Shelf Disclosure Document/ Private Placement Offer - BSE

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SHELF DISCLOSURE DOCUMENT/ PRIVATE PLACEMENT OFFER CUM APPLICATION

AVANSE FINANCIAL SERVICES LIMITED CIN - U67120MH1992PLC068060

A public company incorporated under the Companies Act, 1956 Date of Incorporation: 7th August 1992

Registered Office: 001 & 002 Fulcrum, A Wing, Ground Floor, Next to Hyatt Regency Hotel, Sahar Road, Andheri (East), Mumbai-400099. Tel. No.: +91 22 6859 9999 Fax No.: 022 6859 9900

Website: www.avanse.com Email: [email protected]

Shelf Disclosure Document for issue of Debentures on a private placement basis. June 15th, 2020

Background

This Shelf Disclosure Document is related to the Debentures to be issued by Avanse Financial Services Limited (the “Issuer” or “Company”) on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under this Shelf Disclosure Document has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on September 26, 2019 and the Board of Directors of the Issuer on August 12, 2019 and the Memorandum and Articles of Association of the Company. Pursuant to the resolution passed by the Company’s shareholders dated September 26, 2019 in accordance with provisions of the Companies Act, 2013, the Company has been authorised to borrow, upon such terms and conditions as the Board may think fit, for amounts up to INR 15,000,000,000/- (Rupees One Thousand Five Hundred Crores Only). The present issue of NCDs in terms of this Disclosure Document is within the overall powers of the Board as per the above shareholder resolution(s).

General Risks

Investment in debt and debt related securities involve a degree of risk and Investors should not invest any funds in the debt instruments, unless they can afford to take the risks attached to such investments and only after reading the information carefully. For taking an investment decision, the Investors must rely on their own examination of the Company and the Issue including the risks involved. The Debentures have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of Investors is invited to the statement of Risk Factors at SECTION 3: of this memorandum of private placement for issue of Debentures on a private placement basis (“Shelf Disclosure Document”). This Shelf Disclosure Document has not been submitted, cleared or approved by SEBI.

Issue of upto 3000 (Three Thousand) Secured, Rated, Listed Redeemable, Non-Convertible Debenture of face value of Rs 10,00,000/- (Rs. Ten Lakhs Only) each, aggregating up to Rs. 300,00,00,000/- ( Rs Three Hundred Crore Only) on a private placement basis (the “Issue”) in one or more tranches.

http://www.avanse.com/

mailto:[email protected]

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Issuer’s Absolute Responsibility

The Issuer, having made all reasonable inquiries, confirms and represents that the information contained in this Shelf Disclosure Document is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. The Issuer is solely responsible for the correctness, adequacy and disclosure of all relevant information herein.

Credit Rating The Debentures proposed to be issued by the Issuer have been rated by CARE Ratings Limited (“CARE”). CARE Ratings Limited has, vide its letter dated May 26, 2020 assigned a rating of “CARE A+ Stable” (pronounced as “CARE A Plus Stable”) in respect of the Debentures. The above ratings are not a recommendation to buy, sell or hold securities and Investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other ratings. Please refer to Annexure II of this Shelf Disclosure Document for the letter dated May 26, 2020 from the CARE assigning the credit ratings abovementioned disclosing the rating rationales adopted for the aforesaid ratings.

Issue Schedule

Issue Opens on: As per pricing supplement Issue Closing on: As per pricing supplement Deemed Date of Allotment: As per pricing supplement

The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue shall be open for subscription during the banking hours on each day during the period covered by the Issue Schedule. The Debentures are proposed to be listed on the wholesale debt market of the BSE Limited (“BSE”).

Debenture Trustee

Catalyst Trusteeship Limited

(Formerly known as GDA Trusteeship Limited)

GDA House, Plot No. 85, Bhusari Colony (Right), Paud Road, Pune – 411 038 Tel: +91 20 2528 0081 Email: [email protected] Contact Person: Pallavi Kulkarni


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TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 4 SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 6 SECTION 3: RISK FACTORS 10 SECTION 4: FINANCIAL STATEMENTS 13 SECTION 5: REGULATORY DISCLOSURES 13 SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT 49 SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS 49 SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS 50 SECTION 9: DECLARATION 59 ANNEXURE I: TERM SHEET 60 ANNEXURE II: RATING LETTER & RATING RATIONALE 6166 ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE 627 ANNEXURE IV: APPLICATION FORM 6368 ANNEXURE V: LAST AUDITED FINANCIAL STATEMENTS 6570 ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS 6671

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

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

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

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

Business Day Means a day (other than a Saturday or a Sunday or a Bank holiday) on which banks are open for general business in Mumbai.

CDSL Central Depository Services (India) Limited.

Client Loan Each loan made by the Issuer as a lender, and “Client Loans” shall refer to the aggregate of such loans.

CEO Chief Executive Officer

CFO Chief Financial Officer

CXO L1 to Chief Executive Officer

Debenture Holders / Investors

The holders of the Debentures issued by the Issuer and shall include the registered transferees of the Debentures from time to time.

Deemed Date of Allotment As per pricing supplement

Debenture Trustee Catalyst Trusteeship Limited.

Debenture Trustee Agreement

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

Debenture Trust Deed Shall mean the Debenture Trust Deed executed/to be executed by and between the Debenture Trustee and the Company 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.

Deed of Hypothecation Shall mean the Deed of Hypothecation executed/to be executed by and between the Debenture Trustee and the Company pursuant to which hypothecation over Secured Property shall be created by the Issuer in favour of the Debenture Trustee (acting for and on behalf of Debenture Holders)

Demat Refers to dematerialized securities which are securities that are in electronic form, and not in physical form, with the entries noted by the Depository.

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

Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time.

Depository Participant / DP A depository participant as defined under the Depositories Act

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

DP ID Depository Participant Identification Number.

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Due Date Any date on which the holders of the Debentures are entitled to any payments, whether on maturity or earlier, on exercise of the option to redeem the Debentures prior to the scheduled Maturity Date or acceleration.

EFT Electronic Fund Transfer.

Financial Year/ FY Twelve months period commencing from April 1 of a particular calendar year and ending on March 31 of the subsequent calendar year.

GAAP Generally Accepted Accounting Principles prescribed by the Institute of Chartered Accountants of India from time to time and consistently applied by the Issuer.

IND AS Indian Accounting Standard

Issue Private Placement of the Debentures.

Issue Closing Date As per pricing supplement

Issue Opening Date As per pricing supplement

Issuer/ Company Avanse Financial Services Limited

Majority Debenture Holders

Debenture Holders whose participation or share in the principal amount(s) outstanding with respect to the Debentures aggregate to more than 75% (Seventy Five per cent) of the value of the nominal amount of the Debentures for the time being outstanding.

Material Adverse Effect The effect or consequence of an event, circumstance, occurrence or condition which has caused, as of any date of determination, a material and adverse effect on (i) the financial condition, business or operation of the Issuer; (ii) the ability of the Issuer to perform their obligations under the Transaction Documents; or (iii) the validity or enforceability of any of the Transaction Documents (including the ability of any party to enforce any of its remedies there under).

Maturity Date As per pricing supplement

Mortgage Deed The deed of mortgage entered/to be entered into between the Issuer and the Debenture Trustee, pursuant to which mortgage over Secured Property shall be created by the Issuer in favour of the Debenture Trustee (acting for and on behalf of the Debenture Holders).

Net Assets Net Assets shall mean the total assets on the balance sheet of the Issuer excluding any securitised assets and managed (non-owned) loan portfolio.

N.A. Not Applicable.

NSDL National Securities Depository Limited.

PAN Permanent Account Number.

Private Placement Offer cum Application Letter (Private Placement Offer Letter)

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

RBI Reserve Bank of India.

Rating Agency(ies) Credit Analysis & Research Limited, being credit rating agency registered with SEBI pursuant to SEBI (Credit Rating Agencies) Regulations 1999, as amended from time to time.

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

R&T Agent Registrar and Transfer Agent to the Issue, in this case being Link Intime India Pvt. Ltd.

ROC Registrar of Companies.

Rs. / INR Indian Rupee.

RTGS Real Time Gross Settlement.

SEBI Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992 (as amended from time to time).

SEBI Debt Listing Regulations

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

Security The security for the Debentures as specified in Annexure I.

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

TDS Tax Deducted at Source.

The Companies Act/ the Act

The Companies Act, 1956 or where applicable, the notified provisions of the Companies Act, 2013.

Terms & Conditions Shall mean the terms and conditions pertaining to the Issue as outlined in the Transaction Documents.

Transaction Documents Shall mean the documents executed or to be executed in relation to the issuance of the Debentures as more particularly set out in Annexure I.

WDM Wholesale Debt Market.

Wilful Defaulter Shall mean an Issuer who is categorized as a wilful defaulter by any Bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India and includes an issuer whose director or promoter is categorized as such in accordance with Regulation 2(n) of SEBI (Issue and Listing of Debt Securities) Regulations, 2008.

Net Debt Net Debt would mean the total short term and long term debt including any obligation under or in relation to any put option or shortfall undertaking, any corporate or financial guarantee minus C ash (excluding cash in escrow or being earmarked for specific purpose)

Equity Equity means the paid-up equity share capital, free reserves including any positive or negative balances in the profit and loss account but excluding goodwill and any revaluation reserves minus intangible assets of the Issuer.

SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS

2.1 ISSUER’S DISCLAIMER

This Shelf Disclosure Document is neither a prospectus nor a statement in lieu of a prospectus and should not be construed to be a prospectus or a statement in lieu of a prospectus under the Companies

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Act. The issue of the Debentures to be listed on the WDM segment of BSE Limited is being made strictly on a private placement basis. Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated as such. This Shelf Disclosure Document does not constitute and shall not be deemed to constitute an offer or invitation to subscribe to the Debentures to the public in general. As per the applicable provisions, it is not necessary for a copy of this Shelf Disclosure Document/ Disclosure Document to be filed or submitted to the SEBI for its review and/or approval. This Shelf Disclosure Document has been prepared in conformity with the SEBI Debt Listing Regulations as amended from time to time and the applicable RBI Circulars governing private placements of debentures by NBFCs. This Shelf Disclosure Document has been prepared solely to provide general information about the Issuer to the eligible investors to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This Shelf Disclosure Document does not purport to contain all the information that any eligible investor may require. Further, this Shelf Disclosure Document has been prepared for informational purposes relating to this transaction only and upon the express understanding that it will be used only for the purposes set forth herein. Neither this Shelf Disclosure Document nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this Shelf Disclosure Document should not consider such receipt as a recommendation to subscribe to any Debentures. Each potential Investor contemplating subscription to any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential Investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such potential Investor’s particular circumstances. The Issuer confirms that, as of the date hereof, this Shelf Disclosure Document (including the documents incorporated by reference herein, if any) contains all the information that is material in the context of the Issue and regulatory requirements in relation to the Issue and is accurate in all such material respects. No person has been authorized to give any information or to make any representation not contained or incorporated by reference in this Shelf Disclosure Document or in any material made available by the Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation must not be relied upon as having been authorized by the Issuer. The Issuer certifies that the disclosures made in this Shelf Disclosure Document and/or the Private Placement Offer Letter are adequate and in conformity with the SEBI Debt Listing Regulations. Further, the Issuer accepts no responsibility for statements made otherwise than in the Shelf Disclosure Document or any other material issued by or at the instance of the Issuer and anyone placing reliance on any source of information other than this Shelf Disclosure Document would be doing so at its own risk. This shelf Disclosure Document, the Private Placement Offer Letter and the contents hereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the Issuer and only such recipients are eligible to apply for the Debentures. All Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of this Shelf Disclosure Document and/or the Private Placement Offer Letter are intended to be used only by those potential Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the recipient.

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No invitation is being made to any person other than those to whom Application Forms along with this Shelf Disclosure Document and the Private Placement Offer Letter being issued have been sent. Any application by a person to whom the Shelf Disclosure Document and/or the Private Placement Offer Letter has not been sent by the Issuer shall be rejected without assigning any reason. The person who is in receipt of this shelf Disclosure Document and/or the Private Placement Offer Letter shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents hereof without the consent of the Issuer. The recipient agrees to keep confidential all information provided (or made available hereafter), including, without limitation, the existence and terms of the Issue, any specific pricing information related to the Issue or the amount or terms of any fees payable to us or other parties in connection with the Issue. This Shelf Disclosure Document and/or the Private Placement Offer Letter may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Issuer. Upon request, the recipients will promptly return all material received from the Issuer (including this Shelf Disclosure Document) without retaining any copies hereof. If any recipient of this Shelf Disclosure Document and/or the Private Placement Offer Letter decides not to participate in the Issue, that recipient must promptly return this Shelf Disclosure Document and/or the Private Placement Offer Letter and all reproductions whether in whole or in part and any other information statement, notice, opinion, memorandum, expression or forecast made or supplied at any time in relation thereto or received in connection with the Issue to the Issuer. The Issuer does not undertake to update the Shelf Disclosure Document and/or the Private Placement Offer Letter to reflect subsequent events after the date of Shelf Disclosure Document and/or the Private Placement Offer Letter and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer. Neither the delivery of this shelf Disclosure Document and/or the Private Placement Offer Letter nor any sale of Debentures made hereafter shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Shelf Disclosure Document and/or the Private Placement Offer Letter does not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. No action is being taken to permit an offering of the Debentures or the distribution of this Shelf Disclosure Document and/or the Private Placement Offer Letter in any jurisdiction where such action is required. Persons into whose possession this Shelf Disclosure Document comes are required to inform themselves about and to observe any such restrictions. The Shelf Disclosure Document is made available to potential Investors in the Issue on the strict understanding that it is confidential. 2.2 DISCLAIMER CLAUSE OF STOCK EXCHANGES As required, a copy of this Shelf Disclosure Document has been filed with the BSE in terms of the SEBI Debt Listing Regulations. It is to be distinctly understood that submission of this Shelf Disclosure Document to the BSE should not in any way be deemed or construed to mean that this Shelf 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 Shelf 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.

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2.3 DISCLAIMER CLAUSE OF SEBI As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of this Shelf Disclosure Document has to be filed with or submitted to the SEBI for its review / approval. It is to be distinctly understood that this Shelf Disclosure Document should not in any way be deemed or construed to have been approved or vetted by SEBI and that this Issue is not recommended or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Shelf Disclosure Document. 2.4 DISCLAIMER IN RESPECT OF JURISDICTION This Issue is made in India to Investors as specified under the clause titled “Eligible Investors” of this Shelf Disclosure Document, who shall be/have been identified upfront by the Issuer. This Shelf Disclosure Document and/or the Private Placement Offer Letter does not constitute an offer to sell or an invitation to subscribe to Debentures offered hereby to any person to whom it is not specifically addressed. Any disputes arising out of this Issue will be subject to the exclusive jurisdiction of the courts and tribunals at Mumbai. This Shelf Disclosure Document and/or the Private Placement Offer Letter does not constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. 2.5 DISCLAIMER IN RESPECT OF RATING AGENCIES Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. The Rating Agency has based its ratings on information obtained from sources believed by it to be accurate and reliable. The Rating Agency does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by the Rating Agency have paid a credit rating fee, based on the amount and type of bank facilities/instruments. 2.6 ISSUE OF DEBENTURES IN DEMATERIALISED FORM The Debentures will be issued in dematerialised form. The Issuer has made arrangements with the Depositories for the issue of the Debentures in dematerialised form. Investors will have to hold the Debentures in dematerialised form as per the provisions of Depositories Act. The Issuer shall take necessary steps to credit the Debentures allotted to the beneficiary account maintained by the Investor with its depositary participant. The Issuer will make the Allotment to Investors on the Deemed Date of Allotment after verification of the Application Form, the accompanying documents and on realisation of the application money. 2.7 DISCLAIMER IN RESPECT OF RBI The company is having a valid certificate of Registration dated 05.02.2004 issued by Reserve Bank of India under Section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of liabilities by the company. 2.8 Force Majeure The Company reserves the right to withdraw the offer prior to the earliest closing date in the event of any unforeseen development adversely affecting the economic and regulatory environment or otherwise. In such an event, the Company will refund the application money, if any, along with interest payable on such application money, if any, without assigning any reason.

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SECTION 3: RISK FACTORS The following are the risks relating to the Company, the Debentures and the market in general envisaged by the management of the Company. Potential Investors should carefully consider all the risk factors in this Shelf Disclosure Document and/or the Private Placement Offer Letter for evaluating the Company and its business and the Debentures before making any investment decision relating to the Debentures. The Company believes that the factors described below represent the principal risks inherent in investing in the Debentures, but does not represent that the statements below regarding risks of holding the Debentures are exhaustive. The ordering of the risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. Investors should also read the detailed information set out elsewhere in this Shelf Disclosure Document and/or the Private Placement Offer Letter and reach their own views prior to making any investment decision. 3.1 REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER. Potential Investors should be aware that receipt of the principal amount, (i.e. the redemption amount) and any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer. Potential Investors assume the risk that the Issuer will not be able to satisfy their obligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures may not be made or may be substantially reduced or delayed. 3.2 THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID. The Debentures may be very illiquid and no secondary market may develop in respect thereof. Even if there is a secondary market for the Debentures, it is not likely to provide significant liquidity. Potential Investors may have to hold the Debentures until redemption to realize any value. 3.3 CREDIT RISK & RATING DOWNGRADE RISK The Rating Agency has assigned the credit ratings to the Debentures. In the event of deterioration in the financial health of the Issuer, there is a possibility that the Rating Agency may downgrade the rating of the Debentures. In such cases, potential Investors may incur losses on revaluation of their investment or make provisions towards sub-standard/ non-performing investment as per their usual norms. 3.4 CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OF NCDS. All securities where a fixed rate of interest is offered, such as this Issue, are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing economy, are likely to have a negative effect on the pricing of the Debentures. 3.5 TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS 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.

