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HARSHAL PROPERTIES PRIVATE LIMITED CIN: U45309MH2019PTC332685

REGISTERED OFFICE: FLAT - 007, BORIVALI HIMANSHU CHS LTD, OFF S V P ROAD, NEAR MCF CLUB, BORIVALI

WEST, MUMBAI – 400092

Private Placement Offer Cum Application Letter

FOR PRIVATE CIRCULATION ONLY

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PRIVATE PLACEMENT OFFER CUM APPLICATION LETTER

[Pursuant to section 42 and section 71of the Companies Act, 2013 and Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and any other applicable provisions.

ISSUE OF UP TO 18 (EIGHTEEN) SENIOR, SECURED, RATED, REDEEMABLE,NON-CONVERTIBLE DEBENTURES OF THE FACE VALUE OF RS. 10,00,000 (RUPEES TEN LAKHS ONLY) EACH (THE “NCDs”/“DEBENTURES”) AGGREGATING UP TO RS. 1,80,00,000/- (RUPEES ONE CRORE EIGHTY LAKHSONLY) ON A PRIVATE PLACEMENT BASIS (THE “ISSUE”), BY HARSHAL PROPERTIES PRIVATE LIMITED (THE “COMPANY”/“ISSUER”)

BACKGROUND

This Private Placement Offer Cum Application Letter (hereinafter referred to as the “Offer Letter”) is related to the Debentures to be issued by the Issuer on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The Issue has been authorised by the Issuer through a resolution passed by the Board of Directors of the Issuer on 15th January, 2020 and by a resolution passed by the shareholders of the Issuer on 17thJanuary, 2020.

GENERAL RISK

As the Issue is being made on a private placement basis, this Offer Letter has not been submitted to or cleared by the Securities and Exchange Board of India (“SEBI”). The Issue has not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Offer Letter. Investors are advised to take an informed decision and to read the risk factors carefully before investing in the DebenturesSpecific attention of the investors is invited to the summarized Risk Factors mentioned elsewhere in this Offer Letter.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Offer Letter contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Offer Letter is true and correct 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 Offer Letter as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Company shall make an application for the listing of the Debentures on the Stock Exchange within 15 days from the Closing Date.



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ISSUE PROGRAM

Issue Opens on:14th May, 2020 Issue Closes on: 17th May, 2020

The Issue shall be open for subscription during the banking hours on each day during the period covered by the Issue Program.

Note: This Offer Letter, prepared pursuant to Section 42 and Section 71 of the Companies Act, 2013 (“Companies Act”) and Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (“Rules”), as amended, for private placement of the Debentures is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the debt securities to be issued by the Issuer. This is only an information brochure intended for private use and circulation.

REGISTRAR TO THE ISSUE DEBENTURE TRUSTEE TO THE ISSUE

Bigshare Services Pvt Ltd Bharat Tin Works Building, Opp. Vasat Oais, Makhvana Road, Marol, Andheri East, Mumbai 400059.

Vistra ITCL (India) Limited

IL&FS Financial Center, Plot No – C 22, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051.



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DISCLAIMERS

GENERAL DISCLAIMER

THIS OFFER LETTER IS NEITHER A PROSPECTUS NOR A STATEMENT IN LIEU OF A PROSPECTUS AND SHOULD NOT BE CONSTRUED TO BE A PROSPECTUS OR A STATEMENT IN LIEU OF PROSPECTUS UNDER THE COMPANIES ACT. THIS OFFER LETTER CONTAINS DISCLOSURES AS PER FORM PAS-4, PURSUANT TO SECTION 42 OF THE COMPANIES ACT AND RULE 14(3) OF THE RULES, AS AMENDED. THE ISSUE OF DEBENTURES IS BEING MADE STRICTLY ON A PRIVATE PLACEMENT BASIS. MULTIPLE COPIES HEREOF GIVEN TO THE SAME ENTITY SHALL BE DEEMED TO BE GIVEN TO THE SAME PERSON AND SHALL BE TREATED AS SUCH. THIS OFFER LETTER DOES NOT CONSTITUTE AND SHALL NOT BE DEEMED TO CONSTITUTE AN OFFER OR AN INVITATION TO SUBSCRIBE TO THE DEBENTURES TO THE PUBLIC IN GENERAL. THIS OFFER LETTER IS NOT INTENDED TO BE CIRCULATED TO MORE THAN 49 (FORTY NINE) INVESTORS ELIGIBLE UNDER THE LAWS OF INDIA TO INVEST IN THESE DEBENTURES (“ELIGIBLE INVESTORS”).APART FROM THIS OFFER LETTER, NO OFFER DOCUMENT OR PROSPECTUS HAS BEEN PREPARED IN CONNECTION WITH THE OFFERING OF THIS ISSUE OR IN RELATION TO THE ISSUER NOR IS SUCH A PROSPECTUS REQUIRED TO BE REGISTERED UNDER THE APPLICABLE LAWS. ACCORDINGLY, THIS OFFER LETTER HAS NEITHER BEEN DELIVERED FOR REGISTRATION NOR IS IT INTENDED TO BE REGISTERED.

UNDER THE APPLICABLE PROVISIONS OF THE COMPANIES ACT, IT IS NOT NECESSARY FOR A COPY OF THIS OFFER LETTER TO BE FILED OR SUBMITTED TO SEBI FOR ITS REVIEW AND/OR APPROVAL.

THIS OFFER LETTER AND THE CONTENTS HEREOF ARE RESTRICTED ONLY FOR THE INTENDED RECIPIENT(S) WHO HAVE BEEN ADDRESSED DIRECTLY AND SPECIFICALLY THROUGH A COMMUNICATION BY THE ISSUER AND ONLY SUCH RECIPIENTS ARE ELIGIBLE TO APPLY FOR THE DEBENTURES. ALL INVESTORS ARE REQUIRED TO COMPLY WITH THE RELEVANT REGULATIONS/GUIDELINES APPLICABLE TO THEM FOR INVESTING IN THIS ISSUE. THE CONTENTS OF THIS OFFER LETTER ARE INTENDED TO BE USED ONLY BY THOSE INVESTORS TO WHOM IT IS ISSUED. IT IS NOT INTENDED FOR DISTRIBUTION TO ANY OTHER PERSON AND SHOULD NOT BE REPRODUCED BY THE RECIPIENT IN ANY MANNER.

EACH COPY OF THIS OFFER LETTER IS SERIALLY NUMBERED AND THE PERSON TO WHOM A COPY OF THE OFFER LETTER IS SENT, IS ALONE ENTITLED TO APPLY FOR THE DEBENTURES. NO INVITATION IS BEING MADE TO ANY PERSONS OTHER THAN THOSE TO WHOM APPLICATION FORMS ALONG WITH THIS OFFER LETTER HAVE BEEN SENT. ANY APPLICATION BY A PERSON TO WHOM THE OFFER LETTER HAS NOT BEEN SENT BY THE ISSUER SHALL BE REJECTED WITHOUT ASSIGNING ANY REASON.

THE PERSON WHO IS IN RECEIPT OF THIS OFFER LETTER SHALL MAINTAIN UTMOST CONFIDENTIALITY REGARDING THE CONTENTS OF THIS OFFER LETTER AND SHALL NOT REPRODUCE OR DISTRIBUTE IN WHOLE OR PART OR MAKE ANY ANNOUNCEMENT IN PUBLIC OR TO A THIRD PARTY REGARDING THE CONTENTS HEREOF WITHOUT THE CONSENT OF THE ISSUER. THE RECIPIENT AGREES TO KEEP CONFIDENTIAL ALL INFORMATION PROVIDED (OR MADE AVAILABLE HEREAFTER), INCLUDING, WITHOUT LIMITATION, THE EXISTENCE AND TERMS OF THE ISSUE, ANY SPECIFIC PRICING INFORMATION RELATED TO THE ISSUE OR THE AMOUNT OR TERMS OF ANY FEES PAYABLE TO OTHER PARTIES IN CONNECTION WITH THE ISSUE.

