Private & Confidential Not for Circulation · Private & Confidential – Not for Circulation Credit...

Private & Confidential – Not for Circulation

MEMORANDUM OF PRIVATE PLACEMENT

KARVY FINTECH PRIVATE LIMITED

(Formerly known as KCPL Advisory Services Private Limited)

(A private limited company under the Companies Act, 2013) Date of Incorporation: June 8, 2017

CIN: U67200TG2017PTC117649

Registered Office: Karvy Selenium, Tower B, Plot No- 31 & 32, Financial District, Nanakramguda,

Serilingampally Hyderabad Rangareddi Telangana 500032 Telephone No: +91-40-33211000 or +91-40-67172222

Memorandum of Private Placement for issue of Debentures on a private placement basis on

November 6, 2018

Issue of up to 4,000 (four thousand) Rated, Listed, Redeemable, Non-convertible Debentures of

face value of Rs. 1,000,000 (Rupees one million) each, aggregating up to Rs. 4,000,000,000

(Rupees four billion) on a private placement basis (the “Issue”)

Background

This Memorandum of Private Placement is related to the Debentures to be issued by Karvy Fintech

Private Limited, formerly known as KCPL Advisory Services Private Limited (the “Issuer” or “Company”) on a private placement basis through an electronic book mechanism as available on the

website of the BSE and contains relevant information and disclosures required for the purpose of

issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under

this Memorandum of Private Placement has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer at the extraordinary general meeting held on October 15, 2018 and

the Board of Directors of the Issuer on October 15, 2018 and the Memorandum and Articles of

Association of the Company. Pursuant to the resolution passed by the Company’s shareholders on August 2, 2017 in accordance with provisions of the Companies Act, 2013, the Company has been

authorised to borrow, upon such terms and conditions as the Board may think fit for amounts up to

INR 4,300,000,000/- (Rupees four billion three hundred million only) over and above the aggregate of the paid-up share capital of the Company and its free reserves. The present issue of Debentures in

terms of this Memorandum of Private Placement is within the overall powers of the Board as per the

above shareholder resolution(s). This Memorandum of Private Placement has been prepared in

accordance with the SEBI Debt Listing Regulations. The Debentures to be issued by the Issuer are not ‘secured debentures’ for the purposes of the Companies Act, 2013 read with the Companies (Share

Capital and Debentures) Rules, 2014 but shall otherwise be secured by the Security described

hereunder. The Issuer shall also, at all times during the tenure of the Debentures, maintain a minimum of 100% (one hundred per cent) asset cover in respect of the outstanding Debentures as required under

the SEBI Debt Listing Regulations.

Company’s Absolute Responsibility

The Company, having made all reasonable inquiries, accepts responsibility for, and confirms that this

Disclosure Document contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Disclosure Document is true

and correct in all material respects and is not misleading in any material respect, and that there are no

other facts, the omission of which makes this Disclosure Document as a whole or any of such information misleading in any material respect.


Credit Rating

The Debentures proposed to be issued by the Issuer have been rated by ICRA Limited (“Rating

Agency” / “ICRA”). The Rating Agency has vide its letter dated November 29, 2018 assigned a rating of ‘[ICRA] AA- (stable) (pronounced as ICRA double A minus Stable) in respect of the

Debentures. The above rating is not a recommendation to buy, sell or hold securities and investors

should take their own decision. The rating may be subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other ratings. Please refer to Annexure II

of this Memorandum of Private Placement for the letter dated November 29, 2018 from the Rating

Agency assigning the credit rating abovementioned and the letter dated November 29, 2018 issued by

the Rating Agency disclosing the rating rationale adopted for the aforesaid rating.

Eligible Investors

Only registered Foreign Portfolio Investors or such other persons as may be permitted under

Applicable Law to hold the Debentures, who have been specifically approached and have been

identified upfront, are eligible to apply for this private placement of Debentures subject to fulfilling their respective investment norms/rules and compliance with laws applicable to them by submitting

all the relevant documents along with the Application Form.

Issue Schedule Issue Opens on: November 15, 2018

Issue Closing on: November 15, 2018

Deemed Date of Allotment: November 16, 2018

The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at

its sole discretion, without giving any reasons or prior notice.

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

Issuer intends to use electronic book mechanism as available on the website of the BSE.

Registrar Arranger to the Issue Arranger to the Issue Debenture Trustee

Karvy Computershare

Private Limited 46, Avenue 4, Street

No 1, Banjara Hills,

Hyderabad 500034

Standard Chartered

Bank 5th Floor, Crescenzo,

C-38/39, G-Block,

Behind MCA Club

Bandra-Kurla Complex, Bandra (E),

Mumbai 400 051

Nomura Financial

Advisory & Securities (India) Private Limited

Ceejay House, 11th

Level, Plot F,

Shivsagar Estate, Dr. Annie Besant Road,

Worli, Mumbai 400018

IDBI Trusteeship

Services Limited Asian Building,

Ground floor, 17, R

Kamani Marg, Ballard

Estate, Mumbai 400 001


TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 4 SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 11 SECTION 3: RISK FACTORS 18 SECTION 4: FINANCIAL STATEMENTS 21 SECTION 5: REGULATORY DISCLOSURES 22 SECTION 6: OTHER INFORMATION AND APPLICATION PROCESS 49 SECTION 7: DECLARATION 57 ANNEXURE I: TERM SHEET 58 ANNEXURE II: RATING LETTER& RATING RATIONALE 59 ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE 60 ANNEXURE IV: APPLICATION FORM 61 ANNEXURE V: FINANCIAL STATEMENTS 65 ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS 70 ANNEXURE VII: OTHER DIRECTORSHIPS 71


4

SECTION 1: DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, capitalised terms defined anywhere in this

Disclosure Document shall have the meanings so ascribed and the following terms shall have

the meanings given below in this Memorandum of Private Placement.

Account Bank ICICI Bank Limited

Allot/Allotment/Allotted Unless the context otherwise requires or implies, the

allotment of the Debentures pursuant to this Issue.

Applicable Law all applicable laws, bye-laws, rules, regulations, orders,

ordinances, protocols, codes, guidelines, policies, notices,

directions, judgments, decrees or other requirements or official directives of any Governmental Authority or person

acting under the authority of any Governmental Authority

and/or of any statutory authority, and specifically

including, the RBI, SEBI and/or of a stock exchange, whether in effect on the date of this Disclosure Document

or thereafter.

Application Form The form used by the recipient of this Disclosure Document and/or the Private Placement Offer Letter, to

apply for subscription to the Debentures, which is in the

form annexed to this Memorandum of Private Placement

and marked as Annexure IV.

Arrangers Standard Chartered Bank and Nomura Financial Advisory

& Securities (India) Private Limited

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

Business Shall mean the business of providing products, technology or services to companies within the financial services

industry, and includes the proposed businesses inter-alia of

providing (i) services of a registrar to an issue of securities or of a share transfer agent, and back office functions in

relation thereto; (ii) transfer agency and fund accounting

services to the asset management industry and compliance,

back office operations and data processing activities in relation thereto; and (iii) central recordkeeping agency

services under the National Pension System operated and

administered by the PFRDA

Business Day Shall mean any day (other than Sunday or a bank holiday)

on which banks are open for business in Mumbai,

Hyderabad, New York and Singapore

CDSL Central Depository Services (India) Limited

Companies Act / the Act Shall mean the Companies Act, 2013 (“2013 Act”), and for

any matters or affairs prior to the notification of the

relevant provisions of the 2013 Act, the Companies Act,

1956 and shall include the rules, regulations, circulars and notifications issued thereunder and any other statutory

amendment or re-enactment thereof

Continuing Promoters Mr. C. Parthasarathy, Adhiraj Parthasarathy, Rajat Parthasarathy, C. Parthasarathy HUF and Compar Estates

and Agencies Private Limited, which is wholly owned and

Controlled by the persons mentioned herein

Debentures / NCDs Up to 4,000 (four thousand) Rated Listed Redeemable Non-Convertible Debentures bearing a face value of Rs.

Rs. 1,000,000 (Rupees one million) each, aggregating to


5

Rs. 4,000,000,000 (Rupees four billion)

Debenture Holders / Investors The persons who are, for the time being and from time to time, the holders of the Debentures and whose names

appear in the register of beneficial owners of the

Debentures maintained in the records of the relevant Depository

Debenture Trustee IDBI Trusteeship Services Limited

Debenture Trustee Agreement Agreement to be executed by and between the Debenture

Trustee and the Company for the purposes of appointment of the Debenture Trustee to act as debenture trustee in

connection with the issuance of the Debentures.

Deed of Corporate Guarantee The unconditional and irrevocable deed of guarantee dated

October 25, 2018 executed by the Target in favour of the Debenture Trustee for the benefit of the Finance Parties, in

a form acceptable to the Debenture Trustee (acting on

behalf of the Debenture Holders).

Deemed Date of Allotment November 16, 2018

Default Interest Means the default interest at the rate of 2% (two per cent)

per annum over and above the then prevailing Coupon Rate

payable by the Company upon failure by the Company to pay any amount payable by it under a Transaction

Document on its due date and payable on the sum due and

payable but unpaid from the due date and until the date of actual payment (both before and after judgment) in

accordance with the Transaction Documents

Demat Refers to dematerialized securities which are securities that

are in electronic form, and not in physical form, with the entries noted by the Depository.

Demerger Shall mean the demerger of the RTA Undertaking (as

defined under the Scheme) of KCL on a going concern

basis pursuant to which the Company will also legally and beneficially acquire 50% (fifty per cent) of the issued and

paid-up share capital of, and voting rights in, the Target on

a fully diluted basis.

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

Depository A Depository registered with SEBI under the SEBI

(Depositories and Participant) Regulations, 1996, as

amended from time to time.

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

Act

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

Disclosure Document / Memorandum of Private

Placement

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

Disposal Threshold Shall mean INR 4,000,000,000 (Rupees four billion only)

DP ID Depository Participant Identification Number.

Due Date Any date on which the holders of the Debentures are

entitled to any Coupon payments or any Redemption

Amount in relation to the Debentures, whether in

accordance with the Redemption Schedule of the Debenture or otherwise.

Effective Date Shall mean the date on which the order of the relevant

National Company Law Tribunal approving the Scheme is

filed by Company and KCL with the relevant Registrar of


6

Companies

EFT Electronic Fund Transfer

Finance Parties Arrangers, initial Subscribers, Debenture Holder(s),

Debenture Trustee, Receivers and Delegates

Financial Year/ FY Twelve months period commencing from April 1 of a

particular calendar year and ending on March 31 of the subsequent calendar year

GAAP Generally Accepted Accounting Principles

Governmental Authority any government or any governmental agency, regulatory,

semi-governmental or judicial entity or authority (including, without limitation, any stock exchange, SEBI,

RBI or any self-regulatory organisation established under

any law)

Issue Private Placement of the Debentures.

Issue Opening Date November 15, 2018

Issue Closing Date November 15, 2018

Issue Proceeds Account Shall mean the no-lien current account bearing number

000805018053 opened by the Company with the Account Bank and which shall include any other account which is a

successor to such account or any re-numbering or re-

designation of such account

Issuer / Company Karvy Fintech Private Limited

KCL Karvy Consultants Limited, a company incorporated under

the Companies Act, 1956 with corporate identity number

U74140TG1981PLC003122 and having its registered office at 46, Avenue, 4th Street, No.1, Banjara Hills,

Hyderabad, Telangana - 500034, which currently owns

50% (fifty percent) of the shareholding of the Target

Majority Debenture Holders Debenture Holders whose participation or share in the

principal amount(s) outstanding with respect to the

Debentures, aggregate to at least 51% (fifty one per cent)

of the value of the nominal amount of the Debentures for the time being outstanding.

All decisions with respect to the Debentures shall be taken by the Debenture Trustee acting on the instructions of the

Majority Debenture Holders.

Maturity Date November 16, 2023 being 60 (Sixty months) from the

Deemed Date of Allotment, on which date all outstanding Debentures shall be mandatorily redeemed in full in

accordance with the terms and conditions of the

Debentures.

Material Adverse Effect Any act or event which (i) prevents the Issuer or the Target from carrying on material part of its business (which

contributes to more than 70% of its turnover); or (ii)

prevents any Obligor from performing its obligations under any Transaction Document; or (iii) renders any Transaction

Document, invalid or unenforceable, or (iv) affects the

ranking of any security interest granted or purported to be granted pursuant to any Transaction Document.

Merger Shall mean the amalgamation of the Target with and into

the Issuer in accordance with the Scheme, as a result of

which the Issuer is the resultant entity.

MFTA The Business of the Target in relation to transfer agency


7

and fund accounting services to the asset management industry and compliance, back office operations and data

processing activities in relation thereto

N.A. Not Applicable

NCLT The National Company Law Tribunal

NSDL National Securities Depository Limited.

Obligor The Issuer and the Target

PAN Permanent Account Number.

Person Shall include an:

(i) individual, sole proprietorship, firm, partnership, limited liability partnership, trust, joint venture, company,

corporation, body corporate, unincorporated body,

association, organisation, any Governmental Authority or other entity or organisation (whether or not in each case

having separate legal personality);

(ii) that person’s successors in title, executors, and permitted transferees and permitted assignees; and

(iii) references to a person’s representatives shall be to its officers, employees, legal or other professional advisers,

sub-contractors, agents, attorneys and other duly authorised

representatives

PFRDA Pension Fund Regulatory and Development Authority

Phase 1 Acquisition Shall mean the acquisition of 50% (fifty per cent) of issued

and paid-up share capital of the Target on a fully diluted

basis by the Company for the Purchase Consideration, pursuant to the relevant investor documents.

Post-Merger Actions Shall mean the acquisition of 49.58% of issued and paid-up

share capital of the Company on a fully diluted basis by the Sponsor, pursuant to the relevant investor documents

Private Placement Offer Letter Shall mean the offer letter prepared in compliance with

Section 42 of the Companies Act, 2013 read with the

Companies (Prospectus and Allotment of Securities) Rules, 2014.

Purchase Consideration Shall mean the purchase consideration payable by the

Issuer to the Seller in relation to the Phase 1 Acquisition,

being an amount of up to INR 8,200,000,000 (Rupees eight billion two hundred million)

RBI Reserve Bank of India

Rating Agency ICRA Limited

Record Date The date which will be used for determining the Debenture Holders who shall be entitled to receive the amounts due on

any Due Date, which shall be the date falling 7 (seven)

calendar days prior to any Due Date.

Required Duration Shall mean the residual maturity of 1 year or any other time period as may be prescribed under Applicable Law,

calculated as on the Pay-In Date

R&T Agent Registrar and Transfer Agent to the Issue, in the present case being Karvy Computershare Private Limited.

ROC Registrar of Companies.

Rs. / INR Indian National Rupee.

RTA The Business of the Target in relation to services of a registrar to an issue of securities or of a share transfer


8

agent, and back office functions in relation thereto

RTGS Real Time Gross Settlement.

Scheme Shall mean the composite scheme of arrangement and

amalgamation between, inter alia, the Company, KCL, the

Target and their respective shareholders and creditors approved by the board of directors of the Company on

August 2, 2017 pursuant to which, inter alia, the Demerger

and the Merger will be effected

SEBI Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992 (as

amended from time to time).

SEBI Debt Listing Regulations The Securities and Exchange Board of India (Issue and

Listing of Debt Securities) Regulations, 2008 issued by SEBI, as amended from time to time.

Security Shall mean the security created in relation to the Issue,

being: (i) a charge by way of hypothecation created and

perfected by the Issuer in terms of the Issuer Deed

of Hypothecation;

(ii) a charge by way of hypothecation created and perfected by the Issuer in terms of the Issue

Proceeds Account Deed of Hypothecation;

(iii) a charge by way of hypothecation created and perfected by the Target in terms of the Target Deed

of Hypothecation;

(iv) a charge by way of hypothecation created and

perfected by the Issuer in terms of the Prepayment Escrow Account Deed of Hypothecation, in

accordance with and subject to the provisions of

the Debenture Trust Deed; (v) any other security interest created from time to

time to secure the Debentures for the benefit of the

Finance Parties in accordance with the Transaction Documents.

Security Documents Shall mean the documents executed or to be executed in

relation to the creation of Security being:

(i) deed of hypothecation dated October 25, 2018

executed by the Issuer creating a first ranking charge by way of hypothecation over all assets of

the Issuer (present and future) save and except its

shareholding in the subsidiaries located outside

India (to be created as a condition precedent to the Pay-In Date) (“Issuer Deed of Hypothecation”);

(ii) deed of hypothecation dated October 25, 2018

executed by the Issuer creating a charge by way of hypothecation over the Issue Proceeds Account (to

be created as a condition precedent to the Pay-In

Date) (“Issue Proceeds Account Deed of

Hypothecation”);

(iii) deed of hypothecation to be executed by the Issuer

creating a charge by way of hypothecation over the

Prepayment Escrow Account (“Prepayment


9

Escrow Account Deed of Hypothecation”), in accordance with and subject to the provisions of

the Debenture Trust Deed;

(iv) deed of hypothecation dated October 25, 2018

executed by the Target, creating a first ranking charge by way of hypothecation over all assets of

the Target, save and except its shareholding in the

subsidiaries located outside India, to be effective automatically upon the Seller receiving the

Purchase Consideration in its bank account bearing

number 000273449 opened with HSBC Bank USA

(“Target Deed of Hypothecation”); (v) the powers of attorney issued pursuant to the

documents listed above; and

(vi) any other document entered into from time to time for creation of, or evidencing the creation of, any

security interest for the benefit of the Finance

Parties in accordance with the Transaction Documents.

