DISCLOSURE DOCUMENT - BSE

Serial No. 1

To: Kotak Mahindra Bank Limited Disclosure Document as per Schedule I of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and Securities and Exchange Board of India (Issue and Listing of Debt Securities)(Amendment) Regulations, 2012 and Private Placement Offer Letter as per PAS 4 (Pursuant to Section 42 of Companies Act, 2013 and Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014

EQUITAS MICRO FINANCE PRIVATE LIMITED

(Wholly Owned Subsidiary of Equitas Holdings Private Limited) (A Company incorporated under the Companies Act, 1956)

Registered Office & Corporate Office: 4th Floor, Phase II, Spencer Plaza, No.769, Mount Road, Anna Salai, Chennai - 600 002

Tel.: +91 44 4299 5000 Fax: +91 44 4299 5050 Website: www.equitasmf.in E-Mail: [email protected]

ISSUE OF 1,000 SECURED, REDEEMABLE, TAXABLE, NON-CONVERTIBLE RATED, LISTED DEBENTURES (NCDS OR DEBENTURES) EACH AT FACE VALUE OF ` 10,00,000 (RUPEES TEN LAKHS ONLY) PER DEBENTURE FOR CASH, AGGREGATING TO ` 100,00,00,000 (RUPEES HUNDRED CRORES ONLY) ON PRIVATE PLACEMENT BASIS ("THE ISSUE")

Credit Rating: CARE A

General Risk: For taking an investment decision, the investors must rely on their own examination of the Issuer and the Offer including the risks involved. This Offer/ Issue is being made on a private placement basis. The Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. Credit Rating: The rating is not recommendation to buy, sell or hold securities and investors should take their own decision. The rating agency has the right to suspend, withdraw the rating at any time on the basis of new information etc. and should be evaluated independently of any other rating. Issuer’s Absolute Responsibility: The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Disclosure Document contains all information as required under Schedule I of SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Issue and Listing of Debt Securities)(Amendment) Regulations, 2012 and PAS 4 (Pursuant to Section 42 of Companies Act, 2013 and Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014 that the information contained in this Disclosure Document is true and fair in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Disclosure Document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Listing: The Debentures are proposed to be listed on BSE Limited (BSE). BSE shall be the designated stock exchange. This disclosure document is dated 26th May 2015 Note: This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus. This is only an information brochure intended for private use and should not be construed to be a prospectus and/or an invitation to the public for subscription to debentures under any law for time being in force.)

SOLE ARRANGER Kotak Mahindra Bank Ltd 27BKC,5th Floor, Plot No. C-27 G Block, Bandra Kurla Complex Bandra(East) Mumbai-400 051 Contact Person: Mr. Hardik Kotak Email: [email protected]

REGISTRAR & TRANSFER AGENT Karvy Computershare Pvt Ltd 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Contact Person: Mr. P A Varghese Email: [email protected]

DEBENTURE TRUSTEE IDBI Trusteeship Services Ltd Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai - 400 001 Contact Person: Mr. Pratik Gala Email:[email protected]

DISCLOSURE DOCUMENT

http://www.equitasmf.in/

mailto:[email protected]



Disclosure Document - Private & Confidential Page | 2 (This Disclosure Document is neither a prospectus nor a statement in lieu of prospectus)

TABLE OF CONTENTS

DISCLAIMER CLAUSE ............................................................................................................... 3

MANAGEMENT’S PERCEPTION OF RISK FACTORS ........................................................... 6

TABLE INDICATING REFERENCES OF DISCLOSURE REQUIREMENTS UNDER FORM PAS 4 (PURSUANT TO SECTION 42 OF COMPANIES ACT, 2013 AND RULE 14 (1) OF COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014) .................................................................................................................................. 10

DEFINITIONS............................................................................................................................. 12

REGULATORY DISCLOSURES .............................................................................................. 15

1. LIST OF DOCUMENTS TO BE FILED WITH STOCK EXCHANGE .............................. 15

2. LIST OF DISCLOSURES TO BE SUBMITTED TO THE TRUSTEE .............................. 15

3. BRIEF PARTICULARS ..................................................................................................... 15

4. BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER ..................... 17

5. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION, DETAILS OF DEMERGER, CHANGES IN ITS CAPITAL STRUCTURE, ............................................ 29

6. LEGAL INFORMATION .................................................................................................... 46

7. ANY MATERIAL EVENT/ DEVELOPMENT OR CHANGE ............................................ 46

8. PARTICULARS OF THE DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH ........................................................................................................ 46

9. PERMISSION / CONSENT FROM THE PRIOR CREDITOR FOR A SECOND OR PARI PASSU CHARGE BEING CREATED, WHERE APPLICABLE, IN FAVOR OF THE TRUSTEES TO THE PROPOSED ISSUE ....................................................................... 46

10. TERMS PERTAINING TO THE ISSUE ............................................................................ 46

11. APPLICATION PROCESS ............................................................................................... 55

12. DIRECTOR’S DECLARATION ......................................................................................... 59

ANNEXURE 1 - APPLICATION FORM .................................................................................... 60

ANNEXURE 2 - ILLUSTRATION OF DEBENTURE CASHFLOWS....................................... 63

ANNEXURE 3 - RATING RATIONALE AND RATING LETTER ............................................ 64

ANNEXURE 4 - TRUSTEE CONSENT LETTER ..................................................................... 72

ANNEXURE 5 - BOARD RESOLUTION AND SHAREHOLDERS’ RESOULTIONS ............ 73


DISCLAIMER CLAUSE GENERAL DISCLAIMER This document is neither a “Prospectus” nor a “Statement in Lieu of Prospectus” but a “Disclosure Document” prepared in accordance with Securities and Exchange Board of India (Issue & Listing of Debt Securities) Regulations, 2008, as amended from time to time, issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 6, 2008 and PAS 4 (Pursuant to Section 42 of Companies Act, 2013 and Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended from time to time). This document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Debentures to be issued by Equitas Micro Finance Private Limited. The document is for the exclusive use to whom it is delivered and it should not be circulated or distributed to third party/(ies). The Issuer certifies that the disclosures made in this document are generally adequate and are in conformity with the captioned SEBI Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue. Apart from this Document, no offer document or prospectus has been prepared in connection with this Issue and no prospectus in relation to the Issuer or the Debentures relating to this offer has been delivered for registration nor is such a document required to be registered under the applicable laws. This Document is issued by the Company and has been prepared by the Company to provide general information on the Company to potential investors to whom it is addressed and who are eligible and willing to subscribe to the Debentures and does not purport to contain all the information a potential investor may require. Where this Document summarizes the provisions of any other document, that summary should not be solely relied upon and the relevant document should be referred to for the full effect of the provisions. Neither this Document, nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation. Any recipient of this Document should not consider such receipt a recommendation to purchase the Debentures. Each potential investor contemplating the purchase of 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 legal, regulatory, tax, financial, accounting, and/or 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 potential investor's particular circumstances. This Document shall not be considered as a recommendation to purchase the Debentures and recipients are urged to determine, investigate and evaluate for themselves, the authenticity, origin, validity, accuracy, completeness, adequacy or otherwise the relevance of information contained in this Document. The recipients are required to make their own independent valuation and judgment of the Company and the Debentures. It is the responsibility of potential investors to ensure that if they sell/ transfer these Debentures, they shall do so in strict accordance with this Document and other applicable laws, so that the sale does not constitute an offer to the public, within the meaning of the Act. The potential investors should also consult their own tax advisors on the tax implications relating to acquisition, ownership, sale or redemption of the Debentures and in respect of income arising thereon. Investors are also required to make their own assessment regarding their eligibility for making investment(s) in the Debentures. The Company or any of its directors, employees, advisors, affiliates, subsidiaries or representatives do not accept any responsibility and/ or liability for any loss or damage however arising and of whatever nature and extent in connection with the said information.


RBI DISCLAIMER The Company is having a valid certificate of Registration dated 6th March 2013 issued by the Reserve Bank of India under Section 45 IA of the Reserve Bank of India Act 1934. However, the Reserve Bank of India (“RBI”) does not accept any responsibility or guarantee about the present position as to the financial soundness of the Issuer or for the correctness of any of the statements or representations made or opinions expressed by the Issuer and for discharge of liability by the Issuer. DISCLAIMER CLAUSE OF THE DESIGNATED STOCK EXCHANGE(S) As required, a copy of this Disclosure Document has been filed with the BSE in terms of the SEBI Regulations. It is to be distinctly understood that submission of this Disclosure Document to the BSE should not in any way be deemed or construed to mean that this Disclosure Document 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 Disclosure Document, 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. As per the provisions of the SEBI Regulations, a copy of this Disclosure Document has not been filed with or submitted to the SEBI. It is to be distinctly understood that this Disclosure Document should not in any way be deemed or construed to have been approved or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project(s) for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Disclosure Document. 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 DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This Disclosure Document has not been filed with SEBI. The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this document. The issue of Debentures being made on private placement basis, filing of this document is not required with SEBI, however SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this document. DISCLAIMER OF THE TRUSTEE The Issuer confirms that all necessary disclosures have been made in the Disclosure document including but not limited to statutory and other regulatory disclosures. Investors should carefully read and note the contents of the Disclosure document. Each prospective investor should make its own independent assessment of the merit of the investment in NCDs and the Issuer. Prospective Investor should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the NCDs and should possess the appropriate resources to analyze such investment and suitability of such investment to such investor’s particular circumstance. Prospective investors are required to make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in such instruments. The Trustees, “ipso facto” do not have the obligations of a borrower or a Principal Debtor or a Guarantor as to the monies paid/invested by investors for the debentures.

DISCLAIMER CLAUSE OF THE SOLE ARRANGER The Issuer hereby declares that it has exercised due-diligence to ensure complete compliance with prescribed disclosure norms in this Information Memorandum and/or the Private Placement Offer Letter. The only role of the Sole Arranger with respect to the Debentures is confined to arranging placement of the Debentures on the basis of this Information Memorandum as prepared by the


Issuer. Without limiting the foregoing, the Sole Arranger is not acting, and has not been engaged to act, as an underwriter, merchant banker or other intermediary with respect to the Debentures. The Issuer is solely responsible for the truth, accuracy and completeness of all the information provided in this Information Memorandum and/or the Private Placement Offer Letter. Neither is the Sole Arranger responsible for preparing, clearing, approving, scrutinizing or vetting this Information Memorandum and/or the Private Placement Offer Letter, nor is the Sole Arranger responsible for doing any due-diligence for verification of the truth, correctness or completeness of the contents of this Information Memorandum and/or the Private Placement Offer Letter. The Sole Arranger shall be entitled to rely on the truth, correctness and completeness of this Information Memorandum and/or the Private Placement Offer Letter. It is to be distinctly understood that the aforesaid use of this Information Memorandum and/or the Private Placement Offer Letter by the Sole Arranger should not in any way be deemed or construed to mean that the Information Memorandum and/or the Private Placement Offer Letter has been prepared, cleared, approved, scrutinized or vetted by the Sole Arranger. Nor should the contents of this Information Memorandum and/or the Private Placement Offer Letter in any manner be deemed to have been warranted, certified or endorsed by the Sole Arranger as to the truth, correctness or completeness thereof. Each recipient must satisfy itself as to the accuracy, reliability, adequacy, reasonableness or completeness of the Information Memorandum and/or the Private Placement Offer Letter. The Sole Arranger has not conducted any due diligence review on behalf or for the benefit of the Debenture Trustee or any of the Debenture Holders. Each of the Debenture Holders should conduct such due diligence on the Issuer and the Debentures as it deems appropriate and make its own independent assessment thereof. Distribution of this Information Memorandum and/or the Private Placement Offer Letter does not constitute a representation or warranty, express or implied by the Sole Arranger that the information and opinions herein will be updated at any time after the date of this Information Memorandum and/or the Private Placement Offer Letter. The Sole Arranger does not undertake to notify any recipient of any information coming to the attention of the Sole Arranger after the date of this Information Memorandum and/or the Private Placement Offer Letter. No responsibility or liability or duty of care is or will be accepted by the Sole Arranger for updating or supplementing this Information Memorandum and/or the Private Placement Offer Letter nor for providing access to any additional information as further information becomes available. Neither the Sole Arranger nor any of their respective directors, employees, officers or agents shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this Information Memorandum or in any other information or communications made in connection with the Debentures. The Sole Arranger is acting for the Company in relation to the Issue of the Debentures and not on behalf of the recipients of this Information Memorandum and/or the Private Placement Offer Letter. The receipt of this Information Memorandum and/or the Private Placement Offer Letter by any recipient is not to be constituted as the giving of investment advice by the Sole Arranger to that recipient, nor to constitute such a recipient a customer of the Sole Arranger. The Sole Arranger is not responsible to any other person for providing the protection afforded to the customers of the Sole Arranger nor for providing advice in relation to the Debentures. Each recipient of this Information Memorandum and/or the Private Placement Offer Letter acknowledges that: a) each recipient has been afforded an opportunity to request and to review and has received all

additional information considered by the recipient to be necessary to verify the accuracy of or to supplement the information contained herein; and

b) such recipient has not relied on the Sole Arranger in connection with its investigation of the accuracy of such information or its investment decision.


MANAGEMENT’S PERCEPTION OF RISK FACTORS

The Debentures are sophisticated instruments which involve a significant degree of risk and are intended for sale only to those investors capable of understanding the risks involved in such instruments. Investors should note that both the return on the Debentures and the return of the principal amount in full are at risk if the Debentures are not held till or for any reason have to be sold or redeemed before the Redemption Date. The Debentures are a principal protected product only upon maturity. The Debentures are structured and are complex and an investment in such a structured product may involve a high risk of loss of a part of the initial investment as compared to investment in other securities unless held till redemption date. The investor shall receive at least the face value of the Debenture only if the investor holds and is able to hold the Debentures till the redemption date. Prior to investing in the Debentures, a prospective investor should ensure that such prospective investor understands the nature of all the risks associated with the investment in order to determine whether the investment is suitable for such prospective investor in light of such prospective investor’s experience, objectives, financial position and other relevant circumstances. Prospective investors should independently consult with their legal, regulatory, tax, financial and/or accounting advisors to the extent the prospective investor considers necessary in order to make their own investment decisions. The Company believes that the following factors may affect its ability to fulfill its obligations in respect of the Debentures. All of these factors are contingencies which may or may not occur and the Company is not in a position to express a view on the likelihood of any such contingency occurring. The Company believes that the factors described below represent the principal risks inherent in investing in the Debentures, but the inability of the Company, as the case may be, to pay principal or other amounts on or in connection with any Debentures may occur for other reasons and the Company does not represent that the statements below regarding the risks of holding any Debentures are exhaustive. Potential investors should perform their own independent investigation of the financial condition and affairs of the Company, and their own appraisal of the creditworthiness of the Company. Potential investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations with respect to the Debentures. Potential investors should thereafter reach their own views prior to making any investment decision. CREDIT RISK Potential investors should be aware that receipt of the principal amount, (i.e. the redemption amount) and any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer. Potential investors assume the risk that the Issuer will not be able to satisfy their obligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures may not be made or may be substantially reduced or delayed. THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID The Debentures may be very illiquid and no secondary market may develop in respect thereof. Even if there is a secondary market for the Debentures, it is not likely to provide significant liquidity. Potential investors may have to hold the Debentures until redemption to realize any value. RATING AGENCY MAY DOWNGRADE THE CREDIT RATING ASSIGNED TO THE ISSUE OR THE DEBENTURES 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 or rating of the company. 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.


TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS Special tax considerations and legal considerations may apply to certain types of investors. Potential investors are urged to consult with their own financial, legal, tax and other advisors to determine any financial, legal, tax and other implications of this investment. ACCOUNTING CONSIDERATIONS Special accounting considerations may apply to certain types of taxpayers. Potential investors are urged to consult with their own accounting advisors to determine implications of this investment. SECURITY MAYBE INSUFFICIENT TO REDEEM THE DEBENTURES In the event that the Company is unable to meet its payment and other obligations towards Investors under the terms of the Debentures, the Trustee may enforce the Security over the Hypothecated Property as per the terms of Security Documents, and other Transaction Documents. The Investors recovery in relation to the Debentures will be subject to (i) the market value of such Hypothecated Property, (ii) finding willing buyers for the Hypothecated Property at a price sufficient to repay the potential investors amounts outstanding under the Debentures. The value realized from the enforcement of the Security over the Hypothecated Property may be insufficient to redeem the Debentures. MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT OR OTHER OBLIGATIONS The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any changes in the regulatory framework could adversely affect the profitability of the Issuer or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise. LEGALITY OF PURCHASE Potential investors 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. 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. RISKS RELATED TO THE BUSINESS OF THE ISSUER

(a) Majority of the loans provided by the Issuer are unsecured and if the Issuer is unable to control the level of non-performing loans (“NPAs”) in the future, or if the loan loss reserves are insufficient to cover future loan losses, the financial condition of the Issuer and results of operations may be materially and adversely affected. All of the loans of the Issuer are unsecured. Non-performing or low credit quality loans can negatively impact its results of operations. As of 31st March 2015, following was the summary of ageing of gross portfolio (including managed / securitised portfolio) of the Company:

` in Crores

Asset Classification Portfolio Outstanding (Inc. Securitised Assets) %

Standard Assets - No Overdues 214,207.49 99.91%


Asset Classification Portfolio Outstanding (Inc. Securitised Assets) %

- Overdue up to 29 days 57.22 0.03% Non-Performing Assets - Overdue for 30 - 59 days 23.93 0.01% - Overdue for 60 - 89 days 18.45 0.01% - Overdue for 90 - 119 days 16.66 0.01% - Overdue for 120 - 179 days 27.87 0.01% - Overdue for 180 days & above 51.36 0.02%

Total 214,402.98 100.00%

The Issuer cannot assure that the Issuer will be able to effectively reduce the level of the impaired loans in its total loan portfolio. The amount of the Issuer’s reported non-performing loans may increase in the future as a result of growth in the total loan portfolio, and also due to factors beyond the Issuer’s control, such as over-extended member credit that we are unaware of. Failure to manage NPAs or effect recoveries will result in operations being adversely affected. The Issuer provides for standard asset provision to the extent of 1.25% of closing loan portfolio apart from conservative loan loss provision policy. However, the loan loss reserves may not be adequate to cover an increase in the amount of NPAs or any future deterioration in the overall credit quality of the Issuer’s total loan portfolio. As a result, if the quality of the Issuer’s total loan portfolio deteriorates the Issuer may be required to increase the loan loss reserves, which will adversely affect the Issuer’s financial condition and results of operations. The Issuer’s members are economically weaker 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 the Issuer’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 is unable to control or reduce the level of its NPAs or poor credit quality loans, the Issuer’s financial condition and results of the Issuer’s operations could be materially and adversely affected.