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3.6 ACCOUNTING CONSIDERATIONS Special accounting considerations may apply to certain types of taxpayers. Potential Investors are urged to consult with their own accounting advisors to determine implications of this investment. 3.7 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 Debenture Trustee may enforce the Security as per the terms of security documents, and other related documents. The Investor’s recovery in relation to the Debentures will be subject to (i) the market value of such secured property, (ii) finding willing buyers for the Security at a price sufficient to repay the potential Investors amounts outstanding under the Debentures. The value realised from the enforcement of the Security may be insufficient to redeem the Debentures. 3.8 MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT COULD IMPAIR THE

ISSUER’S ABILITY TO MEET PAYMENT OR OTHER OBLIGATIONS. The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any changes in the regulatory framework could adversely affect the profitability of the Issuer or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise. 3.9 LEGALITY OF PURCHASE Potential Investors of the Debentures will be responsible for the lawfulness of the acquisition of the Debentures, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates or for compliance by that potential Investor with any law, regulation or regulatory policy applicable to it. 3.10 POLITICAL AND ECONOMIC RISK IN INDIA The Issuer operates only within India and, accordingly, all of its revenues are derived from the domestic market. As a result, it is highly dependent on prevailing economic conditions in India and its results of operations are significantly affected by factors influencing the Indian economy. An uncertain economic situation, in India and globally, could result in a further slowdown in economic growth, investment and consumption. A slowdown in the rate of growth in the Indian economy could result in lower demand for credit and other financial products and services and higher defaults. Any slowdown in the growth or negative growth of sectors where the Issuer has a relatively higher exposure could adversely impact its performance. Any such slowdown could adversely affect its business, prospects, results of operations and financial condition. 3.11 RISKS RELATED TO THE BUSINESS OF THE ISSUER A. Majority of the loans provided by the Issuer are both secured and 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. Non-performing or low credit quality loans can negatively impact its results of operations. As at March 31, 2020, the gross NPA was 52.51 Crores on a gross portfolio of Rs. 2815 Crores (including managed / securitized portfolio of Rs. 362 Crores).

The Issuer cannot assure that it will be able to effectively control and reduce the level of the NPAs of its Client Loans. The amount of its reported NPAs may increase in the future as a result of growth of Client Loans, and also due to factors beyond its control, such as over-extended

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member credit that it is unaware of. If the Issuer is unable to manage its NPAs or adequately recover its loans, the results of its operations will be adversely affected. The Issuer’s current 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. 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. 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, 1934, 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% 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.

C. Credit risk The issuer is exposed to the risk of default by its borrowers. A strong credit risk management process helps in containing the portfolio quality of the company. Key elements of the credit risk management include a structured and standardised credit approval process supported by a strong ERP system, effective training programs, legal and technical due diligence, monitoring and robust credit risk management strategy at a senior management level.

D. Interest Rate Risk Interest rate risk arises when there is a mismatch in the interest rate profile of assets and liabilities adversely impacting the net interest income. Organization measures interest rate risks by the ‘“maturity gap” method. The maturity gap is a risk measure that tracks the gap between assets and liabilities sensitive to interest rate changes, to assess the impact of interest rate changes on the cost of funds to the Issuer. Considering the volatility of interest rates in the market, the Company’s strategy is to realize its borrowings between short term and long term debt as well as floating and fixed rate instruments.

E. Market Risk An Asset Liability Management Committee (ALCO) consisting of senior management of the Issuer under the directions of the Board reviews and approves all market risk policies and recommends the tolerance limits on borrowings, the fixed vs. floating rate exposure on the borrowings, the ALM position of the Company and also fixes the framework of operations for ALCO.

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F. Operational Risk Operational Risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, systems, or from external events. The aim of an Operational Risk framework is to identify, assess, control and mitigate operational risk and for effective reporting of risk and emerging risk issues.

G. Regulatory Risk The Company is governed by RBI on requirements related to capital adequacy and provisioning and various other legal and regulatory requirements from concerned authorities. Any change in the regulatory framework could have an impact on the Company

SECTION 4: FINANCIAL STATEMENTS

The audited financial statements of the Issuer for the FY ended 31.03.2019 are set out in Annexure V hereto

SECTION 5: REGULATORY DISCLOSURES The Shelf Disclosure Document is prepared in accordance with the provisions of SEBI Debt Listing Regulations and in this section, the Issuer has set out the details required as per Schedule I of the SEBI Debt Listing Regulations. 5.1 Documents Submitted to the Exchanges The following documents have been / shall be submitted to the BSE: A. Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the

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

agreements; D. Copy of the resolution passed by the shareholders of the Company at the Annual General

Meeting held on September 26, 2019 authorizing the issue/offer of non-convertible debentures by the Company;

E. A resolution dated March 7, 2018 passed by the shareholders of the Company in accordance with the Section 180(1)(a) of the Companies Act, 2013;

F. A resolution of the shareholders of the Company dated March 7, 2018 approving (among others) the current borrowing limits of the Company, in accordance with Section 180(1)(c) of the Companies Act, 2013

G. Copy of the Board/Committee Resolution authorizing the borrowing and list of authorized signatories;

H. Certified true copy of the resolution passed by the Company at the Annual General Meeting held on September 26, 2019 authorising the Company to borrow by way of issue of NCDs, upon such terms as the Board may think fit, upto an aggregate limit of INR 1500 crores/- (Rupees One Thousand Five Hundred Crores Only);

I. An undertaking from the Issuer stating that the necessary documents for the creation of the charge, including the Debenture Trust Deed would be executed within the time frame prescribed in the relevant regulations/acts/rules etc. and the same would be uploaded on the website of the BSE, where the debt securities have been listed, within 5 (Five) working days of execution of the same;

14

J. Where applicable, an undertaking that permission / consent from the prior creditor for a second or pari passu charge being created, in favour of the trustees to the proposed issue has been obtained; and

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

5.2 Documents Submitted to Debenture Trustee The following documents have been/shall be submitted to the Debenture Trustee in electronic form (soft copy) on or before the allotment of the Debentures: A. Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the

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

agreements; D. Latest audited / limited review half yearly consolidated (wherever available) and standalone

financial information (profit & loss statement, balance sheet and cash flow statement) and auditor qualifications, if any.

E. An undertaking to the effect that the Issuer would, until the redemption of the debt securities, submit the details mentioned in point (D) above to the Debenture Trustee within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. 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. Further, the Issuer shall within 180 (One Hundred and Eighty) calendar days from the end of the financial year, submit a copy of the latest annual report to the Debenture Trustee and the Debenture Trustee shall be obliged to share the details submitted under this clause with all ‘Qualified Institutional Buyers’ and other existing debenture-holders within 2 (two) Business Days of their specific request.

5.3 Details of Issuer

Name: Avanse Financial Services Limited

Registered Office of Issuer: 001 & 002 Fulcrum, A Wing, Ground Floor, Next to Hyatt Regency Hotel, Sahar Road, Andheri (East), Mumbai-400099

Corporate Office of Issuer: 001 & 002 Fulcrum, A Wing, Ground Floor, Next to Hyatt Regency Hotel, Sahar Road, Andheri (East), Mumbai-400099

Branches The Company operates its business through eleven branches across India viz. Mumbai, Delhi, Chennai, Kolkata, Hyderabad, Pune, Ahmedabad, Bangalore, Raipur, Jaipur & Chandigarh and five sales representative offices viz. Indore, Coimbatore, Vijaywada, Ludhiana and Vishakapatnam.

Company Secretary & Compliance Officer of Issuer:

Mr. Rakesh Dhanuka [email protected]

CFO of Issuer: Mr Rahul Bhapkar

Arrangers: NA

Registration Number: B-13.01704

Corporate Identification Number:

U67120MH1992PLC068060

Phone No.: +91-22-6859 9999

Fax No: +91 22 6859 9900

Contact Person: Mr Rahul Bhapkar


15

Email: [email protected]

Website of Issuer: www.avanse.com

Auditors of the Issuer:

M /s Deloitte Haskins and Sells LLP Address: Tower 3, 27th - 32nd Floor, Indiabulls Finance Center, Senapati Bapat Marg, Elphinstone (W) Mumbai – 400013

Trustee to the Issue:

Catalyst Trusteeship Limited (Formerly known as GDA Trusteeship Limited), GDA House, Plot No. 85, Bhusari Colony (Right), Paud Road, Pune – 411 038

Registrar to the Issue: Link Intime India Pvt. Ltd C 101, 247 Park, LBS Marg, Vikhroli West, Mumbai 400 083

Credit Rating Agency of the Issue:

Credit Analysis & Research Limited 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022

Any default in Annual filing of the Company under the Companies Act, 2013

No

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

A. Overview: Avanse Financial Services Ltd. (“Avanse” or the “Company”) is a Systemically Important Non-Deposit accepting NBFC regulated by RBI and we have started our business operations from the month of January 2013. We are a subsidiary of Olive Vine Investment Ltd, an affiliate of Warburg Pincus LLC, one of the global leading private equity firm. Our vision – To be India’s Leading Customer Centric Digitally Agile NBFC focused on Profitable Growth with Leadership position in Education Financing. Background Avanse Financial Services Limited is a new age, education-focused NBFC on a mission to provide seamless and affordable education financing for every deserving Indian student. Established in 2013, Avanse is on a journey to strengthen its leadership position in Education Lending by creating solutions for individuals (Education Loans) and Indian institutions (Education Institution Financing). The Company commenced its operations in January 2013 and as of 31st March 20 the company’s outstanding AUM is ~Rs. 2815 crores. The Company is operating out of sixteen locations across the country. As of 31st Mar 20, Olive Vine Investment Ltd, an affiliate of Warburg Pincus LLC holds 80% equity in Avanse and balance 20% of the equity stake is held by International Finance Corporation (IFC), an arm of the World Bank. The Company is managed by eminent personalities from the fields of Finance, Banking, Law and Retail.



16

Brief particulars of the management of the company

a) Mr. Amit Gainda, Chief Executive Officer

He holds a degree in Finance Management from IMT Ghaziabad and a Marketing and Finance post graduate diploma from IMI, Delhi. He has also done an Executive Education program in General Management from INSEAD, Singapore and Finance. He has over two decades of experience in the banking and financial services industry. He has been associated with Avanse since April 1, 2017. Prior to joining Avanse, he was working with Dewan Housing Finance Corporation Limited as the President of its Small and Medium Enterprises & Mortgage Loan Business. b) Mr. Rahul Bhapkar, Chief Financial Officer

He is a Chartered Accountant and has done MBA. He has experience of over 12 years in the Finance sector. He has been associated with Avanse since April 1, 2017. Prior to joining Avanse, he was working with Wadhawan Global Capital Private Limited as its Vice President of its Strategy department. Important Recent Highlights:

Avanse is a systemically important non Deposit taking NBFC as per RBI regulations.

CARE has awarded A+ Stable Rating for Long Term facilities of the company.

IFC, a member of the World Bank Group, invested equity in Avanse Financial Services to expand its ability to provide loans to Indian students pursuing higher education in India and overseas, improving access to quality education.

Avanse successfully completed country’s 1st Education loan securitization deal in FY 17-18. B. Corporate Structure/Organization Structure

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Corporate Planning, PMO, Strategic Alliance & Acting CMO

Chief Technology Officer

Business Head - EL

Chief Audit Officer Business Head – EIL

& SIL

Chief Risk Officer Head Sales - Overseas

Chief People Officer

17

C. Key Operational and Financial Parameters for the last 3 audited years on a consolidated basis (wherever available) else on a standalone basis. As per IGAAP In Rs. Cr.

Parameters Audited Audited Audited Audited

31-Mar-17

31-Mar-18

31-Mar-19

30-Sept-19

Net Worth 140.25 484.99 574.32 875.28

Total Debt 895.00 1,851.26 2,346.49 2,094.30

Of which – Non Current Maturities of - Long Term Borrowing 742.63 1,348.87 1,623.52 1,499.29

- Short Term Borrowing 84.37 339.71 309.53 229.97

- Current Maturities of Long Term Borrowing

68 162.67 413.44 365.03

Net Fixed Assets 1.49 2.47 12.09 15.12

Non Current Assets 9.93 53.84 139.3 181.89

Cash and Cash equivalents 64.76 238.82 168.53 312.05

Current Investments - - 50 126.03

Current Assets 2.81 9.74 7.86 25.76

Current Liabilities 25.98 54.43 125.63 71.02

Assets Under Management 982.25 2,085.81 2,668.67 2,438.35

Off balance sheet assets - - - -

Interest Income 96.69 189.54 386.2 186.84

Interest Expense 64.96 119.43 231.22 112.78

Provisioning & write Offs 2.21 8.32 8.23 1.67

PAT 5.6 10.25 24.31 0.96

Gross NPA (%) 0.29 0.1 0.18 0.01

Net NPA (%) 0.25 0.07 0.14 0.01

Capital Ratio (%) 16.5 25.71 21.97 33.53

Tier I Capital Adequacy Ratio (%) 13.63 21.73 18.9 30.36

Tier II Capital Adequacy Ratio (%) 2.87 3.98 3.07 3.17 As per IndAS

(Rs in Crs)

Parameters (as per IND AS Accounts) FY 2017-18 FY 2018-19 Sep-19

For Financial Entities

Networth 485.56 577.78 880.99

Total Debt - Debt securities 507.67 467.95 430.57

- Borrowings (other than debt securities) 1,335.44 1,869.69 1,688.28

Net fixed assets 2.47 12.09 15.12

Cash and cash equivalents 238.82 143.48 252.00

Loans 2,211.01 2,940.07 2,741.84

Other assets 10.09 10.34 22.24

18

Off balance sheet assets - - -

Interest income 200.06 405.06 194.21

Interest expense 120.63 240.15 120.65

Impairment on financial instruments 4.58 6.8 2.59

PAT 11.86 27.27 3.27

Gross NPA (%) 0.1 0.18 0.01

Net NPA (%) 0.07 0.14 0.01

Capital Ratio (%) 25.71 21.97 33.53

Tier I Capital Adequacy Ratio (%) 21.73 18.9 30.36

Tier II Capital Adequacy Ratio (%) 3.98 3.07 3.17

D. Gross Debt: Equity Ratio of the Company:

as on March 31, 2020 2.73x

Calculations

Debt-to-equity ratio is calculated March 2020 as follows: -

Debt – INR crores 2445.61 crores

Equity – INR crores 895.58 crores

Debt/Equity 2.73 x

Note: Debt Includes Subordinated Debt

E. Project cost and means of financing, in case of funding new projects: N.A.

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

A. Details of Share Capital :

Share Capital : as on September 30, 2019 Rs

Authorized Share Capital 100,000,000 (60,000,000) Equity Shares of Rs.10 each

1,000,000,000

Issued, Subscribed and Paid-up Share Capital 8,25,91,861 (6,28,55,019) Equity Shares of Rs.10 each

82,59,18,610

Share Capital : as on December 31, 2019 Rs

Authorized Share Capital 100,000,000 (60,000,000) Equity Shares of Rs.10 each

1,000,000,000

Issued, Subscribed and Paid-up Share Capital 8,25,91,861 (6,28,55,019) Equity Shares of Rs.10 each

82,59,18,610

19

B. Changes in its capital structure as on last quarter end i.e. September 30, 2019, for the last five years:

Date of Change (EGM) Rs. Particulars

07th March 2018 100.00 crs Authorised share capital has increased from Rs. 60,00,00,000 divided into 6,00,00,000 equity shares of Rs. 10 each to Rs. 100,00,00,000 divided into 10,00,00,000 equity shared of Rs. 10 each

C. Equity Share Capital History of the Company as on March 31, 2020, for the last five years:

Date of Allotment

Name of Investor/ Shareholder

No of Equity Shares

Face Value ( in Rs )

Issue Price ( in Rs )

Consideration

Nature of Allotment

No of Equity Shares

Equity Share Capital ( Rs in Crores)

Equity Share Premium ( Rs in Crores)

29.03.2016 Wadhawan Global Capital Private Limited

45,95,677 10 50 50 Rights Issue

2,98,02,991

29.80 94.73

29.03.2016 International Finance Corporation

33,64,272 10 50 50 Rights Issue

3,31,67,263

33.16 108.19

29.03.2016 Sonpal Jain

73 10 50 50 Rights Issue

3,31,67,336

33.16 108.19

29.03.2016 Mohit Chaturvedi


3,31,67,409

33.16 108.19

29.03.2016 Ajay Vazirani


3,31,67,482

33.16 108.19

29.03.2016 Hemant Bhatia


3,31,67,513

33.16 108.19

12.07.2017 DHFL 42,75,420 10 64 64 Rights Issue

3,74,42,933

37.44 131.27

12.07.2017 Wadhawan Global Capital Private Limited

50,25,155 10 64 64 Rights Issue

4,24,68,088

42.47 158.4


23,25,145 10 64 64 Rights Issue

4,47,93,233

44.79 170.95

31.03.2018 Wadhawan Global Capital Limited

1,16,71,651

10 180 180 Rights Issue

5,64,64,884

56.46 369.35

31.03.2018 Dewan Housing

27,77,777 10 180 180 Rights Issue

5,92,42,661

59.42 416.57

20

Finance Corporation Limited


36,12,358 10 180 180 Preferential Issue

6,28,55,019

62.85 477.97

30.07.2019 Olive Vine Investment Ltd

1,57,89,474

10 152 152 Preferential Issue

7,86,44,493

78.64 702.17


39,47,368 10 152 152 Preferential Issue

8,25,91,861

82.59 56.05

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

E. Details of any Reorganization or Reconstruction in the last 1 (one) year NIL 5.6 Details of the shareholding of the Company as on the March 31, 2020:

A. Shareholding pattern of the Company as on March 31 2020:

Shareholding pattern of Avanse as on 31st March 2020

Sr. No. Name of Shareholder No. of Shares % Shareholding

No. Of shares in Demat form

1 Olive Vine Investment Ltd (an affiliate of Warburg Pincus)

6,60,73,483 80.00 6,60,73,483

2 International Finance Corporation

1,65,18,373 20.00 1,65,18,373

3 Mr. Amit Gainda* 1 00.00 1

4 Mr. Rahul Bhapkar* 1 00.00 1

5 Mr. Samir Kumar Mohanty* 1 00.00 1

6 Mr. Amit Yadav* 1 00.00 1

7 Mr. Smitesh Shah* 1 00.00 1 Total 8,25,91,861 100.00% 8,25,91,861

*Nominee Shareholder of Olive Vine Investment Ltd

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

B. List of top 10 holders of equity shares of the Company as on March 31, 2020:

Sr. No. Name of Shareholder No. Of Shares

held No of Shares in

demat form %

1 Olive Vine Investment Ltd (an affiliate of Warburg Pincus)

6,60,73,483 6,60,73,483

80.00

2 International Finance Corporation 1,65,18,373 1,65,18,373 20.00

21

3 Mr. Amit Gainda 1 1 00.00

4 Mr. Rahul Bhapkar 1 1 00.00

5 Mr. Samir Kumar Mohanty 1 1 00.00

6 Mr. Amit Yadav 1 1 00.00

7 Mr. Smitesh Shah 1 1 00.00

Total 8,25,91,861 8,25,91,861 100.00

5.7 Following details regarding the directors of the Company:

A. Details of current directors of the Company:

This table sets out the details regarding the Company’s Board of Directors as on March 31, 2020

Name of the Director

Designation Age DIN Occupation Address Director of

the Company since

Details of other Directorship

Ms. Savita Mahajan

Independent Director

60 06492679 Consultant 89, Villa Greens, Gandipet Hyderabad – 500 075 Telangana

01.12.2018 AUROBINDO PHARMA LTD

INSTILLMOTION CONSULTING PRIVATE LIMITED

BHAGIRATH RESURGENCE PRIVATE LIMITED

CRAFTIZEN FOUNDATION

Mr. Neeraj Swaroop


61 00061170 Professor

1104, Signia Isles, G Block,

Near Dhirubhai

International School,

Bandra Kurla Complex,

Bandra East, Mumbai - 400051

30.07.2019

PNB Metlife India Insurance Company Limited

Small Business Fincredit India Private Limited

Ms. Vijayalakshmi Iyer


64

0524960

Consultant

1402, Barberry Towers, Nahar Amrut Shakti, Chandivilli, Powai, Andheri East,

30.07.2019

Magma Fincorp Limited

Aditya Birla Capital Limited

22

Mumbai - 400 072

ICICI Securities Limited

Religare Enterprises Ltd

L & T Infrastructure Development Projects Ltd

Aditya Birla ARC Ltd

BFSI Sector Skill Council of India

Axis Mutual Fund Trustee Limited.