Seller ACN 081 035 752 PTY LTD, a company incorporated

under the Corporations Act (2001) of Australia and having its registered office at Yarra Falls, 452, Johnston Street,

Abbotsford, Victoria 3067, Australia

Sponsor General Atlantic Singapore Fund Pte. Ltd. a company

incorporated under the laws of Singapore and having its principal place of business at 8 Marina View, #41-04 Asia

Square Tower 1, Singapore 018960, which expression

shall, unless it be contrary to the context or meaning thereof, be deemed to mean and include its successors and

permitted assigns

Sponsor Non-Disposal

Undertaking

The non-disposal undertaking dated October 25, 2018

issued by the Sponsor in favour of the Debenture Trustee in relation to the shares of the Company held/to be held by the

Sponsor.

Target Karvy Computershare Private Limited, a company incorporated under the Companies Act, 1956 with

corporate identity number U72400TG2003PTC041636 and

having its registered office at 46, Avenue, 4th Street, No.1,

Banjara Hills, Hyderabad, Telangana – 500034

TDS Tax Deducted at Source.

Terms & Conditions Shall mean the terms and conditions pertaining to the Issue

as outlined in the Transaction Documents.

Transaction Documents Shall mean the following documents in relation to the issuance of the Debentures including but not limited to:

(a) the Debenture Trustee Agreement dated October

25, 2018, which confirms the appointment of IDBI Trusteeship Services Limited as the Debenture

Trustee (“Debenture Trustee Agreement”)

(b) the Debenture Trust Deed dated October 25, 2018,

which sets out the terms upon which the Debentures are being issued and shall include the

representations and warranties and the covenants to

be provided by the Issuer (“Debenture Trust


10

Deed”); (c) this Disclosure Document;

(d) the Private Placement Offer Letter;

(e) the mandate letter dated August 3, 2017 entered

into between the Company and the Arrangers in relation to the issue of the Debentures as amended,

supplemented, and/or restated from time to time;

(f) any fee letter entered into between the Company and an Arranger read together with all

supplemental letters thereto executed from time to

time;

(g) any fee letter entered into between the Company and the Trustee read together with all supplemental

letters thereto executed from time to time;

(h) each Security Document; (i) Deed of Corporate Guarantee;

(j) Sponsor Non-Disposal Undertaking; and

(k) Any other documents that may be designated as a Transaction Document by the Trustee and the

Issuer.

WDM Wholesale Debt Market.


11

SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS

2.1 ISSUER’S DISCLAIMER

This Memorandum of Private Placement is neither a prospectus nor a statement in lieu of a

prospectus and should not be construed to be a prospectus or a statement in lieu of a

prospectus under the Companies Act. The issue of the Debentures to be listed on the WDM segment of the BSE is being made strictly on a private placement basis through electronic

book mechanism as available on the website of the BSE. 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 Memorandum of Private Placement does not constitute and shall not be deemed to constitute

an offer or invitation to subscribe to the Debentures to the public in general. The Issuer has

mandated Standard Chartered Bank and Nomura Financial Advisory & Securities (India)

Private Limited to act as arrangers for the Debentures and to distribute this Memorandum of Private Placement to identified potential investors.

As per the applicable provisions, it is not necessary for a copy of this Memorandum of Private Placement / Disclosure Document to be filed or submitted to SEBI for its review and/or

approval. However pursuant to the provisions of Section 42 of the Companies Act 2013 read

with the Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended from time to time, the copy of this Memorandum of Private Placement / Private Placement Offer

Letter shall be filed with the ROC within the stipulated timelines under the Companies Act,

2013.

This Memorandum of Private Placement has been prepared in conformity with the SEBI Debt

Listing Regulations. This Memorandum of Private Placement has been prepared solely to

provide general information about the Issuer to the Eligible Investors (as defined below) to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This

Memorandum of Private Placement does not purport to contain all the information that any

Eligible Investor may require. Further, this Memorandum of Private Placement has been

prepared for informational purposes relating to this transaction only and upon the express understanding that it will be used only for the purposes set forth herein.

Neither this Memorandum of Private Placement nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other

evaluation and any recipient of this Memorandum of Private Placement should not consider

such receipt as a recommendation to subscribe to any Debentures. Each Investor contemplating subscription to any Debentures should make its own independent investigation

of the financial condition and affairs of the Issuer, and its own appraisal of the

creditworthiness of the Issuer. Potential Investors should consult their own financial, legal,

tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyse such

investment and the suitability of such investment to such Investor’s particular circumstances.

By applying for the subscription to the Issue in the manner provided in this Memorandum of Private Placement, the Investor shall be deemed to have made its own independent decisions

(based upon its own judgement and upon advice from such advisers as it has deemed

necessary), and is not relying on the Issuer to subscribe to this Issue, it being understood that information and explanations related to the terms and conditions of the Issue shall not be

considered investment advice or a recommendation to subscribe to the Issue. No

communication (written or oral) received from the Issuer shall be deemed to be an assurance

or guarantee as to the expected results of the Issue.

The Issuer confirms that, as of the date hereof, this Memorandum of Private Placement

(including the documents incorporated by reference herein, if any) contains all the


12

information that is material in the context of the Issue and regulatory requirements in relation to the Issue and is accurate in all such material respects. No person has been authorized to

give any information or to make any representation not contained or incorporated by

reference in this Memorandum of Private Placement or in any material made available by the

Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation must not be relied upon as having being authorized by the Issuer. The Issuer

certifies that the disclosures made in this Memorandum of Private Placement and/or the

Private Placement Offer Letter are adequate and in conformity with the SEBI Debt Listing Regulations and the Companies (Prospectus and Allotment of Securities) Rules, 2014, as

amended from time to time. Further, the Issuer accepts no responsibility for statements made

otherwise than in the Memorandum of Private Placement or any other material issued by or at the instance of the Issuer and anyone placing reliance on any source of information other than

this Memorandum of Private Placement would be doing so at its own risk.

This Memorandum of Private Placement, the Private Placement Offer Letter and the respective contents hereof are restricted only for the intended recipient(s) who have been

addressed directly and specifically through a communication by the Issuer and only such

recipients are eligible to apply for the Debentures. All Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents

of this Memorandum of Private Placement and/or the Private Placement Offer Letter are

intended to be used only by those Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the recipient.

No invitation is being made to any persons other than those to whom Application Forms

along with this Memorandum of Private Placement and the Private Placement Offer Letter being issued have been sent. Any application by a person to whom the Memorandum of

Private Placement and/or the Private Placement Offer Letter has not been sent by the Issuer

shall be rejected without assigning any reason.

The person who is in receipt of this Memorandum of Private Placement and/or the Private

Placement Offer Letter shall not reproduce or distribute in whole or part or make any

announcement in public or to a third party regarding the contents hereof without the written 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 in connection with the Issue. This Memorandum of Private Placement and/or the

Private Placement Offer Letter may not be photocopied, reproduced, or distributed to others at

any time without the prior written consent of the Issuer. Upon request, the recipients will promptly return all material received from the Issuer (including this Memorandum of Private

Placement) without retaining any copies hereof. If any recipient of this Memorandum of

Private Placement and/or the Private Placement Offer Letter decides not to participate in the

Issue, that recipient must promptly return this Memorandum of Private Placement and/or the Private Placement Offer Letter and all reproductions whether in whole or in part and any

other information, statement, notice, memorandum, expression or forecast made or supplied at

any time in relation thereto or received in connection with the Issue to the Issuer.

The Issuer does not undertake to update the Memorandum of Private Placement and/or the

Private Placement Offer Letter to reflect subsequent events after the date of Memorandum of Private Placement and/or the Private Placement Offer Letter and thus it should not be relied

upon with respect to such subsequent events without first confirming its accuracy with the

Issuer.

Neither the delivery of this Memorandum of Private Placement, and/or the Private Placement

Offer Letter nor any sale of Debentures made hereafter shall, under any circumstances,


13

constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof.

This Memorandum of Private Placement and/or the Private Placement Offer Letter does not

constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom

it is unlawful to make such an offer or solicitation. No action is being taken to permit an

offering of the Debentures or the distribution of this Memorandum of Private Placement and/or the Private Placement Offer Letter in any jurisdiction where such action is required.

Persons into whose possession this Memorandum of Private Placement comes are required to

inform themselves about and to observe any such restrictions. The Memorandum of Private Placement is made available to potential Investors in the Issue on the strict understanding that

it is confidential. Recipients are not entitled to use any of the information contained in this

Memorandum of Private Placement and/or the Private Placement Offer Letter for any purpose

other than for the purposes of making an independent assessment to decide whether or not to participate in the Debentures.

2.2 DISCLAIMER CLAUSE OF STOCK EXCHANGES

As required, a copy of this Memorandum of Private Placement has been filed with the BSE in

terms of the SEBI Debt Listing Regulations. It is to be distinctly understood that submission of this Memorandum of Private Placement to the BSE should not in any way be deemed or

construed to mean that this Memorandum of Private Placement 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 Memorandum of Private Placement, nor does the BSE warrant that the Issuer’s Debentures will be listed or will continue to be

listed on the BSE; nor does the BSE take any responsibility for the soundness of the financial

and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer.

2.3 DISCLAIMER CLAUSE OF SEBI

As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of

this Memorandum of Private Placement has to be filed with or submitted to the SEBI for its review / approval. It is to be distinctly understood that this Memorandum of Private

Placement should not in any way be deemed or construed to have been approved or vetted by

SEBI and that this Issue is not recommended or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for which the Debentures

issued thereof is proposed to be made or for the correctness of the statements made in this

Memorandum of Private Placement.

2.4 DISCLAIMER CLAUSE OF THE ARRANGERS

This Memorandum of Private Placement and/or the Private Placement Offer Letter are being provided to potential investors in relation to the issue of the Debentures by the Issuer. All the

information contained in this Memorandum of Private Placement and/or the Private

Placement Offer Letter has been provided by the Issuer or is from publicly available information, and the Arranger has not independently verified the contents of this

Memorandum of Private Placement and/or the Private Placement Offer Letter.

The Issuer hereby declares that it has exercised due-diligence to ensure complete compliance with prescribed disclosure norms in this Memorandum of Private Placement and/or the

Private Placement Offer Letter. The Issuer has authorized the Arrangers to distribute this

Memorandum of Private Placement in connection with issuance of the Debentures. The role of the Arrangers with respect to the Debentures is confined to arranging placement of the


14

Debentures on the basis of this Memorandum of Private Placement as prepared by the Issuer. The Issuer has prepared this Disclosure Document and the Issuer is solely responsible for its

contents. The Issuer is solely responsible for the truth, accuracy and completeness of all the

information provided in this Memorandum of Private Placement and/or the Private Placement

Offer Letter. Neither are the Arrangers responsible for preparing, clearing, approving, scrutinizing or vetting this Memorandum of Private Placement and/or the Private Placement

Offer Letter, nor are the Arrangers responsible for doing any due-diligence for verification of

the truth, correctness or completeness of the contents of this Memorandum of Private Placement and/or the Private Placement Offer Letter. The Arrangers shall be entitled to rely

on the truth, correctness and completeness of this Memorandum of Private Placement and/or

the Private Placement Offer Letter. It is to be distinctly understood that the aforesaid use of this Memorandum of Private Placement and/or the Private Placement Offer Letter by the

Arrangers should not in any way be deemed or construed to mean that the Memorandum of

Private Placement and/or the Private Placement Offer Letter has been prepared, cleared,

approved, scrutinized or vetted by the Arrangers, nor should the contents of this Memorandum of Private Placement and/or the Private Placement Offer Letter in any manner

be deemed to have been expressly or impliedly represented, warranted, certified or endorsed

by the Arrangers as to the truth, correctness or completeness thereof (or as to the reasonableness of any assumption contained therein) or any other information written or oral

information made available to recipients or their advisers in connection with the Debentures.

Each recipient must satisfy itself as to the accuracy, reliability, adequacy, reasonableness or completeness of the Memorandum of Private Placement and/or the Private Placement Offer

Letter.

The Arrangers have 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 Memorandum of Private Placement and/or the Private Placement Offer

Letter does not constitute a representation or warranty, express or implied by the Arrangers

that the information herein will be updated at any time after the date of this Memorandum of Private Placement and/or the Private Placement Offer Letter. The Arrangers do not undertake

to notify any recipient of any information coming to the attention of the Arrangers after the

date of this Memorandum of Private Placement and/or the Private Placement Offer Letter. No responsibility or liability or duty of care is or will be accepted by the Arrangers for updating

or supplementing this Memorandum of Private Placement and/or the Private Placement Offer

Letter nor for providing access to any additional information as further information becomes available.

Neither the Arrangers 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 Memorandum of Private

Placement or in any other information or communications made in connection with the

Debentures.

The Arrangers are acting for the Company in relation to the Issue of the Debentures and not

on behalf of the recipients of this Memorandum of Private Placement and/or the Private Placement Offer Letter. The receipt of this Memorandum of Private Placement and/or the

Private Placement Offer Letter by any recipient is not to be constituted as the giving of

investment advice by the Arrangers to that recipient, nor to constitute such a recipient a

customer of the Arrangers.

The Issuer shall, at all times, be in compliance with all provisions of the Companies Act, the

Debenture Trustee Regulations and the Debt Listing Regulations, the debt listing agreement


15

entered into with the Stock Exchange and this Memorandum of Private Placement. All the

information contained in this Memorandum of Private Placement has been provided by the

Issuer or is from publicly available information, and such information has not been

independently verified by the Arrangers. No representation or warranty, expressed or implied,

is or will be made, and no responsibility or liability is or will be accepted, by the Arrangers

for the accuracy, completeness, reliability, correctness or fairness of this Memorandum of

Private Placement or any of the information or opinions contained therein, and the Arranger

hereby expressly disclaims, to the fullest extent permitted by law, any responsibility for the

contents of this Memorandum of Private Placement and any liability, whether arising in tort

or contract or otherwise, relating to or resulting from this Memorandum of Private Placement

or any information or errors contained therein or any omissions therefrom. By accepting this

Disclosure Document, the investor agrees that the Arranger will not have any such liability.

The investor should carefully read and retain this Memorandum of Private Placement.

However, the investor is not to construe the contents of this Memorandum of Private

Placement as investment, legal, accounting, regulatory or tax advice, and should consult with

its own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Debentures.

The Arrangers may purchase and hold the Debentures for their own account or for the accounts of their customers or enter into other transactions (including derivatives) relating to

the Debentures at the same time as the offering of the Debentures. The Arrangers may have

engaged in or may in the future engage in other dealings in the ordinary course of business with the Issuer and/or its subsidiaries and affiliates.

Nothing in this Memorandum of Private Placement constitutes an offer of securities for sale

in the United States or any other jurisdiction where such offer or placement would be in

violation of any law, rule or regulation.

This Memorandum of Private Placement and/or the Private Placement Offer Letter has been

prepared to provide general information about the Issuer to potential investors to whom it is

addressed and who are willing and eligible to subscribe to the Debentures. This Memorandum

of Private Placement and/or the Private Placement Offer Letter does not purport to contain all

the information that any potential investor may require. Each investor contemplating

purchasing any Debentures should make its own independent investigation of the financial

condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer.

Potential investors should consult their own financial, legal, tax and other professional

advisors as to the risks and investment considerations arising from an investment in the

Debentures and should possess the appropriate resources to analyse such investment and the

suitability of such investment to such investor's particular circumstances. It is the

responsibility of potential investors to also ensure that they will subscribe these Debentures in

strict accordance with this Memorandum of Private Placement and/or the Private Placement

Offer Letter and other applicable laws, so that the subscription does not constitute an offer to

the public, within the meaning of the Companies Act, 2013. The Arranger shall not be liable

for any subscription of the Debentures by the potential investors in contravention of the

provisions of the Companies Act, 2013. The Arranger does not undertake to review the

financial condition or affairs of the issuer during the life of the arrangements contemplated by

this Memorandum of Private Placement and/or the Private Placement Offer Letter or to advise

any investor or potential investor in the Debentures of any information coming to the

attention of any of the Arranger.

This Memorandum of Private Placement and/or the Private Placement Offer Letter is

confidential and is made available to potential investors in the Debentures on the understanding that it is confidential. Recipients are not entitled to use any of the information


16

contained in this Memorandum of Private Placement and/or the Private Placement Offer Letter for any purpose other than in assisting to decide whether or not to participate in the

Debentures.