(b) Microcredit lending poses unique risks not generally associated with other forms of lending in India, and, as a result, the Company may experience increased levels of NPAs and related provisions and write-offs that negatively impact results of operations. The Company is actively engaged in providing loans to micro businesses and other income generating activities of its members. Those members are generally poor women living in urban India, who have limited sources of income and savings, and who cannot provide us with any collateral or security for their borrowings. Any downturn in the area of activity by members could adversely affect the ability of members to make loan repayments on time and in turn negatively impact the company’s operations. As a result, such members pose a higher risk of default than borrowers with greater financial resources and more established credit score based on their past repayment track record and borrowers living in urban areas with better access to education, employment opportunities, and social services.

(c) Issuer requires certain statutory and regulatory approvals for conducting business and failure to obtain or retain them in a timely manner, or at all, may adversely affect operations. The Company is a Non-Banking Financial Company engaged in microfinance activities. As such, the company is regulated by RBI through NBFC-MFI Directions, December 2011 issued by RBI and amended from time to time. The Company requires certain approvals, licenses, registrations and permissions for operating, 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 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 that is subject to numerous conditions. In addition, branches are required to be registered under the relevant shops and establishments laws of the states in which they are located. The shops and establishment 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, business may be adversely affected. If the Issuer fails to comply, or a regulator claims we have not complied, with any of these conditions, its certificate of registration may be suspended or cancelled and the Issuer shall not be able to carry on such activities.

(d) Issuer may be required to increase capital ratio or amount of loan loss reserves, which

may result in changes to business and accounting practices that would harm business and results of operations. The Issuer is subject to the RBI minimum capital to risk weighted assets ratio regulations. Pursuant to Section 45 -IC of the RBI Act, every NBFC is required to create a reserve fund and transfer thereto a sum not less than 20.0% of its net profit every year, as disclosed in the profit and loss account and before any dividend is declared. The Issuer is also required to maintain a minimum capital adequacy ratio of 15.0% in relation to aggregate risk-weighted assets and risk adjusted assigned loans. The RBI may also in the future require compliance with other financial ratios and standards. Compliance with such regulatory requirements in the future may require alteration of its business and accounting practices or take other actions that could materially harm its business and operating results.


TABLE INDICATING REFERENCES OF DISCLOSURE REQUIREMENTS UNDER FORM PAS 4 (PURSUANT TO SECTION 42 OF COMPANIES ACT, 2013 AND RULE 14 (1) OF COMPANIES

(PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014)

Sl No. Particulars Page No

1 GENERAL INFORMATION A Name, Address, Website and Other contact details of the Company 15 B Date of Incorporation of the Company 29

C Business carried on by the company and its subsidiaries with the details of branches or units, if any 21

D Brief Particulars of the Management of the Company 18 E Names, Addresses, DIN and Occupations of the Directors 31 F Management’s Perception of Risk Factors 5 G Details of Default, if any. 38

H Names, designation, address and phone number, email ID of the nodal / compliance officer of the company, if any, for the private placement offer process;

15

2 PARTICULARS OF THE OFFER A Date of passing of board resolution 59

B Date of passing of resolution in the general meeting, authorizing the offer of securities 59

C Kinds of securities offered (i.e. whether share or debenture) and class of security 47

D Price at which the security is being offered including the premium, if any, along with justification of the price 47

E Name and address of the valuer who performed valuation of the security offered;

Not Applicable

F Amount which the company intends to raise by way of securities; 47

G Terms of Raising of Securities: Duration, if applicable, Rate of dividend or rate of interest, mode of payment and repayment 47 & 51

H Proposed time schedule for which the offer letter is valid 48 I Purposes and objects of the offer 47

J Contribution being made by the promoters or directors either as part of the offer or separately in furtherance of such objects;

Not Applicable

K Principle terms of assets charged as security, if applicable 48

3 DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION ETC.

A Any financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the interests of other persons.

38

B

details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any promoter of the offeree company during the last three years immediately preceding the year of the circulation of the offer letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed.

38

C Remuneration of directors (during the current year and last three financial years).

39

D Related party transactions entered during the last three financial years immediately preceding the year of circulation of offer letter including with regard to loans made or, guarantees given or securities provided.

39


Sl No. Particulars Page No

E

Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years immediately preceding the year of circulation of offer letter and of their impact on the financial statements and financial position of the company and the corrective steps taken and proposed to be taken by the company for each of the said reservations or qualifications or adverse remark.

40

F

Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years immediately preceding the year of circulation of offer letter in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section-wise details thereof for the company and all of its subsidiaries.

40

G Details of acts of material frauds committed against the company in the last three years, if any, and if so, the action taken by the company. 41

4 FINANCIAL POSITION OF THE COMPANY

A

The capital structure of the company in the following manner in a tabular form- (i) (a) the authorised, issued, subscribed and paid up capital (number of

securities, description and aggregate nominal value); (b) size of the present offer; (c) paid up capital;

(A) after the offer; (B) after conversion of convertible instruments (if applicable);

(d) share premium account (before and after the offer); (ii) the details of the existing share capital of the issuer in a tabular form,

indicating therein with regard to each allotment, the date of allotment, the number of shares allotted, the face value of the shares allotted, the price and the form of consideration.

Provided that the Issuer shall also disclose the number and price at which each of the allotments were made in the last one year preceding the date of the offer letter separately indicating the allotments made for considerations other than cash and the details of the consideration in each case.

29

B Profits of the company, before and after making provision for tax, for the three financial years immediately preceding the date of circulation of offer letter.

41

C Dividends declared by the company in respect of the said three financial years; interest coverage ratio for last three years (Cash profit after tax plus interest paid/interest paid).

41

D A summary of the financial position of the company as in the three audited balance sheets immediately preceding the date of circulation of offer letter.

41

E Audited Cash Flow Statement for the three years immediately preceding the date of circulation of offer letter.

41

F Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company.

43

5 DECLARATION 59


DEFINITIONS

Term Meaning / Definition / Complete Term “we”, “us”, “Issuer”, “the Company”, “our Company”, or “Issuer Company”

Unless the context otherwise indicates or implies, refers to Equitas Micro Finance Private Limited

Application Form The application form set out in Annexure 1 of this Disclosure Document for subscribing to the Debentures

Articles of Association The Articles of Association of the Issuer Beneficial Owner(s) Debenture holder(s) holding Debenture(s) in dematerialized form

(Beneficial Owner of the Debenture(s) as defined in clause (a) of sub‐section of Section 2 of the Depositories Act, 1996)

Beneficiary/Beneficiaries Person(s) whose name(s) appear(s) as a beneficiary of the Debenture in the details provided by the Depositories (NSDL and/ or CDSL) as of the record date

Board / BoD / Board of Directors Board of Directors of the Issuer or a Committee thereof BSE BSE Limited Business Day A day (other than a Saturday or Sunday) on which banks are open

for business generally in Chennai CDSL Central Depository Services (India) Limited. Client Means any borrower, investee or other Person financed directly or

indirectly by the financing operations of the Issuer Companies Act The Companies Act, 1956 or the Companies Act, 2013, as may be

applicable Credit Rating Agency Means CARE, CRISIL or ICRA CRISIL CRISIL Limited Disclosure Document / Offer Document

This disclosure document pursuant to which the Debentures are being offered for private placement.

Debt Security(ies) or Debenture(s) or NCDs

Rated, listed, secured, taxable, transferrable, redeemable, non-convertible debentures aggregating ` 100,00,00,000 (Rupees One Hundred Crores) issued pursuant to this Disclosure Document.

Debenture holder(s) / Debentureholders

The holder(s) of the Debenture(s) in dematerialized form

Debenture Trust Deed Debenture Trust Deed to be entered into between the Issuer and the Trustee for the Issue

Debenture Trustee Agreement Trustee agreement to be entered into between the Issuer and the Trustee for the latter's appointment as the debenture trustee for the Issue

Deed of Hypothecation The deed of hypothecation executed by the Issuer in favour of the Trustee for creating an exclusive first ranking charge over the Hypothecated Property in favour of the Trustee (for the benefit of the Debenture Holders)

Deemed Date of Allotment 27th May 2015 Depository NSDL and/or CDSL, as the case may be DP Depository Participant DRR Debenture Redemption Reserve EDIT Equitas Development Initiatives Trust EHPL or Equitas Equitas Holdings Private Limited EQUITAS Equitas group Fiscal Year/Financial Year The accounting year of the Issuer commencing each year on April

1st and ending on the following March 31st or such other period as the Issuer, with the Trustee’s consent (acting in accordance with Relevant Instructions), from time to time designates as its accounting year;


Term Meaning / Definition / Complete Term ICRA ICRA Limited Indebtedness "Indebtedness" means any obligation of the Company (whether

incurred as principal, independent guarantor or as a surety) for the payment or repayment of borrowed money, whether present or future, actual or contingent

INR / Rs. / ` The lawful currency of the Republic of India Investors Those persons (who fall within a class listed under the heading

“who can apply” on page 55 of this Disclosure Document) may be sent, specifically numbered and addressed to such person, with a view to offering the Debentures for sale on a private placement basis only under this Disclosure Document

Issue / Offer / Offering Private placement of rated, collateralised, redeemable, listed, non-convertible debentures issued pursuant to this Disclosure Document

IT Income Tax MoA / MOA / Memorandum Memorandum of Association of the Issuer MFI Microfinance Institution MFIN Microfinance Institutions Network NBFC Non‐Banking Finance Company NBFC-MFI Non‐Banking Finance Company - Micro Finance Institution NBFC‐ND‐SI Systematically Important ‐ Non Deposit taking ‐ Non Banking

Finance Company NBFC MFI Regulations Regulations of the RBI that pertain to NBFC-MFI NCD Regulations Regulations of the RBI that pertain to the issuance of non-

convertible debentures, including issuance of non-convertible debentures by NBFCs

NCD Register Register maintained by the Issuer containing the details of Issue and the Debenture Holders

NRI Non-Resident Indian NSDL National Securities Depository Limited NA Not Applicable Person Any natural person, corporation, company, partnership, firm,

voluntary association, joint venture, trust, unincorporated organization, governmental authority or any other entity whether acting in an individual, fiduciary or other capacity.

RBI Reserve Bank of India Receivables under financing activity

Microfinance loan receivables from the customers of the company in the ordinary course of business

Registrar and Transfer Agent Karvy Computershare Private Limited Relevant Instructions As defined in the Debenture Trust Deed RoC / ROC Registrar of Companies, Chennai RTGS Real Time Gross Settlement SEBI Securities and Exchange Board of India SEBI Regulations The Securities and Exchange Board of India (Issue and Listing of

Debt Securities) Regulations, 2008 as amended, varied or modified from time to time and such other applicable rules, regulations, notifications and circulars issued by SEBI from time to time.


Term Meaning / Definition / Complete Term Security Means any mortgage, charge, pledge, assignment, hypothecation,

security interest, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker’s lien, privilege or priority of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of Law

Security Documents Means the Deed of Hypothecation and any other document designated as a security document by the Debenture Holders and/or Trustee

Series Any series of debentures issued under this Disclosure Document Stock Exchange BSE Limited Transaction Documents As defined in Debenture Trust Deed Trustee IDBI Trusteeship Services Limited


REGULATORY DISCLOSURES 1. LIST OF DOCUMENTS TO BE FILED WITH STOCK EXCHANGE The Issuer shall file the following documents with the Stock Exchange along with listing application seeking listing of securities issued under this offer document: a) Memorandum and Articles of Association and necessary resolution(s) for the allotment of the debt

securities b) Copy of last three years audited Annual Reports c) Statement containing particulars of, dates of, and parties to all material contracts and agreements d) Copy of the Board / Committee Resolution authorizing the borrowing and list of authorized

signatories e) An undertaking from the issuer stating that the necessary documents for the creation of the

charge, where applicable, including the Trust Deed would be executed within the time frame prescribed in the relevant regulations/act/rules etc and the same would be uploaded on the website of the Designated Stock exchange, where the debt securities have been listed, within five working days of execution of the same

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

g) An undertaking that permission / consent from the prior creditor for a second or pari passu charge being created, where applicable, in favor of the trustees to the proposed issue has been obtained

2. LIST OF DISCLOSURES TO BE SUBMITTED TO THE TRUSTEE The Issuer shall submit the following disclosures to the Trustee in electronic form at the time of allotment of debt securities issued under this offer document:

a) Memorandum and Articles of Association and necessary resolution(s) for the allotment of the debt

securities b) Copy of last three years’ audited Annual Reports c) Statement containing particulars of, dates of, and parties to all material contracts and agreements d) Latest Audited / Limited Review Half Yearly Consolidated (wherever available) and Standalone

Financial Information (Profit & Loss statement, Balance Sheet and Cash Flow statement) and auditor qualifications , if any

e) An undertaking to the effect that the Issuer would, till the redemption of the debt securities, submit the details mentioned in point (d) above to the Trustee within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No.SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended from time to time, for furnishing / publishing its half yearly/ annual result.

f) Further, the Issuer shall submit information as required under Clause 1, Schedule 5 of the Debenture Trust Deed to the Trustee. The Trustee shall be obliged to share the details submitted under this clause with all ‘Qualified Institutional Buyers’ (QIBs) and other existing debenture-holders within two working days of their specific request. Further, the Trustee shall be obliged to share the Quarterly Trustee Report, under the provisions of Clause 5.3 of the Debenture Trust Deed, with the Debenture Holders.

3. BRIEF PARTICULARS

A Name of the Issuer Equitas Micro Finance Private Limited B Registered Office 4th Floor, Spencer Plaza, Phase II,

No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasmf.in Email : [email protected]




C Corporate Office 4th Floor, Spencer Plaza, Phase II, No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasmf.in Email : [email protected]

D Compliance Officer Mr. K R Sampath Kumar, Company Secretary 4th Floor, Spencer Plaza, Phase II, No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasmf.in Email : [email protected]

E Chief Financial Officer Mr. N. Sridharan, Chief Financial Officer 4th Floor, Spencer Plaza, Phase II, No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasmf.in Email : [email protected]

F Arrangers for the Debentures, if any

Kotak Mahindra Bank Limited 27 BKC, 5th Floor, Plot No. C-27 G Block, Bandra Kurla Complex Bandra (East) Mumbai - 400 051 Contact Person: Mr. Hardik Kotak Email: [email protected] Tel : +91 22 6166 0001 Fax : +91 22 6713 2410

G Trustee of the Issue IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17 R Kamani Marg, Ballard Estate Fort, Mumbai - 400 001 Contact Person: Mr. Pratik Gala Email: [email protected] Tel : +91 22 4080 7000 Fax : +91 22 6631 1776

H Registrar & Transfer Agent of the Issue

Karvy Computershare Private Limited 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Contact Person: Mr. P A Varghese Email: [email protected] Tel : +91 40 2342 0815 Fax: + 91 40 2342 0814

I Credit Rating Agency of the Issue

Credit Analysis & Research Limited Unit No. O-509/C, Spencer Plaza 5th Floor, No.769, Anna Salai, Chennai- 600 002

J Auditors of the Issue Deloitte Haskins & Sells, Chartered Accountants 8th Floor, ASV’N, Ramana Towers, 52, Venkatnarayana Road, T Nagar, Chennai - 600 017 Tel : +91 44 6688 5000 Fax : +91 44 6688 5100











4. BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER a) OVERVIEW Headquartered in Chennai, Equitas Micro Finance Private Limited is a non-deposit taking Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI) registered with the Reserve Bank of India (RBI). The Company was incorporated as Singhivi Investment & Finance Private Limited on 7th July 1994 with registered office as “Nanesh Villa”, 6/68, Sundaram Pillai Street, Purasaiwalkam, Chennai - 600 007. Equitas Holdings Private Limited (EHPL) acquired the company on 7th July 2011. Post the acquisition, the Company became a wholly owned subsidiary of EHPL. The name of the company was changed from Singhivi Investment & Finance Private Limited to Equitas Micro Finance Private Limited after necessary approvals from the RBI and ROC, Chennai. EHPL commenced the microfinance business in December 2007. The microfinance business was demerged from EHPL to the Company with effect from 1st April 2011 vide the order of Honourable High Court of Madras Judicature dated 11th January 2012. For the financial year ended 31st March 2015, the company has reported net profit of ` 69 Crores on a total income of ` 438 Crores. The Company has been rated CARE A and CRISIL A-/Stable by rating agencies CARE and CRISIL respectively for long term borrowings. The CRAR of the Company as on 31st March 2015 was 21.15% against the minimum regulatory requirement of 15% for systemically important non-deposit accepting NBFCs. The Company extends business loans to women micro-entrepreneurs with limited access to formal financial services. The Company has demonstrated the success and scalability of its business model by providing micro-credit over 2.3 million women customer. Mission, Vision and Guiding Principles of the Company Mission:

a. To improve quality of life b. by increasing total household asset value c. of those who are not effectively serviced by the formal financial sector d. by providing transparent and trustworthy access e. to financial and other relevant products and services f. by deploying cutting edge technology g. And forming partnerships and alliances