DISCLAIMER IN RESPECT OF JURISDICTION



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THIS ISSUE IS MADE IN INDIA TO THE ELIGIBLE INVESTORS, WHO SHALL BE SPECIFICALLY APPROACHED BY THE ISSUER. THE DISTRIBUTION OF THE OFFER LETTER OR THE APPLICATION FORMS AND THE OFFER, SALE, PLEDGE OR DISPOSAL OF THE DEBENTURES MAY BE RESTRICTED OR PROHIBITED BY LAW IN CERTAIN JURISDICTIONS. RECIPIENTS ARE REQUIRED TO OBSERVE ANY DISPUTES ARISING OUT OF THIS ISSUE WILL BE SUBJECT TO THE NON–EXCLUSIVE JURISDICTION OF THE COURTS OF MUMBAI IN ACCORDANCE WITH THE DEBENTURE TRUST DEED DATED 6th FEBRUARY, 2020 (“DEBENTURE TRUST DEED”). THIS OFFER LETTER DOES NOT CONSTITUTE AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE TO THE DEBENTURES HEREIN, IN ANY OTHER JURISDICTION AND TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR INVITATION IN SUCH JURISDICTION. THE SALE OR TRANSFER OF THESE DEBENTURES OUTSIDE INDIA MAY REQUIRE REGULATORY APPROVALS IN INDIA, INCLUDING WITHOUT LIMITATION, THE APPROVAL OF THE RBI.

DISCLAIMER OF THE ISSUER

THIS OFFER LETTER HAS BEEN PREPARED BY THE ISSUER SOLELY TO PROVIDE GENERAL INFORMATION ABOUT THE ISSUER AND SETTING OUT THE KEY TERMS UPON WHICH THE DEBENTURES ARE BEING ISSUED, TO ELIGIBLE INVESTORS TO WHOM IT IS ADDRESSED AND WHO ARE WILLING AND ELIGIBLE TO SUBSCRIBE TO THE DEBENTURES. FURTHER, THIS OFFER LETTER HAS BEEN PREPARED FOR INFORMATION PURPOSES RELATING TO THIS TRANSACTION ONLY AND UPON THE EXPRESS UNDERSTANDING THAT IT WILL BE USED ONLY FOR THE PURPOSES SET FORTH HEREIN.

THE ISSUER DOES NOT UNDERTAKE TO UPDATE THE OFFER LETTER TO REFLECT SUBSEQUENT EVENTS AFTER THE DATE OF THE OFFER LETTER AND THUS IT SHOULD NOT BE RELIED UPON WITH RESPECT TO SUCH SUBSEQUENT EVENTS WITHOUT FIRST CONFIRMING ITS ACCURACY WITH THE ISSUER.

DISCLAIMER OF THE DEBENTURE TRUSTEE

I. THE DEBENTURE TRUSTEE DOES NOT UNDERTAKE TO REVIEW THE FINANCIAL CONDITION OR AFFAIRS OF THE ISSUER DURING THE TERM OF THE ARRANGEMENTS CONTEMPLATED BY THIS OFFER LETTER AND DOES NOT HAVE ANY RESPONSIBILITY TO ADVISE ANY INVESTOR OR PROSPECTIVE INVESTOR IN THE DEBENTURES OF ANY INFORMATION AVAILABLE WITH OR SUBSEQUENTLY COMING TO THE ATTENTION OF THE DEBENTURE TRUSTEE, ITS AGENTS OR ADVISORS EXCEPT AS SPECIFICALLY PROVIDED FOR IN THE DEBENTURE TRUST DEED.

II. THE DEBENTURE TRUSTEE HAS NOT SEPARATELY VERIFIED THE INFORMATION CONTAINED IN THIS OFFER LETTER. ACCORDINGLY, NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS MADE AND NO RESPONSIBILITY IS ACCEPTED BY DEBENTURE TRUSTEE AS TO THE ACCURACY OR ANY OTHER INFORMATION PROVIDED BY THE ISSUER. ACCORDINGLY, THE DEBENTURE TRUSTEE ASSOCIATED WITH THE ISSUE SHALL HAVE NO LIABILITY IN RELATION TO THE INFORMATION CONTAINED IN THIS OFFER LETTER OR ANY OTHER INFORMATION PROVIDED BY THE ISSUER IN CONNECTION WITH THE ISSUE.

III. THE DEBENTURE TRUSTEE IS NEITHER A PRINCIPAL DEBTOR NOR A GUARANTOR OF THE DEBENTURES.



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PART A 1. GENERAL INFORMATION

(i) Name, address, website, if any, and other contact details of the company indicating both registered office and corporate office:

Issuer / Company: Harshal Properties Private Limited Registered Office : Flat- C07, Himanshu Co-operative Housing Society Off SVP Road, Borivali West, Near MVF Club, Mumbai – 400092 Tel no : 02228923263 Website: :NA Fax: NA Contact Person: Mr. Santosh Raju Email: [email protected]

(ii) Date of incorporation of the company: 7th November, 2019

(iii) Business carried on by the Company and its subsidiaries with the details of branches or units, if any:

Real estate development

(iv) Brief particulars of the management of the company:

Company is managed by the board of directors, who are also actively involved in day to day operations of the company

(v) Names, addresses, Director Identification Number (DIN and occupations of the directors :

Sr. No

Name and Designation Occupation

Address DIN Occupation

1 Mr. Nemchand Khetshi Dedhia,Director

Row House no 4. Shree Tilak Complex; Eksar Road; Devki Nagar Borivali West

00366208 Business

2 Mr. Tarun Harshi Motta, Director

Row House no. 4. Shree Tilak Complex; Eksar Road; Devki Nagar Borivali West

00844451 Business



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(vi) Management’s perception of risk factors: The following are the risks envisaged by the management of the Company relating to the Company, the Debentures and the market in general. The order of the risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. The Company believes that the factors described below represent the principal risks inherent in investing in the Debentures but does not represent that the statements below regarding risks of holding the Debentures are exhaustive. Potential investor should also read the detailed information set out elsewhere in this Offer Letter and reach their own views prior to making any investment decision. Notwithstanding anything contained to the contrary, the occurrence of any event described as a “risk factor” or undertaking of any investigation or absence thereof by the potential investor shall not preclude any potential investor from making any claim against the Company or any other person as per the terms of the Transaction Documents and the Company or such other person shall not at any time claim or attempt to claim any benefit or seek to reduce its liability under the Transaction Documents by making reference to or seeking refuge under any of the “Risk Factors” disclosed hereunder. Risk Factors in relation to the Debentures 1. Taxation Potential purchasers and sellers of the Debentures should be aware that they may be required to pay taxes in accordance with the laws and practices of India. Payment and/or delivery of any amount due in respect of the Debentures will be conditional upon the payment of all applicable taxes, duties and/or expenses. Potential investors who are in any doubt as to their tax position should consult their own independent tax advisers. In addition, potential investors should be aware that tax regulations and their application by the relevant taxation authorities change from time to time. Accordingly, it is not possible to predict the precise tax treatment which will apply at any given time.

Mitigation: The Issuer believes that the tax regime would be stable in the near future.

2. There is no assurance that the NCDs issued pursuant to this Offer Letter will be listed on Stock Exchanges in a timely manner, or at all.

In accordance with Indian law and practice, permissions for listing and trading of the NCDs issued pursuant to this Offer Letter will not be granted until after the NCDs have been issued and allotted. Approval for listing and trading will require all relevant documents to be submitted and carrying out of necessary procedures with the Stock Exchanges. There could be a failure or delay in listing the NCDs on the Stock Exchanges for reasons unforeseen. There is no assurance that the NCDs issued pursuant to this Offer Letter will be listed on Stock Exchanges in a timely manner, or at all. 3. The Issuer may have limited sources of funds to fulfill its obligations under the Debentures

If there is a shortfall in any amounts then due and payable pursuant to the terms of the Debentures, the Issuer may not have sufficient funds to make payments on the Debentures and the Debenture Holders may incur a loss on the Debenture amount and redemption premium. The ability of the Issuer to meet its obligations to pay any amounts due to the Debenture Holders under the Debentures will ultimately be dependent upon funds being received from internal accruals and/or borrowings. The Issuer is therefore generally exposed to the credit risk of the relevant counterparties in respect of such payments.