GIC Housing

Finance Ltd

Computer Age Management Services Limited

Mr. Narendra Ostawal

Non-executive Director

42

06530414

Serivce

B-4101, 41st floor, One Avighna Park, Mahadeo Palav Marg, Curry Road, Parel, Mumbai - 400012

30.07.2019

Warburg Pincus India Private Limited

Laurus Labs Limited

D B Power Limited

DB Power (Madhya Pradesh) Limited

Diliigent Power Private Limited

Decore Thermal Power Private Limited

23

Computer Age Management Services Limited

Fusion Micro Finance Private Limited

Carmel Point Investments India Private Limited

AU Small Finance Bank Limited

IndiaFirst Life

Insurance Company Limited

# List of other companies in which [_] holds office of Director:

B. Details of change in directors since last three years as on March 31, 2020

Name & Designation DIN Date of

Appointment/ Resignation

Director of the Company since (in

case of resignation)

Remarks

Mr. Ashok Malik, Independent Director

07075819 24.07.2017 15.07.2016 Resigned

Ms. Aruna Wadhawan, Non-executive Director

00103372 30.03.2018 03.03.2016 Resigned

Ms. Savita Mahajan, Independent Director

06492679 01.12.2018 -- Appointment

Mr. Kapil Wadhawan, Non-executive Director

00028528 31.07.2019 23.07.2012 Resigned

Mr. Suresh Mahalingam, Non-executive Director

01781730 31.07.2019 19.10.2015 Resigned

Mr. Mahendra K Chouhan, Independent Director

00187253 31.07.2019 23.07.2012 Resigned

Mr. Suresh Kumar Jain, Independent Director

05103064 31.07.2019 12.01.2017 Resigned

Mr. Neeraj Swaroop, Independent Director

00061170 30.07.2019 -- Appointment

Ms. Vijayalakshmi Iyer, Independent Director

05242960 30.07.2019 -- Appointment

Mr. Narendra Ostawal, Non-executive Director

06530414 30.07.2019 -- Appointment

24

C. *Company to disclose name of the current directors who are appearing in the RBI defaulter list and/or ECGC default list, if any: None

5.8 Following details regarding the auditors of the Company:

A. Details of the auditor of the Company:

B. Details of change in auditors since last three years: M/s T R Chadha & Co. LLP (one of the Joint

Statutory Auditors) has resigned as Statutory Auditors of the Company w.e.f. November 1, 2019.

5.9 Details of borrowings of the Company, as on latest quarter end i.e. March 31, 2020: A. Details of Secured Loan Facilities as on March 31, 2020:

Lender’s Name

Type of Facility

Amt. Sanctioned

(Rs. Cr.)

Principal Amt. Outstanding (Rs. Cr.)

Repayment Date / Schedule

Security

Aditya Birla Finance Limited

Term Loan

75 60.00

Principal to be repaid in 5 annual installments commencing after moratorium of 3 years reckoned from the date of first disbursement. (Door to Door tenor of 7 years).

Receivables and current assets

AK Capital Term

Loan- I 25 25

3 Year Loan, 6 Month Moratorium, Monthly repayment


AK Capital Term

Loan-2 25 25

3 Year Loan, 6 Month Moratorium, Monthly repayment


Axis Bank Term

Loan-1 50 45.00

Repayment Schedule in 20 Equal Quarterly Instalments starting immediately after 3 months from the date of first disbursement.


Axis Bank Term

Loan-2 50 50.00

Repayment Schedule in 20 Equal Quarterly Instalments starting immediately after 3 months from the date of first disbursement.


Name Address Auditor

Since

Deloitte Haskins and Sells LLP Chartered Accountants

Tower 3, 27th - 32nd Floor, Indiabulls Finance Center Senapati Bapat Marg, Elphinstone (W) Mumbai – 400013

12th

September,

2018

25

Axis Bank CC Limit 20 20.00 On demand Receivables and current assets

Bank of Baroda

Term Loan-1

50 20.00

Principal to be repaid in 20 quarterly instalments of Rs. 2.50 crs each. Repayment to start by end of the 1st quarter from the date of 1st disbursement (Door to Door tenor of 5 years).


Bank of Baroda

Term Loan-2

100 67.78

Door to Door Tenor -84- months. Repayable in 28 equal quarterly installments. Repayment to start from end of the 1st quarter from the date of 1st disbursement.


Bank of Baroda (earlier

Vijaya Bank

Term Loan 2

25 18.75

Principal to be repaid in 20 equal installments commencing after moratorium of 2 years reckoned from the date of first disbursement. (Door to Door tenor of 7 years). The interest to be paid as and when debited


Bank of Baroda (Earlier

Vijaya Bank)

Term Loan 1

25 10.00

Principal to be repaid in 20 equal installments commencing after moratorium of 2 years reckoned from the date of first disbursement. (Door to Door tenor of 7 years). The interest to be paid as and when debited


Bank of India Term

Loan 1 25 8.75

Term Loan is repayable in 20 Equal quarterly installments of Rs. 1.25 Crs commencing after moratorium period of 2 years from the date of first disbursement.


Bank of India Term

Loan 3 50 45.00

Term Loan is repayable in 20 Equal quarterly installments of Rs. 2.50 Crs commencing after moratorium period of 2


26

years from the date of first disbursement.

Bank of Maharashtra

Term Loan-1

25 10.00



Bank of Maharashtra

Term Loan-2

50 30.00



Bank of Maharashtra

Term Loan-3

25 22.50



Bank of Maharashtra

Term Loan-4

75 75.00



Equitas Small finance Bank

Term Loan

50 45.00

Door to Door tenor of 5 years. Repayable in equal half yearly installments


HDFC Bank Term

Loan 1 15 5.29

Principal to be repaid in 21 quarterly instalment from the end of 24th month from the date of 1st drawdown.


HDFC Bank Term

Loan 2 25 10.00

In 20 equal quarterly installments without any moratorium. The repayment to start from the end of 3rd month from the date of 1st drawdown.


27

HDFC Bank Term

Loan 3 35 32.08

4 Year Loan, Repayment monthly on EMI Basis


HERO Fincorp Ltd

Term Loan

50 50

11 Month Loan, 1st 50% principal payment on 10th month & 2nd 50% principal payment on 11th Month.


Hinduja Leyland Finance

Term Loan

50 35.92 60 Equal monthly Instalments.


Indian Bank Term

Loan 1 50 45.00

Term Loan is repayable in 20 quarterly instalments of Rs. 2.5 Crores which will start by end of 1st quarter after moratorium of 2 years


Indian Bank Term

Loan 2 150 150.00

Term Loan is repayable in 22 quarterly instalments of Rs. 6.82 Crores which will start after moratorium of 6 Month


Indian Overseas

Bank

Term Loan

50 50.00

Door to Door tenor of 7 years. Repayable in 20 equal quarterly installments of Rs. 2.50 cr after initial moratorium period of 2 years from 1st date of disbursement.


Indusind Bank

Term Loan 2

20 8.75

Repayment in 16 Quarterly instalment commencing after 12 months from first disbursement


Karur Vysya Bank

Term Loan

50 45.00

Repayment to be made in 20 Equal Quarterly Installments of Rs. 2.50 crores each after Moratorium of 2 years. First Installment to commence at the end of 27th month from the date of first drawdown.


NABARD Term Loan

314 82.50 Door to Door tenor of 5 years. Repayable in half yearly installments


28

Shinhan Bank

Term Loan

25 10.42

Door to Door tenor of 3 years. Repayable in 12 equal quarterly installments of Rs. 2,08,33,334 commencing at the end of 3 months from the date of disbursement.


South Indian Bank

Term Loan-1

25 8.00

Term Loan is repayable in 20 quarterly instalments of Rs.1,25,00,000 (One crore twenty five lakhs) each commencing after initial holiday period of two years from the date of final disbursement.


South Indian Bank

Term Loan-2

25 13.75

Term Loan is repayable in 20 quarterly instalments of Rs.1,25,00,000 (One crore twenty five lakhs) each commencing after initial holiday period of 24 months after initial draw down


South Indian Bank

Term Loan-3

25 18.75



South Indian Bank

Term Loan-4

25 25.00



State Bank of India

Term Loan 1

50 20.00

Term Loan is repayable in 20 quarterly instalments of Rs. 2.5 Crores which will start by end of 1st quarter after moratorium of 2 years


29

from date of 1st disbursement.

State Bank of India

Term Loan 2

50 35.00

Term Loan is repayable in 20 quarterly instalments of Rs. 2.5 Crores which will start by end of 1st quarter after moratorium of 2 years from date of 1st disbursement.


State Bank of India

Term Loan 3

100 77.28

Repayment in 22 (twenty two) quarterly instalments of 4,54,54,545/- (rupees four crore fifty four lakhs fifty four thousand five hundred and forty five only) each which will start by end of 1st quarter after moratorium of 18 months from the date of first drawdown.


State Bank of India (Earlier State Bank of Hyderabad)

Term Loan 4

25 15.00

Term Loan is repayable in 20 quarterly instalments of Rs.1,25,00,000 (One crore twenty five lakhs) each after moratorium period from the date of First Disbursement.


Syndicate Bank

Term Loan-1

50 30.00

Repayment in 20 (twenty) quarterly instalments of 2,50,00,000/- (rupees two crore fifty lakhs only) each which will start by end of 1st quarter after moratorium of 2 years from the date of first drawdown.


30

Syndicate Bank

Term Loan-2

50 50.00

Repayment in 20 (twenty) quarterly instalments of 2,50,00,000/- (rupees two crore fifty lakhs only) each which will start by end of 1st quarter after moratorium of 2 years from the date of first drawdown.


UCO Bank Term Loan

50 50.00

Door to Door tenor of 7 years. Repayable in 20 equal quarterly installments after initial holiday period of 2 years.


Union Bank of India

Term Loan-1

25 7.50

7 year loan including initial moratorium period of two years. Repayment to start by end of first quarter after moratorium, through equal quarterly installments.


Union Bank of India

Term Loan – 2

21 12.60



Union Bank of India

Term Loan – 3

25 16.25



Union Bank of India

Term Loan – 4

25 21.25



31

Union Bank of India

Term Loan – 5

25 22.50



Union Bank of India

Term Loan – 6

100 100.00



Union Bank of India

Term Loan – 7

100 100.00



Total 2375.00 1725.62

B. Details of Unsecured Loan Facilities as on March 31, 2020:

Nil

C. Details of Non-Convertible Debentures as on March 31, 2020:

ISIN No. Debenture Series

Amount in Crs

Tenor/ Period

of Maturity

Coupon Allotment

Date Redemption

Date Credit Rating

Secured/ Unseucre

d Security

INE087P07022 NCD 001 25 120 10.10% 31-Jul-15 31-Jul-25

BWR A+/

CARE A+

Secured

Hypothecation of Receivables & current

assets and Mortgage of land parcel

INE087P07030 NCD 002 10 84 10.05% 07-Aug-15 08-Aug-22

BWR A+/

CARE A+

Secured

Hypothecation of Receivables & current assets and Mortgage of land parcel

INE087P07048 NCD 003 15 120 10.10% 07-Aug-15 07-Aug-25

BWR A+/

CARE A+

Secured


INE087P07055 Series 2 Tranche 1

10 60 9.55% 26-Oct-15 26-Oct-20

BWR A+/

CARE A+

Secured


INE087P07063 Series 2 Tranche 2

10 84 9.65% 26-Feb-16 26-Feb-23

BWR A+/

CARE A+

Secured


32

INE087P07089 NCD Series 4 Tranche 1

25 36 8.65% 03-Nov-17 02-Nov-20

BWR A+/

CARE A+

Secured


INE087P07105 NCD Series 6

250 36 10.10% 12-07-

2018 12-Jul-21

CARE A+

Secured



195 36 11.40% 12-12-

2019 09-Dec-22

CARE A+

Secured



105 36 11.40% 18-12-

2019 16-Dec-22

CARE A+

Secured


INE087P08012 Sub Debt Series 1

25 96 10.50% 16-03-

2016 16-Mar-24

BWR A+/

CARE A

Unsecured

N.A.

INE087P08020 Sub Debt Series 2

25 120 9.50% 30-06-

2017 30-Jun-27

BWR A+/

CARE A

Unsecured

N.A.

INE087P08038 Sub Debt series 3

25 120 9.35% 27-12-

2017 27-Dec-27

BWR A+/

CARE A

Unsecured

N.A.

D. List of Top 10 Debenture Holders (as on May 31, 2020)

Sr. No. Secured Debenture Holders Rs in crs

1 ICICI PRUDENTIAL 300.00

2 SBI CREDIT RISK FUND 150.00

3 UTI- ULTRA SHORT TERM FUND 100.00

4 A P S R T C EMPLOYEES PROVIDENT FUND TRUST 23.00

5 ARKA FINCAP LIMITED 20.00

6 MTNL - GRATUITY TRUST 15.00

7 HVPNL EMPLOYEES PENSION FUND TRUST 10.90

8 ALSTOM T&D INDIA LIMITED EMPLOYEES PROVIDENT FUND TRUST 5.10

9 EIL EMPLOYEES PROVIDENT FUND 4.00

10 PICO CAPITAL PRIVATE LIMITED 4.00

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

E. The amount of corporate guarantee issued by the Issuer along with name of the counterparty

(like name of the subsidiary, JV entity, group-company, etc) on behalf of whom it has been issued. (if any) NIL

F. Details of Commercial Paper: Nil as of 31st Mar 2020

G. Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally Convertible

Debentures / Preference Shares) as on March 31, 2020: NIL

H. Details of all default/s and/or delay in payments of interest and principal of any kind of term

loans, debt securities and other financial indebtedness including corporate guarantee issued by the Company, in the past 5 years:

33

NIL

I. Details of any outstanding borrowings taken / debt securities issued where taken / issued (i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in pursuance of an option: NIL

5.10 Details of Promoters of the Company:

A. Details of Promoter Holding in Company as on latest quarter end, i.e. March 31, 2020:

Sr. No.

Name of the Shareholders

Total No. of Equity Shares

No of shares in Demat Form

Total Shareholding as % of total No of

Equity Shares

No of Shares Pled

ged

% of Shares pledged

with respect to

shares owned

1 Olive Vine Investment Ltd

6,60,73,488 6,60,73,488 80.00 NIL NIL

Total 6,60,73,488 6,60,73,488 80.00 NIL NIL

5.11 Abridged version of the Audited Consolidated and Standalone Financial Information (like

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

As per IGAAP In Rs. Cr.

Profit and Loss Statement (INR Crores)

31.03.2017

31.03.2018

31.03.2019 30.09.2019

Audited Audited Audited Unaudited

Interest Income

96.69

189.54

386.20 186.84

Less: Interest Expenses

64.96

119.43

231.22 112.78

Net Interest Income

31.73

70.11

154.98 74.06

Other Income

15.40

25.40

33.11 15.18

Total Income

47.13

95.52

188.09 89.24

Operating Expenses

38.67

70.86

138.89 79.94

Provisions & Write Offs

2.21 8.32 8.23 1.67

Operating Profit/(Loss) 6.25 16.34 40.97 7.63

Depreciation

0.53 0.82 4.04 3.10

Profit Before Tax 5.72 15.52 36.93 4.53

34

Provisions for tax

0.12 5.28

12.63

3.57

Profit After Tax

5.60

10.25

24.31 0.96

Balance Sheet (INR Crores)

31.03.2017 31.03.2018 31.03.2019 30.09.2019

Equity capital 33.17 59.24 62.86 82.59 Reserve & Surplus 107.08 425.75 511.47 792.69 TNW ( A) 140.25 484.99 574.32 875.28 Total Debt 895 1,851.26 2,346.49 2,094.30 Current Liabilities+ Provisions

25.59 53.9 124.67 127.26

Total Outside Liabilities ( B )

920.59 1,905.16 2,471.16 2,221.56

Total Liabilities ( A + B ) 1,060.84 2,390.15 3,045.48 3,096.85

Fixed assets (Net) 1.11 1.49 3.1 7.59 Investments - 8.68 62.92 12.92 Gross Advances 982.25 2,085.81 2,668.67 2,438.35 Less : Loan Loss Reserve 0.39 0.53 0.96 2.36 Net Loan Outstanding 981.85 2,085.28 2,667.71 2,435.99 Cash / Liquid Investments 64.76 238.82 168.53 438.09 Non Current assets 8.54 41.34 119.04 162.85 Other current assets 2.81 9.74 7.86 25.76 Deferred Tax Assets 1.39 3.82 7.33 6.12 Intangible Assets 0.38 0.98 9 7.53 Other Long Term Assets - - - - Total Assets 1,060.84 2,390.15 3,045.48 3,096.85

Particulars

For the

year

ended

March

31,2017

For the

year

ended

March

31,2018

For the

year ended

March

31,2019

For the

period

ended

Sept

30,2019

Amt. in

Crs

Amt. in

Crs

Amt. in

Crs

Amt.

in Crs

1

CASH FLOW FROM

OPERATING

ACTIVITIES

Profit/(Loss) before taxation 5.72 15.52 36.94

4.53

35

Adjustments to reconcile

loss before tax to cash

provided by operating

activities

Depreciation from continuing operations 0.53 0.82 4.04

3.10

Provision for standard assets 1.85 8.18 7.52

-0.25

Provision for Non Performing assets 0.37 0.14 0.43

1.40

Provision for expenses 0.99 3.91 10.13 14.77

Profit on sale of investments -3.54 -2.6 -5.36

-1.83 Loss on sale of fixed assets 0.01 - - -

Excess provision written back -0.05 -0.45 -

-0.41

Interest accrued but not due on borrowings 3.47 9.78 42.13

32.73

Interest accrued but not due on loans and advances 2.27 23.14 71.96

36.27

Operating Profit before

working capital changes 11.61 58.45 167.78

90.30

Movement in working capital :

Decrease / (Increase) in long term loans and advances

-436.05 -957.4 -890.82 234.76

Decrease / (Increase) in short term loans and advances

-25.74 -183.6 229.66 -15.39

(Decrease) / Increase in short term borrowings 84.37 255.34 -31.68

-79.56

(Decrease) / Increase in Long term borrowings 277 606.25 688.09 -

172.64

Decrease / (Increase) in Other Current Assets -0.51 -25.56 -70.6

-38.78

Decrease / (Increase) in Other Non Current Assets - -4.34 -2.37 -

Increase / (Decrease) in Trade Payables 0.72 -0.95 3.87

-3.12

Increase / (Decrease) in Other Long Term Liabilities 3.97 3.09 15.97

10.38

36

Increase / (Decrease) in Long Term Provisions 0.85 -9.22 -15.56

-1.31

Increase / (Decrease) in Short Term Provisions 0.09 -0.12 1.76

0.88

Increase / (Decrease) in Other current liabilities 49.43 101.06 -172.38

-53.43

Cash generated from

operations during the year -34.25 -157.01 -76.26

-

27.90

Taxes paid 0.98 4.46 3.5 1.75

Net Cash Flow from

Operating Activities -33.27 -152.55 -72.76

-

26.15

2

CASH FLOW FROM

INVESTING

ACTIVITIES

Purchase of Fixed assets -1.17 -1.81 -13.66 -6.12

Purchase of current investments -908.24 -1,734.93 -2,149.75 -

847.00

Redemption of current investments 911.78 1,728.85 2,100.86

722.80

Net cash Flow from

Investing Activities 2.37 -7.88 -62.55

-

130.33

3

CASH FLOW FROM

FINANCING

ACTIVITIES

Proceeds from issue of equity share capital - 26.08 3.61

19.74

Share premium - 308.42 61.41 280.26

Net cash flow from

financing activities - 334.49 65.02

300.00

Net increase/ (decrease) in

cash and cash equivalents -30.9 174.06 -70.29

143.53

CASH AND CASH

EQUIVALENTS AS AT

THE BEGINNING OF

THE YEAR

95.66 64.76 238.82

168.53

37

CASH AND CASH

EQUIVALENTS AS AT

THE END OF THE

YEAR

64.76 238.82 168.53

312.06

As per IndAS In Rs. Cr.