Each recipient of this Memorandum of Private Placement and/or the Private Placement Offer Letter acknowledges that:

(a) such 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 Arrangers in connection with its investigation of

the accuracy of such information or its investment decision.

This Memorandum of Private Placement and/or the Private Placement Offer Letter does not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in

any jurisdiction in which such offer or solicitation is not authorized or to any person to whom

it is unlawful to make such an offer or solicitation. No action is being taken to permit an offering of the debentures or the distribution of this Memorandum of Private Placement

and/or the Private Placement Offer Letter in any jurisdiction where such action is required.

The distribution of this Memorandum of Private Placement and/or the Private Placement Offer Letter and the offering and sale of the Debentures may be restricted by law in certain

jurisdictions. Persons into whose possession this Memorandum of Private Placement and/or

the Private Placement Offer Letter come are required by the Arranger and the Issuer to inform

themselves about and to observe any such restrictions.

The Arranger: (a) is not acting as trustee or fiduciary for the investors or any other person;

and (b) is under no obligation to conduct any "know your customer" or other procedures in relation to any person on behalf of any investor. The Arranger is not responsible for (a) the

adequacy, accuracy and/or completeness of any information (whether oral or written)

supplied by the Issuer or any other person in or in connection with this Memorandum of

Private Placement and/or the Private Placement Offer Letter; or (b) the legality, validity, effectiveness, adequacy or enforceability of this Memorandum of Private Placement and/or

the Private Placement Offer Letter or any other agreement, arrangement or document entered

into, made or executed in anticipation of or in connection with this Memorandum of Private Placement and/or the Private Placement Offer Letter; or (c) any determination as to whether

any information provided or to be provided to any investor is non-public information the use

of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

Neither the Arranger nor the Issuer is required to file this Memorandum of Private Placement

and/or the Private Placement Offer Letter with SEBI/ROC as it is strictly on private placement basis and not an offer to the general public.

Please note that:

(a) the Arrangers and/or their affiliates may, now and/or in the future, may have other

investment and commercial banking, trust and other relationships with the Issuer and with other persons (“Other Persons”);

(b) as a result of those other relationships, the Arrangers and/or their affiliates may get

information about Other Persons, the Issuer and/or the Issue or that may be relevant to any of them. Despite this, the Arrangers and/or their affiliates will not be required to

disclose such information, or the fact that it is in possession of such information, to any


17

recipient of this Memorandum of Private Placement and/or the Private Placement Offer Letter;

(c) the Arrangers and/or their affiliates may, now and in the future, have fiduciary or other

relationships under which it, or they, may exercise voting power over securities of various persons. Those securities may, from time to time, include securities of the

Issuer; and

(d) the Arrangers and/or its affiliates may exercise such voting powers, and otherwise

perform its functions in connection with such fiduciary or other relationships, without

regard to its relationship to the Issuer and/or the securities.

2.5 DISCLAIMER CLAUSE OF THE DEBENTURE TRUSTEE

The Debenture Trustee, by virtue of acting as the debenture trustee to the Issue, does not ipso facto undertake or have the obligations of a borrower or a principal debtor or a guarantor as to

the monies paid / invested by an Investor for the Debentures.

2.6 DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is made in India to Investors as specified under the clause titled “Eligible Investors” of this Memorandum of Private Placement, who shall be/have been identified

upfront by the Issuer. This Memorandum of Private Placement and/or the Private Placement

Offer Letter does not constitute an offer to sell or an invitation to subscribe to Debentures

offered hereby to any person to whom it is not specifically addressed. Any disputes arising out of this Issue will be subject to the jurisdiction of the courts and tribunals at Hyderabad.

This Memorandum of Private Placement and/or the Private Placement Offer Letter does not

constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such

jurisdiction.

2.7 DISCLAIMER IN RESPECT OF RATING AGENCIES

Ratings are opinions on credit quality and are not recommendations to sanction, renew,

disburse or recall the concerned bank facilities or to buy, sell or hold any security. The Rating Agency has based its ratings on information obtained from sources believed by it to be

accurate and reliable. The Rating Agency does not, however, guarantee the accuracy,

adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose

bank facilities/instruments are rated by the Rating Agency have paid a credit rating fee, based

on the amount and type of bank facilities/instruments.

2.8 ISSUE OF DEBENTURES IN DEMATERIALISED FORM

The Debentures will be issued in dematerialised form. The Issuer has made arrangements with the Depositories for the issue of the Debentures in dematerialised form. Investors will

have to hold the Debentures in dematerialised form as per the provisions of Depositories Act.

The Issuer shall take necessary steps to credit the Debentures allotted to the beneficiary account maintained by the Investor with its depositary participant. The Issuer will make the

Allotment to Investors on the Deemed Date of Allotment after verification of the Application

Form, the accompanying documents and on realisation of the application money.


18

SECTION 3: RISK FACTORS

The following are the risks relating to the Company, the Debentures and the market in general

envisaged by the management of the Company. If any or some combination of the

following risks, or other risks that are not currently known or believed to be material, actually occur, our business, financial condition and results of operation may suffer, and the

trading price of, and the value of your investment in, the Debentures may decline and you may

lose all or part of your investment. Prospective investors should carefully consider the risk factors relating to the business and the industry described below, together with all other

information contained in this document before making any investment decision relating to the

Debentures. These risks and uncertainties are not the only issues that the Company faces; additional risks and uncertainties not presently known to the Company or that are currently

believed to be immaterial may also have an adverse effect on the business, results of

operations, financial condition or prospects and cause the market price of the Debentures to

fluctuate and consequently adversely impact the investment by investors, upon a sale of the Debentures. Unless otherwise stated in the relevant risk factors set forth below, we are not in

a position to specify or quantify the financial or other risks mentioned herein.

The ordering of the risk factors is intended to facilitate ease of reading and reference and does

not in any manner indicate the importance of one risk factor over another. Investors should

also read the detailed information set out elsewhere in this Memorandum of Private Placement and reach their own views prior to making any investment decision.

3.1 REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER

Potential investors should be aware that receipt of the principal amount (i.e. the redemption

amount) and any other amounts that may be due in respect of the Debentures is subject to the

credit risk of the Issuer. Potential investors assume the risk that the Issuer will not be able to satisfy their obligations under the Debentures. In the event that bankruptcy or insolvency

proceedings or composition, scheme of arrangement or similar proceedings to avert

bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures

may not be made or may be substantially reduced or delayed.

3.2 RISK OF LOW TRADING VOLUMES IN SECONDARY MARKET AND/ OR

IMPROPER FUNCTIONING OF CAPITAL MARKETS COULD RESTRICT

THE LIQUIDITY OF THE DEBENTURES IN THE SECONDARY MARKET

The Company intends to list the Debentures on the WDM segment of BSE. The Company cannot provide any guarantee that the Debentures will be frequently traded on the BSE and

that there would be any market for the Debentures. It is not possible to predict if and to what

extent a secondary market may develop for the Debentures or at what price the Debentures

will trade in the secondary market or whether such market will be liquid or illiquid. The fact that the Debentures may be so listed or quoted or admitted to trading does not necessarily lead

to greater liquidity than if they were not so listed or quoted or admitted to trading. Further, the

Company may not be able to issue any further Debentures, in case of any disruptions in the securities market.

3.3 CREDIT RISK & RATING DOWNGRADE RISK

The Rating Agency has assigned a credit rating to the Debentures. In the event of

deterioration in the financial health of the Company, there is a possibility that the Rating

Agency may downgrade the rating of the Debentures. In such cases, potential investors may incur losses on re-valuation of their investment or make provisions towards sub-standard/

non-performing investment as per their usual applicable norms. The rating is not a

recommendation to purchase, hold or sell the Debentures in as much as the ratings do not


19

comment on the market price of the Debentures or its suitability to a particular investor. There is no assurance either that the rating will remain at the same level for any given period of time

or that the rating will not be lowered or withdrawn entirely by the Rating Agency. In the

event of deterioration in the rating of the Debentures, the Investors may have to take loss on

revaluation of their investment.

3.4 TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS

Special tax considerations and legal considerations may apply to certain types of potential

investors. Potential investors are urged to consult with their own financial, legal, tax and other

professional advisors to determine any financial, legal, tax and other implications of this investment.

3.5 ACCOUNTING CONSIDERATIONS

Special accounting considerations may apply to certain types of taxpayers. Potential Investors

are urged to consult with their own accounting advisors to determine implications of this

investment.

3.6 SECURITY OR GUARANTEE MAY BE INSUFFICIENT TO REDEEM THE

DEBENTURES

In the event that the Company is unable to meet its payment and other obligations towards

Investors under the terms of the Debentures, the Debenture Trustee may enforce the Security

as per the terms of Security Documents and/or invoke the guarantee as per the Deed of Corporate Guarantee, and other related documents. The Investor’s recovery in relation to the

Debentures will be subject to (i) the market value of such secured property, (ii) finding

willing buyers for the Security at a price sufficient to repay the potential Investors amounts outstanding under the Debentures and (iii) payment by the Target as per the terms of the Deed

of Corporate Guarantee. The value realised from the enforcement of the Security or

invocation of the guarantee under the Deed of Corporate Guarantee may be insufficient to

redeem the Debentures.

3.7 MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS

SUBJECT COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT

OR OTHER OBLIGATIONS

The Issuer and the Target are subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any changes in the

regulatory framework could adversely affect the profitability of the Issuer or its future

financial performance, by requiring a restructuring of its activities, increasing costs or

otherwise.

3.8 LEGALITY OF PURCHASE

Potential investors of the Debentures will comply with 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, in relation to the subscription of the Debentures by such investor(s).

3.9 SCHEME RELATED RISKS

The Scheme is subject to obtaining requisite approvals from SEBI and PRFDA. In the

absence of obtaining such approvals, the Issuer and the Target may not be in a position to file

the Scheme with the ROC to make the Scheme effective.


20

Further, in the event the aforesaid approvals are subject to fulfilment of certain conditions,

which in the opinion of the Issuer and the Target are detrimental to the interests of the

Sponsor, the Issuer and/or the Target, it may not be viable for the Issuer and the Target to file

the Scheme with the ROC to make the Scheme effective.

3.10 MARKET RISKS

The Target, or (after the Effective Date) the Issuer, operates / will operate primarily within

India and, accordingly, majority of its revenues are / will be derived from the domestic

market. As a result, it is / will be highly dependent on prevailing economic conditions in India and its results of operations are / will be significantly affected by factors influencing the

Indian economy. An uncertain economic situation, in India, could result in a further

slowdown in economic growth and investment. Any slowdown in the growth or a negative

growth of sectors where the Issuer has an exposure could adversely impact its performance. Any such slowdown could adversely affect its business, prospects, results of operations and

financial condition.

3.11 CLIENT CONCENTRATION

A majority of the revenue of the Target, or (after the Effective Date) the Issuer, is / will be

derived from a small portion of its clients. In the event of a downward price negotiation or termination of a contract with a key client, such client concentration could adversely impact

the financial condition and profitability of the Target, or (after the Effective Date) the Issuer.

3.12 DIGITISATION

The Target, or (after the Effective Date) the Issuer, is / will be in the business of servicing

asset management companies and lending support for inter-alia transactions with these companies. Chief among the support provided by the Target, or (after the Effective Date) the

Issuer is / will be certain back-end operations of such companies. In the event any of the

processes involved in such transactions are digitised, it may result in a reduction in the assistance required from the Target, or (after the Effective Date) the Issuer, and accordingly

may adversely impact the financial condition and profitability of the Target, or (after the

Effective Date) the Issuer.

3.13 OPERATIONAL RISKS

The Target, or (after the Effective Date) the Issuer, is / will be subject to certain operational risks owing to any administrative errors in its operations. An illustration of such risk is where,

owing to an administrative error by an employees of the Target, or (after the Effective Date)

the Issuer, the money to be credited to a particular account is credited to another account and it is difficult to recover the money so credited, the Target, or (after the Effective Date) the

Issuer, may be held liable to indemnify the customer for the loss of such money.


21

SECTION 4: FINANCIAL STATEMENTS

Enclosed as Annexure V hereto are the audited balance sheets of the Issuer as of March 31,

2018, provisional financials of the Issuer as of September 30, 2018, audited financial statements of the Target as of March 31, 2018 and provisional financials of the Target as of

September 30, 2018.


22

SECTION 5: REGULATORY DISCLOSURES

The Memorandum of Private Placement is prepared in accordance with the provisions of

SEBI Debt Listing Regulations and in this section, the Issuer has set out the details required

as per Schedule I of the SEBI Debt Listing Regulations.

5.1 Documents Submitted to the Exchanges

The following documents have been / shall be submitted to the BSE:

(a) Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the issuance of the Debentures, along with the Certificate of Incorporation of the

Issuer;

(b) Copy of the audited balance sheets of the Issuer as of March 31, 2018, provisional

financials of the Issuer as of September 30, 2018, audited financial statements of the Target as of March 31, 2018 and provisional financials of the Target as of September

30, 2018;

(c) Statement containing particulars of, dates of, and parties to all material contracts and agreements;

(d) Certified true copy of the resolution passed by the Company at the extraordinary

general meeting of the Company held on August 2, 2017 authorising the Company to borrow, upon such terms as the Board may think fit, up to an aggregate limit of INR

4,300,000,000/- (Rupees four billion three hundred million only) over and above the

aggregate of the paid-up share capital of the Company and its free reserves;

(a) Certified true copy of the resolution passed by the shareholders of the Company at the extraordinary general meeting of the Company held on October 15, 2018, authorizing

the issue/offer of non-convertible debentures by the Company up to an aggregate

limit of Rs.4,000,000,000/- (Rupees four billion only); (b) Certified true copy of the Board Resolution dated October 15, 2018 authorizing the

borrowing and issuance of the Debentures and the list of authorised signatories of the

Company in relation to the issuance of the Debentures;

(c) An undertaking from the Issuer stating that the necessary documents for the creation of the charge, where applicable, would be executed in the manner agreed between the

Issuer and the Investors and in any event within the time frame prescribed in the

relevant regulations/acts/rules etc. (if any) and the same would be uploaded on the website of the BSE, where the debt securities have been listed, within 5 (five) days

from the execution of such documents; and

(d) Any other particulars or documents that the BSE may call for as it deems fit.

5.2 Documents Submitted to Debenture Trustee

The following documents have been / shall be submitted to the Debenture Trustee:

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

for the issuance of the Debentures, along with the Certificate of Incorporation of the Issuer;

(b) Copy of audited balance sheets of the Issuer as of March 31, 2018, provisional

financials of the Issuer as of September 30, 2018, audited financial statements of the Target as of March 31, 2018 and provisional financials of the Target as of September

30, 2018;

(c) Statement containing particulars of, dates of, and parties to all material contracts and

agreements; (d) Latest Audited / Limited Review Half Yearly Consolidated (wherever applicable) and

Standalone Financial Information (Profit & Loss statement, Balance Sheet and Cash

Flow statement) and auditor qualifications, if any;


23

(e) An undertaking to the effect that the Issuer would, until the redemption of the debt securities, 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 Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11,

2009 as amended from time to time, for furnishing / publishing its half yearly/ annual

result. Further, the Issuer shall within 180 (one hundred and eighty) calendar days from the end of the financial year, submit a copy of the latest annual report to the

Debenture Trustee and the Debenture Trustee shall be obliged to share the details

submitted under this clause with all ‘Foreign Portfolio Investors’ and other existing debenture-holders within 2 (two) Business Days of their specific request.

(f) Any other particulars or documents that the Debenture Trustee may reasonably

request in relation to the Issue, for the benefit of the Debenture Holders.

5.3 Issuer Information

Name: Karvy Fintech Private Limited Registered Office of Issuer: Karvy Selenium, Tower B, Plot No- 31 & 32, Financial

District, Nanakramguda, Serilingampally Hyderabad

Rangareddi Telangana 500032 Corporate Office of Issuer: Karvy Selenium, Tower B, Plot No- 31 & 32, Financial

District, Nanakramguda, Serilingampally Hyderabad

Rangareddi Telangana 500032

Compliance Officer of Issuer: Mr. Rakesh Kumar Santhalia CFO of Issuer: Mr. Rakesh Kumar Santhalia

Registration Number: 117649

Corporate Identification Number: U67200TG2017PTC117649 Phone No.: +91-9177466066

Contact Person: Mr. Rakesh Kumar Santhalia

Email: [email protected]

Website of Issuer: Not available Auditors of the Issuer: M/s. BSKS & Co.