Mitigation: The Issuer believes that it has sufficient sources to service the obligations under this



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instrument. Further, the Security Providers have sufficient backup to arrange for shortfall funding if required.

4. The Debentures may not be a suitable investment for all investors

Potential investors should ensure that they understand the nature of the Debentures and the extent of their exposure to risk, that they have sufficient knowledge, experience and access to professional advisers such as legal, tax, accounting and other advisers to make their own legal, tax, accounting and financial evaluation of the merits and risks of investment in the Debentures and that they consider the suitability of the Debentures as an investment in the light of their own circumstances and financial condition.

5. The right of the Debenture Holders to receive payments under the Debentures will be junior to certain liabilities preferred by law on an insolvency of the Issuer

The Debentures will be subordinated to certain liabilities preferred by law such as certain liabilities incurred in the ordinary course of the Issuer’s business (including workmen’s dues). Upon an order for winding-up in India, the assets of a company are vested in a liquidator who has wide powers to liquidate such company to pay its debt and administrative expenses.

Risks in Relation to Indian Market, Economy and Political Situation 6. Future legal and regulatory obstructions The central and state governments serve multiple roles in the Indian economy, including producers, consumers and regulators, which may have a significant influence on the Issuer. Future government policies and changes in laws and regulations in India, including applicable foreign exchange laws and comments, statements, policy changes or any adverse interpretation of applicable law by any regulator, including but not limited to the SEBI or the RBI, may adversely affect the Debentures. The timing and content of any new law or regulation is not within the Issuer’s control and such new law, regulation, comment, statement, policy change or adverse interpretation by any regulator could have an adverse effect on the market for and the price of the Debentures. Mitigation: The Issuer believes that the regulations affecting the debentures would be stable in the near future.

7. Political instability or changes in the government could delay further liberalisation of the Indian economy and adversely affect economic conditions in India generally We operate only within India and, accordingly, all of our revenues are derived from the domestic market. As a result, we are highly dependent on prevailing economic conditions in India and our 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 renting immovable properties. Any slowdown in the growth or negative growth of sectors where we have a relatively higher exposure could adversely impact our performance. Any such slowdown could adversely affect our business, prospects, results of operations, cash flows and financial condition. Since 1991, successive central governments have pursued policies of economic liberalisation and financial sector reforms. Nevertheless, the role of the central and state governments in the Indian economy as producers, consumers and regulators has remained significant. However, there can be no assurance that the liberalization policies announced by the Government in the past will continue in the future. A significant change in the Government’s policies could affect business and economic



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conditions in India and could also adversely affect our business.

Mitigation: The Issuer believes that there would not be any significant change in the policy of the Government that will adversely affect the business.

Risk Factors in relation to the Issuer 8. The security provided by the Issuer may not be sufficient to cover the obligations arising pursuant to the Debentures

In the event the security cover falls below the agreed levels, the Issuer is required to create charge over additional assets to maintain the required security cover in relation to the Debentures. While, as on date, the Issuer has sufficient assets to meet the required collateral cover, there can be no assurance that the value of the Projects will not decrease in the future. Any inability of the Issuer, as applicable to carry on its current business activities may adversely affect its business and prospects and consequently its ability to fulfill its security obligations. There can be no assurance that the Issuer will be able to maintain the security during the period that the Debentures are outstanding or provide additional assets towards security or that such security would be adequate to cover the obligations of the Issuer arising pursuant to the issue of the Debentures.

Mitigation: The Issuer believes that the Issuer, the Guarantors and the Security Providers will continue to have sufficient assets to fulfill the obligations in the unlikely event of shortfall in the security provided.

9. We are required to comply with the requirements of certain labour laws which may impose additional costs on us

Our employees are required to be registered under the provisions of certain labour laws and maintain certain records under the provisions of these laws, which add to our costs. If we fail to comply, or a regulator claims that we have not complied, with the provisions of these laws, we may be subject to penalties under these labour laws or if we do not obtain the requisite approvals, our business, financial condition, cash flows and results of operations may be adversely affected.

Mitigation: In the opinion of the Issuer, there would not be any significant change which would result in higher cost of compliance.

10. Our business and growth plan could be adversely affected by the incidence and rate of property taxes and stamp duties

We are subject to the property tax regime in India. These taxes could increase in the future, and new types of property taxes may be established which would increase our costs. Any such changes in the incidence or rates of property taxes or stamp duties could materially and adversely affect our business, financial condition and results of operations.

Mitigation: The Issuer is of the opinion that there may not be any drastic change in the stamp duties or property taxes in the foreseeable future.

11. Our business may be adversely affected by acts of god or other force majeure events

Our operations are subject to hazards inherent to our line of business, such as risk of fire, acts of god such as earthquake, tsunami, flood and other force majeure events, acts of terrorism and explosions including hazards that may cause injury and loss of life, severe damage to and the destruction of property and equipment and environmental damage which may have an adverse impact on our cash



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flows, operations and business.

Mitigation: The Issuer and other Security Providers have taken sufficient insurance coverage in case of such acts of god or force majeure events.

12. Terrorist attacks, civil disturbances, regional conflicts and other acts of violence in Mumbai affecting the Property may disrupt or otherwise adversely affect our business and its profitability

Certain events may occur that are beyond our control, such as terrorist attacks and other acts of violence or war involving India which could adversely affect our business, results of operations, financial condition and cash flows. India witnessed a major terrorist attack in Mumbai on November 26, 2008 which resulted in loss of life and destruction of property. Similar acts of terrorism may affect the Project which could have an adverse effect on our business and future financial performance. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that are protracted or involve the threat or use of nuclear weapons, our operations might be significantly affected.

Mitigation: The Issuer believes that the security available in the place of operation of the Issuer is sufficient to take care of these risks.

Risks in Relation to the Real Estate Sector

13. Our business and profitability is significantly dependent on the performance of the real estate market generally in India. Fluctuations in market conditions may affect our ability to sell our projects at expected prices, which could materially and adversely affect our revenues and earnings.

Our business is significantly dependent on the performance of the real estate market generally in India, and particularly in Mumbai, and could be adversely affected if market conditions deteriorate. The real estate business is significantly affected by changes in government policies, economic and other conditions, such as economic slowdown, demographic trends, employment levels, availability of financing, rising interest rates and declining demand for real estate, or the public perception that any of these events may occur. We operate in highly competitive markets, and competition in these markets is based primarily on the availability and cost of land. We also face competition from other real estate companies in India in bidding for new property development projects. These factors can adversely affect the demand for, and pricing of, our projects as well as adversely affect the value of our land bank, and, as a result, may materially and adversely affect our business, financial condition, results of operations, cash flows, our ability to service our debts.

Mitigation: The Issuer is of the opinion that the Real Estate Industry in Mumbai is favorable in general.