Particulars For the year ended March

31, 2018

For the year ended March

31, 2019

For the period ended Sept 30,

2019

I Income

Revenue from operations

Interest income 200.06 405.06 194.21

Fees and commission income

2.91 7.05 1.62

Other operating income 1.18 1.03 10

Total revenue from operations

204.15 413.13 205.82

Other income 3.68 7.18 5.4

Total income 207.83 420.32 211.23

II Expenses

Finance costs 120.63 240.15 120.65

Impairment on financial instruments

4.58 6.8 2.59

Employee benefits expense 29.09 75.16 29.98

Depreciation and amortisation expense

0.82 4.04 4.13

Other expenses 34.72 52.68 18.39

Total expenses 189.83 378.83 175.74

III Profit before exceptional items and tax

18 41.49 35.49

IV Exceptional items - - 28.57

V Profit before tax 18 41.49 6.92

IV Tax expense

Current tax 7.71 16.14 2.36

Deferred tax -1.56 -1.92 1.29

38

Total tax expense 6.14 14.22 3.65

V Net profit after tax 11.86 27.27 3.27

Particulars As at March 31,

2018 As at March 31

2019 As at Sept 30,

2019

ASSETS

I Financial assets

(a) Cash and cash

equivalents 238.82 143.48 252

(b) Bank balances other

than (a) above 4.34 31.76 66.76

(c) Loans 2,211.01 2,940.07 2,741.84

(d) Investments - - 126.27

(e) Other financial assets 6.04 6.72 11.3

2,460.21 3,122.03 3,198.17

II Non-Financial assets

(a) Current tax assets

(net) 1.15 1.53 3.78

(b) Deferred tax assets

(net) 3.52 5.47 4.2

(c) Property, plant and

equipment 1.49 3.1 18.7

(d) Other intangible

assets 0.98 9 7.53

(e) Other non-financial

assets 4.05 3.62 10.93

11.19 22.71 45.14

Total Assets 2,471.40 3,144.74 3,243.31

LIABILITIES AND EQUITY

LIABILITIES

I Financial Liabilities

(a) Trade payables

39

- total outstanding dues of micro and small enterprises

- 0.06 0.03

- total outstanding dues to creditors other than micro and small enterprises

4.6 14.45 14.84

(b) Debt securities 507.67 467.95 430.57

(c) Borrowings (other

than debt securities) 1,335.44 1,869.69 1,688.28

(d) Other financial

liabilities 136.27 207.43 219.71

1,983.98 2,559.58 2,353.43

Non-Financial Liabilities

(a) Current tax liabilities

(net) 0.46 2.27 -

(b) Provisions - 2.29 3.69

(c) Other non-financial

liabilities 1.4 2.82 5.2

1.86 7.38 8.89

III EQUITY

(a) Equity share capital 59.24 62.86 82.59

(b) Other equity 426.31 514.93 798.4

Total equity 485.56 577.78 880.99

Total liabilities and equity

2,471.40 3,144.74 3,243.31

Particulars As at

31.03.2019 As at

31.03.2018

A Cash flow from operating activities

Profit before tax 41.49 18.00

Adjustment for:

Depreciation and amortization expenses 4.04 0.82

Net gain on fair value changes (realized) -5.36 -2.60

Provision for impairment on financial instruments 6.80 4.58

Interest on fixed deposits -1.71 -0.06

Bad-debts written off 0.22 -

40

Actuarial loss on post retirement benefit plans -0.10 -0.12

Gain on sale of fixed asset 0.00 -0.00

Excess provision written back - -0.45

Operating profit before working capital changes 45.38 20.18

Adjustment for:

(Increase) in loans -736.08 -1,235.13

Decrease / (Increase) in Other non-financial assets 0.43 -3.19

Decrease / (Increase) in financial assets 0.20 -4.22

Increase in financial liabilities 75.75 110.52

Increase in trade payables 8.41 2.11

Increase in non financial liabilities 1.41 0.92

Increase / (Decrease) in Provisions 2.29 -1.64

Cash (used in) operations -602.23 -1,110.44

Direct taxes paid (net) -14.70 -7.37

Net cash (used in) operating activities -616.92 -1,117.81

B Cash flow from investing activities

Investments in mutual fund units -2,095.49 -1,726.25

Sale of mutual fund units 2,100.85 1,728.85

Interest received on bank deposits 0.84 -

Purchase of property, plant & equipment and intangible assets -12.16 -1.81

Sale of property, plant & equipment 0.00 0.00

Bank deposit not considered as cash and cash equivalents (net) -27.42 -4.34

Net cash (used in) investment activities -33.38 -3.55

C Cash flow from financing activities

Proceeds from issue of equity share 3.61 26.08

Share premium 61.41 308.42

Proceeds from long-term borrowings 825.00 770.00

Repayment of long-term borrowings -299.58 -69.08

(Repayment of) / proceeds from short-term borrowings (net) -35.47 260.00

Net cash generated from financing activities 554.97 1,295.41

Net (Decrease) / Increase in Cash and cash equivalents -95.34 174.06

Cash and cash equivalents at the beginning of the year 238.82 64.76

Cash and cash equivalents at the end of the year 143.48 238.82

The relevant information is furnished in Annexure V of the Shelf Disclosure Document. Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company: There have been no changes in the accounting policies of the Company during the last three years. As per the provisions of the Companies Act, 2013 and rules made thereunder, the financial statement of the Company is prepared as per IND AS for FY19.

5.12 Abridged version of Latest Audited/ Limited Review Half Yearly Consolidated and Standalone

Financial Information and auditors’ qualifications, if any.: Auditors Qualifications Nil, Abridged version of Latest Audited/ Limited Review Half Yearly Consolidated and Standalone Financial Information provided in point 5.11 above.

41

5.13 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. The Issuer hereby declares that there has been no material event, development or change at the time of issue from the position as on the date of the last audited financial statements of the Issuer, which may affect the Issue or the Investor’s decision to invest/ continue to invest in the debt securities of the Issuer. Details of significant and material orders passed by the Regulators, Court and Tribunals impacting the going concern status of the Company and its future operations: None

5.14 Names of the Debentures Trustees and Consents thereof The Debenture Trustee of the proposed Debentures is Catalyst Trusteeship Limited. Catalyst Trusteeship Limited has given its written consent for its appointment as debenture trustee to the Issue and inclusion of its name in the form and context in which it appears in this Shelf Disclosure Document and in all the subsequent periodical communications sent to the Debenture Holders. The consent letter from Debenture Trustee is provided in Annexure III of this Disclosure Document.

5.15 Rating Rationale(s) adopted (not older than one year on the date of opening of the Issue)/

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

The Rating Agencies has assigned ratings of “CARE A+ Stable” (pronounced as “CARE A Plus Stable”) the Debentures. Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk. The rating letter and rationale from the Rating Agency is provided in Annexure II of this Disclosure Document.

5.16 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

5.17 Names of all the recognized stock exchanges where the debt securities are proposed to be

listed: The Debentures are proposed to be listed on the WDM segment of the BSE. The Issuer shall comply with the requirements of the SEBI Listing Regulations, 2015 for debt securities to the extent applicable to it on a continuous basis.

5.18 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 Issue and the effect of such interest in so far as it is different from the interests of other persons None

42

b) Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against the Promoter of the Issuer during the last three years immediately preceding the year of the circulation of the Offer Document and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action None

c) Remuneration of Directors (during the current year and last three financial years)

Details of Sitting Fees

# Name of the Director Current FY 2019-20

FY 2018-19

FY2017-18 FY2016-17

1 Mr. Mahendra K Chouhan

2,10,000/- 4,40,000/- 1,45,000/- 50,000/-

2 Ashok Malik - - - 30,000/-

3 Suresh Kumar Jain 2,10,000/- 4,10,000/- 60,000/- -

4 Savita Mahajan 4,40,000/- 30,000/- - -

5 Neeraj Swaroop 6,70,000/- - - -

6 Vijayalakshmi Iyer 5,90,000/- - - -

d) Related party transactions entered during the last three financial years immediately preceding the year of the circulation of the Offer Document including with regard to loans made or, guarantees given or securities provided

Refer financial statements

e) Summary of reservations or qualifications or adverse remarks of the auditors in the last

five financial years immediately preceding the year of the circulation of the Offer Document and of their impact on the financial statements and financial position of the Issuer and the corrective steps taken and proposed to be taken by the Issuer for each of the said reservations or qualifications or adverse remark None

f) Details of any inquiry, inspections or investigations initiated or conducted under the

Companies Act 2013 or any previous company law in the last three years immediately preceding the year of circulation of the Offer Document in the case of the Issuer and all of its subsidiaries. Further, 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 Document and if so, section-wise details thereof for the Issuer and all of its subsidiaries None

g) Details of acts of material frauds committed against the Issuer in the last three years if any, and if so, the action taken by the Issuer None

43

5.19 Other details:

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

B. Issue / instrument specific regulations: The Issue of Debentures shall be in conformity with the applicable provisions of the Companies Act including the notified rules thereunder, the SEBI Debt Listing Regulations, the SEBI (Listing Obligations and Shelf Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the applicable RBI guidelines.

C. Application process: The application process for the Issue is as provided in SECTION 8: of this Shelf Disclosure Document.

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

The contracts and documents referred to hereunder are material to the Issue, may be inspected at the Registered Office of the Company between 10.00 am to 4.00 pm on working days.

Sr. No. Nature of Contract

1 Certified true copy of the Memorandum & Articles of Association of the Issuer.

2 Borrowing Committee Resolution dated 15th June 2020 authorizing issue of Debentures offered under terms of this Disclosure Document.

3 Shareholder Resolution dated September 26, 2019 authorizing the issue of non-convertible debentures by the Company.

4 Shareholder Resolution dated March 07, 2018 authorizing the borrowing by the Company and the creation of security.

5 Copies of Annual Reports of the Company for the last three financial years.

6 Credit rating letter from the Rating Agency dated May 26, 2020 from CARE.

7 Letter from Catalyst Trusteeship Limited giving its consent to act as Debenture Trustee dated 12th June 2020.

8 Certified true copy of the certificate of incorporation of the Company.

9 Certified true copy of the tripartite agreement between the Company, the Registrar & Transfer Agent and NSDL/CDSL.

10 Copy of application made to BSE for grant of in-principle approval for listing of Debentures.

5.21 Details of Debt Securities Sought to be Issued

Under the purview of the current document, the Issuer intends to raise an amount upto Rs. 300,00,00,000/- (Rupees Three Hundred Crores only) by issue of Secured Rated Listed Redeemable Non-Convertible Debentures, on a private placement basis.

44

For further details of the Debentures, please refer to the terms and conditions of the Debentures set out in Section 5.24 of this Disclosure Document. 5.22 Issue Size

As per Pricing supplement 5.23 Utilization of the Issue Proceeds

The Issuer undertakes that the proceeds of this Issue shall be used for loan portfolio growth of the company, repayment of existing borrowing and other general corporate purposes and not to facilitate resource requests of its group entities/parent company/associates. The Issue shall not be utilised towards acquisition financing: viz buyback of shares/securities, purchase of shares of other companies and/or promoter contribution towards the equity capital of a company or as a bridge loan. The Company undertakes that proceeds of this Issue shall not be utilized for the following purposes as specified in the RBI Master Circular No. DBOD.BP.BC.No.5/21.04.172/2015-16 dated July 1, 2015 including inter alia: 1) Bills discounted / rediscounted by NBFCs, except for rediscounting of bills discounted by NBFCs

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

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

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

and for purchase of shares from secondary market. 5.23 Interim Use of Proceeds The management of the Company, in accordance with the policies formulated by it from time to time, will have flexibility in deploying the proceeds received from the Issue. Pending utilization of the proceeds out of the Issue for the purposes described above, the Company intends to temporarily invest funds in high quality interest bearing liquid instruments including money market and overnight mutual funds, deposits with banks or temporarily deploy the funds in investment grade interest bearing securities as may be approved by the Board. Such investment would be in accordance with the investment policies approved by the Board or the Investment Committee from time to time. Until the allotment of the Debentures all monies received towards application for the Debentures shall be kept in a separate Bank account in a scheduled Bank and shall not be utilized for any purpose other than: 1. For adjustment against allotment of securities 2. For the repayment of monies where the company is unable to allot securities

45

5.24 Issue Details The following is a summary of the terms of the issue to the extent that they are applicable to each Tranche/Series. Since the terms for each Tranche/Series may be different, the specific terms of each Tranche/Series of Non-Convertible Debentures to be issued under this issue shall be specified in the relevant Term Sheet/Pricing Supplement to be issued in respect of that Tranche/Series.

Issuer Name Avanse Financial Services Limited

Security Name NCD Series 9

Type of Instrument Secured, Rated, Listed, Redeemable Non - Convertible Debentures (“NCD” or “Debentures”)

Nature of Instrument Secured

Seniority

a. Each Debenture issued by the Issuer will constitute direct, secured and senior obligations of the Issuer. The claims of the Debenture Holders shall be superior to the claims of investors/lenders of Tier I and Tier II Capital and shall rank pari passu to all unsubordinated, secured indebtedness of the Issuer.

b. Each of the Debenture Holders shall inter-se rank pari passu in relation to their rights and benefits in relation to the Debentures, without any preference or privilege.

Mode of Issue Private placement

Eligible Investors

a. The following categories of investors shall together constitute “Eligible Investors”:

i. Scheduled commercial banks in India; ii. NBFCs and RNBCs registered with RBI;

iii. Indian companies; iv. Mutual Funds; v. Rural regional banks in India;

vi. Insurance companies registered with IRDA; vii. Financial institutions, including All India Financial

Institutions; viii. Housing finance companies registered with the National

Housing Board; and ix. Other eligible investors as per the concerned guidelines

and regulations b. For the purposes of this Term Sheet, the term Debenture

Holder(s) means person(s) who are holders of the Debentures and whose names have been entered into the Register of Debenture Holder(s) as on the relevant record date.

Listing

The Debentures are proposed to be listed on the WDM segment of BSE Limited. Company will endeavour to list the securities within 20 days from the deemed date of allotment. In case of delay in listing of the debt securities beyond 20 days from the deemed date of allotment, the Issuer will pay penal interest of at least 1 % p.a.

46

over the coupon rate from the expiry of 20 days from the deemed date of allotment till the listing of such debt securities to the investor.

Rating of the Instrument As per Pricing Supplement

Issue Size As per Pricing Supplement

Option to retain oversubscription (Amount)

As per Pricing Supplement

Coupon Rate As per Pricing Supplement

Coupon Payment Frequency


Coupon payment dates As per Pricing Supplement

Coupon Type As per Pricing Supplement

Coupon Reset Process As per Pricing Supplement

Tenor As per Pricing Supplement

Redemption Dates As per Pricing Supplement

Redemption Amount As per Pricing Supplement

Redemption Premium /Discount


Put Option As per Pricing Supplement

Put option Date As per Pricing Supplement

Put Option Price As per Pricing Supplement

Call Option As per Pricing Supplement

Call Option Date As per Pricing Supplement

Call Option Price As per Pricing Supplement

Put Notification Time As per Pricing Supplement

Call Notification Time As per Pricing Supplement

Objects of the Issue To raise long term resources to support its business activities

Details of the utilization of the Proceeds

a. The funds raised through the issue of Debentures are not meant for any specific project as such and therefore the proceeds of the Debentures shall be utilized for the general corporate purposes of the Issuer including repayment of existing debt, and to finance the growth of portfolio of the Issuer as permitted by RBI for bank finance.

b. Pending full utilization of issue proceeds, the Issuer shall be

entitled to invest the issue proceeds in money market instruments, mutual funds and deposits with banks.

Day Count Basis

Actual/Actual. All interest accruing for any Interest Period shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a year of 365 days (or 366 days in case of a leap year), at the applicable Interest Rate and rounded off to the nearest Rupee.

Interest on Application Money

At Coupon Rate from the date of realization of the cheque / receipt of funds in case of RTGS till one day prior to date of allotment. The interest will be paid within one month from the Allotment Date

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Default Interest Rate In case of default, additional interest of 2% p.a. (two per cent per annum) over the coupon rate will be payable by the Issuer for the defaulting period.

