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. 3.1 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. 3.2 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. 3.3 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. 3.4 CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OF NCDs. 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. 3.5 TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS


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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.

3.6 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. 3.7 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. 3.8 LEGALITY OF PURCHASE Potential investors of the Debentures will be responsible for the lawfulness of the acquisition of the Debentures, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates or for compliance by that potential investor with any law, regulation or regulatory policy applicable to it. 3.9 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. 3.10 RISKS RELATED TO THE BUSINESS OF THE ISSUER

(i) Majority of the Issuer’s loans are unsecured and the clients of these unsecured loans

are of the high risk category and if the Issuer is unable to control the level of non-performing loans (“NPAs”) in the future, or if the Issuer’s loan loss reserves are insufficient to cover future loan losses, the financial condition and results of operations may be materially and adversely affected.

A majority of the Issuer’s loans are unsecured and the clients of these unsecured loans are of the high risk category. There is uncertainty on the client’s ability to fulfil its loan obligations as MFI clients typically do not have bank accounts or proper income proof verification so it can be difficult to verify all client details and assess the risk. Such non-performing or low credit quality loans can negatively impact our results of operations. The Issuer has various procedures and process controls in place to mitigate the risk. All


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group lending loans are provided under the Grameen Model and based on the joint liability of the group. As at March 2016, the gross NPA was Rs. 94.78 lakhs on a gross portfolio of Rs. 924.76 crores (including managed / securitized portfolio of Rs. 209.62 crores). The Issuer cannot assure that it will be able to effectively control and reduce the level of the NPAs of its Client Loans. The amount of its reported NPAs may increase in the future as a result of growth of Client Loans, and also due to factors beyond its control, such as over-extended member credit that it is unaware of. If the Issuer is unable to manage our NPAs or adequately recover its loans, the results of its operations will be adversely affected.

The current loan loss reserves of the Issuer may not be adequate to cover an increase in the amount of NPAs or any future deterioration in the overall credit quality of Client Loans. As a result, if the quality of its total loan portfolio deteriorates the Issuer may be required to increase its loan loss reserves, which will adversely affect its financial condition and results of operations.

The members are poor and, as a result, might be vulnerable if economic conditions worsen or growth rates decelerate in India, or if there are natural disasters such as floods and droughts in areas where the Issuer’s members live. Moreover, there is no precise method for predicting loan and credit losses, and the Issuer cannot assure that it’s monitoring and risk management procedures will effectively predict such losses or that loan loss reserves will be sufficient to cover actual losses. If the Issuer are unable to control or reduce the level of its NPAs or poor credit quality loans, it’s financial condition and results of its operations could be materially and adversely affected.

(ii) The Issuer’s business operates through a large number of rural and semi urban branches and is exposed to operational risks including fraud

The Issuer is exposed to operational risks, including fraud, petty theft and embezzlement, as it handles a large amount of cash due to high volume of small transactions. This could harm its operations and its financial position.

As the Issuer handles a large amount of cash through a high volume of small transactions taking place in its network, the Issuer is exposed to the risk of fraud or other misconduct by its employees or outsiders. These risks are further compounded due to the high level of delegation of power and responsibilities that the Issuer’s business model requires. Given the high volume of transactions processed by the Issuer, certain instances of fraud and misconduct may go unnoticed before they are discovered and successfully rectified. Even when the Issuer discovers such instances of fraud or theft and pursue them to the full extent of the law or with its insurance carriers, there can be no assurance that the Issuer will recover any such amounts. In addition, the Issuer’s dependence upon automated systems to record and process transactions may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect.

The Issuer maintains an internal audit process to ensure the operations team follows the defined procedures and reports any deviations to the operations staff and management team. The Issuer also has a strong MIS system that has a wide range of data that can be used to monitor financial and operational performance.

To mitigate the above risk, the Issuer maintains an internal audit process to ensure the operations team follows the defined procedures and reports any deviations to the operations staff and management team. The Issuer also has a MIS system able to generate data analysis that can be used to monitor financial and operational performance.

(iii) Loans due within two years account for almost all of the Issuer’s interest income,


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and a significant reduction in short term loans may result in a corresponding decrease in its interest income All of the loans the Issuer issues are due within approximately two years of disbursement. The relatively short-term nature of the Issuer’s loans means that the Issuer’s long-term interest income stream is less certain than if a portion of its loans were for a longer term. In addition, the Issuer’s customers may not obtain new loans from the Issuer upon maturity of their existing loans, particularly if competition increases. The potential instability of the Issuer’s interest income could materially and adversely affect the Issuer’s results of operations and financial position.

The loans given by the issuer are at fixed interest rate, and the tenor of the underlying asset has increased from one year to two year which has provided stability to the portfolio and interest income and has also smoothened operating expense.

(iv) The Issuer is exposed to certain political, regulatory and concentration of risks

Due to the nature of its operations, the Issuer is exposed to political, regulatory and concentration risks. The Issuer believes a mitigant to this is to expand its geographical reach and may consequently expand its operations other states. If it is not effectively able to manage such operations and expansion, it may lose money invested in such expansion, which could adversely affect its business and results of operations.

Large scale attrition, especially at the senior management level, can make it difficult for the Issuer to manage its business.

If the Issuer is not able to attract, motivate, integrate or retain qualified personnel at levels of experience that are necessary to maintain the Issuer’s quality and reputation, it will be difficult for the Issuer to manage its business and growth. The Issuer depends on the services of its executive officers and key employees for its continued operations and growth. In particular, the Issuer’s senior management has significant experience in the microfinance, banking and financial services industries. The loss of any of the Issuer’s executive officers, key employees or senior managers could negatively affect its ability to execute its business strategy, including its ability to manage its rapid growth. The Issuer’s business is also dependent on its team of personnel who directly manage its relationships with its members. The Issuer’s business and profits would suffer adversely if a substantial number of such personnel left the Issuer or became ineffective in servicing its members over a period of time. The Issuer’s future success will depend in large part on its ability to identify, attract and retain highly skilled managerial and other personnel. Competition for individuals with such specialized knowledge and experience is intense in this industry, and the Issuer may be unable to attract, motivate, integrate or retain qualified personnel at levels of experience that are necessary to maintain its quality and reputation or to sustain or expand its operations. The loss of the services of such personnel or the inability to identify, attract and retain qualified personnel in the future would make it difficult for the Issuer to manage its business and growth and to meet key objectives.

(v) The Issuer’s business and results of operations would be adversely affected by strikes, work stoppages or increased wage demands by employees The employees are not currently unionized. However, there can be no assurance that they will not unionize in the future. If the employees unionize, it may become difficult to maintain flexible labour policies, and could result in high labour costs, which would adversely affect the Issuer’s business and results of operations.

(vi) The Issuer’s insurance coverage may not adequately protect it against losses. Successful claims that exceed its insurance coverage could harm the Issuer’s results of operations and diminish its financial position


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The Issuer maintains insurance coverage of the type and in the amounts that it believes are commensurate with its operations and other general liability insurances. The Issuer’s insurance policies, however, may not provide adequate coverage in certain circumstances and may be subject to certain deductibles, exclusions and limits on coverage.

In addition, there are various types of risks and losses for which the Issuer does not maintain insurance, such as losses due to business interruption and natural disasters, because they are either uninsurable or because insurance is not available to the Issuer on acceptable terms. A successful assertion of one or more large claims against the Issuer that exceeds it’s available insurance coverage or results in changes in its insurance policies, including premium increases or the imposition of a larger deductible or co-insurance requirement, could adversely affect the Issuer’s business, financial condition and results of operations.

(vii) The Issuer requires certain statutory and regulatory approvals for conducting its business and the failure to obtain or retain them in a timely manner, or at all, may adversely affect operations NBFCs in India are subject to strict regulation and supervision by the RBI. Pursuant to guidelines issued by the RBI (circular dated August 3, 2012 and NBFC-MFI Directions) the Issuer is required to maintain its status as a NBFC-MFI in order to be eligible for categorization as priority sector advance for bank loans. See ‘risk factor titled ―Current Microfinance Industry Challenges’ for details. The Issuer requires certain approvals, licenses, registrations and permissions for operating its business, including registration with the RBI as a NBFC-MFI. Further, such approvals, licenses, registrations and permissions must be maintained/renewed over time, applicable requirements may change and the Issuer may not be aware of or comply with all requirements all of the time. Additionally, the Issuer may need additional approvals from regulators to introduce new insurance and other fee based products to its members. In particular, the Issuer is required to obtain a certificate of registration for carrying on business as a NBFC-MFI that is subject to numerous conditions. In addition, its branches are required to be registered under the relevant shops and establishments laws of the states in which they are located. The shops and establishments laws regulate various employment conditions, including working hours, holidays and leave and overtime compensation. If the Issuer fails to obtain or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, its business may be adversely affected. If the Issuer fails to comply, or a regulator claims that it has not complied, with any of these conditions, the Issuer’s certificate of registration may be suspended or cancelled and it shall not be able to carry on such activities. If the Issuer fails to comply with the NBFC-MFI Directions and fails to maintain the status of NBFC-MFI, it will not be eligible for priority sector loans from the Indian banking sector and may also attract penal provisions under the RBI Act, 1934 for non-compliance.


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SECTION 4: FINANCIAL STATEMENTS

Set out in Annexure V hereto


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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. 5.1 Documents Submitted to the Exchanges The following documents have been / shall be submitted to the BSE: (i) Memorandum and Articles of Association of the Issuer and necessary resolution(s) for

the allotment of the Debentures; (ii) Copy of last 3 (Three) years audited Annual Reports; (iii) Statement containing particulars of, dates of, and parties to all material contracts and

agreements; (iv) Certified true copy of the resolution passed by the shareholders of the Company at the

Extra-Ordinary General Meeting held on April 22, 2016, authorizing the issue/offer of non-convertible debentures by the Company;

(v) Certified true copy of the board resolution dated May, 10, 2016 authorizing the Issue and list of authorized signatories of issuance of the Debentures;

(vi) Certified true copy of the resolution passed by the Company at the Extra-Ordinary General Meeting held on April 22, 2016 authorising the Company to borrow, upon such terms as the Board may think fit, upto an aggregate limit of INR 1200,00,00,000/- (Rupees Twelve Hundred Crores Only);

(vii) Certified true copy of the resolution passed by the Company at the Extra-Ordinary General Meeting held on April 22, 2016 authorising the Company to create security or charge on the assets of the company;

(viii) An undertaking from the Issuer stating that the necessary documents including the DTMD and Deed of Hypothecation 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 15 (fifteen) working days of execution of the same;

(ix) An undertaking that permission/ consent from the prior creditor for a second or pari passu charge being created, in favour of the trustees to the proposed issue has been obtained; and

(x) Any other particulars or documents that the recognized stock exchange may call for as it deems fit.

5.2 Documents Submitted to Debenture Trustee The following documents have been / shall be submitted to the Debenture Trustee: (i) Memorandum and Articles of Association of the Issuer and necessary resolution(s) for

the allotment of the Debentures; (ii) Copy of last 3 (Three) years audited Annual Reports; (iii) Statement containing particulars of, dates of, and parties to all material contracts and

agreements; (iv) 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.

(v) 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 including for furnishing / publishing its half yearly/ annual result and any other information as prescribed in SEBI's circular no. CFD/CMD/6/2015 dated October 13, 2015, as amended from time to time and/or any


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other notification, circular, press release issued by the SEBI/RBI, from time to time. Further, the Issuer shall within 180 (One Hundred and Eighty) calendar days or such other time period as may be prescribed in the listing agreement read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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) Business Days of their specific request.

5.3 Name and Address of Registered Office of the Issuer

Name: Annapurna Microfinance Private Limited Registered Office of Issuer: HIG- 97, Dharma Vihar, Khandagiri, Bhubaneswar 751030, Odisha Corporate Office of Issuer: 1215/1401, Khandagiri Bari, Opposite Jayadev Vatika, Khandagiri, Bhubaneswar – 751030, Odisha Compliance Officer of Issuer: Mr. Subrata Pradhan CFO of Issuer: Mr. Dibyajyoti Pattanaik Registration Number: B. 04-00027 Corporate Identification Number: U52234OR1986PTC015931 Phone No.: +91-674-2350253 Contact Person: Mr. Subrata Pradhan Email: [email protected] Website of Issuer: www.ampl.net.in Auditors of the Issuer: S. R. Batliboi & Associates LLP Trustee to the Issue: GDA Trusteeship Limited Address: GDA House, Plot No. 85, Bhusari Colony (Right), Paud Road, Pune – 411038 Registrar to the Issue: Karvy Computershare Private Limited 7th floor, 701, Hallmark Business Plaza Sant Dnyaneshwar Marg, Off Bandra Kurla Complex Bandra East Mumbai - 400 051, India Credit Rating Agency of the Issue: ICRA Limited A-10 & 11, 3rd Floor, FMC Fortuna 234/3A, A.J.C. Bose Road Kolkata—700020

mailto:[email protected]

http://www.ampl.net.in


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A brief summary of business / activities of the Issuer and its line of business (i) Overview Annapurna Microfinance Private Limited (AMPL) is a non-deposit accepting or taking NBFC micro-finance institution registered with the Reserve Bank of India. AMPL was started as Mission Annapurna by People‘s Forum (the parent organisation) to carry out the microfinance activities of People‘s Forum. People‘s Forum has been in operations since 1994 and is engaged in wide array of developmental activities for the poor including microfinance, healthcare, women empowerment, agricultural and allied services training, microenterprise training programs etc. The company’s mission is “Establishment of a self -sustainable and economically empowered rural, tribal & sub-urban society”. Mission Annapurna was subsequently converted to an NBFC in Financial Year (FY) 2008-09 after acquisition of an NBFC. The organisation is jointly promoted by Mr Gobinda Pattanaik and Mr Dibyajyoti Pattanaik. Mr Gobinda Pattanaik, a development professional is the chief promoter. Gobinda Pattanaik started Peoples Forum (PF) in 1988 which is one of the largest NGOs operating in Odisha. PF today works on a wide variety of issues including mental health and rehabilitation of destitute women, natural resource management, and reproductive child health and community health care including HIV/AIDS awareness. AMPL has its head office in Bhubaneswar and operates in mainly rural areas with a good presence in semi urban areas and small presence in urban areas. The company is present mainly in the state of Odisha with a small presence in Chhattisgarh, Bihar, Jharkhand, Madhya Pradesh, Maharashtra, Rajasthan, Tripura, Assam & Meghalaya. Industry Overview Indian microfinance now has 70 million borrower accounts, by-far the largest in any country across the world. Over the last year Indian microfinance institutions that are organised as NBFC-MFIs and operating in remote rural areas of India have emerged as effective financial intermediaries offering an alternative to the inaccessible formal financial institutions. Most of them who received funding and growth capital from banks, have demonstrated commendable scale, sustainability and impact. Many NBFC-MFIs have received a good quantum of capital in FY 2016 in the form of both debt and equity. Almost all NBFC-MFIs (less than INR 1000 crores of assets under management) have been consistent in their growth, maintaining excellent portfolio quality in FY 2016. As a result of a crisis in the MFI industry on October 2010 in the southern state of Andhra Pradesh, the RBI set up a committee to study issues and concerns in the MFI sector, which provided the Malegam Committee Report. The Malegam Committee Report has made various operational and financial recommendations on the microfinance sector that may have negative implications on the operating and financial performance of MFIs including the Issuer. Some of the recommendations made include:

i. Increase in regulatory restrictions on a NBFC-MFI (minimum net worth, establishing client protection codes, increase in information technology systems and corporate governance, maintenance of solvency and penalty on MFI for non-compliance);

ii. State level legislations to be enacted for regulation of MFIs; Maximum indebtedness of an individual borrower;

iii. Maximum annual income of a household qualifying for a loan from an NBFC-MFI; iv. Maximum number of loans to an individual borrower;


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v. Restrictions on the end usage of the loan for income generating purposes; and vi. Maximum interest rate and maximum margin over cost of funds, maximum

processing fees. Most of the recommendations made under the Malegam Committee Report in January 2011 have been accepted by RBI and the RBI has issued circular dated July 20, 2012 to banks stating that bank loans to micro finance sector will be eligible for categorization as priority sector advance if they meet the eligibility criteria‘s set out in the said circular and has created a new category of NBFCs called the Non-Banking Financial Company-Micro Finance Institution (the NBFC-MFIs). The directions issued by the RBI on August 3, 2012 have been incorporated and now form part of the NBFC-MFI Directions. The NBFC-MFI Directions have been further modified on April 08, 2015

All non-deposit taking NBFCs (other than a company licensed under Section 25 of the Indian Company Act, 1956) that has not less than 85% of its net assets in the nature of ―qualifying assets and has a minimum net owned funds of Rs. 5 Crores other than the ones registered in north eastern region of the country for which net owned fund requirement stands at Rs. 2 Crores. The existing NBFCs to be classified as NBFC-MFIs will be required to comply with the NBFC-MFI Directions w.e.f. April 01, 2012. Existing NBFCs with asset size of more than Rs. 100 Crores are required to maintain a minimum CRAR of 15% from Dec 2, 2011 onwards. Some of the key requirements of the NBFC-MFI Directions and subsequent modifications which the Issuer is required to comply with which will affect the business operations of the Issuer, which are:

i. All registered NBFCs intending to convert to NBFC-MFI must seek registration with

immediate effect and in any case not later than October 31, 2012, subject to the condition that they shall maintain Net Owned Funds (NOF) at Rs.3 Crores by March 31, 2013 and at Rs.5 Crores by March 31, 2014, failing which they must ensure that lending to the Microfinance sector i.e. individuals, SHGs or JLGs which qualify for loans from MFIs, will be restricted to 10 per cent of the total assets.

ii. NBFC-MFIs are required to maintain not less than 85 per cent of their net assets as Qualifying Assets. In view of the problems being faced by NBFCs in complying with these criteria on account of their existing portfolio, it has been decided that only the assets originated on or after January 1, 2012 will have to comply with the Qualifying Assets criteria. As a special dispensation, the existing assets as on January 1, 2012 will be reckoned towards meeting both the Qualifying Assets criteria as well as the Total Net Assets criteria.

iii. Rate of interest on individual loans may exceed 26%, the maximum variance permitted

for individual loans between the minimum and maximum interest rate cannot exceed 4 per cent.

iv. Maintain margin cap of 10% for NBFC- MFIs with assets more than INR 100 Crores

and 12% for NBFC-MFIs with assets less than INR 100 Crores

v. NBFC-MFIs are also required to ensure that the aggregate amount of loans given for income generation is not less than 75 per cent of the total loans extended.

vi. NBFI MFIs will have to ensure compliance with, among others, conditions relating to

annual household income levels Rs. 100,000/- for rural and Rs. 160,000/- for urban and semi urban households, total indebtedness not to exceed Rs. 100,000/- membership of SHG/JLG, borrowing sources as well as percentage of qualifying assets and percentage of income generating assets


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vii. Maintain fair practices in lending as stated in the NBFC-MFI Directions;

viii. Ensure that it has a code of conduct and systems are in place for supervision of field

staff such that non- coercive methods for recovery are used;

ix. Ensure corporate governance norms are adopted and there is improvement in efficiency, information technologies etc.; and submit statutory auditors certificate with reference to the position of the company as at end of the financial year ended March 31, every year which should also indicate that the company fulfils all conditions stipulated to be classified as an NBFC-MFI.