(vii) Details of default, if any, including therein the amount involved, duration of default and present status, in repayment of – (a) statutory dues; No default (b) debentures and interest thereon; No default (c ) deposits and interest thereon; NA (d) Loan from any bank or financial institution and

interest thereon. No default

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

Mr. Nemchand Dedhia

Tel No. 02228923263

Email.id : [email protected]



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(ix) Any default in annual filing of the Company under the Companies Act, 2013 or the rules made thereunder:

NIL

2. PARTICULARS OF THE OFFER Note: The capitalised terms listed below shall have the following meanings and all capitalised terms used but not defined herein shall have the meaning ascribed to them in the Transaction Documents executed between the Company, the Promoters, the Co-Borrowers and the Debenture Trustee. “Debenture Outstandings” shall mean all present and future moneys, obligations, debts or liabilities due owing or incurred from time to time, amounts payable, whether then due or not, by the Company and/or other Security Providers to the Debenture Holders and/or the Debenture Trustee in relation to the Debentures issued pursuant to the terms of Debenture Trust Deed and the other Transaction Documents whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever, including, without limitation:

(i) the principal of and Interest payable by the Company, whether due or not, in respect of Debentures, the Debenture Holders absolute returns, if any, and all other obligations and liabilities of the Company and/or the other Security Providers, including Interest on Debenture Subscription Amount, Additional Interest, indemnities, expenses, fees, costs, charges, Default Interest, Automatic Trigger Event Interest and penalties, incurred under, arising out of or in connection with the Debentures;

(ii) the Redemption Amounts;

(iii) any and all sums advanced/incurred by the Debenture Trustee in order to preserve the Security in

relation to Debentures;

(iv) any and all sums incurred by the Debenture Holders and the Debenture Trustee for the enforcement of any of the Security under any of the Transaction Documents and for the appropriation of the realizations thereof including without limitation stamp duty, any additional stamp duty including any penalty thereon, tax liability incurred for the enforcement of the Security;

(v) in the event of any proceeding for the collection, releasing or enforcement of the Security, after an

Event of Default shall have occurred and be continuing, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing the Security, or of any exercise by the Debenture Trustee of its right under the relevant Transaction Documents, together with legal and attorney fees and court costs;

(vi) costs, charges, expenses, commissions, fees (including the remuneration of the Debenture Trustee for

its services as Debenture Trustee as per terms of its engagement and in terms of the Debenture Trustee Appointment Agreement in addition to all legal, travelling and all fees costs, charges and expenses payable to the Debenture Trustee and the Receiver);

(vii) all reasonable costs, charges and expenses including reasonable legal costs and fees that may be incurred by the Debenture Holders and the Debenture Trustee, as the case may be, in protecting, preserving and/or enforcing the Security as set out under the Transaction Documents;

(viii) any transfer charges payable to the relevant authorities pursuant to execution or performance of any

of the terms of the Transaction Documents, and any penalties, interest and/or other amounts payable to the relevant authorities in relation to the same; and



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(ix) liquidated damages and any other costs, charges, expenses and other monies whatsoever stipulated in

the Debenture Trust Deed and the Transaction Documents; “Debenture Trustee Appointment Agreement” shall mean the debenture trustee appointment agreement dated 4th February, 2020executed between the Company and the Debenture Trustee;

“Mortgaged Properties” shall mean the Project Property together with the benefit and entitlement in relation to the Project Property, and all other rights, title and interest in respect of the Project Property, and (ii) the development rights (present and future) of the Project Property and all benefits and advantages arising out of the development of the Project Property including but not limited to the entire free sale Floor Space Index (“FSI”) of the Project Property, the Transferable Development Rights (“TDR”), FSI potential which is proposed to be loaded on the Project (subject to the same being permissible under Applicable Law), the future FSI and TDR, if any, generated on the Project Property and (iii) the areas constructed/to be constructed in the Project being the Unsold Units, the car parks, other amenities and all other properties and rights whatsoever in respect thereof from time to time excluding however the Excluded Property;

“Face Value” shall mean, in respect of a Debenture, Rs. 10,00,000 (Rupees Ten Lakhs), being the face value of each Debenture, and accordingly “Face Values” means in respect of the Debentures, Rs.1,80,00,000 (Rupees One Crore and Eighty Lakhs), being the face value of all the Debentures;

“Project Property”or“Project”shall have the meaning as ascribed to it in the Transaction Documents;

“Project Receivables” means all and any of the monies, present or future accruing to or arising out of the Project Property to the Company and/or the other Security Providers including, but not limited to amounts owing to, and received and / or receivable by the Company and/or the other Security Providers and/or any Person on their behalf, all book debts, present or future, all cash flows and receivables and proceeds arising from / in connection with the Project Property and all rights, title, interest, benefits, claims and demands whatsoever of the Company and/or the other Security Providers to or in respect of the Project Property, both present and future including but not limited to, advance, booking amounts, instalments, amounts accruing from the sale / lease / transfer of the Unsold Units or parking allotment/sale, external development charges, membership charges, internal development charges, infrastructure premium, legal charges, floor rise and terrace charges, interest, transfer charges, share application money, society formation charges, advance maintenance, electricity deposits, interest free maintenance deposits etc. (excluding Pass Through Charges and refunds if any), and/or any other monies whatsoever arising out of rents/ the booking for sale/pre-sale/pre-launch etc. in relation to the Units of the Project Property, the security deposits to be received from the land owners, tenants and any other accruals forming part of the Project Property including the receivables from the sale of the Unsold Units and the receivables pending to be received of the Sold Units and also including but not limited to proceeds of insurance with respect to the Project payable to or received by the Company, Harshal Enterprise and/or the other Security Providers and/or any Person on its behalf under any claim arising out of any insurance policy in effect and held by the Debenture Trustee and acting for and on behalf of and for the benefit of the Debenture Holders. The details of the Project Receivables are more specifically provided in the Debenture Trust Deed;

“Promoter1” shall mean Mr. Nemchand khetshi Dedhia an Indian inhabitant holding permanent account number AACPD3444Kand residing at Row House no 4. Shree Tilak Complex, Eksar Road, Devki Nagar Borivali West, Mumbai – 400103;

“Promoter2” shall mean Mr. Tarun Harshi Motta an Indian inhabitant holding permanent account number AAEPM9064Aand residing at Row House no 4. Shree Tilak Complex, Eksar Road, Devki Nagar Borivali West, Mumbai – 400103;



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“Guarantor 1” shall mean Mr. Devesh Tarun Motta an Indian inhabitant holding permanent account number AAEMP9067Dand residing at Bungalow No. 1, Tilak Complex, Behind Shanti Aashram, Devki Nagar, Borivali West, Mumbai-400103;

“Guarantor 2” shall mean Ms. Hiten Tarun Mottaan Indian inhabitant holding permanent account number AAEPM9066Cand residing at Bungalow No. 1, Tilak Complex, Behind Shanti Aashram, Devki Nagar, Borivali West, Mumbai – 400103;

“Harshal Enterprise” shall mean M/s Harshal Enterprise,a partnership firm registered under the Indian Partnership Act, 1932 and having Registration Number BA-72112 and having PAN AAAFH0150N and having its registered office at Flat C-6, Himanshu Co-operative Housing Society Limited, Near Mandpeshwar Industrial Estate, Prem Nagar, MCF Udyan Marg, Borivali West, Mumbai – 400 092;

“TeeArch” shall mean M/s TeeArch,a partnership firm registered pursuant to the Indian Partnership Act, 1932 and having Registration Number BA--180219 and having PAN AAAFT4014H and having its registered office at 9 Square, Ramdas Sutrale Marg, Off Chandavarkar Lane, Borivali – West, Mumbai – 400092;

“TAC Pvt. Ltd.” shall mean Teearch Architects And Consultants Private Limited, a company within the meaning of the Companies Act, 2013 with corporate identification number U74990MH1988PTC047623 and PAN AACCT1745N, having its registered office at 3rd floor, 9 square building, Ramdas Sutrale Marg, Off Chandavarkar Lane, Borivali-West, Mumbai – 400092, Maharashtra;

“Promoters” shall mean Promoter 1 and Promoter 2collectively;

“Security Providers” means the Company, each of the Promoters, each of the Guarantors and each of the Co-Obligors;

“Sold Units” means all such Units which are sold alongwith all the rights, title and interest therein and in respect of which part / full consideration is received, the particulars of the sold units on the date of the Debenture Trust Deed being provided therein;

“Unsold Units” means all such Units of the Project which have been constructed / proposed to be constructed and are not sold/agreed to be sold and sale is yet to be finally concluded by the parties, details of which are provided in the Debenture Trust Deed but excluding the Sold Units;

(a) Financial position of the Company for the last 3 financial years As per attached Balance Sheet for last three financial years (b) Date of passing of board resolution 15th January, 2020 (c) Date of passing of resolution in the general meeting, authorizing the offer of securities 17th January, 2020 (d) Kind of securities offered (i.e. whether share or debenture) and class of security; the total number of shares or other securities to be issued:

18(Eighteen) senior, secured, rated, redeemable non-convertible debentures of the Face Value up to an aggregate amount of Rs.1,80,00,000/- (Rupees One Crores and Eighty Lakhs only)

(e) Price at which the security is being offered

Rs. 10,00,000/- each



13

including the premium, if any, alongwith justification of the price:

Based on the valuation report of Knight Frank (India) Pvt. Ltd.