Vision: To be the leader in Microfinance in the country Guiding Principles: Customer led product & services development, adaptation and innovation shall be the three guiding principles for the Company. Growth of Microfinance Operations The growth of the microfinance operations earlier in the holding company, and now in the company over the last few years is summarized below:

Particulars of Growth 31-Mar- 11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 No of States / Union Territory 7 7 6 7 7 No of Districts 78 77 94 109 124 No of Branches 293 265 286 323 361 Loan Portfolio (` in Crores) 794 724 1,135 1,503 2,144


b) CORPORATE STRUCTURE

Headquartered in Chennai, Equitas Group has business interests in various asset classes namely microfinance, used commercial vehicle finance, affordable housing finance, loans against property and loans to micro, small enterprises. Equitas Holdings Private Limited (EHPL) is the group holding company. Currently, EHPL has the following operating subsidiaries:

• Equitas Micro Finance Pvt Ltd (engaged in microfinance business) • Equitas Finance Pvt Ltd (engaged in used commercial vehicle finance, loan against property

and loans to micro and small enterprises) • Equitas Housing Finance Pvt Ltd (engaged in housing finance business and loan against

property)

The Company has established sound governance structure with eminent board of directors including eight independent directors. Mr. Arun Ramanathan, former I.A.S. Officer (Retd.) and former Union Finance Secretary, is the Chairman of the Company. The day-to-day operations of the Company are managed by the Chief Executive Officer along with Management Committee of senior management under the supervision of the Board. The senior management team of the Company has rich corporate experience with cumulative experience of over 200 years.

c) BRIEF PARTICULARS OF THE MANAGEMENT OF THE COMPANY

Name of the Director Brief Profile

Mr. Arun Ramanathan Independent & Non-Executive Chairman

Mr. Arun Ramanathan is an I.A.S Officer (Retd.), with diverse exposure, has held portfolios in Industry, Finance, Taxation, Civil Supplies, Consumer Protection, Transport, Cooperation, Fisheries, Sericulture and General Administration. At the Centre, he was Secretary (Chemicals & Petrochemicals), Secretary (Financial Services) and at the time of superannuation (April 2009), the Union Finance Secretary. He was the Union Finance Secretary at the time of the global financial crisis and nominated by the Prime Minister to chair the Group of Secretaries to recommend measures needed to counter the meltdown in the financial and industrial sectors. He is an Associate Member of the Institute of Cost & Works Accountants of India. He has done his Master Degree in Philosophy from the School of Economics, Cambridge University - UK, Master Degree in Business Administration from Madras University. He is also a Master of Science in Nuclear Physics from Andhra University, Waltair. He holds Bachelor Degree in Science (Physics, Mathematics & Chemistry) from Loyola College, Madras.

Mr. Arun K Verma Independent Non-Executive Director

Mr. Arun Kumar Verma, aged 60 years is a Fellow Chartered Accountant from ICAI. He is also a Law Graduate and has done Diploma in Information Systems Audit. He is the past Chairman of the Bhubaneswar Branch of EIRC of ICAI and a Peer Reviewer in Peer Review Board, ICAI other than being a Guest Faculty in University Law College, Bhubaneswar. He is an Independent Director on the Board of Shipping Corporation of India, a Navaratna Company and also a Member of Audit Committee and Investor Grievance Committee, Shipping Corporation of India. He participated in The 7th Programme on Corporate Governance with Special Focus on Independent Directors organized under the Aegis of Department of Public Enterprises, Govt. of India and in the 8th programme on Corporate Governance for Professionalization of CPSEs Boards organized under the Aegis of Department of Public Enterprises, Govt. of India. He has been in Public Practice as Chartered Accountant since 1979. High Ethical Standards and Integrity have been the guiding factors while discharging duties in Public Practice. During Public Practice he has been professionally associated, inter alia, with Steel & Mines Department, Commercial Taxes Department of Govt. of Odisha. He has rendered service as a Vigiliance Auditor for Orissa Mining Corporation Ltd, Govt. of Odisha Undertaking and has also been associated with National Rural Health Mission, Odisha, Konark Met Coke Ltd, Orissa State Civil Supplies Corporation Ltd, National Vector Borne Disease Control Program, funded by World Bank, Orissa State Warehousing Corporation Ltd, State Resource Centre of the National Literacy Mission, State Bank of India and various other nationalised banks and insurance companies.



Ms. Chitra Chandramoulis-waran Independent & Non-Executive Director

Ms. Chitra Chandramouliswaran, aged 68 years holds Masters Degree in Statistics from Presidency College, Chennai and is a Certified Associate of the Indian Institute of Bankers. She served the Reserve Bank of India spanning over 37 years and retired from Reserve Bank of India as Chief General Manager. She worked in several departments covering traditional central banking functions and functions involving developmental roles. She served as a Principal in the Staff Training College of the Bank and headed an Internal Working Group to restructure the working of the regulatory and supervisory functions exercised by RBI over commercial Banks. During her tenure, she was involved in various functions including regulatory functions over commercial banks (DBOD), grant of permission to banks to set up subsidiaries and participate in joint ventures, fixing of prudential limits on the extent of finance by banks, allocation of bank credit for food procurement and other essential activities, framing of policies relating to allocation of industrial credit, administration of Foreign Exchange Control at the level of regional offices, inspection of Commercial Banks and Urban Cooperative Banks. She served on the Board of Syndicate Bank as a nominee of RBI from the year 2002 till retirement in the year 2004 and was also on the Board of Indian Overseas Bank after retirement, during the period 2007 to 2010

Mr. R Desikan Independent & Non-Executive Director

Mr. R Desikan started his career as Advertising Manager, Reader’s Digest, Bombay from 1966 to 1971. After a few other stints, came back to Readers Digest to head their Southern Regional office. He quit the professional role to become a full time consumer activist. A few of the highlights are: He established the Federation of Consumer Organisation of Tamil Nadu and grew it

from a 12 member organization to a federated structure of over 300 member organizations

He also established the Consumer Association of India and continues to be its Managing Trustee

Appeared on several television shows and radio broadcast programmes on AIR on subjects related to consumer protection.

Has addressed hundreds of public meetings, seminars, and workshops on consumer protection.

Has organized hundreds of seminars, workshops, and training programmes on Consumer Protection.

He is also a member of the following: Committee for drafting National Consumer Policy BIS Board Tamil Nadu Electricity Regulatory Commission Economic Advisory Committee of Civil Aviation

He is also an avid writer and has contributed countless articles to various business and social journals on consumer rights and protection.

Mr. M Janakiraman Nominee Director of IDBI Bank Ltd

He is a Post Graduate in Horticulture (M.Sc (Hort)) and also qualified the Associate Examination of the Indian Institute of Banking and Finance (CAIIB). He has also completed the following certificate examinations conducted by the Indian Institute of Banking and Finance;

SME Finance for Bankers Quantitative Methods for Banking and Finance Trade Finance Anti-Money Laundering / Know Your Customer Certified Information System Banker

He has total work experience of about 16 years in banking. Presently working as Deputy Gen Manager, Corporate Banking Group in IDBI Bank Ltd. Prior to joining IDBI Bank, he worked in Canara Bank for about 9 years, handling Priority Sector lending and branch banking. In IDBI Bank, he is handling Priority Sector Credit, Retail Banking and at present Corporate Banking. He was heading the Agri Business Group as Cluster Head at Chennai, handling Agri Business and MFI Portfolio in Tamil Nadu and Kerala. Subsequently, he was heading the Agri Processing Centre (Business Development and Loan Processing of Agri and MFI loans) and then, a Priority Sector Branch.



Mr. Y C Nanda Independent & Non-Executive Director

Shri. Y C Nanda is an alumnus of Delhi School of Economics. After an initial career with the State Bank of India and the Reserve Bank of India, he joined NABARD (India’s National Bank for Agriculture and Rural Development) when it was being formed in 1983. He was appointed Managing Director of NABARD in 1998 and went on to become the Chairman in 2000. After retirement, acknowledging his expertise, he was appointed a full-time member of the National Commission of Farmers by the Government of India. Shri Nanda has also worked as a consultant to number of international organizations like IFAD, UNOPS, GTZ and FAO. He has served on a number of Government and RBI led Committees as Chairman/member. He was also the Chairman of the Working Group on Agriculture Credit and Cooperatives for the 11th Five Year Plan. Currently, he is Chairman of the Agriculture Finance Corporation. He has also been involved with a number of microfinance institutions, rural development agencies, management institutes as Director/Trustee.

Mr. Marco Boa (Director Representing Investors of Holding Company

Mr. Marco Boa has been working with MicroVentures since March 2013 as Risk Network Officer in charge of risk analysis of MicroVentures investees. Besides, he coordinates the activity of start-up MFIs in new countries. Prior to joining MicroVentures, Marco has worked with MicrofinanzaRating S.R.L. since 2005. His last position was Asia Regional Manager based in Manila. He has carried out 100 ratings and assessments with a focus on Central Asia and South East Asia as well as trainings on risk management and financial indicators to MFIs and rural banking networks. Marco Boa is graduated in Economics, with a Master’s Degree in Development (specialization in SMEs financing and Microcredit) from the University of Bologna.

Mr. N Raman Nominee Director of SIDBI

Mr. N Raman, Executive Director of Small Industries Development Bank of India (SIDBI) is a Mechanical Engineer by training and also a Certified Associate of Indian Institute of Bankers besides holding a Diploma in Development Banking awarded by Indian Institute of Bankers. He has over 32 years of experience in industry and development banking of which 26 years have been with two apex level institutions namely Industrial Development Bank of India (IDBI) and SIDBI. Prior to his present position, he headed the Western Zonal Office of SIDBI, Mumbai, responsible for business operations of the bank in the states of Maharashtra, Gujarat, Madhya Pradesh and Goa. Earlier, he held various responsibilities at SIDBI’s Head Office including promotional and developmental activities for MSMEs, inter-institutional financing, recovery of bad loans and direct credit to MSMEs. He has also headed the Hyderabad and Dimapur branch offices of the bank. He has been nominated on the boards of State Financial Corporations and Venture Capital Companies, besides SIDBI assisted industrial units.

Mr. P B Sampath Independent & Non-Executive Director

His work experience is rich spanning more than three decades and varied responsibilities in accounting, finance and management. He worked in accounting and management related areas with India Pistons Limited of the Amalgamations Group for over 10 years. Since 1983, he has been with the flagship Company of the Group - Tractors and Farm Equipment Limited (TAFE) - in different capacities and currently, he holds position as Director and Secretary. He is also on the Boards of subsidiaries of TAFE co-coordinating their financial planning and administration. He has intimate knowledge of the accounting, financial and legal processes and needs of engineering industry. He is a qualified Chartered Accountant, Cost Accountant and Company Secretary, holding Associate membership in three professional accounting bodies in India.

Mr. V Shankar Independent & Non-Executive Director

He is the founder and Managing Director of Computer Age Management Services Private Limited. He is committed to establishing technology oriented services to the financial sector. For more than a decade he has been providing dynamic innovations in IT enabled services to the Indian Financial Services Industry. He is an Engineering graduate from IIT, Chennai and Post Graduate in Business Administration from IIM, Kolkata. After college he joined Ponds India Limited (now part of Hindustan Unilever Limited) as Management Trainee in 1983. During a five year stint at Ponds India Limited, he went through the commercial, project management and sales management functions and was responsible for systems initiatives in these areas.



Mr. N Srinivasan Independent & Non-Executive Director

He holds a Master Degree in Economics and has qualified the Associate examination of the Indian Institute of bankers (CAIIB). In addition he has obtained a Certificate in Training and Development from the University of Manchester, UK. His Professional affiliations and board positions amongst others include: • Member of Advisory Committee, Microfinance India, New Delhi • Member, Resource Persons Group, United Nations Solution Exchange, Microfinance

Community of Practice, UNDP, New Delhi • Chairman, Microfinance Transparency, USA • Member, Board of Trustees, Hand in Hand, Tamil Nadu • Member, Board of Trustees, Mahabank Agriculture and Rural Development Foundation,

Bank of Maharashtra, Pune • Chairman, Board of Trustees, North East Financial Inclusion Trust, Agartala • Member, Board of Trustees, Access – Assist, Technical services in microfinance, New

Delhi The last position held by him was that of Chief General Manager, National Bank for Agriculture and Rural Development, India. Currently he is an expert advisor and Independent consultant in development finance, agricultural finance, microfinance, livelihood development and has rich and varied experience in the microfinance sector.

Mr. P N Vasudevan Non-Executive Director

He is the Founder and Managing Director of Equitas Holdings Private Ltd. Earlier to this, he was the Executive Vice President and Head - Consumer Banking Group in Development Credit Bank Ltd, based out of Mumbai for one and half years. In this position he was responsible for the retail banking including retail liabilities, branch banking, retail assets and alternate channels and managing a branch network of 72 branches spread largely over Maharashtra, Gujarat and North. Many new products were launched during this period such as Privilege Banking for the HNI customers, MPower - a current account based product etc. Earlier to this, Mr Vasudevan worked in Cholamandalam Investment and Finance Co Ltd, part of the Murugappa Group for 20 years, based out of Chennai. He joined as the Management Trainee in 1986 and resigned as Vice President and Business Head, heading all their business lines.

d) SUMMARY OF BUSINESS / ACTIVITIES Equitas was established to extend business loans to women micro-entrepreneurs with limited access to formal financial services. The alternate source for such people normally is the private money lenders whose rates of interest range anywhere from 30% to upwards of 100%. Equitas seeks to extend micro-credit to this segment at reasonable cost and in a transparent manner. Equitas follows the Grameen model of Joint Liability Groups (JLG) with suitable adaptations. Globally, the Grameen model of microfinance has proved to be effective in empowering women belonging to low-income groups and in improving their quality of life. Backed by its senior management’s rich experience in retail banking, the Company has been a truly unique player in the microfinance segment from its inception. Operating more like a retail bank than a typical microfinance institution, Equitas rolled out its first product after establishing a robust process framework along with a comprehensive Information Technology system.


CRISIL GRADING AND RATING MFI Grading As a reflection of the performance of the Company’s microfinance operations, CRISIL has reaffirmed the highest MFI grading of mfR1.The grading history of the microfinance operations of the Company in last few years is given below:

Month MFI Grading Action December 2014 mfR1 Reaffirmation October 2013 mfR1 Upgrade February 2013 mfR2 Reaffirmation February 2012 mfR2 Assigned

Basel II - Bank Loan Rating Rating Agencies, CARE and CRISIL have carried the Bank Loan rating under Basel II norms of the Company and have accorded “CARE A” and “CRISIL A- with Stable Outlook” for long term bank Borrowings. The credit rating history of the Company with CARE and CRISIL are given below:

Month Amount Rated (` in Crores) Rating Action

January 2015 100 CARE A Upgrade June 2014 100 CARE A- Assigned

Month Amount Rated (` in Crores) Rating Action

February 2015 2,300 CRISIL A-/Stable Rating Reaffirmed December 2014 2,300 CRISIL A-/Stable Limits Enhanced September 2014 2,000 CRISIL A-/Stable Limits Enhanced June 2014 1,750 CRISIL A-/Stable Upgrade December 2013 1,750 CRISIL BBB+/Stable Limit Enhanced November 2013 1,550 CRISIL BBB+/Stable Limit Enhanced September 2013 1,450 CRISIL BBB+/Stable Upgrade & Limits enhanced June 2013 1,350 CRISIL BBB/Stable Limits Enhanced February 2012 1,300 CRISIL BBB/Stable Upgrade January 2012 1,300 CRISIL BBB-/Positive Assigned

Non-Convertible Debentures and Subordinated Debt CRISIL / CARE have rated the earlier issuances of Non-Convertible Debentures of the Company. The details of credit ratings assigned for the NCDs issued by the Company are given below:

Debenture Reference Amount Rated (` in Crores) Rating Outstanding

Equitas NCD Series 1 - Unsecured, Subordinated 50 CRISIL A-/Stable NCD Series 2 - Secured 23 CRISIL A-/Stable NCD Series 4 - Secured 25 CRISIL A-/Stable NCD Series 6 - Secured 60 CARE A NCD Series 7 - Secured 35 CRISIL A-/Stable & CARE A NCD Series 8 - Unsecured, Subordinated 30 CARE A-

Rating Agency, CARE has assigned credit rating of CARE A for the proposed NCDs - Series 9 to be issued under this offer document. The rating letter issued by CARE for the non-convertible debentures is attached herewith as Annexure 3.


OPERATING MODEL OVERVIEW Product Details: As a company established to work with the vulnerable sections of the society on a large scale, the Company recognizes the need to design products to address customer requirements and to develop rigorous processes and systems with the customer’s interest in mind. The Company provides a full line of financial products and services specifically customized to meet the needs of its clients. The Company’s core products are for income generating activities with the belief that its clients have the best understanding of how best to employ working capital. The Company is continuously working with its clients and partners to improve and extend its product offering. Current Loan Products Offered by the Company:

Loan Products Income Generating Loan (Cycle 1) - 2

years tenure

Income Generating Loan (Cycle 2) - 2

years tenure


years tenure


years tenure

Income Generating Loan (1 year) - 1 year

tenure Loan Amount# ` 15,000 ` 18,000 ` 20,000 ` 20,000 ` 5,000

Interest Rate (p.a.) 23.00% p.a. 23.00% p.a. 23.00% p.a. 23.00% p.a. 23.00% p.a.