(ii) Corporate Structure i. Vision and Mission:

The company's mission is "Empowerment of 10,00,000 poor women and households for their economic security by 2018. Bring recognition, legitimacy, respect and opportunity for 2,50,000 micro-entrepreneurs by 2018”.

The company’s vision is “Establishment of a self -sustainable and economically empowered rural, tribal & sub-urban society”.

ii. Current Corporate Status:

The Issuer was incorporated as a private limited company and is currently registered as a NBFC-MFI with the RBI. The Issuer derives the following benefits of being registered as an NBFC-MFI:

Access to Funds: Commercial lenders have greater comfort lending to a regulated NBFC-MFI with transparent ownership. As an Issuer, Annapurna can raise equity and offer commercial returns.

Diverse Funding Sources: An NBFC-MFI can access commercial investors and international capital markets, diversifying away from donors or members as equity funders.

Commercialisation: Classifying Annapurna as an NBFC-MFI increases its commercial credibility and integrates it and its clients into the formal financial sector which ultimately increases its outreach potential.

Mainstream Resources: As a for-profit commercial NBFC-MFI, Annapurna will be more likely to attract mainstream capital resources which Societies or Trusts would find difficult to attract.

Regulatory Coverage: As Annapurna grows in size, operating as an NBFC-MFI within the regulatory framework mitigates risks from political and regulatory intervention.

Stakeholder Involvement: As an NBFC-MFI, Annapurna can bring a variety of stakeholders to the table, including clients, management, employees and investors.


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iii. Brief Profile of the Board of Directors

Board Of Directors Name Designation Experience Mr. Gobinda Chandra Pattanaik

Managing Director

M.A. LLB: He has a good understanding of microfinance and has more than two decade of experience in implementing various developmental and micro enterprise activities. He played key role in setting up various community institutions, is an advisor to various Dist. Administrations and is a member in various committee formed by state govt.

Mr. Dibyajyoti Pattanaik

Promoter Director

PGDM: He also holds a management certificate from Boulder institute of management, USA in micro finance and a post graduate in management from Entrepreneurship Development Institute of India,(EDII) Ahmedabad with specialization in micro finance and micro enterprise management. He is instrumental in building this programme from a team of 5 to a 240 people in 4 years while working as a programme head and CFO at mission Annapurna of people’s forum. He played a key role in transformation of mission Annapurna to Annapurna micro finance private limited a NBFC MFI.

Mr. Aditya Bhandari

Nominee Director (Incofin)

B.Com, FCA: He has over seven years of experience in private equity, venture capital, investment banking and corporate finance. His professional repertoire includes working with Aavishkaar Venture Capital, Goldman Sachs and Standard Chartered Bank.

Mr. Ashok Ranjan Samal

Nominee Director (SIDBI)

Mr. Ashok Ranjan Samal has rich experience of more than 31 years in development banking with diverse and long association with Micro Finance sector. Before retirement from SIDBI he served as General Manager at SIDBI’s Head Office Lucknow and looking after SIDBI Foundation for Microcredit (SFMC). Mr. Samal is a Certified Associate of Indian Institute of Bankers (CAIIB) and Post Graduate in English from Utkal University.


27

Board Of Directors Name Designation Experience Mrs. Laetitia Counye

Nominee Director (BIO)

MS (Business Economics): Ms Counye has a 10+ years track record in private equity investments both in emerging and developed markets after having started her career in asset management. Between 2007 – 2011 Ms Counye served as a private equity consultant for Incofin Investment Management, manager of several microfinance investment vehicles worldwide.

Mr. K.K. Tiwary

Independent Director

M.Com, FCA: Mr. Tiwary is a senior Chartered Accountant and has the expertise in various fields of audit, taxation, Project consultancy, Micro Finance, NBFC takeovers and financing activities. He has an exclusive expertise over development, control, audit and monitoring the Financial organization for his MFI Clients.

Mr. Sean Nossel


MBA, CFA: Mr. Nossel has 20 years of immense experience in the field of Insurance, Investment Banking, Structure Finance, Private Equity and Financial Markets. He has worked with JP Morgan Investment Bank, US as an Executive Director.

Mr. R.V Dilip Kumar

Nominee Director (SVCL)

Mr. Dilip has been with SIDBI Venture Capital Limited (SVCL) since its inception in 1999 and was part of the core team which had set up SIDBI Ventures, SIDBI Trustee Company and NFSIT. He represents SVCL on the Boards of some portfolio companies, where he has played an active role in building up systems and processes.

Prior to joining SVCL in 1999, Dilip was with SIDBI for nearly 8 years with experience in credit appraisal, accounts and audit functions. He is a Post Graduate in Commerce and Economics, AICWA, CS (Inter), PGDBA and CAIIB

iv. Brief Profile of the Senior Management

Sl. No Name of the Employee Designation Major Responsibilities

1 Mr. Dibyajyoti Pattanaik Director

Since very beginning of the program, he has been instrumental in streamlining and administering overall operations of the company.

2 Mr. Sanjay Pattanaik

Chief Operating officer

He is a trainer in micro entrepreneurship. Along with being a trainer in the field of entrepreneurship, his expertise also lies in the areas of achievement motivation, soft skill development. His expertise helped people’s forum in SHG grooming, development and leadership building. He has worked with different management institution as faculty. By now he has trained around 5000 persons.

3 Mr. Satyajit Das Chief Finance Manager

His main functions include mobilising resources for the company. His good understanding of the sector makes him an instrumental person in exploring new opportunities and implementing them in the organisation.

4 Mr. Sabhyasachi Sahoo

Chief Manager – Credit & Appraisal

Has good experience of micro finance and has been instrumental in strengthening and streamlining the overall operations from the beginning of the programme.

5 Mr. Rakesh Chief Manager – Treasury Management, data entry and maintain the


28

Ranjan Rath Accounts database of company transactions.

6 Mr. Manas Ranjan Pattanaik

Chief Manager (Zonal Head, Madhya Pradesh)

With his valuable experience in microfinance and development sector, he is currently looking after the business expansion & operation at Madhya Pradesh.

7 Mr. Suraj Bali Painkra

Senior Manager- Internal Audit

With his 32 member audit team, he is the key person looking after monthly audit of branches. He is also a part of appraisal committee that sanctions loan disbursements. Prior to this, he was handling micro-insurance in Bajaj Allianz & has a rich experience of more than 8 years.

8 Mr. Hara Prasad Mishra

Senior Manager – HR

He looks after the manpower requirements of the company. He takes care of HR verticals like Employee engagement, Compensation Management, Training interventions & other talent management activities.

9 Ms. Bandita Behera

Associate Manager - MIS

Her key role includes co-ordinating different branches and maintaining all necessary records. She also caters to the data requirement needs of external agencies.

10 Mr. Subrata Pradhan

Company Secretary

Instrumental handling Company Secretary’s and Legal Functions independently. He is expertise in all the aspects of the Company Law, Legal and Statutory Compliances.

11 Ms. Akansha Madnani

Manager- Institutional Finance

Having practical exposure of the development sector, she is currently involved in managing and streamlining financial operations of the company.

12 Mr. Binod Bihari Mishra

Senior Manager – Operation (Zonal Head, Odisha Central Zone)

Streamlining the operations of branches in a particular zone. Implementing the management policies on field. He is currently handling the portfolio in 36 branches of Odisha.

13 Mr. Ramkrishna Atre Manager - Product

By profession he is involved in exploring new product opportunities in the market and in designing the product.

14 Mr. Anoop TP Manager - Risk Mr. Anoop T P is currently handling the Risk Department of AMPL

15 Mr. Bharat Bakshi Associate Manager (SWASTH Project)

A MBA graduate who leads the SWASTH product independently in our branches.

16 Mr. Nagesh Kumar Sunkari

Senior Manager – Operation (Business Correspondence, Odisha)

He has an ample experience in microfinance sector. He is the key person looking after all the business correspondence transaction assignments taken up by the company.

17 Mr. Kumar Vaibhav

Senior Manager – Institutional Finance

Has an ample experience in banking sector & is currently involved in managing and streamlining financial operations of the company.

18 Mr. Pramod Kumar Panda

Senior Manager – Insurance

A business professional having rich experience if Insurance sector. He is currently dealing with the clientele insurance of the company.

19 Mr. Rajiv Kumar Mishra

Senior Manager – Operation (Chhattisgarh Business Correspondence)

He is the key person taking care of the BC assignments at Chhattisgarh Zone.

20. Mr. S.A. Sabir Senior Manager – Dedicatedly looking after the business expansion at


29

Operation (Zonal Head, Aurangabad Zone)

Aurangabad Zone of Maharashtra. Involved in strategic business plan and implementation.

21. Mr. Pabitra Barik Senior Manager – Operation (Zonal Head, Odisha Western Zone)

He has a rich experience in Banking as well as MFI sector. Currently managing portfolio of 30 branches of Odisha.

22. Mr. Sudhir Pattanaik

Senior Manager – Operation (Zonal Head, Chhattisgarh)

He is presently handling 26 branches and looking after the business operation in Chhattisgarh zone.

23 Mr. Pradeepta Champatiray Manager – IT

He is presently looking after the IT vertical of the company. He is taking care of system installation and management across all the branches, Regional Offices and H.O.

24 Mr. Parashar Kemparai

Manager – Operation (Zonal Head, Nagpur Zone)

A Management graduate from IIFM. He is currently handling the business operation in Nagpur zone.

25 Mr. Soham Patra Manager – Operation (Zonal Head, Jharkhand)

A MBA graduate from KIIT Bhubaneswar. He is currently handling the business operation in Jharkhand zone.

26 Mr. Subrat Sabyasachi Roy

Senior Manager – Operation (Zonal Head, Bihar)

With an all round experience in development and insurance sector, he is currently looking after the business expansion and operation in Bihar zone.

27 Mr. Laxman Kumar Mohapatra

Senior Manager – Accounts & Treasury

With rich and diverse experience with regard to finance and accounts, is currently heading the treasury department.

v. Business Segments

PRODUCT DETAILS

Product Features Purpose Agricultural Crops

Amount:8000-30000, tenure: 12-24 months, ROI: 22-23%

To be utilized for financing agricultural activities.

Trade & Enterprise Loan

Amount:8000-40000, tenure: 12-24 months, ROI: 22-23%

To be utilized for financing trade and entrepreneurial activity.

Agri-Allied Amount:8000-50000, tenure: 12-24 months, ROI: 22-23%

To be utilized for financing agri-allied activities like dairy etc.

Education Loan Amount:10000-100000, tenure: 12-36 months, ROI: 18%

To be utilized for financing education needs of rural and urban poor.

Water &Sanitation Loan

Amount:10000-25000, tenure: 12-24 months, ROI: 22%

To be utilized for finance requirement for building toilets and safe water equipment.

Solar Home Lighting Systems Loan

Amount:2000-5000, tenure: upto 12 months, ROI: 18%

To be utilized for financing solar lighting systems.

Microenterprise Loan

Amount: INR 25,000 to 3,00,000; Tenure: 12-36 months, ROI: 26%

For micro enterprises (service, trade or manufacturing)

Home Amount: INR 20,000 to 1,20,000; Tenure: For major or minor home repairs or


30

Improvement Loan

12-48 months, ROI: 22% home extension only

Dairy Development Loan

Amount: INR 32,000 to 1,28,000; Tenure:12-36 months; ROI: 23%

For financing of Cross breed cows only

Crop Loan Amount: 25,000 (For vegetables); Tenure: 12 months; ROI: 23%

To finance the needs of all the costs of cultivation of vegetables (for the pilot phase)

vi. Lending Methodology

Origination Process: Once a branch is setup in an area the BMs and FCOs conduct survey of areas within

its vicinity identifying the demographic and activity patterns of the areas. Based upon their judgement of the area and the areas are selected or rejected. The process of area identification and rejection are not completely formalized and documented.

Once an area has been identified then the FCOs set out in the identified village and try to gather information about existing SHG groups through the ‘Anganwadi’. At the same time they also conduct village level meetings to inform the village people about their organization and the importance of savings. In such meetings they generally focus on highlighting the importance of forming groups and savings and do not emphasize a lot about their loan product.

The village level meeting and announcements are followed by a second round of meetings which are towards the target clients. This is attended only by eligible women and here the women are encouraged to form groups to engage in group savings. Although the groups are formed by the women themselves the groups formed should adhere to the following: A group generally has 10 to 20 members. FCOs are generally advised to form group

with at least 12 to 15 members to handle client dropouts during the observation period as well during the tenure of the loan.

AMPL does not allow new members to join a group in between. Also all members in a group are given the same amount of loan and also inter-cycle SHGs are not allowed.

The group comprises of the low income villagers, specifically women belonging to the poor and marginalized families in the villages for the group formation.

The rules and regulations set are abiding for one and all in the group. There should be no discrimination between the people figuring in the BPL records

of govt. and those not enlisted. There should not be any bias or favouritism in terms of caste, community or

religion The group should be homogeneous in nature in terms of sex, religion, economic and

social status etc. to avoid any conflict. Members should not be scattered all across the village. People from the same

vicinity should become members of a particular group. There can be several groups in a village places in different areas of the village.

Of late AMPL has allowed groups with just 8 members to qualify for loan. This flexibility has been introduced to handle multiple dropouts as AMPL does not merge groups or allow new members to be part of existing groups.


31

Loan Utilization Check: The loan utilization check is performed by the FCO and the BM. 100% audit is done on all cases post disbursement by internal auditors and documented. Cash Management:

Cash management has been given very high importance in Annapurna. All branches have an almirah with a locker in which cash is deposited. AMPL has also availed of in-transit insurance whereby cash up to INR 40,000 is insured for each of the FCOs for a period of one day. The cash collected by each FCO is directly deposited in the bank account of PF either on the same day or brought to the branch in case of delay in collection. The same is stored in the branch and deposited in the branch the next day. The branch cash retention limit is INR 10,000 and amounts larger than this can be held at the branch only if the bank is closed before the collections are over. The undisbursed amount of the loan is however maintained in the branch until it has been disbursed.

Delinquency Management: Pre-recovery visits are held where the FCO meets all the members of the SHG to remind them about the upcoming instalment. During this meeting members’ who might face difficulty in repaying the particular instalment generally announce the same to the group. This helps to pre-empt over-dues and default by exerting group pressure or by preparing the other group members to contribute for the member who is unable to pay.