Address: 104, Sri Krishna Residency, Opposite Siddhartha Degree

College, Nagarjuna Nagar Colony, Ameerpet, Hyderabad 500 073

Debenture Trustee of the Issue: IDBI Trusteeship Services Limited

Address: Asian Building, Ground floor, 17, R Kamani Marg, Ballard Estate, Mumbai 400 001

Registrar of the Issue: Karvy Computershare Private Limited

Address: 46, Avenue 4, Street No 1, Banjara Hills, Hyderabad 500034

Credit Rating Agency of the Issue: ICRA Limited Address: Building No 8, 2nd Floor, Tower A, DLF Cyber City,

Phase II, Gurgaon – 122 002

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

(a) Overview

Karvy Fintech Private Limited provides products, technology or services to companies within

the financial services industry, and includes the proposed businesses inter-alia of providing

(i) services of a registrar to an issue of securities or of a share transfer agent, and back office

mailto:[email protected]


24

functions in relation thereto; (ii) transfer agency and fund accounting services to the asset management industry and compliance, back office operations and data processing activities in

relation thereto; and (iii) central recordkeeping agency services under the National Pension

System operated and administered by the PFRDA.

(b) Corporate Structure

The Company has been incorporated by Mr. Venkata Ram Mohan Karavadi and Mr. Bharat Naidu Bobbili as shareholders, each holding 50% of the issued share capital. The current

shareholding pattern of the Company is set out below:

Name of the Shareholders No. of

Shares

Percentage of

Shareholding

Adhiraj Parthasarathy 161 1.61%

Rajat Parthasarathy 161 1.61%

C. Parthasarathy – HUF 363 3.63%

Compar Estates and Agencies Pvt. Ltd. 2658 26.58%

M. Rajini 2216 22.16%

M. Ahalya 199 1.99%

M. Gangadhar Rao 107 1.07%

M. Spandana 786 7.86%

M. Rushyanth 691 6.91%

M. Meena 476 4.76%

Jhansi Sureddi 2182 21.82%

Total 10,000 100%

(c) Key Operational and Financial Parameters for the last 3 audited years: Given

that the Issuer has been incorporated recently, the key operational and financial

parameters set out below are based on the indicative balance sheets of the Issuer as of

March 31, 2018 and September 30, 2018.

(Rs.)

Parameters Sept. 30,

18 FY 2018 FY 2017 FY 2016

Networth 1,00,000 1,00,000 N.A N.A.

Total Debt 6,00,00,000 0 N.A N.A.

Comprising

of

Non-Current

Maturities of Long Term Borrowing

0

0 N.A N.A.

Short Term

Borrowing

6,00,00,000 0 N.A N.A.

Current Maturities of Loan Term

Borrowings

0 0 N.A N.A.

Net Fixed Assets 0 0 N.A N.A.

Non-Current Assets 10,96,663 0 N.A N.A.

Cash and Cash Equivalents 60,84,092 99,882 N.A N.A.

Current Investments 0 0 N.A N.A.

Current Assets 6,50,84,092 1,080,873 N.A N.A.

Current Liabilities 60,80,755 1,080,755 N.A N.A.


25

Parameters Sept. 30,

18 FY 2018 FY 2017 FY 2016

Net Sales 0 0 N.A N.A.

EBITDA 0 0 N.A N.A.

EBIT 0 0 N.A N.A.

Interest 0 0 N.A N.A.

PAT 0 0 N.A N.A.

Dividend amounts 0 0 N.A N.A.

Current ratio 1.0 0 N.A N.A.

Interest coverage ratio NA N.A. N.A N.A.

Gross debt/equity ratio NA N.A. N.A N.A.

Debt Service Coverage Ratios NA N.A. N.A N.A.

Gross Debt: Equity Ratio of the Company:

Before the issue of debt securities 0 N.A.

After the issue of debt securities 0.97 N.A.

Calculations

As on September 30, 2018 debt-to-equity ratio is calculated as follows:-

Debt 0

Equity 1,00,000

Debt/Equity 0

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

Debt 400,00,00,000

Equity 412,28,88,028

Debt/Equity 0.97

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

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

activities:

Details of Share Capital as on last quarter end i.e. September 30, 2018:

Particulars Amount (Rs.)

Authorised

60,00,000 Equity Shares 6,00,00,000

Total 6,00,00,000

Issued Subscribed and Paid Up

10,000 Equity Shares of Rs. 10 each fully paid up 1,00,000

Total 1,00,000


26

(a) Changes in its capital structure as on last quarter end i.e. September 30, 2018, for the last five years: None

(b) Equity Share Capital History of the Company as on last quarter end i.e.

September 30, 2018, for the last five years:

Date

of allotm

ent

Name

of shareh

older

No. of

equity shares

Fa

ce Va

lue

(R

s.)

Iss

ue pri

ce

(Rs

.)

Consideration (cash,

other than cash etc.)

Nature of

Allot

ment

Cumulative paid-

up capital (Rs.)

No. of

eq

uity

sha

res

Equity

shar

e Cap

ital

(Rs.)

Equity

Shar

e Pre

miu

m (Rs.

)

July 3,

2017

Bharat

Naidu Bobbil

i

5,000 10 50,

000

NA Subsc

ription

10,

000

1,00

,000

Nil

July 3,

2017

Venkat

a Ram Mohan

Karava

di

5,000 10 50,

000

NA Subsc

ription

10,

000

1,00

,000

Nil

July

10,

2017

Coman

dur

Parthas

arathy

164 10 1,6

40

NA Transf

er

10,

00

0

1,00

,000

Nil

July

10,

2017

M.

Ganga

dhar Rao

107 10 1,0

70

NA Transf

er

10,

00

0

1,00

,000

Nil

July

10,

2017

M.

Spanda

na

786 10 7,8

60

NA Transf

er

10,

00

0

1,00

,000

Nil

July

10,

2017

Adhira

j

Parthas

arathy

161 10 1,6

10

NA Transf

er

10,

00

0

1,00

,000

Nil

July

10,

2017

Rajat

Parthas

arathy

161 10 1,6

10

NA Transf

er

10,

00

0

1,00

,000

Nil

July 10,

2017

Meka Rajini

2,216 10 22,61

0

NA Transfer

10,00

0

1,00,000

Nil

July 10,

2017

Meka Ahalya

199 10 1,990

NA Transfer

10,00

0

1,00,000

Nil

July

10, 2017

M.

Rushyanth

691 10 6,9

10

NA Transf

er

10,

000

1,00

,000

Nil


27

Date of

allotm

ent

Name of

shareh

older

No. of equity

shares

Face

Va

lue

(Rs.)

Issue

pri

ce

(Rs.)

Consideration (cash, other than cash etc.)

Natur

e of

Allot

ment

Cumulative paid-up capital (Rs.)

No

. of

equit

y

sha

res

Equ

ity

share

Cap

ital

(Rs.)

Equi

ty

Share

Pre

miu

m (Rs.

)

July 10,

2017

M. Meena

476 10 4,760

NA Transfer

10,00

0

1,00,000

Nil

July

10, 2017

C.

Parthasarathy-

HUF

199 10 19

90

NA Transf

er

10,

000

1,00

,000

Nil

July

10, 2017

Jhansi

Sureddy

2,182 10 21,

820

NA Transf

er

10,

000

1,00

,000

Nil

July

10, 2017

M/S

Compar

Estates

&

Agencies

Private

Limited

2,658 10 26,

580

NA Transf

er

10,

000

1,00

,000

Nil

July

28,

2017

Coman

dur

Parthasarathy

164 10 1,6

40

NA Transf

er

10,

00

0

1,00

,000

Nil

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

None

(d) Details of any Reorganization or Reconstruction in the last 1 (one) year:

None

5.5 Details of the shareholding of the Company as on the latest quarter end, i.e.

September 30, 2018:

(a) Shareholding pattern of the Company as on last quarter end, i.e. September 30,

2018:


28

Sr.

No. Name of the Shareholder / Particulars Class

Total

Number of

equity shares

Percentage

(% ) of

Total

Shareholdin

g

Number of

shares

held in

Demat

Form

1. Adhiraj Parthasarathy Equity 161 1.61% 161

2. Rajat Parthasarathy Equity 161 1.61% 161

3. C. Parthasarathy – HUF Equity 363 3.63% 363

4. Compar Estates and Agencies Pvt. Ltd. Equity 2658 26.58% 2658

5. M. Rajini Equity 2216 22.16% 2216

6. M. Ahalya Equity 199 1.99% 199

7. M. Gangadhar Rao Equity 107 1.07% 107

8. M. Spandana Equity 786 7.86% 786

9. M. Rushyanth Equity 691 6.91% 691

10. M. Meena Equity 476 4.76% 476

11. Jhansi Sureddi Equity 2182 21.82% 2182

Total Equity Shares

100.00%

Notes: Details of shares pledged or encumbered by the promoters (if any): NIL

(b) List of top 10 holders of equity shares of the Company as on the latest quarter

end, i.e. September 30, 2018:

Sr.

No. Name of the Shareholder Class

Total

Number of

equity shares

Percentage

(% ) of Total

Shareholding

Number of

shares held

in Demat

Form

1. Compar Estates and Agencies Pvt. Ltd. Equity 2658 26.58% 2658

2. M. Rajini Equity 2216 22.16% 2216

3. Jhansi Sureddi Equity 2182 21.82% 2182

4. M. Spandana Equity 786 7.86% 786

5. M. Rushyanth Equity 691 6.91% 691

6. M. Meena Equity 476 4.76% 476

7. C. Parthasarathy – HUF Equity 363 3.63% 363

8. M. Ahalya Equity 199 1.99% 199

9. Adhiraj Parthasarathy Equity 161 1.61% 161

10. Rajat Parthasarathy Equity 161 1.61% 161

Total Equity Shares

100.00%

5.6 Following details regarding the directors of the Company:

(a) Details of current directors of the Company:

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

The Board of the Company comprises the following:


29

Name,

Designation

and DIN

Age

(in

years)

Address

Director of the

Company Since

Other Directorships

Venkata Ram

Mohan Karavadi

Director

DIN

02270230

54 Flat No.503,Sri Sai

Viswanatha Towers,Sai Baba

Temple St.,Ganga

Nagar,Kalyan

Nagar Vent Ure Iii Hyderabad 500045

AP IN

June 8, 2017 Enclosed as

Annexure VII

Bharat Naidu Bobbili

Director

DIN

06392666

51 2-4-127/1/313, New Friends

Colony To Happy

Homes Colony,

Upperpally, Rajen Dranagar Ranga

Reddy 500048 AP

IN

June 8, 2017 Enclosed as

Annexure VII

*Company to disclose name of the current directors who are appearing in the RBI defaulter

list and/or ECGC default list, if any: None

(b) Details of change in directors since last three years: None

5.7 Following details regarding the auditors of the Company:

5.8 Details of the auditor of the Company:

(a) Details of current auditor of the Company

Name Address Auditor since

M/s. BSKS & Co. 104, Sri Krishna Residency, Opposite Siddhartha Degree College, Nagarjuna

Nagar Colony, Ameerpet, Hyderabad

500 073

June 8, 2017

(b) Details of change in auditors since last three years: None

5.9 Details of borrowings of the Company, as on latest quarter ended, September 30,

2018:

(a) Details of Secured Loan Facilities: None

(b) Details of Unsecured Loan Facilities: None

(c) Details of Non-Convertible Debentures: Nil

(d) List of Top 10 Debenture Holders (as on September 30, 2018): Nil

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

counterparty (like name of the subsidiary, JV entity, group company, etc) on

behalf of whom it has been issued (if any): Nil

(f) Details of Commercial Paper: Nil

(g) Details of rest of the borrowing (if any including hybrid debt like FCCB,

Optionally Convertible Debentures / Preference Shares) as on September 30,

2018: Nil


30

(h) Details of all default/s and/or delay in payments of interest and principal of any

kind of term loans, debt securities and other financial indebtedness including

corporate guarantee issued by the company, in the past 5 years: Nil

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

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

5.10 Details of Promoters of the Company:

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

30, 2018

Sr

No

Name of the

shareholders

Total No of

Equity shares

No .of

shares in

Demat

form

Total

shareholding as

% of total no of

equity shares

No of

shares

Pledged

% of shares

pledged with

respect to

shares owned

1. Adhiraj Parthasarathy

161 161 1.61% N.A. N.A.

2. Rajat

Parthasarathy

161 161 1.61% N.A. N.A.

3. C. Parthasarathy –

HUF

363 363 3.63% N.A. N.A.

4. Compar Estates

and Agencies Pvt.

Ltd.

2658 2658 26.58% N.A. N.A.

5. M. Rajini 2216 2216 22.16% N.A. N.A.

6. M. Ahalya 199 199 1.99% N.A. N.A.

7. M. Gangadhar Rao 107 107 1.07% N.A. N.A.

8. M. Spandana 786 786 7.86% N.A. N.A.

9. M. Rushyanth 691 691 6.91% N.A. N.A.

10. M. Meena 476 476 4.76% N.A. N.A.

11. Jhansi Sureddi 2182 2182 21.82% N.A. N.A.

5.11 Abridged version of the Audited Consolidated and Standalone Financial

Information (like Profit and Loss statement, Balance Sheet and Cash Flow

statement) for at least last three years and auditor qualifications, if any.: Given

that the Issuer has been incorporated recently, the financial information set out below

is based on the indicative balance sheets of the Issuer as of September 30, 2018:

Particulars 30.09.2018 31.03.2018 31.03.2017 31.03.2016

Unaudited Audited Audited Audited

1. (a) Net Sales/Income from

Operations

(b) Other Operating Income

0 0 N.A. N.A.

2. Expenditure (a). Increase/decrease in

stock in trade and work in

progress (b). Consumption of raw

materials

(c). Purchase of traded goods

0 0 N.A. N.A.


31

Particulars 30.09.2018 31.03.2018 31.03.2017 31.03.2016

Unaudited Audited Audited Audited

(d). Employees cost

(e). Depreciation

(f). Other expenditure (g). Total

(Any item exceeding 10% of

the total expenditure to be shown separately)

3. Profit from Operations

before Other Income, Interest

and Exceptional Items (1–2)

0 0

N.A.

N.A.

4. Other Income 0 0 N.A. N.A.

5. Profit before Interest &

Exceptional Items (3+4)

0 0

N.A. N.A.

6. Interest 0 0 N.A. N.A.

7. Exceptional items 0 0 N.A. N.A.

8. Profit (+)/ Loss (-) from

Ordinary Activities before tax (3) - (4+5+6)

0 0

N.A. N.A.

9. Tax expense 0 0 N.A. N.A.

10. Net Profit (+)/ Loss (-)

from Ordinary Activities after tax (7-8)

0 0

N.A. N.A.

11. Extraordinary Items (net

of tax expense Rs.)

0 0 N.A. N.A.

12. Net Profit(+) / Loss(-) for the period (9-10)

0 0

N.A. N.A.

13. Paid-up equity share

capital (Face Value of the

Share shall be indicated)

100,000 100,000 1,00,000 N.A.

14. Paid up Debt Capital 0 0 0 N.A.

15. Reserves excluding

Revaluation Reserves as per balance sheet of previous

accounting year

0 0 N.A. N.A.

16. Debenture Redemption

Reserve

0 0 N.A. N.A.

17. Earnings Per Share (EPS) NA N.A. N.A. N.A.

18. Debt Equity Ratio NA N.A. 0 N.A.

19. Debt Service Coverage

Ratio

NA N.A. N.A. N.A.

20. Interest Service Coverage

Ratio

NA N.A. N.A. N.A.

Note: Suggested definition for Coverage Ratios: ISCR = Earnings before Interest and Tax / Interest Expense. DSCR = Earnings before Interest and Tax / (Interest + Principal

Repayment). Formula used for actual computation of the ratios shall be disclosed in the

footnotes.


32

5.12 Abridged version of Latest Audited/ Limited Review Half Yearly Consolidated and Standalone Financial Information and auditors qualifications, if any. Given

that the Issuer has been incorporated recently, the financial information set out below

is based on the indicative balance sheets of the Issuer as of September 30, 2018.

Particulars For the period ended For the period ended

30.09.2018 31.03.2018

1. (a) Net Sales/Income from Operations

(b) Other Operating Income

0 0

2. Expenditure

(h). Increase/decrease in stock in trade and work in progress

(i). Consumption of raw materials

(j). Purchase of traded goods (k). Employees cost

(l). Depreciation

(m). Other expenditure

(n). Total (Any item exceeding 10% of the total

expenditure to be shown separately)

0 0

3. Profit from Operations before Other Income, Interest and Exceptional Items

(1–2)

0 0

4. Other Income 0 N.A.

5. Profit before Interest & Exceptional Items (3+4)

0 0

6. Interest 0 N.A.

7. Exceptional items 0 N.A.

8. Profit (+)/ Loss (-) from Ordinary Activities before tax (3) - (4+5+6)

0 0

9. Tax expense 0 N.A.

10. Net Profit (+)/ Loss (-) from Ordinary Activities after tax (7-8)

0 0

11. Extraordinary Items (net of tax

expense Rs.)

