efl - debt disclosure document - august 2016 - final ... · contact person: mr. b dheeraj kumar...

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333333333333333333333333333333333333333333To: THIS DISCLOSURE DOCUMENT IS NEITHER A PROSPECTUS NOR A STATEMENT IN LIEU OF PROSPECTUS. THIS DISCLOSURE DOCUMENT HAS BEEN PREPARED IN CONFORMITY WITH SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2008/13/127878 DATED JUNE 06, 2008, AS AMENDED FROM TIME TO TIME, THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 ISSUED VIDE CIRCULAR NO. SEBI/LAD-NRO/GN/2015-16/013 DATED SEPTEMBER 02, 2015, AS AMENDED FORM TIME TO TIME, SECTION 42 OF COMPANIES ACT, 2013 AND COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014.

EQUITAS FINANCE LIMITED

(formerly known as Equitas Finance Private Ltd) (Wholly Owned Subsidiary of Equitas Holdings Limited)

(A Company incorporated under the Companies Act, 1956 and Registered as Non-Banking Finance Company-Asset Finance Company with Reserve Bank of India)

Corporate Identification Number: U65191TN1993PLC025280 Registered Office & Corporate Office: 4

th Floor, Phase II, Spencer Plaza, No.769, Mount Road,

Anna Salai, Chennai - 600 002 Tel.: +91 44 4299 5000 Fax: +91 44 4299 5050

Website: www.equitasvf.in E-Mail: [email protected]

ISSUE OF UPTO 500 (FIVE HUNRED) SENIOR, UNSECURED, REDEEMABLE, TAXABLE, RATED, LISTED, NON-CONVERTIBLE DEBENTURES, EACH AT FACE VALUE OF Rs.10,00,000/- (RUPEES TEN LAKHS ONLY), FOR CASH, AGGREGATING UPTO Rs.50,00,00,000 (RUPEES TFIFTY CRORES ONLY) BEING ISSUED IN A SINGLE SERIES (“DBENTURES”/ “NCD”) ON PRIVATE PLACEMENT BASIS ("THE ISSUE").

General Risk: For taking an investment decision, the investors must rely on their own examination of the Issuer and the Offer/ Issue including the risks involved. This Offer/ Issue is being made on a private placement basis. The Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. Credit Rating: The Debentures proposed to be issued by the Issuer have been rated by Credit Analysis and Research Limited (“Rating Agency”). The Rating Agency has assigned a rating of ‘CARE A+’ [pronounced Single A Plus]’ in respect of the Debentures vide its letter dated August 10, 2016. The rating is not recommendation to buy, sell or hold securities and investors should take their own decision. The Rating Agency has the right to suspend, withdraw the rating at any time on the basis of new information etc. and should be evaluated independently of any other rating. Please refer to Annexure 3 of this Disclosure Document for the letter dated August 10, 2016 issued by the Rating Agency assigning the abovementioned credit rating and the rating rationale adopted by the Rating Agency for the aforesaid rating. Issuer’s Absolute Responsibility: The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Disclosure Document contains all information as required under Schedule I of SEBI (Issue and Listing of Debt Securities) Regulations, 2008, issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended from time to time, Section 42 of Companies Act, 2013 and Companies (Prospectus and Allotment of Securities) Rules, 2014 and that the information contained in this Disclosure Document is true and fair in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Disclosure Document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Listing: The Debentures are proposed to be listed on BSE Limited (“BSE”). BSE shall be the designated stock exchange. This disclosure document is dated August 23, 2016. Note: This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus. This is only an information brochure intended for private use and should not be construed to be a prospectus and/or an invitation to the public for subscription to debentures under any law for time being in force.

SOLE ARRANGER

Derivium Tradition Securities (India) Private Limited Eucharistic Congress III, 10

th Floor, 5, Convent Road,

Colaba, Mumbai - 400 039 Email: [email protected]

REGISTRAR & TRANSFER AGENT

Karvy Computershare Pvt Ltd 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Contact Person: Mr. B Dheeraj Kumar Email: [email protected]

DEBENTURE TRUSTE

Catalyst Trusteeship Ltd Office No. 83 – 87, 8th floor Mittal Tower’, ‘B’ Wing, Nariman Point, Mumbai – 400 021 Contact Person: Ms. Deesha Trivedi Email:[email protected]

DISCLOSURE DOCUMENT

Disclosure Document - Private & Confidential Page | 2

(This Disclosure Document is neither a prospectus nor a statement in lieu of prospectus)

TABLE OF CONTENTS

SECTION I: DISCLAIMER CLAUSE ............................................................................................. 3

SECTION II: MANAGEMENT’S PERCEPTION OF RISK FACTORS ......................................... 7

SECTION III: TABLE INDICATING REFERENCES OF DISCLOSURE REQUIREMENTS UNDER FORM PAS 4 (PURSUANT TO SECTION 42 OF COMPANIES ACT, 2013 AND RULE 14 (1) OF COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014) ....................................................................................................................... 12

SECTION IV: DEFINITIONS ........................................................................................................ 14

SECTION V: REGULATORY DISCLOSURES ........................................................................... 17

1. LIST OF DOCUMENTS TO BE FILED WITH STOCK EXCHANGE ................................. 17

2. LIST OF DISCLOSURES TO BE SUBMITTED TO THE TRUSTEE ................................. 17

3. ISSUER INFORMATION ...................................................................................................... 17

4. TERMS PERTAINING TO THE ISSUE ............................................................................... 42

5. APPLICATION PROCESS .................................................................................................. 50

SECTION VI: DISCLOSURES PERTAINING TO WILFUL DEFAULTER ................................ 53

SECTION VII: DECLARATION .................................................................................................... 55

ANNEXURE 1 - APPLICATION FORM ....................................................................................... 56

ANNEXURE 2 - ILLUSTRATION OF DEBENTURE CASHFLOWS.......................................... 59

ANNEXURE 3 - RATING RATIONALE AND RATING LETTER ............................................... 59

ANNEXURE 4 - DEBENTURE TRUSTEE CONSENT LETTER ................................................ 60

ANNEXURE 5 - BOARD RESOLUTION AND SHAREHOLDERS’ RESOULTIONS ............... 61



SECTION I: DISCLAIMER CLAUSE GENERAL DISCLAIMER This document is neither a “Prospectus” nor a “Statement in Lieu of Prospectus” but a “Disclosure Document” prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 6, 2008 as amended from time to time, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued vide circular no. SEBI/LAD-NRO/GN/2015-16/013 dated September 02, 2015, as amended form time to time, Section 42 of Companies Act, 2013 and Companies (Prospectus and Allotment of Securities) Rules, 2014). This Disclosure Document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Debentures to be issued by Equitas Finance Limited (“Issuer”/ “Company”). This Disclosure Document is for the exclusive use to whom it is delivered and it should not be circulated or distributed to third party/(ies). The Issuer certifies that the disclosures made in this Disclosure Document are generally adequate and are in conformity with the SEBI Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with this Issue and no prospectus in relation to the Issuer or the Debentures relating to this Offer has been delivered for registration nor is such a document required to be registered under the applicable laws. This Disclosure Document is issued by the Company and has been prepared by the Company to provide general information on the Company to potential investors to whom it is addressed and who are eligible and willing to subscribe to the Debentures and does not purport to contain all the information a potential investor may require. Where this Disclosure Document summarizes the provisions of any other document, that summary should not be solely relied upon and the relevant document should be referred to for the full effect of the provisions. Neither this Disclosure Document, nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation. Any recipient of this Disclosure Document should not consider such receipt a recommendation to purchase the Debentures. Each potential investor contemplating the purchase of any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential investors should consult their own legal, regulatory, tax, financial, accounting, and/or other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such potential investor's particular circumstances. This Disclosure Document shall not be considered as a recommendation to purchase the Debentures and recipients are urged to determine, investigate and evaluate for themselves, the authenticity, origin, validity, accuracy, completeness, adequacy or otherwise the relevance of information contained in this Disclosure Document. The recipients are required to make their own independent valuation and judgment of the Company and the Debentures. It is the responsibility of potential investors to ensure that if they sell/ transfer these Debentures, they shall do so in strict accordance with this Disclosure Document and other applicable laws, so that the sale does not constitute an offer to the public, within the meaning of the Act. The potential investors should also consult their own tax advisors on the tax implications relating to acquisition, ownership, sale or redemption of the Debentures and in respect of income arising thereon. Investors are also required to make their own assessment regarding their eligibility for making investment(s) in the Debentures. The Company or any of its directors, employees, advisors, affiliates, subsidiaries or representatives do not accept any responsibility and/ or liability for any loss or damage however arising and of whatever nature and extent in connection with the said information.



RBI DISCLAIMER The Company is having a valid certificate of Registration dated 29th October 2015 issued by the Reserve Bank of India under Section 45 IA of the Reserve Bank of India Act 1934. However, the Reserve Bank of India (“RBI”) does not accept any responsibility or guarantee about the present position as to the financial soundness of the Issuer or for the correctness of any of the statements or representations made or opinions expressed by the Issuer and for discharge of liability by the Issuer. DISCLAIMER CLAUSE OF THE DESIGNATED STOCK EXCHANGE(S) As required, a copy of this Disclosure Document has been filed with the BSE in terms of the SEBI Regulations. It is to be distinctly understood that submission of this Disclosure Document to the BSE should not in any way be deemed or construed to mean that this Disclosure Document has been reviewed, cleared or approved by the BSE; nor does the BSE in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document, nor does the BSE warrant that the Debentures will be listed or will continue to be listed on the BSE; nor does the BSE take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA As per the provisions of the SEBI Regulations, a copy of this Disclosure Document has not been filed with or submitted to the SEBI. It is to be distinctly understood that this Disclosure Document should not in any way be deemed or construed to have been approved or vetted by SEBI. The Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document. SEBI does not take any responsibility either for the financial soundness of any scheme or the project(s) for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Disclosure Document. The issue of Debentures being made on private placement basis, filing of this document is not required with SEBI, however SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this document. DISCLAIMER OF THE DEBENTURE TRUSTEE The Issuer confirms that all necessary disclosures have been made in the Disclosure Document including but not limited to statutory and other regulatory disclosures. Investors should carefully read and note the contents of the Disclosure Document. Each prospective investor should make its own independent assessment of the merit of the investment in the Debentures and the Issuer. Prospective Investor should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and suitability of such investment to such investor’s particular circumstance. Prospective investors are required to make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in such instruments. The Trustees, “ipso facto” do not have the obligations of a borrower or a Principal Debtor or a Guarantor as to the monies paid/invested by investors for the Debentures.

DISCLAIMER CLAUSE OF THE SOLE ARRANGER The Issuer hereby declares that it has exercised due-diligence to ensure complete compliance with prescribed disclosure norms in this Information Memorandum and/or the Private Placement Offer Letter. The only role of the Sole Arranger with respect to the Debentures is confined to arranging placement of the Debentures on the basis of this Information Memorandum as prepared by the Issuer. Without limiting the foregoing, the Sole Arranger is not acting, and has not been engaged to act, as an underwriter, merchant banker or other intermediary with respect to the Debentures. The Issuer is solely responsible for the truth, accuracy and completeness of all the information provided in this Information Memorandum and/or the Private Placement Offer Letter. Neither is the Sole Arranger responsible for preparing, clearing, approving, scrutinizing or vetting this Information Memorandum and/or the Private Placement Offer Letter, nor is the Sole Arranger responsible for doing any due-diligence for verification of the truth, correctness or completeness of the contents of this Information Memorandum and/or the



Private Placement Offer Letter. The Sole Arranger shall be entitled to rely on the truth, correctness and completeness of this Information Memorandum and/or the Private Placement Offer Letter. It is to be distinctly understood that the aforesaid use of this Information Memorandum and/or the Private Placement Offer Letter by the Sole Arranger should not in any way be deemed or construed to mean that the Information Memorandum and/or the Private Placement Offer Letter has been prepared, cleared, approved, scrutinized or vetted by the Sole Arranger. Nor should the contents of this Information Memorandum and/or the Private Placement Offer Letter in any manner be deemed to have been warranted, certified or endorsed by the Sole Arranger as to the truth, correctness or completeness thereof. Each recipient must satisfy itself as to the accuracy, reliability, adequacy, reasonableness or completeness of the Information Memorandum and/or the Private Placement Offer Letter.

The Sole Arranger has not conducted any due diligence review on behalf or for the benefit of the Debenture Trustee or any of the Debenture Holders. Each of the Debenture Holders should conduct such due diligence on the Issuer and the Debentures as it deems appropriate and make its own independent assessment thereof. Distribution of this Information Memorandum and/or the Private Placement Offer Letter does not constitute a representation or warranty, express or implied by the Sole Arranger that the information and opinions herein will be updated at any time after the date of this Information Memorandum and/or the Private Placement Offer Letter. The Sole Arranger does not undertake to notify any recipient of any information coming to the attention of the Sole Arranger after the date of this Information Memorandum and/or the Private Placement Offer Letter. No responsibility or liability or duty of care is or will be accepted by the Sole Arranger for updating or supplementing this Information Memorandum and/or the Private Placement Offer Letter nor for providing access to any additional information as further information becomes available.

Neither the Sole Arranger nor any of their respective directors, employees, officers or agents shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from this Information Memorandum or in any other information or communications made in connection with the Debentures.