The FCOs visit the SHG group members for recoveries. Attendance is not compulsory during this meeting and group members generally pool their money to pay the FCO. The FCO also updates the pass book of the SHG members during the visit. Each collection meeting lasts for about 20 minutes.

The repayments are collected by the field coordinator on a monthly basis at the cluster meeting. AMPL’s loan monitoring mechanism is relatively good. The field coordinator has to complete the loan utilization check within seven days of disbursements and should submit the report to the branch manager. The field officer has to compulsorily attend the monthly SHG meeting. Moreover, the field coordinator also conducts a pre recovery visit a week before the instalment is due to ascertain whether the group has any issues in repayment. If they do, the issues are addressed immediately. The branch and area managers conduct surprise visits to the SHG for verifying the records maintained at the SHG level. The loan portfolio is monitored at each level by the head office staff.

Credit Bureau Check The Issuer will not give a loan to a member if they have more than two other loans outstanding. These measures have helped the Issuer mitigate the credit risk in a sector and have allowed it to maintain a cumulative repayment rate of over 98%.

(iii) Key Operational and Financial Parameters for the last 3 audited years (Rs. Crore)

Parameters Audited Audited Audited 31-Mar-13 31-Mar-14 31-Mar-15

Total Debt 67.83 141.71 246.55 - Non current maturities of long term Borrowings 23.88 59.16 99.31 - short term borrowings 0 0 0 - Current maturities of long term Borrowings 43.95 82.55 147.24 Net Fixed Assets 0.21 0.86 2.14 Non-Current Assets 16.59 31.46 92.36


32

Cash and Cash equivalents 20.31 83.04 99.1 Current investments 3.7 0.23 71.97 Current Assets 2.48 5.77 3.24 Current liabilities 4.6 18.23 94.32 Assets Under Management 92.01 170.39 398.2 Off balance sheet assets 37.6 72.2 70.7 Interest Income 8.05 17.47 44.3 Interest Expense 3.76 11.52 30.93 Provisioning & write Offs 0.54 0.98 8.97 PAT 1.79 4.2 3.06 Gross NPA (%) 0.17% 0.10% 0.08% Net NPA (%) 0.00% 0.00% 0.00% Tier I Capital Adequacy Ratio (%) 26.95% 24.42% 15.53% Tier II Capital Adequacy Ratio (%) 15.01% 25.50% 7.54% Gross Debt: Equity Ratio of the Company as of March 31, 2016:

Before the issue of debt securities 7.31 After the issue of debt securities 7.82

Calculations

As on March 31, 2016 debt-to-equity ratio is calculated as follows:-

Debt Rs. 852,94,47,958.15 Equity Rs. 116,70,45,461.00 Debt/Equity 7.31

Subsequent to the issue, debt-to-equity ratio shall be calculated as follows:-

Debt Rs. 912,94,47,958.15 Equity Rs. 116,70,45,461.00 Debt/Equity 7.82 (iv) Project cost and means of financing, in case of funding new projects: Not

Applicable

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

(i) Details of Share Capital as on last quarter end i.e. March 31, 2016:

Share Capital Rs. Authorised 43,00,00,000.00 3,80,00,000 Equity shares (previous year 2014-15, 3,30,00,000 of Rs. 10/- each 38,00,00,000.00 50,00,000 Preference Share (previous year 2014-15, 20,00,000) of Rs. 10/- each 5,00,00,000.00 TOTAL 43,00,00,000.00 Issued, Subscribed and Fully Paid- up

3,13,81,155 Equity shares (previous year 2014-15, 2,41,95,074) of Rs. 10/- each 31,38,11,550.00 50,00,000 Preference Share (previous year 2014-15, 20,00,000) of Rs. 10 each 5,00,00,000.00 TOTAL 36,38,11,550.00


33

(ii) Changes in its capital structure as on last quarter end i.e. March 31, 2016, for the last five years:

Date of Change (AGM/EGM) Authorised Capital in Rs. Particulars 30.11.2009 500,00,000 Increase from Rs. 30,00,000 15.12.2010 800,00,000 Increase from Rs. 500,00,000 10.06.2012 1800,00,000 Increase from Rs 800,00,000 13/01/2014 3500,00,000 Increase from Rs 1800,00,000 28/09/2015 3800,00,000 Increase from Rs 3500,00,000 08/02/2016 4300,00,000 Increase from Rs 3800,00,000

(iii) Equity Share Capital History of the Company as on last quarter end i.e. March 31, 2016,

for the last five years:

Cumulative Paid Up Capital

Date of Allotment

Name of Investor

No of Equity Shares

Face Value ( in Rs )

Issue Price ( in Rs )

Consideration

Nature of Allotment

Cumulative No. of Equity Shares

Equity Share Capital ( Rs in Crore)

Equity Share Premium ( Rs in Crore)

17.03.10 Dia Vikash 25,00,00

0 10 10 Cash Fresh Equity Shares 27,64,700 2.76 0

15.07.10

Gobinda C. Pattanaik (Promoter)

2,80,000 10 10 Cash Fresh Equity Shares 30,44,700 3.04 0

30.12.10


10,57,500 10 10 Cash Fresh Equity

Shares 41,02,200 4.10 0

30.12.10 Nijar Finance 10,00,00


20.06.11 Gulmohar 5,00,000 10 10 Cash

Transferred from Dia

Vikash and Nijjar Finance

56,02,200 5.60 0

27.06.12


7,56,731 10 10 Cash Fresh Equity Shares 63,58,931 6.36 0

29.06.12

Incofin RIF East II

35,79,298 10 18.1

6 Cash Fresh Equity Shares 99,38,229 9.94 2.92

05.02.13 SIDBI 10,00,00


13.07.13

Incofin RIF East II (CCD conversion)

33,83,654 10 19.2

1 Cash Fresh Equity Shares 143,21,000 14.32 6.04

27.03.14

Incofin RIF East II 3,87,147 10 25.8

3 Cash Fresh Equity Shares

147,09,030 14.70 6.65

27.03.14 BIO 19,35,73

4 10 25.83 Cash Fresh Equity

Shares 166,44,764

16.64 9.71

30.09.14 RIF East 2 12,18,39

8 10 32.83 Cash

Conversion of CCD into

Equity 178,63,162 17.86 26.40

30.09.14 BIO 60,91,98

9 10 32.83 Cash

Conversion of CCD into

Equity 2,39,55,151 23.95

31.03.2015

SIDBI Venture Capital Limited

2,39,923 10 41.68 Cash Fresh Equity

Shares 2,41,95,074 24.19 27.16

10.06.2015

SIDBI Venture Capital Ltd

53,61,930 10 44.7

6 Cash Conversion of

CCD into Equity

2,95,57,004 29.55 45.79


34

24.02.2016

DCB Bank Ltd.

18,24,151 10 54.8

2 Cash Fresh Equity Shares 3,13,81,155 31.38 53.96

(iv) Details of any Acquisition or Amalgamation in the last 1 (one) year: NIL

(v) Details of any Reorganization or Reconstruction in the last 1 (one) year: NIL 5.5 Details of the shareholding of the Company as on the latest quarter end, i.e.

March 31, 2016:

(i) Shareholding pattern of the Company as on last quarter end, i.e. March 31, 2016,

Sr. No.

Name of the Shareholder / Particulars Class

Total Number of

equity shares

Total percentage

(% ) of Shareholding

Number of shares held in Demat

Form 1. Gobinda Chandra Pattanaik Class A 62,92,731 20.052 None 2. Dibyajyoti Pattanaik Class A 66,200 0.211 None 3. RIF East 2 Class A 85,68,497 27.304 None 4. BIO Class A 80,27,723 25.581 None 5. SIDBI Class A 10,00,000 3.186 None 6. SIDBI Venture Capital Limited Class A 56,01,853 17.851 None 7. DCB Bank Ltd. Class A 18,24,151 5.813 None Total Equity Shares 3,13,81,155 100.00 Nil

Notes: Details of shares pledged or encumbered by the promoters (if any): N.A. (ii) List of top 10 holders of equity shares of the Company as on the latest quarter end, i.e.

March 31, 2016

Sr. No.

Name of the Shareholder / Particulars Class

Total Number of

equity shares

Total percentage

(% ) of Shareholding

Number of shares held in Demat

Form 1. Gobinda Chandra Pattanaik Class A 62,92,731 20.052 None 2. Dibyajyoti Pattanaik Class A 66,200 0.211 None 3. RIF East 2 Class A 85,68,497 27.304 None 4. BIO Class A 80,27,723 25.581 None 5. SIDBI Class A 10,00,000 3.186 None 6. SIDBI Venture Capital Limited Class A 56,01,853 17.851 None 7. DCB Bank Ltd. Class A 18,24,151 5.813 None Total Equity Shares 3,13,81,155 100.00 Nil

5.6 Following details regarding the directors of the Company:

(i) Details of current directors of the Company:


35

This table sets out the details regarding the Company’s Board of Directors as on date of the Information Memorandum:

S. No.

Name of the Directors

Designation

Date of Birth

Address DIN PAN Director of the company since

Director in other company

1 Gobinda Chandra Pattanaik

Managing Director

23-06-1968

Konark Nagar Pallhat, Khurda, Odisha.

02716330 AJEPP2669K

13-Aug-09

-

2 Dibyajyoti Pattanaik

Director 27-06-1977

HIG-44, Dharma Vihar, Khandagiri, Bhubaneswar, Odisha

02764187 AMUPP2199K

14-Sep-09 -

3 Aditya Bhandari

Nominee Director

22-04-1983

Jains Amrit Kalash, Block II, Flat A8,, 159, Strahans Road, Pattalam, Chennai, Tamil Nadu

03062463 AIZPB3649K

20-Jul-12 Fusion Micro Finance Private Limited, Hope Microcredit Finance (India) Private Limited, Incofin South Asia Advisory Private Limited, Arman Financial Services Limited, Namra Finance Limited

4 K K Tiwary Independent Director

29-02-1972

A-36/51-E, Kajjakpura Konia Road, Varanasi-221001, Uttar Pradesh

02914614 ABRPT3587D

13-Feb-12 -------------

5 Ashok Ranjan Samal

Nominee Director (SIDBI)

24-07-1955

House No- 7, Aryabhoomi, Plot No- 442/ 3998, Nandankanan Main Road, Patia, Bhubaneswar- 751031, Odisha

00918164

ABJPS3492E

24 Sept 2015

------------------

6 Sean Nossel


11-06-1970

792 Columbus Ave, 16P Manhattan, New York,

05327455

Passport No: 462701490

20-Jul-12

------------

7 Laetitia Counye

Nominee Director

16-02-1971

Achiel Cleynhenslaan 148, 3140 Keerbergen, Belgium

06990144

Passport No: EI021204

7-Oct-14

------------

8 R. V Dilip Kumar

Additional Director

20-10-1968

C-703, Raheja Heights, Dr. Arun Mumar Vaidya Marg, Dindoshi, Malad, Mumbai

01060651

AAEPD4604P

27-Aug-15

Glocal Health Care System Pvt. Ltd ESAF Microfinance and Investments Private Limited Sonata Finance Private 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 Details of change in directors since last three years:


36

Name DIN Date of Appointment/ Resignation

Director of the Company since

(in case of resignation)

Remarks

Aditya Bhandari 03062463 20-July-2012 - Nil Sean Nossel 05327455 20-July-2012 - Nil K.K. Tiwary 02914614 13-Feb-2012 - Nil

P.K. Saha 02947368 24- Sept- 2015 (Resignation) 13- July- 2013 Nil Laetitia Counye 06990144 07-October-2014 - Nil Basant Mohanty 05225722 20-July-2012 (Resignation) 12-Mar-2012 Nil Saneesh Singh 02254868 20-July-2012 (Resignation) 26-Feb-2010 Nil

R. V. Dilip Kumar 01060651 27-Aug-2015 - Nil Ashok Ranjan Samal 00918164 24- Sept- 2015 Nil

5.7 Following details regarding the auditors of the Company:

(i) Details of the auditor of the Company:

Name Address Auditor since Remark S. R. Batliboi & Associates LLP

22, Camac Street, Block C, 3rd floor, Kolkata – 700016, West Bengal, India

May, 2014 None.

(ii) Details of change in auditors since last three years: Name Address Date of

appointment / resignation

Auditor since

Remark

B.S. Subudhi 776, Saheed Nagar, Maharishi College Road, Bhubaneswar-751007

May 2014 Mar 2010 None

5.8 Details of borrowings of the Company, as on latest quarter ended :

(i) Details of Secured Loan Facilities: Lender’s Name Type of

Facility Cumulat

ive Amount Sanctioned (Rs.

Mn)

Principal Amount

Outstanding as on Mar 31,

2016 (Rs. Mn.)

Repayment Date/

Schedule

Security

Primary Security

(book debt

hypothecation)

Percentage of Cash

Collateral

DCB TL -8 Term Loan

50 5.56 Monthly 100% 10.00%

DCB TL -9 Term Loan

50 19.44 Monthly 100% 7.50%

IFMR Term Loan -21 Term Loan

55 22.86 Monthly 100% 0.00%

IFMR Term Loan -22 Term Loan

80 46.61 Monthly 100% 0.00%

MAS TL -9

Term Loan 100

2.92 Monthl

y 100% 13.00% Term Loan

2.50


37

MAS TL-10 Term Loan

100 37.50 Monthly 100% 12.50%

MAS TL-11 A Term Loan

. 100

52.50 Monthly 100% 10.00%

MAS TL-11 B 23.75 Monthly 100% 10.00%

Maanaveeya Term-3 (Oiko Credit)

Term Loan 100

33.34 Quarterl

y 105% 0.00% Term Loan

0.00

Maanaveeya Sub Debt TL - 4 (Oiko Credit)

Term Loan

100 90.91 Bullet Repaym

ent 0% 0.00%

Maanaveeya TL - 5.1 (Oiko Credit)

Term Loan

100 100.00 Monthl

y 105%

- Term Loan

0 0.00

Ratnakar Bank (TL-4) Term Loan

50 12.50 Quarterly 110% 5.00%


100 50.00 Quarterly 110% 5.00%


100 75.00 Quarterly 110% 5.00%


250 250.00 Quarterly 110% 5.00%

Ratnakar Bank CC Limit Term Loan

50 0.00 On demand 110% 0.00%

UCO Bank - 2 Term Loan

75 21.39 Monthly 100% 10.00%

UCO Bank - 3 Term Loan

120 106.79 Monthly 100% 10.00%

Canara Bank TL-1 Term Loan

100 20.59 Monthly 110% 10.00%

Canara Bank TL-2 Term Loan

100 68.75 Monthly 110% 10.00%

Canara Bank TL-3

Term Loan

100

Quarterly 110% 10.00%

99.89

SIDBI TL-2 A Term Loan

100 72.72 Monthly 100% 10.00%

SIDBI TL-2 B Term Loan

0 0.00 Monthly 100% 10.00%

SIDBI TL 3 Term Loan

41.2 17.50 Bullet Repaym

ent 0% 0.00%


0 2.50 Bullet Repaym

ent 0% 0.00%


250 200.00 Monthly 110% 5.00%

MUDRA TL 1 Term Loan

150 150.00 Monthly 110% 10.00%

NABARD TL 1 Term Loan

600 600.00 Half yearly 115% 0.00%

SBI TL-1-A Term Loan

100 58.95 Quarterly 110% 10.00%

SBI TL-1-B Term Loan

50 35.75 Quarterly 110% 10.00%

Bank of Baroda TL-1 Term 100 72.00 Monthl 110% 10.00%


38

Loan y

IDBI Bank ( Loan-3)

Term Loan 150

21.43 Monthl

y 110% 10.00% Term Loan

28.57

IDBI Bank (Loan-4) Term Loan

150 85.71 Monthly 110% 10.00%

IDBI Bank (Loan-5) Term Loan

300 285.71 Monthly 110% 5.00%

Indian overseas bank-2 Term Loan

150 84.38 Monthly 110% 10.00%

Indian overseas bank-3 Term Loan

100 100.00 Monthly 111% 10.00%

Reliance Capital - 3

Term Loan 200

24.23 Monthl

y 100% 10.00% Term Loan

30.09

Reliance Capital - 4A Term Loan

190 47.53 Monthly 100% 10.00%

Reliance Capital - 4B Term Loan

0 58.32 Monthly 100% 10.00%

OBC TL 1 Term Loan

44 20.88 Monthly 110% 10.00%

OBC TL 2 Term Loan

50 38.54 Monthly 110% 10.00%

OBC TL 3 Term Loan

150 137.50 Monthly 110% 10.00%

Ananya Finance -2 Term Loan

20 5.83 Monthly 100% 10.00%

Ananya Finance-3 Term Loan

20 8.89 Monthly 100% 10.00%

Caspian TL 1 (Bellwether Microfinance Fund)

Term Loan 60

12.50 Monthl

y 110% 0.00% Term Loan

0.00

Caspian TL 2 (Bellwether Microfinance Fund)

Term Loan

60 45.00 Quarterly 110% 0.00%

Axis Bank TL 1 Term Loan

150 64.29 Monthly 100% 10.00%

Axis Bank TL 2 Term Loan

80 80.00 Monthly 100% 10.00%

Bhartiya Mahila Bank TL 1 Term Loan

30 18.35 Quarterly 110% 10.00%

Yes Bank TL 1 Term Loan

150 41.67 Monthly 100% 10.00%

Yes Bank TL 2 Term Loan

300 200.00 Monthly 105% 5.00%

ICICI Bank TL 1 Term Loan

50 10.00 Monthly 100% 10.00%


100 95.45 Monthly 100% 10.00%


150 135.00 Monthly 100% 10.00%

Corporation Bank TL 1 Term Loan

30 23.70 Monthly 115% 10.00%

SBBJ TL 1 Term Loan

100 90.92 Monthly 110% 10.00%

Vijaya Bank TL 1 Term 90 85.20 Monthl 110% 10.00%


39

Loan y

Vijaya Bank TL 2 Term Loan

100 100.00 Monthly 110% 10.00%

Dena Bank TL 1 Term Loan

90 90.00 Monthly 110% 10.00%

Dena Bank TL 2 Term Loan

100 100.00 Monthly 110% 10.00%

IndusInd Bank TL-1 Term Loan

300 300.00 Quarterly 110% 5.00%

Andhra Bank TL 1 Term Loan

100 100.00 Monthly 110% 10.00%

Bandhan Bank TL 1 Term Loan

50 50.00 Quarterly 100% 5.00%

Indian Bank TL 1 Term Loan

100 100.00 Monthly 100% 10.00%

Kotak Mahindra Bank TL 1 Term Loan

250 250.00 Quarterly 100% 5.00%

NCD-Hinduja Leyland Finance 1 (CBO I)

NCD 100 4.17 Monthly 110% 0.00%

NCD-Hinduja Leyland Finance 2 (CBO V)

NCD 150 50.00 Monthly 110% 0.00%

NCD-Hinduja Leyland Finance 3 (CBO VIII)

NCD 110 68.75 Monthly 110% 0.00%

NCD-Symboitics I NCD 292 292.00 Bullet

Repayment

100% 0.00%

NCD-Symboitics II NCD 396 396.00 Semi

Annually

100% 0.00%

NCD-Ratnakar Bank (CBO IV)

NCD 150 50.00 Bi-Monthl

y 110% 0.00%

NCD-Blue Orchard-1 NCD 240 240.00 Bullet

Repayment

110% 0.00%


Repayment

110% 0.00%


Repayment

110% 0.00%

NCD-Triodos Investment Mgmt.

