Mr. Ankur Aggarwal Mr. Ankur Aggarwal E-mail: … IM.pdf · Indian School Finance Company Private Limited ... Mr. Ankur Aggarwal Mr. Ankur Aggarwal E-mail: [email protected] E-mail

Indian School Finance Company Private Limited (Formerly known as Corporate Deposits and Investments Private Limited)

(The “Issuer” incorporated with limited liability under the Companies Act, 1956 as amended from time to time)

REGISTERED OFFICE: CORPORATE OFFICE: First Floor, No. 8-2-269/2/52, 502, KLJ Towers, Netaji Subhash Place, Plot No. 52 , Sagar Society Pitampura, Road No.2 ,Banjara Hills New Delhi-110034 Hyderabad – 500 034

Tel: 040-66505000 Tel: 011-47572697/98/99

COMPLIANCE OFFICER: CHIEF OPERATING OFFICER:

Mr. Ankur Aggarwal Mr. Ankur Aggarwal

E-mail: [email protected] E-mail: [email protected]

THE ISSUE

ISSUE OF SECURED, RATED, LISTED, TAXABLE, TRANSFERABLE, REDEEMABLE, NON-CONVERTIBLE DEBENTURES OF FACE VALUE OF RS. 5,00,000/- (RUPEES FIVE LAKH) EACH, AGGREGATING TO INR EQUIVALENT OF USD 2.0 MILLION SUBJECT TO A MAXIMUM

OF RS. 12,00,00,000/- (RUPEES TWELVE CRORES ONLY) (THE “DEBENTURES”) ON A PRIVATE PLACEMENT BASIS (THE “ISSUE”) BY INDIAN SCHOOL FINANCE COMPANY PRIVATE LIMITED (THE “ISSUER”) (PLEASE SEE SECTION TITLED ISSUE STRUCTURE FOR THE ISSUE STRUCTURE AND FURTHER DETAILS).

ISSUE PROGRAMME

ISSUE OPENING DATE ISSUE CLOSING DATE ISSUE PAY-IN DATE DEEMED DATE OF ALLOTMENT

JULY 23, 2014 JULY 25, 2014 JULY 25, 2014 JULY 25, 2014 REGISTRAR & TRANSFER AGENT DEBENTURE TRUSTEE

Sharepro Services (I) Pvt Limited IDBI Trusteeship Services Limited 13 AB Samhita Warehousing Complex, Asian Building, Ground Floor, 2nd Floor, Sakinaka Telephone Exchange, 17, R. Kamani Marg, Off Andheri-Kurla Road, Sakinaka Ballard Estate Andheri (E) - 400072 Mumbai – 400001

Mumbai, Maharashtra, India Maharashtra, India Tel: +91 22 6638 2666 Tel: +91 22 4080 7000 Fax: +91 22 6633 1135 Fax: +91 20 4080 7080 Email: [email protected] Email: [email protected]

Contact Person: Nilesh Bhandari Contact Person: Website: http://www.shareproservices.com Website: www.idbitrustee.com

mailto:[email protected]




http://www.shareproservices.com/

http://www.idbitrustee.com/

Information Memorandum Private & Confidential – For Private Circulation Only Date: 23rd July, 2014

(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of a Prospectus) P a g e | 1

Background

This Information Memorandum is related to the Debentures to be issued by Indian School Finance Company Pvt. Ltd. (the “Issuer” or “Company”) on a private placement basis and

contains relevant information and disclosures required for the purpose of issuing of the

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

Information Memorandum has been authorised by the Issuer through a resolutions passed

by the shareholders of the Issuer on July 11, 2014 and the Board of Directors of the Issuer on July 11, 2014 and the Memorandum and Articles of Association of the Company.

Pursuant to the resolution passed by the Company’s shareholders dated July 11, 2014 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 40 Crores/- (Rupees Two Hundred Crores only) during FY 2014-15. The present issue

of NCDs in terms of this Information Memorandum is within the overall powers of the Board as per the above shareholder resolution(s).

This Information Memorandum prepared under SEBI (Issue and Listing of Debt

Securities) Regulations 2008 dated June 6, 2008 as amended by the SEBI (Issue and

Listing of Debt Securities) (Amendment) Regulations, 2012 dated October 12, 2012, as amended form time to time, for private placement of the Debentures is neither a

prospectus nor a statement in lieu of prospectus and does not constitute an offer to

the public generally to subscribe for or otherwise acquire the debt securities to be

issued by the Issuer. This is only an information brochure intended for private use.