Processing Fee* 1% of loan amount 1% of loan amount 1% of loan amount 1% of loan amount 1% of loan amount Other Fees / Charges Nil Nil Nil Nil Nil Tenor 2 years 2 years 2 years 2 years 1 year Repayment Frequency Weekly or Fortnightly or Once in 28 days or Monthly Pre-closure Charges Nil Nil Nil Nil Nil

# Additional amount of ` 2,000 will be provided, if the customers take the disbursement through Cheque * Processing Fee and Insurance Premium are exclusive of service tax. Insurance Fee structure

Insurance Company Loan Amount (`) 15,000 17,000 18,000 20,000 22,000 5,000

Life Insurance Corporation of India

Member - Premium (inc. ST) 74 84 89 99 109 12 Spouse - Premium (inc. ST) 260 294 311 346 381 43 Total - Premium (inc. ST) 334 378 400 445 489 56

DHFL Pramerica Life Insurance Company Ltd

Member - Premium (inc. ST) 83 94 99 110 121 14 Spouse - Premium (inc. ST) 229 260 275 306 336 38 Total - Premium (inc. ST) 312 353 374 416 457 52


Terms and Conditions of Loans: The major terms and conditions of the loan products offered by the Company are given below: a. Women Members: All Joint Liability Groups (JLGs) shall be formed comprising of poor women in

rural and urban areas and within the boundary of the branch offices. b. KYC Documentation: As per the KYC policy of the Company, all members are informed to provide

copies of ration card and photo identity card for availing the loan products of the Company. c. Membership Size: The membership of the each JLG shall be five. The minimum number of

members in a centre is ten and the maximum number of members shall not exceed thirty. d. Centre Meeting: The centre meeting of the JLGs will be facilitated by the Company’s staff every

fortnight where the installment amount will to be collected by Equitas staff. e. Joint Liability: The members of each group cross guarantee the loans borrowed by the other

members in the same group. f. Borrowings from other MFIs: MFIN has partnered with High Mark Credit Information Services Pvt

Ltd to establish an MFI-specific credit bureau. The High Mark credit report and Sales Officer’s declaration will be the basis for determining an applicant’s exposure to other MFIs. While applying for the first cycle loan, the applicant should not have any live loans at any other MFI. While applying for subsequent primary loans, the applicant should not have any live loans at more than one MFI.

g. Loan Disbursement: All loans are disbursed at the Company’s Branch Offices. After identifying the borrowers with their photograph identity cards in the presence of their centre leader, the loans are disbursed by cash.

h. Borrowers shall come in person: At the time of loan disbursement, all members who have applied for loan shall compulsorily be present at the branch office, for receiving the loan amount.

i. Passbooks: A passbook will be issued to the each member detailing the amount of loan, date of installment, principal and interest amounts payable till the completion of loan account, rate of interest and insurance charges.

j. Duration of Loan: The duration of loan will be as per the loan product availed by the customer. k. Income Generation Program Purposes only: The Company sanctions micro finance loans only

for supporting and enabling the members for undertaking the Income Generation activities. l. Repayment at Centre Meetings: All the members shall repay the loan only at respective centre

meetings. Receipt (collection sticker) will be issued by the Relationship Officer to the members. m. Utilization of Loan Funds: The assets purchased / created if any, would be verified by the field

risk officer on a random basis. n. Collateral: This model is based on the Joint Group Liability. The collateral is social i.e. the

members of the group together assure the repayment of the loans. Documentation: ID/address proof: Voter ID card / ration card / gas bill / bank passbook copy, etc Photo of self and husband Membership application form Loan application and sanction form Demand promissory note Loan pass book Term Life Insurance Cover: The Company presently has a tie up with Life Insurance Corporation of India for Group Term Insurance covering all the members for a period of two years. The sum assured will be the loan amount disbursed to the member. As part of being transparent, the Company discloses the premium collected for insurance in the passbooks issued to members. Operating Model - Processes & Systems Business Development Methodology: The Sales Officer visits the identified areas and communicates the salient features of the products on offer to potential clients and the documentation


required. The purpose of loans would be normally to support their business requirements while other purposes such as repayment of other higher cost borrowings would also be encouraged.

Member Mobilization: The Company would be operating broadly under the Grameen model with suitable adaptations. The customers would be asked to form groups consisting of five members and three to six groups would be combined to form a centre. Each group and centre would have one leader. The groups would be joint liability groups with each member of the group guaranteeing the loan repayment of the other members of the group. The groups are trained by the sales officer on the concept of group formation, group liability, purpose and usage of the loan amount, the fortnightly meeting schedules, the loan collection process, terms of loan, etc. Once the clients are clear on the terms and conditions, Application Forms are handed over and the completed applications along with the KYC documentation are submitted at the branch.

Customer Group Training: The groups would then be put under training with the sales officer explaining the concept of group formation, group liability, purpose and usage of the loan amount, the fortnightly meeting schedules and collection process. Once the customers are clear on the same, Application Forms would be handed over to them to be filled up and submitted.

Credit Appraisal System: Applicants would be screened from a credit perspective. Some of the criteria to be checked would be longevity in the same place of residence (minimum five years to be there), nature of business and activity level to support the borrowing, income to expense ratio and ability to service loan, etc. After this, the sales officer would visit each customer’s house and do a physical verification to satisfy the veracity of all the statements in the Application Form and the place of business to satisfy the eligibility criteria. The papers would be submitted to the Branch Manager, who makes random visits to 25% of the customers per centre for cross checking on the due process and the credit approval would be done based on delegated powers.

Loan Disbursement: Once credit process is complete and the loan has been approved, the papers would be sent to the back office at H.O and the same would be data entered into the system and the proposal made OK for payment. Once the same is done, the branch would invite all the customers belonging to each center to the branch and disbursement would take place at the branch.

Collection: Collections would be done in centre meetings to be held every fortnight. In each quarter, while five meetings would be conducted solely for the purpose of collections, one meeting per quarter would be used for obtaining feedback on the service levels, other add on features, customer requirements, etc. and same would be fed back to a central desk for appropriate action. The Relationship Officer Issues pre-printed sticker to be pasted on the passbook of the member as a receipt for the money collected at the centre meetings. The concept of pre-printed stickers is first of its kind in the Banking, Financial Services and Insurance (BFSI) sector in India.

Operational Systems: The bedrock of the Company’s scalability is its approach of delivering efficient back-office support to its branch teams. The Company is the first, and only, MFI to establish a dedicated and centralized back-office team. By setting up this back-office team, the Company has enabled its field personnel to focus purely on customer-facing activities; and thereby multiplied the productivity of its branches. Currently, a lean team is deployed to service the back-end requirements for the entire customer base. Such high levels of efficiency have been enabled by a series of innovations adopted by the Information Technology & Operations teams.

Real-Time Collections Monitoring: With its rapid growth, the Company has established a simple and highly effective system to track its collections on a real-time basis. The Company is the first in the BFSI sector to have implemented such a system. A central server obtains SMS-based information on the proceeds of every collection meeting within fifteen minutes of its completion. An internet-based application helps Branch & Area Managers detect any anomaly in their collections immediately; and facilitates quick resolution of the anomaly.


Automated Forms Processing: In order to multiply the productivity of its back-office team, the Company has introduced an Optical Mark Recognition (OMR)-based membership form. Most fields in these forms are parameterized; and are updated directly into the system on scanning the OMR form. The introduction of this OMR system has reduced, by a factor of three, the time required for the back-office team to update new members’ details in the system. This has resulted in a direct impact on the scalability of the Company’s business. This is yet another first for the Company in the BFSI sector. Audit Processes & Systems Field Risk Audit: Any model of rapid growth has the potential for compromise on quality. Given its rapid growth projections, the Company recognized the need for checks and measures to ensure portfolio quality as well as to eliminate the risk of fraud. These processes are aligned to verify the efficacy of group bonding in every centre; which is the core strength of the Grameen model. The Company has instituted a check of every member prior to disbursement. The Sales officer conducts physical verification of all the members verifying the members’ address, their business and income generating capabilities. This inspection by the Sales officer is corroborated by a random check (of at least 5 members per centre) conducted by the Branch Manager (BM). These inspections include verification of the member-candidate’s household and business details. In parallel, the Operations Team conducts de-dupe of every member based on her ration card ID for eliminating the duplication of members at a household level. Also, the BM conducts a comprehensive Group Recognition Test to ascertain the bonding of members within the centre. In addition, after the disbursement, the Company’s Relationship Officer conducts a loan utilization inspection. Also, the Company has addressed the risk of fraud during collections by deploying pre-printed stickers. In addition to these checks and measures, the Company has pioneered the establishment of a final line of defense - an independent field risk audit team. Field Risk Officers (FRO) are deputed to independently confirm the adherence to standard processes in a random sample of all transactions performed in the previous month. The entire risk audit process is parameterized in order to deliver an audit score; which is directly linked to the field personnel’s monthly incentive scheme. The design of the Company’s risk audit structure lends itself to successful risk-management due to the following reasons: Independence from Branch Offices: The risk audit team is de-linked from the branch manager; and has a parallel hierarchy of Territory and Regional Risk Managers. Randomized Sample Selection: The sample to be inspected by the FRO is selected by an automated system. By ensuring a truly random sample covering every branch, the pressure on branch personnel to adhere to processes will be consistently maintained.

Blind Validation: Instead of validating the entries made by a branch personnel, an FRO is instead required to fill in member details afresh. The FRO is not aware of the corresponding details filled in by the branch personnel. This blindness to the information submitted by the branch personnel further strengthens the risk audit process.

Automated Audit Score Generation: By using OMR-based audit forms, the information provided by FRO is automatically updated into the system without any manual data entry. Also, the system matches these details with those already provided by the branch personnel and computes the staff and branch audit score.

Internal Audit: In addition to the Field Risk Audits, the Company has also appointed an independent Chartered Accountant firm to carry out an internal audit for the Company. The internal auditors conduct a review of internal controls and transaction audit on sample basis. The broad scope of internal audit coverage is given below:


Sourcing of new loans Centre meetings process Cash handling at various levels both for disbursement and collection Branch and HO Operations Statutory Compliance

All the branches of the Company are covered once in a year by the internal audit team. The branches are selected randomly for the audit. After the carrying out audit of branches, the internal auditors also carry out a special review audit for the branches to ensure the compliance for the deviations reported in their previous audits. e) KEY OPERATIONAL AND FINANCIAL PARAMETERS

` in Lakhs

Parameters As at

31.03.2015 / FY 2013-14

As at 31.03.2014 / FY 2013-14

As at 31.03.2013 /

FY 2012-2013

As at 31.03.2012 /

FY 2011-2012 Net-worth 37,999.70 31,144.62 25,489.79 20,243.28 Total Debt of which

- Non-Current Maturities of Long Term Borrowings

71,341.23 53,084.83 62,714.15 28,133.48

- Short Term Borrowings - 883.90 997.99 5,000.00 - Current Maturities of Long Term

Borrowings 91,422.54 77,783.34 42,121.60 19,560.84

Net Fixed Assets 1,272.42 271.24 319.10 618.48 Non-Current Assets 1,392.21 1,040.41 1,122.07 641.50 Cash and Cash Equivalents 31,905.35 41,229.85 43,377.28 21,083.80 Current Investments 15,000.00 340.12 394.73 - Current Assets 9,474.39 14,016.18 9,438.51 7,932.72 Current Liabilities 19,243.61 10,778.07 7,716.75 5,786.23 Assets Under Management 214,402.98 150,300.54 113,466.07 72,395.71 Off Balance Sheet Assets 52,989.33 31,734.00 27,033.80 20,935.90 Interest Income 36,091.77 28,201.69 18,619.06 15,276.61 Interest Expense 18,699.92 14,733.90 9,493.94 6,270.92 Provisioning & Write-offs 895.66 551.09 599.27 580.49 PAT 6,855.09 5,654.83 2,751.19 1,824.16 Gross NPA (%) 0.08% 0.08% 0.03% 1.32% Net NPA (%) 0.02% 0.02% 0.01% 0.08% Tier I Capital Adequacy (%) 17.79% 19.61% 22.43% 24.05% Tier II Capital Adequacy (%) 3.37% 3.30% 4.75% 7.30%

Notes: 1. Non-Current Assets includes the following:

` in Lakhs Parameters 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Deferred Tax Assets 1,372.21 1,020.41 761.95 621.50 Non-Current Investments 20.00 20.00 360.12 20.00

2. Assets under Management include Off-Balance Sheet Assets, i.e. loan portfolio under bilateral assignments and securitizations.


f) GROSS DEBT EQUITY RATIO OF THE COMPANY (AS ON 31st MARCH 2015)

Before the issue of Debt Securities 4.28 times After the issue of Debt Securities 4.55 times

g) DETAILS OF PROJECT COST AND MEANS OF FINANCING

NA

h) KEY ANALYSIS OF PORTFOLIO

4% 3%

8%

16%

1%

5%

63%

No of Customers - 31.03.2015

Gujarat

Karnataka

Madhya Pradesh

Maharastra

Pondicherry

Rajasthan

Tamil Nadu

4% 3%

7%

15%

1%

5%65%

Portfolio Outstanding - 31.03.2015

Gujarat

Karnataka

Madhya Pradesh

Maharastra

Pondicherry

Rajasthan

Tamil Nadu


5. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION, DETAILS OF DEMERGER, CHANGES IN ITS CAPITAL STRUCTURE,

a) BACKGROUND Equitas Micro Finance Private Limited was incorporated as Non-Banking Finance Company in 1994. Equitas Holdings Private Limited (EHPL) acquired this company on 7th July 2011. Post this acquisition, The Company became wholly owned subsidiary of EHPL. The name of the company was changed from Singhivi Investment & Finance Private Limited to Equitas Micro Finance Private Limited after necessary approvals from the RBI and ROC, Chennai. Equitas was founded for extending business loans to women micro-entrepreneurs with limited access to formal financial services. The alternate source for such people normally is the private money lenders whose rates of interest ranges anywhere from 30% to upwards of 100%. Equitas seeks to extend micro-credit to this segment at reasonable cost and in a transparent manner. Equitas follows the Grameen model with suitable adaptations. Globally, the Grameen model of microfinance has proved to be effective in empowering women belonging to low-income groups and in improving their quality of life ‘Equitas’ is a Latin word that translates to being equitable, fair and transparent. True to its name, Equitas aims to be the leader in the microfinance industry by setting benchmarks in the industry in terms of being fair and transparent to customers.

Particulars Description Date of Incorporation 7th July 1994 Date of RBI License as NBFC-ND 6th March 2013 Corporate Identity Number (CIN) U65993TN1994PTC028002 Permanent Account Number (PAN) AAACS7012F Constitution Private Limited Company operating as NBFC-MFI Name of the Chief Functionary Mr. H K N Raghavan, Chief Executive Officer Financial Year 1st April to 31st March Credit Rating / MFI Grading MFI Grading of mfR1 from CRISIL

Credit Rating of CRISIL A-/Stable from CRISIL Credit Rating of CARE A from CARE

Registered Office 4th Floor, Phase II, Spencer Plaza, No.769, Mount Road, Anna Salai, Chennai - 600 002

Auditors Deloitte Haskins & Sells, Chartered Accountants, 7th Floor, ASV N Ramana Towers, 52, Venkatnarayana Road, T. Nagar, Chennai - 600 017

b) CAPITAL STRUCTURE (i) Details of Share Capital as on 31st March 2015

Particulars Description No. of Shares Amount in `

Authorized Capital 210,000,000 Equity Shares of Face Value of ` 10 Each Equity Shares 210,000,000 2,100,000,000 Issued, Subscribed & Paid up Capital 198,750,000 Equity Shares of Face Value of ` 10 Each Equity Shares 198,750,000 1,987,500,000


(ii) Details of present offer

Particulars Amount in ` Remarks

Size of the present offer 1,000,000,000 Issue of 1,000 secured, redeemable, taxable, non-convertible, rated, listed debentures

Paid-up capital After the offer 1,987,500,000 Nil After conversion of convertible

instruments (if applicable) 1,987,500,000 Nil

Share Premium account Before the offer 64,693,300 Nil After the offer 64,693,300 Nil

(iii) Details of changes in capital structure as on 31st March 2015 and for the last five years The holding company, Equitas Holdings Private Limited acquired all the outstanding equity shares of the Issuer on 7th July 2011. The following changes have taken place in the authorized capital of the Company during last five years, i.e. from 1st April 2008:

Date Amount in ` Particulars As on

01.04.2008 3,000,000 300,000 shares of ` 10 each totalling ` 30 Lakhs

03.08.2011 53,000,000 Increased from 300,000 shares of ` 10 each totalling ` 30 Lakhs to 5,300,000 shares of ` 10 each totalling ` 5.30 Crores

05.09.2011 1,600,000,000 Increased from 5,300,000 shares of ` 10 each totalling to 5.30 Crores to 160,000,000 shares of ` 10 each totalling ` 160.00 Crores

19.01.2012 2,100,000,000 Increased from 160,000,000 shares of ` 10 each totalling ` 160.00 Crores to 210,000,000 shares of ` 10 each totalling ` 210.00 Crores

18.11.2013 2,200,000,000 Increased from 210,000,000 shares of ` 10 each totaling ` 210.00 Crores to 220,000,000 shares of ` 10 each totaling ` 220.00 Crores

(iv) Details of Equity Share Capital History of the Company as on last quarter ended

31st March 2015 and for the last five years (Also, refer note below)

Date of Allotment

No. of Equity Shares

Face Value

(`)

Issue Price

(`)

Consideration (Cash, Other than cash,

etc.)

Nature of Allotment

Cumulative

Remarks No of Equity Shares

Share Capital (`)

Share Premium

As on 01.04.2008 266,200 10.00 10.00 N.A. N.A. 266,200 2,662,000 Nil Nil

07.09.2011 5,000,000 10.00 10.00 Cash Fresh Issue 5,266,200 52,662000 Nil Nil

21.01.2012 150,000,000 10.00 10.00 Other than Cash

Scheme of Arrangement 155,266,200 1,552,662,000 Nil Nil

23.01.2012 25,000,000 10.00 10.00 Cash Fresh Issue 180,266,200 1,802,662,000 Nil Nil 18.03.2013 18,483,800 10.00 13.50 Cash Fresh Issue 198,750,000 1,987,500,000 64,693,300 Nil Note: Equitas Holdings Private Limited acquired all the outstanding equity shares of the Issuer from its erstwhile promoters on 7th July 2011. The details of equity shares allotted (number of shares, price, consideration, etc.) prior to 2008 are not available with the Issuer and hence, the same are not provided in the table above.