NCD

154.5

154.50 Bullet Repaym

ent 110% 0.00%

NCD-Mahindra Finance 1 (CBO VI)

NCD 100

41.67 Monthly 110% 0.00%

NCD-Mahindra Finance 2 (CBO X)

NCD 150

106.25 Monthly 110% 0.00%

NCD- Microvest NCD

330


ent 100% 0.00%

NCD - Aditya Birla Finance Ltd (CBO XI)

NCD 200

150.00 Monthly 110% 0.00%

NCD- IFMR Fimpact Investment (Senior Debt)

NCD

20

20.00 Bullet Repaym

ent 110% 0.00%

NCD- IFMR Fimpact Investment (Sub Debt) 1

NCD 50

50.00 Bullet Repaym 0% 0.00%


40

ent

NCD- IFMR Capital Finance Pvt. Ltd. (Tier- II) 1

NCD

200


ent 0% 0.00%

NCD- IFMR Capital Finance Pvt. Ltd. (Tier- II) 2

NCD

50

50.00 Bullet Repaym

ent 0% 0.00%

NCD Triple Jump 1 NCD

200.4


ent 100% 0.00%

NCD Triple Jump 2 NCD

267


ent 100% 0.00%

TOTAL (A)

10,929.10

8,526.64

Off Balance Sheet Portfolio O/S

IFMR Mosec - Ariadne ( IDBI)

Securitization 105.39 0.74

Monthly 100% 11.50%

IFMR Mosec - Talos ( IDBI) Securitization 49.98 0.03

Monthly 100% 7.75%

IFMR Mosec - Mesembria (RBL)


Monthly 100% 7.00%

IFMR Mosec - Zephyrus (RBL)


Monthly 100% 6.25%

Mosec - Arkaios Multi Micro Finance (IDBI)


Monthly 100% 10.00%

IFMR Mosec - Agon (RBL) Securitization 126.58 16.83

Monthly 100% 5.50%

IFMR Mosec - Aethon (IDBI) Securitization 113.92 12.92

Monthly 100% 5.50%

IFMR Mosec - Aria (ICICI) Securitization 49.94 14.26

Monthly 100% 7.00%

IFMR Sosec - Karpo (Kotak) Securitization 210.23 112.84

Monthly 100% 5.00%

IFMR Sosec - Hysminai (Kotak)


Monthly 100% 4.75%

IFMR Sosec- Tera (RBL) Securitization 121.38 97.47

Monthly 100% 6.00%

IFMR Sosec-Lachesis (IndusInd Bank)


Monthly 100% 4.50%

IFMR Sosec- Mori (Kotak) Securitization 181.03 169.21

Monthly 100% 4.50%

IFMR Sosec- Augustus (IDBI) Securitization 191.21 191.21

Monthly 100% 3.50%

IFMR Sosec- Okuni (RBL) Securitization 294.31 294.31

Monthly 100% 4.00%

IFMR Sosec- Claudius (IndusInd Bank)


Monthly 100% 6.00%

TOTAL (B) 2398.91 1511.74

Total (A+B) 13328.01 10038.3

8

(ii) Details of Unsecured Loan Facilities:

Lender’s Name Type of Facility

Amount Sanctioned (amount in

Crores)

Principal Amount

Outstanding

Repayment Date/Schedule


41

Maanaveeya Sub Debt (Oiko Credit)

Term Loan 10.00 10.00 Bullet Repayment

NCD- IFMR Fimpact Investment (Sub Debt)

Non-Convertible Debentures

5.00 5.00 Bullet Repayment

NCD- IFMR Capital Finance Private Limited -I



NCD- IFMR Capital Finance Private Limited-II



(iii) Details of Non-Convertible Debentures: Debenture

Series Tenor/Period of Maturity

Coupon

(Rate of

Interest)

Outstanding

Amount (Rs in Lacs)

Date of allotment

Redemption Date/

Schedule

Credit Rating

Secured/ Unsecured

Security

NCD-Hinduja Leyland Finance1-CBO1

24 13.90%

41.66 28-03-2014

Monthly ICRA BBB+ (SO)

Secured Hypothecation of loans

NCD-Symboitics I

58 14.75%

2,920.00 27-06-2014

Bullet Repayment

ICRA BBB


NCD-Ratnakar Bank (CBO-IV)

30 12.55%

499.99 31-07-2014

Bi-Monthly ICRA A+ SO


NCD-Blue Orchard-1

48 14.70%

2,400.00 08-10-2014

Bullet Repayment

ICRA BBB/St

able


NCD-Blue Orchard-2

48 14.70%

1,500.00 27-11-2014

Bullet Repayment

ICRA BBB/ Stable


NCD-Hinduja Leyland Finance 2 (CBO-V)

24 13.50%

500.00 02-12-2014

Monthly ICRA BBB+ (SO)


NCD-Triodos Investment Mgmt.

36 13.75%

1545.00 04-12-2014

Bullet Repayment

ICRA BBB/ Stable


NCD-Mahindra Finance (CBO VI)

24 13.25%

416.65 23-01-2015

Monthly ICRA A-

(SO)


NCD- IFMR Fimpact Investment (Senior Debt)

66 15.50%

200.00 29-06-2015

Bullet Repayment

ICRA (BBB)


NCD- IFMR Fimpact Investment (Sub Debt)

66 17.00%

500.00 30-06-2015

Bullet Repayment

ICRA (BBB)

Unsecured Nil

NCD-Blue Orchard-3

60 14.70%

3,840.00 29-05-2015

Bullet Repayment

ICRA BBB


NCD-Hinduja Leyland

24 13.50%

687.5 24-06-2015

Monthly ICRA BBB+

Secured Hypothecation of


42

Finance 3 (CBO-VIII)

(SO) loans

NCD- Mahindra and Mahindra (CBO-X)

24 12.75%

1062.50 26-08-2015

Monthly ICRA (A-) (SO)


NCD- Microvest

48 14.00%

3300.00 14-09-2015

Bullet Repayment

ICRA (BBB)


NCD- Aditya Birla (CBO-XI)

24 12.70%

1500.00 23-09-2015

Monthly ICRA A-

(SO)


NCD- A.A.V. Sarl, Symboitic –II

36 13.60%

3960.00 04-12-2015

Bullet Repayment

ICRA (BBB) (SO)


NCD- Micro Build B.V. (Triple Jump-I )

72 13.70%

2004.00 08-12-20015

Bullet Repayment

ICRA (BBB) (SO)


NCD- Pettelaar Effectenbewa Arbedrijf N.V (Triple Jump-II

72 13.70%

2670.00 10-12-2015

Bullet Repayment

ICRA (BBB) (SO)


NCD- IFMR Capital Finance Pvt. Ltd. I

66 14.90%

2000.00 15-03-2016

Bullet Repayment

ICRA (BBB)

Unsecured Nil

NCD- IFMR Capital Finance Pvt. Ltd. II

66 14.90%

500.00 28-03-2016

Bullet Repayment

ICRA (BBB) (SO)

Unsecured Nil

(iv) List of Top 10 Debenture Holders (as on March 31, 2016)

Sl. No.

List of Debenture Holders

Outstanding amount (in Rs.)

1. AAV S.A.R.L (Symboitics II) 39,60,00,000.00

2. Blue Orchard Microfinance Fund SA, SICAV – SIF BO- III 38,40,00,000.00

3. Microvest Short Duration Fund L.P 33,00,00,000.00 4. AAV S.A.R.L (Symboitics I) 29,20,00,000.00 5. Pettelaar Effectenbewa Arbedrijf N.V (Triple Jump-II) 26,70,00,000.00

6. Microfinance Initiative for Asia (MIFA) Debt Fund SA, SICAV-SIF BO-I 24,00,00,000.00

7. Micro Build B.V. (Triple Jump-I ) 20,04,00,000.00 8. IFMR Capital Finance Pvt. Ltd. I 20,00,00,000.00 9. Stichting Hivos - Triodos Fonds 15,45,00,000.00 10. Aditya Birla Finance Ltd (CBO XI) 15,00,00,000.00

Total 2,61,39,00,000.00

(v) The amount of corporate guarantee issued by the Issuer along with name of the counterparty (like name of the subsidiary, JV entity, group company, etc) on behalf of whom it has been issued. (if any): The Company has not issued any corporate guarantee for any third party as at March 31, 2016.

(vi) Details of Commercial Paper:

The Company has not issued any Commercial Paper as at March 31, 2016


43

(vii) Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally Convertible Debentures / Preference Shares) as on March 31, 2016:

Party Name (In case of Facility)/Instrument Name

Type of Facility/ Instrument

Amount Sanctioned/ Issued (in crores)

Principal Amount Outstanding (in crores)

Repayment Date/ Schedule

Credit Rating

Secured/ Unsecured

Security

SIDBI OCPS 2.00 2.00 NA NA Unsecured NA AATO CCPS 3.00 3.00 NA NA Unsecured NA

(viii) 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

(ix) 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

5.9 Details of Promoters of the Company:

(i) Details of Promoter Holding in Company as on latest quarter end, i.e. March 31,

2016: 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. Gobinda Chandra Pattanaik 62,92,731 0 20.052% 0 0 2. Dibyajyoti Pattanaik 66,200 0 0.211% 0 0 Total 63,58,931 20.263% 0 0 5.10 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.

[Note: Financial information submitted must be in line with the timelines specified in the Uniform Listing Agreement, issued vide circular no. CFD/CMD/6/2015 dated October 13, 2015 (as amended, modified or restated from time to time)]

Profit and Loss Statement (INR Crores)

31.03.2013 31.03.2014 31.03.2015 Audited Audited Audited

Interest Income 9.01 19.27 48.72 Less: Interest Expenses 4.57 12.92 33.38 Net Interest Income 4.44 6.34 15.34 Other Income 1.54 6.62 11.55 Total Income 5.97 12.96 26.89 Operating Expenses 2.76 6.17 19.16 Provisions & Write Offs 0.45 0.44 2.31 Operating Profit 2.76 6.36 5.42 Depreciation 0.05 0.15 0.9 Profit Before Tax 2.71 6.21 4.52 Provisions for tax 0.92 2.01 1.47 Profit After Tax 1.79 4.2 3.06


44

Balance Sheet (INR crores) 31.03.2013 31.03.2014 31.03.2015 Equity capital 12.94 18.64 26.2 Reserve & Surplus 5.3 15.99 37.47 TNW ( A) 18.24 34.64 63.66 Total Debt 74.33 165.71 391.48 Current Liabilities+ Provisions 4.6 18.23 28.18 Total Outside Liabilities ( B ) 78.93 183.94 419.66 Total Liabilities ( A + B ) 97.16 218.58 483.32 Fixed assets (Net) 0.21 0.86 2.14 Investments 20.15 31.43 71.97 Gross Advances 11.7 24.3 100.39 Cash / Liquid Investments 20.31 83.04 94.12 Non Current assets - - Other current assets 44.76 78.92 214.7 Deferred Tax Assets 0.15 0.27 - Intangible Assets - - - Other Long Term Assets - - - Total Assets 97.16 218.58 483.32 5.11 Abridged version of Latest Audited/ Limited Review Half Yearly Consolidated and

Standalone Financial Information and auditor’s qualifications, if any. [Note: Financial information submitted must be in line with the timelines specified in the Uniform Listing Agreement, issued vide circular no. CFD/CMD/6/2015 dated October 13, 2015 (as amended, modified or restated from time to time)]

Profit and Loss Statement (in INR Cr) For the period ended

30.09.2015

Revenue from Operations 57.76 Other Income 3.85 Total Revenue 61.61 Expenses: Provisions 1.72 Employee benefits expense 13.61 Finance costs 30.19 Depreciation and amortization 0.61 Other expenses 4.91 Total expenses 51.04 Profit / (Loss) for the period before Tax - Current tax 4.34 - Deferred tax expense/(benefit) -0.61 - Prior period taxes Profit after tax 6.85

Balance Sheet (in INR Cr) 30.09.2015


45

EQUITY AND LIABILITIES Shareholder's funds Share capital 34.56 Reserves and surplus 63.49 Non-current Liabilities Long-term borrowings 286.14 Deferred tax liabilities, net Other long-term liabilities 0.01 Long-term provisions 1.44 Current liabilities Short-term borrowings 3.69 Other current liabilities 237.20 Short-term provisions 6.76 Total 633.28 ASSETS Non-current assets Fixed assets

(i) Tangible Assets 3.08 (ii) Intangible Assets

Deferred tax assets, net 0.41 Loan portfolio Long-term loans and advances 149.52 Other non-current assets 21.73 Current assets Current Investments 0.48 Cash and bank balances 87.70 Short-term loans and advances 358.86 Other current assets 11.51 0.00 Total 633.28

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

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


46

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. Other than as disclosed in this Information Memorandum, there are no other material events or developments or changes at the time of this Issue or subsequent to the Issue which may affect the Issue or the investors’ decision to invest/ continue to invest in the Issue.

5.13 Names of the Debentures Trustees and Consents thereof The Debenture Trustee of the proposed Debentures is GDA Trusteeship Limited. GDA Trusteeship Limited has given its written consent for its appointment as debenture trustee to the Issue under regulation 4(4) of the SEBI Debt Listing Regulations and inclusion of its name in the form and context in which it appears in this Information Memorandum, Transaction Documents 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.

5.14 Rating and Rating Rationale

The Rating Agency has assigned ratings of “[ICRA] BBB” (Pronounced “Triple B”) to the Debentures. Instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. Please see Annexure III.

5.15 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.: N.A.

5.16 Names of all the recognized stock exchanges where the debt securities are proposed

to be listed: 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.

5.17 Other details:

(i) Debenture Redemption Reserve Creation:

As per Section 71 of the 2013 Act, any company that intends to issue debentures must create a debenture redemption reserve to which adequate amounts shall be credited out of the profits of the company until the redemption of the debentures. However, under the Companies (Issuance of Share Capital and Debentures) Rules, 2014, non-banking financial companies are exempt from this requirement in respect of privately placed debentures. Pursuant to this exemption, the Company does not intend to create any reserve funds for the redemption of the Debentures.

(ii) Issue / instrument specific regulations:


47

The Issue of Debentures shall be in conformity with the applicable provisions of the Companies Act including the notified rules thereunder, the SEBI (Debenture Trustee Regulations, 1993, the Depositories Act, 1996the SEBI Debt Listing Regulations, SEBI (Listing Obligations and Disclosure Requirements), 2015 and all other applicable guidelines of the RBI in relation to the private placement of debentures by NBFCs.