(f) Name and address of the valuer who performed valuation of the security offered, and basis on which the price has been arrived at along with report of the registered valuer:

Knight Frank (India) Private Limited Paville House, Near Twin Towers, Off Veer Savarkar Road, Prabhadevi, Mumbai 400025

(g) Relevant date1 with reference to which the price has been arrived at: Not Applicable (h) The class or classes of persons to whom the allotment is proposed to be made: Senior, Rated, Secured, Redeemable Non-Convertible Debentures (i) The proposed time within which the allotment shall be completed: 19.05.2020 (j) Details of any change in control, if any, in the Company that would occur consequent to the private placement: Not Applicable (k) The number of persons to whom allotment on preferential basis/private placement/rights issue has already been made during the year (in terms of number of securities as well as price) by the Company - (l) The justification for the allotment proposed to be made for consideration other than cash together with valuation report of the registered valuer: Not applicable (m) Amount which the company intends to raise by way of proposed offer of securities: Up to an aggregate amount of Rs.1,80,00,000/- (Rupees One Crore and Eighty

Lakhs only)

1Relevant Date means a date atleast thirty days prior to the date on which the general meeting of the company is scheduled to be held



14

A. Terms of raising of securities: Duration, if applicable, rate of dividend or rate of interest, mode of payment and repayment:

Number of NCD to be issued 18(Eighteen) Debentures Face value of NCD Rs. 10,00,000/- each Aggregate value of NCD Up to an aggregate amount of Rs.1,80,00,000/- (Rupees One Crore

and Eighty Lakhs only) Rate of Interest

The Issuer shall be bound and liable to pay to the Debenture Holders overall IRR equivalent to a coupon of 18.4% p.a. compounded on a monthly basis on the Debentures as follows:

A. The Interest shall be paid by the Issuer on a quarterly basis in the following manner: i. Till 31st March, 2022, the interest shall be payable at

the rate of 12% per annum compounded monthly and payable 6 monthly; and

ii. From 1st April, 2022, the interest shall be payable at the rate of 16% per annum compounded monthly and payable quarterly.

B. The first Interest shall be payable on 30th September, 2020.

For the Interest Period commencing from 1st April, 2020 and ending upto 31st March, 2022, the Interest shall be paid on a half yearly basis on the Interest Payment Date viz., 30th September, 2020 and 31st March, 2021, 30th September, 2021 and 31st March, 2022. Thereafter, for the Interest Period commencing from 31st March, 2022 and until the Final Settlement Date, the Interest be paid on a quarterly basis at the end of the relevant Fiscal Quarter on the Principal Payment Dates.

C. Irrespective of the mode and manner of redemption, the Debentures shall be redeemed in such proportion and at such premium which gives overall IRR equivalent to a coupon of 18.4% p.a. compounded on a monthly basis on the Debentures Outstanding taking into account the Coupon and Redemption Premium paid and excluding Default Interest, Automatic Trigger Event Interest, service tax and any other costs for e.g. fees paid to consultants, lender’s engineer / architect, Debenture Trustee, etc. and Redemption Premium shall be payable on last three (3) Principal Repayment Dates.

D. Notwithstanding anything contained herein, in the event that sufficient Project Receivables are generated from the Project, the Company may with the prior written intimation to the Debenture Holders in accordance with the Debenture Trust Deed pay the Interest prior to the date of payment as provided in Debenture Trust Deed above without any further prepayment premium.

E. All Interest shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a year of 365 (three hundred sixty five) days (or 366 (three hundred



15

Default in Execution of Trust Deed: Default in Payment: Delay in Listing:

sixty six) days in case of a leap year), at the applicable Interest and rounded off to the nearest Rupee. The Interest shall be computed on the principal outstanding on the NCDs for the period commencing from the first day of the Interest Period (or the previous Interest Payment Date on which the Interest has been fully paid) and expiring on the immediately succeeding Interest Payment Date or Principal Payment Date as the case may be. Any Interest payment made intermittently as aforesaid shall be adjusted against the Interest payable on the succeeding Interest Payment Date.

F. All duties, charges, levies, etc. on payment of Interest shall be borne by the Company.

G. For the purposes of making payment of the Interest, the Company and the Promoters, the Guarantors and the Co-Obligors shall ensure that atleast 3 (Three) Business Days prior to each Interest Payment Date, the Debenture Payment Account is credited with such additional amounts as is required to meet the Interest amounts due on the said Interest Payment Date or Principal Payment Date as the case may be. It is hereby clarified that notwithstanding that the Interest has been deposited in advance of the Interest Payment Date, the Interest shall be computed till the respective Interest Payment Date and shall be paid only on the respective Interest Payment Date.

A trust deed for securing the issue of debenture shall be executed by the issuer in favour of the debenture trustees within three months of the closure of the issue, where an issuer fails to execute trust deed within the period specified, the issuer shall pay interest of at least two percent per annum to the debenture holder, over and above the agreed coupon rate, till the execution of trust deed. In case of default in payment of Interest and/or principal redemption on the due dates, additional interest of atleast @ 2% p.a. over the coupon rate shall be payable by the Company for the defaulting period.

In case of delay in listing of the debt securities beyond 20 days from the deemed date of allotment, the Company shall pay penal interest of atleast @1% p.a. over the coupon rate from the expiry of 30 days from the deemed date of allotment till the listing of such debt securities to the investor.

Tenure The tenure of each of the Debentures shall be such that all of them are mandatorily and compulsorily redeemed not later than June 30, 2024 irrespective of the date of allotment of such NCDs (“Maturity



16

Date”).

Redemption A. The redemption of the NCDs shall be done in 9 (nine) quarterly installments commencing from 30th June, 2022 and shall arise on the Principal Payment Dates and Interest Payment Dates as per the Redemption Schedule set out in Schedule G till the Maturity Date or such other earlier dates as provided herein (each referred to as the “Redemption Date”). The redemption of the Debentures in any of the eventualities provided under this Deed shall be referred to herein as (“Redemption”). It is clarified that the Redemption/Repayment Schedule set out in Schedule G of the Debenture Trust Deed is indicative and will change based on the actual dates of disbursement for each Series of the NCDs in the manner communicated in writing by the Debenture Holders / Debenture Trustee to the Company.

B. On the Redemption Date, all NCDs shall be redeemed by the Company by paying the, (A) face value of the NCDs being redeemed (B) the Interest (C) the Redemption Premium (D) the Default Interest if any, payable (E) the Automatic Trigger Event Interest, if any, payable and (F) any other Debenture Outstandings, if any, payable ((A) (B) (C) (D) and (E) collectively referred to as the “Redemption Amounts”), failing which, Trustee (acting on the instructions of the Majority Debenture Holders) shall be entitled to exercise its rights as set out in the Transaction Documents.

C. Upon redemption of the NCDs, if the Company does not pay the Redemption Amount to Debenture Holders, the Debenture Holders and the Debenture Trustee shall be entitled to exercise any of their rights as set out in the Transaction Documents and the Security shall be enforceable in the manner set out in the Transaction Documents.

D. For the purposes of Redemption, the Company, the Promoters and the Co-Obligors shall ensure that atleast 3 (Three) Business Days prior to each Principal Payment Date, the Debenture Payment Account is credited with such additional amounts as is required to meet the principal amounts due on the said Principal Payment Date.

E. It is agreed that any amounts paid by the Company on the NCDs, shall be paid proportionately to all the Debenture Holders.

F. In the event the Project Receivables from the Project is insufficient for meeting the working capital requirements for the Project and/or the Project Costs and/or to make repayment as contemplated in this Deed the same shall be the sole responsibility of the Promoters and the Co-Obligors and shall be borne by the Promoters and the Co-Obligors from



17

their own sources and Debenture Holders and the Debenture Trustee shall not be liable for any such additional costs/expenses.