The number and price at which each of the allotments were made in the last one year preceding the date of the offer letter separately indicating the allotments made for considerations other than cash and the details of the consideration in each case - Not Applicable

(v) Details of any Acquisition or Amalgamation in the last 1 year

Nil


(vi) Details of any Reorganization or Reconstruction in the last 1 year

Nil

(vii) Details of the shareholding of the Company as on 31st March 2015

Sl No Particulars Total No of

Equity Shares Total No of shares

in Demat form

Total Shareholding as % of total no of

equity shares 1 Equitas Holdings Private Ltd 198,749,999 Nil 100.00%

2 Nominee of Equitas Holdings Private Ltd

- Mr. S Bhaskar 1 Nil 0.00% Total 198,750,000 Nil 100.00%

Notes: Shares pledged or encumbered by the promoters (if any) – Nil

(viii) List of Top 10 holders of equity shares of the Company as on 31st March 2015

Sl No Particulars Total No of

Equity Shares

Total No of shares in Demat

form

Total Shareholding as % of total no of equity

shares 1 Equitas Holdings Private Ltd 198,749,999 198,749,999 100.00% 2 Mr. S Bhaskar as Nominee of

Equitas Holdings Private Ltd 1 1 0.00%

c) DETAILS REGARDING DIRECTORS OF THE COMPANY

(i) Details of Current directors of the Company*

Sl No

Name, Designation and

DIN Age Address Occupation

Director of the Company

since

Details of Other Directorships as on

01.04.2015 1 Mr. Arun

Ramanathan, Director, 00308848

63 6A, 6th West Cross Street, Shenoy Nagar, Chennai - 600 030

Chairman 17.02 2012 Equitas Holdings Pvt Ltd Religare Enterprises

Limited L & T Infra Debt Fund

Limited L&T Fincorp Limited

2 Mr. Arun K Verma, Director, 03220124

61 A/14, Sahid Nagar, Bhubaneswar, Odisha - 751 007

Independent Director

08.05.2012 Nil

3 Ms. Chitra Chandramoulis-waran, Director, 06429083

69 K-304, “The Atrium” No. 22 Kalashetra Road, Thiruvanmiyur, Chennai - 600 041.


07.02.2013 Nil

4 Mr. R Desikan, Director, 05236967

79 No. 2, Leburnam Avenue, 228, Chinnandikuppam Road, Vettuvankeni, Chennai - 600 041


23.03.2012 Nil


Sl No




since


01.04.2015 5 Mr. M

Janakiraman, Nominee Director, 06919906

50 Flat A223, Twin Towers, Veer Savarkar Marg, Prabhadevi, Mumbai - 400 025


14.07.2014# Nil

6 Mr. Y C Nanda, Director, 01643316

69 Flat 14C, GH-4, Orchid Garden, Sun City, Gurgaon, Sector 54, Haryana


17.02 2012 Bandhan Financial Services Pvt Ltd

Micro Credit Ratings International Pvt Ltd

SUUTI Tech Option Ltd Equitas Holdings Pvt Ltd Access Holding

Ventures India Private Limited

Bandhan Financial Holdings Limited

7 Mr. Marco Boa, Nominee Director 06698036

36 Corso Giacomo Matteotti N.23, Brescia, Italy – 25122

Investor Director

13.11.2013 Microfinanza Rating, Philippines

Konsultasi Mikro Ventura (KMV), Indonesia

MV Philippines Financing Company

8 Mr. N Raman, Nominee Director, 03062858

57 Flat No. 303, B Block, Arif King Apartments, 6/3, Mall Avenue, LBS Marg, Lucknow - 226 001


27.03.2012 Nominee Director of SIDBI in Equitas Holdings Pvt Ltd

9 Mr. P B Sampath, Director, 00037043

68 New No. 22, Old No. 31/1, Bhagirathi Ammal Street, T.Nagar, Chennai - 600 017


17.02 2012 Tractors and Farm Equipment Ltd

Southern Tree Farms Ltd

Kuduma Fasteners Pvt Ltd

Alpump Ltd AMCO Batteries Ltd TAFE Access Ltd AMCO Saft India Ltd

10 Mr. V Shankar, Director, 00513650

52 Old No. 1-53, New No.39, 10th Avenue, Ashok Nagar, Chennai - 600 083


17.02 2012 Acsys Software (India) Pvt Ltd

11 Mr. N Srinivasan, Director, 01501266

58 T2/403, Kapil Malhar, Baner Main Road, Baner, Pune - 411 045


17.02 2012 Vasundhara Agri-Horti Producer Company Ltd

Equitas Holdings Pvt Ltd RGVN (North East)

Microfinance Ltd Access Holding

Ventures India Private Limited


Sl No




since


01.04.2015 12 Mr. P N

Vasudevan, Director, 01550885

51 Flat 1A, 1st Floor, II Block, Kences Enclave, No.1 Rama Krishna Street, T.Nagar, Chennai - 600 017

Non-Executive Director

07.07.2011 Equitas Holdings Pvt Ltd Alpha Micro Finance

Consultants Pvt Ltd Equitas B2B Trading Pvt

Ltd Equitas Housing

Finance Pvt Ltd Equitas Finance Pvt Ltd Indian Housing Finance

Companies’ Association * Company to disclose name of the current directors who are appearing in the RBI defaulter list and / or ECGC default list, if any: None of the Directors are appearing in the RBI defaulter list and / or ECGC default list. # IDBI Bank Ltd, a lender of the company has appointed Mr. M Janakiraman as nominee director in the board of the Company. The date mentioned is the date of communication received by the Company from IDBI Bank Ltd.

(ii) Details of change in directors since last three years

Name, Designation and DIN

Date of Appointment / Resignation

Director of the Company since (in

case of resignation) Remarks

Mr. Sampatlal Singhivi Director, 00770200

07.07.2011 07.07.1994

Resigned as Directors Mrs. Asha Singhivi Director, 00770176

07.07.2011 07.07.1994

Mr. P N Vasudevan, Additional Director, 01550885

07.07.2011 -

Appointed as Additional Directors of the Company

Mr. S Bhaskar, Additional Director, 02360919

07.07.2011 -

Mr. K P Venkatesh, Additional Director, 02742011

07.07.2011 -

Mr. Arun Ramanathan, Additional Director, 00308848

17.02.2012 -

Appointed as Additional Directors of the Company

Mr. Y C Nanda, Additional Director, 01643316

17.02.2012 -

Mr. Paolo Brichetti, Additional Director, 01908040

17.02.2012 -

Mr. N Srinivasan, Additional Director, 01501266

17.02.2012 -

Mr. P B Sampath, Additional Director, 00037043

17.02.2012 -






Mr. V Shankar, Additional Director, 00513650

17.02.2012 -

Mr. S Bhaskar, Additional Director, 02360919

15.03. 2012 07.07.2011 Resigned as Additional Directors Mr. K P Venkatesh,

Additional Director, 02742011

15.03. 2012 07.07.2011

Mr. R Desikan, Additional Director, 05236967

23.03.2012 - Appointed as Additional Director of the Company

Mr. P N Vasudevan, Additional Director, 01550885

23.03.2012 - Appointed Managing Director of the Company

Mr. N Raman, Nominee Director, 03062858

27.03.2012 - Appointed as Nominee Director of the Company

Mr. Arun Kumar Verma, Additional Director, 03220124

08.05.2012 - Appointed as Additional Director of the Company

Mr. Arun Ramanathan, Director, 00308848

11.06.2012 - Appointed as Director of the Company in the Annual General Meeting of the Company Mr. N Srinivasan,

Director, 01501266

11.06.2012 -

Mr. P B Sampath, Director, 00037043

11.06.2012 -

Mr. V Shankar, Director, 00513650

11.06.2012 -

Mr. R Desikan, Director, 05236967

11.06.2012 -

Mr. Arun Kumar Verma, Director, 03220124

11.06.2012 -

Mr. Y C Nanda, Director, 01643316

11.06.2012 -

Mr. Paolo Brichetti, Nominee Director, 01908040

11.06.2012 - Appointed as Nominee Director of Equitas Holdings Private Limited

Mr. P N Vasudevan, Managing Director, 01550885

11.06.2012 - Appointed as Managing Director of the Company

Mr. P N Vasudevan, Managing Director, 01550885

11.06.2012 - Appointed as Managing Director of the Company






Ms. Chitra Chandramouliswaran Director, 06429083

07.02.2013 - Appointed as Additional Director

Ms. Chitra Chandramouliswaran Director, 06429083 01.07.2013 -

Appointed as Director of the Company in the Annual General Meeting of the Company

Mr. M Janakiraman, Nominee Director, 06919906

14.07.2014 - Appointed as Nominee Director of the Company

Mr. P N Vasudevan, Director, 01550885 04.02.2015 -

Resigned as Managing Director and continuing as Non-Executive Director of the Company

d) DETAILS REGARDING AUDITORS OF THE COMPANY

(i) Details of the auditor of the Company

Name Address Auditor since Deloitte Haskins & Sells, Chartered Accountants

8th Floor, ASV ‘N’ Ramana Towers, 52, Venkatnarayana Road T.Nagar, Chennai - 600 017

19.09.2011

(ii) Details of change in auditor since last three years

Name Address Date of

Appointment / Resignation

Auditor of the Company since

(in case of resignation)

Remarks

Deloitte Haskins & Sells, Chartered Accountants

8th Floor, ASV ‘N’ Ramana Towers, 52, Venkatnarayana Road, T.Nagar, Chennai - 600 017

19.09.2011 Nil

Appointed as auditors at EGM held on 19.09.2011

ML. Chhajer & Co, Chartered Accountants

Old No.11, Chinna Naicken Street, Mahaveer Complex, 1st Floor, Sowcarpet, Chennai - 600 079

2011 1994 Resigned as auditors

e) DETAILS OF BORROWINGS OF THE COMPANY, AS ON 31ST March 2015

(i) Details of secured loan facilities

` in Crores

Sl No Lender’s Name Type of

Facility Amount

Sanctioned

Principal Amount

Outstanding Repayment Schedule1 Securit

y

1 Axis Bank Ltd - TL I Term Loan 50.00 21.88 8 Quarterly Instalments Axis Bank Ltd - TL II Term Loan 75.00 75.00 18 Monthly Instalments Axis Bank Ltd - TL III Term Loan 35.00 35.00 8 Quarterly Instalments



Facility Amount

Sanctioned

Principal Amount


y

2 Dhanlaxmi Bank Ltd Term Loan 25.00 18.75 8 Quarterly Instalments 3 Federal Bank Ltd - TL I Term Loan 15.00 8.57 7 Quarterly Instalments Federal Bank Ltd - TL II Term Loan 25.00 25.00 21 Monthly Instalments 4 HDFC Bank Ltd - TL I Term Loan 42.50 20.83 24 Monthly Instalments HDFC Bank Ltd - TL II Term Loan 75.00 63.21 24 Monthly Instalments HDFC Bank Ltd - TL III Term Loan 75.00 75.00 21 Monthly instalments 5 ICICI Bank Limited Term Loan 50.00 50.00 24 Monthly Instalments 6 Indusind Bank Limited Term Loan 75.00 20.63 24 Monthly Instalments Indusind Bank Limited Term Loan 45.00 33.75 24 Monthly Instalments Indusind Bank Limited Term Loan 30.00 27.50 24 Monthly Instalments 7 ING Vysya Bank Ltd - TL I Term Loan 25.00 1.04 24 Monthly Instalments ING Vysya Bank Ltd - TL II Term Loan 25.00 3.13 24 Monthly Instalments ING Vysya Bank Ltd - TL III Term Loan 23.00 9.89 24 Monthly Instalments ING Vysya Bank Ltd - TL IV Term Loan 32.00 29.33 24 Monthly Instalments 8 Kotak Mahindra Bank Ltd - TL

I Term Loan 50.00 5.78 24 Monthly Instalments

Kotak Mahindra Bank Ltd - TL II

Term Loan 60.00 34.67 24 Monthly Instalments

9 Lakshmi Vilas Bank Limited Term Loan 15.00 15.00 7 Quarterly Instalments 10 The Ratnakar Bank Limited -

TL II Term Loan 70.00 50.00 7 Quarterly Instalments

The Ratnakar Bank Limited - TL III

Term Loan 25.00 25.00 7 Quarterly Instalments

11 South Indian Bank Ltd - TL I Term Loan 25.00 7.14 7 Quarterly Instalments South Indian Bank Ltd – TL II Term Loan 25.00 25.00 7 Quarterly Instalments

12 Allahabad Bank Term Loan 35.00 25.45

11 Quarterly Instalments

13 Canara Bank - TL I Term Loan 20.00 9.00 20 Monthly Instalments Canara Bank - TL II Term Loan 25.00 24.96 20 Monthly Instalments

14 Dena Bank Term Loan 25.00 10.71 7 Quarterly Instalments 15 IDBI Bank Ltd - TL I Term Loan 50.00 6.35 63 Monthly Instalments

IDBI Bank Ltd - T L II Term Loan 100.00 44.44


IDBI Bank Ltd - TL III Term Loan 50.00 27.78


IDBI Bank Ltd - TL IV Term Loan 50.00 27.78


IDBI Bank Ltd - TL V Term Loan 100.00 44.04 6 Quarterly Instalments IDBI Bank Ltd - TL VII Term Loan 50.00 50.00 24 Monthly Instalments

16 Oriental Bank of Commerce Term Loan 50.00 28.57 7 Quarterly Instalments 17 State Bank of India Term Loan 60.00 11.18 32 Monthly Instalments 18 Vijaya Bank Term Loan 20.00 15.00 20 Monthly Instalments 19 Bank of America Term Loan 50.00 50.00 Repayment on Maturity 20 The Hongkong and Shanghai

Banking Corporation Ltd - TL II


The Hongkong and Shanghai Banking Corporation Ltd - TL II


21 Standard Chartered Bank Term Loan 45.00 11.25 8 Quarterly Instalments Standard Chartered Bank Term Loan 25.00 12.50 8 Quarterly Instalments Standard Chartered Bank Term Loan 48.00 36.00 8 Quarterly Instalments Standard Chartered Bank Term Loan 55.00 53.13 8 Quarterly Instalments

22 State Bank of Mauritius Ltd Term Loan 20.00 11.43 7 Quarterly Instalments



Facility Amount

Sanctioned

Principal Amount


y

23 IDFC Limited Term Loan 60.00 50.00 24 Monthly Instalments 24 SIDBI - TL I Term Loan 110.00 9.93 58 Monthly Instalments

SIDBI - TL I Term Loan 27.50 2.88 21 Monthly Instalments SIDBI - TL I Term Loan 75.00 75.00 30 Monthly Instalments Total 2,255.00 1,404.64

Notes: 1. Repayment schedule given above is the schedule at the time of sanction of credit facilities. 2. All the above loans are secured by hypothecation of receivables under financing activity.

(ii) Details of unsecured loan facilities


Facility Amount

Sanctioned Amount

Outstanding Repayment Schedule

Nil

(iii) Details of Non-Convertible Debentures

Debenture Series

Tenor / Period of Maturity

Coupon Amount

(` in Crores)

Date of Allotment

Redemption Date /

Schedule

Credit Rating

Secured / Unsecured Security

Series 1 8 years 14.04% 50.00 01.06.2011 01.06.2019 CRISIL A-/ Stable

Unsecured Nil Series 2 7 years 13.40% 23.00 11.04.2012 11.04.2019 Secured

Note 1 Series 6 5 Years 12.67% 60.00 20.08.2014 28.05.2019 CARE A- Secured

Series 7 2 Years 13.50% 35.00 30.01.2015 30.01.2017 CRISIL A-/ Stable & CARE A

Secured

Series 8 6 years 1 month

16.00% 30.00 30.03.2015 30.04.2017 CARE A- Unsecured

Note: 1. The above NCDs are secured by hypothecation of receivables under financing activity

(iv) List of Top 10 debenture holders as on 31st March 2015

Sl No Name of the Debenture Holders Amount

(` in Crores) 1 International Finance Corporation 60.00 2 Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N V 50.00 3 Reliance Capital Trustee Co. Ltd - A/c - Reliance Regular Savings Fund - Debt Option 35.00 4 Maanaveeya Development & Finance Pvt Ltd 30.00 5 Oikocredit Ecumenical Development Co-Operative Society U. A. 25.00

(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

Nil

(vi) Details of Commercial Paper issued by the Company


Maturity Date Amount Outstanding

Nil Nil

(vii) Details of rest of the borrowings (if any including hybrid debt like FCCB, Optionally Convertible Debentures / Preference Shares) as on 31st March 2015

Party Name (In

case of Facility) / Instrument Name

Type of Facility /

Instrument

Credit Rating

Amount Sanctioned

/ Issued

Principal amount

Outstanding

Repayment Date /

Schedule

Secured / Unsecured Security

Nil Nil Nil Nil Nil Nil Nil Nil

(viii) Details of all default/s and/or delay in payments of Statutory dues, 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 and before.

Particulars Amount Involved

Duration of Default

Present Status

Statutory Dues Nil Not

Applicable Not

Applicable

Debentures and Interest thereon Nil Not Applicable

Not Applicable

Deposits and Interest thereon Nil Not Applicable

Not Applicable

Loan from any bank or financial institution and interest thereon Nil

Not Applicable

Not Applicable

(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

f) Disclosure with regard to interest of Directors, Litigations, Remuneration, Related Party

disclosures, etc.

(i) Any financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the interests of other persons.

Nil (ii) Details of any litigation or legal action pending or taken by any Ministry or Department of

the Government or a statutory authority against any promoter of the offeree company during the last three years immediately preceding the year of the circulation of the offer letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed.