(iii) Application process: The application process for the Issue is as provided in Section 8 of this Information Memorandum.

5.18 A statement containing particulars of the dates of, and parties to all material contracts, agreements:

The following contracts, not being contracts entered into in the ordinary course of business carried on by the Company or entered into more than 2 (Two) years before the date of this Information Memorandum, which are or may be deemed material, have been entered into by the Company. The contracts and documents referred to hereunder are material to the Issue, may be inspected at the Registered Office of the Company between 10.00 am to 4.00 pm on working days.

Sr. No. Nature of Contract 1 Certified true copy of the Memorandum & Articles of Association of the Issuer

2 Board resolution dated May, 10, 2016 authorizing issue of Debentures offered under terms of this Disclosure Document.

3 Shareholder Resolutions dated April 22, 2016 authorizing the issue of non-convertible debentures by the Company.

3A Shareholder resolutions each dated April 22, 2016 authorizing the borrowing and creation of security by the Company

4 Copies of Annual Reports of the Company for the last three financial years 5 Credit rating letter from the Rating Agency

6 Letter from GDA Trusteeship Ltd, Debenture Trustee dated May 23, 2016 giving its consent to act as Debenture Trustee

7 Letter from the 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 & Transfer Agent and the NSDL/CDSL

5.19 Details of Debt Securities Sought to be Issued

Under the purview of the current document, the Issuer intends to raise an amount of INR 60,00,00,000 (Rupees Sixty Crores only) by issue of Secured, Rated, Listed, Redeemable Non-Convertible Debentures, on a private placement basis. For further details of the Debentures, please refer to the terms and conditions of the debentures set out in Section 5.22 of this Information Memorandum. 5.20 Issue Size

The aggregate issue size for the Debentures is INR 60,00,00,000 (Rupees Sixty Crores only) 5.21 Utilization of the Issue Proceeds


48

The proceeds shall be used for the ongoing business purpose loan portfolio growth of the company subject to such restrictions as the parties may have agreed upon and shall not be utilised for the purposes mentioned below. The Issuer undertakes that the proceeds of this Issue shall be utilized for the deployment of funds on its own balance sheet and not to facilitate resource requests of its group entities/parent company/associates. The Issuer undertakes that proceeds of this Issue shall not be utilized for the following purposes as specified in the RBI Master Circular No. RBI/2015-16/36 DBR.BP.BC.No.5/21.04.172/2015-16 dated July 1, 2015 1) Bills discounted / rediscounted by NBFCs, except for rediscounting of bills discounted by

NBFCs arising out of: Commercial vehicles (including light commercial vehicles) and two wheeler and three wheeler vehicles, subject to the following conditions: The bills should have been drawn by the manufacturer on dealers only; The bills should represent genuine sale transactions as may be ascertained from the chassis / engine number and; Before rediscounting the bills, the bona fides and track record of NBFCs which have discounted the bills would be verified.

2) Investments of NBFCs both of current and long-term nature, in any company / entity by way of shares, debentures, etc. However, Stock Broking Companies may be provided need-based credit against shares and debentures held by them as stock-in-trade.

3) Unsecured loans / inter-corporate deposits by NBFCs to / in any company. 4) All types of loans and advances by NBFCs to their subsidiaries, group companies / entities. 5) Finance to NBFCs for further lending to individuals for subscribing to Initial Public

Offerings (IPO) and for purchase of shares from secondary market


49

5.22 Issue Details

Security Name 13.00% Annapurna Microfinance Private Limited 2021 Issuer Annapurna Microfinance Private Limited Type of Instrument Non-Convertible Debentures Nature of Instrument Secured Rated Listed Redeemable Non-Convertible Debentures Seniority Senior Mode of Issue Private placement Eligible/Identified Investors As provided in Clause 7.14 below Listing Subsequent to the Deemed Date of Allotment, the Company shall submit

all duly completed documents to the BSE, SEBI, ROC, CERSAI or any other governmental authority, as is required under Applicable Law and obtain the listing of the Debentures within 15 (fifteen) calendar days from the Deemed Date of Allotment ("Listing Period"). In the event that the Debentures are not listed within the Listing Period for any reason whatsoever, then the Company undertakes to immediately redeem the Debentures immediately upon the expiry of the Listing Period from the Debenture Holders who are foreign portfolio investors and are not permitted to hold to-be listed debt securities if listing is not done within 15 (Fifteen) days plus pay any reasonable costs and expenses incurred by such investors. If the Company fails to redeem or buyback the Debentures in accordance herewith, then any Debenture Holder that is a foreign portfolio investor may, at its option, sell the Debentures to a third party. The Company shall (i) indemnify such Debenture Holders for any loss, damage, costs, charges, expenses and liability that the Debenture Holders may incur in relation to such sale to a third party, and (ii) co-operate in such sale by taking all necessary corporate actions, and other actions required by Applicable Law.

Rating of Instrument BBB by ICRA Limited Issue Size INR 60,00,00,000 (Rupees Sixty Crores only) Option to retain oversubscription N.A. Objects of the Issue To raise senior secured debt to the extent upto the INR 60,00,00,000

(Rupees Sixty Crores only) and the issue proceeds will be utilized for ongoing business purposes of the Company in accordance with Applicable Law

Details of the utilization of the Proceeds

The issue proceeds will be utilized for providing debt financing for loan portfolio growth.

Coupon Rate 13.00% (Thirteen percent) per annum payable Semi Annually (net of all withholding taxes)

Withholding Tax (WHT) If the Company is required by Applicable Law to deduct or withhold any Taxes from or in respect of any sum payable hereunder, the Company (a) shall increase the sum payable to the extent necessary so that after making all required deductions (including deductions applicable to additional sums payable by the Company after gross up), the Debenture Holders receive an amount equal to the sum they would have received, had no such deductions been made, and (b) shall make such deductions and shall pay the full amount deducted or withheld to the relevant tax authority or other authority in accordance with the Applicable Law in a timely manner.

Step Up/ Step Down Coupon Rate N.A


50

Coupon Payment Frequency Semi Annually Coupon Payment Dates / Interest Payment Dates

Semi Annually on the dates as specified in Annexure VI hereto

Coupon Type Fixed Coupon rate Day Count Basis Actual / Actual Interest on Application Money The Company shall be liable to pay the Debenture Holders interest on

Application Money net of withholding taxes at the rate of 13% (Thirteen Percent) per annum for the period commencing from the date on which the Debenture Holders have made payment of the application monies in respect of the Debentures to the Company and ending on the Deemed Date of Allotment. The interest on Application Monies shall be paid by the Company to the Debenture Holders within 7 (Seven) Business Days from the Deemed Date of Allotment. In the event the Company fails to allot the Debentures to the Applicants within 60 (sixty) days from the date of receipt of the Application Money ("Allotment Period"), it shall repay the Application Money to the Applicants within 15 (fifteen) days from the expiry of the Allotment Period ("Repayment Period"). In the event the Company fails to repay the Application Money within the Repayment Period, then Company shall be liable to repay the Application Money along with interest at the rate of 13% (Thirteen Percent) per annum from the expiry of the Allotment Period. PROVIDED HOWEVER THAT, no interest shall be payable if the Company is paying Coupon on the Debenture in terms of the Transaction Documents.

Default Interest Rate Any payment obligations due on the Debentures including any Coupon and/or principal amounts and/or any other payment to be made by the Company in connection with the Debentures shall, in case the same be not paid on the respective due dates, carry further default interest of 2% (Two Percent) per annum over the Coupon Rate computed on the entire obligations under the Issue, for the period commencing from the respective due dates for such amounts and expiring on the date on which such payment is actually made.

Delay Penalty (a) In the case of a delay in the execution of the Deed of Hypothecation the Company shall refund the subscription with the agreed rate of interest or shall pay penal interest of 2% (two percent) per annum over and above the applicable Coupon Rate until such time when the conditions have been complied with at the option of the Debenture Holders (b) In the event there is any delay in listing of the Debentures beyond 20 (twenty) calendar days from the Deemed Date of Allotment, the Company will pay to the Debenture Holders, a penal interest of 1 % per annum over the Coupon Rate, from the expiry of 30 (thirty) calendar days from the Deemed Date of Allotment till the listing of the Debentures is completed.

Tenor 5 years (Five Years) from the Deemed Date of Allotment. Redemption Date The Debentures shall be fully redeemed on a pari passu basis by the

Company by payment of the Redemption Amounts on each of the Redemption Dates until the Final Redemption Date being at the end of 60th month from the Deemed Date of Allotment. Such payment will be a legal discharge of the liability of the Company towards the Debenture Holders. The total Redemption Amounts for each Debenture shall be equal to the face value of the said Debentures plus the accrued Coupon and default interest (if any). The Company will not redeem all or any part of the Debentures except at the times and in the manner expressly provided for in the Transaction Documents.

Redemption Amount Rs. 10,00,000/- (Rupees Ten Lakhs Only) per Debenture on the


51

Redemption Date plus accrued Coupon if any to be paid in instalments as specified in Annexure VI.

Redemption Premium/ Discount N.A Issue Price INR. 9,90,000/- (Rupees Nine Lakhs Ninety Thousand Only) per

debenture Discount at which security is issued and the effective yield as a result of such discount

The debentures are issued at a front end discount of 1% of the face value of each of the Debentures.

Put Option Date NA Put Option Price NA Call Option Date NA Call Option Price NA. Put Notification Time NA Call Notification Time NA Face Value Rs. 10,00,000 /- (Rupees Ten Lakhs Only) per Debenture Minimum Application size 100 Debentures and in multiples of 10 Debentures thereafter Issue Timing Issue Opening Date: June 9, 2016

Issue Closing Date: June 15, 2016 Pay-in Dates: June 9, 2016 - June 15, 2016 Deemed Date of Allotment: June 15, 2016

Issuance mode of the Instrument Demat only Trading mode of the Instrument Demat only Settlement mode of the Instrument RTGS Depositories NSDL/CDSL Business Days Means any day of the week, exclusive of Sunday, that is not a public

holiday in India(as under Section 25 of the Negotiable Instruments Act, 1881) and Amsterdam.;

Business Day Convention If the due date in respect of any coupon or liquidated damages and all other monies payable under this DTMD falls on a day which is not a Business Day, then the immediately succeeding Business Day shall be the due date for such payment. Further, if the due date in respect of any redemption amount falls on a day which is not a Business Day, then the immediately preceding Business Day shall be the due date for such payment.

Record Date The date which will be used for determining the Debenture Holders who shall be entitled to receive the amounts due on any due date, which shall be the date falling 15 (d) days prior to any due date.

Security (i) The security to be provided by the Company as security for the discharge of the Secured Obligations shall consist of (i) a first ranking excusive charge created over the Hypothecated Assets under or pursuant to the Deed of Hypothecation and (ii) a first ranking pari passu mortgage created over the Immovable Property by and under the DTMD (collectively, the Security). (ii) The Deed of Hypothecation shall be executed on or prior to the Deemed Date of Allotment. The security created over the Hypothecated Assets in terms of the Deed of Hypothecation shall continue to remain in force until released (whether partially or fully) in accordance with the terms of the Deed of Hypothecation. The details of the proposed Hypothecated Assets are provided in the Transaction Documents. The charge over the Hypothecated Assets shall be 1.0 (One) time the value of the outstanding amounts under


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the Debentures and shall be maintained at all times until all the Obligations are satisfied by the Company as more particularly described in the Deed of Hypothecation. The Company shall create the charge by way of hypothecation over the Hypothecated Assets on or prior to the Deemed Date of Allotment and perfect such hypothecation by filing Form CHG-9 with the ROC and reporting the charge created to the CERSAI in respect thereof within 30 (Twenty) calendar days from the Deemed Date of Allotment. (iii) The Company shall create the mortgage over the Immovable Property in terms of the DTMD on or prior to the Deemed Date of Allotment and register the DTMD with the jurisdictional sub-registrar of assurances and shall file form CHG-9 and Form I in respect of the mortgage over the Immovable Property within 30 (Thirty) days of the Deemed Date of Allotment.

Transaction Documents Shall be as set out in Clause 6.1 6.1 below Conditions Precedent to Disbursement

The Debenture Holders shall not be obliged to subscribe to any of the Debentures unless and until the Debenture Holders or Debenture Trustees have received all the documents and evidence referred to below, which documents and evidence the Debenture Holders or Debenture Trustees must have received no later than 2 days and has found them to be satisfactory in form and substance. The Debenture Holders or Debenture Trustee shall notify the Company promptly upon being so satisfied. 1. A copy of the organizational chart. 2. A copy of a document with an overview of ownership structure, including list of shareholders (if applicable). 3. Corporate documents of the Company:

(a) Its certificate of incorporation, memorandum and articles of association, by-laws (if any) and other constitutional documents and their amendment thereof;

(b) Its current business registration certificate. 4. A copy of a legal document with proof legal registered address. 5. If applicable, a copy of a legal document with proof of operational address. 6. If applicable, governmental authorisation and authorisation from the Financial Supervisory Authorities for the Company to execute the DTMD and to make Payments to the Debenture Holders. 7. A copy of a resolution of the board of directors of the Company:

(a) Approving the terms of, and the transactions contemplated by the DTMD and resolving that it execute the DTMD;

(b) Authorising a specified person or persons to execute the DTMD on its behalf; and

(c) Authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the DTMD.

8. Copies of the passports of the persons authorised to represent the Company legally. 9. Evidence that all necessary filings, registrations and other formalities have been completed, including the name of the Debenture Trustee. 10. A certificate of an authorised signatory of the Company certifying that each copy document relating to it specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of the DTMD. 11. A legal opinion in form and substance satisfactory to the Debenture Holders of an external counsel in India acceptable to the Debenture Holders. 12. A certificate on the letter head paper of an authorised signatory of


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the Company certifying the banking details of the Company containing:

(a) Full name and address of the Company; (b) Bank account number of the Company; (c) Name and address of the Company's bank; (d) SWIFT and/or ABA number of the Company's bank.

13. An update of the financial statements (balance sheet, profit & loss account) of the Company up to date as of the date of the DTMD. 14. First Quarterly Progress Report is provided by the Issuer to the Debenture Holders, which shows that all financial indicators are in compliance with the covenants set out in the DTMD.

Conditions Subsequent to Disbursement

1. Filing of the relevant documents inter alia private placement offer letter, record of offer, return of allotment etc. with the ROC within the timelines specified under the rules under the Companies Act, 2013.

2. Filing of Forms CHG 9 and Forms I in relation to the Security within prescribed timelines.

3. Completion of listing of Debentures on the stock exchange. 4. Execution of any other documents as customary for transaction of a

similar nature and size. Events of Default As mentioned in Clause 6.6 Provisions related to Cross Default Clause

If the Company, in regards to any Financial Indebtedness exceeding in the aggregate 1% (One percent) of its Net Assets (A) defaults in any payment of any Financial Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created or (B) defaults in the observance or performance of any agreement or condition relating to any Financial Indebtedness, 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 (with the giving of notice or the passage of time or both would permit or cause) any such Financial Indebtedness to become due prior to its stated maturity; or (C) due to any default or an event of default, any Financial Indebtedness of the Company shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, (whether or not such right shall have been waived) prior to the stated maturity thereof

Role and Responsibilities of Debenture Trustee

To oversee and monitor the overall transaction for and on behalf of the Debenture Holders and as more particularly provided in the DTMD.

Covenants As mentioned in Clause 6.3 below Representation and warranties As mentioned in Clause 6.2 below Illustration of Bond Cash flows Kindly refer to Annexure VI of this Information Memorandum Governing Law The Transaction Documents shall be governed by and construed in

accordance with the laws of India. The courts and tribunals at Chennai, India shall have exclusive jurisdiction to settle any disputes.


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SECTION 6: TRANSACTION DOCUMENTS AND KEY TERMS

6.1 Transaction Documents

The following documents shall be executed in relation to the Issue (“Transaction Documents”):

(i) Debenture trustee agreement, which will confirm the appointment of GDA Trusteeship Limited as the Debenture Trustee (“Debenture Trustee Agreement”);

(ii) Debenture trust cum mortgage 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 (“DTMD”);

(iii) Deed of Hypothecation which will create the security over identified receivables to secure the Debentures ("Deed of Hypothecation"); and

(iv) Such other documents as agreed between the Issuer and the Debenture Trustee or as designated as Transaction Documents in the DTMD or by the Debenture Trustee.

The Transaction Documents shall be executed on or prior to the Issue Closing Date. 6.2 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.

(a) AUTHORITY AND CAPACITY

(i) The Company has been duly incorporated, organized and is validly existing under Applicable Law.

(ii) The Company has the corporate power, authority and all material permits, approvals, authorizations, licenses, registrations, and consents including registrations, to own and operate its assets and to carry on its business in substantially the same manner as it is currently conducted.