0 N.A.

12. Net Profit(+) / Loss(-) for the period (9-10)

0 0

13. Paid-up equity share capital (Face

Value of the Share shall be indicated)

100,000 100,000

14. Paid up Debt Capital 0 0

15. Reserves excluding Revaluation

Reserves as per balance sheet of

previous accounting year

0 0

16. Debenture Redemption Reserve 0 0

17. Earnings Per Share (EPS) N.A. N.A.

18. Debt Equity Ratio N.A. N.A.

19. Debt Service Coverage Ratio N.A. N.A.

20. Interest Service Coverage Ratio N.A. N.A.


33

Note: Suggested definition for Coverage Ratios: ISCR = Earnings before Interest and Tax / Interest Expense. DSCR = Earnings before Interest and Tax/ (Interest + Principal

Repayment). Formula used for actual computation of the ratios shall be disclosed in the

footnotes.

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

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

Issuer/promoters, tax litigations resulting in material liabilities, corporate

restructuring event etc) at the time of Issue which may affect the issue or the

investor’s decision to invest / continue to invest in the debt securities.

None.

In light of the proposed Scheme, however, it may be pertinent to note the following:

Certain proceedings were initiated against the Target (KCPL) in relation to alleged

market irregularities pertaining to the initial public offerings of Yes Bank Limited

(“Yes Bank IPO”) and IDFC Limited (“IDFC IPO”) (the Yes Bank IPO and the

IDFC IPO are collectively referred to as the “IPOs”) vide ex-parte order dated April

27, 2006 and interim order dated May 26, 2006 issued by SEBI. Subsequently, SEBI

had appointed an enquiry officer to conduct an enquiry. The enquiry officer submitted

its report dated December 20, 2006 recommending prohibition on the Target to act as

registrar to issue for a period of nine months, with effect from April 27, 2006. SEBI

issued another order dated February 22, 2007, whereby it has taken the cognizance of

the ban period already underwent by the Target as per recommendation from the

enquiry officer and lifted the ban on Target to act as registrar to issue and share

transfer agent. Finally, through a final order dated February 3, 2014, the SEBI

Wholetime Member agreed with the finding of the enquiry officer that a prohibition

on the Target to act as registrar to issue and a share transfer agent (RTA), other than

RTA for mutual funds, for a period of nine months should be imposed on the Target.

In view of the fact that the Target had already undergone a prohibition on acting as a

registrar to issue and a share transfer agent for a period of nine months (during the

year 2006-07), no further penalty was imposed and the proceedings were disposed of

without any further directions.

Subsequent to the enquiries into these IPO irregularities, the regulator (SEBI) has

made a number of changes to the guidelines vide its circular dated August 10, 2018

bearing reference number SEBI/HO/MIRSD/DoP/CIR/P/2018/119 which have

strengthened processes and controls at the intermediary level.

In addition to these enquiry proceedings, SEBI had also filed a criminal complaint

pertaining to the IPOs against certain sub-brokers, Karvy Stock Broking Limited

(“KSBL”) and certain directors of KSBL before the Additional Chief Metropolitan

Magistrate, Mumbai, on September 4, 2006. The Target is not named as an accused in

the complaint but Mr. Yugandhar Meka, director of KSBL and Mr. C.Parthasarathy,

director of the Target and KSBL, are named as accused. The complaint is pending

before the Court No. 22, Sessions Court in Mumbai, but there has been no material

progress in the matter since the filing of the complaint, except periodical appearances

the last of which was on September 24, 2018 and the next scheduled date whereof is

November 26, 2018.


34

SEBI had also lodged first information reports with the Central Bureau of

Investigation (“CBI”) in relation to the IPOs. CBI investigated the matter, and filed

two chargesheets before the Special Judge, CBI, naming the Target and other Karvy

Group entities / employees as accused, in October 2007 and September 2009. Mr.

Parthasarathy is named as an accused in one of the chargesheets. There has been no

development in the proceedings since the filing of the chargesheets. The last date of

hearing in the matter was October 10, 2018 and the next scheduled date of hearing is

November 26, 2018.

The Enforcement Directorate (“ED”) has also, on reference from CBI in the same

IPO matter, taken up an investigation against the Target and other Karvy group

entities in relation to alleged money laundering offences, pertaining to the IPOs under

Section 467 of the Indian Penal Code, 1860 and under the Prevention of Money

Laundering Act, 2002 (“PMLA”) in the CBI chargesheets which is a predicate

offence under the schedule to the PMLA. The matter is pending before the Court No.

16, Sessions Courts, Mumbai. An appeal was filed by KCL, the Target and KSBL

against the Order of the PMLA Adjudicating Authority dated March 18, 2014, KCPL

and KSBL subsequently withdrew their appeals. There has been no other progress in

the matter since the filing of the complaint. The last date of hearing in the matter was

October 4, 2018 and the next scheduled date of hearing is November 22, 2018.

5.14 Disclosure pertaining to wilful default: None

5.15 Names of the Debentures Trustees and Consents thereof

The Debenture Trustee of the proposed Debentures is IDBI Trusteeship Services Limited. IDBI Trusteeship Services Limited has given its written consent for its

appointment as debenture trustee to the Issue and inclusion of its name in the form

and context in which it appears in this Memorandum of Private Placement and in all the subsequent periodical communications sent to the Debenture Holders. The

consent letter from the Debenture Trustee is provided in Annexure III of this

Memorandum of Private Placement.

5.16 Rating and Rating Rationale

The Rating Agency has assigned a rating of “[ICRA] AA- (Stable)’ (pronounced as ICRA double A minus Stable)” to the Debentures. Instruments with this rating are

considered to have high degree of safety regarding timely servicing of financial

obligations. Such instruments carry low credit risk.

5.17 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.

The Debentures are guaranteed by the Target in terms of the Deed of Corporate

Guarantee, proposed to be executed on or prior to the Pay-In Date. Upon the

occurrence of an Event of Default (as defined in the Debenture Trust Deed) under Clause 13.19(a) (Acquisition) and Clause 13.19(b) (Acquisition) of the the Debenture

Trust Deed, the outstanding Secured Obligations (as defined in the Debenture Trust

Deed) shall become due and payable by the Company within 6 (six) Business Days of


35

the Deemed Date of Allotment. The Company shall, on the day of occurrence of any such Event of Default, deposit the outstanding Secured Obligations in the Issue

Proceeds Account, which shall only be used towards discharge of the Secured

Obligations. In the event the Company fails to deposit the outstanding Secured

Obligations in the Issue Proceeds Account as aforesaid, the Trustee shall mandatorily invoke the Corporate Guarantee by issuing a demand notice on the Target by email or

fax on the same day and call upon the Target to make payment of the Secured

Obligations.

The copy of the executed Deed of Corporate Guarantee will be available at the

registered office of the Company.

5.18 Names of all the recognized stock exchanges where the debt securities are

proposed to be listed:

The Debentures are proposed to be listed on the WDM segment of the BSE. The

Issuer shall comply with the requirements of the listing agreement for debt securities

to the extent applicable to it on a continuous basis. The in-principle approval of the BSE has been obtained in this regard.

5.19 Other details:

(a) Debenture Redemption Reserve Creation:

As per Section 71 of the 2013 Act, any company that intends to issue debentures must create a debenture redemption reserve to which adequate amounts shall be credited

out of the profits of the company until the redemption of the debentures. Accordingly,

the Company will create a debenture redemption reserve, if required.

(b) Issue / instrument specific regulations:

The Issue of Debentures shall be in conformity with the applicable provisions of the Companies Act including the notified rules thereunder and the SEBI Debt Listing

Regulations.

(c) Application process:

The application process for the Issue is as provided in Section 6 of this Memorandum of Private Placement.

5.20 A statement containing particulars of the dates of, and parties to all material

contracts, agreements:

The following contracts, not being contracts entered into in the ordinary course of business

carried on by the Company, which are or may be deemed material, have been entered into by the Company.

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

Sr.

No. Nature of Contract

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


36

2

Certified true copy of the resolution passed by the Company at the extraordinary general meeting held on August 2, 2017 authorising the Company to borrow, upon such

terms as the Board may think fit, up to an aggregate limit of INR 4,300,000,000/-

(Rupees four billion three hundred million only) over and above the aggregate of the

paid-up share capital of the Company and its free reserves

3

Certified true copy of the resolution passed by the shareholders of the Company at the

extraordinary general meeting held on October 15, 2018, authorizing the issue/offer of

non-convertible debentures by the Company up to an aggregate limit of

Rs.4,000,000,000

4 Certified true copy of the Board Resolution dated October 15, 2018 authorizing the

borrowing and issuance of the Debentures

5

Copy of the audited balance sheets of the Issuer as of March 31, 2018, provisional financials of the Issuer as of September 30, 2018, audited financial statements of the

Target as of March 31, 2018 and provisional financials of the Target as of September

30, 2018

6 Credit rating letter from the Rating Agency

7 Letter from IDBI Trusteeship Services Limited dated September 1, 2017 giving its

consent to act as Debenture Trustee

8 Letter from the Registrar and Transfer Agent

9 Certified true copy of the certificate of incorporation of the Company

10 Certified true copy of the tripartite agreement between the Company, the Registrar & Transfer Agent and the National Securities Depository Limited/CDSL

5.21 Details of Debt Securities Sought to be Issued

Under the purview of the current document, the Issuer intends to raise an amount of upto Rs.

4,000,000,000 (Rupees four billion) by issue of Rated Listed Redeemable Non-Convertible

Debentures, on a private placement basis.

For further details of the Debentures, please refer to the terms and conditions of the

debentures set out in Section 5.23 of this Memorandum of Private Placement. The Debentures to be issued by the Issuer are not ‘secured debentures’ for the purposes of the Companies Act,

2013 read with the Companies (Share Capital and Debentures) Rules, 2014 but shall

otherwise be secured by the Security described hereunder. The Company shall also, at all times during the tenure of the Debentures, maintain a minimum of 100% (one hundred per

cent) asset cover in respect of the outstanding Debentures as required under the Debenture

Regulations.

5.22 Issue Size

The aggregate issue size for the Debentures is up to Rs. 4,000,000,000 (Rupees four billion).

5.23 Utilization of the Issue Proceeds

The proceeds of the Issue shall be used for payment of the Purchase Consideration and payment of costs, fees and expenses in connection with the issue of the Debentures and in

connection with the Acquisition.

5.24 Issue Details

Security Name 11.50% Karvy Fintech Private Limited 2023

Issuer Karvy Fintech Private Limited

Type of Instrument Non-Convertible Debentures

Nature of Instrument Rated, Listed and Redeemable Non-Convertible Debentures


37

Seniority Senior debt

Mode of Issue Private placement

Eligible/Identified Investors As provided in Clause 6.14 below

Listing The Debentures are proposed to be listed on the WDM segment

of the BSE within a maximum period of 15 (fifteen) calendar days from the Deemed Date of Allotment.

In the event of the Issuer’s failure to do so, the Issuer shall immediately redeem any and all Debentures and shall reimburse

the Debenture Holders for any and all accrued Coupon, costs

and expenses (including liquidity costs and Early Prepayment Cost), as determined by each such Debenture Holder that such

Debenture Holder may have incurred in connection with the

investment in the Debentures, in accordance with the terms and

conditions of the Debenture Trust Deed and the other Transaction Documents.

Rating of Instrument “ [ICRA] AA- (Stable)’ (pronounced as ICRA double A minus Stable)” by ICRA Limited

Issue Size Up to Rs. 4,000,000,000 (Rupees four billion)

Option to retain

oversubscription

N.A.

Objects of the Issue To raise senior debt to the extent up to Rs. 4,000,000,000

(Rupees four billion) for payment of the Purchase Consideration

and payment of costs, fees and expenses in connection with the issue of the Debentures and in connection with the Acquisition

Details of the utilization of the

Proceeds

To raise senior debt to the extent up to Rs. 4,000,000,000

(Rupees four billion) for payment of the Purchase Consideration and payment of costs, fees and expenses in connection with the

issue of the Debentures and in connection with the Acquisition

Acquisition On the Pay-In Date

• Upon receipt of the order of the relevant NCLT approving

the Scheme, the Sponsor will infuse equity proceeds into the

Issuer Proceeds Account towards the Phase 1 Acquisition.

• This amount together with the proceeds of the Issue lying in

the Issue Proceeds Account, can only be released from such Issue Proceeds Account with the prior consent of the

Debenture Trustee and will be directly remitted to the

Seller. Upon receipt of a request from the Issuer to pay the

Purchase Consideration for the Phase 1 Acquisition to the Seller on or before the Effective Date, the money lying in

the Issue Proceeds Account shall be released from the said

Issue Proceeds Account.

On the Effective Date

• The Issuer will complete the Phase 1 Acquisition.

• The Issuer will acquire ownership of 50% of the Target


38

shareholding consequent to the Demerger and will issue common equity shares to the existing shareholders of KCL

and thereby, the Issuer will own 100% of issued and paid-up

share capital of the Target on the Effective Date and

immediately prior to the Merger.

• The Merger will occur.

• Consequently, the Sponsor will own 33.67% of the Issuer

and existing shareholders of KCL will own the remaining

66.33%.

Post-Merger Actions

• The Sponsor will purchase all equity shares held by shareholders of the Issuer other than the Continuing

Promoters and a portion of the equity shares held by the

Continuing Promoters in the Issuer. Consequent to the Post Merger Actions aforesaid, the Sponsor will hold 83.25%

shareholding in the Issuer and the Continuing Promoters

will hold 16.75%.

Coupon Shall mean the amount payable by the Company to the Investors on the Coupon Payment Date at the Coupon Rate.

Coupon Rate 11.50% p.a.

Step Up/ Step Down Coupon Rate

In case the credit rating of the Debentures (as on the Deemed Date of Allotment) is downgraded as a result of the Issuer

undertaking a Permitted M&A (as defined in the Debenture

Trust Deed):

(i) the Coupon will increase by 0.25 % (point two five per

cent) per annum for each notch downgrade in the credit

rating of the Debentures till the credit rating reaches A minus by ICRA Limited from the date of each such

downgrade in the credit rating of the Debentures; and

(ii) if the credit rating of the Debentures by ICRA Limited

is downgraded below A minus, the Coupon will

increase by an aggregate of 1.50 % (one point five per cent) per annum (in addition the Coupon increased

pursuant to paragraph (i) above) from the date of such

downgrade in the credit rating of the Debentures,

in accordance with the terms and conditions set out in the

Debenture Trust Deed and other Transaction Documents.

Coupon Payment Frequency Semi-annual after March 31, 2019

Coupon Payment Dates March 31, 2019 and every 6 (six) months thereafter

Coupon Type The Coupon Rate shall be a fixed rate

Exercise Date/Coupon Reset

Date

N.A.

Coupon Reset Process N.A.

Day Count Basis Actual (based on the number of calendar days in the relevant


39

Calculation Period) / Actual

Interest on Application Money The Company shall be liable to pay interest on the application

money at the applicable Coupon Rate from the Pay-In Date until

the Deemed Date of Allotment.

Default Interest Rate Default interest at the rate of 2% (two per cent) per annum over and above the then prevailing Coupon Rate payable by the

Company upon failure by the Company to pay any amount

payable by it under a Transaction Document on its due date and payable on the sum due and payable but unpaid from the due

date and until the date of actual payment (both before and after

judgment) in accordance with the Debenture Trust Deed and other Transaction Documents

Prepayment Penalty N.A.

Early Prepayment Amount Principal and coupon payable in relation to the relevant

Debentures, together with any break costs, default interest, accrued but unpaid coupon, unpaid cost and expenses and other

outstanding amounts that may be payable in accordance with the

terms of the Debenture Trust Deed and other Transaction Documents.

Break cost including, without limitation, the funding cost, hedge

unwinding cost, hedge modification cost as communicated by each of the Debenture Holder to the Debenture Trustee in

accordance with the terms of the Debenture Trust Deed and

other Transaction Documents. The break cost will be on a pass through basis and any benefits arising to the Debenture Holder,

if any, shall be passed on to the Issuer and can be adjusted

against the Coupon payment to the Debenture Holders due by the Issuer. For avoidance of doubt, such amount cannot be

adjusted against the principal.

The manner of indicative and non-binding calculation of the break cost and the components thereof are to be shared with the

Issuer, upon a written request from the Issuer, within 3 (three)

Business Days from the date of receipt of such request in accordance with the terms of the Debenture Trust Deed and

other Transaction Documents. The Debenture Holders will

convey the binding break cost calculation to the Issuer 2 (two) Business Days prior to the Call Option Date, the Accelerated

Repayment Date or the Mandatory Redemption Date (as the

case may be) in accordance with the terms of the Debenture

Trust Deed and other Transaction Documents.