Voluntary Prepayment A. Notwithstanding the scheduled Principal Payment Dates set

out in the Debenture Trust Deed , the Company shall be entitled to pre-pay the Debentures, from any source of funds subject to the following conditions: -

B. At least 15 (fifteen) Business Days prior written notice should be given by the Company to the Debenture Trustee mentioning therein the intention of the Company to redeem part of the Debenture Subscription Amount with details of the amount sought to be redeemed;

C. Subject to conditions mentioned in the Debenture Trust Deed, the minimum principal amount of the Debentures sought to be prepaid shall not be lesser than Rs.50,00,000/- (Rupees Fifty Lakhs only);

D. If the Company wishes to prepay the Debentures from sources other than Project Receivables on any date from Tranche I Closing Date upto 21 (twenty one) months from the Tranche I Closing Date, the Company shall be liable to pay to the Debenture Holders further prepayment premium of 2% (two per cent) of the amount sought to be redeemed over and above the Debenture Holders absolute returns for entire 21 (twenty one) months from the First Tranche Closing Date shall be protected. Provided however that the Company shall not, during the aforesaid period, be entitled to redeem in full the Debentures pursuant to any bulk sale of the Unsold Units;

E. For any prepayment after 21 (twenty one) months from the Tranche I Closing Date, from sources other than Project Receivables, no further prepayment premium will be levied;

F. Notwithstanding anything to the contrary contained herein or in the Transaction Documents, it is agreed that in the event that the repayment is from the Project Receivables generated from the Project no further prepayment premium will be levied;

G. Prepayment will be permitted to be made once in a month on the last Business Day of the month in which the notice is given as provided herein even before completion of the respective Interest Period without any further prepayment premium;

H. Any amount pre-paid shall be deemed cancelled and will become unavailable for redrawing.

I. Any prepayments made as aforesaid shall reduce the



18

scheduled principal amounts payable on the immediately following principal payment date and in the event that the entire principal amounts payable on the said principal payment date has been prepaid, the balance amounts available for making prepayments shall be adjusted towards the scheduled principal amounts payable on the immediately following principal payment date and so on and so forth until all the scheduled principal amounts due in respect of the debentures have been fully paid.

J. All prepayments made by the Company shall be paid by the Company, by remitting / causing to be remitted the relevant prepayment amounts from the Project Escrow Account, Lender Escrow Account and/or the Debenture Payment Account to the accounts of the Debenture Holders in accordance with the Project Escrow Agreement.

Mandatory Prepayment A. All cash inflow in the form of sales proceeds/ any other cash

flow etc. directly / indirectly from the Project Property charged to the Debenture Holders as mentioned in Debenture Trust Deed would be routed through the Escrow Accounts from the Tranche I Closing Date and would be utilised (a) to service the Interest and the repayment of the Principal on the Debenture Subscription Amount in accordance with the terms and conditions of this Deed; (b) to service the Automatic Trigger Event Interest (if applicable) payable in accordance with the terms and conditions of this Deed and (c) towards Cash Cover.

B. It is hereby clarified that the Company and / or the Co-

Obligors can make prepayments, over and above Mandatory Prepayment and other payments, from Project Receivables without any prepayment penalties.

C. The monies deposited in the Debenture Payment Account

(other than the Debenture Subscription Amount) shall be appropriated/utilised (a) to service the Interest and the Principal on the Debenture Subscription Amount in accordance with the terms and conditions of this Deed (b) to service the Automatic Trigger Event Interest (if applicable) payable in accordance with the terms and conditions of this Deed and (c) towards Cash Cover. Provided however that in case of a surplus in the Project Escrow Account, after appropriation as mentioned hereinabove and provided the Security Cover Ratio and the Cash Cover requirements are met, the same shall, with the prior written consent of the Trustee, be utilised towards meeting Project Costs as approved by the Debenture Trustee in accordance with this Deed and the Project Escrow Agreement or for any other purpose, subject to the provisions of the Applicable Law.



19

D. The monies to be appropriated towards mandatory repayment

from Lender Escrow / Project Escrow Account shall be transferred to Debenture Payment Account for appropriation in accordance with the Debenture Trust Deed.

E. It is clarified that the Interest shall be paid only on the respective Interest Payment Dates and the principal on the Principal Payment Dates.

F. For the purposes of utilization of the Project Receivables as mentioned in this Clause, the Debenture Trustee shall issue necessary written instructions to the Escrow Agent to transfer the appropriate amounts out of the Lender Escrow Account and/or the Project Escrow Account and/or the Debenture Payment Account in the format set out in the Project Escrow Agreement. It is clarified that all amounts to be paid to the Debenture Holders shall be transferred to the Debenture Payment Account and shall thereafter be transferred to the accounts of the Debenture Holders in accordance with the Project Escrow Agreement.

G. The appropriation of the amounts as mentioned in this provision may be modified by the Majority Debenture Holders at their sole discretion at any time.

H. In the event that the amounts in the Lender Escrow Account

and/or the Project Escrow Account and/or the Debenture Payment Account are insufficient for meeting the payments to be made towards Interest/ principal/ Automatic Trigger Event Interest as provided in this Clause, the same shall be the sole responsibility of the Promoters and the Co-Obligors and shall be borne by the Promoters and the Co-Obligors from their own sources and the Promoters and the Co-Obligors agree and undertake to deposit such shortfall amount in the Debenture Payment Account or Lender Escrow Account atleast 3 (Three) Business Days prior to each Interest Payment Date/Principal Payment Date/date of payment of Automatic Trigger Event Interest.

I. Upon any payments towards principal amount of the

Debentures, the same would be adjusted towards the immediate next principal instalments falling due and the Trustee (acting on the instructions of the Majority Debenture Holders) shall accordingly modify the Repayment Schedule with respect to payment of the principal amount of the Debentures;

J. It is clarified that if pursuant to Mandatory Prepayment as

provided above, if the Debentures are to be redeemed in full on any date, then the Company shall redeem the Debentures in full by paying the Debenture Holders the Redemption



20

Amounts.

K. It is hereby clarified that no further interest/redemption premium charges would be payable in case of the mandatory repayment specified in this Clause.

L. Notwithstanding anything contained herein or in any of the

Transaction Documents, (i) upon the occurrence of any Potential Event of Default or Event of Default and/or (ii) upon the occurrence of a Material Adverse Effect or any other event, development or occurrence reasonably likely to have a Material Adverse Effect and/or (iii) upon the occurrence of any Automatic Trigger Events, the Debenture Trustee (on instructions of the Majority Debenture Holders) shall be entitled to issue necessary instructions to the Escrow Agent to protect the interests of the Debenture Holders including for transfer of (a) the Permitted Withdrawals from the RERA Designated Escrow Account to the Project Escrow Account only subject to the provisions of the Applicable Law permitting the same and (b) the entire amounts lying in the Lender Escrow Account, Project Escrow Account to the Debenture Payment Account, if instructed by the Majority Debenture Holders. Further, all amounts lying in the Project Accounts shall be utilized for the repayment of the entire Debenture Outstandings. The Company and other Security Providers undertake to provide full cooperation and assistance as may be required by the Debenture Trustee to withdraw the Project Receivables from the RERA Designated Escrow Account including but not limited to obtaining the relevant certificates and the relevant self-declaration prescribed under RERA for withdrawals.

(n) Proposed time schedule for which the Offer Letter is valid; 17.05.2020

(o) Purpose and objects of the offer:

The proceeds from NCD will be infused in Harshal Enterprises, a partnership firm, in which 99% stake is held by the Company. Harshal Enterprise will utilise the said fund inthe following manner:

Debenture Subscription Amount shall be applied and utilized in the following manner:

Rs.1,80,00,000/- (Rupees One Crores and Eighty Lakhs only) for meeting Project Cost

The appropriations of the Debenture Subscription Amount as provided in herein may be modified by the Debenture Holders at their sole discretion.