(iii) The Company has not taken any action nor has any order been passed for its winding-up, dissolution or re-organisation or for the enforcement of any security over its assets or for the appointment of a liquidator, supervisor, receiver, administrator, administrative receiver, compulsory manager, trustee or other similar officer for it or in respect of its assets.

(iv) The Company is in compliance with the Applicable Law for the performance of its obligations with respect to this Issue.

(v) The Company represents that all consents, and actions of, filings with and notices to any governmental or regulatory authority as may be required to be obtained by the Company in connection with the Issue, and to make the Transaction Documents admissible as evidence in its jurisdiction of incorporation, has been obtained and is in full force and effect.

(b) CORPORATE MATTERS


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(i) All the legal and procedural requirements specified in the constitutional documents have been duly complied with in all respects in relation to the Issue.

(ii) The registers, documents and minute books (including the minutes of board and shareholders meeting) required to be maintained by the Company under Applicable Law:

(A) are up-to-date and have been maintained in accordance with Applicable Law;

(B) comprise complete and accurate records of all information required to be recorded in such books and records; and

(C) no notice or allegation that any of them are incorrect and/ or should be rectified has been received.

(c) NON-CONFLICT WITH OTHER OBLIGATIONS

The Issue (or any of the obligations undertaken by the Company in relation thereto) does not and will not conflict with any law or regulation to which the Company is subject, including but not limited to any laws and regulations regarding anti-money laundering/ terrorism financing and similar financial sanctions as well as 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.

(d) STAMP DUTIES AND REGISTRATION

There are no stamp duties, registration, filings, recordings or notarizations before or with any court or public office required to be carried out in India in relation to the execution and delivery of the Transaction Documents by the Company other than the (a) stamping of the Transaction Documents (on or before their execution in Chennai, India in accordance the applicable provisions of the Indian Stamp Act, 1899 as applicable to Tamil Nadu, India and (b) stamping (if so required) of the Debenture certificates in accordance with the relevant sections, schedules and articles of the Indian Stamp Act, 1899.

(e) UTILIZATION OF PROCEEDS

The Company shall utilise the moneys received from the subscription of the Debentures for the Purpose. No part of the proceeds from the Issue will be used, directly or indirectly for any payments to any governmental office or employee, political party, official or a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain, or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

(f) ACCOUNTS AND RECORDS

The books of accounts of the Company and its subsidiaries have been fairly and properly maintained, the accounts of the Company and its subsidiaries have been prepared in accordance with law and in accordance with applicable generally accepted accounting principles, so as to give a true and fair view of


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the business (including the assets, liabilities and state of affairs) of the Company and its subsidiaries. There has been no event since the preparation of the aforementioned audited consolidated financial statements that will have a Material Adverse Effect on the Company's business or its financial condition.

(g) TAXATION MATTERS

(i) The Company has complied with all the requirements as specified under the respective tax laws as applicable to it in relation to returns, computations, notices and information which are or are required to be made or given by the Company to any tax authority for taxation and for any other tax, any additional cess and other government levies or duty purposes, have been made and are correct.

(ii) The Company has not received any written notice of any tax disputes or other liabilities of taxes in respect of which a claim has been made or notice has been issued against the Company.

(h) LEGAL / LITIGATION MATTERS

(i) There are no claims, investigations or proceedings before any court, tribunal or governmental authority in progress or pending against or reasonably anticipated relating to the Company, other than in the normal course of business, which would have a Material Adverse Effect on the Debentures (or the holders thereof) or on the ability of the Company to make the scheduled payments in relation to the Debentures.

(ii) There are no unfulfilled or unsatisfied judgments or court orders of which the Company has notice and which is outstanding against the Company, other than in the normal course of business, which would have a Material Adverse Effect on the Debentures (or the holders thereof) or on the ability of the Company to make the scheduled payments in relation to the Debentures.

(iii) The Company has not taken any action nor has any order been passed for its winding-up, dissolution or re-organisation or for the enforcement of any security over its assets or for the appointment of a liquidator, supervisor, receiver, administrator, administrative receiver, compulsory manager, trustee or other similar officer for it or in respect of its assets

(i) ASSETS

The Company is well possessed of and has good and marketable title to all its properties.

(j) EVENT OF DEFAULT

The Company hereby represents that there is no Event of Default that has currently occurred or is continuing as on the date of the Transaction Documents.

(k) MATERIAL ADVERSE EFFECT

The Company hereby represents that there is no Material Adverse Effect existing and that there are no circumstances existing which could give rise, with the passage of time or otherwise, to a Material Adverse Effect on the


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Debentures (or the holders thereof) or on the ability of the Company to make the scheduled payments in relation to the Debentures.

(l) NO IMMUNITY

Neither the Company nor any of its assets are entitled to immunity from suit, execution, attachment or other legal process in its jurisdiction of incorporation. This Issue (and the documents to be executed in relation thereto) constitutes, and the exercise of its rights and performance of and compliance with its obligations in relation thereto, will constitute, private and commercial acts done and performed for private and commercial purposes.

(m) INFORMATION

All information provided by the Company is true and accurate in all respects as at the date it was provided or as at the date at which it was stated and is not misleading whether by reason of omission to state a material fact or otherwise.

(n) PARI PASSU RANKING

The Company's payment obligations under this Transaction Document rank at least pari passu with the claims of all its other creditors, except for obligations mandatorily preferred by law applying to companies generally.

(o) SECURITY

(i) Save and except the charge created to secure the Debentures (and any other charge disclosed to the Debenture Trustee) and the security interests in relation to the Immovable Property disclosed to the Debenture Trustee and the Debenture Holders, the Immovable Property and the Hypothecated Assets is the sole and absolute property of the Company and are free from any other mortgage, charge or encumbrance and is not subject to any attachment, or other order or process issued by any Government and that the Company has a clear and marketable title to the Hypothecated Assets.

(ii) The Company has power to grant, convey, transfer, assure and assign unto the Debenture Trustee the Immoveable Property in the manner contemplated by these presents.

(p) REPETITION

The representations are deemed to be made by the Company (by reference to the facts and circumstances then existing) on each Coupon Payment Date and each Redemption Date.

(q) PRIMA FACIE EVIDENCE

The determination by the Debenture Trustee, from time to time, of the conditions set in this Transaction Document shall be final and conclusive and shall be binding upon the Company

(r) DISCLOSURES


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The Company confirms that all necessary disclosures have been made in the Information Memorandum and the Private Placement Offer Letter including but not limited to statutory and other regulatory disclosures.

6.3 GENERAL COVENANTS

The Company hereby covenants with the Debenture Trustee that the Company shall (except as

may otherwise be previously agreed in writing by the Debenture Trustee: (a) Validity of Transaction Documents

Ensure that the Transaction Documents shall be validly executed and delivered and will continue in full force and effect and will constitute valid, enforceable and binding obligations of the Company.

(b) Further documents and acts

Shall execute all such deeds, documents and assurances and do all such acts and things the Debenture Trustee may reasonably require for exercising the rights under the Transaction Documents and the Debentures and for perfecting the Transaction Documents in favor of the Debenture Trustee for the benefit of the Debenture Holders.

(c) Memorandum and Articles of Association

Carry out such alterations to its Constitutional Documents as may be deemed necessary in the opinion of the Debenture Trustees (acting on the instructions of the Debenture Holders to safeguard the interests of the Debenture Holders. The Company shall not make any amendments to the main object clause of its Constitutional Documents in a manner which would prejudicially affect the interests of the Debenture Holders, without the prior written consent of the Debenture Trustee.

(d) Preserve Corporate Status

(i) Diligently preserve its corporate existence and status and its license to conduct business as an non-banking financial company and any other rights, licenses and franchises necessary for its business, under the Debentures and the Transaction Documents and continue to be a validly existing organization in good standing and at all times act and proceed in relation to its affairs and business in compliance with Applicable Law.

(ii) Change the general nature of its business from that which is permitted as a non-banking financial company-micro finance institution registered with the RBI.

(iii) Any material changes to its Constitutional Documents (including a reduction of its authorized capital).

(e) Furnish Information

Give to the Debenture Trustee or their nominee(s) (and to the Debenture Holders, if so requested):


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(i) Submit to the Debenture Holders (in a format which shall be provided by the Debenture Holders from time to time) such other information relevant to the Debenture issuance that the Debenture Holders may reasonably request on a monthly, quarterly and annual basis or pursuant to an annual diligence by the Debenture Holders, subject to such information being available with the Company.

(ii) Such information as they shall require as to all matters relating to the business, property and affairs of the Company that materially impacts the interests of the Debenture Holders.

(iii) Forward promptly, whether a request for the same has been made or not:

(A) a copy of the statutory auditors' and directors' annual report, balance sheet and profit and loss account and of all periodical and special reports at the same time as they are issued;

(B) a copy of all notices, resolutions and circulars relating to new issue of debt securities at the same time as they are sent to shareholders/ holders of debt securities; and

(C) a copy of all the notices, call letters, circulars, proceedings, etc. of the meetings of debt security holders at the same time as they are sent to the holders of debt securities or advertised in the media.

(iv) Permit the Debenture Trustee and the Debenture Holders to examine the relevant books and records of the Company all upon reasonable prior notice and at such reasonable times and intervals as the Debenture Trustee/ Debenture Holders may reasonably request.

(v) Furnish quarterly reports to the Debenture Trustee containing the following particulars:

(A) updated list of the names and addresses of the Debenture Holders.

(B) details of the Coupon and principal payments to be made, but unpaid and reasons thereof;

(C) the number and nature of grievances received from the Debenture Holders and resolved by the Company; and

(D) a statement that the Hypothecated Assets is sufficient to discharge the claim of the Debenture Holders as and when they become due.

(vi) The Company agrees to send to the Debenture Holders and also to the BSE for dissemination a half-yearly communication, countersigned by the Debenture Trustee containing the following information:

(A) credit rating of the Issue;

(B) asset cover available accompanied with a half yearly certificate


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regarding maintenance of 100% security cover in respect of the Debentures, by either a practicing company secretary or a practicing chartered accountant, within one month from the end of the half year;

(C) debt- equity ratio of the Company 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; and

(E) next due date of payment of principal and Coupon.

(f) Grievance Redressal

Promptly and expeditiously attend to and redress the grievances, if any, of the Debenture Holders. The Company 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.

(g) Corporate Governance

Confirm to all mandatory recommendations on corporate governance contained in the listing agreement entered into with the BSE, for the Debentures and under the Act.

(h) Due Payment of Public and Other Demands

Confirm that the Company is not, and will continue not to be, in arrears of any undisputed public demands such as income-tax, corporation tax and all other taxes and revenues or any other statutory dues payable to Central or State governments or any local or other authority.

(j) Comply with Investor Education and Protection Fund requirements

The Company shall 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.

(k) Financial Terms and Conditions

At all times during the term of these presents, comply with each of the Financial Terms and Conditions.

(l) Authorisations

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 lawfully to enter into and perform its obligations under the Debentures and the Transaction Documents or to ensure the legality, validity, enforceability or admissibility in evidence in India of the Debentures and Transaction Documents. The Company shall promptly supply certified copies to the Debenture Trustee of any Authorisation required under Applicable Law or regulation of its jurisdiction of


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incorporation to enable it to perform its obligations under the Transaction Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of the Transaction Documents.

(m) Loan Size

Maintain at the time of any progress report an Average Outstanding Loan Size for the period ending with such report consistent with the Company's corporate purposes.

(n) Performance

Perform all of its obligations under the Transaction Documents and maintain in full force and effect each of the Transaction Documents.

(o) OPIC Policy

Comply in all respects with the covenants prescribed in Schedule V of the DTMD ("OPIC Policy Covenants"). The Company shall cooperate in any information requests OPIC will have with regard to compliance with the OPIC Policy Covenants, including filling out periodic questionnaires.

(p) Financial Obligations

(i) Promptly pay and discharge all of its financial obligations and regularly make payments due and payable by the Company, including but not limited to taxes and also such payments due and payable under or in respect of the Debentures and any documents executed in connection therewith.

(ii) All payments by the Company to the Debenture Holders under or in respect of the Debentures shall be made net of all taxes or other deductions and if any withholding is required then all relevant payments will be grossed up by the Company accordingly.

(iii) The Company shall indemnify the Debenture Holders against all liabilities, costs and expenses which may result from any delay or default in paying such duties, taxes or fees.

(q) Change in Ownership

The Company shall take prior consent from the Debenture Holders before changing ownership by more than 10% (Ten percent). The Debenture Holders will not unreasonably withhold such consent and will give a formal answer within 30 calendar days following the formal request by the Company.

(r) Creation of Security

(i) Without the prior written consent of the Debenture Trustee, the Company shall not create or permit to subsist any security over any of its assets; and

(ii) Without limiting the foregoing, should any security be created or subsisted for the benefit of creditors whose claims have a ranking which is not higher than the ranking of the claims of the Debenture Holders under the Transaction Documents and the Deed of Hypothecation, the


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Company shall promptly inform the Debenture Trustee and shall provide the Debenture Holders on first demand with equal security.

(s) Acquisition

Without the prior written consent of the Debenture Trustee, the Company shall not acquire any company, business, assets or undertaking if the amount of the acquisition cost, when aggregated with the aggregate acquisition cost of any other companies, business, assets or undertaking acquired by the Company during that financial year exceeds maximum 10% of equity.

(t) Mergers

The Company shall not engage in or undertake any corporate restructuring, re-organisation and / or re-capitalisation of any sort but not limited to merger, spin-offs, demerger, consolidation, reorganisation, amalgamation, reconstruction, capital reduction and liquidation, except as permitted under the Transaction Documents.

(u) Financial Statements

(i) Submit to the Debenture Trustee (and to the Debenture Holders, its duly audited annual accounts, within 120 (one Hundred and twenty) days from the close of its accounting year.

(ii) Submit to the Debenture Trustee (and to the Debenture Holders, its provisional quarterly financials, which shall include: (A) a balance sheet; and (B) a profit and loss account, within 30 (Thirty) days from the close of each of its accounting quarters.

(v) Insurance

The Company shall maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies against those risks and to the extent as is usual for companies carrying on the same or substantially similar business in the country of the Company and shall ensure that all premiums are paid on time and other obligations of the Company under the insurance policies are duly complied with.

(w) Compliance with Laws

(i) The Company shall comply in all respects with all Applicable Law to which it may be subject if failure so to comply would, or could reasonably be expected to have, a Material Adverse Effect.

(ii) Without prejudice to sub-Clause (i) above, the Company shall comply with:

(A) all Applicable Law, rules, regulations and guidelines (including but not limited to environmental, social and taxation related laws), as applicable in respect of the Debentures and obtain such regulatory approvals as may be required from time to time, including but not limited, in relation to the following (1) the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, the Securities and


63

Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as may be in force from time to time during the tenor of the Debentures; and (2) the provisions of the listing agreement to be entered into by the Company with the BSE in relation to the Debentures and any revisions or amendments thereto;

(B) the Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993 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 thereof in performance of their duties in accordance therewith to the extent applicable to the Debentures; and

(C) the provisions of the Act in relation to the issue of the Debentures.

(x) Negative pledge

Sell, transfer, or otherwise dispose of in any manner whatsoever any Assets of the Company (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 Company in its ordinary course of business.

(y) Free Access

Shall permit the Debenture Trustee and/or accountants or other professional advisers and contractors appointed by the Debenture Trustee free access at all reasonable times and on reasonable notice of the Company to (i) check the management of the funds made available through subscription to the Debentures, (ii) inspect and take copies and extracts from the books, accounts and records of the Company; (iii) visit and inspect the premises of the Company; and (iv) meet and discuss matters with senior management employees of the Company. The Debenture Trustee shall discuss the conclusions of the above actions with the Company before they are included in a report. The Company shall render assistance to any enquiry and/or evaluation (as mentioned above), performed by persons or institutions indicated by OPIC, at no costs to the Company.

11.2 Financial Covenants & Portfolio Information

(a) The Company shall ensure that, until the Final Settlement Date, on the last day of each calendar month (unless specified otherwise):

(i) PAR Ratio Over 30 Days at less than 7%;

(ii) the Capital Adequacy Ratio shall not fall below 17%; and

(b) The Company shall ensure that, until the Final Settlement Date:

(i) it maintains Un-Hedged Open Foreign Currency Ratio at not more than -25%


64

(minus Twenty Five percent) and less than 25% (Twenty Five percent);

(ii) it maintains the ratio of the (x) Loan Loss Reserves divided by (y) the Portfolio At Risk over 90 days plus Restructured Loans greater than 100%; and

(iii) it maintains a ratio of Return on Assets net of Donations greater than 0%.