Mandatory Prepayment Events /

Mandatory Redemption Date

(a) Change of control of the Issuer / Target: The Sponsor (i)

ceasing to legally and beneficially hold at least 51% of the Issuer (on a fully diluted basis) after Post-Merger Actions

are completed; or (ii) ceasing to have Control (as defined

under the Companies Act, 2013); or (iii) ceasing to have the

right to appoint at least 50% of the members of the board; (b) Sale, transfer or disposal of Business / Assets (including by

way of demerger, slump sale, asset transfer or business

transfer) for aggregate consideration in excess of the


40

Disposal Threshold in a single transaction or a series of transactions (whether related or not), in which case the net

proceeds in excess of the Disposal Threshold shall be

utilised to prepay the Debentures. Provided that any disposal

of any assets for less than INR 10,000,000 (Rupees ten million only) in the ordinary course of business by the

Issuer will not be counted towards such Disposal of

Business / Assets; and (c) It becomes illegal for any Debenture Holder to hold the

Debentures. It is clarified that in case of any mandatory

prepayment pursuant to this provision the Issuer will only be obligated to redeem Debentures held by the relevant

Debenture Holder who is affected by such illegality,

as specified in the Debenture Trust Deed and the other Transaction Documents.

Mandatory Prepayment Process / Mandatory Redemption

Process

On the occurrence of a Mandatory Prepayment Event, the Issue shall be accelerated and, (i) the entire outstanding amount, in

case of paragraph (a) of Mandatory Prepayment Events above;

(ii) the relevant part of the Debentures in case of paragraph (b)

of Mandatory Prepayment Events above; and (iii) the Debentures held by the relevant Debenture Holder who is

affected by such illegality in case of paragraph (c) of Mandatory

Prepayment Events above, will be due for payment on the “Mandatory Prepayment Date” which shall be the earlier of

10 (ten) Business Days from the date of occurrence of any

Mandatory Prepayment Event and the maximum period permitted by Applicable Law. It is clarified that the escrow

agreement in relation to the Prepayment Escrow Account for the

purposes of making the Mandatory Prepayment shall be

executed within 5 (five) Business Days from the date of occurrence of any Mandatory Prepayment Event and the

Prepayment Escrow Account for this purpose shall be opened

prior to date on which payment in relation to such Mandatory Prepayment Event is required to be made.

All mandatory repayments shall be made at Early Prepayment Amount.

If a Mandatory Prepayment Event results in the Issue likely to

have overall duration of the Debentures less than the Required Duration, then the Issuer will deposit such amount set out above

and Coupon for balance period remaining for the Debentures to

attain the Required Duration into the Prepayment Escrow Account and such account shall be charged as security

exclusively for this Issue in favour of the Debenture Trustee and

the Debentures shall only be redeemed, if and when permitted

by Applicable Law or specifically permitted by RBI and/or SEBI. Failure to deposit the funds in the Prepayment Escrow

Account and create first ranking and exclusive security over the

Prepayment Escrow Account shall constitute a payment Event of Default. The Issuer shall, on best efforts basis, obtain all

authorisations that may be required for effecting the relevant


41

Mandatory Redemption. At the earlier of expiry of the balance period remaining for the Debentures to attain the Required

Duration and the date the Issuer obtaining relevant approvals for

redemption of Debentures, the Debenture Trustee will have the

ability to utilise such amounts for the redemption of the Debentures. The Debenture Trustee will also have the ability to

make Coupon and other payments from the Prepayment Escrow

Account.

Interest payable if any in respect of such escrow arrangement,

will be paid to the Issuer.

Any mandatory redemption of the Debentures shall be in

accordance with the terms of the Debenture Trust Deed and the

other Transaction Documents.

Prepayment Escrow Account As a result of a Mandatory Prepayment Event or, exercise of

Call Option for all the Debentures or Accelerated Repayment in relation to all the Debentures if the duration of the Debentures is

not equal to or more than the Required Duration, the entire

monies (including, without limitation, the principal, coupon,

accrued but unpaid coupon, Early Prepayment Amount, future coupon, unpaid cost, break cost and expenses and any other

amounts payable by the Issuer to the Finance Parties) payable to

the Finance Parties shall be deposited in an escrow account (“Prepayment Escrow Account”) and a first ranking and

exclusive security shall be created in favour of the Debenture

Trustee over the said Prepayment Escrow Account and the amounts therein in a form and manner acceptable to the

Debenture Trustee. Upon such creation of security over the

Prepayment Escrow Account, all the other Security (save and

except the security over the Prepayment Escrow Account and the amounts lying therein), Sponsor Non-Disposal Undertaking

and the obligations of the Issuer and the Sponsor and the

financial and other covenants (other than the obligation to redeem the Debentures with the accrued coupon, obligation to

pay other amounts in relation to the Debentures, event of

default, etc., together with certain fundamental warranties and covenants as mentioned in the Transaction Documents

(including, without limitation, information covenants)) shall fall

away. The Issuer shall obtain all authorisations required from

third parties (including its lenders) in relation to creation of security on the Prepayment Escrow Account and deposit of

amounts therein prior to creation of such escrow and charge.

The Issuer shall, on best efforts basis, obtain all Authorisations

that may be required for effecting the payments on account of a Mandatory Prepayment Event, exercise of Call Option for all

the Debentures or Accelerated Repayment in relation to all the

Debentures. At the earlier of expiry of the balance period

remaining for the Debentures to attain the Required Duration and the date the Issuer obtaining relevant approvals for

redemption of Debentures, the Debenture Trustee will have the

ability to utilise such amounts for the redemption of the


42

Debentures. The Debenture Trustee will also have the ability to make Coupon and other payments from the Prepayment

Escrow Account. It is clarified that failure to deposit the funds

in the Prepayment Escrow Account and create first ranking and

exclusive security over the Prepayment Escrow Account shall constitute a payment Event of Default.

The Prepayment Escrow Account shall be maintained in accordance with the terms of the Debenture Trust Deed and the

other Transaction Documents.

Delay Penalty In the case of a delay in the execution of Debenture Trust Deed

or any of the Security Documents, the Issuer shall refund the

subscription with the agreed rate of interest or shall pay penal

interest of 2% (Two Percent) per annum over and above the applicable Coupon Rate until such time the conditions have

been complied with at the option of the Investor.

Tenor 60 (Sixty) months from the Deemed Date of Allotment

Duration The Debentures will comply with the minimum residual

maturity requirement of 1 year (or any other time period as may

be prescribed under Applicable Law) in all the below situations:

(i) Part payment by the investor to the Issuer (ii) Scheduled amortisations (i.e. part repayment by the

Issuer to the Investor),

(iii) Accelerated repayment, (iv) Call option to be exercised by the Issuer, and

(v) Redemption pursuant to Mandatory Prepayment Events.

Manner of Bidding Open Book Bidding

Mode of Allotment Uniform Yield

Mode of Settlement ICCL

Redemption Dates As provided in the Redemption Schedule below

Redemption Schedule As % of Issue Amount

September 30, 2019 2.0%

March 31, 2020 2.0%

September 30, 2020 4.0%

March 31, 2021 4.0%

September 30, 2021 6.5%

March 31, 2022 6.5%

September 30, 2022 10.0%

March 31, 2023 10.0%

September 30, 2023 5.0%

Date falling 5 (five) years

from the Deemed Date of Allotment

50.0%

The average maturity of the Debentures as per the Redemption

Schedule will not exceed 4.214 years from the Deemed Date of Allotment.


43

The final Coupon Payment Date will coincide with 5 years from

the Pay-In Date.

Redemption Amount At par i.e. Rs. 1,000,000 (Rupees one million) per Debenture on the Redemption Date plus accrued Coupon if any.

Redemption Premium/ Discount N.A.

Issue Price Rs. 1,000,000 (Rupees one million) per Debenture

Discount at which security is

issued and the effective yield as

a result of such discount

N.A.

Put Option Date N.A.

Put Option Price N.A.

Call Option Date The Issuer shall be entitled to redeem the Debentures (in part

(subject to minimum redemption of INR 300 million) or in full) on March 31, 2022 and every Coupon Payment Date thereafter

(i.e. March 31, 2022 and every 6 months thereafter) thereafter

(each, a “Call Option Date”), by issuing a written notice to the Debenture Trustee, in accordance with the terms and conditions,

and as set out in the Debenture Trust Deed and the other

Transaction Documents.

Call Option Price Rs. 1,000,000 (Rupees one million) per Debenture and all Early Prepayment Amounts as set out in the Debenture Trust Deed

and the other Transaction Documents.

Put Notification Time N.A.

Call Notification Time In the event the Issuer is desirous of exercising the Call Option

the Issuer shall be entitled to redeem the Debentures (in part

(subject to minimum redemption of INR 300 million) or in full) by issuing a notice to the Debenture Trustee in relation to the

exercise of the Call Option at least 5 (five) Business Days prior

to the Call Option Date.

In each case, upon issuance of the notice as aforesaid, the Issuer

shall redeem the Debentures in the manner provided below,

identified in the notice on the relevant Call Option Date by paying the Early Prepayment Amount.

Each Call Option notice after issuance by the Issuer will be irrevocable.

In case of exercise of the Call Option, the proceeds shall be

adjusted as set out below.

In the event the Applicable Laws require the Required Duration:

(i) Upon exercise of the Call Option, the proceeds from such

Call Option shall be adjusted in the Repayment Schedule

in the following manner:

(a) pro rata towards all future payments due under the


44

Repayment Schedule, such that after pro rata adjustment, the overall duration of the Debentures is

maintained at or above the Required Duration.

(b) in the event the pro rata adjustment as set out above

results in the overall duration of the Debentures being lesser than the Required Duration, then in

chronological order starting from the immediate next

scheduled payment, subject to (i) overall duration of the Debentures being maintained at Required Duration,

(ii) no increase in final repayment instalment of INR

2000 million; and (iii) the Final Maturity Date remaining unchanged.

(ii) Subject to provisions in relation to the Prepayment Escrow

Account as set out above, if despite changes in the Repayment Schedule, the overall duration of the

Debentures is less than the Required Duration, then the

Issuer shall not be entitled to redeem the Debentures as part of the Call Option.

The above Call Option will be subject to break cost as set out in

this Memorandum of Private Placement.

The Required Duration will be calculated and certified by the

Issuer and such calculation shall be confirmed by the Debenture Trustee (acting on the instructions of the Majority Debenture

Holders).

The exercise of the Call Option will be in accordance with the

terms and conditions as specified in Debenture Trust Deed and

the other Transaction Documents.

Accelerated Repayment In addition to making the payments as set out in the Repayment

Schedule, and subject to the availability of Excess Cash, the

Issuer will have the ability to make accelerated repayments (“Accelerated Repayment”) on any Coupon Payment Date

after the expiry of 30 months from the Deemed Date of

Allotment (each, an “Accelerated Repayment Date”), by issuing a 5 (five) Business Days written notice to the Debenture

Trustee. Any such payment shall be of at least INR 300 million.

Any Accelerated Repayment shall be made, subject to ensuring

that the Required Duration requirements prescribed under Applicable Law are complied with at all times.

In case of any Accelerated Repayment, the proceeds shall be adjusted as follows:

(i) In an Accelerated Repayment, the proceeds from such

Accelerated Repayment shall be adjusted in the Repayment Schedule in the following manner:

(a) pro rata towards all future payments due under the Repayment Schedule, such that after pro rata

adjustment, the overall duration of the Debentures


45

is maintained at or above the Required Duration. (b) in the event the pro rata adjustment as set out above

results in the overall duration of the Debentures

being lesser than the Required Duration, then in

chronological order starting from the immediate next scheduled payment, subject to (i) overall

duration of the Debentures being maintained at

Required Duration, (ii) no increase in final repayment instalment of INR 2000 million; and (iii)

the Final Maturity Date remaining unchanged.

(ii) Subject to provisions in relation to the Prepayment Escrow

Account, if despite changes in the Repayment Schedule,

the overall duration of the Debentures is less than the

Required Duration, then the Issuer shall not be entitled to redeem the Debentures as part of Accelerated Repayment.

The above Accelerated Repayments will be subject to payment of Early Prepayment Amounts. Each Accelerated Repayment

notice after issuance by the Issuer will be irrevocable.

The Required Duration will be calculated and certified by the Issuer and such calculation shall be confirmed by the Debenture

Trustee (acting on the instructions of the Majority Debenture

Holders).

“Excess Cash” shall be calculated 15 days prior to the

Accelerated Repayment Date as excess of Cash and Cash Equivalent over sum of immediate next Coupon and scheduled

repayment instalment, subject to Cash and Cash Equivalents

being at least INR 200 million post such Accelerated

Repayment.

Any Accelerated Repayments will be in accordance with the

terms and conditions as specified in Debenture Trust Deed and the other Transaction Documents.

Face Value Rs. 1,000,000 (Rupees one million) per Debenture

Minimum Application size and

in multiples of __ thereafter

1 Debenture

Issue Timing Issue Opening Date: November 15, 2018

Issue Closing Date: November 15, 2018 Pay-in Date: November 16, 2018 (T+1)

Deemed Date of Allotment: November 16, 2018

All documentation including, but not limited to, the

Memorandum of Private Placement, Board Resolution, Rating

Letter, Debenture Trustee Agreement, Debenture Trustee

Consent Letter to be completed and made available to the Arrangers, on or prior to the Deemed Date of Allotment.

Issuance mode of the

Instrument

Demat only


46

Trading mode of the Instrument Demat only

Settlement mode of the

Instrument

All payments must be made using the services of electronic

clearing services (ECS), real time gross settlement (RTGS),

direct credit or national electronic fund transfer (NEFT);

provided however, that where direct credit, ECS, RTGS, or NEFT service is not available, such payment shall be made by

the Issuer by way of bank draft or demand drafts.

Depositories NSDL/CDSL

Business Days Any day (other than Sunday or a bank holiday) on which banks

are open for business in Mumbai, Hyderabad, New York and Singapore.

Business Day Convention If any Coupon Payment Date falls on a day that is not a

Business Day, the Coupon payment shall be made on the

immediately succeeding Business Day.

If any Redemption Date / Call Option Date / Accelerated

Repayment Date falls on a day that is not a Business Day, the Redemption Amounts (excluding Coupon) shall be paid on the

immediately preceding Business Day. The Coupon payable on

the Redemption Date / Call Option Date / Accelerated

Repayment Date shall in such cases be made on the immediately succeeding Business Day.

Except in relation to the last Coupon payment, the Coupon payable shall not be adjusted due to the payment being made on

the next Business Day.

Any other payment (excluding any payment of Coupon as set

out above) which is due to be made on a day that is not a

Business Day shall, subject to Applicable Law, be made on the

immediately succeeding Business Day.

Record Date Shall be the date falling 7 (seven) calendar days prior to any

Due Date.

Security Shall mean the security created in relation to the Issue as set out

in the Debenture Trust Deed and other Transaction Documents,

being: (i) a charge by way of hypothecation created and perfected

by the Issuer in terms of the Issuer Deed of

Hypothecation;

(ii) a charge by way of hypothecation created and perfected by the Issuer in terms of the Issue Proceeds Account

Deed of Hypothecation;

(iii) a charge by way of hypothecation created and perfected by the Target in terms of the Target Deed of

Hypothecation; and

(iv) any other security interest created from time to time to

secure the Debentures for the benefit of the Finance Parties.

The Debentures are also unconditionally and irrevocably


47

guaranteed by the Target in accordance with the Deed of Corporate Guarantee. Additionally, the Sponsor has issued a

non-disposal undertaking in favour of the Debenture Trustee in

relation to the shares of the Company held/to be held by the

Sponsor under the Sponsor Non-Disposal Undertaking.

Transaction Documents 1. Memorandum of Private Placement

2. Private Placement Offer Letter 3. Debenture Trustee Agreement

4. Debenture Trust Deed

5. each Security Document 6. Deed of Corporate Guarantee

7. Sponsor Non-Disposal Undertaking

8. the mandate letter dated August 3, 2017 entered into

between the Company and the Arrangers in relation to the issue of the Debentures read together with all supplemental

letters thereto executed from time to time;

9. any fee letter entered into between the Company and an Arranger read together with all supplemental letters thereto

executed from time to time;

10. any fee letter entered into between the Company and the

Trustee read together with all supplemental letters thereto executed from time to time;

11. Any other documents that may be designated as a

Transaction Document by the Trustee and the Issuer.

The Transaction Documents shall be executed on or prior to the

Deemed Date of Allotment.

Conditions Precedent to

Disbursement

As more particularly set out under the Debenture Trust Deed

Conditions Subsequent to

Disbursement

As more particularly set out under the Debenture Trust Deed

Events of Default As more particularly set out under the Debenture Trust Deed

Provisions in relation to cross

default

(a) Any Financial Indebtedness (as defined in the

Debenture Trust Deed) of any Obligor or any Permitted M&A Debt (as defined in the Debenture Trust Deed) is

not paid when due nor within any applicable grace

period.

(b) Any Financial Indebtedness of any Obligor or any

Permitted M&A Debt is declared to be or otherwise

becomes due and payable prior to its specified maturity as a result of an event of default (however described).

(c) Any commitment for any Financial Indebtedness of any Obligor or any commitment for any Permitted M&A

Debt is cancelled or suspended by a creditor as a result

of an event of default (however described).