(p) Contribution being made by the promoters or directors either as part of offer or separately in Not applicable



21

furtherance of such objects:

(q) Principal terms of assets charged as security, if applicable:

A. The Debenture Outstandings under the Transaction Documents shall be secured by the Security in favour of the Debenture Trustee for the benefit of the Debenture Holders in the following manner:

(i) First and exclusive registered English mortgage over the Mortgaged

Properties having ranking as specified below;

(ii) First and exclusive charge by way of hypothecation on the Secured Project Receivables of the Project having ranking as specified below;

(iii) First and exclusive charge by way of hypothecation over the Partnership

Interest; (iv) Personal guarantee from Promoter 1, Promoter 2, Guarantor 1 and

Guarantor 2 in accordance with the Deed of Personal Guarantee;

(v) Guarantee from Co-Obligors in accordance with the Deed of Guarantee;

(vi) First and exclusive charge by way of pledge over the Pledged Shares in accordance with the Deed of Pledge and the Pledge Power of Attorney;

(vii) Creation of the Purchase Option by execution of the Purchase Option

Agreement;

(viii) First and exclusive charge on the Lender Escrow Account, the Project Escrow Account and the Debenture Payment Account;

(ix) Creation of the Cash Cover, which shall be subject to a lien in favour of

the Trustee, from time to time in the manner provided in the Debenture Trust Deed and the Project Escrow Agreement;

(x) Demand Promissory Notes and Letter of Continuity;

(xi) A registered irrevocable power of attorney(s) in favour of the Debenture

Trustee to enable the Debenture Trustee to enforce the Mortgaged Properties (“Power of Attorney (Mortgage)”);

(xii) Such other security as may be required by Trustee (acting on the

instructions of the Majority Debenture Holders) as provided in terms of Transaction Documents.

B. The Security created by the Security Providers in favour of the Debenture

Trustee shall be created by way of a registered English mortgage on the Mortgaged Properties (without possession of the land or superstructure and enforceable without the intervention of court) and hypothecation over the Secured Project Receivables ranking as follows:

(i) First ranking sole and exclusive charge by way of mortgage on the Mortgaged Properties with possession of original Development/Title Documents; and



22

(ii) First ranking sole and exclusive charge by way of hypothecation on the Secured Project Receivables of the Project.

C. The Security Providers shall register the Security with the Registrar of

Companies and the sub-registrar of assurances as required under Applicable Law within the timeline mentioned in the Debenture Trust Deed. The Security Providers shall ensure that each of the parties executes all requisite and necessary documents for creating and maintaining the Security as required under the terms of Debenture Trust Deed and the Transaction Documents. The Security Providers shall take or cause to be taken, all actions required to maintain, protect and preserve the Security. The Security Providers shall from time to time execute or cause to be executed any and all further instruments and register and record such instruments in all public and other offices in order to create and maintain valid, perfected and enforceable Security on the terms contained in the Transaction Documents. All expenses, costs, charges, incurred for the purpose of creation, maintenance, protection and preserving the Security, including the transfer charges and all amounts payable to the relevant authorities for the transactions contemplated in the Transaction Documents shall be borne and paid by the Company and/or the Co-Borrowers.

(r) The details of significant and material orders passed by theregulators, Courts and Tribunals impacting the going concern status of the Company and its future operations:

NA

(s) The pre-issue and post-issue shareholding pattern of the Company:

SI. No.

Category Pre-issue Post-issue No. of shares held

% of share

holding

No. of shares held

% of share

holding A Promoters’ holding 1 Indian

Individual 10000 100 10000 100

Bodies corporate - -

Sub-total - -

2 Foreign promoters - -

sub-total (A) 10000 100 10000 100

B Non -promoters’holding

1 Institutional investors - -

2 Noninstitutional Investors

- -



23

Private corporate bodies

- - - -

Directors and relatives

- -

Indian public - -

othersincludingNon-residentIndians(NRIs)

Sub-total (B) - - - -

GRANDTOTAL 10000 100 10000 100

3. MODE OF PAYMENT FOR SUBSCRIPTION:

(A) Cheque: NA

(B) Demand Draft:NA

(C) Other Banking Channels:RTGS NEFT

4. DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION, 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:

Not Applicable

(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 Company during the last three years immediately preceding the year of the issue of the private placement offer cum application letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed:

Not Applicable

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

Not Applicable

(iv) Related party transactions entered during the last three financial years immediately preceding

the year of issue of private placement offer cum application letter including with regard to loans made or, guarantees given or securities provided:

As per the Financial Statements

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

years immediately preceding the year of issue of private placement offer cum application 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:



24

Not Applicable

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

Act, 2013 or any previous company law in the last three years immediately preceding the year of issue of private placement offer cum application letter in the case of Company and all of its subsidiaries, and 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 private placement offer cum application letter and if so, section-wise details thereof for the company and all of its subsidiaries: Not Applicable

(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:

Not Applicable 5. FINANCIAL POSITION OF THE COMPANY: (A) Capital Structure of the Company:

(i) (a) Share Capital Aggregate Face Value (Rs.)

Authorized: 10000 Shares of Rs. 10 each.

Issued, subscribed and paid up: 10000 Shares of Rs. 10 each.

Rs. 1,00,000/-

Rs. 1,00,000/-

(b) Size of the present offer:

18 (Eighteen) senior, secured, rated, redeemable non-convertible debentures of the face value of Rs. 10,00,000/- each.

Rs.1,80,00,000/- (Rupees One Crore and Eighty Lakhs only)

(c) Paid up capital (A) after the offer: (B) after conversion of convertible instruments (if applicable):

No change

(d) share premium account (before and after the offer)

No change

(ii) Details of existing Share Capital:

The following is the history of the equity share capital of our Company:

Equity Share Capital (As per Annexure 1 attached)

Date of Allotment of fully Paid-up

No. of Equity Shares Allotted

Cumulative number of

Face Value Per Shar

Securities Premium

Issue Price Per Share

Nature of payment of

Reasons for Allotment

Cumulative securities

Cumulative paid -up capital



25

Equity Shares

shares e (Rs.)

Per Share (Rs.)

(Rs.) consideration

premium account

Preference Share capital

Date of Allotment of fully Paid-up Preference Shares

No. of Preference Shares Allotted

Cumulative number of shares

Face Value Per Share (Rs.)

Securities Premium Per Share (Rs.)

Issue Price Per Share (Rs.)

Nature of payment of consideration


Cumulative securities premium account


NA

Details of allotments made in the last one year preceding the date of the offer letter:

Not Applicable (B)Profits of the company, before and after making provision for tax, for the three financial years immediately preceding the date of issue of offer letter:

Financial Year Before Tax (Rs.) After Tax (Rs.) 2017-2018 Nil Nil

2016-2017 Nil Nil

2015-2016 Nil Nil

Company is incorporated on 7th November 2019, hence no profit in the preceding years.

(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:

Year Dividend declared Interest Coverage Ratio(Cash profit after tax plus interest paid/interest paid)

NA [NA NA

(D)Summary of the financial position of the company as in the three audited balance sheets immediately preceding the date of issue of Offer Letter:

Year Net Worth of the Company Profit After Tax for the year 2017-2018 Nil Nil

2016-2017 Nil Nil

2015-2016 Nil Nil



26

(E)Audited Cash Flow Statements for the three years immediately preceding the date of issue of theOffer Letter:

Not Applicable (F) Any Change in Accounting Policies during the Last Three Years and their effect on the profits and reserves of the Company:

Not Applicable

PART B (To be filled of applicant) (i) Name: Nemchand Khetshi Dedhia (ii) Father’s name: Khetshi Khimraj Dedhia (iii) Complete address including flat / house number, street, locality, pin code : Row House No.4, Shree

Tilak Complex, Eksar Road, Devki Nagar, Borivali (west), Mumbai- 400103. (i) Phone number, if any: 8652680087 (ii) Email id, if any: [email protected] (iii) PAN number: AACPD3444K (iv) Bank account details: Vijaya Bank, Account No-504701010002350, Branch- Borivali (west)

Signature Initial of the Officer of the company designated to keep the record 6. A DECLARATION BY THE DIRECTORS 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 made does not imply that payment of dividend or interest

or repayment of preference shares or 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 the

Offer Letter; I am authorized by the Board of Directors of the Company vide resolution number 2 dated 1stFebruary, 2019 to sign this form and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of this form and matters incidental thereto have been 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.