6.4 REPORTING COVENANTS (a) The Company shall provide/cause to be provided information in respect of the

following, to the Debenture Holders/Debenture Trustee in a format which shall be provided by the Debenture Holders from time to time;

(i) within 30 (Thirty) days after the close of each of the Company's quarter end, a quarterly progress report with respect to the Company's lending program as outlined in Schedule VI of the DTMD ("Quarterly Progress Report");

(ii) when requested by the Debenture Trustee (or any Debenture Holders) the PAR Ratio Over 1 Day of the Company;

(iii) within 30 (Thirty) days after receiving approval by the board of the Company, annual business plan including a detailed investment budget and forecast accounts for the following financial year and financial projections for at least the years the Debentures continue to be outstanding;

(iv) within 30 (Thirty) days after the close of the Company's quarters, updated reports as to any changes with respect to all of the Company's beneficial owners, agreements evidencing financial indebtedness and Off-Balance Sheet Liabilities (including any new indebtedness and changes to the existing indebtedness of the Company), as appropriate;

(v) promptly upon receipt by the Company, a copy of any notice, correspondence, or other written materials from any governmental agency or authority, revoking or indicating an intention to revoke the Company's organization, licenses or franchises or otherwise adversely affecting the Company's ability to operate a lending program;

(vi) promptly upon the request of the Debenture Holders supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Debenture Holders in order for the Debenture Holders to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under Applicable Law pursuant to the transactions contemplated in this Issue;

(vii) such other information in respect of the operations, activities and financial condition of the Company as the Debenture Holders may from time to time reasonably request, including without limitation, promptly after receipt by the Company, the results of any periodic review conducted by or on behalf of the Company; and

(viii) inform the Debenture Holders prior to creating any new subsidiaries.


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(b) The Company shall provide / cause to be provided information to the Debenture Trustee (and to the Debenture Holders, if so requested) in respect of the following promptly and no later than 10 (Ten) calendar days from the occurrence of such event (unless otherwise specifically provided):

A. notice in writing of any application for winding up having been made or receipt of any statutory notice of winding up under the provisions of the Act or any other notice under any other law or otherwise of any suit or legal process intended to be filed and all orders, directions notices of the court or tribunal affecting or likely to affect the charged assets and the title to the property of the Company;

B. the details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against the Company, and which might, if adversely determined, have a Material Adverse Effect;

C. any material new financings, information regarding such new financings;

D. notice in writing if it becomes aware of any fact, matter or circumstance which would cause any of the representations and warranties under any of the Transaction Documents to become untrue or inaccurate or misleading in any material respect;

E. notice in writing of any event which constitutes an Event of Default, specifying the nature of such event and any steps the Company is taking and proposes to take to remedy the same;

F. notice in writing of any of any proposed change in the nature or scope or the business or operations of the Company or the entering into any agreement or arrangement by any person other than in the normal course of business that may materially affect the assets and liabilities of the Company, at least 3 (Three) Business Days prior to the date on which such action is proposed to be given effect;

G. such further information regarding the financial condition, business and operations of the Company as the Debenture Trustee may reasonably request in relation to the payments due to be made on the Debentures;

H. the details on utilization of funds raised through the issue of Debentures duly certified by the Company's statutory auditors, to the Debenture Trustee within 30 (Thirty) Business Days from the Deemed Date of Allotment;

I. inform the Debenture Trustee of any major change in the composition of its Board of Directors, which may amount to change in control, where "control" shall have the meaning given to it in in the Act;

J. inform the Debenture Trustee of any changes in the Constitutional Documents;

K. inform the Debenture Trustee of any change in the Company's ownership structure, which may amount to change in control, where "control" shall have the meaning given to it in the Act;


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L. inform the Debenture Trustee of any change in the Company's senior management;

M. as soon as practicable, and in any event within 5 (Five) Business Days after such prepayment of any Financial Indebtedness of the Company, notice of any prepayment of such Financial Indebtedness if prepaid amount is aggregating to or exceeding 1% of the Net Assets of the Company; and

N. such further information regarding the financial condition, business and operations of the Company as the Debenture Trustee may reasonably request.

6.5 FURTHER ASSURANCES

(a) The Company shall perform all of its obligations under the terms of the

applicable Transaction Documents and maintain in full force and effect each of the Transaction Documents to which it is a party.

(b) The Company shall promptly obtain all consents, as maybe necessary for performing its obligations in relation to this Issue.

(c) The Company shall ensure that any transactions entered into with any Controlled Entity shall be on terms and conditions that are substantially as favourable to the Company as it would obtain in a comparable arm's-length transaction with a person that is not a Controlled Entity.

(d) The Company shall give to the Debenture Trustee any information, relating to the business, property and affairs of the Company, that materially impacts the interests of the Debenture Holders.

(e) The Company shall at all times act and proceed in relation to its affairs and business in compliance with Applicable Law. The Company shall not 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 nor in violation of the Exclusion List mentioned in sub-Clause (f) below.

(f) The Company shall not permit any of the Debenture proceeds to be used to fund any activity on the Exclusion List where:

"Exclusion List" means any activity including 1) 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, PCB's, wildlife or products regulated under CITES, 2) production or trade in weapons and munitions, 3) production or trade in alcoholic beverages (excluding beer and wine), 4) production or trade in tobacco, 5) gambling, casinos and equivalent enterprises, 6) production or trade in radioactive materials (this does not apply to the purchase of medical equipment, quality control (measurement) equipment), 7) 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%), 8) drift net fishing in the marine environment


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using nets in excess of 2.5 km. in length, 9) production or activities involving harmful or exploitative forms of forced labor, 10) harmful child labor, 11) 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), 12) production or activities that impinge on the lands owned, or claimed under adjudication, by indigenous peoples, without full documented consent of such peoples.

(g) The Company shall not make any changes to the underwriting procedures of its Client Loan program that would have the effect of materially increasing the risk of default in the Company's Client Loan portfolio.

(h) The Company shall maintain the making of Client Loans as one of its permitted corporate purposes and shall not make any material change in the general nature of its operations from that carried on at the date of the DTMD.

(i) The Company shall respect all peoples and faiths and shall not discriminate in the provision of services against individuals on the basis of race, color, sex, sexual orientation, gender identity, religious orientation, disability, age, status, ancestry, or national or ethnic origin.

(j) The Company shall not undertake or directly or indirectly apply any proceeds of the Debentures, or any income from the investment thereof, towards the conduct of, any of the following activities:

(i) proselytizing or advocating for a church, congregation, sect, belief, doctrine, faith, religious affiliation or ideology, promoting a political party or movement, or, counseling individuals on spiritual matters; and

(ii) if the Company is associated with an organization that engages in proselytizing or other activities listed in sub-Clause (i), the Company shall clearly demarcate and segregate its provision of financial services, including the personnel, management, administration, funding, accounting, training, policies and promotional events related to its provision of such financial services, from the associated organization.

(k) The Company shall take the prior written consent of the Majority Debenture Holders, prior to incurring any Financial Indebtedness constituting of Off-Balance Sheet Liabilities, provided however that such consent shall not be required to incur indebtedness arising from its ordinary course of business including securitization transactions.

(l) The Company shall take the prior written consent of the Majority Debenture Holders for declaring or paying out any dividend to its shareholders during any financial year, if an Event of Default has occurred and is continuing.

(m) If the Company proposes to issue any additional shares or equity interests or has its existing shares or equity interests transferred, sold, pledged or otherwise encumbered, and such action results in the owners or holders of such existing shares and equity interests having less than 10% of the total voting power and economic interests in the Company, the prior written consent of the Majority Debenture Holders will be taken. PROVIDED THAT the Majority Debenture Holders must provide the aforementioned consent (or rejection) within 20 (twenty) days of receipt of request, failing which the Company shall be entitled


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to take any of the aforementioned actions.

(n) The Company shall ensure that during the tenure of the Debentures, there are a minimum number of 2 (Two) independent directors on the Board of Directors of the Company. The Company further assures that it shall obtain the prior written consent from the Debenture Trustee (acting on the consent of the Majority Debenture Holders) prior to reducing the number of independent directors on the Board of the Directors of the Company below the aforementioned amount.

(o) In the event that the Company proposes to sell, transfer or otherwise dispose of all or substantially all of its assets other than in the normal course of business of the Company; or consolidate or amalgamate with or merge or demerge with or into, or receive all or substantially all the assets or obligations of, another entity, the prior written consent of the Majority Debenture Holders shall be taken.

(p) The Company shall not enter into any compromise or arrangement or settlement with any of its secured creditors that would prejudicially affect the interests of the Debenture Holders, without obtaining the prior written consent of the Majority Debenture Holders.

6.6 EVENTS OF DEFAULT

If one or more of the events specified under this category (hereinafter each an "Event of

Default" and collectively, "Events of Default") occur, the Debenture Trustee shall be entitled to exercise any and all rights contained in the Transaction Documents and under Applicable Law:

a. If the Company defaults in making repayment of the coupon and/or the

Redemption Amounts on the respective due date(s) and such failure to pay has continued for 5 (Five) calendar days;

b. Except for the events contained in sub clause (a), the Company defaults in the performance of any other covenants, obligation, or warranty on the part of the Company under these presents and such default is not remedied within 30 (Thirty) Business Days of the Debenture Trustee giving notice to the Company or the Company becoming aware of the failure to comply with such covenants, obligation, representation or warranty under these presents;

c. Any representation or statement (including the representations stated in Transaction Documents) made or deemed to be made by the Company or any other document delivered by or on behalf of the Company under or in connection with the Transaction Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made;

d. The Company does not list the Debentures within 15 (Fifteen) days from the Deemed Date of Allotment;

e. The Company has voluntarily or involuntarily become the subject of proceedings under any bankruptcy or insolvency law and such proceedings have been admitted by a competent court or the Company is voluntarily or involuntarily dissolved;

f. A receiver or a liquidator has been appointed or allowed to be appointed of all or any part of the properties of the Company;


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g. An order is made or an effective resolution passed for the winding-up or dissolution, judicial management or administration of the Company, or the Company ceases to carry on all of its business or operations, except for the purpose of and followed by a reconstruction, amalgamation, re-organisation, merger or consolidation on terms approved by a Special Resolution of the Debenture holders;

h. The Company has admitted in writing that the Company is unable to pay its debts as they fall due or 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 indebtedness;

i. The value of the assets of the Company becomes less than its liabilities (taking into account contingent and prospective liabilities);

j. A moratorium is declared in respect of any indebtedness of the Company;

k. The Company becomes insolvent according to the definitions of the Financial Supervisory Authorities under the applicable regulations and/or any other competent authority with the regulated and legal framework of India;

l. A distress, attachment, execution or other legal process is levied, enforced or sued out on or against any material part of the property, assets or revenues of the Company and is not discharged or stayed within 45 (Forty Five) Business Days;

m. If the Company, in regards to any Financial Indebtedness exceeding in the aggregate 1% (One percent) of its Net Assets (A) defaults in any payment of any Financial Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created or (B) defaults in the observance or performance of any agreement or condition relating to any Financial Indebtedness, 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 (with the giving of notice or the passage of time or both would permit or cause) any such Financial Indebtedness to become due prior to its stated maturity; or (C) due to any default or an event of default, any Financial Indebtedness of the Company shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, (whether or not such right shall have been waived) prior to the stated maturity thereof;

n. The Company ceases to operate its lending program;

o. An encumbrance takes possession or an administrative or other receiver or an administrator is appointed of the whole part of the property, assets or revenues of the Company (as the case may be) and is not discharged within 60 (Sixty) Business Days;

p. One or more judgments or decrees shall be entered against the Company involving a liability (not paid or not covered by a reputable and solvent insurance company), individually or in the aggregate, exceeding 5% (Five percent) of the Total Assets of the Company and such judgments or decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed pending appeal for any period of 90 (Ninety) calendar days;


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q. There shall have occurred a change in the business, operations, property, assets, liabilities, condition (financial or otherwise) or prospects of the Company since the date hereof has resulted in or would result in a Material Adverse Effect and such Material Adverse Effect has not been remedied or rectified for a period of 15 (Fifteen) Business Days;

r. It is or will become unlawful for the Company to perform or comply with any one or more of its obligations under any of the Debentures or the Transaction Documents;

s. Any step is taken by governmental authority or agency or any other competent authority, with a view to the seizure, compulsory acquisition, expropriation or nationalisation of all of the assets of the Company which is material to the Company;

t. The Company's organizational status, or any license or franchise is revoked or suspended by any governmental agency or authority after the Company has exhausted all remedies and appeals relating thereto;

u. The Company is in default in the due performance of any obligation or combination of obligations which represents a value of the Indian Rupees equivalent of USD 250,000 (US Dollars Two Hundred and Fifty Thousand) or more under any other agreement or arrangement to which the Company is a party, or for whatever reason and without the Debenture Trustee's previous consent in writing such agreement or arrangement is suspended, terminated or changed or any provision thereof is waived or any loan outstanding there under is prepaid or has to be repaid immediately on demand of the lender concerned, such prior to the terms agreed therefore in such agreement or arrangement;

v. Any event or circumstance occurs which the Debenture Trustee believes might have a Material Adverse Effect on the ability of the Company to perform or comply with its obligations hereunder;

w. The Company creates or attempts to create any charge on the Hypothecated Assets or any part thereof, in addition to the charge created under the Deed of Hypothecation without the consent of the Special Majority Debenture Holders;

x. The Company 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; and/or

y. In the opinion of the Debenture Trustee the Hypothecated Assets are in jeopardy.

6.7 CONSEQUENCES OF EVENTS OF DEFAULT

On and at any time after the occurrence of an Event of Default, unless such Event of Default at

the request of the Company is expressly waived by the Debenture Trustee acting on the instructions of the Debenture Holders, (a) upon the expiry of the cure period provided to the Company, or (b) if the cure period provided is mutually extended by the Parties hereto upon the expiry of such extended period or (c) where it is not practical to provide a cure period, then forthwith, or (d) where no cure period has been provided and the parties mutually agree to provide for a cure period, upon the expiry of such mutually agreed to cure period, the Debenture Trustee shall if so directed by the Majority Debenture


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Holders:

(a) subject to Applicable Law, require the Company to mandatorily redeem the Debentures and repay the principal amount on the Debentures, along with accrued but unpaid Coupon, principal and other costs, charges and expenses incurred under or in connection with the Transaction Documents;

(b) declare that all or part of the Obligations under the Issue be immediately due and payable, whereupon they shall become immediately due and payable;

(c) accelerate the redemption of the Debentures;

(d) enforce the charge over the Hypothecated Assets and the Immovable Property in accordance with the terms of the Deed of Hypothecation;

(e) subject to Section 69 of the Transfer of Property Act, 1882, to sell, assign or otherwise liquidate or direct the Company to sell, assign or otherwise liquidate any or all of the Immovable Property, in such manner, at such time, at such place or places and on such terms as the Debenture Trustee may, in compliance with the requirements of law, determine in its absolute discretion and to take possession of the proceeds of any such sale or liquidation;

(f) to receive all rents and profits thereof without any disturbance or hindrance from the Company and to retain all cash proceeds received or receivable by the Company in respect of the Immovable Property and to use such funds, in whole or part, towards repayment of the Company's obligations to the Debenture Holders and/or the Debenture Trustee under these presents;

(g) authority to execute documents including re-conveyance and re-transfer of Immovable Property or the conveyance in case of sale, assignment or transfer of the Immovable Property in exercise of the power of sale herein contained or transfer of mortgage or other assurance required to be executed by the Debenture Trustee shall if executed by any authorized officer of the Debenture Trustee be deemed as good and effectual as if the Debenture Trustee had authorized such person to execute the same; and/or exercise any other right that the Debenture Trustee and / or Debenture Holders may have under the Transaction Documents or under Indian law.

Until the happening of any of the Event(s) of Default set out above, the Debenture Trustee shall not be in any manner required, bound or concerned to interfere with the management of the affairs of the Company or its business thereof. The Debenture Trustee shall, on being informed by the Company of the happening of any of the Event(s) of Default or upon the happening of any of such Event(s) of Default coming to its notice, forthwith give written notice to the Debenture Holders of the same.


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SECTION 7: OTHER INFORMATION AND APPLICATION PROCESS 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, Application Form and other terms and conditions as may be incorporated in the Transaction Documents. 7.1 Mode of Transfer/Transmission of Debentures The Debentures shall be transferable freely; however, it is clarified that no Investor shall be entitled to transfer the Debentures to a person who is not entitled to subscribe to the Debentures. The Debenture(s) shall be transferred and/or transmitted in accordance with the applicable provisions of the Act and other applicable laws including the Depositories Act, 1996 the rules made thereunder, the bye-laws, rules and regulations of the Depository (each as amended, modified or restated from time to time). 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 debenture holders 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. The Debenture Holders shall also have the right to novate, transfer or assign its rights and/or the benefits under the Transaction Documents upon such transfer/transmission of the Debentures. 7.2 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/fund transfer/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 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. 7.3 Trustee for the Debenture Holder(s) The Issuer has appointed GDA Trusteeship Limited to act as trustee for the Debenture Holder(s). The Issuer and the Debenture Trustee intends to enter into the Debenture Trustee Agreement and the DTMD 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 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). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the repayment of principal and yield thereon and they will take


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necessary action, subject to and in accordance with the Debenture Trustee Agreement and the DTMD, at the cost of the Issuer. The Debenture Trustee Agreement and the DTMD shall more specifically set out the rights and remedies of the Debenture Holder(s) and the manner of enforcement thereof. Payments made in accordance with the DTMD, shall be considered a legal discharge of the liability of the Company towards the Debenture Holders. On such payment being made, the Company will inform the Depositories and accordingly the account of the Debenture Holders with Depositories will be adjusted. The Company's liability to the Debenture Holders in respect of all their rights including for Payment or otherwise shall cease and stand extinguished after maturity, in all events save and except for the Debenture Holders right of redemption as stated above. Upon dispatching the payment instrument towards the payments as specified in the DTMD in respect of the Debentures, the liability of the Company shall stand extinguished.