Face Value Rs. 10,00,000 (Rupees Ten Lakh only) per Debenture

Minimum Application 10 (Ten) Debenture and in multiples of 1(One) thereafter

Issue Opening Date As per Pricing Supplement

Issue Closing Date As per Pricing Supplement

Pay-in Date As per Pricing Supplement

Deemed Date of Allotment As per Pricing Supplement

Bank Account details in case of application amount remitted by Real Time Gross Settlement (RTGS)

As provided in Section 8.13 below

Issuance mode of the Instrument

Demat only

Trading mode of the Instrument

Demat only

Settlement mode of the Instrument

RTGS/NEFT/Fund Transfer to ICCL

Depository National Securities Depository Limited / Central Depository Services (India) Limited

Registrar to the issue Link Intime India Pvt. Ltd.

Debenture Trustee Catalyst Trusteeship Ltd.

Business Days Means a day (other than a Saturday or a Sunday or a Bank holiday) on which banks are open for general business in Mumbai.

Business Day Convention

If any coupon payment date falls on a day that is not a working day, the payment shall be made on the immediately succeeding working day. If the redemption date/exercise date/ maturity date (also being the last coupon payment date) (each a “Redemption Date”) of the Debentures falls on a day that is not a working day, the redemption proceeds shall be paid on the immediately preceding working day.

Record Date 15 (fifteen) days prior to each Coupon Payment and Redemption 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).


Security Cover As per Pricing Supplement

Execution of Debenture Trust Deed

In the case of failure in the execution of Debenture Trust Deed within 3 months from the closure of the issue, without prejudice to any liability arising on account of violation of the provisions of the Act and Regulations, an interest of Two Percent per annum to the Debenture Holders over and above the applicable Coupon Rate till the execution of Debenture Trust Deed.

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Affirmative Covenants As per Pricing Supplement

Negative Covenants As per Pricing Supplement

Transaction Documents

a. Signed Disclosure Document/Offer Document including the signed summary term sheet;

b. PAS-4 c. Board Resolution authorizing the issuance of NCDs; d. Shareholders’ Resolution under section 180(1)(c) of the

Companies Act, 2013; e. Rating Letter; f. Rating Rationale; g. Debenture Trustee Consent Letter; h. Debenture Trusteeship Agreement; i. Any other document as agreed between the Issuer and the

Debenture Trustee.

Conditions Precedent to Disbursement


Condition Subsequent to Disbursement


Events of Default As per Pricing Supplement

Material Representations & Warranties

The Issuer (and where applicable its affiliates) shall make representations customary for issuance of this nature, including but not limited to: a. Corporate existence, power and authority; b. Legal validity and binding nature of the transaction; c. Corporate authorizations and consents; d. Non-contravention of constitutional documents and binding

nature of the same; e. No outstanding default or material litigation; f. No violation of law or material agreements; g. No occurrence of a material adverse effect; h. No litigation that may have a material adverse effect on

operation of business; i. No insolvency; j. (Completeness and accuracy of financial statements; k. Fund proceeds under this transaction shall only be applied in

accordance with the end use as stated in this term sheet;

Material Adverse Change

This Term Sheet is subject to, in the opinion of the prospective debenture holders/ investors, a. any material adverse change having occurred in any of the

business, condition (financial operations, of the issuer (and its subsidiaries or parent company) since the last available audited annual report,

b. any material adverse change having occurred in the financial markets in which the issuer and/or its principal assets are located or in the market for loans to and debt securities of India.

c. any circumstance, change or condition (including the

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continuation of an existing condition) in the domestic and international commercial bank, loan syndication, financial or capital market, political or economic conditions that, in the opinion of the prospective debenture holders/ investors, would materially affect syndication and conclusion of the Facility;

Buy Back of Debentures

The issuer, at its sole and absolute discretion, shall have right at any time to buy back/purchase some or all of the Non-Convertible debentures issued under this shelf disclosure document prior to its maturity as specified in the relevant Term Sheet/Pricing Supplement subject to applicable laws

Role and Responsibilities of Debenture Trustee

As per Debenture Trust Deed, Debenture Trustee Agreement and Disclosure Documents.

Governing Law and Jurisdiction

Indian Law & Mumbai.

Note: 1. The list of documents which has been executed or will be executed in connection with the issue

and subscription of debt securities shall be annexed.

2. The penal interest rates mentioned above as payable by the Issuer are independent of each other.

SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT A. Name of the Bank declaring the entity as a Wilful Defaulter: Nil

B. The year in which the entity is declared as a Wilful Defaulter: Nil

C. Outstanding amount when the entity is declared as a Wilful Defaulter: Nil

D. Name of the entity declared as a Wilful Defaulter: Nil

E. Steps taken, if any, for the removal from the list of wilful defaulters: Nil F. Other disclosures, as deemed fit by the Issuer in order to enable investors to take informed

decisions: Nil G. Any other disclosure as specified by the Board: Nil

SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS

7.1 Transaction Documents

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

A. Debenture Trustee Agreement, which will confirm the appointment of Catalyst Trusteeship Limited as the Debenture Trustee (“Debenture Trustee Agreement”);

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

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C. Deed of Hypothecation whereby the Issuer will create a pari passu charge by way of

hypothecation over the Secured Property in favour of the Debenture Trustee to secure its obligations in respect of the Debentures (“Deed of Hypothecation”); and

D. Such other documents as agreed between the Issuer and the Debenture Trustee. 7.2 Representations and Warranties of the Issuer As set out in the Term Sheet 7.3 Covenants of the Issuer

As set out in the Term Sheet 7.4 Events of Default

As set out in the Term Sheet 7.5 Consequences of Events of Default

Upon the happening of an Event of Default, the Debenture Trustee shall be entitled to exercise any and all remedies in accordance with the terms contained in the Transaction Documents including but without limited to acceleration of the Debentures, whereby it becomes immediately due and payable, and enforcement the Security.

SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS The Debentures being offered as part of the Issue are subject to the provisions of the Act, the Memorandum and Articles of Association of the Issuer, the terms of this Shelf Disclosure Document, Application Form and other terms and conditions as may be incorporated in the Transaction Documents. 8.1 Mode of Transfer/Transmission of Debentures The Debentures shall be transferable freely; however, it is clarified that no Investor shall be entitled to transfer the Debentures to a person who is not entitled to subscribe to the Debentures. The Debenture(s) shall be transferred and/or transmitted in accordance with the applicable provisions of the Act and other applicable laws. The Debentures held in dematerialized form shall be transferred subject to and in accordance with the rules/procedures as prescribed by NSDL/CDSL and the relevant DPs of the transferor or transferee and any other applicable laws and rules notified in respect thereof. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, amounts due will be paid/redemption will be made to the person, whose name appears in the register of debenture holders maintained by the R&T Agent as on the Record Date, under all circumstances. In cases where the transfer formalities have not been completed by the transferor, claims, if any, by the transferees would need to be settled with the transferor(s) and not with the Issuer. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in dematerialised form. The seller should give delivery instructions containing details of the buyer’s DP account to his DP. 8.2 Debentures held in Dematerialised Form The Debentures shall be held in dematerialised form and no action is required on the part of the Debenture Holder(s) for redemption purposes and the redemption proceeds will be paid by

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cheque/fund transfer/RTGS to those Debenture Holder(s) whose names appear on the list of beneficiaries maintained by the R&T Agent. The names would be as per the R&T Agent’s records on the Record Date fixed for the purpose of redemption. All such Debentures will be simultaneously redeemed through appropriate corporate action. The list of beneficiaries as of the Record Date setting out the relevant beneficiaries’ name and account number, address, bank details and DP’s identification number will be given by the R&T Agent to the Issuer. If permitted, the Issuer may transfer payments required to be made in any relation by EFT/RTGS to the bank account of the Debenture Holder(s) for redemption payments. 8.3 Trustee for the Debenture Holder(s) The Issuer has appointed Catalyst Trusteeship Limited to act as trustee for the Debenture Holder(s). The Issuer and the Debenture Trustee intends to enter into the Debenture Trustee Agreement and the Debenture Trust Deed inter alia, specifying the powers, authorities and obligations of the Debenture Trustee and the Issuer. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of its agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture Trustee may in its absolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s). Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s) shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the repayment of principal and coupon thereon and they will take necessary action, subject to and in accordance with the Debenture Trustee Agreement and the Debenture Trust Deed, at the cost of the Issuer. No Debenture Holder shall be entitled to proceed directly against the Issuer unless the Debenture Trustee, having become so bound to proceed, fails to do so. The Debenture Trustee Agreement and the Debenture Trust Deed shall more specifically set out the rights and remedies of the Debenture Holder(s) and the manner of enforcement thereof. 8.4 Sharing of Information The Issuer may, at its option, but subject to applicable laws, use on its own, as well as exchange, share or part with any financial or other information about the Debenture Holder(s) available with the Issuer, with its subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Issuer nor its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid information. 8.5 Debenture Holder not a Shareholder The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders other than those available to them under the Act. The Debentures shall not confer upon the Debenture Holders the right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the Issuer. 8.6 Modification of Debentures The Debenture Trustee and the Issuer will agree to make any modifications in the Shelf Disclosure Document / Offer Document which in the opinion of the Debenture Trustee is of a formal, minor or technical nature or is to correct a manifest error.

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Any other change or modification to the terms of the Debentures shall require approval by the Majority Debenture Holders in the manner as provided for in the Debenture Trust Deed. For the avoidance of doubt, the following matters require the consent of Majority Debenture Holders, either by providing their express consent in writing or by way of a resolution at a duly convened meeting of the Debenture Holders: A. Creating of any additional security; and B. Amendment to the terms and conditions of the Debentures or the Transaction Documents. 8.7 Right to accept or reject Applications The Board of Directors/Borrowing Committee reserves its full, unqualified and absolute right to accept or reject any application for subscription to the Debentures, in part or in full, without assigning any reason thereof. 8.8 Notices Any notice may be served by the Issuer/ Debenture Trustee upon the Debenture Holders through registered post, recognized overnight courier service, hand delivery or by facsimile transmission addressed to such Debenture Holder at its/his registered address, e-mail or facsimile number. All notice(s) to be given by the Debenture Holder(s) to the Issuer/ Debenture Trustee shall be sent by registered post, recognized overnight courier service, hand delivery, email or by facsimile transmission to the Issuer or to such persons at such address/ facsimile number as may be notified by the Issuer from time to time through suitable communication. All correspondence regarding the Debentures should be marked “Private Placement of Debentures”. Notice(s) shall be deemed to be effective (a) in the case of registered mail, 5 (Five) Business Days after posting via certified or registered mail, return receipt requested; (b) 1 (One) Business Day after delivery by recognized overnight courier service, if sent for next Business day delivery (c) in the case of facsimile at the time when dispatched with a report confirming proper transmission; (d) in the case of personal delivery, at the time of delivery or (e) or in case of e-mail at the time of the sending thereof (provided no delivery failure notification is received by the sender within 24 hours of sending such email). 8.9 Issue Procedure Only Eligible Investors as given hereunder and identified upfront by the Issuer may apply for the Debentures by completing the Application Form in the prescribed format in block letters in English as per the instructions contained therein. The minimum number of Debentures that can be applied for and the multiples thereof shall be set out in the Application Form. No application can be made for a fraction of a Debenture. Application Forms should be duly completed in all respects and applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must be duly completed by the applicant. This is required for the applicant’s own safety and these details will be printed on the refund orders and /or redemptions warrants. The applicant should transfer payments required to be made in any relation by EFT/RTGS, to the bank account of the Issuer as per the details mentioned in the Application Form.

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8.10 Application Procedure & Payment Instructions Eligible investors will be invited to subscribe by way of the Application Form prescribed in the Disclosure Document during the period between the Issue Opening Date and the Issue Closing Date (both dates inclusive). The Issuer reserves the right to change the Issue schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue will be open for subscription during the banking hours on each day during the period covered by the Issue Schedule. The Application Form should be submitted directly. The entire amount of Rs. 10,00,000/- (Rupees Ten Lakhs only) per Debenture is payable along with the making of an application. Applicants can remit the application amount through RTGS on Pay-in Date. The RTGS details of the Issuer are as under:

Beneficiary Name: Avanse Financial Services Limited

Bank Account No. 915020028361470

IFSC CODE: UTIB0000028

Bank Name Axis Bank Limited

Branch Address: Mangal Mahal, Turner Road, Bandra (W.), Mumbai- 400 050

8.11 Fictitious Application All fictitious applications will be rejected. 8.12 Basis of Allotment Notwithstanding anything stated elsewhere, Issuer reserves the right to accept or reject any application, in part or in full, without assigning any reason. Subject to the aforesaid, in case of over subscription, priority will be given to Investors on a first come first serve basis. The investors will be required to remit the funds as well as submit the duly completed Application Form along with other necessary documents to Issuer by the Deemed Date of Allotment.

8.13 Eligible Investors The following categories of Investors, who have been specifically approached and have been identified upfront, are eligible to apply for this private placement of Debentures subject to fulfilling their respective investment norms/rules and compliance with laws applicable to them by submitting all the relevant documents along with the Application Form: A. Mutual Funds B. Non-banking financial companies C. Provident Funds and Pension Funds D. Corporates E. Banks F. Foreign Portfolio Investors (FPIs) G. Foreign Institutional Investors (FIIs) H. Qualified Foreign Investors (QFIs) I. Insurance Companies J. Investment holding companies of high net worth individuals K. Any other person (not being an individual or a group of individuals) eligible to invest in the

Debentures

All potential Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this issue of Debentures.

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Note: Participation by potential Investors in the Issue may be subject to statutory and/or regulatory requirements applicable to them in connection with subscription to Indian securities by such categories of persons or entities. Applicants are advised to ensure that they comply with all regulatory requirements applicable to them, including exchange controls and other requirements. Applicants ought to seek independent legal and regulatory advice in relation to the laws applicable to them. 8.14 Procedure for Applying for Dematerialised Facility

A. The applicant must have at least one beneficiary account with any of the DP’s of NSDL/CDSL

prior to making the application.

B. The applicant must necessarily fill in the details (including the beneficiary account number and DP - ID) appearing in the Application Form under the heading “Details for Issue of Debentures in Electronic/Dematerialised Form”.

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

D. For subscribing to the Debentures, names in the Application Form should be identical to those appearing in the details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details maintained with the DP.

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

F. If incomplete/incorrect details are given under the heading “Details for Issue of Debentures in Electronic/Dematerialised Form” in the Application Form, it will be deemed to be an incomplete application and the same may be held liable for rejection at the sole discretion of the Issuer.

G. For allotment of Debentures, the address, nomination details and other details of the applicant as registered with his/her DP shall be used for all correspondence with the applicant. The applicant is therefore responsible for the correctness of his/her demographic details given in the Application Form vis-a-vis those with his/her DP. In case the information is incorrect or insufficient, the Issuer would not be liable for the losses, if any.

H. The redemption amount or other benefits would be paid to those Debenture Holders whose names appear on the list of beneficial owners maintained by the R&T Agent as on the Record Date. In case of those Debentures for which the beneficial owner is not identified in the records of the R&T Agent as on the Record Date, the Issuer would keep in abeyance the payment of the redemption amount or other benefits, until such time that the beneficial owner is identified by the R&T Agent and conveyed to the Issuer, whereupon the redemption amount and benefits will be paid to the beneficiaries, as identified.

8.15 Depository Arrangements The Issuer shall make necessary arrangement with CDSL and NSDL for issue and holding of Debenture in dematerialised form.

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8.16 List of Beneficiaries The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of each Record Date. This shall be the list, which will be used for payment or repayment of redemption monies. 8.17 Application under Power Of Attorney A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories of the Investor and the tax exemption certificate/document of the Investor, if any, must be lodged along with the submission of the completed Application Form. Further modifications/additions in the power of attorney or authority should be notified to the Issuer or to its agents or to such other person(s) at such other address(es) as may be specified by the Issuer from time to time through a suitable communication. In case of an application made by companies under a power of attorney or resolution or authority, a certified true copy thereof along with memorandum and articles of association and/or bye-laws along with other constitutional documents must be attached to the Application Form at the time of making the application, failing which, the Issuer reserves the full, unqualified and absolute right to accept or reject any application in whole or in part and in either case without assigning any reason thereto. Names and specimen signatures of all the authorized signatories must also be lodged along with the submission of the completed Application Form. 8.18 Procedure for application by Mutual Funds and Multiple Applications In case of applications by mutual funds and venture capital funds, a separate application must be made in respect of each scheme of an Indian mutual fund/venture capital fund registered with the SEBI and such applications will not be treated as multiple application, provided that the application made by the asset management company/trustee/custodian clearly indicated their intention as to the scheme for which the application has been made. The application forms duly filled shall clearly indicate the name of the concerned scheme for which application is being made and must be accompanied by certified true copies of A. SEBI registration certificate B. Resolution authorizing investment and containing operating instructions C. Specimen signature of authorized signatories

8.19 Documents to be provided by Investors Investors need to submit the following documents, as applicable A. Memorandum and Articles of Association or other constitutional documents B. Resolution authorising investment C. Power of Attorney to custodian D. Specimen signatures of the authorised signatories E. SEBI registration certificate (for Mutual Funds) F. Copy of PAN card G. Application Form (including EFT/RTGS details)

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8.20 Applications to be accompanied with Bank Account Details Every application shall be required to be accompanied by the bank account details of the applicant and the magnetic ink character reader code of the bank for the purpose of availing direct credit of redemption amount and all other amounts payable to the Debenture Holder(s) through EFT/RTGS. 8.21 Succession In the event of winding-up of the holder of the Debenture(s), the Issuer will recognize the liquidator or such other legal representative of the Debenture Holder(s) as having title to the Debenture(s). The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of such other legal representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the concerned Debenture Holder on production of sufficient documentary proof and/or an indemnity. 8.22 Mode of Payment All payments must be made through EFT/RTGS as set out in the Application Form. 8.23 Effect of Holidays In case any Coupon Payment Date falls on a day which is not a Business Day the payment to be made on such Coupon Payment Date shall be made on the immediately succeeding Business Day. When the Redemption Date falls on a day which is not a Business Day, all payments to be made on the Redemption Date (including accrued Coupon), shall be made on the immediately preceding Business Day. 8.24 Tax Deduction at Source Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/lower rate of TDS, relevant certificate/document must be lodged by the Debenture Holder(s) at the office of the R&T Agents of the Issuer at least 15 (Fifteen) calendar days before the relevant payment becoming due. Tax exemption certificate / declaration of non-deduction of tax at source on interest on application money, should be submitted along with the Application Form. If any payments under this issuance is subject to any tax deduction other than such amounts as are required as per current regulations existing as on the date of the Debenture Trust Deed, including if the Company shall be required legally to make any payment for tax from the interest/coupon payable under the Issue, (“Tax Deduction”), the Company shall make such Tax Deduction, and shall simultaneously pay to the Debenture Holders such additional amounts as may be necessary in order that the net amounts received by the Debenture Holders after the Tax Deduction shall equal the respective amounts which would have been receivable by the Debenture Holders in the absence of such Tax Deduction. Provided however, if such rate of Tax Deduction reverts to the increased rate existing prior to June 1, 2013, the Company shall not be required to gross up, i.e., pay additional monies on account of any Tax Deduction for any interest/coupon payments to the Debenture Holders, so long as the holder of the Debentures is a FPI/QFI/FII. It is clarified that any increase in the Tax Deduction on interest/coupon