The Sole Arranger is acting for the Company in relation to the Issue of the Debentures and not on behalf of the recipients of this Information Memorandum and/or the Private Placement Offer Letter. The receipt of this Information Memorandum and/or the Private Placement Offer Letter by any recipient is not to be constituted as the giving of investment advice by the Sole Arranger to that recipient, nor to constitute such a recipient a customer of the Sole Arranger. The Sole Arranger is not responsible to any other person for providing the protection afforded to the customers of the Sole Arranger nor for providing advice in relation to the Debentures. Each recipient of this Information Memorandum and/or the Private Placement Offer Letter acknowledges that: (a) each recipient has been afforded an opportunity to request and to review and has received all

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

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



AUTHORISATION LETTER August 23, 2016 To : Derivium Tradition Securities (India) Pvt. Ltd (the “Arranger”) Dear Sirs: Issue of Secured Rated Listed Redeemable Non-Convertible Debentures on a Private Placement basis (the “Debentures”) Equitas Finance Limited (the “Company” or the “Issuer”), refers to the Disclosure Document dated August 23, 2016 (the “Disclosure Document”) in connection with the Debentures proposed to be issued by the Issuer. The Issuer confirms that, as at the date of this letter, the factual information contained in the Disclosure Document is true and accurate and no factual information has been omitted that renders such information contained in the Disclosure Document untrue or inaccurate in any material respect and any financial forecasts and projections contained in any part of the Disclosure Document have been prepared on the basis of recent historical information and assumptions believed by the Issuer to be fair and reasonable. All expressions of opinion, statements and estimates set forth and reflected in the Disclosure Document have been made by the Issuer after due and proper consideration. In addition, the Issuer is not aware of any information not contained in the Disclosure Document, the omission of which would lead to the Disclosure Document being inaccurate, untrue or misleading in any material respect. The Issuer further confirms that it is in compliance and shall comply with all applicable laws and regulations in relation to the proposed issue of the Debentures. The Issuer authorises the Arranger to deliver copies of the Disclosure Document to those specified persons identified by the Company/Arranger from whom the Arranger proposes to seek participation in the Debentures. The Issuer agrees to indemnify and hold the Arranger and each of its officers, employees, representatives, and agents harmless from and against any and all losses, liabilities, damages, claims, costs or expenses which may be imposed on or incurred by the Arranger or its affiliates, officers, employees, representatives, and agents as a result of any inaccurate, untrue or misleading statement contained in the Disclosure Document or caused by an omission of any material fact which is necessary to make any of the statements contained in the Disclosure Document not misleading. This letter and all claims arising in connection with it are governed by, and are to be construed in accordance with, Indian law. The Issuer submits to the exclusive jurisdiction of the courts and tribunals at Chennai for the resolution of any dispute arising in connection with this letter. Yours faithfully, For Equitas Finance Limited (formerly known as Equitas Finance Private Ltd) N Sridharan Group Head - Treasury & MIS



SECTION II: MANAGEMENT’S PERCEPTION OF RISK FACTORS The following are the risks envisaged by the management, and Investors should consider the following risk factors carefully for evaluating the Company and its business before making any investment decision. Unless the context requires otherwise, the risk factors described below apply to Equitas Finance Limited only. If anyone of the following stated risks actually occurs, the Company's business, financial conditions and results of operations could suffer and therefore the value of the Company's debt securities could decline. Note: Unless specified or quantified in the relevant risk factors, the Company is not in a position to quantify the financial and other implications of any risk mentioned herein below. Reference to “our business” in this section refers to the business of the Company. CREDIT RISK Potential investors should be aware that receipt of the principal amount, (i.e. the redemption amount) and any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer. Potential investors assume the risk that the Issuer may not be able to satisfy their obligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures may not be made or may be substantially reduced or delayed. THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID The Debentures may be very illiquid and no secondary market may develop in respect thereof. Even if there is a secondary market for the Debentures, it is not likely to provide significant liquidity. Potential investors may have to hold the Debentures until redemption to realize any value. RATING AGENCY MAY DOWNGRADE THE CREDIT RATING ASSIGNED TO THE ISSUE OR THE DEBENTURES The Rating Agency has assigned the credit ratings to the Debentures. In the event of deterioration in the financial health of the Issuer, there is a possibility that the Rating Agency may downgrade the rating of the Debentures or rating of the Company. In such cases, potential investors may incur losses on revaluation of their investment or make provisions towards sub-standard/ non-performing investment as per their usual norms. TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS Special tax considerations and legal considerations may apply to certain types of investors. Potential investors are urged to consult with their own financial, legal, tax and other advisors to determine any financial, legal, tax and other implications of this investment. ACCOUNTING CONSIDERATIONS Special accounting considerations may apply to certain types of taxpayers. Potential investors are urged to consult with their own accounting advisors to determine implications of this investment. MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT OR OTHER OBLIGATIONS The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any changes in the regulatory framework could adversely affect the profitability of the Issuer or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise. LEGALITY OF PURCHASE Potential investors of the Debentures will be responsible for the lawfulness of the acquisition of the Debentures, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates or for compliance by that potential investor with any law, regulation or regulatory policy applicable to it.



POLITICAL AND ECONOMIC RISK IN INDIA The Issuer operates only within India and, accordingly, all of its revenues are derived from the domestic market. As a result, it is highly dependent on prevailing economic conditions in India and its results of operations are significantly affected by factors influencing the Indian economy. An uncertain economic situation, in India and globally, could result in a further slowdown in economic growth, investment and consumption. A slowdown in the rate of growth in the Indian economy could result in lower demand for credit and other financial products and services and higher defaults. Any slowdown in the growth or negative growth of sectors where the Issuer has a relatively higher exposure could adversely impact its performance. Any such slowdown could adversely affect its business, prospects, results of operations and financial condition.

THE BUSINESS MODEL AND REGULATORY FRAMEWORK GOVERNING SFBS ARE UNTESTED IN INDIA. THERE CAN BE NO ASSURANCE THAT WE WILL BE ABLE TO IMPLEMENT THE SFB MODEL SUCCESSFULLY IN INDIA. The RBI issued the Small Finance Bank Guidelines on 27th November 2014 to license SFBs in the private sector to, inter-alia, supply credit to micro and small enterprises and agriculture and provide banking services in unbanked and underbanked areas in India. The RBI granted an in-principle approval through a letter dated 7th October 2015 to our holding Company. Further, RBI has granted final license on 30th June 2016 to start the SFB operations in India. Equitas Micro Finance Ltd and Equitas Housing Finance Ltd are proposed to be merged with the Company to start SFB. Honourable High Court of Madras Judicature has sanctioned the scheme of amalgamation of Equitas Micro Finance Ltd and Equitas Housing Finance Ltd with the Company. The merger will be effective one working day prior to the commencement of SFB operations. We cannot assure you that such SFBs will be able to provide credit and banking services to the unbanked or underbanked populations in a profitable manner or at all or that the products and services offered by such SFBs will achieve market acceptability. In addition, as the SFB model is in the nascent stages, there is a limited amount of knowledge or market practice with respect to the appropriate business policies and processes to be adopted by such SFBs. While we intend to rely on our experiences in the microfinance, vehicle finance and housing finance businesses to develop and implement certain processes and policies for the proposed SFB, there can be no assurance that such policies and processes will be effective.

Further, the regulatory framework applicable to SFBs is new and untested and could be subject to varying interpretations. We cannot currently determine the full impact and applicability of the SFB Guidelines and other banking regulations to the proposed SFB. Uncertainty in the applicability, interpretation or implementation of the governing law, specifically due to the absence of administrative or judicial precedent may be time consuming as well as costly for us to resolve. To ensure compliance with the regulatory framework applicable to SFBs, we may need to allocate additional resources, which may increase our regulatory compliance costs and divert management attention. We may also be subject to fines or other penalties if we are unable to comply with such requirements, which may adversely affect our business, results of operations, cash flows and financial condition.

RISKS RELATED TO THE BUSINESS OF THE ISSUER (a) The financial performance of the Company is vulnerable to interest rate volatility

The profitability of the company is mainly dependent on the Net Interest Margins. The Company borrows both in floating and fixed interest rates. The Company is exposed to interest rate risks since the disbursements are generally made in fixed interest rates. Volatility in interest rates can materially and adversely affect our financial performance and cash flows. In a rising interest rate environment, if the yield on the interest-earning assets of the Company does not increase simultaneously with or to the same extent as cost of funds, or, in a declining interest rate environment, if the cost of funds does not decline simultaneously or to the same extent as the yield on our interest-earning assets, our net interest income and net interest margin would be adversely impacted.



Interest rates are highly sensitive and fluctuations thereof are dependent upon many factors which are beyond our control, including the monetary policies of the RBI, de-regulation of the financial services sector in India, domestic and international economic and political conditions, inflation and other factors. Rise in inflation, and consequent changes in Bank rates, Repo rates and Reverse Repo rates by the RBI has led to an increase in interest rates on loans provided by banks and financial institutions, and market interest rates in India have been volatile in recent periods.

(b) If the Company 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 the operations of the Company. As of 30th June 2016, following was the summary of portfolio ageing:

Asset Classification Portfolio Outstanding

(Rs. in Crores) %

Standard Assets - On book Portfolio 2,456.96 97.06% Gross Non-Performing Assets - On book Portfolio 74.55 2.94%

Total 2,531.51 100.00%

We cannot be sure that we will be able to improve our collections and recoveries in relation to our NPAs, or otherwise adequately control our level of NPAs in future. Moreover, as our loan portfolio matures, we may experience greater defaults in principal and/or interest repayments. Thus, if we are not able to control or reduce our level of NPAs, the overall quality of our loan portfolio may deteriorate and our results of operations and/or cash flows may be adversely affected. Furthermore, our current provisions may not be adequate when compared to the loan portfolios of other financial institutions. Moreover, there also can be no assurance that there will be no further deterioration in our provisioning coverage as a percentage of Gross NPAs or otherwise, or that the percentage of NPAs that we will be able to recover will be similar to our past experience of recoveries of NPAs. In the event of any further deterioration in our NPA portfolio, there could be an even greater, adverse impact on our results of operations and/or cash flows.

(c) The company’s business is primarily focused on commercial vehicle finance for pre-

owned commercial vehicles and any adverse developments in this sector would adversely affect our results of operations

As we focus on providing financing for pre-owned and new commercial vehicles, our asset and NPA portfolios have, and will likely continue in the future to have, a high concentration of pre-owned and new commercial vehicle financing arrangements. Moreover, our customer base has, and will likely continue in the future to have, a high concentration of FTUs and SRTOs. Our business is, therefore, entirely dependent on various factors that impact this customer segment, such as the demand for transportation services in India, changes in Indian regulations and policies affecting pre-owned commercial vehicles, natural disasters and calamities, and macroeconomic environment in India and globally. Also, individual borrowers and FTUs and SRTOs generally are less financially resilient than larger corporate borrowers or fleet owners, and, as a result, can be more adversely affected by declining economic conditions. Such factors may result in a decline in the sales or value of new and pre-owned commercial vehicles. Correspondingly, the demand for finance for pre-owned and new commercial vehicles may decline, which in turn may adversely affect our financial condition, the results of our operations and/or cash flows. Further, the ability of commercial vehicle owners and/or operators to perform their obligations under existing financing agreements may be adversely affected if their



businesses suffer as a result of the aforesaid factors. Accordingly, since our business is not a diversified business, any factor which adversely impacts this segment may have a disproportionate impact on our operations, profitability and/or cash flows.

(d) High levels of customer defaults could adversely affect our business, financial condition,

results of operations and/or cash flows.

Our primary business involves lending money to commercial vehicle owners and operators in India, and we are subject to customer default risks including default or delay in repayment of principal or interest on our loans. Customers may default on their obligations to us as a result of various factors including bankruptcy, lack of liquidity, lack of business and operational failure. If borrowers fail to repay loans in a timely manner or at all, our financial condition, results of operations and/or cash flows will be adversely impacted. In addition, our customer portfolio principally consists of SRTOs and FTUs with underdeveloped banking habits, and individual borrowers generally are less financially resilient than larger corporate borrowers, and, as a result, they can be more adversely affected by declining economic conditions. In addition, a significant majority of our client base belongs to the low income group. The owners and/or operators of commercial vehicles financed by us often do not have any credit history supported by tax returns and other related documents which would enable us to assess their creditworthiness. In addition, we may not receive updated information regarding any change in the financial condition of our customers or may receive inaccurate or incomplete information as a result of any fraudulent misrepresentation on the part of our customers. Furthermore, unlike several developed economies, a nationwide credit bureau has only recently become operational in India, so there is less financial information available about the creditworthiness of individuals, particularly our clients who are mainly from the low income group and who typically have limited access to other financing sources. It is therefore difficult to carry out precise credit risk analyses on our clients. Although we follow certain procedures to evaluate the credit profile of our customers at the time of sanctioning a loan, we generally rely on the referrals from the local trucking community and value of the commercial vehicle provided as underlying collateral rather than on a stringent analysis of the credit profile of our customers. Although we believe that our risk management controls are sufficient, we cannot be certain that they will continue to be sufficient or that additional risk management policies for individual borrowers will not be required. Failure to continuously monitor the loan contracts, particularly for individual borrowers, could adversely affect our credit portfolio which could have a material and adverse effect on our results of operations, financial condition and/or cash flows.

(e) We may not be able to recover, on a timely basis or at all, the full value of collateral or

amounts which are sufficient to cover the outstanding amounts due under defaulted loans.

As a security interest for the financing facilities provided by us to our customers, the vehicles purchased by our customers are hypothecated in our favour. The value of the vehicle, however, is subject to depreciation, deterioration, and/or reduction in value on account of other extraneous reasons, over the course of time. Consequently, the realizable value of the collateral for the credit facility provided by us, when liquidated, may be lower than the outstanding loan from such customers. Any default in repayment of the outstanding credit obligations by our customers may expose us to losses. Furthermore, in the case of a default, we typically repossess the commercial vehicles financed and sell such vehicles through auctions. The hypothecated vehicles, being movable property, may be difficult to locate or seize in the event of any default by our customers. There can also be no assurance that we will be able to sell such vehicles provided as collateral at prices sufficient to cover the amounts under default. In addition, there may be delays associated with such process.

A failure or delay to recover the expected value from sale of collateral security could expose us to a potential loss. Any such losses could adversely affect our financial condition, results of



operations and/or cash flows. Furthermore, enforcing our legal rights by litigating against defaulting customers is generally a slow and potentially expensive process in India. Accordingly, it may be difficult for us to recover amounts owed by defaulting customers in a timely manner or at all. The recovery of monies from defaulting customers may be further compounded by the fact that we do not generally insist on, or receive post-dated cheques as security towards the timely repayment of dues from customers to whom we have provided loans. Further if we are unable to sell any repossessed vehicles provided as security for such loans, at commercially favourable prices, in a timely manner or at all, we may not recover the costs of maintaining such repossessed vehicles and our operations, cash flows and profitability could be adversely affected.

(f) A large part of our collections are in cash and consequently we face the risk of

misappropriation or fraud by our employees.

A significant portion of our collections from our customers is in cash. Large cash collections expose us to the risk of fraud, misappropriation or unauthorized transactions by our employees responsible for dealing with such cash collections. While we have taken insurance policies and coverage for cash in safes and in transit, and undertake measures to detect and prevent any unauthorized transaction, fraud or misappropriation by our representatives and officers, this may not be sufficient to prevent or deter such activities in all cases, which may adversely affect our operations, profitability and/or cash flows. Further, we may be subject to regulatory or other proceedings in connection with any unauthorized transaction, fraud or misappropriation by our representatives and employees, which could adversely affect our goodwill.

(g) Issuer requires certain statutory and regulatory approvals for conducting business and

failure to obtain or retain them in a timely manner, or at all, may adversely affect operations

The Company is a non-deposit taking Non-Banking Financial Company-Asset Finance Company (“NBFC-AFC”) registered with the RBI. As such, the company is regulated by RBI vide its Master Circular named as “Non-Banking Financial (Non - Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015”. These directions were issued by Reserve bank of India on 22nd February 2007 vide notification No. DNBS.193 /DG (VL) - 2007. The provisions of these directions apply to all non-banking financial companies not accepting / holding public deposits. If the Issuer fails to comply, or a regulator claims we have not complied, with any of these conditions, its certificate of registration may be suspended or cancelled and the Issuer shall not be able to carry on such activities.