Nil


(iii) Remuneration of directors (during the current year and last three financial years)

The details of remuneration paid to the Managing Director and other Directors of the Company are summarized in the below table:

Amount in ` Financial Year Other Directors Managing Director

2011-12 97,000 4,842,974 2012-13 4,107,300 4,855,519 2013-14 5,750,000 4,859,516 2014-15 5,750,000 4,088,092*

*Mr. P N Vasudevan, Director (Managing Director upto 4th February 2015)) (iv)Related party transactions entered during the last three financial years

immediately preceding the year of circulation of offer letter including with regard to loans made or, guarantees given or securities provided.

Amount in `

Transaction Related Party For the Year

Ended 31st March 2015

For the Year Ended

31st March 2014

For the Year Ended

31st March 2013 Income Interest on Loans / Deposit to Related Party

Equitas Finance Pvt Ltd 11,271,234 17,853,150 9,485,479 Equitas Housing Finance Pvt Ltd 9,307,810 18,555,342 - EDIT 372,456 2,128,749 2,318,604 Equitas Dhanyakosha India - 4,914,041 5,239,044

Guarantee Commission Equitas Dhanyakosha India - 18,491 44,630 Recovery of Expenses

Equitas Holdings Pvt Ltd 506,069 2,282,241 844,057 Equitas Finance Pvt Ltd 38,275,621 46,194,004 36,471,910 Equitas Housing Finance Pvt Ltd 2,893,031 5,027,455 6,734,296 Equitas B2B Trading Pvt Ltd 10,431 1,022 - Equitas Dhanyakosha India 93,701 746,908 6,056,277 EDIT 35,403 116,345 278,244

Interest Expenses Equitas Holdings Pvt Ltd - - Staff Welfare Expenses Equitas Dhanyakosha India 72341 117,461 59,292

Equitas B2B Trading Pvt Ltd - - Reimbursement of Expenses

Equitas Housing Finance Pvt Ltd 89,889 223,549 188,461 Equitas Holdings Pvt Ltd - 362,512 81,982 Equitas Finance Pvt Ltd 2,623,142 2,261,970 972,035

Remuneration to Key Managerial Personnel

Mr. P N Vasudevan 4,088,092 4,859,516 4,815,000

Mr. H K N Raghavan 1,032,000 - - Mr. N Sridharan 2,178,000 - - Mr. K R Sampath Kumar 500,000 - - Donation EDIT 23,500,000 28,274,000 13,756,000 Issue of Equity Shares (including Securities Premium)

Equitas Holdings Pvt Ltd - - 249,531,300

Loans Given Equitas Dhanyakosha India - 11,000,000 22,000,000 EDIT 3,000,000 5,500,000 11,700,000

Loans Recovered I.

Equitas Dhanyakosha India - 57,730,255 10,035,141 EDIT 15,093,218 14,314,158 3,054,286

Inter Corporate Deposit Given

Equitas Finance Pvt Ltd - 280,000,000 790,000,000 Equitas Housing Finance Pvt Ltd - 320,000,000 -


Transaction Related Party For the Year

Ended 31st March 2015

For the Year Ended

31st March 2014

For the Year Ended

31st March 2013 Inter Corporate Deposit received back

Equitas Holdings Pvt Ltd 280,000,000 - 790,000,000 Equitas Housing Finance Pvt Ltd 250,000,000 70,000,000 -

Sale of Fixed Assets

II.

Equitas Housing Finance Pvt Ltd 1,102,386 - 107,227 Equitas Dhanyakosha India - - 3,494 Equitas Finance Private Limited - 12,006 705,503 EDIT - - -

Purchase of Fixed Assets

Equitas Finance Private Limited 754,281 7,695 - Equitas Holdings Private Limited 660,802 - -

Transfer of Staff loans to Related parties on account of employee transfer

Equitas Housing Finance Pvt Ltd 140,400 - 50,752 EDIT - - 15,560 Equitas Finance Pvt Ltd 475,862 4,142 546 Equitas B2B Trading Pvt Ltd - - -

Transfer of Staff loans from related parties on account of employee transfers

Equitas Housing Finance Pvt Ltd

- 14,485 -

Recovered and paid on behalf of Customers

EDIT 4,446,200 4,858,400 903,660

Recovered and paid on behalf of Customers

Equitas Dhanyakosha India

13,950,000

Recovered and paid on behalf of the Company

Equitas Holdings Pvt Ltd 401,027 - 6,479,970

Payable

III.

EDIT - 7,974,000 5,156,000 Equitas Finance Pvt Ltd 190,634 139,459 - Equitas Housing Finance Pvt Ltd - 17,206 - Equitas Holdings Pvt Ltd 1,115,783 - -

Receivable

IV.

Equitas Holdings Pvt Ltd - 67,762 - Equitas Dhanyakosha India - - 47,297,620 EDIT - 12,092,905 20,907,063 Equitas Housing Finance Pvt Ltd 403,721 250,448,047 - Equitas Finance Pvt Ltd 5,899,497 284,257,017 -

Corporate Guarantee Given

Equitas Dhanyakosha India - - 15,000,000

Corporate Guarantee issued by the holding company

Equitas Holdings Pvt Ltd 4,060,000,000 7,170,000,000 8,000,000,000

(v) Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years immediately preceding the year of circulation of offer letter and of their impact on the financial statements and financial position of the company and the corrective steps taken and proposed to be taken by the company for each of the said reservations or qualifications or adverse remark.

Nil

(vi) Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years immediately preceding the year of circulation of offer letter in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section-wise details thereof for the company and all of its subsidiaries.

Nil


(vii) Details of acts of material frauds committed against the company in the last three

years, if any, and if so, the action taken by the company.

Nil g) DETAILS OF PROMOTERS OF THE COMPANY

(i) Details of Promoter Holding in the company as on the latest quarter ended, 31st March 2015

Sl 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 Equitas Holdings Private Limited

198,750,000 (Including shares held by Nominee)

Nil 100% Nil Not Applicable

(ii) Abridged version of Audited Consolidated (wherever available) and Standalone Financial

Information (like Profit & Loss statement, Balance Sheet and Cash Flow statement) for at least last three years and auditor qualifications , if any.

Standalone financial information of the Company for last three financial years:

Balance Sheet ` in Lakhs

Particulars 31.03.2015 (Audited)

31.03.2014 (Audited)

31.03.2013 (Audited)

EQUITY AND LIABILITIES Shareholders’ Funds Share Capital 19,875.00 19,875.00 19,875.00 Reserves & Surplus 18,124.70 11,269.62 5,614.79 Non-Current Liabilities Long Term Borrowings 71,341.23 50,584.83 62,714.15 Other Long Term Liabilities 1,035.50 679.82 444.50 Long Term Provisions 858.48 557.92 570.27 Current Liabilities Short Term Borrowings - 3,383.90 997.99 Current Maturities of Long Term Borrowings 91,422.54 77,783.34 42,121.60 Trade Payables 1,361.73 934.13 642.51 Other Current Liabilities 14,717.73 8,370.62 6,629.74 Short Term Provisions 2,631.90 2,025.15 1473.84

TOTAL 221,368.81 175,464.33 141,084.39 ASSETS Non-Current Assets Fixed Assets - Tangible Assets 1,011.08 236.98 257.35 Fixed Assets - In-Tangible Assets 134.33 21.35 61.75 Non-Current Investments 20.00 20.00 360.12 Deferred Tax Asset 1,372.21 1,020.41 761.95 Long Term Receivables under Financing Activities 56,316.51 37,384.92 26,386.99 Long Term Loans and Advances 976.28 1,280.50 1,956.24 Other Non-Current Assets 5,708.59 5,341.70 4,544.82


` in Lakhs


31.03.2014 (Audited)

31.03.2013 (Audited)

Current Assets Current Investments 15,000.00 340.12 394.73 Short Term Receivables under Financing Activities 106,007.94 81,181.62 60,045.72 Cash and cash equivalents 26,824.85 36,542.54 39,262.58 Short Term Loans and Advances 1,982.68 7,824.47 3,202.49 Other current Assets 6,014.34 4,269.72 3,849.65

TOTAL 221,368.81 175,464.33 141,084.39

Statement of Profit and Loss Account ` in Lakhs

Particulars FY 2014-15 (Audited)

FY 2013-14 (Audited)

FY 2012-13 (Audited)

REVENUE Revenue from Operations 43,521.25 33,699.13 22,426.30 Other Income 276.91 462.89 560.70

TOTAL 43,798.16 34,162.02 22,987.00 EXPENSES Employee Benefits Expenses 8,702.85 6,335.53 5,334.19 Finance Costs 18,699.92 14,733.90 9,493.93 Provisions and Write Offs 895.66 551.09 599.27 Depreciation and Amortisation Expense 394.84 293.55 440.54 Other Expenses 4,691.60 3,648.58 3,052.33

TOTAL 33,384.87 25,562.65 18,920.26 Profit Before Tax 10,413.29 8,599.37 4,066.74 Tax Expense - Current Tax 3,910.00 3,203.00 1,456.00 Tax Expense - Deferred Tax (351.80) (258.46) (140.45) Profit After Tax for the Year 3,558.20 5,654.83 2,751.19 Interest Coverage Ratio 1.42 1.43 1.39 Dividend Declared Nil Nil Nil

Cash Flow Statement ` in Lakhs


31.03.2014 (Audited)

31.03.2013 (Audited)

A. Cash Flow from Operating Activities Profit Before Tax 10,413.29 8,599.37 4,066.74 Adjustments for: 0.00 Depreciation and Amortisation Expense 394.84 293.55 440.54 Contingent Provision for Standard Receivables (Net) 546.88 400.58 443.50 Provision for Sub-standard and Doubtful Receivables under Financing Activity 79.94 75.05 30.98

Provision for Credit Enhancements on Assets De-Recognised (Net)

254.22 55.29 81.53

Loss Assets Written Off (Net) 14.62 20.17 43.26 Prompt Payment Rebate (Net) 0.00 0.89 103.43 Provision for Doubtful Loans 9.72 9.74 19.65 Finance Costs 18,699.92 14,733.90 9,493.94 Interest Income on Deposits with Banks (790.06) (1,325.02) (768.17) Interest Income on PTCs (31.99) (25.15) (22.06) Interest Income on Loans/Deposits to Related parties (209.52) (434.51) (170.43) Gain from Securitisation / Assignment of Receivables (Net) (4,084.37) (2,658.64) (2,337.87) Gain on Sale of Fixed Assets (Net) (6.51) - -


` in Lakhs


31.03.2014 (Audited)

31.03.2013 (Audited)

Gain on Sale of Current Investments (Net) (584.72) (234.19) (372.18) Operating Profit before Changes in Working Capital 24,706.27 10,911.66 11,052.84 Changes in Working Capital: Adjustments for (increase) / decrease in operating assets: Long Term Receivables Under Financing Activities (18,931.59) (10,997.93) (11,762.32) Long Term Loans and Advances 387.00 757.03 146.72 Short Term Receivables Under Financing Activities (24,921.23) (21,156.08) (23,767.50) Short Term Loans and Advances 5,907.88 (4,621.98) (715.05) Other Current Assets (1483.55) (337.32) (586.36) Bilateral Assignment and Securitisation of Assets (Net) 4,084.37 2,658.64 2,330.95 Adjustments for increase / (decrease) in operating liabilities: 0.00 Other Long Term Liabilities 355.69 114.15 (58.85) Long Term Provisions 0.00 (186.11) 65.25 Trade Payables 427.59 291.62 38.77 Other Current Liabilities 6,249.18 808.89 1,384.91 Short Term Provisions 106.56 193.25 (1,165.42) Cash Flow Used in Operations 3,111.82 (12,964.82) (23,036.08) Interest Income on Deposits / Other loans 814.60 2,085.16 611.56 Gain on Sale of Current Investments (Net) 584.72 234.19 372.18 Finance Costs Paid (18,602.00) (14,288.20) (8,926.82) Direct Taxes Paid (4,002.50) (3,264.03) (1,486.10) Net Cash Flow Used in Operations (24,316.99) (28,197.70) (32,465.25) B. Cash Flow from Investing Activities Capital Expenditure on fixed assets (including capital advances) (1,397.25) (265.72) (149.32) Proceeds from Sale of Fixed Assets 37.72 2.93 8.16 Bank Deposits (Net) (having original maturity of more than 3 months)

(2,627.30) 10,051.79 (11,995.77)

Investment in Pass Through Certificates (Net) 340.12 394.73 (734.85) Purchase of Current Investments (15,000) (75,175.81) (78,567.82) Proceeds from Sale of Current Investments - 75,175.81 78,567.82 Net Cash Flow From / (Used in) Investing Activities (18,646.72) 10,183.73 (12,871.78) C. Cash Flow from Financing Activities Proceeds from Issue of Share Capital - - 2,495.31 Long Term Borrowings Taken 125,572.70 81,279.69 79,857.64 Long Term Borrowings Repaid (91,176.92) (57,747.26) (22,716.21) Short Term Borrowings Taken / (Repaid) (Net) (3,383.90) 2,385.91 (4,002.01) Net Cash Flow From Financing Activities 31,011.89 25,918.33 55,634.73 Net Increase in Cash and Cash Equivalents (A) + (B) + (C) (11,951.82) 7,904.36 10,297.70 Cash and Cash Equivalents at the Beginning of the Year 33,602.85 25,698.48 15,400.78 Add: Cash and Bank Balance in the nature of Cash and Cash Equivalents (Scheme of Arrangement)

- - -

Cash and Cash Equivalents at the End of the Year 21,651.04 33,602.84 25,698.48 Add: Deposits with Original Maturity over a period of 3 months - - 8,50.00 Add: Lien Marked Deposits 5,173.81 2,939.70 4,614.10 Cash and Cash Equivalents as per Balance sheet 26,824.85 36,542.54 39,262.58

Notes: 1. Micro Finance Loans mentioned in summary balance sheet does not include microfinance

assets under bilateral assignments / securitisations. 2. The company has not changed its accounting policies during the last three years. 3. Auditor Qualifications, if any - Nil


(iii) Abridged version of Latest Audited/Limited Review Half Yearly Consolidated` and

Standalone Financial Information (like Profit & Loss statement, and Balance Sheet) and auditors’ qualifications, if any.

Audited (Standalone) Financial Results for the Half Year Ended 31th March 2015

` in Lakhs

Particulars Half Year

Ended 31-March-15

1 Income from Operations (a)+(b)+(c)+(d) 22,870.73

(a) Interest Income from Loans 18,900.70

(b) Income on Investments 245.12

(c) Interest on Balances with Reserve Bank of India and other Inter-Bank Funds 0.00

(d) Others 3,724.91 2 Other Income 47.41 3 Total Income (1+2) 22,918.14 4 Interest Expended (Incl. Finance Charges) 9,868.82 5 Operating Expenses (i)+(ii)+(iii) + (iv) 7,090.67

(i) Employees Cost 4,429.11

(ii) Depreciation / Amortization 244.52

(iii) Other Operating Expenses 2,417.04 6 Total Expenditure (4+5) excluding Provisions and Contingencies 16,959.49 7 Operating Profit before Provisions and Contingencies (3-6) 5,958.65 8 Provisions (other than Tax) and Contingencies 412.93 9 Exceptional Items 0.00 10 Profit from Ordinary Activities before Tax (7-8-9) 5,545.71 11 Tax Expense 1,877.51 12 Net Profit from Ordinary Activities after Tax (10-11) 3,668.21 13 Extraordinary Items (net of Tax Expense) 0.00 14 Net Profit for the Period / Year (12-13) 3,668.21 15 Paid-up Equity Share Capital (Face Value of the Share is ` 10 each) 19,875.00 16 Analytical Ratios

(i) Capital Adequacy Ratio (%) 21.15%

(ii) Earnings Per Share (EPS) - Not Annualized

Basic (`) 1.86

Diluted (`) 1.86

(iii) Return on Assets - Not Annualized (% of Profit After Tax to Total Assets) 17 NPA Ratios

a) Gross NPA 125.33

b) Net NPA 37.72

c) % of Gross NPA to Receivables under Financing Activity 0.08%

d) % of Net NPA to Receivables under Financing Activity 0.02% Auditor Qualifications, if any - Nil (iv) Any material event/ development or change having implications on the financials/credit

quality (e.g. any material regulatory proceedings against the Issuer/promoters, tax litigations resulting in material liabilities, corporate restructuring event, etc.) at the time of issue which may affect the issue or the investor’s decision to invest / continue to invest in the debt securities.

Nil


(v) Details of the Trustee(s) IDBI Trusteeship Services Limited is appointed as trustee for the issue of debentures under this offer document. They have given their consent to act as Trustee to the Issuer for their appointment as per sub regulation 4 under regulation 4 of Securities Exchange and Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and in all the subsequent periodical communications sent to the holders of debt securities.

(vi) Credit Rating Rationale and Credit Rating Letter Credit Rating Letter (Issued on 25th May 2015) issued by the rating agency, CARE is enclosed in Annexure 3.

(vii) 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.

Nil

(viii) Copy of consent letter from the Trustee shall be disclosed

Copy of consent letter from IDBI Trusteeship Services Limited is enclosed in Annexure 4.

(ix) Names of all the recognized stock exchanges where the debt securities are proposed

to be listed clearly indicating the designated stock exchange.

On Wholesale Debt Market (WDM) segment of BSE Limited. The Issuer undertakes to get the Debentures listed within 20 days from the Deemed Date of Allotment. In case the Debentures are not listed within 20 days of Deemed Date of Allotment for any reason whatsoever, the Issuer shall be required to immediately redeem all the Debentures from the Debenture Holders along with the interest accrued from the date of issuance at the Interest Rate till the date of redemption.