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payments exceeding the rate existing prior to June 1, 2013 will be grossed up only to the extent of the differential rate arising from such increase in Tax Deduction and the rate existing prior to June 1, 2013. 8.25 Deemed Date of Allotment All the benefits under the Debentures will accrue to the Investor from the specified Deemed Date of Allotment. The Deemed Date of Allotment for the Issue will be as defined in the pricing supplement and by which date the Investors would be intimated of allotment 8.26 Record Date The Record Date will be 15 (Fifteen) calendar days prior to any Due Date. 8.27 Refunds For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched within seven days from the Deemed Date of Allotment of the Debentures. In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the application money relating to the Debentures in respect of which allotments have been made, the R&T Agent shall upon receiving instructions in relation to the same from the Issuer repay the moneys to the extent of such excess, if any. 8.28 Interest on Application Money Interest shall be payable on all application monies received at the Coupon Rate specified in the pricing supplement for each tranche , from the date of realization of the application monies by the Issuer until the Deemed Date of Allotment and the same shall be paid to the relevant Investors within 7 (Seven) Business Days from the Deemed Date of Allotment. 8.29 PAN Number Every applicant should mention its Permanent Account Number (“PAN”) allotted under Income Tax Act, 1961, on the Application Form and attach a self-attested copy as evidence. Application forms without PAN will be considered incomplete and are liable to be rejected. 8.30 Payment on Redemption Payment on redemption will be made by way of cheque(s)/redemption warrant(s)/demand draft(s)/credit through RTGS system/funds transfer in the name of the Debenture Holder(s) whose names appear on the list of beneficial owners given by the Depository to the Issuer as on the Record Date. The Debentures shall be taken as discharged on payment of the redemption amount by the Issuer on maturity to the registered Debenture Holder(s) whose name appears in the Register of Debenture Holder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL/CDSL and accordingly the account of the Debenture Holder(s) with NSDL/CDSL will be adjusted. On the Issuer dispatching the amount as specified above in respect of the Debentures, the liability of the Issuer shall stand extinguished. Disclaimer: Please note that only those persons to whom this Shelf Disclosure Document has been specifically addressed are eligible to apply. However, an application, even if complete in all respects,

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is liable to be rejected without assigning any reason for the same. The list of documents provided above is only indicative, and an investor is required to provide all those documents / authorizations / information, which are likely to be required by the Issuer. The Issuer may, but is not bound to revert to any investor for any additional documents / information, and can accept or reject an application as it deems fit. Investment by investors falling in the categories mentioned above are merely indicative and the Issuer does not warrant that they are permitted to invest as per extant laws, regulations, etc. Each of the above categories of investors is required to check and comply with extant rules/regulations/ guidelines, etc. governing or regulating their investments as applicable to them and the Issuer is not, in any way, directly or indirectly, responsible for any statutory or regulatory breaches by any investor, neither is the Issuer required to check or confirm the same.

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ANNEXURE I: TERM SHEET: as per Clause 5.24

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ANNEXURE II: RATING LETTER

RATING RATIONALE CAN BE ACCESSED AT: http://www.careratings.com/upload/CompanyFiles/PR/Avanse%20Financial%20Services%20Limited-09-

26-2019.pdf

http://www.careratings.com/upload/CompanyFiles/PR/Avanse%20Financial%20Services%20Limited-09-26-2019.pdf

http://www.careratings.com/upload/CompanyFiles/PR/Avanse%20Financial%20Services%20Limited-09-26-2019.pdf

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ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE

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ANNEXURE IV: APPLICATION FORM

AVANSE FINANCIAL SERVICES LIMITED CIN - U67120MH1992PLC068060

A public company incorporated under the Companies Act, 1956 Date of Incorporation: 07th Aug 1992

Registered Office: 001 & 002 Fulcrum Building, A Wing, Ground Floor, Next to Hyatt Regency Hotel, Sahar Road, Andheri (East), Mumbai-400099.

Telephone No.: 022-68599999 Fax no.- 022-68599900 Email id: [email protected] Website: www.avanse.com

DEBENTURE SERIES APPLICATION FORM SERIAL NO. To, Avanse Financial Services Ltd

We have read and understood the terms and conditions of the Shelf Disclosure Document/Offer Document, Term Sheet/Pricing Supplement dated _________________ and have considered these in making our decision to apply. We bind ourselves to these terms and conditions and wish to apply for allotment of Debentures. DEBENTURE SERIES APPLIED FOR: Number of Debentures __________ In words _______________________________________ Amount Rs. ____________/-_ in words Rupees _________________________________Crores Only_

DETAILS OF PAYMENT: RTGS No. _____________ Drawn on_____________________________________________ Funds transferred to Avanse Financial Services Limited Dated ____________ Total Amount Enclosed (In Figures) _______________ (In words) ______________________________________

APPLICANT’S NAME IN FULL (CAPITALS) SPECIMEN SIGNATURE

We request you to please place our name(s) on the Register of Holders. APPLICANT’S ADDRESS

ADDRESS

STREET CITY PIN PHONE FAX EMAIL ID

APPLICANT’S PAN/GIR NO. _______________________IT CIRCLE/WARD/DISTRICT ______________


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WE ARE ( ) COMPANY ( ) OTHERS ( ) SPECIFY ________________________

We the undersigned, are agreeable to hold the Debentures of the Company in dematerialised form. Details of my/our Beneficial Owner Account are given below:

DEPOSITORY NSDL ( ) CDSL ( ) DEPOSITORY PARTICIPANT NAME DP-ID BENEFICIARY ACCOUNT NUMBER NAME OF THE APPLICANT(S)

Applicant Bank Account: (Settlement by way of Cheque / Demand Draft / Pay Order / Direct Credit / ECS / NEFT/RTGS/other permitted mechanisms)

(Note: Cheque and Drafts are subject to realisation)

We understand and confirm that the information provided in the Shelf Disclosure Document is provided by the Issuer and the same has not been verified by any legal advisors to the Issuer, and other intermediaries and their agents and advisors associated with this Issue. We confirm that we have for the purpose of investing in these Debentures carried out our own due diligence and made our own decisions with respect to investment in these Debentures and have not relied on any representations made by anyone other than the Issuer, if any. We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account as mentioned above would get credited to the extent of allotted Debentures, ii) the Applicant must ensure that the sequence of names as mentioned in the Application Form matches the sequence of name held with our Depository Participant, iii) if the names of the Applicant in this application are not identical and also not in the same order as the Beneficiary Account details with the above mentioned Depository Participant or if the Debentures cannot be credited to our Beneficiary Account for any reason whatsoever, the Company shall be entitled at its sole discretion to reject the application or issue the Debentures in physical form. We understand that we are assuming on our own account, all risk of loss that may occur or be suffered by us including as to the returns on and/or the sale value of the Debentures. We undertake that upon sale or transfer to subsequent investor or transferee (“Transferee”), we shall convey all the terms and conditions contained herein and in this Shelf Disclosure Document to such Transferee. In the event of any Transferee (including any intermediate or final holder of the Debentures) suing the Issuer (or any person acting on its or their behalf) we shall indemnify the Issuer(and all such persons acting on its or their behalf) and also hold the Issuer and each of such person harmless in respect of any claim by any Transferee. Applicant’s Signature and Stamp

65

ANNEXURE V: LAST AUDITED FINANCIAL STATEMENTS

Available on link below- https://www.avanse.com/investors#tab4

https://www.avanse.com/investors#tab4

66

ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS

As per pricing supplement

Note

No.

As at

March 31,

2017

As at

March 31,

2016 Amt. in Rs Amt. in Rs

I. EQUITY AND LIABILITIES

1. Shareholders' funds

(a) Share Capital 2.01 33,16,75,130 33,16,75,130

(b) Reserves and Surplus 2.02 1,07,08,29,995 1,01,48,35,764

2. Non - Current liabilities

(a) Long term borrowings 2.03 7,42,62,50,000 4,65,62,50,000

(b) Other Long Term liabilities 2.04 6,29,71,074 2,32,29,252

(c) Long term provisions 2.05 4,95,70,171 2,25,69,314

3. Current liabilities

(a) Short term borrowings 2.06 84,37,44,800 -

(b) Trade Payables 2.07

i)Total oustanding dues of Micro Enterprises - -

& Small Enterprises

ii)Total oustanding dues other than Micro Enterprises 1,45,40,637 77,88,102

& Small Enterprises

(c) Other Current liabilities 2.08 81,03,01,025 27,14,02,961

(d) Short term provisions 2.09 12,47,516 3,60,760

10,61,11,30,348 6,32,81,11,283

II. ASSETS

1. Non-Current assets

(a) Fixed Assets (net) 2.10

(i) Tangible assets 1,11,06,115 75,97,543

(ii) Intangible assets 37,80,360 9,89,942

(b) Deferred tax assets (net) 2.11 1,39,32,827 75,06,495

(c) Long-term loans and advances 2.12 9,40,61,84,178 5,08,85,00,512

2. Current assets

(a) Cash and Bank Balances 2.13 64,75,69,240 95,66,00,356

(b) Short Term Loans and Advances 2.14 51,88,47,108 26,23,26,616

(c) Other current assets 2.15 97,10,521 45,89,819

10,61,11,30,348 6,32,81,11,283

Significant Accounting Policies 1

Notes forming part of financial statements 2

As per our report of even date For and on behalf of the Board of Directors

Sd/- Sd/- Sd/- Sd/-

For T R Chadha & Co LLP Kapil Wadhawan Mahendra Chouhan Anoop Pabby Suresh Mahalingam

Chartered Accountants Director Director Director Director

Firm Regn. No. 06711N/N500028

Sd/- Sd/- Sd/-

Kashyap Vaidya Aruna Wadhawan Ashok Malik

Partner Director Director

Membership No. : 37623

Sd/- Sd/- Sd/-

Amit Gainda Rahul Bhapkar Rakesh Dhanuka

Chief Executive Officer Chief Financial Officer Company Secretary

Place : Mumbai Place: Mumbai

Date : 28.04.2017 Date: 28.04.2017

AVANSE FINANCIAL SERVICES LIMITED

BALANCE SHEET AS AT MARCH 31, 2017

TOTAL

TOTAL

Particulars

Avanse Financial Services Ltd

47

Note

No.

For the Year ended

March 31, 2017

For the Year ended

March 31, 2016 Amt. in Rs Amt. in Rs

Revenue

(a) Revenue from Operations 2.16 1,06,30,67,618 54,27,26,607

(b) Other Income 2.17 5,77,95,934 4,00,33,822

I Total Revenue 1,12,08,63,552 58,27,60,429

Expenses

(a) Employee benefit expenses 2.18 16,80,52,919 9,34,61,436

(b) Finance costs 2.19 64,95,65,824 32,37,16,767

(c) Depreciation and Amortization expenses 2.10 53,16,295 37,32,528

(d) Other expenses 2.20 21,86,11,483 12,58,10,404

(e) Provisions for non performing assets 2.41 36,55,846 2,84,663

(f) Contingent provisions against standard assets 2.21 1,84,83,811 99,39,119

II Total Expenses 1,06,36,86,178 55,69,44,917

III Profit Before Tax (I -II) 5,71,77,374 2,58,15,512

Tax Expense:

(a) Current tax 76,09,475 65,22,238

(c) Deferred tax -64,26,332 -75,06,495

IV Total Tax Expense 11,83,143 -9,84,257

V Profit for the year from Continuing Operations (III-IV) 5,59,94,231 2,67,99,769

VI Earnings per equity share (face value of Rs. 10 each)

(a) Basic 2.22 1.69 1.06

(b) Diluted 1.69 1.06




Sd/- Sd/- Sd/- Sd/- Sd/-

For T R Chadha & Co LLP kapil Wadhawan Mahendra Chouhan Anoop Pabby Suresh Mahalingam



Sd/- Sd/-

Kashyap Vaidya Aruna Wadhawan Ashok Malik



Sd/- Sd/- Sd/-




Date : 28.04.2017 Date: 28.04.2017


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2017

Particulars


48

For the year ended

March 31,2017

For the year ended

March 31,2016

Amt. in Rs Amt. in Rs

1 CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 5,59,94,231 2,58,15,512

Adjustments to reconcile loss before tax to cash provided by operating activities

Depreciation from continuing operations 53,16,295 37,32,528

Provision for standard assets 1,84,83,811 99,39,119

Provision for Non Performing assets 36,55,846 2,84,663

Provision for expenses 98,77,915 1,94,52,974

Profit on sale of investments -3,53,67,317 -2,44,21,550

Profit on sale of fixed assets -5,500 -

Loss on sale of fixed assets 62,756 -

Excess provision written back -4,80,672 -90,000

Interest accrued but not due on borrowings 3,47,06,059 3,77,29,281

Interest accrued but not due on loans and advances 2,26,88,642 -6,86,060

Operating Profit before working capital changes 11,49,32,066 7,17,56,467


Decrease / (Increase) in long term loans and advances -4,35,93,18,091 -2,78,90,99,168

Decrease / (Increase) in short term loans and advances -25,74,21,811 -15,20,74,983

(Decrease) / Increase in short term borrowings 84,37,44,800 -24,59,96,750

(Decrease) / Increase in Long term borrowings 2,77,00,00,000 3,16,25,00,000

Decrease / (Increase) in Other Current Assets -51,20,702 -19,72,394

Increase / (Decrease) in Trade Payables 72,33,207 67,73,251

Increase / (Decrease) in Other Long Term Liabilities 3,97,47,514 1,41,03,128

Increase / (Decrease) in Long Term Provisions 85,17,046 11,60,580

Increase / (Decrease) in Short Term Provisions 8,86,756 -2,40,467

Increase / (Decrease) in Other current liabilities 49,43,14,090 9,76,79,625

Cash generated from operations during the year -34,24,85,125 16,45,89,289

Taxes paid 97,59,233 13,57,111

Net Cash Flow from Operating Activities -33,27,25,892 16,59,46,400

2 CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed assets -1,17,01,641 -58,04,489

Asset written off 29,100 20,094

Purchase of current investments -9,08,24,23,014 -6,99,95,21,177

Redemption of current investments 9,11,77,90,331 7,02,39,42,727

Net cash Flow from Investing Activities 2,36,94,776 1,86,37,155

3 CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of equity share capital - 7,96,01,990

Share premium - 31,84,07,960

Net cash flow from financing activities - 39,80,09,950

Net increase/ (decrease) in cash and cash equivalents -30,90,31,116 58,25,93,505

CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 95,66,00,356 37,40,06,851

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 64,75,69,240 95,66,00,356

Cash on Hand 6,948 37,232

Balances with Banks in Current Accounts 64,75,62,292 95,65,63,124


Sd/- Sd/- Sd/- Sd/-

For T R Chadha & Co LLP Kapil Wadhawan Mahendra Chouhan Anoop Pabby Suresh Mahalingam



Sd/- Sd/- Sd/-

Ashok Malik



Sd/- Sd/- Sd/-




Date : 28.04.2017 Date: 28.04.2017

Kashyap Vaidya Aruna Wadhawan


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31,2017

Cash and cash equivalents at the end of the year comprise of

Note: the above Cash Flow Statement has been prepared under the Indirect method set out in AS - 3 issued by the Central Govt. under the

Companies (Accounts) Rules 2014.

Particulars


49

Note

No.

As at

March 31,

2018

As at

March 31,

2017 Amt. in Rs Amt. in Rs

I. EQUITY AND LIABILITIES

1. Shareholders' funds

(a) Share Capital 2.01 59,24,26,610 33,16,75,130

(b) Reserves and Surplus 2.02 4,25,74,73,356 1,07,08,29,995

2. Non - Current liabilities

(a) Long term borrowings 2.03 13,48,87,24,033 7,42,62,50,000

(b) Other Long Term liabilities 2.04 9,38,46,111 6,29,71,074

(c) Long term provisions 2.05 11,61,96,020 4,95,70,171

3. Current liabilities

(a) Short term borrowings 2.06 3,39,71,48,750 84,37,44,800

(b) Trade Payables 2.07

i)To micro and small enterprises

ii)To Others 50,51,319 1,45,40,637

(c) Other Current liabilities 2.08 1,95,06,43,861 80,75,68,407

(d) Short term provisions 2.09 - 12,47,516

23,90,15,10,060 10,60,83,97,730

II. ASSETS

1. Non-Current assets

(a) Fixed Assets 2.10

(i) Tangible assets 1,49,30,702 1,11,06,115

(ii) Intangible assets 97,68,226 37,80,360

(b) Non Current Investments 2.11 8,67,71,426 -

(c) Deferred tax assets (net) 2.12 3,82,28,334 1,39,32,827

(d) Long-term loans and advances 2.13 18,93,15,18,873 9,40,34,51,560

(e) Other non current assets 2.14 4,34,00,000 -

2. Current assets

(a) Cash and Bank Balances 2.15 2,38,81,55,239 64,75,69,240

(b) Short Term Loans and Advances 2.16 2,35,48,85,270 51,88,47,107.68

(c) Other current assets 2.17 3,38,51,989 97,10,521

23,90,15,10,060 10,60,83,97,730

-




For T R Chadha & Co LLP

Chartered Accountants


Kapil Wadhawan Suresh Mahalingam

Director Director

DIN 00028528 DIN 01781730

Pramod Tilwani

Partner Amit Gainda Rahul Bhapkar Rakesh Dhanuka

Membership No. : 076650 Chief Executive Officer Chief Financial Officer Company Secretary


Date : April 24, 2018 Date: April 24, 2018



TOTAL

TOTAL

Particulars

Note

No.