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

may result in changes to business and accounting practices that would harm business and results of operations.

The Issuer is subject to the RBI minimum capital to risk weighted assets ratio regulations. Pursuant to Section 45 -IC of the RBI Act, every NBFC is required to create a reserve fund and transfer thereto a sum not less than 20.0% of its net profit every year, as disclosed in the profit and loss account and before any dividend is declared. The Issuer is also required to maintain a minimum capital adequacy ratio of 15.0% in relation to aggregate risk-weighted assets and risk adjusted assigned loans.

The RBI may also in the future require compliance with other financial ratios and standards. Compliance with such regulatory requirements in the future may require alteration of its business and accounting practices or take other actions that could materially harm its business and operating results.



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

COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014)

Sl No.

Particulars Page No

1 GENERAL INFORMATION A Name, Address, Website and other contact details of the Company 17 B Date of Incorporation of the Company 25

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

17

D Brief Particulars of the Management of the Company 19 E Names, Addresses, DIN and Occupations of the Directors 28 F Management’s Perception of Risk Factors 7

G Details of Default, if any, including the amounts involved, duration of default, and present status, in repayment of

35

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

18

2 PARTICULARS OF THE OFFER

A Date of passing of board resolution 55

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

55

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

43

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

43

E

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

Not applicableas the Debentures are being issued at par.

F Amount which the company intends to raise by way of securities; 43

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

43

H Proposed time schedule for which the offer letter is valid 44 I Purposes and objects of the offer 43

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

Not Applicable

K Principle terms of assets charged as security, if applicable Not

Applicable. .

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

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

35

B

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

35



Sl No.

Particulars Page No

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

35

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

36

E

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

37

F

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

37

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

37

4 FINANCIAL POSITION OF THE COMPANY

A

The capital structure of the company in the following manner in a tabular form-

(i) (a) the authorised, issued, subscribed and paid up capital (number of securities, description and aggregate nominal value); (b) size of the present offer; (c) paid up capital;

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

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

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

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

26

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

37

C

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

37

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

37

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

37

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

42

5 DECLARATION 55



SECTION IV: DEFINITIONS

Term Meaning / Definition / Complete Term

“we”, “us”, “Issuer”, “the Company”, “our Company”, or “Issuer Company”

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

Act/ Companies Act Mean the Companies Act, 2013, and such provisions of the Companies Act, 1956 which are in force.

Application Form The form in terms of which, the investors shall apply for the Debentures of the Issuer attached in Annexure 1

Articles of Association The Articles of Association of the Issuer AUM Asset Under Management Beneficial Owner(s) Debenture Holder(s) holding Debenture(s) in dematerialized form

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

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

Board / BoD / BOD / Board of Directors

Board of Directors of the Issuer or a Committee thereof

BSE BSE Limited Business Day Means any day (i) other than a Saturday, Sunday, or a public

holiday under Section 25 of the Negotiable Instruments Act, 1881 at Chennai and (ii) on which banks are open for general business in Chennai and Mumbai, India.

CARE Ratings/ Rating Agency Credit Analysis and Research Ltd CDSL Central Depository Services (India) Limited. CV Commercial Vehicle Disclosure Document This disclosure document dated August 23, 2016 pursuant to which

the Debentures are being offered for private placement. Debenture Holder(s) The holder(s) of the Debenture(s) in dematerialized form. Debenture Trustee Agreement The debenture trustee agreement to be entered into between the

Issuer and the Debenture Trustee for the latter's appointment as the debenture trustee for the Issue

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

Debt Guidelines Securities Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 6, 2008 as amended from time to time, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued vide circular no. SEBI/LAD-NRO/GN/2015-16/013 dated September 02, 2015, as amended form time to time

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

Senior, unsecured rated, listed, taxable, transferrable, redeemable, non-convertible debentures aggregating Rs. 50,00,00,000/- (Rupees Fifty Crores) being issued pursuant to this Disclosure Document.

Deemed Date of Allotment 24th August 2016 Depositories NSDL and CDSL DP Depository Participant



Term Meaning / Definition / Complete Term DRR Debenture Redemption Reserve ECS Electronic Clearing Service EDIT Equitas Development Initiatives Trust EFL Equitas Finance Limited EHL Equitas Holdings Limited EMI Equated Monthly Instalment EQUITAS Equitas Group FDI Foreign Direct Investment FTU First Time User HFC Housing finance company Indebtedness "Indebtedness" means any obligation of the Company (whether

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

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

“who can apply” on page 50 of this Disclosure Document) may be sent, specifically numbered and addressed to such person, with a view to offering the Debentures for sale on a private placement basis only under this Disclosure Document

IRR Internal Rate of Return Issue / Offer / Offering Private Placement of Senior, Unsecured, rated, Unsecured,

transferable, redeemable, listed, non-convertible debentures being issued pursuant to this Disclosure Document

Issue Open Date 24th August 2016 Issue Close Date 24th August 2016 IT Income Tax KYC Know Your Customer MoA / MOA / Memorandum Memorandum of Association of the Issuer Majority Consent Means the written consent obtained from the Debenture holders

representing not less than 51% (fifty one per cent) of the aggregate nominal amount of the Debentures for the time being outstanding; or consent by Majority Resolution duly passed at the meeting of the Debenture holders convened in accordance with the provisions set out in the debenture Trust Deed.

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

MSME Micro, small and medium enterprises NBFC Non‐Banking Financial Company

NBFC‐ND Non Deposit taking ‐ Non Banking Financial Company NBFC Regulations Regulations of the RBI that pertain to NBFCs NCD Regulations Regulations of the RBI that pertain to the issuance of non-

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

NRI Non-resident Indian



Term Meaning / Definition / Complete Term NSDL National Securities Depository Limited Outstanding Principal Amount Means, at any date, the principal amount outstanding under the

Debentures PAN Permanent Account Number PDC Post Dated Cheque PDD Post Disbursement Documents RBI Reserve Bank of India Receivables under Financing Activity

Shall inter alia include asset financing, loans against property, SME loans, any other lending activity of the Company

Registrar and Transfer Agent Karvy Computershare Private Limited RoC / ROC Registrar of Companies, Chennai RTGS Real Time Gross Settlement SEBI Securities and Exchange Board of India SEBI Regulations Regulations of SEBI that pertain to the issuance and listing of

privately placed non-convertible debentures. Secured Obligations Means all present and future obligations (whether actual or

contingent and whether owed jointly or severally or in any capacity whatsoever) obligations of the Company to the Debenture Holders or the Trustee under the Debenture Trust Deed

Series Any series of debentures issued under this Disclosure Document SFB Small Finance Bank SRTO Small Road Transport Operators STO Small Truck Operators Stock Exchange(s) BSE Ltd Transaction Documents Means the Debenture Trustee Agreement, the Debenture Trust

Deed, this Disclosure Document, the letters issued by the credit rating agency and the Registrar and all other documents in relation to the issuance of the Debentures

Trustee Catalyst Trusteeship Limited WCDL Working Capital Demand Loan



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

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

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

where applicable, including the Trust Deed would be executed within the time frame prescribed in the relevant regulations/act/rules etc. and the same would be uploaded on the website of the Designated Stock exchange, where the debt securities have been listed, within 5 (five) working days of execution of the same;

f) Any other particulars or documents that the Stock Exchange may call for as it deems fit. 2. LIST OF DISCLOSURES TO BE SUBMITTED TO THE TRUSTEE The Issuer shall submit the following disclosures to the Trustee in electronic form at the time of allotment of debt securities issued under this offer document:

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

allotment of the Debentures; b) Copy of last three years’ audited Annual Reports of the Issuer; 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) Undertaking to the effect that the Issuer would, till the redemption of the Debentures, submit the 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, to the Debenture Trustee within the timelines as mentioned in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the Company shall also promptly submit to the Debenture Trustee all the other documents/intimations as are required to be submitted under the provisions of Regulation 56 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

3. ISSUER INFORMATION A. BRIEF PARTICULARS

i. Name of the Issuer Equitas Finance Limited

ii. Registered Office 4th Floor, Spencer Plaza, Phase II, No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasvf.in Email : [email protected] Contact Person: Ms. Sridevi Surrender, Company Secretary



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

iv. Compliance Officer Name: Ms. Sridevi Surender, Designation: Company Secretary, Address: 4th Floor, Spencer Plaza, Phase II, No.769, Mount Ro ad, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 Website : www.equitasvf.in Email : [email protected]

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

vi. Debenture Trustee of the Issue

Catalyst Trusteeship Ltd 83 - 87, 8th Floor, 'B' Wing Mittal Tower, Nariman Point Mumbai - 400 021 Website:www.gdatrustee.com Email:[email protected]

vii. Registrar & Transfer Agent of the Issue

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

viii. Credit Rating Agency of the Issue

Credit Analysis & Research Ltd.

Unit No O - 509/C, Spencer Plaza, 5th Floor,

No. 769, Anna Salai, Chennai, Tamil Nadu - 600002

Email: [email protected]

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

B. BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER (i) OVERVIEW Headquartered in Chennai, the Company is a non-deposit taking Non-Banking Financial Company-Asset Finance Company (NBFC-AFC) registered with the Reserve Bank of India (RBI). The Company was incorporated on 21st June 1993 as V.A.P. Finance Private Limited with registered office at No.16, Kapali Koil Sannathi Street, Mylapore, Chennai - 600 004. The registered office of the Company was changed to the present address in June 2014. As per the audited financial statements of FY 2015-16, the Company reported net profit of Rs.85 Crores on a total income of Rs.476 Crores. The Company has been rated “CARE A+” for long term bank facilities and NCDs. The Company has also been rated “IND A-/Stable” by India Ratings (Fitch Group) for its long term borrowings and NCD programme and “IND A1” for Commercial Paper. The Company has also been rated “CRISIL A1+” from CRISIL Ltd for its Commercial Paper. The CRAR of the Company as on 31st March 2016 as per the audited financials was 29.63% against the minimum regulatory requirement of 15% for non-deposit accepting NBFCs.



The Company is a wholly owned subsidiary of Equitas Holdings Limited. The Equitas Group commenced microfinance business in 2007 and demonstrated its success in scalable manner. Banking on its success in microfinance, Equitas Group has diversified its business operations into other secured lines of business such as affordable housing finance and used commercial vehicle finance businesses during financial year 2011-12. To spearhead its vehicle finance business, Equitas Group had acquired V.A.P. Finance Limited in March 2011 and converted the Company into a private limited company. The name of the Company was then changed to Equitas Finance Private Limited in August 2011. Equitas Group commenced vehicle finance business in June 2011 through the Company. The Company extends loans to SRTOs and FTUs who have limited access to formal financial services for funding the acquisition of pre-owned commercial vehicles. During the year 2013-14, the Company launched additional secured lines of business by extending Loans against Property and Loans to Micro, Small and Medium Enterprises. Mission: Empowering through financial inclusion Vision Statement: To be the 2nd largest UCV finance company in India by 2018 (ii) CORPORATE STRUCTURE Headquartered in Chennai, Equitas Group has business interests in various asset classes namely microfinance, used commercial vehicle finance, affordable housing finance, loans against property and loans to micro, small enterprises. Equitas Holdings Limited (EHL) is the group holding company. Currently, EHL has the following operating subsidiaries:

• Equitas Micro Finance Limited (engaged in microfinance business) • Equitas Finance Limited (engaged in used commercial vehicle finance, loans to micro and small

enterprises, loan against property, loan against gold and Two wheeler loans) • Equitas Housing Finance Limited (engaged in housing finance business and loan against

property) • Equitas Technologies Private Ltd (engaged in freight aggregation business)

The Company has established sound governance structure with eminent board of directors including an independent Chairman. Mr. P T Kuppuswamy, former Managing Director and Chief Executive Officer of Karur Vysya Bank, is the Chairman of the Company. The day-to-day operations of the Company are managed by management committee of senior management under the supervision of the Board. The senior management team of the Company has rich corporate experience with cumulative experience of over 200 years. (a) Brief particulars of the management of the Company

Name Qualification & Work Experience

Mr. P T Kuppuswamy Chairman and Independent Director

Mr. P.T. Kuppuswamy retired as Managing Director and Chief Executive Officer of Karur Vysya Bank on 31

st May 2011. He served Karur Vysya Bank as Managing Director since 1

st

June 2008, as CEO since 1st June 2002 and as Executive Director since 9

th July 2001. He

was an officer at Canara Bank since 1969, and an inspector of its branches for 5 years, and branch manager for a period of 13 years. Kuppuswamy worked as a divisional manager in 1987, heading the balance sheet and central accounts department of Canara Bank for 10 years, and elevated to higher cadres. He has B.Com, ACA, and ACS as qualifications. He is also a member of the Institute of Chartered Accountants of India and Institute of Company Secretaries of India as well.




Mr. P S Balasubramaniam Independent Director

He is an Associate Member of Institute of Chartered Accountants of India and Institute of Company Secretaries of India. He has over 40 years of experience in the Financial Services Sector. He joined Kothari Group of concerns in August, 1972 as the Group Accounts Officer. After holding several positions in the middle and senior management levels, he retired as the Managing Director of The Investment Trust of India, an NBFC in the Group, in August, 2002. Currently, he is working as an Advisor and Director in the Group companies. He currently holds directorship with , Kothari Sugars and Chemicals Limited, Kothari Safe Deposits Limited, Kothari Biotech Limited, Kothari International Trading Limited, HCK Capital Services (P) Limited, Mahaveer Finance (India) Limited, Finance companies’ Association (India), Deccan Finance Limited, Equitas Technologies Private Limited and as a Member-Local Advisory Board on Bank of Ceylon. Currently, he is the Member of the Managing Committees of Federation of Indian Hire Purchase Associations, Finance Companies Association (India) and South India Hire Purchase Association.