7.4 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. 7.5 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. If, however, any resolution affecting the rights attached to the Debentures is placed before the shareholders, such resolution will first be placed before the Debenture Holders for their consideration. 7.6 Modification of Debentures The Debenture Trustee and the Issuer will agree to make any modifications in the Information Memorandum which in the opinion of the Debenture Trustee is of a formal, minor or technical nature or is to correct a manifest error. The DTMD shall not be modified or amended without the written consent of the Debenture Trustee provided that the Debenture Trustee shall consent to a modification or an amendment only if such modification or amendment is approved by a consent in writing of the Majority Debenture Holder(s) for the time being outstanding, or by a Majority Resolution duly passed at a meeting of the Debenture Holder(s) convened in accordance with the provisions set out in Schedule II of the DTMD. The Debenture Trustee shall give effect to such modification or amendment by executing necessary deed(s) supplemental to the DTMD.The rights, privileges, terms and conditions attached to the Debentures may be varied, modified or abrogated with 100% (One Hundred percent) of Debenture Holders approving such modification by way of a unanimous resolution. PROVIDED THAT nothing in such consent or resolution shall be operative against the Company where such consent or resolution modifies or varies the terms and conditions governing the Debentures and the same are not acceptable to the Company.

7.7 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.


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7.8 Notices Any notice may be served by the Issuer/ Debenture Trustee upon the Debenture Holders in writing and, unless otherwise stated, may be made by facsimile, letter or electronic mail addressed to such Debenture Holder at its/his registered address or facsimile number as prescribed in the Transaction Documents. All notice(s) to be given by the Debenture Holder(s) to the Issuer/ Debenture Trustee in relation to the Issue shall be in writing and, unless otherwise stated, may be made by facsimilie, letter or electronic mail to the Issuer or to such persons at such address/ facsimile number as may be notified by the Issuer from time to time through suitable communication. All correspondence regarding the Debentures should be marked “Private Placement of Debentures”. Notice(s) shall be deemed to be effective (a) in the case of registered mail, 3 (three) calendar days after posting; (b) 1 (One) Business Day after delivery by recognized overnight courier service, if sent for next Business Day delivery; or (c) in the case of facsimile at the time when dispatched with a report confirming proper transmission. 7.9 Issue Procedure Only Eligible Investors as given hereunder and identified upfront by the Issuer 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 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 applicant should transfer payments required to be made in any relation by EFT/RTGS, to the bank account of the Issuer as per the details mentioned in the Application Form. 7.10 Application Procedure Eligible investors will be invited to subscribe by way of the Application Form prescribed in the 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 or prior notice. The Issue will be open for subscription during the banking hours on each day during the period covered by the Issue Schedule. 7.11 Fictitious Applications All fictitious applications will be rejected. 7.12 Basis of Allotment Notwithstanding anything stated elsewhere, Issuer reserves the right to accept or reject any application, in part or in full, without assigning any reason. Subject to the aforesaid, in case of over subscription, priority will be given to Investors on a first come first serve basis. The investors will be required to remit the funds as well as submit the duly completed Application Form along with other necessary documents to Issuer by the Deemed Date of Allotment.


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7.13 Payment Instructions The Application Form should be submitted directly. The entire amount of Rs.9,90,000/- (Rupees Nine Lakh Ninety Thousand only) per Debenture is payable along with the making of an application. Applicants can remit the application amount through RTGS on Pay-in Date. The RTGS details of the Issuer are as under:

Beneficiary Name : Annapurna Microfinance Private Limited Bank Account No : 028405005995 SWIFT Code : ICICINBBCTS IFSC Code : ICIC0000284 Bank Name : ICICI Bank Limited Branch Address : Nayapalli, Bhubaneswar 7.14 Eligible Investors The following categories of Investors, who have been specifically approached and have been identified upfront, 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: (i) Mutual Funds (ii) Non-banking financial companies (iii) Provident Funds and Pension Funds (iv) Corporates (v) Banks (vi) Foreign Institutional Investors (FIIs) (vii) Foreign Portfolio Investors (FPIs) (viii) Qualified Foreign Investors (QFIs) (ix) Insurance Companies (x) Investment holding companies of high net worth individuals (xi) Any other person eligible to invest in the Debentures All Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this issue of Debentures. Note: Participation by potential investors 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. The Debentures are and have been placed on a private placement basis and shall not be issued to more than forty nine (49) Eligible Investors. 7.15 Procedure for Applying for Dematerialised Facility

(i) The applicant must have at least one beneficiary account with any of the DP’s of

NSDL/CDSL prior to making the application. (ii) 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”.


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(iii) Debentures allotted to an applicant will be credited to the applicant’s respective beneficiary account(s) with the DP.

(iv) 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.

(v) Non-transferable allotment advice/refund orders will be directly sent to the applicant by the Registrar and Transfer Agent to the Issue.

(vi) 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.

(vii) 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.

(viii) 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.

7.16 Depository Arrangements The Issuer shall make necessary arrangement with CDSL and NSDL for issue and holding of Debenture in dematerialised form. 7.17 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. 7.18 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 Investor and the tax exemption certificate/document of the Investor, 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


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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. 7.19 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 (i) SEBI registration certificate (ii) Resolution authorizing investment and containing operating instructions (iii) Specimen signature of authorized signatories

7.20 Documents to be provided by Investors Investors need to submit the following documents, as applicable (i) Memorandum and Articles of Association or other constitutional documents (ii) Resolution authorising investment (iii) Power of Attorney to custodian (iv) Specimen signatures of the authorised signatories (v) SEBI registration certificate (for Mutual Funds) (vi) Copy of PAN card (vii) Application Form (including RTGS details) 7.21 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 EFT/RTGS. 7.22 Succession In the event of winding-up of the holder of the Debenture(s), the Issuer will recognize the executor or administrator of the concerned Debenture Holder(s), or the other legal representative as having title to the Debenture(s). The Issuer shall not be bound to recognize such executor or administrator or other legal representative as having title to the Debenture(s), unless such executor or administrator obtains probate or letter of administration or other legal representation, as the case may be, from a court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or other legal representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the concerned Debenture Holder on production of sufficient documentary proof and/or an indemnity. 7.23 Mode of Payment All payments must be made through EFT/RTGS as set out in the Application Form. 7.24 Effect of Holidays


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If the due date in respect of any coupon or liquidated damages and all other monies payable under the Debentures falls on a day which is not a Business Day, then the immediately succeeding Business Day shall be the due date for such payment. Further, if the due date in respect of any redemption amount falls on a day which is not a Business Day, then the immediately preceding Business Day shall be the due date for such payment. 7.25 Tax Deduction at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/lower rate of TDS, relevant certificate/document must be lodged by the debenture holders at the office of the Registrar & Transfer Agents of the Company at least 15 (Fifteen) days before the relevant payment becoming due. Tax exemption certificate / declaration of non-deduction of tax at source on interest on application money, should be submitted along with the Application Form. If the applicable rate of tax deducted at source is modified and results in a reduction of the net interest received by the Debenture Holders, the Company must give written notice to the Debenture Holders (with a copy to the Debenture Trustee) as soon as it becomes aware of such change. If the Company is required by Applicable Law to deduct or withhold any Taxes from or in respect of any sum payable hereunder, the Company (a) shall increase the sum payable to the extent necessary so that after making all required deductions (including deductions applicable to additional sums payable in accordance with this provision), the Debenture Holders receive an amount equal to the sum they would have received, had no such deductions been made, and (b) shall make such deductions and shall pay the full amount deducted or withheld to the relevant tax authority or other authority in accordance with the Applicable Law in a timely manner. 7.26 Letters of Allotment 7.27 The depository account of the Debenture Holders with Depository, will be credited

within 5 (five) Business Days from the Deemed Date of Allotment.Deemed Date of Allotment

All the benefits under the Debentures will accrue to the Investor from the specified Deemed Date of Allotment. The Deemed Date of Allotment for the Issue is June 15, 2016. 7.28 Record Date The Record Date will be 15 (Fifteen) Business Days prior to any due date. 7.29 Refunds If the Company fails to allot the Debentures to the Applicants within 60 (sixty) calendar days from the date of receipt of the Application Money ("Allotment Period"), it shall repay the Application Money to the Applicants within 15 (Fifteen) calendar days from the expiry of the Allotment Period ("Repayment Period"). If the Company fails to repay the Application Money within the Repayment Period, then Company shall be liable to repay the Application Money along with interest at the rate of 13.00% (Thirteen Percent) annum, from the expiry of the Allotment Period. PROVIDED HOWEVER THAT, no interest shall be payable if the Company is paying interest on the Debentures at the Coupon Rate. 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.


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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 Registrar shall upon receiving instructions in relation to the same from the Issuer repay the moneys to the extent of such excess, if any. 7.30 Interest on Application Money The Company shall be liable to pay the Debenture Holders interest on Application Money net of withholding taxes at the rate of 13% (Thirteen Percent) per annum for the period commencing from the date on which the Debenture Holders have made payment of the application monies in respect of the Debentures to the Company and ending on the Deemed Date of Allotment. The Interest on the Application Monies shall be paid by the Company to the Debenture Holders within 7 (seven) Business Days from the Deemed Date of Allotment. 7.31 PAN Number Every applicant should mention its Permanent Account Number (“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. 7.32 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 Debenture Holder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL/CDSL and accordingly the account of the Debenture Holder(s) with NSDL/CDSL will be adjusted. On the Issuer dispatching the amount as specified above in respect of the Debentures, the liability of the Issuer shall stand extinguished. Disclaimer: Please note that only those persons to whom this memorandum has been specifically addressed are eligible to apply. However, an application, even if complete in all respects, is liable to be rejected without assigning any reason for the same. The list of documents provided above is only indicative, and an investor is required to provide all those documents / authorizations / information, which are likely to be required by the Issuer. The Issuer may, but is not bound to revert to any investor for any additional documents / information, and can accept or reject an application as it deems fit. Investment by investors falling in the categories mentioned above are merely indicative and the Issuer does not warrant that they are permitted to invest as per extant laws, regulations, etc. Each of the above categories of investors is required to check and comply with extant rules/regulations/ guidelines, etc. governing or regulating their investments as applicable to them and the Issuer is not, in any way, directly or indirectly, responsible for any statutory or regulatory breaches by any investor, neither is the Issuer required to check or confirm the same.


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SECTION 8: DIRECTOR DECLARATION

I am authorized by the Board of Directors of the Company vide resolution number ___________ dated May 10, 2016 to sign this Information Memorandum and declare that: (a) the Company has complied with the provisions of the Act and the rules made

thereunder; (b) the compliance with the Act and the rules does not imply that payment of interest or

repayment of debentures is guaranteed by the Central Government; (c) the monies received under the Issue shall be used only for the purposes and objects

indicated in the Information Memorandum; (d) all the requirements of Act and the rules made thereunder in respect of the subject matter

of this Information Memorandum and matters incidental thereto have been complied with and whatever is stated in this form 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 and Articles of Association;

(e) all the relevant provisions in the regulations/guidelines issued by SEBI and other applicable laws have been complied;

(f) no statement made in this Information Memorandum is contrary to the provisions of the regulations/guidelines issued by SEBI and other applicable laws; and

(g) all the required attachments have been completely, correctly and legibly attached to this form.

Signed

Date: Place: Attachments:- Copy of board resolution Copy of shareholders resolution


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ANNEXURE I: TERM SHEET

As per Clause 5.22 Issue details


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ANNEXURE II: RATING LETTER& RATING RATIONALE


84


85


86


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ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE


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ANNEXURE IV: APPLICATION FORM

Annapurna Microfinance Private Limited A private limited company incorporated under the Companies Act, 1956

Date of Incorporation: April 30, 1986 Registered Office: HIG-97, Dharma Vihar, Khandagiri Square,

Bhubaneswar, Odisha-751030 Telephone No: +91 674-2350253

DEBENTURE SERIES APPLICATION FORM SERIAL NO. 1

ISSUE OF UPTO 600 SECURED RATED LISTED REDEEMABLE NON CONVERTIBLE DEBENTURES OF

RS. 10,00,000/- (RUPEES TEN LAKH ONLY) EACH AGGREGATING UPTO RS. 60,00,00,000/- (RUPEES SIXTY CRORES ONLY) IN FACE VALUE, FULLY PAID UP FOR CASH AT DISCOUNT FOR INR 9,90,000 (RUPEES NINE LAKH NINETY THOUSAND) EACH DEBENTURE SERIES APPLIED FOR: Number of Debentures 600 In words Six Hundred Only Amount Rs. 60,00,00,000 /- in words Rupees Sixty Crores Only DETAILS OF PAYMENT: RTGS No. _____________ Drawn on_____________________________________________ Funds transferred to Annapurna Microfinance Private Limited Dated ____________ Total Amount Enclosed (In Figures) _____________ (In words) ______________________________________ APPLICANT’S NAME IN FULL (CAPITALS) SPECIMEN SIGNATURE

APPLICANT’S ADDRESS

ADDRESS STREET CITY E Mail PIN PHONE FAX

APPLICANT’S PAN/GIR NO. ________________ IT CIRCLE/WARD/DISTRICT ____


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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 Memorandum and have considered these in making our decision to apply. We bind ourselves to these Terms and Conditions and wish to apply for allotment of these 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 : (Settlement by way of Cheque / Demand Draft / Pay Order / Direct Credit / ECS / NEFT/RTGS/other permitted mechanisms)

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 Information Memorandum is provided by the Issuer and the same has not been verified by any legal advisors to the Issuer, the 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


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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. We understand that we are assuming on our own account, all risk of loss that may occur or be suffered by us including as to the returns on and/or the sale value of the Debentures and shall not look directly or indirectly to the any person acting on its or their behalf to indemnify or otherwise hold us harmless in respect of any such loss and/or damage. We undertake that upon sale or transfer to subsequent investor or transferee (“Transferee”), we shall convey all the terms and conditions contained herein and in this Information Memorandum to such Transferee. In the event of any Transferee (including any intermediate or final holder of the Debentures) suing the Issuer (or any person acting on its or their behalf) we shall indemnify the Issuer (and all such persons acting on its or their behalf) and also hold the Issuer each of such person harmless in respect of any claim by any Transferee. 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. 1

Received from _______________________________________________ Address________________________________________________________________ ______________________________________________________________________ Cheque/Draft/UTR # ______________ Drawn on _______________________________ for Rs. _____________ on account of application of _____________________ Debenture


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ANNEXURE V: LAST AUDITED FINANCIAL STATMENTS


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ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS

Illustration of Bond Cash Flows Company Annapurna Microfinance Private Limited Face Value (per security) Rs. 10,00,000/- (Rupees Ten Lakhs only) Issue Date / Date of Allotment June, 15, 2016 Principle Redemption Dates As specified below Principle Redemption Amount INR 60,00,00,000/- Coupon Rate 13.00% (Thirteen Percent) per annum net of

withholding taxes Coupon Payment Dates As specified below

Frequency of the Coupon Payment with specified dates

Semi Annually as per the dates specified below

Day Count Convention Actual/Actual

Cash Flows Date No.

Days in Coupon Period

Interest Payment Principal Total

Payment Balance

Due

Issue amount: 600,000,000 07-06-2016

6000,00,000

1st Coupon 07-12-2016 183 390,00,000 -

390,00,000

6000,00,000

2nd Coupon 07-06-2017 182 388,93,151 -

388,93,151

6000,00,000

3rd Coupon 07-12-2017 183 391,06,849 -

391,06,849

6000,00,000

4th Coupon 07-06-2018 182 388,93,151 -

388,93,151

6000,00,000

5th Coupon 07-12-2018 183 391,06,849 -

391,06,849

6000,00,000

6th Coupon 07-06-2019 182 388,93,151 -

388,93,151

6000,00,000

7th Coupon 07-12-2019 183 391,06,849 -

391,06,849

6000,00,000

8th Coupon 07-06-2020 183 391,06,849

2000,00,000

2391,06,849

4000,00,000

9th Coupon 07-12-2020 183 260,71,233

2000,00,000

2260,71,233

2000,00,000

10th Coupon 07-06-2021 182 129,64,384

2000,00,000

2129,64,384

-