27

Annexure 1

The following is the history of the equity share capital of our Company:

Equity Share Capital

Date of Allotment of fully Paid-up Equity Shares

No. of Equity Shares Allotted

Cumulative number of shares

Face Value Per Share (Rs.)

Securities Premium Per Share (Rs.)

Issue Price Per Share (Rs.)

Nature of payment of consideration


Cumulative securities premium account


7/11/2019 5100 5100 10 - 10 Cash Subsriber to Memorandum

- 51000

7/11/2019 4900 4900 10 - 10 Cash Subscriber to Memorandum

- 49000

Ratings

II RI'E 1'1J23XO 13/NCDI12194S492December 31.1019

.'Ir. J\l'nJchand Ill'dhiaDircclllrlIarshall'rolwrlies I'ri\'ale LimitedF1;J1No 007 Horivati Ilimanshu ellS LimicdOff SVP Road NC<lTi\1CF ClubBori valt W csti\ltunh<li - 400092

De:lf Mr. Nemchaml Dcdhia.

CO:\,FIDENTI:\L

CRISILAn S&P Global Company

I~e: CHISIL Ibling 011 the Rs. 511Croft' Non Conn'rtihle Debentures of Han.hal Prnprrties Pri\'at{"Limited

We refer to your request for a rating for the captioned Non Convertible Debentures.

CRISIL has. aller due consideration. assigned its "CRISIL BB-/Stable" (pronounced as CRISIL double Bminus filling wilh Stable outlook) rating 10 the captioned Jebt instrument. Instruments with this rating <Ireconsidcrcl!lo have moderate risk of default rcgarding timely servicing of financial obligations.

For Inc purpose of issuance of the captioned debt instrument, this Iclter is valid for 180 calendar Jays from thedate of the leller. In the event of your company not placing the above instrument within this period. or in thce\.cnt of any change in the size/structure of your proposed issue. the rating shall have to be rcviewed <lnda letterof rcvalidalion shall have to bc issucd to you. Once the instrumcnt is issued, the above rating is vi.lid throughoutthe life of the captioned debt instrument.

As pcr our Rating Agreement, CRISIL would disseminate the rating along with outlook through its publicationsand (lther media. and keep thc rating along with outlook under surveillance for the life of the instrument.CRISIL reserves the right to withdraw or revise the ratings assigned 10 lhe captioncd instrumcnt al any time, onthe basis of ncw information, or unavailability of infomlation or othcr circulIlst<lnces. which CRISIL believes.Ill;]Y havc an impact on the rating.

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Rating RationaleDecember 30, 2019 | Mumbai

Harshal Properties Private Limited'CRISIL BB-/Stable' assigned to NCD

Rating Action

Rs.50 Crore Non Convertible Debentures CRISIL BB-/Stable (Assigned)1 crore = 10 millionRefer to annexure for Details of Instruments & Bank Facilities

Detailed RationaleCRISIL has assigned its 'CRISIL BB-/Stable' rating on the non-convertible debentures (NCDs) of Harshal PropertiesPrivate Limited (HPPL). The rating reflects the company's healthy business risk profile supported by its promoters' extensive experience and thefavourable location of its project. These strengths are partially offset by exposure to project-related risks and exposure tocyclicality inherent in the real estate sector.

Analytical ApproachFor arriving at its ratings, CRISIL has combined the financial and business risk profiles of HPPL and Harshal Enterprise(HE). This is because HPPL is a special-purpose vehicle (SPV) for raising non-convertible debentures (NCDs), theproceeds of which would be used to complete the real estate project undertaken by HE. Furthermore, sale proceeds of HEwould be escrowed, to be utilised for meeting interest and principal obligations of the NCD.

Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed DescriptionStrengths: * Extensive experience of the promoters: Mr Nemchand Dedhia has been in the construction business since 1984 andhas completed more than 16 lakh square feet of work in Andheri, Borivali, and Dahisar (all in Mumbai). Mr Tarun Motta is acivil engineer and a licensed surveyor. * Favourable location of the project: The project is located in Dahisar East, which is near the metro station, about 3kilometres (km) away from Dahisar Railway Station, and 5 km away from Borivali Railway Station. It is close to the WesternHighway. All means of public transport are easily available from the site, which also has schools and hospitals around it. Weaknesses:* Exposure to project-related risks: Around 70% of the total construction is pending indicating significant implementationrisk. Also, only 15% of the overall area has been sold, leading to demand risk. Further project is being funded through ~46%through advances which is again contingent on timely completion of project and demand risk. Thus timely receipt ofapproval, completion of project and subsequent saleability will remain critical for maintaining regular cash flow and servicingdebt. * Exposure to cyclicality inherent in the real estate sector: Risks and cyclicality inherent in the real estate sector mayresult in volatility in saleability and realisations, and hence, cash flow. The residential real estate sector has been underpressure due to weak demand and bearish consumer sentiment in the past few years, resulting in increase in leverage andrefinancing needs.

Liquidity StretchedLiquidity remains stretched, marked by low level of customer advances expected from sold inventory and modest cashbuffer ratio of 1.23 times over the medium term. Customer advances of ~Rs 25 crore and ~Rs 40 crore over fiscals 2021and 2022 respectively, should cover the total obligation (debt plus interest) of Rs 7.8 crore and Rs 26.8 crore, in fiscals 2021& 2022, respectively. The balance construction cost of ~ Rs 82 crores will be funded partly by remaining customer advancesand non-convertible debentures. Timely inflow of customer advances will remain a rating sensitivity factor.

Outlook: StableCRISIL believes HPPL will benefit over the medium term from its promoters' extensive experience. Rating sensitivity factors:Upward factors:* Significant improvement in average cash buffer ratio (CBR) to over 1.5 times, supported by higher-than-anticipated cashflow* Faster-than-expected project execution and realisation of customer advances Downward factors:* Drop in CBR to below 1.1 times due to cost overrun or inability to sell ongoing residential project at profitable rates * Delays in completion of ongoing project or in receipt of payments from customers

About the CompanyIncorporated in November 2019 and promoted by Mr Tarun Motta (owns 51% stake) and Mr Nemchand Dedhia (holds theremaining stake), HPPL is an SPV that was created to raise funds through NCD to finance the residential-cum-retail projectundertaken by HE. HE is a partnership firm that was earlier owned by Mr Nemchand Dedhia (50%), Ms Bharti Dedhia (35%), and Mr DeveshMotta (15%). It is now owned 99% by HPPL, while the balance is held by Tarun Motta and Mr Nemchand Dedhia. The firm isconstructing a residential-cum-retail project, Dev Chhaya, in Mumbai.

Key Financial IndicatorsParticulars Unit 2019 2018Revenue Rs crore NA NAProfit after tax (PAT) Rs crore NA NAPAT margin % NA NAAdjusted debt/adjusted networth Times NA NAInterest coverage Times NA NA

Note on complexity levels of the rated instrument:CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are availableon www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider forinvestment. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name of Instrument Date ofAllotment

CouponRate (%)

MaturityDate

Issue Size(Rs. Cr.)

Rating Assigned withOutlook

NA Non-Convertible Debentures NA* NA NA 50 CRISIL BB-/Stable*Not yet placed Annexure - List of entities consolidatedNames of Entities Extent of Consolidation Rationale for Consolidation

http://www.crisil.com/complexity-levels

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ConsolidatedHarshal Properties Pvt Ltd Full Common management, business synergies, and promotersHarshal Enterprise Full Common management, business synergies, and promoters

Annexure - Rating History for last 3 Years Current 2019 (History) 2018 2017 2016 Start of

2016

Instrument Type OutstandingAmount Rating Date Rating Date Rating Date Rating Date Rating Rating

Non ConvertibleDebentures LT 50.00

30-12-19 CRISIL

BB-/Stable -- -- -- -- --

All amounts are in Rs.Cr.

Links to related criteriaCRISILs Approach to Financial RatiosCRISILs Bank Loan Ratings - process, scale and default recognitionCRISILs Rating criteria for Real Estate SPVsCRISILs Criteria for Consolidation

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