Mr. V A George Independent Director

He holds degree in Mechanical Engineering, post graduate diploma in Management and is also a Certified Associate of the Institute of Banking & Finance. He has more than three and half decades experience in banking and corporate sectors. Presently, he is the Chairman of Knowledge Xchange, Chennai and Kerala Sports Persons Association. He is also the board member of Xavier’s Board of Higher Education In India - Bangalore, Rajagiri Business School - Kochi and Academic Advisory Council - Loyola Institute of Business Administration (LIBA) - Chennai Currently, Shri V A George is the visiting faculty in Reserve Bank Staff College, XLRI - Jamshedpur and XIMR - Mumbai (St. Xavier’s, Mumbai)

Mr. R Jagannath Independent Director

Mr. R Jagannath, aged 73 years is a B.E. (Mechanical) from Coimbatore Institute of Technology, Coimbatore and Secured an Honours rating (75% and above) with Seventh Rank in the University. Apart from academic brilliance, he was known for his active participation in extra-curricular activities as well. He represented the Institute in Cricket and Table Tennis and was Vice-President of the Institute Cricket Team in 1963-64. He took active part in Inter-Collegiate Seminars and Debates too. He joined Ashok Leyland in July 1964 as a Graduate Apprentice and has held various positions and handled different portfolios, including Design and Development, Export Sales, Sales and Marketing, Sales and Service, In charge of new projects, Materials etc. He was inducted into the Board of Ashok Leyland as Whole-time Director in April 1998 and was made the in charge of all the manufacturing units of the Company at Ennore, Hosur, Alwar, Bhandara and Hyderabad. In July 2000 he was re-designated as Deputy Managing Director and given additional charge of Ennore Foundries Limited (a sister concern of Ashok Leyland). On 31 March 2003, he retired from the services of Ashok Leyland as Deputy Managing Director and from Ennore Foundries as Director-in-charge. He held directorships on the boards of Lanka Ashok Leyland Limited, Colombo, a joint venture company with the Government of Sri Lanka and AAF Trustee Fund of IL & FS Venture Corporation Limited. He was the Past Chairman of the Tamil Nadu Committee of Confederation of Indian Industry (Southern Region) and was a member of the International Trade Committee, Confederation of Indian Industry. He was also the past President of the Madras Management Association.




Mr. John Arunkumar Diaz, Non-Executive Director

Arun Diaz is a Management Consultant, an entrepreneur in the healthcare sector and is also involved in Venture Capital. Following a degree in Mathematics and an MBA from XLRI, Arun worked with Standard Chartered Bank for 28 years in all areas of banking with assignments in India, Europe, the Middle East and the Asia Pacific Region. Since leaving SCB in late 2001, Arun was briefly Head, Reuters Consulting South Asia before becoming a freelance consultant in Banking. Arun is also on the boards of several private limited companies; both in his personal capacity and as a nominee of Aavishkaar Venture Management Services Pvt. Ltd. where he is an advisor. He then started The Apollo Clinic, Thane as a franchisee of Apollo Health & Lifestyles Ltd. with Deepa Chandrasekhar in 2005/06 and gained valuable insights into the working of the healthcare sector. Between 2011 and 2014, Arun founded and headed up a start-up secondary hospital chain called Jeevanti Healthcare Pvt. Ltd., with VC funding from Seed fund. Arun is also an active member of TiE-Mumbai (The Indus Entrepreneurs, Mumbai Chapter) and enjoys mentoring new and upcoming entrepreneurs.

Mrs. Lalitha Lakshmanan Independent Director

Mrs. Lalitha Lakshmanan, has over 35 years of experience in the Banking Sector and holds a Master’s degree in Bank Management from Alagappa University, Tamil Nadu, India. After a brief stint of 3 years in ITC Bangalore, she joined Canara Bank as a Probationary Officer in 1975. Promoted as Manager in 1985, Executive in 1995 and retired as Chief General Manager in June 2013. Was successful in all her assignments, had pan-India exposure in operations and various facets of Banking. Besides surpassing business targets, was successful in accomplishing targets under Insurance and Mutual fund. Her proven track record earned her the coveted assignment as ‘Circle Head‘ of Coimbatore Circle in 2008 & Chennai Metro Circle in 2010. Was the FIRST WOMAN CIRCLE HEAD of the Bank after 1987. Having had many firsts to her credit, Large & Exceptionally Large branches headed by her were adjudged with many accolades including declaring them as Best Branches/Model Branches. As a promising and performing youngest Executive, she was selected to participate in a conclave held at Luxembourg for three weeks on ‘customer orientation’ programme in 1998 as one amongst 9 bankers representing the Country. Was one amongst 12 bankers to participate in the Exchange programme “Marching towards World Class Banking” conducted by RBI/MDI in 2009. Her interactions with the regulator during the program helped her in gaining insights as to how RBI guided and monitored commercial Banks in India and weathered the financial crises of 2008-2009 in comparison with European counterparts. Was a part of many internal committees at various levels during her tenure at H.O

Mr. P Parthasarathy Independent Director

Mr. P Parthasarathy, is a Chartered Accountant in Practice for over 35 years and is the senior partner in M/s. J L Sengupta & Co., Chartered Accountants. He has been Central Statutory Auditor for many Banks including RBI and his specialisation includes arbitration and settlements. He is a member of the Institute of Chartered Accountants of India and is a rank holder.

Mr. V K Sharma Independent Director

He is an Independent Director of the Company. He was appointed as non-executive Director of the Company on May 7, 2014 and independent director of the Company on June 17, 2014. He holds a Bachelors degree in Science as well as a Masters degree in Science (Physics) from Saugor University. Prior to joining Equitas, he served as an executive director of the RBI and has chaired the Working Group on Interest Rate Futures and Working Group on Common Clearing for Commodity Exchanges.

Mr. P N Vasudevan Managing Director

P N Vasudevan is the Managing Director of the Company. He holds a Bachelors degree in Science from University of Madras. He is a qualified company secretary from the Institute of Company Secretaries of India. He has extensive experience in the financial services sector and had served as the Head - Consumer Banking Group in Development Credit Bank Limited, for more than one and half years. He has also worked for about two decades in Cholamandalam Investment and Finance Co Limited, part of the Murugappa Group, where he joined as a management trainee and resigned as vice president and business head of vehicle finance. He was also the chairman of the managing committee of the South India Hire Purchase Association for the Financial Year 2006.



(b) Summary of Business / Activities

The Company was established to extend loans to SRTOs and FTUs who have limited access to formal financial services for funding the acquisition of pre-owned commercial vehicles. Also, the company is in the business of extending loans to Small and Medium Enterprises and Loan against Property at reasonable cost and in a transparent manner.

Product Details The principal business of the Company is to provide loans for the purchase of used commercial vehicles. The vehicle finance business was commenced in June 2011. During the financial year 2013-14, the Company launched new secured lines of businesses such as loan against property and loans to micro, small and medium business enterprises. Since inception the Company has rapidly expanded with reach of 151 branches spread across 14 states and 2 union territories. The gross loan portfolio of the Company as on 30th June 2016 was Rs. 2,849.13 Crores. The growth of loan portfolio and branches since the commencement of business and the portfolio distribution as on 30th June 2016 are depicted in the below charts:



Used Commercial Vehicle Finance The market for used CV financing is in the region of Rs. 150,000 Crores out of which nearly 70% of the market is catered to by local financiers. Except a major player, there are no other established players from the organized sector. This sector has also not attracted the banks since it consists of buyers who are not very organized and need a different approach both to credit appraisal as well as collections. Traditional methods of appraisal based on documents and collections through agencies would not work in this segment. This calls for certain level of relationship building at the client level which calls for significant investment in human resources and training which does not align itself naturally to the processes of the banks. Nationalized banks and some of the older private banks would be financing some of these operators through their branch network but it is not a focused activity for a bank and hence it is difficult to gather data of their exposure to this sector.

The Company would target customers who are STOs and FTUs. The Company also covers small vehicles like Ace of Tata Motors and used light commercial vehicle financing. These loans will be secured by hypothecation of vehicles in favour of the Company. Loans to Micro, Small and Medium Enterprises According to reports published by the Department of Micro, Small and Medium Enterprises (MSME) Development, Government of India, 15.64 lakh MSMEs are registered across the country. Around 95% of these MSMEs are micro-enterprises and 90% of MSMEs are registered as Sole Proprietorships indicating the unorganized nature of this segment.

The Company would primarily focus on financing MSME clients for their business expansion. The profile of these customers will be self-employed who don’t have access to normal banking options for their credit requirements. Initial target customers for the Company would be customer of microfinance business of the Equitas group would look for expansion of their businesses apart from other SME customers. The Company commenced the business during the month of May 2013. Loans against Property The formal financing options for the self-employed segment are limited. The dependence on informal sources as chit funds is relatively high. MSME finance is recognized widely as the “Missing Middle”. Banks and NBFCs have sought to address this requirement by providing loan against property.

The Company seeks provide loans against properties to middle-sized self-employed segment based on their Income Tax returns and a clean CIBIL record. This segment has limited access to similar products from traditional HFCs, NBFCs and banks. The Company commenced the business during the month of April 2013.

(c) Credit Rating

Bank Loan Ratings CARE has assigned credit rating for long term bank facilities of the company under Basel II for the company and assigned credit rating of CARE A+ [CARE A Single Plus] for the long term bank facilities of the company amounting to Rs. 600 Crores. The rating history of the Company with CARE on loan term scale is given below:

Month Amount Rated (Rs. in Crores)

Rating Remarks

July 2016 600.00 CARE A+ Upgrade March 2015 600.00 CARE A- Enhancement

November 2014 450.00 CARE A- Upgrade June 2015 450.00 CARE BBB+ Reaffirmation

March 2014 450.00 CARE BBB+ Upgrade December 2013 450.00 CARE BBB Initial Rating Assigned



India Ratings has assigned Rating of “IND A-” with stable outlook. The rating history of the Company with India Ratings on loan term scale is given below:

Month Amount Rated (Rs. in Crores)

Rating Remarks

August 2014 600.00 IND A-/Stable Enhancement June 2014 125.00 IND A-/Stable Reaffirmation April 2014 125.00 IND A-/ Stable Initial Rating Assigned

Commercial Paper CRISIL Ltd has assigned the Credit Rating of CRISIL A1+ (CRISIL A one plus) to the commercial paper programme of the company amount to Rs.600 Crores

India Ratings & Research Private Limited (India Ratings) has assigned credit rating of “IND A1” (IND A One) to the Commercial Paper programme of the company amount to Rs.25 Crores.

Non-Convertible Debentures Rating Agency, India Ratings & Research Private Limited (India Ratings) has assigned the credit rating of “IND A-/Stable” (read IND single A minus with Stable Outlook) the issuance of Non-Convertible Debentures programme amount to Rs.370 Crores.

The Series 17 NCDs issued under this offer document is rated by Credit Analysis & Research Limited with credit rating of “CARE A+”. The rating letter issued by CARE Ratings for the non-convertible debentures is attached herewith as Annexure 3.

(iii) KEY OPERATIONAL AND FINANCIAL PARAMETERS

Rs.in Lakhs

Parameters

As at 31.03.2016 / FY 2015-16 (Audited)

As at 31.03.2015 / FY 2014-15 (Audited)

As at 31.03.2014 / FY 2013-14 (Audited)

Net-worth 71,091.89 62,579.87 29,168.82

Total Debt of which:

Non-Current Maturities of Long Term Borrowings 95,253.60 68,113.75 19,887.09

Short Term Borrowings 23,517.72 40,809.62 37,094.63

Current Maturities of Long Term Borrowings 45,001.72 22,709.45 1,312.91

Net Fixed Assets 1,116.52 778.64 289.51

Non-Current Assets 9,894.33 1,735.03 912.11

Cash and Cash Equivalents 9,854.12 27,192.78 2,870.49

Current Investments - - -

Current Assets (excluding Receivables) 8,014.98 3,555.00 2,285.62

Current Liabilities 12,475.50 4,560.55 4,063.92

Assets Under Management 258,712.90 167,559.56 89,359.92

Off Balance Sheet Assets 38,322.29 3,176.24 5,267.53

Interest Income 40,074.81 25,667.32 11,688.29

Interest Expense 15,911.31 10,436.73 4,360.77

Provisioning & Write-offs 4,028.04 4,070.76 1,267.56

Profit After Tax 8,512.02 3,422.71 1,579.43

Gross NPA (%) 2.46% 1.97% 1.63%

Net NPA (%) 1.82% 1.48% 1.43%

Tier I Capital Adequacy (%) 28.46% 36.17% 32.78%

Tier II Capital Adequacy (%) 1.17% 2.46% 0.00%



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

Rs. in Lakhs

Parameters As at

31.03.2016 (Audited)

As at 31.03.2015 (Audited)

As at 31.03.2014 (Audited)

Deferred Tax Assets 1,222.15 807.60 351.44

2. Assets under Management mentioned above include off-balance sheet assets, i.e. loan portfolio

under securitization and Direct Assignment transactions (iv) GROSS DEBT EQUITY RATIO OF THE COMPANY (AS ON MARCH 31, 2016)

Before the issue of Debt Securities 2.30 times After the issue of Debt Securities 2.60 times

(v) DETAILS OF PROJECT COST AND MEANS OF FINANCING

Not Applicable

C. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION

The Company was incorporated in 1993 by Mr. V A Parthasarathy and Mrs. V Ananda Parthasarathy as V.A.P. Finance Private Limited. To launch its vehicle finance business, Equitas Group had acquired V.A.P. Finance Limited as wholly owned subsidiary in March 2011 and converted the Company into a private limited company. The Company commenced vehicle finance business in June 2011. In 2013, the Company launched additional secured lines of business by extending Loans against Property and Loans to Micro, Small and Medium Enterprises. The name of this Company was changed to Equitas Finance Private Limited in August 2011. Subsequently, the name of the company has changed to Equitas Finance Limited pursuant to the conversion of the company into public limited company.

‘Equitas’ is a Latin word that translates to being equitable, fair and transparent. True to its name, Equitas aims to be the leader in the industry by setting benchmarks in terms of being fair and transparent to its customers.

Particulars Description

Date of Incorporation 21st June 1993

RBI Registration No. B-07-00412 dated 29th October 2015 (Refer Note)

Corporate Identity Number U65191TN1993PLC025280

Permanent Account Number AAACV2544H

Constitution Public limited company operating as Systemically Important, Non-Deposit taking NBFC-AFC

Name of the Chief Functionary Mr. P N Vasudevan, Managing Director

Financial Year 1st April to 31

st March

Credit Rating CARE A+ from CARE IND A-/Stable and IND A1 from India Ratings CRISIL A1+ from CRISIL

Registered Office 4th Floor, Spencer Plaza, Phase II,

No.769, Mount Road, Anna Salai, Chennai - 600 002 Tel : +91 44 4299 5000 Fax : +91 44 4299 5050 website : www.equitasvf.in

Auditors Deloitte Haskins & Sells, Chartered Accountants 8th Floor, ASV’N, Ramana Towers, 52, Venkatnarayana Road, T Nagar, Chennai - 600 017



Note: Earlier, Reserve Bank of India had issued registration certificate dated 18th December 1998 as Non-Banking Financial Company - Non Deposit Taking. The Company has obtained fresh registration from RBI, reclassifying the Company as non-deposit taking Non-Banking Financial Company - Asset Finance Company on 10th October 2012 and subsequent to the conversion of the Company to Public Limited Company, RBI has issued registration certificate dated 29th October 2015.