(x) Other Details

1. DRR Creation - relevant regulations and applicability

As per Rule 18 (7)(b)(ii) of Companies (Share Capital & Debentures) Rules, 2014 creation of Debenture Redemption Reserve is not required for NBFC’s when such debentures are issued

on private placement basis by Non‐Banking Financial Companies registered with Reserve Bank of India under Section 45 (I) A of the RBI (Amendment) Act 1997.

2. Issue / Instrument specific regulations - relevant details (Companies Act, RBI

Guidelines, etc.).

The Companies Act, 1956 and the Companies Act, 2013 the Securities Contracts (Regulation) Act, 1956 Securities and Exchange Board of India Act, 1992 the Reserve Bank of India Act, 1934 SEBI Regulations NBFC - MFI Regulations NCD Regulations


and the rules and regulations issued thereunder, including modifications to all of the foregoing.

3. Application process - As mentioned in Clause 11 in this Disclosure Document.

6. LEGAL INFORMATION

a) PENDING CASE AGAINST THE COMPANY

During the FY 2010-11, EHPL received an Order dated 22nd October 2010 from the Regional Provident Fund Commissioner demanding an amount of ` 18,753,700 towards provident fund payment for the period February 2009 to September 2010 on the incentives/ allowances paid to the employees. Equitas has preferred an appeal with the Honorable Employees’ Provident Fund Appellate Tribunal and has obtained a stay against the said order. As per the stay order received from the Honorable Employees’ Provident Fund Appellate Tribunal, EHPL has given a deposit amount of ` 5,626,110 to the Employees’ Provident Fund Organization. Post the demerger discussed earlier in this offer document, the deposit amount has been transferred to the Issuer to reflect in the Issuer’s financial statements. As on date, the appeal is pending to be settled. b) PENDING CASE FILED BY THE HOLDING COMPANY

EHPL had filed a Writ Petition, W.P.No.16444 of 2008 against the money lending act in the state of Tamil Nadu. EHPL had prayed that it is not charging exorbitant interest. Post the demerger of microfinance business, the Issuer is pursuing the case in the High Court. As on date, the case is pending to be listed in the High Court for further arguments and the date of listing is awaited.

7. ANY MATERIAL EVENT/ DEVELOPMENT OR CHANGE Save as stated elsewhere in this Document, in the opinion of the of the Directors of the Company, there have been no material developments after the date of the last audited / un-audited financial statements as disclosed in this Disclosure Document, which would materially and adversely affect, or would be likely to affect, the trading or profitability of the Company or the value of its assets or its ability to pay its liabilities. 8. PARTICULARS OF THE DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN

CASH The Company has not issued any debt securities for consideration other than cash, whether in whole or part, at a premium or discount or in pursuance of an option. 9. PERMISSION / CONSENT FROM THE PRIOR CREDITOR FOR A SECOND OR PARI PASSU

CHARGE BEING CREATED, WHERE APPLICABLE, IN FAVOR OF THE TRUSTEES TO THE PROPOSED ISSUE

The Company is not required to obtain any prior permission from its lenders for creation of exclusive charge in favour of trustee for the issue under this Offer Document and the Debenture Trust Deed. 10. TERMS PERTAINING TO THE ISSUE

a) RATING RATIONALE

CARE has assigned credit rating of CARE A for the NCDs of ` 1,000,000,000 (Rupees One Hundred Crores Only) issued by the Company under this document. A copy of the rating letter issued by CARE is enclosed as Annexure 3.


b) SUMMARY TERM SHEET SHALL BE PROVIDED WHICH SHALL INCLUDE AT LEAST FOLLOWING INFORMATION (WHERE RELEVANT) PERTAINING TO THE SECURED / UNSECURED NON CONVERTIBLE DEBT SECURITIES (OR A SERIES THEREOF)

Security Name 12.50%/EMFPL/Semi Annual/2017 Issuer Equitas Micro Finance Private Limited Type of Instrument Secured, Redeemable, Taxable, Non-Convertible Rated, Listed

Debentures (NCDs) Class of Security Not Applicable Nature of Instrument Secured Seniority The Debentures will constitute direct, secured and senior

obligations of the Company, and rank pari passu with other senior, secured obligations of the Company

Mode of Issue On Private Placement Basis Eligible Investors • Companies

• Banks and NBFCs • Individuals, HUFs, and Partnerships • Financial Institutions and Insurance companies • Pension Funds and Mutual Funds • Foreign Institutional Investors registered with SEBI having

adequate corporate debt limits and permitted to invest in Indian Corporate debt

• Multilateral development banks such as International Finance Corporation

• Qualified Foreign Investors • Any other investor authorized to invest in these

Debentures Listing (including name of stock Exchange(s) where it will be listed and timeline for listing)

On the Wholesale Debt Market (WDM) segment of the Bombay Stock Exchange within 20 days from the Deemed Date of Allotment.

Rating of the Instrument “CARE A” by CARE Issue Size ` 100 Crores (Rupees Hundred Crores only) Option to retain oversubscription (Amount)

No

Objects of the Issue The Issuer shall use the proceeds from the issue of the Debentures pursuant to the Debenture Trust Deed to finance the growth of the microfinance portfolio of the Issuer

Details of Utilization of the Issue Proceeds

The issue proceeds will be utilized for providing debt financing for loan portfolio growth normal business activity of the Issuer

Interest Rate 12.50% p.a. Step up / Step down Interest Rate

As provided in the Debenture Trust Deed

Interest Payment Frequency Semi annual Interest Payment Dates 26th November 2015

27th May 2016 25th November 2016 26th May 2017

Interest Type Fixed Day Count Basis Actual / Actual Interest on application money Interest will be payable in accordance with the Debenture Trust

Deed. Default Interest Rate In the event of a payment default of the amounts due under

this Issue or any other Event of Default, the Issuer shall pay an


additional 2% (Two Percent) per annum over and above the applicable Interest Rate on the Outstanding Principal Amount of the Debentures, calculated from the date of the occurrence of the default until such default is cured.

Tenor 24 (Twenty Four) months Redemption Date 26th May 2017 Redemption Amount ` 100 Crores Redemption Premium / Discount Nil Issue Price ` 10,00,000 (ten lakhs) per debenture Discount at which security is issued and the effective yield as a result of such discount.

Nil

Put Option Date Nil Put Option Price Nil Call Option Date Nil Call Option Price Nil Put Notification Time Nil Call Notification Time Nil Face Value ` 10,00,000 (ten lakhs) per debenture Minimum Application and in multiples of minimum Securities thereafter

10 debentures and in multiples of 1 debenture thereafter

Issue Timing 1. Issue Opening Date 2. Issue Closing Date 3. Pay-in Date 4. Deemed Date of Allotment

27th May 2015 27th May 2015 27th May 2015 27th May 2015

Cut-off Date for Issue Closure 27th May 2015 Issuance Mode of the Instrument In Demat only Trading Mode of the Instrument In Demat only Settlement Mode of the Instrument

By way of RTGS Credit

Depository NSDL / CDSL Business Day Convention 1. When the day on which or by which a payment of interest is

due to be made is not a Business Day, then such interest payment date shall be automatically changed to the next Business Day.

2. When the day on or by which a payment (other than a payment of interest) is due to be made is not a Business Day that payment shall be made on the preceding Business Day

Record Date Means, in relation to any date on which a payment has to be made by the Issuer in respect of the Debentures, the date that is 15 (fifteen) days prior to that payment date

Security (where applicable) (Including description, type of security, type of charge, likely date of creation of security, minimum security cover, revaluation, replacement of security).

1. Description - Receivables in relation to certain identified loans given under existing business of the Issuer as set out in Schedule I of the Deed of Hypothecation.

2. Likely date of creation of security - Security has been created under the Deed of Hypothecation over certain identified loan portfolios as set out in Schedule I of the Deed of Hypothecation, as may be supplemented from time to time, in accordance with the terms of the Transaction Documents


3. Type - First ranking and exclusive security 4. Type of charge - Floating charge on the identified

receivables 5. Security Cover - 110% 6. Revaluation and replacement of security-

The receivables provided as Security shall be less than 30 days overdue. If a receivable exceeds 30 days overdue, such receivable shall be replaced within 15 days.

No receivables from Andhra Pradesh will be part of the provided security

Geographic composition should follow same pattern as that of the geographic composition of the overall portfolio as on the date of the NCD issue. However in this the Issuer will be allowed deviation of 10% plus or minus.

Transaction Documents As set out in Clause 11 (m) below Conditions Precedent to Disbursement

Conditions precedent customary for offerings of this nature. including, but not limited to: the execution and delivery of Transaction Documentation

in form and substance satisfactory to the Trustee including but not limited to (i) board resolutions; (ii) shareholder resolutions and (iii) government authorisations and approvals(if any) of the Issuer and Corporate Guarantor

constitutional documents specimen signatures financial statements relating to the Issuer all governmental and/or regulatory approvals and other

third party consents, including No Objection Certificates (NOC)s (if any) from existing lenders, necessary in connection with the transaction contemplated hereby shall have been obtained and shall be in full force and effect

all representations and warranties are true on and as of the date of the drawdowns, before and after giving effect to such and to the application for the proceeds there from, as though made on and as of such date

no Event of Default or potential Event of Default has occurred and is continuing, or would result from such advances

no law or regulation shall be applicable in the judgment of the Debenture Holders that restrains, prevents or imposes materially adverse conditions upon the transactions contemplated hereby

evidence of payment of all fees, costs and expenses then due from the Issuer under the Transaction Documentation and incurred for the purpose of preparation of Transaction Documentation

the absence of any material adverse effect in the business, condition (financial or otherwise), operations, performance or prospects of the Issuer or the Corporate Guarantor the absence of any pending or threatened litigation, investigation or proceedings that may have a material adverse effect on the business condition (financial or


otherwise), operations, performance or prospects of the Issuer or that purports to affect the Debentures

Conditions Subsequent to Disbursement

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

2. Completion of listing of Debentures on the stock exchange 3. Filing of the relevant form with the ROC for the registration

of charge over the Hypothecated Assets. 4. Execution of any other documents as customary for

transaction of a similar nature and size. Events of Default As per Debenture Trust Deed Cross Default As per Debenture Trust Deed Roles and Responsibilities of Trustee

As per Debenture Trust Deed

Governing Law and Jurisdiction The Debentures and documentation will be governed by and construed in accordance with the laws of India and the parties submit to the exclusive jurisdiction in Chennai.

c) ADDITIONAL COVENANTS

(i) Security Creation (where applicable) In case of delay in execution of Debenture Trust Deed and the Deed of Hypothecation, the Company will refund the subscription with agreed rate of interest or will pay penal interest of atleast 2% p.a. over the Interest Rate till these conditions are complied with at the option of the investor. Security has been created under the Deed of Hypothecation over certain identified loan portfolios as set out in Schedule I of the Deed of Hypothecation, as may be supplemented from time to time, in accordance with the terms of the Transaction Documents.

(ii) Default in Payment

In case of default in payment of interest and/or principal redemption on the due dates, additional interest of at least 2% (two percent) per annum over the Interest Rate will be payable by the Company for the defaulting period.

(iii) Delay in Listing

In case the Debentures are not listed within 20 days of Deemed Date of Allotment for any reason whatsoever, the Issuer shall be required to immediately redeem all the Debentures from the Debenture Holders along with the interest accrued from the date of issuance at the Interest Rate till the date of redemption.

(iv) The Company is entitled at its sole and absolute discretion to accept or reject any application, in part or in full, without assigning any reason thereof. An Application Form, which is not complete in all respects, shall be liable to be rejected. Any application, which has been rejected, would be intimated by the Company along with refund intimation.

(v) In case, the issuer within a period of 3 (three) months post the allotment of debentures under this issue decides to offer a rate of interest higher than the rate of interest offered to debenture holders under this facility / issue, then the issuer shall first make such an offer to the subscribers of debentures under this issue. It is clarified that, the above is not restriction on the issuer to issue any fresh debentures and is free to raise funds in the ordinary course of business as it deems fit.


d) UNDERTAKING TO USE COMMON FORM OF TRANSFER

The normal procedure for the transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions containing details of the buyer's Depository Participant's account to his Depository Participant. The Issuer undertakes that there will be a common transfer form / procedure for transfer of Debentures.

e) OTHER TERMS OF THE ISSUE

The other terms of the above issue are as given below.

(i) Nature and Status of Debentures

The debentures shall be fully paid-up, secured and senior obligations of the Company, and rank pari passu with other senior, secured obligations of the Company.

(ii) Deemed Date of Allotment

All the benefits under the Debentures, including the payment of interest/premium, will accrue to the Investor(s) from the Deemed Date of Allotment as defined in the Debenture Trust Deed.

(iii) Mode of Subscription Electronic transfer of funds through RTGS / ECS mechanism for credit in the account of the Issuer as given below: Name of the Beneficiary : Equitas Micro Finance Private Limited Name of the Bank : ICICI Bank Limited Account No. : 000105026282 Address : No. 1 Cenotaph Road, Teynampet, Chennai - 600 018 IFSC Code : ICIC0000001

(iv) Settlement Payment of interest and repayment of principal shall be made through RTGS/ ECS system.

(v) Listing

The NCDs issued under this document are proposed to be listed on the BSE.

(vi) Issue only in Demat Form The Company shall issue Debentures only in dematerialized form and has made necessary arrangements with NSDL and/or CDSL for the same. Investors shall hold the Debentures in demat form and deal with the same as per provisions of Depositories Act, 1996 / rules as notified by NSDL/CDSL from time to time. Investors should, therefore mention their Depository Participant’s name, DP‐ID and Beneficiary Account Number in the appropriate place in the Application Form. The Company shall take necessary steps to credit the Depository Account of the Investor with the amount of Debentures issued.


(vii) Mode of Transfer, Transmission of Debentures:

The Debentures will be transferred or transmitted in accordance with the provisions of the Companies Act, 1956 ("Act"). The provisions relating to transfer and transmission and other related matters in respect of shares of the Company contained in the Articles of Association of the Company and the Act shall apply, mutatis mutandis (to the extent applicable) to the Debentures as well. The Debentures held in dematerialized form shall be transferred subject to and in accordance with the rules /procedures as prescribed by NSDL / CDSL/ Depository Participant of the transferor/ 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 absence of the same, principal and premium will be paid/redemption will be made to the person, whose name appears in the Register of Debenture holders/ Record of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Company.

(viii) Interest on Application Money Interest shall be paid in accordance with the Debenture Trust Deed.

(ix) Effect of Holidays

When the day on which or by which a payment of interest or principal redemption is due to be made is not a Business Day, then such payment date shall be automatically changed to the next Business Day. However, if the day on or by which the final principal redemption is due to be made is not a Business Day that payment shall be made on the preceding Business Day.

(x) Tax Deduction at Source

Income tax will be deducted at source from Interest on Application money as per the provisions of the Income Tax Act, 1961 and as applicable from time to time. Where any deduction of Income Tax is made at source, the Company shall send to the Debenture Holder a certificate of tax deduction at source at the end of the financial year.

(xi) Tax Benefits

The Debenture‐Holder is advised to consider in his own case the tax implications in respect of subscription to the Debentures after consulting his tax advisor.

(xii) Debenture Certificate

The Company will allot to the investors, the Debentures in due course after verification of the Application Form(s), the accompanying documents and on realization on application money. The Demat Account of the investors with NSDL/CDSL will be credited within 1 working day from the Deemed Date of Allotment. The initial credit in the demat account will be akin to the Debenture Certificate. On completion of all statutory formalities such credit will be substituted for the number of Debentures allotted.

(xiii) Stamp Duty The Company will pay all the stamp duties in relation to the Debentures and all documents executed in relation to the Debentures including any security documents.

(xiv) Redemption


The Debentures shall be redeemed at Face Value.

(xv) Procedure for Redemption In case the Debentures are held in demat form, no action is required on the part of the Debenture Holder(s) at the time of redemption of the Debentures. On the Redemption Date, the redemption proceeds would be paid by way of NEFT / RTGS instruction or by ECS credit to the bank account of those Debenture Holder(s) whose name(s) appear on the list of beneficial owners given by the Depositories to the Company. The name(s) would be as per the Depositories' records on the Record Date fixed for the purpose of redemption. All such Debentures will be simultaneously redeemed through appropriate debit corporate action. Once the redemption proceeds is credited to the Debenture Holder(s) by way of NEFT / RTGS as per the details provided or available from the Depositories record, the Company's liability to redeem the Debentures on the date of redemption shall stand extinguished and the Company will not be liable to pay any interest/premium, income or compensation of any kind from the date of redemption of the Debenture(s).

(xvi) Succession

Where Debentures are held in joint names and one of the joint holders dies, the survivor(s) will be recognized as the Holder(s) of the said Debentures. It would be sufficient for the Company to delete the name of the deceased Debenture Holder after obtaining satisfactory evidence of his death provided a third person may call on the company to register his name as successor of the deceased holder after obtaining evidence of such as probate of a will for the purpose of proving his title to the Debentures. In the event of demise of the sole/first holder of the Debenture(s), the Company will recognize the Executors or Administrator of the deceased Debenture Holder, or the Holder of the Succession Certificate or other legal representative as having title to the Debentures only if such Executor or Administrator obtains and produces probate or Letter of Administration or is the holder of the Succession Certificate or other legal representation, as the case may be, from an appropriate Court in India. The Directors of the Company in their absolute discretion may, in any case, dispense with production of Probate or Letter of Administration or Succession Certificate or other legal representation.

(xvii) Record Date

The Record date means, in relation to any date on which a payment has to be made by the Issuer in respect of the Debentures, the date that is 15 (fifteen) days prior to that payment date. The Company shall request the Depository (ies) to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered final for payment of interest, principal or any other amount, as the case may be. In case of delay in lodgment of the instrument of transfer, all claims on the payment amount due shall be inter-se between the transferor and transferee.