(d) Any creditor of any Group (as defined in the Debenture

Trust Deed) member declares any Financial

Indebtedness of such Group member due and payable


48

prior to its specified maturity as a result of an event of default (however described).

(e) No Event of Default will occur under this clause, if the

aggregate amount of the Financial Indebtedness or commitment for Financial Indebtedness of any Group

member (in relation to any Permitted M&A Debt or

otherwise) falling within paragraphs (a) to (d) above is less than or equal to Rs. 20,000,000 (Rupees twenty

million) (or its equivalent in any other currency or

currencies); provided that no other creditor of the relevant Obligor or the relevant Group member is then

taking any enforcement action.

Role and Responsibilities of Debenture Trustee

To oversee and monitor the overall transaction for and on behalf of the Debenture Holders as set out in the Debenture Trust Deed

and the other Transaction Documents

Covenants As more particularly set out under the Debenture Trust Deed

Representation and warranties As more particularly set out under the Debenture Trust Deed

Illustration of Bond Cashflows Kindly refer to Annexure VI of this Memorandum of Private

Placement

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 jurisdiction of the courts in Hyderabad.


49

SECTION 6: OTHER INFORMATION AND APPLICATION

PROCESS

The Debentures being offered as part of the Issue are subject to the provisions of the Act, the

Memorandum and Articles of Association of the Issuer, the terms of this Memorandum of Private Placement, Application Form and other terms and conditions as may be incorporated

in the Transaction Documents.

6.1 Mode of Transfer/Transmission of Debentures

The Debentures shall be transferable freely; however, it is clarified that no Investor shall be entitled to transfer the Debentures to a person who is not entitled to subscribe to the

Debentures. The Debenture(s) shall be transferred and/or transmitted in accordance with the

applicable provisions of the Act and other Applicable Law. The Debentures held in

dematerialized form shall be transferred subject to and in accordance with the rules/procedures as prescribed by NSDL/CDSL and the relevant DPs of the transferor or

transferee and any other Applicable Law and rules notified in respect thereof. The

transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, amounts due will be paid/redemption will be made to the

person, whose name appears in the register of debenture holders maintained by the R&T

Agent as on the Record Date, under all circumstances. In cases where the transfer formalities have not been completed by the transferor, claims, if any, by the transferees would need to be

settled with the transferor(s) and not with the Issuer. The normal procedure followed for

transfer of securities held in dematerialized form shall be followed for transfer of these

Debentures held in dematerialised form. The seller should give delivery instructions containing details of the buyer’s DP account to his DP.

6.2 Debentures held in Dematerialised Form

The Debentures shall be held in dematerialised form and no action is required on the part of

the Debenture Holder(s) for redemption purposes and the redemption proceeds will be paid by

cheque/fund transfer/RTGS to those Debenture Holder(s) whose names appear on the list of beneficiaries maintained by the R&T Agent. The names would be as per the R&T Agent’s

records on the Record Date fixed for the purpose of redemption. All such Debentures will be

simultaneously redeemed through appropriate debit corporate action.

The list of beneficiaries as of the Record Date setting out the relevant beneficiaries’ name and

account number, address, bank details and DP’s identification number will be given by the R&T Agent to the Issuer. The Issuer must make all payments using the services of electronic

clearing services (ECS), real time gross settlement (RTGS), direct credit or national electronic

fund transfer (NEFT) into the Debenture Holders Account(s); provided however, that where

direct credit, ECS, RTGS, or NEFT service is not available, such payment shall be made by the Issuer by way of bank draft or demand drafts.

6.3 Trustee for the Debenture Holder(s)

The Issuer has appointed IDBI Trusteeship Services Limited to act as the debenture trustee

for the Debenture Holder(s). The Issuer and the Debenture Trustee intend to enter into the Debenture Trustee Agreement and the Debenture Trust Deed inter alia, specifying the

powers, authorities and obligations of the Debenture Trustee and the Issuer. The Debenture

Holder(s) shall, without further act or deed, be deemed to have irrevocably given their

consent to the Debenture Trustee or any of its agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture

Trustee may in its absolute discretion deem necessary or require to be done in the interest of

the Debenture Holder(s). Any payment made by the Issuer to the Debenture Trustee on behalf


50

of the Debenture Holder(s) shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the

repayment of principal and yield thereon and they will take necessary action, subject to and in

accordance with the Debenture Trustee Agreement and the Debenture Trust Deed, at the cost

of the Issuer. No Debenture Holder shall be entitled to proceed directly against the Issuer unless the Debenture Trustee, having become so bound to proceed, fails to do so. The

Debenture Trustee Agreement and the Debenture Trust Deed shall more specifically set out

the rights and remedies of the Debenture Holder(s) and the manner of enforcement thereof.

6.4 Sharing of Information

The Issuer may, at its option, but subject to Applicable Law, use on its own, as well as

exchange, share or part with any financial or other information about the Debenture Holder(s)

available with the Issuer, with its subsidiaries and affiliates and other banks, financial

institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Issuer nor its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid

information.

6.5 Debenture Holder not a Shareholder

The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders other than those available to them under the Act. The Debentures shall not confer upon the

Debenture Holders the right to receive notice(s) or to attend and to vote at any general

meeting(s) of the shareholders of the Issuer.

6.6 Modification of Debentures

The Debenture Trustee shall not agree to any modification to the terms of the Debentures or the Debenture Trust Deed without the consent of the Majority Debenture Holders. The Issuer

shall notify the BSE and the Debenture Holders of any modification made to the terms of the

Debentures or Debenture Trust Deed.

Any change or modification to the terms of the Debentures shall require approval by the

Majority Debenture Holders, either by providing their express consent in writing or by way of

a resolution at a duly convened meeting of the Debenture Holders.

6.7 Right to accept or reject Applications

The Board of Directors reserves its full, unqualified and absolute right to accept or reject any

application for subscription to the Debentures, in part or in full, without assigning any reason

thereof.

6.8 Notices

Any communication by the Issuer/ Debenture Trustee upon the Debenture Holders to be made under or in connection with the Transaction Documents shall be made in writing and shall be

made by email (and may in addition be made by a letter).

Notice(s) shall be deemed to be effective (a) in the case of letter, when it has been left at the

relevant address or 5 (five) Business Days after being deposited in the post postage prepaid in

an envelope addressed to it at that address; (b) by way of email, as soon as the email leaves

the system of the sender to be transmitted to the addressee (unless communication is received of failure to deliver the email).

6.9 Issue Procedure


51

Only Eligible Investors as given hereunder and identified upfront by the Issuer may apply for

the Debentures by completing the Application Form in the prescribed format in block letters

in English as per the instructions contained therein. The minimum number of Debentures that

can be applied for and the multiples thereof shall be set out in the Application Form. No application can be made for a fraction of a Debenture. Application Forms should be duly

completed in all respects and applications not completed in the said manner are liable to be

rejected. The name of the applicant’s bank, type of account and account number must be duly completed by the applicant. This is required for the applicant’s own safety and these details

will be printed on the refund orders and /or redemptions warrants.

The applicant should transfer payments required to be made in any relation by EFT/RTGS, to

the bank account of the Issuer as per the details mentioned in the Application Form.

6.10 Application Procedure

Eligible investors will be invited to subscribe by way of the Application Form prescribed in

the Memorandum of Private Placement during the period between the Issue Opening Date and the Issue Closing Date (both dates inclusive). The Issuer reserves the right to change the issue

schedule including the Deemed Date of Allotment at its sole discretion, without giving any

reasons or prior notice.

6.11 Fictitious Applications

All fictitious applications will be rejected. For the sake of abundant caution, attention of applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of the

Companies Act, 2013, which provides that “Any person who – (a) makes or abets making of

an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a company in different

names or in different combinations of his name or surname for acquiring or subscribing for its

securities; or (c) otherwise induces directly or indirectly a company to allot, or register any

transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447.” Section 447 of the Companies Act, 2013 prescribes (a)

imprisonment for a term which shall not be less than 6 (six) months but which may extend to

10 (ten) years, and (b) fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud.

6.12 Basis of Allotment

Notwithstanding anything stated elsewhere, Issuer reserves the right to accept or reject any

application, in part or in full, without assigning any reason. The investors will be required to

remit the funds as well as submit the duly completed Application Form along with other necessary documents to Issuer by the Deemed Date of Allotment.

6.13 Payment Instructions

In line with SEBI circular no SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018

regarding Mechanism for issuance of debt securities on private placement basis through an Electronic Book Mechanism, the payment must be made through RTGS to the Designated

Bank Account of Indian Clearing Corporation Ltd’s (ICCL).

The Designated Bank Account of ICCL is as under:

ICICI Bank:

Beneficiary Name: INDIAN CLEARING CORPORATION LTD


52

Account Number: ICCLEB IFSC Code: ICIC0000106

Mode: NEFT/RTGS

6.14 Eligible Investors

Only registered Foreign Portfolio Investors or such other persons as may be permitted under

Applicable Law to hold the Debentures, who have been specifically approached and have

been identified upfront, are eligible to apply for this private placement of Debentures subject to fulfilling their respective investment norms/rules and compliance with laws applicable to

them by submitting all the relevant documents along with the Application Form.

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

Note: Participation by potential investors in the issue may be subject to statutory and/or regulatory requirements applicable to them in connection with subscription to Indian

securities by such categories of persons or entities. Applicants are advised to ensure that they

comply with all regulatory requirements applicable to them, including exchange controls and other requirements. Applicants ought to seek independent legal and regulatory advice in

relation to the laws applicable to them.

The Debentures are and have been placed on a private placement basis through an electronic book mechanism as available on the website of the BSE and shall not be issued to more than

200 (two hundred) Eligible Investors and shall comply with all requirements of the

Companies Act in relation to private placement.

6.15 Procedure for Applying for Dematerialised Facility

(a) The applicant must have at least one beneficiary account with any of the DP’s of NSDL/CDSL prior to making the application.

(b) The applicant must necessarily fill in the details (including the beneficiary account number and DP - ID) appearing in the Application Form under the heading “Details

for Issue of Debentures in Electronic/Dematerialised Form”.

(c) Debentures allotted to an applicant will be credited to the applicant’s respective

beneficiary account(s) with the DP.

(d) For subscribing to the Debentures, names in the Application Form should be identical to those appearing in the details in the Depository. In case of joint holders, the names

should necessarily be in the same sequence as they appear in the account details

maintained with the DP.

(e) Non-transferable allotment advice/refund orders will be directly sent to the applicant

by the Registrar and Transfer Agent to the Issue.

(f) If incomplete/incorrect details are given under the heading “Details for Issue of

Debentures in Electronic/Dematerialised Form” in the Application Form, it will be

deemed to be an incomplete application and the same may be held liable for rejection at the sole discretion of the Issuer.


53

(g) For allotment of Debentures, the address, nomination details and other details of the applicant as registered with his/her DP shall be used for all correspondence with the

applicant. The applicant is therefore responsible for the correctness of his/her

demographic details given in the Application Form vis-à-vis those with his/her DP. In

case the information is incorrect or insufficient, the Issuer would not be liable for the losses, if any.

(h) The redemption amount or other benefits would be paid to those Debenture Holders whose names appear on the list of beneficial owners maintained by the R&T Agent as

on the Record Date. In case of those Debentures for which the beneficial owner is not

identified in the records of the R&T Agent as on the Record Date, the Issuer would keep in abeyance the payment of the redemption amount or other benefits, until such

time that the beneficial owner is identified by the R&T Agent and conveyed to the

Issuer, whereupon the redemption amount and benefits will be paid to the

beneficiaries, as identified.

6.16 Depository Arrangements

The Issuer shall make necessary arrangement with CDSL and NSDL for issue and holding of

the Debentures in dematerialised form.

6.17 List of Beneficiaries

The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of each

Record Date. This shall be the list, which will be used for payment or repayment of redemption monies.

6.18 Application under Power of Attorney

A certified true copy of the Power of Attorney or the relevant authority as the case may be

along with the names and specimen signature(s) of all the authorized signatories of the

Investor and the tax exemption certificate/document of the Investor, if any, must be lodged along with the submission of the completed Application Form. Further modifications /

additions in the power of attorney or authority should be notified to the Issuer or to its agents

or to such other person(s) at such other address(es) as may be specified by the Issuer from time to time through a suitable communication.

In case of an application made by companies under a Power of Attorney or resolution or authority, a certified true copy thereof along with memorandum and articles of association

and/or bye-laws along with other constitutional documents must be attached to the

Application Form at the time of making the application, failing which, the Issuer reserves the

full, unqualified and absolute right to accept or reject any application in whole or in part and in either case without assigning any reason thereto. Names and specimen signatures of all the

authorized signatories must also be lodged along with the submission of the completed

Application Form.

6.19 Documents to be provided by Investors

Investors need to submit the certified true copies of the following documents, as applicable

(a) Memorandum and Articles of Association or other constitutional documents

(b) Resolution authorising investment

(c) Power of Attorney to custodian (d) Specimen signatures of the authorised signatories

(e) SEBI registration certificate, if applicable

(f) Copy of PAN card


54

(g) Application Form (including RTGS details) in original

6.20 Applications to be accompanied with Bank Account Details

Every application shall be required to be accompanied by the bank account details of the applicant and the magnetic ink character reader code of the bank for the purpose of availing

direct credit of redemption amount and all other amounts payable to the Debenture Holder(s)

through ECS/RTGS/ NEFT and when these services are not available, bank draft or demand draft.

6.21 Succession

In the event of winding-up of the holder of the Debenture(s), the Issuer will recognize the

executor or administrator of the concerned Debenture Holder(s), or the other legal

representative as having title to the Debenture(s). The Issuer shall not be bound to recognize such executor or administrator or other legal representative as having title to the Debenture(s),

unless such executor or administrator obtains probate or letter of administration or other legal

representation, as the case may be, from a court in India having jurisdiction over the matter.

The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of

probate or letter of administration or other legal representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the concerned Debenture

Holder on production of sufficient documentary proof and/or an indemnity.

6.22 Mode of Payment

All payments must be made through Wire Transfer/ Telegraphic Transfer /EFT/RTGS as set

out in the Application Form, or any other mode of payment permissible under law.

6.23 Effect of Holidays

If any Coupon Payment Date falls on a day that is not a Business Day, the Coupon payment shall be made on the immediately succeeding Business Day.

If any Redemption Date / Call Option Date / Accelerated Repayment Date falls on a day that is not a Business Day, the redemption amounts (excluding Coupon) shall be paid on the

immediately preceding Business Day. The Coupon payable on the Redemption Date / Call

Option Date / Accelerated Repayment Date shall in such cases be made on the immediately succeeding Business Day.

Except in relation to the last Coupon payment, the coupon payable shall not be adjusted due

to the payment being made on the next working day.

Any payment (excluding any payment of Coupon or principal as set out above) which is due

to be made on a day that is not a Business Day shall, subject to Applicable Law, be made on the succeeding Business Day.

6.24 Tax Deduction at Source

All payments to be made by the Company to a Secured Party under the Transaction

Documents shall be made free and clear of, and without any Tax Deduction unless the

Company is required to make a Tax Deduction.

The Company shall, promptly upon becoming aware that it must make a Tax Deduction, or

that there is any change in the rate or the basis of a Tax Deduction, notify the relevant


55

Secured Party accordingly. Similarly, the relevant Secured Party shall notify the Company on becoming so aware in respect of a payment payable to that Secured Party.

If the Company is required to make a Tax Deduction, it shall make that Tax Deduction and

any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by Applicable Law.

If a Tax Deduction is required by Applicable Law to be made by the Company in respect of any payments to be made by it to a Secured Party, the amount of the payment due from the

Company shall be increased to an amount which (after making any Tax Deduction) leaves an

amount equal to the payment which would have been due if no Tax Deduction had been required.

Within 30 (thirty) days or such further period as prescribed under Applicable Laws of making

either a Tax Deduction or any payment required in connection with that Tax Deduction, the Company making that Tax Deduction or payment, shall deliver to the Secured Party evidence

reasonably satisfactory to such Secured Party that the Tax Deduction has been made or (as

applicable) any appropriate payment paid to the relevant taxing authority.

6.25 Deemed Date of Allotment

All the benefits under the Debentures will accrue to the Investor from the specified Deemed

Date of Allotment. The Deemed Date of Allotment for the Issue is November 16, 2018 by

which date the Investors would be intimated of allotment.

6.26 Record Date

The Record Date will be 7 (seven) calendar days prior to any Due Date.

6.27 Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched within 7 (Seven) days from the Deemed Date of Allotment of the Debentures.

In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the application money relating to the Debentures in respect of which allotments

have been made, the Registrar shall upon receiving instructions in relation to the same from

the Issuer repay the moneys to the extent of such excess, if any.

6.28 Interest on Application Money

Interest shall be paid by the Issuer on the application money from the Pay-In Date until the Deemed Date of Allotment at the applicable Coupon Rate.