(i) Details of Share Capital as on last quarter end, i.e. June 30, 2016

Particulars Description No. of Shares

Amount in Rs.

Authorized Capital

750,000,000 Equity Shares of Face Value of Rs. 10 Each Equity Shares 750,000,000 7,500,000,000 Issued, Subscribed & Paid up Capital

542,205,300 Equity Shares of Face Value of Rs. 10 Each Equity Shares 542,205,300 5,422,053,000 Share Premium

Equity Share Capital 3,311,652,000 Total 8,733,705,000

(ii) Details of present offer

Particulars Amount in Rs. Remarks

Size of the present offer 500,000,000

Issue of 500 senior, rated, listed, unsecured, transferable, redeemable, non-convertible debentures of face value of Rs.10 lakhs per debenture.

Paid-up capital

� After the offer 5,422,053,000 Nil

� After conversion of convertible instruments (if applicable)

5,422,053,000 Nil

Share Premium account

� Before the offer 3,311,652,000 Nil

� After the offer 3,311,652,000 Nil

(iii) Details of changes in capital structure as on last quarter end, i.e. June 30, 2016 for the last

five years;

The holding company, Equitas Holdings Limited acquired all the outstanding equity shares of the Issuer on 21st March 2011. The following changes have taken place in the authorized capital of the Company during last five years:

Date of Change Amount in Rs. Change / Remarks

21.03.2011 450,000,000 Increased from 60,000 shares of Rs.100 each to 4,500,000 shares of Rs.100 each totalling to Rs.45 Crores

20.06.2011 450,000,000 4,500,000 shares of Rs.100 each were subdivided into 45,000,000 shares of Rs.10 each comprising the authorized share capital of Rs.45 Crores

14.01.2012 1,000,000,000 Increased from 45,000,000 shares of Rs.10 each to 100,000,000 shares of Rs.10 each totalling to Rs.100 Crores



07.12.2015 7,500,000,000 Increased from 4,400,000,000 shares of Rs.10 each to 7,500,000,000 shares of Rs.10 each totalling to Rs.750 Crores



(iv) Details of Equity Share Capital History of the Company as on last quarter ended June 30, 2016 for the last five years;

Date of Allotment

No. of Equity Shares

Face Value (Rs.)

Issue Price (Rs.)

Consideration (Cash, Other

than cash, etc.,)

Nature of Allotment

Cumulative Re-

marks No of Equity

Shares Equity Share Capital (Rs.)

Equity Share Premium

(Rs.)

31.03.2011 500,000 100 100 Cash Fresh Issue 555,000 55,500,000 Nil Nil

20.06.2011 555,000 10 10

N.A Share Split 5,550,000 55,500,000 Nil Nil 4,995,000 10 10

29.06.2011 15,000,000 10 10 Cash Fresh Issue 20,550,000 205,500,000 Nil Nil




26.10.2012 90,910,000 10 11 Cash Fresh Issue 151,460,000 1,514,600,000 90,910,000 Nil

27.12.2013 89,240,000 10 14 Cash Fresh Issue 240,700,000 2,407,000,000 356,960,000 Nil

21.11.2014 182,300,000 10 16.45 Cash Fresh Issue 423,000,000 4,230,000,000 1,175,835,000 Nil

21.04.2016 119,205,300 10 24.16 Cash Fresh Issue 542,205,300 5,422,053,000 1,687,947,000 Nil

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

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

Reserve Bank of India issued the Small Finance Bank Guidelines during November 2014 to license Small Finance Banks in the private sector to, inter-alia, supply credit to micro and small enterprises and agriculture and provide banking services in unbanked and under-banked areas in India. Based on the guidelines, our holding Company, Equitas Holdings Ltd had made an application to set a Small Finance Bank. RBI granted an in-principle approval vide its letter dated 7th October 2015 to our holding Company. Further, RBI has granted final license to Equitas Holdings on 30th June 2016 to start the Small Finance Bank. Equitas Micro Finance Ltd and Equitas Housing Finance Ltd are proposed to be merged with the Company to start SFB. On 6th June 2016, the Honourable High Court of Madras Judicature had sanctioned the scheme of amalgamation of Equitas Micro Finance Ltd and Equitas Housing Finance Ltd with the Company. As per the Scheme of Amalgamation, the merger will be effective the working day immediately preceding the commencement of business of Small Finance Bank.

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

Type of Event Date of

Announcement Date of

Completion Details

The Company was converted into a Public Company vide revised Certificate of Incorporation dated 29th September 2015 issued by Registrar of Companies, Chennai

(vii) Details of the shareholding of the Company as on June 30, 2016

Shareholding pattern of the Company as on June 30, 2016;

Sl No

Particulars Total No of

Equity Shares

Total No of shares in Demat

form

Total Shareholding as % of total no of

equity shares

1 Equitas Holdings Ltd 54,22,05,285 Nil 100.00%

Nominees of Equitas Holdings Ltd



Sl No

Particulars Total No of

Equity Shares

Total No of shares in Demat

form


equity shares

2 Mr. S Bhaskar 1 Nil 0.00%

3 Mr. H Mahalingam 1 Nil 0.00%

4 Mr. V S Murthy 1 Nil 0.00%

5 Mr. S Muralidharan 1 Nil 0.00%

6 Mr. John Alex 1 Nil 0.00%

7 Mr. H K N Raghavan 1 Nil 0.00%

Total 54,22,05,300 Nil 100.00%

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

List of Top 10 holders of equity shares of the Company as on 30th June 2016 Sl No Particulars

Total No of Equity Shares

Total No of shares in

Demat form


equity shares

1 Equitas Holdings Ltd 54,22,05,285 Nil 100.00%

Nominees of Equitas Holdings Ltd

2 Mr. S Bhaskar 1 Nil 0.00%

3 Mr. H Mahalingam H 1 Nil 0.00%

4 Mr. V S Murthy 1 Nil 0.00%

5 Mr. S Muralidharan 1 Nil 0.00%

6 Mr. John Alex 1 Nil 0.00%

7 Mr. H K N Raghavan 1 Nil 0.00%

Total 54,22,05,300 Nil 100.00%

D. DETAILS REGARDING DIRECTORS OF THE COMPANY

(i) Details of Current directors of the Company*

Sl. No.

Name, Designation, DIN and Occupation

Age Address Director of the

Company since

Details of Other Directorships

1 Mr. P T Kuppuswamy, Designation: Chairman and Independent Director. DIN: 00032309 Occupation: Service

72 3A, Sun Pride Apartments, 9/5, Ganapathy Colony, 2

nd Street,

Gopalapuram, Chennai-600086

01.11.2011 • Equitas Holdings Limited

• Roots Multi Clean Limited

2 Mr. P S Balasubramaniam, Designation: Independent Director DIN: 00019843 Occupation: Service

72 Flat No.52, 5Th Floor, Ankur Grand No.252,Poonamalle High Road, Kilpauk Chennai 60001

01.08.2013 • Kothari Sugars and Chemicals Ltd

• Kothari Safe Deposits Ltd

• Kothari Biotech Ltd

• Kothari International Trading Ltd

• HCK Capital Services (P) Ltd

• Mahaveer Finance (India) Ltd

• Finance Companies’ Association (India)

• Deccan Finance Limited

• Equitas Technologies Private Limited



Sl. No.



Company since


3 Mr. V A George, Designation: Independent Director DIN: 01493737 Occupation: Service

67 Flat No.T-3,Shireen, Door No.2 Karpagam Avenue, Raja Annamalaipuram Chennai 600028

01.08.2013 • Thejo Engineering Ltd


4 Mr. R Jagannath, Designation: Independent Director DIN: 00029184 Occupation: Service

72 Old No.106A, New No.151, St Mary's Road, Chennai, 600018

06.11.2012 • AMW Motors Limited


5 Mr. John Arunkumar Diaz Designation: Non-Executive Director DIN:00493304 Occupation: Service

65 8A, Saahil, 14, Altamount Road, Mumbai 400026

30.10.2014 • Lynx Healthplus Services Private Ltdd

• Synergy Relationship Management Services Pvt Ltd

• Quest on the Frontier Pvt Ltd

• Aavishkaar Venture Trustees Pvt Ltd

• Vortex Engineering Private Ltd

• Intellecash Micro Finance Network Company Private Ltd

• Microfinance Singapore Pte. Ltd Singapore

• INI Farms Private Limited

• Jeevanti Healthcare Private Ltd

• Synergy Nexgen Products LLP

• Synergy Last Mile Solutions Private Limited

6 Mrs. Lalitha Lakshmanan Designation: Independent Director DIN: 07140032 Occupation: Service

63 Sri Bagh -3rd Floor 2,K V Colony 1st Street opp Mohadevan Street West Mambalam ,Chennai -600033

28.03.2015 High Energy Batteries (India) Limited



Sl. No.



Company since


7 Mr. P Parthasarathy, Designation: Independent Director DIN: 05212315 Occupation: Service

63 Sarathys F1, 1st Floor,Rajulas, Sri Ramana,617,51st Street,9th Sector,K K Nagar, Chennai, 600078

12.03.2012 Nil

8 Mr. P N Vasudevan, Designation: Non-Executive Director DIN: 01550885 Occupation: Service

54 Flat 1A, 1st Floor, II

Block, Kences Enclave, No.1 Rama Krishna Street, T Nagar, Chennai - 600 017

21.03.2011 • Alpha Micro Finance Consultants Pvt Ltd (resigned on 01 August 2016)

• Equitas Housing Finance Ltd

• Indian Housing Finance Companies Association Limited (under strike off)

• Equitas Micro Finance Ltd 9 Mr. Vinod Kumar

Sharma, Designation: Independent Director DIN:02051084 Occupation: Service

64 B 804, Park Titanium, Park Street, Kalewadi Phata,Wakad,Hinjavadi , Pune 411057

07.05.2014 • Firstsource Solutions Limited

• Texmaco Rail & Engineering Limited

• Indian Commodity Exchange Limited

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

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

Name, Designation and DIN

Date of Appointment / Resignation

Director of the Company

since (in case of resignation)

Remarks

Mr. Mohit Nijhawan, Director 02201435

01.07.2013 - Appointed as Directors of the Company in the Annual General Meeting of the Company

Mr. R Jagannath, Director 00029184

01.07.2013 -

Mr. P S Balasubramaniam, Additional Director, 00019843

01.08.2013 - Appointed as Additional Directors

Mr. V A George, Additional Director, 01493737

01.08.2013 -

Mr. S Bhaskar, Director, 02360919

02.08.2013 21.03.2011 Resigned as Director

Mr. Vinod Kumar Sharma, Additional Director, 02051084

07.05.2014 - Appointed as Additional Director

Mr. Mohit Nijhawan, Additional Director, 02201435

21.05.2014 06.11.2012 Demised on 21.05.2014

Mr. P S Balasubramaniam, Director, 00019843

17.06.2014 -

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

Mr. V A George, Director, 01493737

17.06.2014 -

Mr. Vinod Kumar Sharma, Director, 02051084

17.06.2014 -



Name, Designation and DIN

Date of Appointment / Resignation

Director of the Company

since (in case of resignation)

Remarks

Mr John Arunkumar Diaz, Additional Director 00493304


Mr. Venkatesh Natarajan 02453219

30.10.2014 - Appointed as Nominee Director

Mr. Gary Ng Jit Meng, Director, 01345204

24.12.2014 12.03.2012 Resigned as Director

Mr. P N Vasudevan, Managing Director, 01550885 29.01.2015 24.07.2012

Resigned as Managing Director and continues as Non-Executive

Director

Mr. P T Kuppuswamy, Director, 00032309

06.03.2015

Appointed as Independent Directors of the Company in Extra-Ordinary General Meeting of the

Company

Mr. P Parthasarathy, Director, 05212315

06.03.2015

Mr. R Jagannath, Director, 00029184

06.03.2015

Mr. P S Balasubramaniam, Director, 00019843

06.03.2015

Mr. V A George, Director, 01493737

06.03.2015

Mr. Vinod Kumar Sharma, Director, 02051084

06.03.2015

Mrs. Lalitha Lakshmanan, Additional Director, 07140032


Mr John Arunkumar Diaz, Director, 00493304

29.06.2015 -

Appointed as Non-Executive Director of the Company in the Annual General Meeting of the

Company

Mrs. Lalitha Lakshmanan, Director, 07140032

29.06.2015 - Appointed as Independent Director

of the Company in the Annual General Meeting of the Company

Mr. Venkatesh Natarajan, Nominee Director, 02453219

21.04.2016 30.10.2014

Ceased to be Director with effect from 21

st April 2016 since the

provisions of Articles of Association granting rights to investors of the holding company, Equitas Holdings Limited, to nominate a Director on the Board of the Company have fallen away on listing of equity shares of the holding company with Stock Exchanges on 21

st April 2016

Mr. P N Vasudevan, Managing Director, 01550885

23.07.2016 - Appointed as Managing Director of the Company

E. DETAILS REGARDING AUDITORS OF THE COMPANY

(i) Details of the auditor of the Company

Name Address Auditor since

Deloitte Haskins & Sells, Chartered Accountants

8th Floor, ASV ‘N’ Ramana Towers,

52, Venkatnarayana Road T Nagar, Chennai - 600 017

17.06.2014



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

Name Address Date of

Appointment / Resignation

Auditor of the Company since

(in case of resignation)

Remarks

Deloitte Haskins & Sells, Chartered Accountants

8th Floor, ASV ‘N’ Ramana

Towers, 52, Venkatnarayana Road, T Nagar, Chennai - 600 017

17.06.2014 Nil Appointed as auditors at AGM held on 17.06.2014

Brahmayya & Co Chartered Accountants

No.48, Masilamani Road, Balaji Nagar, Royapettah, Chennai - 600 014

17.06.2014 20.06.2011 Resigned as auditors

F. DETAILS OF BORROWINGS OF THE COMPANY, AS ON 30TH JUNE 2016

(i) Details of secured loan facilities

� Working Capital facilities

Rs. in Crores Sl No

Lender’s Name Amount

Sanctioned Amount

Outstanding Repayment Schedule

Security

Working Capital Demand Loan

1 State Bank of India 50.00 50.00 At Maturity Refer Notes Cash Credit

1 Corporation Bank 35.00 9.92

2 ICICI Bank Ltd 15.00 -

3 IDBI Bank Ltd 55.00 36.01

4 Indian Bank 25.00 24.26

5 Indian Overseas Bank 44.00 -

6 State Bank of Hyderabad 33.00 32.24

7 State Bank of India 50.00 0.25

8 State Bank of Patiala 25.00 24.26

9 Standard Chartered Bank 25.00 -

Total 357.00 177.14

Notes:

• Primary security - First Pari passu charge by way of hypothecation of Receivables under Financing Activity (excluding the assets charged to term lenders and Debenture Holders on exclusive basis).