GENERAL RISKS

Investment in debt and debt related securities involve a degree of risk and investors

should not invest in the debt instruments, unless they can afford to take the risks

attached to such investments. Investors are advised to read the Information

Memorandum carefully before taking an investment decision in this offering. For taking

an investment decision, investors must rely on their own examination of the issuer and

the offer including the risks involved. The Debentures have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI

guarantee the accuracy or adequacy of this document. This Information Memorandum

has not been submitted, cleared or approved by SEBI.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for, and

confirms that this Information Memorandum contains all information with regard to the

Issuer and the Issue, which is material in the context of the Issue, that the information

contained in this Information Memorandum is true and correct in all material aspects

and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of

which makes this Information Memorandum as a whole or any of such information or

the expression of any such opinions or intentions misleading in any material respect.

ISSUE STRUCTURE

Each Debenture Holder shall subscribe to and hold the Debentures and the debentures

issued by the Issuer, under the issue documents, in proportion to the amount of the

issuance by the Issuer

Occurrence of an Event of Non Compliance (as specified in the Debenture Trust Deed)

and/or an Event of Default (as specified in the Debenture Trust Deed) on part of the

Issuer shall trigger a default for the Issuer.



LISTING

The Debentures to be issued pursuant to this Information Memorandum will be listed on the Wholesale Debt Market segment of the Bombay Stock Exchange. [The Issuer shall

make an application for listing within one day from the Deemed Date of Allotment of

Debentures and shall have obtained the in-principle approval of the Bombay Stock

Exchange for the listing of the Debentures.

CREDIT RATING

Rating “BB+” (pronounced BB plus) with Stable Outlook by IndiaRating

and Research Limited

Symbol IND BB+

Rating

Definition

Instruments with this rating are considered to have some degree of

uncertainty regarding timely servicing of financial obligations. Such

instruments carry fairly weak credit risk.



TABLE OF CONTENTS

1. DEFINITIONS AND ABBREVIATIONS ................................................................................................ 4

2. DISCLAIMERS .................................................................................................................................... 7

3. RISK FACTORS ................................................................................................................................ 10

3.1 RISKS RELATING TO OUR BUSINESS ...................................................................................... 11

3.2 RISKS RELATING TO THE ISSUE ............................................................................................. 13

3.3 EXTERNAL RISK FACTORS ....................................................................................................... 14

4. REGULATORY DISCLOSURES ..................................................................................................... 16

4.1 ISSUER INFORMATION ........................................................................................................ 16

4.2 ISSUE DETAILS .................................................................................................................... 32

5. FINANCIAL STATEMENTS ............................................................................................................ 36

6. TRANSACTION DOCUMENTS AND KEY TERMS ........................................................................ 38

6.1 TRANSACTION DOCUMENTS .............................................................................................. 38

6.2 REPRESENTATIONS AND WARRANTIES ............................................................................. 39

6.3 COVENANTS ......................................................................................................................... 41

6.4 FURTHER ASSURANCES ..................................................................................................... 46

6.5 SECURITY ............................................................................................................................. 47

6.6 NEGATIVE COVENANTS ...................................................................................................... 48

6.7 EVENTS OF NON COMPLIANCE .......................................................................................... 49

7. APPLICATION AND ISSUE PROCEDURE .................................................................................... 53

8. UNDERTAKINGS AND DECLARATIONS BY THE ISSUER .......................................................... 62

ANNEXURE 1: CREDIT RATING LETTER FROM RATING AGENCY ................................................. 63

ANNEXURE 2: CONSENT LETTER FROM DEBENTURE TRUSTEE .................................................. 65

ANNEXURE 4: IN-PRINCIPLE APPROVAL FROM BSE ..................................................................... 69

ANNEXURE 5: AUDITED FINANCIALS ................................................................................................ 70



1. DEFINITIONS AND ABBREVIATIONS

Term Description

Act The Companies Act, 1956, as amended from time to time

Allot/ Allotment/

Allotted

Unless the context otherwise requires or implies, the allotment of the

Debentures pursuant to the Issue

Application Form The form in which an Investor can apply for subscription to the

Debentures, attached as Annexure [3] to this Information

Memorandum.