6.29 PAN Number

Every applicant should mention its Permanent Account Number (“PAN”) allotted under

Income Tax Act, 1961, on the Application Form and attach a self attested copy as evidence. Application forms without PAN will be considered incomplete and are liable to be rejected.

6.30 Payment on Redemption

Payment on redemption shall be made using the services of electronic clearing services

(ECS), real time gross settlement (RTGS), direct credit or national electronic fund transfer

(NEFT) into the Debenture Holders Account(s); provided however, that where direct credit,


56

ECS, RTGS, or NEFT service is not available, such payment shall be made by the Company by way of bank draft or demand drafts. In the name of the Debenture Holder(s) whose names

appear on the list of beneficial owners given by the Depository to the Issuer as on the Record

Date.

The Debentures shall be taken as discharged on payment of the redemption amount by the

Issuer on maturity to the registered Debenture Holder(s) whose name appears in the Register

of Debenture Holder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL/CDSL and accordingly the account of the Debenture Holder(s) with

NSDL/CDSL will be adjusted.

On the Issuer dispatching the amount as specified above in respect of the Debentures, the

liability of the Issuer shall stand extinguished.

Disclaimer: Please note that only those persons to whom this memorandum has been

specifically addressed are eligible to apply. However, an application, even if complete in

all respects, is liable to be rejected without assigning any reason for the same. The list of

documents provided above is only indicative, and an investor is required to provide all

those documents / authorizations / information, which are likely to be required by the

Issuer. The Issuer may, but is not bound to revert to any investor for any additional

documents / information, and can accept or reject an application as it deems fit.

Investment by investors falling in the categories mentioned above are merely indicative

and the Issuer does not warrant that they are permitted to invest as per extant laws,

regulations, etc. Each of the above categories of investors is required to check and

comply with extant rules/regulations/ guidelines, etc. governing or regulating their

investments as applicable to them and the Issuer is not, in any way, directly or

indirectly, responsible for any statutory or regulatory breaches by any investor, neither

is the Issuer required to check or confirm the same.


57

SECTION 7: DECLARATION

The Issuer declares that all the relevant provisions in the regulations/guidelines issued by

SEBI and other applicable laws have been complied with and no statement made in this Memorandum of Private Placement is contrary to the provisions of the regulations/guidelines

issued by SEBI and other applicable laws, as the case may be. The information contained in

this Memorandum of Private Placement is as applicable to privately placed debt securities and subject to information available with the Issuer. The extent of disclosures made in the

Memorandum of Private Placement is consistent with disclosures permitted by regulatory

authorities to the issue of securities made by the companies in the past.

For Karvy Fintech Private Limited

Authorised Signatory Name: Mr. Bharat Naidu

Title: Director

Date: November 6, 2018


58

ANNEXURE I: TERM SHEET

AS PER CLAUSE 5.24 ISSUE DETAILS


59

ANNEXURE II: RATING LETTER& RATING RATIONALE

sisuprabha.s

Stamp


60

ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE


61


62

ANNEXURE IV: APPLICATION FORM

KARVY FINTECH PRIVATE LIMITED

(Formerly known as KCPL Advisory Services Private Limited)

(A private limited company under the Companies Act, 2013) Date of Incorporation: June 8, 2017

CIN: U67200TG2017PTC117649

Registered Office: Karvy Selenium, Tower B, Plot No- 31 & 32, Financial District, Nanakramguda, Serilingampally Hyderabad Rangareddi Telangana 500032

Telephone No: +91-40-33211000 or +91-40-67172222

DEBENTURE SERIES APPLICATION FORM SERIAL NO.

ISSUE OF UPTO 4,000 RATED LISTED REDEEMABLE NON CONVERTIBLE

DEBENTURES OF

Rs. 1,000,000 (RUPEES ONE MILLION) EACH AGGREGATING UPTO Rs.

4,000,000,000 (RUPEES FOUR BILLION), FULLY PAID UP FOR CASH AT PAR TO

THE FACE VALUE

DEBENTURE SERIES APPLIED FOR:

Number of Debentures [●] In words [●]

Amount Rs. _[●]/-_ in words Rupees [●] Only

DETAILS OF PAYMENT:

RTGS No. _____________ Drawn on_____________________________________________

Funds transferred to Karvy Fintech Private Limited Dated ____________

Total Amount Enclosed

(In Figures) _____________ (In words) ______________________________________

APPLICANT’S NAME IN FULL (CAPITALS)

APPLICANT’S ADDRESS

ADDRESS

STREET

CITY

PIN PHONE


63

APPLICANT’S PAN/GIR NO. ________________

WE ARE( ) COMPANY ( ) OTHERS ( ) SPECIFY __________

We have read and understood the Terms and Conditions of the issue of Debentures including

the Risk Factors described in the Memorandum and have considered these in making our decision to apply. We bind ourselves to these Terms and Conditions and wish to apply for

allotment of these Debentures. We request you to please place our name(s) on the Register of

Holders.

Name of the Authorised

Signatory(ies)

Designation Signature

Applicant’s

Signature

We the undersigned, are agreeable to holding the Debentures of the Company in

dematerialised form. Details of my/our Beneficial Owner Account are given below:

DEPOSITORY NSDL () CDSL ( )

DEPOSITORY PARTICIPANT NAME

DP-ID

BENEFICIARY ACCOUNT NUMBER

NAME OF THE APPLICANT(S)

Applicant Bank Account :

(Settlement by way of ECS / NEFT/RTGS/when ECS NEFT RTGS is not

available, bank draft or demand draft)

FOR OFFICE USE ONLY

DATE OF RECEIPT ________________ DATE OF CLEARANCE ________________

(Note: Cheque and Drafts are subject to realisation)

We understand and confirm that the information provided in the Memorandum of Private

Placement is provided by the Issuer and the same has not been verified by any legal advisors

to the Issuer and other intermediaries and their agents and advisors associated with this Issue.

We confirm that we have for the purpose of investing in these Debentures carried out our own due diligence and made our own decisions with respect to investment in these Debentures and

have not relied on any representations made by anyone other than the Issuer, if any.


64

We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account as mentioned above would get credited to the extent of allotted Debentures, ii) the Applicant

must ensure that the sequence of names as mentioned in the Application Form matches the

sequence of name held with our Depository Participant, iii) if the names of the Applicant in

this application are not identical and also not in the same order as the Beneficiary Account details with the above mentioned Depository Participant or if the Debentures cannot be

credited to our Beneficiary Account for any reason whatsoever, the Company shall be entitled

at its sole discretion to reject the application or issue the Debentures in physical form.

We understand that we are assuming on our own account, all risk of loss that may occur or be

suffered by us including as to the returns on and/or the sale value of the Debentures.

Applicant’s Signature

FOR OFFICE USE ONLY

DATE OF RECEIPT ______________________ DATE OF CLEARANCE

_________________

(Note : Cheque and Drafts are subject to realisation)

-------------------------------------------------(TEAR HERE)--------------------------------------------

[●]- ACKNOWLEDGMENT SLIP

(To be filled in by Applicant) SERIAL NO. 1

Received from _______________________________________________

Address________________________________________________________________ ______________________________________________________________________

Cheque/Draft/UTR # ______________ Drawn on _______________________________ for

Rs. _____________ on account of application of _____________________ Debenture


65

ANNEXURE V: FINANCIAL STATEMENTS

1. Audited accounts of the Issuer as of March 31, 2018

Particulars As at

31 March 2018

EQUITY AND LIABILITIES

Shareholders' funds

Share capital 1,00,000

1,00,000

Current liabilities

Other current liabilities 10,80,755

10,80,755

Total 11,80,755

ASSETS

Non-current assets

Other non-current asset 10,80,873

10,80,873

Current assets

Cash and bank balances 99,882

99,882

Total 11,80,755

2. Provisional financials of the Issuer as of September 30, 2018

Particulars As at

30 September 2018

As at

31 March 2018


Shareholders' funds

Share capital 1,00,000 1,00,000

1,00,000 1,00,000

Current liabilities

Short term Borrowings 6,00,00,000 0

Other current liabilities 60,80,755 10,80,755

60,80,755 10,80,755

Total 66,80,755 11,80,755

ASSETS

Non-current assets

Other non-current asset 10,96,663 10,80,873

10,96,663 10,80,873

Current assets

Cash and bank balances 99,882 99,882

Short term Loans and 5,90,00,000


66

Advances

99,882

Total 6,61,80,755 11,80,755

3. Audited financials of the Target as of March 31, 2018

Balance Sheet

Particulars As at

31 March 2018


Shareholders' funds


Reserves and surplus 3,179,197,626

3,231,797,626

Non-current liabilities

Long-term provisions 39,206,076

Other long-term liability 22,393,221

61,599,297

Current liabilities

Trade payables

-Total outstanding dues to micro and small

enterprises

-

-Total dues other than micro and small

enterprises

189,916,779


Short-term provisions 97,686,345

747,957,455

Total 4,041,354,378

ASSETS

Non-current assets

Property, plant and equipment 436,471,700

Intangible assets 53,647,963

Goodwill on consolidation 122,144,429

Deferred tax asset (net) 32,264,511

Long-term loans and advances 49,639,995

Other non-current asset 929,547

695,098,145

Current assets

Current investments 1,761,677,214

Trade receivables 1,019,186,515

Cash and bank balances 344,747,960

Short term loans and advances 74,494,299

Other current assets 146,150,245


67

3,346,256,233

Total 4,041,354,378

P&L

Revenue from operations For the year ended

31 March 2018

Income from operations 4,068,526,831

Other income 83,116,256

Total revenue 4,151,643,087

Expenses

Operating expenses 794,370,119

Employee benefits expense 1,572,579,961

Finance costs -

Depreciation and amortization 123,598,454

Other expenses 356,265,358

Total expenses 2,846,813,892

Profit before tax 1,304,829,195

Tax expense

- Current tax 422,273,962

- Deferred tax charge/(credit) (5,435,942)

Profit after tax 887,991,175

4. Provisional financials of the Target as of September 30, 2018

Balance Sheet

Particulars As at

30 Sept 2018


Shareholders' funds


Reserves and surplus 3,649,993,327

3,702,593,327

Non-current liabilities

Long-term provisions 46,799,385

Other long-term liability 22,684,671

69,484,056

Current liabilities

Trade payables

-Total outstanding dues to micro and small

enterprises

-

-Total dues other than micro and small enterprises

243,667,937


68


Short-term provisions 110,918,454

844,865,281

Total 4,616,942,664

ASSETS

Non-current assets

Property, plant and equipment 414,110,980

Intangible assets 44,689,544

Goodwill on consolidation 1,000,000

Deferred tax asset (net) 122,144,429

Long-term loans and advances 40,518,287

Other non-current asset 50,709,704

-

673,172,943

Current assets

Current investments

Trade receivables 1,980,372,067

Cash and bank balances 1,133,899,793

Short term loans and advances 534,117,763

Other current assets 97,879,249

197,500,848

3,943,769,720

Total

4,616,942,664

P&L

Particulars For the year ended

30 Sept 2018

Revenue from operations

Income from operations 2,200,230,137

Other income 49,644,121

Total revenue 2,249,874,258

Expenses

Operating expenses 459,195,889

Employee benefits expense 865,297,411

Finance costs -

Depreciation and amortisation 66,976,557

Other expenses 169,915,830

Total expenses 1,561,385,687

Profit before tax 688,488,571

Tax expense

- Current tax 234,172,829

- Deferred tax charge/(credit) (8,253,776)


69

Profit after tax 462,569,518


70

ANNEXURE VI: ILLUSTRATION OF BOND CASH FLOWS

Illustration of Bond Cash Flows*

Company Karvy Fintech Private Limited

Face Value (per security) Rs. 1,000,000 (Rupees one million)

Issue Date / Date of Allotment November 16, 2018 (tentative)

Redemption November 16, 2023 (tentative)

Coupon Rate 11.50% (Eleven decimal point five Percent)

per annum

Frequency of the Coupon Payment with

specified dates

March 31, 2019 and every 6 (six) months

thereafter

Day Count Convention Actual / Actual

Assuming Call Option not exercised

Cash Flows Date

No. of days

in

intervening

period

Amount (in

Rupees)

Issue amount Friday, November 16, 2018 0 -1,000,000.00

1st Coupon Sunday, March 31, 2019 135 42,534.25

2nd Coupon Monday, September 30, 2019 183 57,657.53

3rd Coupon Tuesday, March 31, 2020 183 56,350.00

4th Coupon Wednesday, September 30, 2020 183 55,200.00

5th Coupon Wednesday, March 31, 2021 182 52,755.07

6th Coupon Thursday, September 30, 2021 183 50,738.63

7th Coupon Thursday, March 31, 2022 182 46,734.11

8th Coupon Friday, September 30, 2022 183 43,243.15

9th Coupon Friday, March 31, 2023 182 37,272.60

10th Coupon Saturday, September 30, 2023 183 31,711.64

Final Coupon Thursday, November 16, 2023 47 7,404.11

1st Principal repayment Monday, September 30, 2019 N.A. 20,000

2nd Principal repayment Tuesday, March 31, 2020 N.A. 20,000

3rd Principal repayment Wednesday, September 30, 2020 N.A. 40,000

4th Principal repayment Wednesday, March 31, 2021 N.A. 40,000

5th Principal repayment Thursday, September 30, 2021 N.A. 65,000

6th Principal repayment Thursday, March 31, 2022 N.A. 65,000

7th Principal repayment Friday, September 30, 2022 N.A. 100,000

8th Principal repayment Friday, March 31, 2023 N.A. 100,000

9th Principal repayment Saturday, September 30, 2023 N.A. 50,000

Final Principal repayment Thursday, November 16, 2023 N.A. 500,000

* If any Coupon Payment Date falls on a day that is not a Business Day, the Coupon payment shall be

made on the immediately succeeding Business Day. Except in relation to the last Coupon payment, the

Coupon payable shall not be adjusted due to the payment being made on the next Business Day. If any

Redemption Date / Call Option Date / Accelerated Repayment Date falls on a day that is not a Business

Day, the Redemption Amounts (excluding Coupon) shall be paid on the immediately preceding

Business Day. The Coupon payable on the Redemption Date / Call Option Date / Accelerated Repayment Date shall in such cases be made on the immediately succeeding Business Day.


71

ANNEXURE VII: OTHER DIRECTORSHIPS

BHARAT NAIDU

CIN COMPANY DATE OF

APPOINTMENT

U65993TG1981PTC002964 COMPAR ESTATES AND AGENCIES

PRIVATE LIMITED

27/09/2017

U70200TG1994PTC017994 ADHIRAJAT COMMERCIAL

ENTERPRISES PRIVATE LIMITED

27/09/2017

U74140TG1996PTC022922 FORDE CONSULTANTS PRIVATE LIMITED

29/09/2012

U74140TG2001PTC036741 KARVY FORDE SEARCH PRIVATE

LIMITED

29/09/2012

U74300TG2007PTC056837 OLYMPUS ENTERTAINMENTS PRIVATE LIMITED

28/09/2012

U67190TG2017PTC117555 KSBL CONSULTANCY SERVICES

PRIVATE LIMITED

05/06/2017

KV RAM MOHAN

CIN COMPANY DATE OF

APPOINTMENT

U67190TG2017PTC117555 KSBL CONSULTANCY SERVICES

PRIVATE LIMITED

05/06/2017

U67190MH2013PTC246828 KRV FINANCIAL ADVISOR

PRIVATE LIMITED

20/07/2017

U45400TG2009PTC062775 KARVY INFRASTRUCTURE

RESOURCES PRIVATE LIMITED

30/09/2017

U67100TG2007PTC056688 KCPL CONSULTANCY SERVICES

PRIVATE LIMITED

26/09/2017

U74300TG2007PTC056837 OLYMPUS ENTERTAINMENTS

PRIVATE LIMITED

28/09/2017

U45200TG2007PTC055575 HEARTLANDS INFRASTRUCTURE

PRIVATE LIMITED

29/07/2010

U45203TG2007PTC055604 METEOR INFRASTRUCTURE &

PROJECTS PRIVATE LIMITED

29/07/2010

U65993TG1981PTC002964 COMPAR ESTATES AND

AGENCIES PRIVATE LIMITED

29/08/2011

U74140TG1982PTC003636 BUOYANT CONSULTANTS

PRIVATE LIMITED

30/09/2017

U45400TG2007PTC055572 BLUEPLANET HOUSING &

INFRASTRUCTURE PRIVATE LIMITED

29/07/2010

U74140MH1980PLC023592 NOVA CONSULTANTS LIMITED 30/09/2016

U74140TG1996PTC022922 FORDE CONSULTANTS PRIVATE

LIMITED

27/09/2017

U70200TG1994PTC017994 ADHIRAJAT COMMERCIAL

ENTERPRISES PRIVATE LIMITED

29/11/2010

Private & Confidential Not for Circulation · Private & Confidential – Not for Circulation Credit...

Documents

Transcript of Private & Confidential Not for Circulation · Private & Confidential – Not for Circulation Credit...