• Collateral Security - First Pari passu charge on hypothecation of other free assets / fixed assets owned by the company.

• Guarantee - Corporate guarantee from Equitas Holdings Limited

� Term Loans Rs. in Crores

S

No Name of the Lender

Amount

Sanctioned

Amount

Outstanding Repayment Terms Security

Public Sector Banks

1 Andhra Bank 30.00 24.38 16 Quarterly Instalments

2 Bank of Maharashtra 30.00 19.08 11 Quarterly Instalments

3 State Bank of Hyderabad 25.00 25.00 9 Half yearly Instalments

4 State Bank of Mysore 25.00 17.19 16 Quarterly Instalments

5 State Bank of Patiala 50.00 50.00 20 Quarterly Instalments

6 Union Bank of India 50.00 40.00 15 Quarterly Instalments



S

No Name of the Lender

Amount

Sanctioned

Amount

Outstanding Repayment Terms Security

Private Sector Banks Refer Notes Below

7 HDFC Bank Ltd - TL I 15.00 11.25 12 Quarterly Instalments

HDFC Bank Ltd - TL II 50.00 46.87 16 Quarterly Instalments

HDFC Bank Ltd - TL III 50.00 50.00 12 Quarterly Instalments

8 Dhanlaxmi Bank Ltd - TL I 10.00 8.75 16 Quarterly Instalments

Dhanlaxmi Bank Ltd - TL I 40.00 40.00 10 Half yearly Instalments

9 RBL Bank Ltd 100.00 97.37 16 Quarterly Instalments

10 Tamilnad Mercantile Bank Ltd 15.00 14.06 16 Quarterly Instalments

11 The Karur Vysya Bank Ltd - TL I 30.00 26.84 19 Quarterly Instalments

The Karur Vysya Bank Ltd - TL II 20.00 20.00 18 Quarterly Instalments

12 The Lakshmi Vilas Bank Ltd - TL I 25.00 20.31 16 Quarterly Instalments

The Lakshmi Vilas Bank Ltd - TL II 25.00 25.00 9 Half yearly Instalments

13 The South Indian Bank Ltd - TL I 20.00 18.66 15 Quarterly Instalments

The South Indian Bank Ltd – TL II 15.00 15.00 9 Half yearly Instalments Foreign Banks

14 SBM Bank (Mauritius) Ltd - TL I 20.00 16.36 11 Quarterly Instalments

SBM Bank (Mauritius) Ltd - TL II 20.00 20.00 11 Quarterly Instalments Non-Bank Lenders

15 Capital First Limited - TL I 50.00 37.50 8 Monthly instalments

Capital First Limited - TL II 40.00 40.00 6 Monthly instalments

16 SIDBI – TL I 100.00 70.75 45 Monthly Instalments

SIDBI – TL II 75.00 70.75 18 Quarterly Instalments

Total 920.00 800.95

Notes: 1. Repayment terms mentioned above is the schedule at the time of sanction 2. All the loans are secured by hypothecation of Receivables under Financing Activity and

some of the loans are guaranteed by the Holding Company, Equitas Holdings Ltd

(ii) Details of unsecured loan facilities

Nil

(iii) Details of Non-Convertible Debentures Rs. in Crores

Debenture Series

Tenor/ Period of Maturity

Coupon Amount

Out-standing

Date of Allotment

Final Redemption

Date / Schedule

Credit Rating

Secured / Unsecured

Security

Series 1 6 Years 12.70% 50.00 06.06.2013 06.06.2019 CARE

A+

Secured

Refer Notes below

Series 2 4 Years 12.00% 58.00 25.11.2013 25.11.2016/ 25.05.2017/ 25.11.2017

Secured

Series 3 2 Years Zero 20.00 30.08.2014 30.08.2016

IND A-/

Stable

Secured

Series 4 2 Years 12.50% 3.00 29.09.2014 29.09.2016 Secured







Series 11 2 Years 12.50% 15.00 30.01.2015

30.04.2015/ 30.07.2015/ 30.10.2015/ 01.02.2016/ 02.05.2016/ 01.08.2016/

Secured



Debenture Series

Tenor/ Period of Maturity

Coupon Amount

Out-standing

Date of Allotment

Final Redemption

Date / Schedule

Credit Rating

Secured / Unsecured

Security

31.10.2016/ 30.01.2017

Series 12 5 years 12.13% 100.00 26.02.2015 26.02.2020 Secured

Series 13 6 Years, 1

month 14.95% 40.00 30.03.2015 30.04.2021

Un-secured

Un-secured,

Sub-ordinated

Series 14 5 years 11.66% 75.00 28.07.2015 28.01.2020/ 28.04.2020/ 28.07.2020/

Secured Refer Notes

Series 15 5 years 11.66% 75.00 14.08.2016 14.02.2020/ 14.05.2020/ 14.08.2020/

Secured Refer Notes

Total 461.94

Note: 1. The Secured NCDs are secured by hypothecation of receivables under financing activity 2. All the NCDs except Series 3, Series 13, Series 14 and Series 15 are guaranteed by

Equitas Holdings Ltd

(iv) List of Top 10 debenture holders as on 30th June 2016 Rs. in Crores

Sl No Name of Debenture-holders Amount

1 Franklin India Short Term Income Plan 190.00

2 Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N V 58.00

3 UTI International Wealth Creator 4 50.00

4 Franklin India Low Duration Fund 40.00

5 Franklin India Income Opportunities Fund 40.00

6 Capital First Limited 40.00

7 Reliance Capital Trustee Co Ltd A/C- Reliance Regular Savings Fund-Debt Option 15.00

8 Acsys Investments Private Limited 10.00

9 A K Capital Finance Private Limited 8.41

10 Unifi AIF 3.86

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

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

The Company has issued Corporate Guarantee as credit enhancement for the below securitisation transactions

Rs. in Crores Sl No Name of the Transaction Guarantee Amount

1 SME Pool - Series I - August 2015 2.89

2 SME Pool - Series II - October 2015 4.21

3 SME Pool - Series IV - March 2016 2.84 Total 9.94

(vi) Details of Commercial Paper issued by the Company

The total Face Value of Commercial Papers outstanding as on 30th June 2016 is given below:

Rs. in Crores Sl No Maturity Date Amount Outstanding

1 25th

August 2016 35.00

2 14th

September 2016 35.00

3 23rd

December 2016 30.00



Sl No Maturity Date Amount Outstanding

Total 100.00

(vii) Details of rest of the borrowings (if any including hybrid debt like FCCB, Optionally

Convertible Debentures / Preference Shares) as on 30th June 2016;

Party Name (In case of Facility) / Instrument Name

Type of Facility /

Instrument

Credit Rating

Amount Sanctioned

/ Issued

Principal amount

Outstanding

Repayment Date /

Schedule

Secured / Unsecured

Security

Nil Nil Nil Nil Nil Nil Nil Nil

(viii) Details of all default/s and/or delay, if any, including therein the amount involved,

duration of default and present status in repayments of Statutory dues, interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Company, in the past 5 years and before.

Particulars Amount Involved

Duration of Default

Present Status

Statutory Dues Nil Not Applicable Not Applicable

Debentures and Interest thereon Nil Not Applicable Not Applicable

Deposits and Interest thereon Nil Not Applicable Not Applicable

Loan from any bank or financial institution and interest thereon

Nil Not Applicable Not Applicable

(ix) Details of any outstanding borrowings taken/ debt securities issued where taken / issued

(i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in pursuance of an option.

Nil

G. DISCLOSURE WITH REGARD TO INTEREST OF DIRECTORS, LITIGATIONS,

REMUNERATION, RELATED PARTY DISCLOSURES, ETC.

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

Nil

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

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

Nil

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

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

Amount in Rs. Financial Year Other Directors Managing Director

2012-13 875,000 - 2013-14 1,959,000 - 2014-15 4,564,000 -



2015-16 52,50,000 -

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

Rs. in Lakhs

Transaction Related Party For the Year

Ended 31

st March 2016

For the Year Ended

31st

March 2015

For the Year Ended

31st

March 2014

Income

Recovery of expenses Equitas Micro Finance Ltd 11.13 26.23 22.62

Equitas Holdings Ltd - 0.18 -

Equitas Housing Finance Ltd 23.02 28.39 42.57 Expenses

Reimbursement of Expenses Paid

Equitas Micro Finance Ltd 120.74 382.76 461.94

Equitas Housing Finance Ltd 0.90 2.22

Equitas Holdings Ltd 2.84 2.36 1.57

Equitas Dhanyakosha India 0.38 0.37 0.15

Brokerage charges on Retain Loans

Equitas Micro Finance Ltd 695.15 289.45 -

Donation Equitas Development Initiatives Trust

241.00 96.00 -

Interest on Loan Equitas Holdings Ltd 6.63 414.02 168.89

Interest on Inter Corporate Deposits

Equitas Micro Finance Ltd - 112.71 178.53

Remuneration paid to Key Management Personnel

V S Murthy, Chief Executive Officer

65.13 14.32 -

S Vasudevan, Chief Financial Officer

32.87 15.68 -

Sridevi Surender, Company Secretary

8.74 7.06 -

Other Transactions

Issue of Equity Shares Equitas Holdings Ltd - 29,988.35 12,493.60

Purchase of Fixed Assets

Equitas Micro Finance Ltd - - 0.12

Sale of Fixed Assets Equitas Micro Finance Ltd - 7.54 0.07

Equitas Housing Finance Ltd - 5.34 -

Staff Loan transferred

Equitas Micro Finance Ltd 8.07 4.76 4,142

Equitas Housing Finance Ltd 0.16 0.87 -

Equitas Technologies Ltd 1.00 - -

Loans Availed Equitas Holdings Ltd 20,00.00 45,00.00 8,500.00

Inter Corporate Deposits received

Equitas Micro Finance Ltd - - 2,800.00

Loans repaid Equitas Holdings Ltd 20,00.00 99,00.00 3,100.00

Inter Corporate Deposits repaid

Equitas Micro Finance Ltd - 28,00.00 -

Corporate Guarantee of Holding Company (released) / issued [net]

Equitas Holdings Ltd

(127,00.00) 816,00.00 574,00.00

Payables

Loans Equitas Holdings Ltd - - 5,400.00

Inter Corporate Deposits

Equitas Micro Finance Ltd - - 2,800.00

Trade Payables Equitas Micro Finance Ltd 70.41 53.69 38.31 Receivables

Contractually Equitas Housing Finance Ltd 2.84 2.42 3.44



Transaction Related Party For the Year

Ended 31

st March 2016

For the Year Ended

31st

March 2015

For the Year Ended

31st

March 2014

reimbursable expenses

Equitas Micro Finance Ltd 1.69 2.09 1.53

Corporate Guarantee

Corporate Guarantee Equitas Holdings Limited 126,300.00 139,000.00 57,400.00

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

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

Nil

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

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

Nil

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

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

Nil

H. DETAILS OF PROMOTERS OF THE COMPANY

(i) Details of promoter holding in the company as on the latest quarter ended, 30th June 2016

Sl No

Name of the Shareholders

Total No of Equity Shares

No of Shares in

demat form

Total shareholding as % of total no of

equity shares

No of shares

pledged

% of shares pledged with

respect to shares owned

1 Equitas Holdings Limited

54,22,05,300 (Including shares held by Nominee)

Nil 100% Nil Not Applicable

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

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

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

Rs. in Lakhs

Particulars 31.03.2016 (Audited)

31.03.2015 (Audited)

31.03.2014 (Audited)

EQUITY AND LIABILITIES Shareholders’ Funds Share Capital 42,300.00 42,300.00 24,070.00




31.03.2015 (Audited)

31.03.2014 (Audited)

Reserves & Surplus 28,791.89 20,279.87 5,098.82 Non-Current Liabilities Long Term Borrowings 95,253.60 68113.75 19,887.09 Other Long Term Liabilities 5,771.04 247.08 355.07 Long Term Provisions 664.59 425.59 272.01 Current Liabilities Short Term Borrowings 23,517.22 40,809.62 37,094.63 Current Maturities of Long Term Borrowings 45,001.72 22,709.45 1,312.91 Trade Payable 1,360.12 739.09 390.80 Other Current Liabilities 8,923.29 2,654.69 2,008.87 Short Term Provisions 2,192.09 1,166.77 469.49

TOTAL 253,776.06 199,445.91 90,711.23 ASSETS Non-Current Assets Fixed Assets - Tangible Assets 929.10 673.62 221.36 Fixed Assets - In-Tangible Assets 187.42 84.81 53.54 Fixed Assets - Capital Work in progress - 20.21 14.60 Deferred Tax Assets 1,222.15 807.60 351.44 Long Term Receivables under Financing Activities 142,175.40 107,856.20 53,685.62 Long Term Loans and Advances 5,940.40 450.09 113.30 Other Non-Current Assets 2,731.78 477.35 396.25 Current Assets Short Term Receivables under Financing Activities 82,720.71 58,328.26 30,690.04 Cash and cash equivalents 9,854.12 27,192.78 2,870.49 Short Term Loans and Advances 439.37 267.43 187.70 Other current Assets 7,575.61 3,287.56 2,126.90

TOTAL 253,776.06 199,445.91 90,711.23

Statement of Profit and Loss Account Rs. in Lakhs

Particulars FY 2015-16 (Audited)

FY 2014-15 (Audited)

FY 2013-14 (Audited)

REVENUE Revenue from Operations 47,548.33 29,635.52 13,159.59 Other Income 59.48 13.83 8.76

Total 47,607.81 29,649.35 13,168.35 EXPENSES Finance Cost 15,911.31 10,436.73 4,360.77 Employee benefits 9,346.03 6,288.21 3,295.20 Depreciation and Amortization expenses 473.55 317.16 235.58 Other expenses 4,766.42 3,327.94 1,566.28 Provisions and Written offs 4,028.04 4,070.76 1,265.55

Total 34,525.35 24,440.80 10,723.38 Profit Before Tax 13,082.46 5,208.55 2,444.98 Tax Expense - Current Tax 4,985.00 2,242.00 757.18 MAT Credit Adjustment - - 4.82 Tax Expense - Deferred Tax (414.56) (456.16) 103.54 Profit After Tax for the Year 8,512.02 3,422.71 1,579.43 Interest Coverage Ratio 1.58 1.38 1.43 Dividend Declared Nil Nil Nil



Cash Flow Statement Rs. in Lakhs


31.03.2014 (Audited)

31.03.2013 (Audited)

A. Cash Flow from Operating Activities Net profit / (Loss) before taxation, and extraordinary item 13,082.46 5,208.55 2,444.98 Adjustments for: Depreciation and Amortisation expense 473.55 317.16 235.57 Contingent Provision for Standard Receivables under financing activities (Net)