For the Year ended

March 31, 2018

For the Year ended

March 31, 2017


Revenue

(a) Revenue from Operations 2.18 2,08,53,62,716 1,06,30,67,618

(b) Other Income 2.19 6,41,28,348 5,77,95,934

I Total Revenue 2,14,94,91,064 1,12,08,63,552

Expenses

(a) Employee benefit expenses 2.20 29,20,62,623 16,80,52,919

(b) Finance costs 2.21 1,19,43,21,750 64,95,65,824

(c) Depreciation and Amortization expenses 2.10 82,14,499 53,16,295

(d) Other operating expenses 2.22 41,65,13,615 21,86,11,483

(e) Provisions for non performing assets 2.42 13,68,217 36,55,846

(f) Contingent provision against standard assets 2.23 8,17,81,919 1,84,83,811

II Total Expenses 1,99,42,62,623 1,06,36,86,178

III Profit Before Tax (I -II) 15,52,28,441 5,71,77,374

Tax Expense:

(a) Current tax 7,70,72,227 76,09,475

(c) Deferred tax 2,42,95,507- 64,26,332-

IV Total Tax Expense 5,27,76,720 11,83,143

V Profit/(loss) for the year from Continuing Operations (III-IV) 10,24,51,721 5,59,94,231

VI Earnings per equity share (face value of Rs. 10 each)

(a) Basic 2.24 2.46 1.69

(b) Diluted 2.46 1.69








Director Director

DIN 00028528 DIN 01781730

Pramod Tilwani Amit Gainda Rahul Bhapkar Rakesh Dhanuka

Partner Chief Executive Officer Chief Financial Officer Company Secretary






Particulars

For the year ended

March 31,2018

For the year ended

March 31,2017


1 CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 15,52,28,441 5,71,77,374

Adjustments to reconcile loss before tax to cash provided by operating activities

Depreciation from continuing operations 82,14,499 53,16,295

Provision for standard assets 8,17,81,919 1,84,83,811

Provision for Non Performing assets 13,68,217 36,55,846

Provision for expenses 3,91,26,412 98,77,915

Profit on sale of investments -2,59,53,125 -3,53,67,317

Profit on sale of fixed assets - 5,500-

Loss on sale of fixed assets - 62,756

Excess provision written back -44,70,159 -4,80,672

Interest accrued but not due on borrowings 9,77,98,194 3,47,06,059

Interest accrued but not due on loans and advances 23,14,14,986 2,26,88,642

Operating Profit before working capital changes 58,45,09,384 11,61,15,209


Decrease / (Increase) in long term loans and advances -9,57,40,35,531 -4,36,05,01,234

Decrease / (Increase) in short term loans and advances -1,83,60,38,163 -25,74,21,811

(Decrease) / Increase in short term borrowings 2,55,34,03,950 84,37,44,800

(Decrease) / Increase in Long term borrowings 6,06,24,74,033 2,77,00,00,000

Decrease / (Increase) in Other Current Assets -25,55,56,455 -51,20,702

Decrease / (Increase) in Other Non Current Assets -4,34,00,000 -

Increase / (Decrease) in Trade Payables -94,89,318 72,33,207

Increase / (Decrease) in Other Long Term Liabilities 3,08,75,037 3,97,47,514

Increase / (Decrease) in Long Term Provisions -9,22,28,297 85,17,046

Increase / (Decrease) in Short Term Provisions -12,47,516 8,86,756

Increase / (Decrease) in Other current liabilities 1,01,06,21,006 49,43,14,090

Cash generated from operations during the year -1,57,01,11,868 -34,24,85,125

Taxes paid 4,46,00,000 97,59,233

Net Cash Flow from Operating Activities -1,52,55,11,868 -33,27,25,892

2 CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed assets -1,80,63,500 -1,17,01,641

Asset written off 36,548 29,100

Purchase of current investments -17,34,92,71,425 -9,08,24,23,014

Redemption of current investments 17,28,84,53,123 9,11,77,90,331

Net cash Flow from Investing Activities -7,88,45,254 2,36,94,776

3 CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of equity share capital 26,07,51,480 -

Share premium 3,08,41,91,641 -

Net cash flow from financing activities 3,34,49,43,121 -

Net increase/ (decrease) in cash and cash equivalents 1,74,05,85,999 30,90,31,116-

CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 64,75,69,240 95,66,00,356

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 2,38,81,55,239 64,75,69,240

Cash on Hand 1,18,901 6,948

Balances with Banks in Current Accounts 2,38,80,36,338 64,75,62,292






Director Director

DIN 00028528 DIN 01781730

Pramod Tilwani

Partner







CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31,2018

Cash and cash equivalents at the end of the year comprise of

Note: the above Cash Flow Statement has been prepared under the Indirect method set out in AS - 3 issued by the Central Govt. under the

Companies (Accounts) Rules 2014.

Particulars

(Rs. in Lacs)

ASSETS

I Financial assets

(a) Cash and cash equivalents 5 14,347.65 23,881.55 6,475.68

(b) Bank balances other than (a) above 6 3,175.97 434.00 -

(c) Loans 7 2,94,007.00 2,21,100.66 98,046.21

(d) Other financial assets 8 672.14 604.37 176.62

3,12,202.76 2,46,020.58 1,04,698.51


(a) Current tax assets (net) 152.72 115.41 103.14

(b) Deferred tax assets (net) 9 547.20 351.92 191.36

(c) Property, plant and equipment 10 309.66 149.31 111.06

(d) Other intangible assets 10 899.64 97.68 37.80

(e) Other non-financial assets 11 362.01 404.83 86.15

2,271.23 1,119.15 529.51

Total Assets 3,14,473.99 2,47,139.73 1,05,228.02


LIABILITIES


(a) Trade payables

- total outstanding dues of micro and small enterprises 12 5.74 - -

- total outstanding dues to creditors other than micro and small

enterprises

1,444.78 459.51 248.42

(b) Debt securities 13 46,795.42 50,766.91 17,732.87

(c) Borrowings (other than debt securities) 14 1,86,968.62 1,33,544.03 71,432.22

(d) Other financial liabilities 15 20,743.42 13,627.36 1,674.14

2,55,957.98 1,98,397.81 91,087.65


(a) Current tax liabilities (net) 227.37 46.24 -

(b) Provisions 16 228.73 - 164.04

(c) Other non-financial liabilities 17 281.57 140.14 48.15

737.67 186.38 212.19

III EQUITY

(a) Equity share capital 18 6,285.50 5,924.27 3,316.75

(b) Other equity 19 51,492.84 42,631.27 10,611.43

Total equity 57,778.34 48,555.54 13,928.18

Total liabilities and equity 3,14,473.99 2,47,139.73 1,05,228.02

1 to 41

In terms of our report attached

For Deloitte Haskins & Sells LLP For Avanse Financial Services Limited


Registration No. 117366W/W-100018

G. K. Subramaniam Kapil Wadhawan Suresh Mahalingam


Membership No. 109839 DIN - 00028528 DIN - 01781730

Place : Mumbai

Date : April 24, 2019

For T R Chadha & Co LLP Amit Gainda Rahul Bhapkar

Chartered Accountants Chief Executive Officer Chief Financial Officer

Registration No. 06711N/N500028

Pramod Tilwani Rakesh Dhanuka

Partner Company Secretary

Membership No. 076650

Place : Mumbai Place : Mumbai

Date : April 24, 2019 Date : April 24, 2019


The accompanying notes form an integral part of the financial statements


As at March 31, 2018 As at April 1, 2017 Particulars Note

No. As at March 31, 2019

(Rs. in Lacs)

I Income


Interest income 20 40,505.76 20,006.26

Fees and commission income 21 705.06 291.45

Other operating income 22 102.53 117.59

Total revenue from operations 41,313.35 20,415.30

Other income 23 718.47 367.85

Total income 42,031.82 20,783.15

II Expenses

Finance costs 24 24,015.23 12,062.67

Impairment on financial instruments 25 679.74 458.07

Employee benefits expense 26 7,516.32 2,908.77

Depreciation and amortisation expense 10 403.87 82.14

Other expenses 27 5,267.94 3,471.56

Total expenses 37,883.10 18,983.21

III Profit before tax 4,148.72 1,799.94

IV Tax expense

Current tax 28 1,613.58 770.72

Deferred tax 28 -191.83 -156.42

Total tax expense 1,421.75 614.30

V Net profit after tax 2,726.97 1,185.64

VI Other comprehensive income

Items that will not be reclassified to profit or loss

- Actuarial loss on post retirement benefit plans -9.87 -11.85

- Income tax on above 3.45 4.14

Total other comprehensive income -6.42 -7.71

VII Total comprehensive income 2,720.55 1,177.93

VIII Earnings per equity share 30

(Face value of Rs. 10/- each)

Basic (Rs.) 4.40 2.85

Diluted (Rs.) 4.40 2.85

1 to 41





G. K. Subramaniam Suresh Mahalingam


Membership No. 109839 DIN - 01781730

Place : Mumbai


For T R Chadha & Co LLP Rahul Bhapkar

Chartered Accountants Chief Financial Officer





Place : Mumbai



Chief Executive Officer

Place : Mumbai



Kapil Wadhawan

DIN - 00028528

Amit Gainda

Particulars Note No. For the year ended

March 31, 2019

For the year ended

March 31, 2018


(Rs. in Lacs)

Particulars As at

31.03.2019

As at

31.03.2018


Profit before tax 4,148.72 1,799.94

Adjustment for:

Depreciation and amortisation expenses 403.87 82.14

Net gain on fair value changes (realised) -535.89 -259.53

Provision for impairment on financial instruments 679.74 458.07

Interest on fixed deposits -171.44 -5.73

Baddebts written off 22.23 -

Actuarial loss on post retirement benefit plans -9.87 -11.85

Gain on sale of fixed asset 0.19 -0.01

Excess provision written back - -44.70

Operating profit before working capital changes 4,537.55 2,018.33

Adjustment for:

(Increase) in loans -73,608.32 -1,23,512.50

Decrease / (Increase) in Other non-financial assets 42.82 -318.68

Decrease / (Increase) in financial assets 19.76 -422.02

Increase in financial liabilities 7,574.51 11,051.75


Increase in non financial liabilities 141.43 91.99

Increase / (Decrease) in Provisions 228.73 -164.04

Cash (used in) operations -60,222.61 -1,11,044.08

Direct taxes paid (net) -1,469.76 -736.75

Net cash (used in) operating activities -61,692.37 -1,11,780.83


Investments in mutual fund units -2,09,548.99 -1,72,625.00

Sale of mutual fund units 2,10,084.90 1,72,884.53

Interest received on bank deposits 83.90 -

Purchase of property, plant & equipment and intangible assets -1,216.34 -180.64

Sale of property, plant & equipment 0.07 0.38

-2,741.97 -434.00

Net cash (used in) investment activities -3,338.43 -354.73


Proceeds from issue of equity share 361.23 2,607.52

Share premium 6,141.02 30,841.91

Proceeds from long-term borrowings 82,500.00 77,000.00

Repayment of long-term borrowings -29,958.04 -6,908.00

(Repayment of) / proceeds from short-term borrowings (net) -3,547.31 26,000.00

Net cash generated from financing activities 55,496.90 1,29,541.43

Net (Decrease) / Increase in Cash and cash equivalents -9,533.90 17,405.87

Cash and cash equivalents at the beginning of the year 23,881.55 6,475.68

14,347.65 23,881.55The accompanying notes form an integral part of the financial statements 1 to 41





G. K. Subramaniam Kapil Wadhawan Suresh Mahalingam


Membership No. 109839 DIN - 00028528 DIN - 01781730

Place : Mumbai


For T R Chadha & Co LLP Amit Gainda Rahul Bhapkar

Chartered Accountants Chief Executive Officer Chief Financial Officer





Place : Mumbai Place : Mumbai

Date : April 24, 2019 Date : April 24, 2019


STATEMENT OF CASH FLOWS

Cash and cash equivalents at the end of the year (refer note 5)

Bank deposit not considered as cash and cash equivalents (net)

(Rs. in Lacs)

ASSETS

I Financial assets

(a) Cash and cash equivalents 4 64,340.04 14,347.65

(b) Bank balances other than (a) above 5 998.55 3,175.97

(c) Loans 7 2,80,074.61 2,94,007.00

(d) Investments 6 12,500.68 -

(e) Other financial assets 8 1,381.60 672.14

3,59,295.48 3,12,202.76


(a) Current tax assets (net) 352.21 152.72

(b) Deferred tax assets (net) 9 736.89 547.20

(c) Property, plant and equipment 10 772.08 309.66

(d) Other intangible assets 10 930.49 899.64

(e) Intangible assets under development 161.14 -

(f) Right of use assets 10 991.52 -

(g) Other non-financial assets 11 703.36 162.01

4,647.69 2,071.23

Total Assets 3,63,943.17 3,14,273.99


LIABILITIES


(a) Trade payables

- total outstanding dues of micro and small enterprises 12 0.59 5.74

- total outstanding dues to creditors other than micro and small

enterprises

1,123.96 1,244.78

(b) Debt securities 13 74,916.63 49,640.46

(c) Borrowings (other than debt securities) 14 1,71,946.69 1,88,403.09

(d) Other financial liabilities 15 24,870.95 16,463.91

2,72,858.82 2,55,757.98


(a) Current tax liabilities (net) 458.03 227.37

(b) Provisions 16 410.56 228.73

(c) Other non-financial liabilities 17 221.79 281.57

1,090.38 737.67

III EQUITY

(a) Equity share capital 18 8,259.19 6,285.50

(b) Other equity 19 81,734.78 51,492.84

Total equity 89,993.97 57,778.34

Total liabilities and equity 3,63,943.17 3,14,273.99

1 to 44





Neeraj Swaroop Vijayalakshmi Iyer

Director Director

G. K. Subramaniam DIN - 00061170 DIN - 05242960

Partner


Place : Mumbai Amit Gainda Rahul Bhapkar

Date : June 25, 2020 Chief Executive Officer Chief Financial Officer

Rakesh Dhanuka

Company Secretary

Place : Mumbai

Date : June 25, 2020




Particulars Note No. As at March 31,

2020 As at March 31, 2019

(Rs. in Lacs)

I Income


Interest income 20 38,397.89 39,728.12

Fees and commission income 21 1,145.13 1,376.19

Net gain on fair value changes 947.84 535.91

Net gain on derecognition of financial instrument under amortised cost

category 842.69 106.52

Other operating income 22 594.40 102.53

Total revenue from operations 41,927.95 41,849.27

Other income 23 1,450.33 182.56

Total income 43,378.28 42,031.83

II Expenses

Finance costs 24 24,888.41 24,015.23

Impairment on financial instruments 25 2,009.38 679.74

Employee benefits expense 26 5,466.88 7,516.32

Depreciation and amortisation expense 10 949.88 403.87

Other expenses 27 4,040.05 5,267.94

Total expenses 37,354.60 37,883.10

III Profit before exceptional items and tax 6,023.68 4,148.73

IV Exceptional items 28 2,856.99 -

V Profit before tax 3,166.69 4,148.73

VI Tax expense

Current tax 29 1,208.73 1,613.58

Deferred tax 29 -194.48 -191.83

Total tax expense 1,014.25 1,421.75

VII Net profit for the year 2,152.44 2,726.98

VII Other comprehensive income

Items that will not be reclassified to profit or loss

- Actuarial (gain) / loss on post retirement benefit plans 18.95 -9.87

- Income tax on above -4.77 3.45

Total other comprehensive income 14.18 -6.42

IX Total comprehensive income 2,166.62 2,720.56

X Earnings per equity share 31

(Face value of Rs. 10/- each)

Basic (Rs.) 2.83 4.40

Diluted (Rs.) 2.83 4.40

1 to 44






Director Director


Partner




Rakesh Dhanuka

Company Secretary

Place : Mumbai





Particulars Note No. For the year ended

March 31, 2020

For the year ended

March 31, 2019

(Rs. in Lacs)

Particulars For the year ended

March 31, 2020

For the year ended

March 31, 2019


Profit before tax 3,166.69 4,148.73

Adjustment for:

Depreciation and amortisation expenses 949.88 403.87

Net gain on fair value changes (realised) -947.84 -535.90

Provision for impairment on financial instruments 2,009.38 679.74

Interest on fixed deposits -1,152.71 -171.44

Baddebts written off 23.45 22.23

ESOP Expenses 79.00 -

Finance cost in Lease Liability 94.23 -

Actuarial loss on post retirement benefit plans 18.95 -9.87

Gain on sale of fixed asset - 0.19

Excess provision written back -258.05 -

Operating profit before working capital changes 3,982.98 4,537.55

Adjustment for:

Decrease / (Increase) in loans 11,899.57 -73,608.32

(Increase) / Decrease in Other non-financial assets -541.35 42.82

(Increase) / Decrease in financial assets -515.43 19.76

Increase in financial liabilities 6,210.79 7,574.51


(Decrease) / Increase in non financial liabilities -59.79 141.43

Increase in Provisions 181.82 228.73

Cash generated from / (used in) operations 21,290.73 -60,222.61

Direct taxes paid (net) -1,177.56 -1,469.76

Net cash generated from / (used in) operating activities 20,113.17 -61,692.37


Investments in mutual fund units -4,50,700.00 -2,09,548.99

Sale of mutual fund units 4,39,147.16 2,10,084.90

Interest received on bank deposits 958.69 83.90

Purchase of property, plant & equipment and intangible assets -1,337.60 -1,216.34

Sale of property, plant & equipment - 0.07

2,177.42 -2,741.97

Net cash (used in) investment activities -9,754.33 -3,338.43


Proceeds from issue of equity share (including share premium) 30,000.00 6,502.25

Stamp duty expenses on issue of equity shares -30.00 -

Proceeds from long-term borrowings 83,504.51 82,500.00

Repayment of long-term borrowings -49,584.10 -29,958.04

Repayment of short-term borrowings (net) -23,953.41 -3,547.31

Finance cost in Lease Liability -303.46 -

Net cash generated from financing activities 39,633.54 55,496.90

Net Increase / (Decrease) in Cash and cash equivalents 49,992.39 -9,533.90

Cash and cash equivalents at the beginning of the year 14,347.65 23,881.55

64,340.04 14,347.65

The accompanying notes form an integral part of the financial statements 1 to 44






Director Director


Partner




Rakesh Dhanuka

Company Secretary

Place : Mumbai



STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2020

Bank deposit not considered as cash and cash equivalents (net)

Cash and cash equivalents at the end of the year (refer note 4)