(xviii) Interest Rate

Interest shall be paid semi-annually at the Interest Rate in accordance with the Debenture Trust Deed. The interest amount would be paid by way of RTGS instruction to those Debenture Holder(s) whose name(s) appear on the list of beneficial owners given by the Depositories to the Company. The name(s) would be as per the Depositories' records on the Record Date.

(xix) Amendment of the Terms of the Debentures


Any modification of Debentures shall be in accordance with the Debenture Trust Deed.

(xx) Trustees for the Debenture Holders Equitas Micro Finance Private Limited has appointed IDBI Trusteeship Services Ltd. to act as Trustees for the Debenture Holders ("Debenture Trustees"). Equitas Micro Finance Private Limited and the Trustees will enter into a Debenture Trust Deed and a Debenture Trustee Agreement inter alia, specifying the powers, authorities and obligations of the Trustees and the Company. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating‐to the Debentures as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s), except as expressly provided in the Debenture Trust Deed.

The Trustees will protect the interest of the Debenture Holder(s) in the event of default by Equitas Micro Finance Private Limited in regard to timely payment of premium and repayment of principal and they will take necessary action at the cost of the Issuer. The Investor can refer to the Debenture Trust Deed to be entered with the Debenture Trustees for the powers, liability, rights, retirement, and removal etc. of the Debenture Trustees.

(xxi) Rights of Debenture Holder(s)

The Debenture Holder(s) will not be entitled to any rights and privileges of shareholders other than those available to them under statutory requirements. The Debentures shall not confer upon the debenture holders the right to receive notice, or to attend and vote at the general meetings of the Company. The Debentures shall be subject to other usual terms and conditions incorporated in the Debenture Certificate(s) that will be issued to the allottee(s) and by the Memorandum & Articles of Association of the Company.

(xxii) Future Borrowings

The Issuer shall be entitled to borrow or raise loans or create encumbrances on all or any of its assets excluding Security mentioned above or avail financial assistance in whatever form, and issue promissory notes or debentures or other securities by creating security on any present and future assets of the Company, without the consent of, or intimation to the Debenture Holders or the Debenture Trustee. The Issuer shall not create any charge or encumbrance on the assets offered as Security to the Debentures issued under this Disclosure Document except for: (i) the Security to be created under the Deed of Hypothecation to be executed for the Debentures issued under this Disclosure Document and (ii) any tax or other lien arising by operation of law while the obligation underlying that lien is not yet due, or if due, is being contested in good faith by appropriate proceedings and so long as the Issuer has set aside adequate reserves sufficient to promptly pay in full any amounts that the Issuer may be ordered to pay on final determination of any such proceedings.

(xxiii) Governing Law

The Debentures and documentation will be governed by and construed in accordance with the laws of India and the parties submit to the exclusive jurisdiction in Chennai


(xxiv) Debenture Redemption Reserve

As per Rule 18 (7)(b)(ii) of Companies (Share Capital & Debentures) Rules, 2014 creation of Debenture Redemption Reserve is not required for NBFC’s when such debentures are issued on private placement basis by Non‐Banking Financial Companies registered with Reserve Bank of India under Section 45 (I) A of the RBI (Amendment) Act 1997.

11. APPLICATION PROCESS

a) HOW TO APPLY The Issue will open on the issue opening date and close on the issue closing date (both days inclusive) as stated herein below. Potential investors who wish to invest in the Issue are requested to submit an application for the Debentures with all the accompanying documents and the application money at any time starting from the issue opening date and upto the issue closing date.

The Company shall pay interest on the application money at the rate to be set out herein. On the issue closing date, the cut-off time for submitting the application along with the accompanying documents and the application money is 2:00 pm, if application money is credited through RTGS. Applications for the Debentures must be made in the Application Form and must be completed in block letters in English by investors. The full amount of the Face Value applied for has to be paid along with the delivery of the fully completed and executed Application Form together with other applicable documents described below. b) WHO CAN APPLY Only eligible investors who have been addressed through a communication directly by the Company can apply. No person who has not received a direct communication from the Company may apply in this Issue. The following categories of investors, when specifically approached, are eligible to apply for this Private Placement of Debentures. • Multilateral development banks such as International Finance Corporation • Companies • Banks and NBFCs • Individuals, HUFs, and Partnerships • Financial Institutions and Insurance companies • Mutual Funds • Foreign Institutional Investors registered with SEBI and having adequate corporate debt limits • Qualified Foreign Investors

Any other investor authorized to invest in these Debentures. All Investors are required to comply with the relevant regulations / guidelines applicable to them for investing in this issue of Debentures. Foreign Institutional Investors are allowed to purchase the Debentures on the secondary market subject to applicable law.

c) PERMANENT ACCOUNT NUMBER

The applicants should mention the PAN allotted under Income Tax Act, 1961 and the IT Circle / Ward / District should be mentioned in the prescribed Application Form. Applications which are not in compliance with the above requirement shall be liable to be rejected.


d) KYC (KNOW YOUR CUSTOMER)

The applicants should submit the required KYC documents as prescribed by RBI along with the Applications Forms. Applications which are not in compliance with the above requirement shall be liable to be rejected.

e) SUBMISSION OF COMPLETED APPLICATION FORM All applications duly completed and accompanied with necessary documents are to be submitted to the Company at its Registered Office.

f) PROCEDURE FOR APPLICATIONS

Applications for the Debentures must be made in the prescribed Application Form set out in Annexure I hereof, and must be completed in block letters in English by investors. Completed Application Forms must be submitted as mentioned above. The issue price of the Debentures applied for has to be paid along with the delivery of the fully completed and executed Application Form together with other applicable documents described below:

The application must be accompanied by copies of (i) KYC Documents, (ii) Power of Attorney, if applicable, (ii) Specimen signatures of authorized signatories.

The subscription amount shall be made by way of RTGS / NEFT to the account as mentioned in Clause 10 (e) (iii) above.

g) RIGHT TO ACCEPT / REJECT APPLICATIONS

The Issuer is entitled at its sole and absolute discretion to accept or reject any application, in part or in full, without assigning any reason. Application Forms which are incomplete or which do not fulfill the terms & conditions indicated on the back of the Application Form are liable to be rejected.

h) COMPLIANCE OFFICER

In case of any Pre‐Issue / Post‐Issue related problems such as non‐receipt of Letters of Allotment / refund orders etc., the Investors are requested to contact the Compliance Officer as given below:

Mr. K R Sampathkumar, Company Secretary 4th Floor, Phase II, Spencer Plaza, No.769, Mount Road, Anna Salai, Chennai - 600 002 Phone : +91 44 4299 5000 Email : [email protected]

i) DEPOSITORY ARRANGEMENT The Company has appointed Karvy Computershare Private Limited as Registrar and Transfer Agents for the Debenture issuance. Equitas Micro Finance Private Limited has entered into depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Any communication to the Registrar and Transfer Agent shall be sent to the below mentioned address:

Mr. P A Varghese



Karvy Computershare Private Limited 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Phone : +91 40 2342 0815 Email : [email protected]

j) PURCHASE / RE-ISSUE OF DEBENTURES / CANCELLATION OF DEBENTURES

The Company may, at any time and from time to time, purchase Debentures at a discount, at par, or at a premium, in the open market or otherwise in accordance with the applicable laws. Such Debentures may, at the option of the Company, be cancelled, held or reissued at such a price and on such terms and conditions as the Company may deem fit and as permitted by law.

k) REGISTER OF DEBENTURE HOLDERS The Company shall maintain a Register of Debenture Holders containing necessary particulars at its Registered Office / Corporate Office. l) NOTICES

(1) Any communication shall be by letter sent by registered post, courier or fax:

To the Issuer Address 4th Floor, Phase II, Spencer Plaza No. 769,

Mount Road, Chennai - 600 002 Fax +91 44 4299 5050 Attn. Mr. K R Sampathkumar, Company Secretary

To the Trustee Address Asian Building, Ground Floor, 17, R Kamani Marg,

Ballard Estate, Mumbai - 400 001 Fax +91 22 6631 1776 Attn. Mr. Pratik Gala

(2) Communications will take effect in the case of a letter, when delivered, in the case of fax,

when the relevant delivery receipt is received by the sender; provided that any communication which is received (or deemed to take effect in accordance with the foregoing) outside business hours or on a non-business day in the place of receipt shall be deemed to take effect at the opening of business on the next following Business Day in such place. Any communication delivered to any party under this Deed which is to be sent by fax will be written legal evidence.

(3) Without prejudice to paragraphs (1) and (2) above, for so long as the Original Debentureholder remains a Debentureholder, a copy of any notice given or made to the Trustee pursuant to the foregoing provisions shall also be sent by registered post, courier and facsimile to the address set out in the Fee Letter or to such other addresses as the Original Debentureholder may notify to the Trustee from time to time.

m) TRANSACTION DOCUMENTS

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

1. Debenture Trustee Agreement, which will confirm the appointment of IDBI Trusteeship Services Limited as the Trustee (“Debenture Trustee Agreement”);



2. Debenture Trust Deed, which will set out the terms upon which the Debentures are being issued and shall include the representations and warranties and the covenants to be provided by the Issuer (“Debenture Trust Deed”);

3. Deed of Hypothecation whereby the Issuer will create an exclusive charge by way of hypothecation over Hypothecated Assets in favour of the Trustee to secure its obligations in respect of the Debentures (“Deed of Hypothecation”)

4. Such other documents as agreed between the Issuer and the Trustee.

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

n) REPRESENTATIONS AND WARRANTIES OF THE ISSUER

The representations and warranties of the Issuer shall be in accordance with the Debenture Trust Deed.

o) COVENANTS OF THE ISSUER

The covenants of the Issuer shall be in accordance with the Debenture Trust Deed.

p) CONFLICT

In case of any inconsistency where there is a conflict between the conditions as stipulated in this Disclosure Document and the Debenture Trust Deed, the provisions of the Debenture Trust Deed shall prevail and override the provisions of this Disclosure Document. The Issuer agrees, upon request in writing from the Debenture Trustee, to issue any supplementary disclosure document and ensure that this is consistent with the terms and conditions set out in the Debenture Trust Deed.

q) DEBENTURE CASH FLOWS

As Provided in Annexure - 2


12. DIRECTOR’S DECLARATION

TO WHOMSOEVER IT MAY CONCERN In relation to the issue of non-convertible debentures of the face value ` 1,000,000 (Rupees Ten Lakhs Only) each, aggregating to ` 1,000,000,000 (Rupees One Hundred Crores Only) on private placement basis, I, P N Vasudevan, Director of the Company hereby declare that:

a) the company has complied with the provisions of the Companies Act, 2013 (“Act”) and the rules

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

repayment of debentures, if applicable, is guaranteed by the Central Government; c) the monies received under the Offer shall be used only for the purposes and objects indicated in

this Disclosure Document ; d) this Disclosure Document contains full disclosures in accordance with Securities and Exchange

Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated 6th June 2008 (“Guidelines”) and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide No. LAD-NRO/GN/2012-13/19/5392 dated 12th October 2012.

e) the disclosure document contains the minimum information to be provided as per the Disclosure Document brought out by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), in consultation with the Reserve Bank of India as amended from time to time.

f) this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made, misleading. The Disclosure Document also does not contain any false or misleading statement.

I am authorized by the Board of Directors of the Company vide resolution number 14 dated 4th February 2015 to sign this form and declare that all the requirements of the Act and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been complied with. 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 form has been suppressed or concealed and is as per the original records maintained by the promoters subscribing to the Memorandum of Association and Articles of Association It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this form. For Equitas Micro Finance Private Limited

P N Vasudevan Director Place : Chennai Date : 26th May 2015

Attachments:

a) Extract of Board Resolution of the Company in relation to the particulars of the Offer dated 4th February 2015

a) Extract of the resolution passed at the Extra-Ordinary General Meeting of the company Dated in relation to the particulars of the Offer dated 26th May 2015


ANNEXURE 1 - APPLICATION FORM Serial No. 1 To Equitas Micro Finance Private Limited 4th Floor, Phase II, Spencer Plaza, No.769, Mount Road, Anna Salai, Chennai - 600 002 ISSUE OF UP TO 1000 SECURED, REDEEMABLE, TAXABLE, NON-CONVERTIBLE, RATED, LISTED DEBENTURES OF ` 10,00,000 (RUPEES TEN LAKHS ONLY) EACH AGGREGATING UPTO ` 100,00,00,000 (RUPEES HUNDRED CRORES ONLY), FULLY PAID UP FOR CASH AT PAR TO THE FACE VALUE Dear Sirs, Having read and understood the contents of the Disclosure Document and the disclosures made therein, I/we hereby apply to you for 1,000 secured, redeemable, taxable, non-convertible, rated, listed debentures debentures having a face value of ` 10,00,000 (Indian Rupees Ten Lakhs only) each in the aggregate principal amount up to ` 100,00,00,000 (Indian Rupees Hundred Crores only) (“NCDs”) at the Interest Rate mentioned in the Supplementary Disclosure Document. I/we hereby agree to accept the NCDs applied for, subject to the terms of the said Disclosure Document and this Application Form. I/we undertake that I/we will sign all such other documents and do all such other acts, if any, necessary on my/our part to enable me/us to be registered as the holder(s) of the NCDs which may be allotted to me/us. I/we authorize you to place my/our name(s) on the NCD Register of the Company that may be so allotted and to register my/our address(es) as given below. I/we note that the Company is entitled in its absolute discretion to accept or reject this Application Form in whole or in part without assigning any reason whatsoever. Terms used in the Disclosure Document shall have their defined meanings whenever used in this Application Form. We are applying as (Tick whichever is applicable) Domestic Company Commercial Banks / Financial Institutions / Primary Dealers

Foreign Institutional Investors Mutual Funds

Other

NCD Series Amount (Rs) No. of NCDs

(Application amount must be for a minimum amount of `1,00,00,000)

SOLE / FIRST APPLICANT’S NAME IN FULL AUTHORIZED SIGNATORY SECOND APPLICANT’S NAME AUTHORIZED SIGNATORY THIRD APPLICANT’S NAME AUTHORIZED SIGNATORY


ADDRESS (Do not repeat name) (Post Box No alone is not sufficient) PINCODE PHONE FAX

DETAILS OF BANK ACCOUNT: Bank Name & Branch _____________________________ Account No. ___________________________ Nature of Account______________________ Tax Deduction Status (Please tick one) Fully Exempt [ ] Tax to be deducted at source [ ] Not allotted [ ] We request you to please place our name(s) on the register of debenture holders on the date of allotment of the Debentures. REQUEST FOR CERTIFICATES IN ELECTRONIC FORM I/We, the undersigned, want delivery of NCDs, in Electronic Form. Details of my/our Beneficiary (Electronic) account are given below: Depository Name NSDL CDSL Depository Participant Name DP – ID Beneficiary Account Number / Client-ID

I/We understand that: (1) in case of allotment of NCDs to me/us, my/our Beneficiary Account as mentioned above would get

credited to the extent of allotted NCDs; (2) In case of allotment of NCDs to me/us, if NCDs cannot be credited to my/our Beneficiary Account,

for any reason whatsoever, I/We will be given Physical NCD(s); (3) if the names of applicants in this application are not identical and also in the same order with the

Beneficiary Account details with the above mentioned DP, only physical certificates will be issued; (4) Applicants must ensure that the sequence of names as mentioned in the Application Form matches

that of the Account held with the DP. This Application Form shall be governed by the laws of India.

Name of the Authorized Signatory(ies) Designation Signature

1. 1. 2. 2.

Applicant’s Signature ---------------------------------------------------------- (Tear Here)------------------------------------------------------------

ACKNOWLEDGEMENT SLIP (To be filled in by the Applicant)

Date: / / Application Form Serial No. 1

Series Interest Rate No. of NCDs

All future communications in connection with the Application should be addressed to the Company (quoting full name of the Applicant, Serial Number of the Application Form, Number of NCDs applied for and date of application).


Instructions: 1) Application Form must be completed in full in BLOCK LETTERS in English. Applications, which are

not complete in all respects or are, made otherwise than as herein required, are liable to be rejected.

2) In case of applications under power of attorney or by limited companies or bodies corporate, the relevant power of attorney or the relevant resolution or authority as the case may be, to make the application together with a duly certified copy thereof must be lodged separately quoting the serial number of the Application Form simultaneously with the submission of the Application Form failing which the application made is liable to be rejected.

3) Payment should be made either on the Pay-in date or the date after the final allocation is communicated, for the investors exercising early pay-in option.

4) All payments should be made via RTGS / NEFT / Electronic transfers for the benefit of “Equitas Micro Finance Private Limited”.

5) Application Forms duly completed must be submitted to the Issuer on or before 10 AM on Issue Opening Date

6) The Issuer reserves the full, unqualified and absolute right to accept or to reject any application in whole or in part and in either case without assigning any reasons therefore.


ANNEXURE 2 - ILLUSTRATION OF DEBENTURE CASHFLOWS

Company Equitas Micro Finance Private Limited Face Value (per Debentures) `10,00,000 Issue Date / Deemed Date of Allotment 27th May 2015 Redemption Date As per the table below

Interest Rate 12.50% per annum (Twelve Decimal Point Five Zero Percent)

Frequency of the Interest payment with specific dates Semi-annually as per the table below Day Count Convention Actual / Actual

Amount in `

Date for payment of Interest and redemption of principal

No. of days in Period Principal Amount Interest Amount Total Cash

Flows 27-May-2015 1,000,000,000 1,000,000,000 26-Nov-2015 183 - 62,671,233 62,671,233 27-May-2016 183 - 62,500,000 62,500,000 25-Nov-2016 182 - 62,328,767 62,328,767 26-May-2017 182 1,000,000,000 62,328,767 1062,328,767


ANNEXURE 3 - RATING RATIONALE AND RATING LETTER


ANNEXURE 4 - TRUSTEE CONSENT LETTER


ANNEXURE 5 - BOARD RESOLUTION AND SHAREHOLDERS’ RESOULTIONS

DISCLOSURE DOCUMENT - BSE

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