244.80 198.87 47.53

Provision for Sub-Standard and Doubtful Receivables under financing activities (Net)

646.73 657.05 65.87

Provision against repossessed assets (328.35) 305.90 289.24 Provision for Credit Enhancements on assets de-recognised (Net)

78.46 (4.75) 12.35

Loss Assets Written-Off (Net) 656.07 391.54 97.53 Provision for doubtful advances - Staff loan 9.20 4.04 - Finance cost 1,5911.31 10,436.73 4360.77 Interest Income on Deposits with Banks / Others (50.06) (43.08) (5.96) Income from assets securitized (2,439.24) (592.53) (163.08) Profit on sale of current investments (Net) (1.28) (2.08) - (Profit) / loss on sale of Fixed Assets (Net) 0.72 (0.17) 1.63 Operating Profit before Changes in Working Capital 28,284.37 16,877.23 7,386.42 Changes in Working Capital: Adjustments for (increase) / decrease in operating assets:

Long term Receivables under financing activities (34,428.68) (55,123.81) (35,510.22) Long term Loans and Advances (129.76) (141.65) 7.04 Short term Receivables under financing activities (24,392.45) (27,638.22) (18,954.34) Short term Loans and Advances (378.44) (279.87) 309.82 Other Current Assets (505.15) (921.19) (1,189.61) Bilateral Assignment and Securitisation of Assets (Net) 2124.32 633.72 84.93 Adjustments for increase / (decrease) in operating liabilities:

Trade Payables 621.03 348.29 160.39 Other Current Liabilities 2,010.16 467.35 684.56 Short term Provisions 294.34 88.14 82.19 Cash Flow from / (used in) Operations (26,500.26) (65,690.01) (46,938.82)

Interest Income on Deposits / Other loans 49.09 42.03 6.81 Profit on sale of current investments (Net) 1.28 2.08 - Finance cost paid (15,384.10) (9,809.92) (3,623.69) Direct Taxes paid (5,025.66) (2,440.80) (755.95) Net Cash Flow from / (used in) Operations (46,859.65) (77,896.62) (51,311.65)

B. Cash Flow from Investing activities Capital expenditure on fixed assets (including capital advances)

(2,895.66) (818.43) (259.49)

Proceeds from sale of fixed assets 30.82 23.28 3.30 Bank balances not considered as Cash and cash equivalents

(89.56) (306.15) (86.39)

Purchase of current investments (2,000.00) (3,000.00) - Proceeds from sale of current investments 2,001.28 3,002.08 - Net Cash Flow from / (used in) Investing activities (2,953.12) (1,099.22) (342.58) C. Cash Flow from Financing Activities




31.03.2014 (Audited)

31.03.2013 (Audited)

Proceeds from issue of Share Capital - 29,988.35 12,493.60 Long term borrowings availed 69,500.00 93,800.00 21,200.00 Long term borrowings repaid (20,067.88) (24,176.80) (1,156.28) Short term borrowings availed / (repaid) [Net] (17,291.90) 3.611.73 17,648.02 Net Cash Flow from / (used in) Financing activities 32,140.22 103,223.28 50,185.34 Net Increase / (Decrease) in cash and cash Equivalents (A+B+C)

(17,672.55) 24,227.44 (1,468.92)

Cash and Cash Equivalents at the beginning of the period

27,097.93 2,870.49 4,339.41

Cash and Cash Equivalents at the end of the period 9,425.38 27,097.93 2,870.49 Notes: 1. Loans mentioned in summary balance sheet do not include assets under securitisations. 2. During the year ended 31st March 2014, the company has changed its accounting policy and

estimates on asset classification and provisioning norms for standard and non-performing assets to be in line with Reserve Bank of India (RBI) norms. The norms followed by the company were higher than those prescribed by RBI upto 31st March, 2013. Consequently, the

profit before tax for the year is higher by Rs. 1,715.92 Lakhs and profit after tax is higher by Rs.1,132.53 Lakhs for the year ended 31st March 2014.

3. Auditor Qualifications, if any - Nil J. Abridged version of Latest Audited/Limited Review Half Yearly Consolidated and Standalone

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

Audited (Standalone) Financial Results for the Half Year Ended 31st March 2016

Rs. in Lakhs Sl No

Particulars Year Ended 31-Mar-16

1 Income from Operations (a)+(b)+(c)+(d) 47,548.33

(a) Interest Income from Loans 40,074.81

(b) Income on Investments 1.28

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

(d) Others 7,472.24

2 Other Income 59.48 3 Total Income (1+2) 47,607.81

4 Interest Expended (including Finance Charges) 15,911.31

5 Operating Expenses (i)+(ii)+(iii) 14,586.00

(i) Employee Cost 9,346.03

(ii) Depreciation / Amortization 473.55

(iii) Other Operating Expenses 4,766.42 6 Total Expenditure, excluding Provisions & Contingencies (4+5) 30,497.31

7 Operating Profit before Provisions & Contingencies (3-6) 17,110.50

8 Provisions (including standard asset provision but other than Tax) / Write-offs & Contingencies

4,028.04

9 Exceptional Items - 10 Profit from Ordinary Activities before Tax (7-8-9) 13,082.46

11 Tax Expense 4,570.44

12 Net Profit from Ordinary Activities after Tax (10-11) 8,512.02

13 Extraordinary Items (net of Tax Expense) -

14 Net Profit for the Period / Year (12-13) 8,512.02

15 Paid-up Equity Share Capital (Face Value of Share: Rs.10 each) 42,300.00

16 Reserves excluding Revaluation Reserves 28,791.91

17 Analytical Ratios



Sl No

Particulars Year Ended 31-Mar-16

(i) Capital Adequacy Ratio (%) 29.60%

(ii) Earnings Per Share (EPS) - Basic / Diluted (Rs. per share) 2.01 18 NPA Ratio

a) Gross NPA 5,525.27

Net NPA 4,055.78

b) % of Gross NPA to Receivables under financing activity (including Interest accrued but not due)

2.42%

% of Net NPA to Receivables under financing activity (including Interest accrued but not due)

1.78%

c) Return on Assets (% of Profit After Tax to Total Assets) 3.35%

Auditor Qualifications, if any - Nil K. Any material event/ development or change having implications on the financials/credit

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

Nil

L. Details of the Debenture Trustee(s)

Catalyst Trusteeship Limited is appointed as the debenture trustee for the issue of the Debentures under this Disclosure Document. They have given their consent to act as the Debenture Trustee to the Issuer for their appointment as per sub regulation 4 under regulation 4 of Securities Exchange and Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and in all the subsequent periodical communications sent to the holders of debt securities.

M. Credit Rating Rationale and Credit Rating Letter

Credit Rating Letter (Issued on 10th August 2016) issued by the rating agency, CARE Ratings is enclosed in Annexure 3.

N. 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.

Not Applicable

O. Copy of consent letter from the Debenture Trustee shall be disclosed

Copy of consent letter from Catalyst Trusteeship Limited is enclosed in Annexure 4. P. Names of all the recognized stock exchanges where the debt securities are proposed to be

listed clearly indicating the designated stock exchange.

On Wholesale Debt Market (WDM) segment of BSE Limited. The Issuer undertakes to get the Debentures listed within 15 days from the Deemed Date of Allotment.

Q. Other Details



i. DRR Creation - relevant regulations and applicability

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

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

etc.)

� The Companies Act, 1956 and the Companies Act, 2013 � the Securities Contracts (Regulation) Act, 1956 � Securities and Exchange Board of India Act, 1992 � the Reserve Bank of India Act, 1934 � SEBI Regulations � NBFC Regulations � NCD Regulations and the rules and regulations issued thereunder, including modifications to all of the foregoing.

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

R. Legal Information

As on date, to best of knowledge of the Company, there are no legal proceedings filed against the Company in any legal forum in India.

S. Any Material Event / Development Or Change

Save as stated elsewhere in this Document, in the opinion of the of the Directors of the Company, there have been no material developments after the date of the last audited / un-audited financial statements as disclosed in this Disclosure Document, which would materially and adversely affect, or would be likely to affect, the trading or profitability of the Company or the value of its assets or its ability to pay its liabilities.

T. Particulars of the Debt Securities issued for consideration other than Cash

The Company has not issued any debt securities for consideration other than cash, whether in whole or part, at a premium or discount or in pursuance of an option.

U. Permission / consent from the prior creditor for a second or pari passu charge being

created, where applicable, in favor of the trustees to the proposed issue

The Company is not required to obtain any prior permission from its lenders for creation of exclusive charge in favour of Trustee for the Issue issued under this Offer Document and the Debenture Trust Deed.

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

4. TERMS PERTAINING TO THE ISSUE

A. RATING RATIONALE



CARE Ratings has assigned credit rating of CARE A+ for the Debentures of Rs.5,00,000,000 (Rupees Fifty Crores Only) to be issued by the Company under this Disclosure Document. A copy of the rating letter issued by CARE Ratings is enclosed as Annexure 3.

B. SUMMARY TERM SHEET SHALL BE PROVIDED WHICH SHALL INCLUDE AT LEAST

FOLLOWING INFORMATION (WHERE RELEVANT) PERTAINING TO THE SECURED / UNSECURED NON CONVERTIBLE DEBT SECURITIES (OR A SERIES THEREOF)

Security Name 10.15% EFL 2019 Series 18 Issuer Equitas Finance Limited Type of Instrument/ Kind of security offered

Rated, listed, senior, unsecured, redeemable, non-convertible debentures

Class of Security Not Applicable Nature of Instrument Senior Unsecured Seniority The Debentures will constitute direct, unsecured and senior obligations of the

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

Mode of Issue On Private Placement Basis Eligible Investors • Multilateral development banks such as International Finance

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

corporate debt limits and permitted to invest in Indian Corporate debt; • Qualified Foreign Investors; • Any other investor authorized to invest in these Debentures.

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

On the Wholesale Debt Market (WDM) segment of the Bombay Stock Exchange within 15 days from the Deemed Date of Allotment. In case the debentures are not listed within 15 (fifteen) calendar days of Deemed Date of Allotment for any reason whatsoever, the Issuer shall compulsorily buyback the debentures in accordance with the applicable provisions of the Companies Act, 2013

Rating of the Instrument ‘CARE A+’ by Credit Analysis and Research Limited Issue Size 500 (Five Hundred) rated listed senior unsecured redeemable non-

convertible debentures aggregating upto Rs.50,00,00,000 (Rupees Fifty Crores only).

Amount which the Company intends to raise by way of securities

Rs.50,00,00,000 (Rupees Fifty Crores only).

Option to retain oversubscription (Amount)

N.A.

Objects of the Issue The Issuer shall use the proceeds from the Issue for its various lending activities and such other activities as permitted under the guidelines/ regulations issued by RBI in this regard.

Details of Utilization of the Issue Proceeds

The issue proceeds will be utilized for providing debt financing for loan portfolio growth and other activities permitted by the Reserve Bank of India.

Interest Rate / Coupon Rate

10.15% p.a.

Step up / Step down Interest Rate

Not Applicable

Coupon Payment Compound Annually payable on maturity



Frequency

Coupon Payment Dates 24th

September 2019

Coupon Type Fixed Coupon Reset Process N.A. Day Count Basis Actual / Actual Interest on application money

The Issuer shall be liable to pay to each Debenture Holder, interest on the application monies (subject to any tax deductible at source under Applicable Law) paid by the said Debenture Holder in the event that the Debenture Holder has remitted the application monies prior to the Deemed Date of Allotment, which interest shall be calculated at the Coupon Rate, on the applicable monies, for the period commencing from the date on which the said Debenture Holder has made payment of the application monies (in respect of the Debentures) and ending on the day prior to the Deemed Date of Allotment. The interest on the application monies shall be paid by the Issuer to the Debenture Holders within 7 (Seven) Business Days from the Deemed Date of Allotment.

Default Interest Rate In the event of a payment default of the amounts due under this Issue or any other Event of Default, the Issuer shall pay an additional 2% (Two Percent) per annum over and above the applicable Interest Rate on the Outstanding Principal Amount of the Debentures, calculated from the date of the occurrence of the default until such default is cured.

Tenor 37 (Thirty Seven) months Redemption Date 24th Setember 2019 Redemption Amount Rs.10,00,000/- (Rupees Ten Lakhs only) per debenture Redemption Premium / Discount

Nil

Issue Price/ Price at which the security is being offered including the premium if any, along with justification of price.

Rs.10,00,000/- (Rupees Ten Lakhs) per debenture. The pricing of the Debentures has been arrived at on the basis of prevailing market terms and conditions.

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

Nil

Put Option Date Not Applicable Put Option Price Nil

Call Option Date Not Applicable Call Option Price Nil

Put Notification Time Not Applicable Call Notification Time Not Applicable Face Value Rs. 10,00,000 (Rupees Ten Lakhs only) per debenture Minimum Application and in multiples of minimum Securities thereafter

10 debentures and in multiples of 1 debenture thereafter

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

Allotment

August 24,2016 August 24,2016 August 24,2016 August 24,2016

Cut-off Date for Issue Closure

August 24,2016

Issuance Mode of the Instrument

In Demat only

Trading Mode of the Instrument

In Demat only

Settlement Mode of the Instrument/ Mode of

By way of RTGS Credit



Payment/ Mode of Repayment

Depository NSDL / CDSL Business Day Convention

Any payment to be made or action to be taken in terms hereof and other Transaction Documents, is required to be made or taken on a day other than a Business Day, such payment shall be made or action be taken on the immediately succeeding Business Day. However, if the Final Redemption Date is not a Business Day, the payment shall be made on the immediately preceding Business Day

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

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

Unsecured

Transaction Documents Means the Debenture Trustee Agreement, the Debenture Trust Deed, this Disclosure Document, the letters issued by the credit rating agency and the Registrar and all other documents in relation to the issuance of the Debentures.

Conditions Precedent to Disbursement

Shall be as more particularly set out in the Debenture Trust Deed. The Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

Conditions Subsequent to Disbursement

Shall be as more particularly set out in the Debenture Trust Deed. The Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

Financial and Other Covenants

The Issuer undertakes to: 1. Maintain a minimum capital adequacy ratio (as defined in RBI

Regulations) or 15%, whichever is higher; 2. Maintain a minimum rating (for the Debentures issued under this term

sheet) of A at all times from any of the SEBI approved rating agencies (i.e. CRISIL, ICRA, CARE, India Ratings);

3. Retain a minimum shareholding of Equitas Holdings Limited in the Issuer at 51%, with management control with Equitas Holdings Limited;

4. Meet all the regulatory requirements as required under RBI Regulations. Events of Default Shall be as more particularly set out in the Debenture Trust Deed. The

Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

Cross Default An Event of Default shall arise if the Issuer: (A) defaults in any payment of Indebtedness beyond the period of grace if

any, provided in the instrument or agreement under which such Indebtedness was created; or

(B) any Indebtedness of the Company is declared to become due and payable prior to its specified maturity as a result of an event of default (however described).