I N D E P E N D E N T A U D I T O R S ’ R E P O R T O N A U D I T O F A N N U A L F I N A N C I A L R E S U L T ST o T h e B o a r d o f D i r e c t o r s o f A v a n s e F i n a n c i a l S e r v i c e s L i m i t e dO p i n i o nW e h a v e a u d i t e d t h e F i n a n c i a l R e s u l t s f o r t h e y e a r e n d e d M a r c h 3 1 , 2 0 2 0 i n c l u d e d i n t h ea c c o m p a n y i n g “ S t a t e m e n t o f A u d i t e d F i n a n c i a l R e s u l t s f o r t h e s i x m o n t h s a n d Y e a r E n d e d M a r c h3 1 , 2 0 2 0 ” o f A V A N S E F I N A N C I A L S E R V I C E S L I M I T E D ( “ t h e C o m p a n y ” ) , ( “ t h e S t a t e m e n t ” ) ,b e i n g s u b m i t t e d b y t h e C o m p a n y p u r s u a n t t o t h e r e q u i r e m e n t s o f R e g u l a t i o n 5 2 o f t h e S E B I( L i s t i n g O b l i g a t i o n s a n d D i s c l o s u r e R e q u i r e m e n t s ) R e g u l a t i o n s , 2 0 1 5 , a s a m e n d e d ( “ t h e L i s t i n gR e g u l a t i o n s ” ) .I n o u r o p i n i o n a n d t o t h e b e s t o f o u r i n f o r m a t i o n a n d a c c o r d i n g t o t h e e x p l a n a t i o n s g i v e n t o u s ,t h e F i n a n c i a l R e s u l t s f o r t h e y e a r e n d e d M a r c h 3 1 , 2 0 2 0 :( i ) i s p r e s e n t e d i n a c c o r d a n c e w i t h t h e r e q u i r e m e n t s o f R e g u l a t i o n 5 2 o f t h e S E B I ( L i s t i n gO b l i g a t i o n s a n d D i s c l o s u r e R e q u i r e m e n t s ) R e g u l a t i o n s , 2 0 1 5 , a s a m e n d e d ; a n d( i i ) g i v e s a t r u e a n d f a i r v i e w i n c o n f o r m i t y w i t h t h e r e c o g n i t i o n a n d m e a s u r e m e n t p r i n c i p l e s l a i dd o w n i n t h e I n d i a n A c c o u n t i n g S t a n d a r d s a n d o t h e r a c c o u n t i n g p r i n c i p l e s g e n e r a l l y a c c e p t e d i nI n d i a o f t h e n e t p r o f i t a n d t o t a l c o m p r e h e n s i v e i n c o m e a n d o t h e r f i n a n c i a l i n f o r m a t i o n o f t h eC o m p a n y f o r t h e y e a r t h e n e n d e d .B a s i s f o r O p i n i o nW e c o n d u c t e d o u r a u d i t i n a c c o r d a n c e w i t h t h e S t a n d a r d s o n A u d i t i n g ( “ S A s ” ) s p e c i f i e d u n d e rS e c t i o n 1 4 3 ( 1 0 ) o f t h e C o m p a n i e s A c t , 2 0 1 3 ( “ t h e A c t ” ) . O u r r e s p o n s i b i l i t i e s u n d e r t h o s eS t a n d a r d s a r e f u r t h e r d e s c r i b e d i n A u d i t o r ’ s R e s p o n s i b i l i t i e s f o r a u d i t o f t h e A n n u a l F i n a n c i a lR e s u l t s s e c t i o n b e l o w . W e a r e i n d e p e n d e n t o f t h e C o m p a n y i n a c c o r d a n c e w i t h t h e C o d e o f E t h i c si s s u e d b y t h e I n s t i t u t e o f C h a r t e r e d A c c o u n t a n t s o f I n d i a ( “ t h e I C A I ” ) t o g e t h e r w i t h t h e e t h i c a lr e q u i r e m e n t s t h a t a r e r e l e v a n t t o o u r a u d i t o f t h e F i n a n c i a l R e s u l t s f o r t h e y e a r e n d e d M a r c h 3 1 ,2 0 2 0 u n d e r t h e p r o v i s i o n s o f t h e A c t a n d t h e R u l e s t h e r e u n d e r , a n d w e h a v e f u l f i l l e d o u r o t h e re t h i c a l r e s p o n s i b i l i t i e s i n a c c o r d a n c e w i t h t h e s e r e q u i r e m e n t s a n d t h e I C A I ’ s C o d e o f E t h i c s . W eb e l i e v e t h a t t h e a u d i t e v i d e n c e o b t a i n e d b y u s i s s u f f i c i e n t a n d a p p r o p r i a t e t o p r o v i d e a b a s i s f o ro u r a u d i t o p i n i o n .E m p h a s i s o f M a t t e rW e d r a w a t t e n t i o n t o N o t e 8 t o t h e f i n a n c i a l r e s u l t s , i n w h i c h t h e c o m p a n y d e s c r i b e s t h eu n c e r t a i n t i e s a r i s i n g f r o m C O V I D 1 9 p a n d e m i c .O u r o p i n i o n i s n o t m o d i f i e d i n r e s p e c t o f t h i s m a t t e r .M a n a g e m e n t ’ s R e s p o n s i b i l i t i e s f o r t h e S t a t e m e n tT h i s S t a t e m e n t , w h i c h i n c l u d e s t h e F i n a n c i a l R e s u l t s i s t h e r e s p o n s i b i l i t y o f t h e C o m p a n y ’ s B o a r d o fD i r e c t o r s a n d h a s b e e n a p p r o v e d b y t h e m f o r t h e i s s u a n c e . T h e S t a t e m e n t h a s b e e n c o m p i l e d f r o mt h e r e l a t e d a u d i t e d f i n a n c i a l s t a t e m e n t s a n d i n t e r i m f i n a n c i a l i n f o r m a t i o n f o r t h e h a l f y e a r e n d e dM a r c h 3 1 , 2 0 2 0 . T h i s r e s p o n s i b i l i t y i n c l u d e s t h e p r e p a r a t i o n a n d p r e s e n t a t i o n o f t h e F i n a n c i a lR e s u l t s f o r t h e y e a r e n d e d M a r c h 3 1 , 2 0 2 0 t h a t g i v e a t r u e a n d f a i r v i e w o f t h e n e t p r o f i t a n d o t h e rc o m p r e h e n s i v e i n c o m e a n d o t h e r f i n a n c i a l i n f o r m a t i o n i n a c c o r d a n c e w i t h t h e r e c o g n i t i o n a n dm e a s u r e m e n t p r i n c i p l e s l a i d d o w n i n t h e I n d i a n A c c o u n t i n g S t a n d a r d s ( “ I n d A S ” ) p r e s c r i b e d u n d e rS e c t i o n 1 3 3 o f t h e A c t r e a d w i t h r e l e v a n t r u l e s i s s u e d t h e r e u n d e r a n d o t h e r a c c o u n t i n g p r i n c i p l e sg e n e r a l l y a c c e p t e d i n I n d i a a n d i n c o m p l i a n c e w i t h R e g u l a t i o n 5 2 o f t h e L i s t i n g R e g u l a t i o n s . T h i sr e s p o n s i b i l i t y a l s o i n c l u d e s m a i n t e n a n c e o f a d e q u a t e a c c o u n t i n g r e c o r d s i n a c c o r d a n c e w i t h t h ep r o v i s i o n s o f t h e A c t f o r s a f e g u a r d i n g t h e a s s e t s o f t h e C o m p a n y a n d f o r p r e v e n t i n g a n d d e t e c t i n gf r a u d s a n d o t h e r i r r e g u l a r i t i e s ; s e l e c t i o n a n d a p p l i c a t i o n o f a p p r o p r i a t e a c c o u n t i n g p o l i c i e s ; m a k i n gj u d g m e n t s a n d e s t i m a t e s t h a t a r e r e a s o n a b l e a n d p r u d e n t ; a n d t h e d e s i g n , i m p l e m e n t a t i o n a n dm a i n t e n a n c e o f a d e q u a t e i n t e r n a l f i n a n c i a l c o n t r o l s t h a t w e r e o p e r a t i n g e f f e c t i v e l y f o r e n s u r i n g t h ea c c u r a c y a n d c o m p l e t e n e s s o f t h e a c c o u n t i n g r e c o r d s , r e l e v a n t t o t h e p r e p a r a t i o n a n d p r e s e n t a t i o n

o f t h e F i n a n c i a l R e s u l t s t h a t g i v e a t r u e a n d f a i r v i e w a n d i s f r e e f r o m m a t e r i a l m i s s t a t e m e n t ,w h e t h e r d u e t o f r a u d o r e r r o r .I n p r e p a r i n g t h e F i n a n c i a l R e s u l t s , t h e B o a r d o f D i r e c t o r s a r e r e s p o n s i b l e f o r a s s e s s i n g t h eC o m p a n y ’ s a b i l i t y , t o c o n t i n u e a s a g o i n g c o n c e r n , d i s c l o s i n g , a s a p p l i c a b l e , m a t t e r s r e l a t e d t og o i n g c o n c e r n a n d u s i n g t h e g o i n g c o n c e r n b a s i s o f a c c o u n t i n g u n l e s s t h e B o a r d o f D i r e c t o r s e i t h e ri n t e n d s t o l i q u i d a t e t h e C o m p a n y o r t o c e a s e o p e r a t i o n s , o r h a s n o r e a l i s t i c a l t e r n a t i v e b u t t o d os o .T h e B o a r d o f D i r e c t o r s a r e a l s o r e s p o n s i b l e f o r o v e r s e e i n g t h e f i n a n c i a l r e p o r t i n g p r o c e s s o f t h eC o m p a n y .A u d i t o r ’ s R e s p o n s i b i l i t i e s f o r a u d i t o f A n n u a l F i n a n c i a l R e s u l t sO u r o b j e c t i v e s a r e t o o b t a i n r e a s o n a b l e a s s u r a n c e a b o u t w h e t h e r t h e F i n a n c i a l R e s u l t s f o r t h e y e a re n d e d M a r c h 3 1 , 2 0 2 0 a s a w h o l e i s f r e e f r o m m a t e r i a l m i s s t a t e m e n t , w h e t h e r d u e t o f r a u d o re r r o r , a n d t o i s s u e a n a u d i t o r ’ s r e p o r t t h a t i n c l u d e s o u r o p i n i o n . R e a s o n a b l e a s s u r a n c e i s a h i g hl e v e l o f a s s u r a n c e , b u t i s n o t a g u a r a n t e e t h a t a n a u d i t c o n d u c t e d i n a c c o r d a n c e w i t h S A s w i l la l w a y s d e t e c t a m a t e r i a l m i s s t a t e m e n t w h e n i t e x i s t s . M i s s t a t e m e n t s c a n a r i s e f r o m f r a u d o r e r r o ra n d a r e c o n s i d e r e d m a t e r i a l i f , i n d i v i d u a l l y o r i n t h e a g g r e g a t e , t h e y c o u l d r e a s o n a b l y b e e x p e c t e dt o i n f l u e n c e t h e e c o n o m i c d e c i s i o n s o f u s e r s t a k e n o n t h e b a s i s o f t h i s F i n a n c i a l R e s u l t s .A s p a r t o f a n a u d i t i n a c c o r d a n c e w i t h S A s , w e e x e r c i s e p r o f e s s i o n a l j u d g m e n t a n d m a i n t a i np r o f e s s i o n a l s k e p t i c i s m t h r o u g h o u t t h e a u d i t . W e a l s o :• I d e n t i f y a n d a s s e s s t h e r i s k s o f m a t e r i a l m i s s t a t e m e n t o f t h e A n n u a l F i n a n c i a l R e s u l t s , w h e t h e rd u e t o f r a u d o r e r r o r , d e s i g n a n d p e r f o r m a u d i t p r o c e d u r e s r e s p o n s i v e t o t h o s e r i s k s , a n d o b t a i na u d i t e v i d e n c e t h a t i s s u f f i c i e n t a n d a p p r o p r i a t e t o p r o v i d e a b a s i s f o r o u r o p i n i o n . T h e r i s k o fn o t d e t e c t i n g a m a t e r i a l m i s s t a t e m e n t r e s u l t i n g f r o m f r a u d i s h i g h e r t h a n f o r o n e r e s u l t i n g f r o me r r o r , a s f r a u d m a y i n v o l v e c o l l u s i o n , f o r g e r y , i n t e n t i o n a l o m i s s i o n s , m i s r e p r e s e n t a t i o n s , o r t h eo v e r r i d e o f i n t e r n a l c o n t r o l .• O b t a i n a n u n d e r s t a n d i n g o f i n t e r n a l c o n t r o l r e l e v a n t t o t h e a u d i t i n o r d e r t o d e s i g n a u d i tp r o c e d u r e s t h a t a r e a p p r o p r i a t e i n t h e c i r c u m s t a n c e s , b u t n o t f o r t h e p u r p o s e o f e x p r e s s i n g a no p i n i o n o n t h e e f f e c t i v e n e s s o f t h e C o m p a n y ’ s i n t e r n a l c o n t r o l .• E v a l u a t e t h e a p p r o p r i a t e n e s s o f a c c o u n t i n g p o l i c i e s u s e d a n d t h e r e a s o n a b l e n e s s o f a c c o u n t i n ge s t i m a t e s m a d e b y t h e B o a r d o f D i r e c t o r s .• E v a l u a t e t h e a p p r o p r i a t e n e s s a n d r e a s o n a b l e n e s s o f d i s c l o s u r e s m a d e b y t h e B o a r d o f D i r e c t o r si n t e r m s o f t h e r e q u i r e m e n t s s p e c i f i e d u n d e r R e g u l a t i o n 5 2 o f t h e L i s t i n g R e g u l a t i o n s .• C o n c l u d e o n t h e a p p r o p r i a t e n e s s o f t h e B o a r d o f D i r e c t o r s ’ u s e o f t h e g o i n g c o n c e r n b a s i s o fa c c o u n t i n g a n d , b a s e d o n t h e a u d i t e v i d e n c e o b t a i n e d , w h e t h e r a m a t e r i a l u n c e r t a i n t y e x i s t sr e l a t e d t o e v e n t s o r c o n d i t i o n s t h a t m a y c a s t s i g n i f i c a n t d o u b t o n t h e a b i l i t y o f t h e C o m p a n y t oc o n t i n u e a s a g o i n g c o n c e r n . I f w e c o n c l u d e t h a t a m a t e r i a l u n c e r t a i n t y e x i s t s , w e a r e r e q u i r e dt o d r a w a t t e n t i o n i n o u r a u d i t o r ’ s r e p o r t t o t h e r e l a t e d d i s c l o s u r e s i n t h e S t a t e m e n t o r , i f s u c hd i s c l o s u r e s a r e i n a d e q u a t e , t o m o d i f y o u r o p i n i o n . O u r c o n c l u s i o n s a r e b a s e d o n t h e a u d i te v i d e n c e o b t a i n e d u p t o t h e d a t e o f o u r a u d i t o r ’ s r e p o r t . H o w e v e r , f u t u r e e v e n t s o r c o n d i t i o n sm a y c a u s e t h e C o m p a n y t o c e a s e t o c o n t i n u e a s a g o i n g c o n c e r n .• E v a l u a t e t h e o v e r a l l p r e s e n t a t i o n , s t r u c t u r e a n d c o n t e n t o f t h e A n n u a l F i n a n c i a l R e s u l t s ,i n c l u d i n g t h e d i s c l o s u r e s , a n d w h e t h e r t h e A n n u a l F i n a n c i a l R e s u l t s r e p r e s e n t t h e u n d e r l y i n gt r a n s a c t i o n s a n d e v e n t s i n a m a n n e r t h a t a c h i e v e s f a i r p r e s e n t a t i o n .• O b t a i n s u f f i c i e n t a p p r o p r i a t e a u d i t e v i d e n c e r e g a r d i n g t h e A n n u a l F i n a n c i a l R e s u l t s o f t h eC o m p a n y t o e x p r e s s a n o p i n i o n o n t h e A n n u a l F i n a n c i a l R e s u l t s .M a t e r i a l i t y i s t h e m a g n i t u d e o f m i s s t a t e m e n t s i n t h e A n n u a l F i n a n c i a l R e s u l t s t h a t , i n d i v i d u a l l y o r i na g g r e g a t e , m a k e s i t p r o b a b l e t h a t t h e e c o n o m i c d e c i s i o n s o f a r e a s o n a b l y k n o w l e d g e a b l e u s e r o ft h e A n n u a l F i n a n c i a l R e s u l t s m a y b e i n f l u e n c e d . W e c o n s i d e r q u a n t i t a t i v e m a t e r i a l i t y a n dq u a l i t a t i v e f a c t o r s i n ( i ) p l a n n i n g t h e s c o p e o f o u r a u d i t w o r k a n d i n e v a l u a t i n g t h e r e s u l t s o f o u rw o r k ; a n d ( i i ) t o e v a l u a t e t h e e f f e c t o f a n y i d e n t i f i e d m i s s t a t e m e n t s i n t h e A n n u a l F i n a n c i a l R e s u l t s .

W e c o m m u n i c a t e w i t h t h o s e c h a r g e d w i t h g o v e r n a n c e r e g a r d i n g , a m o n g o t h e r m a t t e r s , t h ep l a n n e d s c o p e a n d t i m i n g o f t h e a u d i t a n d s i g n i f i c a n t a u d i t f i n d i n g s i n c l u d i n g a n y s i g n i f i c a n td e f i c i e n c i e s i n i n t e r n a l c o n t r o l t h a t w e i d e n t i f y d u r i n g o u r a u d i t .W e a l s o p r o v i d e t h o s e c h a r g e d w i t h g o v e r n a n c e w i t h a s t a t e m e n t t h a t w e h a v e c o m p l i e d w i t hr e l e v a n t e t h i c a l r e q u i r e m e n t s r e g a r d i n g i n d e p e n d e n c e , a n d t o c o m m u n i c a t e w i t h t h e m a l lr e l a t i o n s h i p s a n d o t h e r m a t t e r s t h a t m a y r e a s o n a b l y b e t h o u g h t t o b e a r o n o u r i n d e p e n d e n c e , a n dw h e r e a p p l i c a b l e , r e l a t e d s a f e g u a r d s .O t h e r m a t t e rA s s t a t e d i n N o t e 3 o f t h e S t a t e m e n t , t h e f i g u r e s f o r t h e h a l f e n d e d M a r c h 3 1 , 2 0 2 0 a r e t h eb a l a n c i n g f i g u r e b e t w e e n a u d i t e d f i g u r e s i n r e s p e c t o f t h e f u l l f i n a n c i a l y e a r a n d t h e p u b l i s h e d y e a rt o d a t e f i g u r e s u p t o t h e h a l f y e a r o f t h e c u r r e n t f i n a n c i a l y e a r w h i c h w e r e s u b j e c t t o l i m i t e d r e v i e wb y u s . O u r r e p o r t o n t h e S t a t e m e n t i s n o t m o d i f i e d i n r e s p e c t o f t h i s m a t t e r .F o r D E L O I T T E H A S K I N S & S E L L S L L PC h a r t e r e d A c c o u n t a n t s( F i r m ’ s R e g i s t r a t i o n N o . 1 1 7 3 6 6 W / W I 1 0 0 0 1 8 )G . K . S u b r a m a n i a mP a r t n e r( M e m b e r s h i p N o . 1 0 9 8 3 9 )U D I N : 2 0 1 0 9 8 3 9 A A A A J K 9 9 2 5P l a c e : M u m b a iD a t e : J u n e 2 5 , 2 0 2 0

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