(C) any encumbrance over any assets of the Company to secure any Financial Indebtedness (other than the Debentures) is enforced by any lender

Roles and Responsibilities of Trustee

To oversee and monitor the overall transaction for and on behalf of the

Debenture Holders as will be more particularly set out in the Debenture Trust

Deed.

Governing Law and Jurisdiction

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



C. ADDITIONAL COVENANTS

�� Security Creation (where applicable)

Not Applicable

�� Default in Payment

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

�� Delay in Listing

In case the Debentures are not listed within 15 days of Deemed Date of Allotment for any reason whatsoever, the Issuer shall be required to immediately redeem all the Debentures from the Debenture Holders along with the interest accrued from the date of issuance at the Interest Rate till the date of redemption.

The interest rates mentioned in above three cases are the minimum interest rates payable by the Company and are independent of each other.

�� The Company is entitled at its sole and absolute discretion to accept or reject any application,

in part or in full, without assigning any reason thereof. An Application Form, which is not complete in all respects, shall be liable to be rejected. Any application, which has been rejected, would be intimated by the Company along with refund intimation.

�� Undertaking To Use Common Form Of Transfer

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

�� Other Terms Of The Issue

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

�� Nature and Status of Debentures

The Debentures shall be fully paid-up and ranking pari passu with the claims of all of its other unsubordinated creditors and senior to any subordinated creditors.

�� Deemed Date of Allotment

The Deemed Date of Allotment is August 24, 2016. All the benefits under the Debentures, including the payment of interest/premium, will accrue to the Investor(s) from the Reference Date as per Clause 2.7 (b) of Debenture Trust Deed.

�� Mode of Subscription

jurisdiction in Chennai.



Electronic transfer of funds through RTGS / ECS mechanism for credit in the account of Equitas Finance Limited details of which are given below:

Name of the Beneficiary : Equitas Finance Limited Bank Name : ICICI Bank Limited Beneficiary Account No : 000105026926 Branch Address : No.1, Cenotaph Road, Teynampet, Chennai - 600 018 IFSC Code : ICIC0000001

�� Settlement

Payment of interest and repayment of principal shall be made through RTGS/ ECS system.

�� Listing

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

�� Issue only in Demat Form

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

�� Mode of Transfer, Transmission of Debentures

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

�� Interest on Application Money Interest shall be paid in accordance with the Debenture Trust Deed.

�� Effect of Holidays

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

�� Tax Deduction at Source



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

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

�� Debenture Certificate

The Company will allot to the investors, the Debentures in due course after verification of the Application Form(s), the accompanying documents and on realization on application money. The Demat Account of the investors with NSDL/CDSL will be credited within 2 Business Days from the Deemed Date of Allotment. The initial credit in the demat account will be akin to the Debenture Certificate. On completion of all statutory formalities such credit will be substituted for the number of Debentures allotted.

�� Stamp Duty The Company will pay all the stamp duties in relation to the Debentures and all documents executed in relation to the Debentures.

�� Redemption

The Debentures shall be redeemed at as per the redemption schedule provided in the term sheet above.

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

�� Succession

Where Debentures are held in joint names and one of the joint holders dies, the survivor(s) will be recognized as the Holder(s) of the said Debentures. It would be sufficient for the Company to delete the name of the deceased Debenture Holder after obtaining satisfactory evidence of his death provided a third person may call on the company to register his name as successor of the deceased holder after obtaining evidence of such as probate of a will for the purpose of proving his title to the Debentures. In the event of demise of the sole/first holder of the Debenture(s), the Company will recognize the Executors or Administrator of the deceased Debenture Holder, or the Holder of the Succession Certificate or other legal representative as having title to the Debentures only if such Executor or Administrator obtains and produces



probate or Letter of Administration or is the holder of the Succession Certificate or other legal representation, as the case may be, from an appropriate Court in India. The Directors of the Company in their absolute discretion may, in any case, dispense with production of Probate or Letter of Administration or Succession Certificate or other legal representation.

�� Record Date

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

�� Interest Rate

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

�� Amendment of the Terms of the Debentures

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

�� Debenture Trustee for the Debenture Holders

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

The Debenture Trustee will protect the interest of the Debenture Holder(s) upon the occurrence of an Event of Default by the Issuer and they will take necessary action at the cost of the Issuer. The Investor can refer to the Debenture Trust Deed to be entered with the Debenture Trustee for the powers, liability, rights, retirement, and removal etc. of the Trustee.

�� Rights of Debenture Holder(s)

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



�� Future Borrowings

The Issuer shall be entitled to borrow or raise loans or create encumbrances on all or any of its assets or avail financial assistance in whatever form, and issue promissory notes or debentures or other securities by creating security on any present and future assets of the Company, without the consent of, or intimation to the Debenture Holders or the Debenture Trustee.

�� Governing Law

The Debentures and documentation will be governed by and construed in accordance with the laws of India and the parties submit to the exclusive jurisdiction in Chennai and as more particularly provided in the Debenture Trust Deed.

�� Debenture Redemption Reserve

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

D. Disclosures pertaining to wilful defaulter

Neither the Issuer nor its Directors nor the Promoter have been declared as willful defaulter. Please refer to Section VI for details.

5. APPLICATION PROCESS

a) HOW TO APPLY

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

The Company shall pay interest on the application money at the rate to be set out herein. On the issue closing date, the cut-off time for submitting the application along with the accompanying documents and the application money is 2:00 pm, if application money is credited through RTGS. Applications for the Debentures must be made in the Application Form and must be completed in block letters in English by investors. The full amount of the Face Value applied for has to be paid along with the delivery of the fully completed and executed Application Form together with other applicable documents described below.

b) WHO CAN APPLY

Only eligible investors who have been addressed through a communication directly by the Company can apply. No person who has not received a direct communication from the Company may apply in this Issue. The following categories of investors, when specifically approached, are eligible to apply for this Private Placement of Debentures. • Multilateral development banks • Companies • Banks and NBFCs



• Individuals, HUFs, Partnerships and Trusts • Financial Institutions and Insurance companies • Pension Funds and Mutual Funds • Foreign Institutional Investors registered with SEBI and having adequate corporate debt

limits and permitted to invest in Indian Corporate Debt • Qualified Foreign Investors

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

c) PERMANENT ACCOUNT NUMBER

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

d) KYC (KNOW YOUR CUSTOMER)

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

e) SUBMISSION OF COMPLETED APPLICATION FORM

All applications duly completed and accompanied with necessary documents are to be submitted to the Company at its Registered Office.

f) PROCEDURE FOR APPLICATIONS

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

The application must be accompanied by copies of (i) FII Registration Certificate, (ii) Power of Attorney, if applicable, (ii) Specimen signatures of authorized signatories. The subscription amount shall be made by way of RTGS / NEFT to the account as mentioned in Clause 10 (e) (iii) above.

g) RIGHT TO ACCEPT / REJECT APPLICATIONS

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

h) COMPLIANCE OFFICER

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



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

i) DEPOSITORY ARRANGEMENT

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

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

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

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

k) REGISTER OF DEBENTURE HOLDERS

The Company shall maintain a Register of Debenture Holders containing necessary particulars at its Registered Office / Corporate Office.

l) NOTICES

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

To the Issuer Address 4th Floor, Phase II, Spencer Plaza No. 769, Mount Road, Chennai - 600 002 Fax +91 44 4299 5050 Attn. Ms. Sridevi Surender, Company Secretary

To the Debenture Trustee Address 83 - 87, 8th Floor, 'B' Wing, Mittal Tower, Nariman Point, Mumbai - 400021 Fax +91 22 4922 0505 Attn. Ms. Deesha Trivedi

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

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



(3) Without prejudice to paragraphs (1) and (2) above, for so long as the Original Debenture

Holder remains a Debenture Holder, a copy of any notice given or made to the Trustee pursuant to the foregoing provisions shall also be sent by registered post, courier and facsimile to the address set out in the Fee Letter or to such other addresses as the Original Debenture Holder may notify to the Trustee from time to time.

m) REPRESENTATIONS AND WARRANTIES OF THE ISSUER

The representations and warranties of the Issuer shall be as more particularly set out in the Debenture Trust Deed. The Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

n) COVENANTS OF THE ISSUER

The covenants of the Issuer shall be as more particularly set out in the Debenture Trust Deed. The Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

o) EVENTS OF DEFAULT OF THE ISSUER

Event of Default shall be as more particularly set out in the Debenture Trust Deed. The Debenture Trust Deed has been finalised and a copy of the same is available with the Debenture Trustee and available for inspection, if required.

p) CONFLICT

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

q) DEBENTURE CASH FLOWS

As Provided in Annexure - 2

SECTION VI: DISCLOSURES PERTAINING TO WILFUL DEFAULTER

I. Name of the bank declaring the entity as a wilful defaulter Not Applicable

II. The year in which the entity is declared as wilful defaulter Not Applicable



III. Outstanding amount when the entity is declared as wilful defaulter

Not Applicable

IV. Name of the entity declared as willful defaulter Not Applicable

V. Steps taken, if any, for the removal form the list of wilful defaulter Not Applicable

VI. Other disclosures, as deemed fit by the Issuer in order to enable investors to take informed decisions

Not Applicable

VII. Any other disclosure as specified by the board. Not Applicable



SECTION VII: DECLARATION

TO WHOMSOEVER IT MAY CONCERN In relation to the issue of non-convertible debentures of the face value Rs. 10,00,000 (Rupees Ten Lakhs Only) each, aggregating to Rs. 50,00,00,000/- (Rupees Fifty Crores Only) on private placement basis, I, P N Vasudevan, Managing Director of the Company hereby declare that:

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

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

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

Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time;

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

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

I am authorized by the Board of Directors of the Company vide resolution number 14 dated 3rd February 2016 to sign this form and declare that all the requirements of the Act and the rules made thereunder in respect of the subject matter of this Disclosure Document and matters incidental thereto have been complied with. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the promoters subscribing to the Memorandum of Association and Articles of Association. It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this form. For Equitas Finance Limited (formerly known as Equitas Finance Private Ltd)

P N Vasudevan Managing Director Place : Chennai Date : 23rd August 2016

Attachments: a) Extract of Board Resolution of the Company in relation to the particulars of the offer dated

03rd February 2016. b) Extract of the resolution passed at the Extraordinary General Meeting of the company in relation to

the particulars of the Offer dated 27th April 2016.



ANNEXURE 1 - APPLICATION FORM Serial No….

To Equitas Finance Limited 4th Floor, Phase II, Spencer Plaza, No.769, Mount Road, Anna Salai, Chennai - 600 002

Dear Sirs,

Having read and understood the contents of the Disclosure Document and the disclosures made therein, I/we hereby apply to you for ________ [number of NCDs to be inserted] of Series …. at the Interest Rate mentioned in the Disclosure Document. I/we hereby agree to accept the NCDs applied for or such smaller number as may be allotted to me/us at an interest equal to or higher than the value state below, subject to the terms of the said Disclosure Document and this Application Form. I/we undertake that I/we will sign all such other documents and do all such other acts, if any, necessary on my/our part to enable me/us to be registered as the holder(s) of the NCDs which may be allotted to me/us. I/we authorize you to place my/our name(s) on the NCD Register of the Company that may be so allotted and to register my/our address(es) as given below. I/we note that Catalyst Trusteeship Ltd. is entitled in its absolute discretion to accept or reject this Application Form in whole or in part without assigning any reason whatsoever. I/We understand that: (1) in case of allotment of NCDs to me/us, I/we as holders of the NCD, am/are entitled to receive income chargeable under the provisions of Income Tax Act, 1961 at the option of the Assessing Officer either in my/our hands. I/We have been regularly assessed to income tax by the _________________________________________________ (name and address of the income-tax authority) and the Permanent Account Number allotted to me / us is ________________________ and the income as holder/transferee of NCDs is includible in my / our total income under the provisions of Income Tax Act, 1961. I/we hereby agree and assure that I/We shall include the said income in my/our total income and have the same assessed to income tax. I/We, therefore, request you not to retain income tax at the time of credit of such income to my/our account or as the case may be, payment hereof to me/us.

We are applying as (Tick whichever is applicable) Domestic Company Commercial Banks / Financial Institutions / Primary Dealers

Foreign Institutional Investors Mutual Funds

Individual, Partnership & Trust Other

NCD Series Amount (Rs) No. of NCDs

(Application amount must be for a minimum amount of Rs.1,00,00,000/- (Rupees One Crores only))

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



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

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

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

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

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

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

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

Name of the Authorized Signatory(ies)

Designation Signature

1. 1. 2. 2.

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

ACKNOWLEDGEMENT SLIP (To be filled in by the Applicant)

Date: / / Application Form Serial No. 1

Series Interest Rate No. of NCDs



All future communications in connection with the Application should be addressed to the Company (quoting full name of the Applicant, Serial Number of the Application Form, Number of NCDs applied for and date of application). Instructions: 1) Application Form must be completed in full in BLOCK LETTERS in English. Applications, which are

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

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

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

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

5) Application Forms duly completed must be submitted to the Issuer on or before 10 a.m. on Issue Opening day.

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



ANNEXURE 2 - ILLUSTRATION OF DEBENTURE CASHFLOWS Company Equitas Finance Limited Face Value (per Debentures) Rs.10,00,000 (Rupees Ten Lakhs Only) Issue Date / Deemed Date of Allotment 24th August 2016

Redemption Date(s) 24th September2019

Interest Rate 10.15% per annum (Ten Decimal Point One Five Percent)

Frequency of the Interest payment with specific dates

Compounded Annually and Payable at Maturity as per the table below

Day Count Convention Actual / Actual

Amount in Rs.

Date for payment of Interest and redemption of principal

No. of days in Period

Principal Outstanding

per Debenture

Principal Amount

per Debenture

Interest Amount per Debenture

Total Cash Flows per

Debentures

Wednesday , August 24, 2016

(1,000,000)

Thursday , August 24, 2017 365 1,000,000 - - -

Friday, August 24, 2018 365 1,000,000 - - -

Saturday, August 24, 2019 365 1,000,000 - - -

Tuesday, September 24, 2019 31 1,000,000 1,000,000 347,973 1,347,973

ANNEXURE 3 - RATING RATIONALE AND RATING LETTER



ANNEXURE 4 - DEBENTURE TRUSTEE CONSENT LETTER



ANNEXURE 5 - BOARD RESOLUTION AND SHAREHOLDERS’ RESOULTIONS