Beneficial Owner(s) Holder(s) of the Debentures in dematerialized form as defined under section 2 of the Depositories Act, 1996

Business Days Business Day shall mean a day (other than a public holiday under

Section 25 of the Negotiable Instruments Act, 1881 at Mumbai or a

Saturday or a Sunday).

Client Loan Each loan made by the Issuer as a lender

Credit Rating

Agency(ies) / Rating

Agency

IndiaRatings and Research Limited or any other credit rating agency,

appointed from time to time.

Debt Listing Agreement

Simplified debt listing agreement entered into by the Issuer with BSE

for listing of the Debentures on the BSE, as amended from time to time

Date of Allotment The Date of Allotment of Debentures to the Debenture Holders, in

this case being July 31, 2014

Deemed Date of

Allotment

The date on which the Debenture Holders are deemed to enjoy all

rights under the Transaction Documents, in this case being July 23,

2014

Debentures

Issue of, senior, secured, rated, listed, taxable, transferable,

redeemable non-convertible debentures of face value of Rs

5,00,000/- (Rupees Five Lakhs Only) each, aggregating INR equivalent of USD 2 Million subject to a maximum of Rs.

12,00,00,000/- (Rupees Twelve Crore Only)

Debenture

Holder(s)/Investor(s)

The several persons who are for the time being holders of the

Debentures and who are entered in the register of Debenture Holders

as mentioned under the Debenture Trust Deed and who will be

subscribing to the Debentures from time to time and to whom this

Information Memorandum is furnished

Debenture Trust Deed

The deed to be dated ________________ executed between the Company and the Debenture Trustee.

Debenture Trustee

/ Trustee

Trustee for the Debenture Holder(s), in this case being IDBI

Trusteeship Services Limited.

Debenture Trustee

Regulations

Securities and Exchange Board of India (Debenture Trustee)

Regulations, 1993, as amended from time to time.

Deed of The deed executed by the Company in favour of the Trustee under



Term Description

Hypothecation the terms of which the Debentures shall be secured by way of a

charge over certain assets of the Company as more particularly defined therein.

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.

Depository(ies)

The National Securities Depository Limited (NSDL) with whom the

Company has entered into an agreement for keeping and dealing

with the Debentures in a dematerialized form.

Demat Dematerialized securities (securities that are in electronic form, and not in physical form), with the entries noted by the Depository.

Director(s) Director(s) of the Issuer

DPID Depository Participant Identification Number.

DSC Means digital signature as accepted by the ROC

Due Date

Any date on which the holders of the Debentures are entitled to any

payments, whether on maturity or upon exercise of the option to

redeem the Debentures prior to the scheduled Maturity Date.

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

Governmental

Authority

The Government of India or of any state in India or any ministry, department, board, authority, instrumentality, agency, corporation

(to the extent acting in a legislative, judicial or administrative

capacity) or commission under the direct or indirect control of such

government or any political subdivision of any of them or owned or

controlled by the government or any of their subdivisions, or any court, tribunal, judicial or regulatory body within India or any other

court, administrative agency or arbitrator.

Information

Memorandum /

Debt Disclosure

Document

This Information Memorandum pursuant to which the Debentures

are being offered for private placement.

Investor Such person to whom this Information Memorandum is furnished and who subscribes to this Issue.

Issue

Issue of, senior, secured, rated, listed, taxable, transferable,

redeemable non-convertible debentures of face value of

Rs.5,00,000/- (Rupees Five Lakhs Only) each, aggregating INR

equivalent of USD 2 Million subject to a maximum of Rs.


Issue Opening Date July 21, 2014

Issue Closing Date July 23, 2014

Issue Pay-in-Date July 23, 2014

Issuer / the

Company

Indian School Finance Company Private Limited, bearing

Corporate identity Number: U65921AP1994PTC065392 and having its corporate office at 502, KLJ Towers, Netaji Subhash Place,

Pitampura, New Delhi – 110034 and its registered office at First

Floor, No. 8-2-269/2/52, Plot No. 52, Sagar Society Road No. 2,

Banjara Hills, Hyderabad – 500034

Loan Loss Reserves The portion of the Company’s portfolio of Client Loans that has been

expensed (provisioned for) in anticipation of losses due to default

Ltd. Limited



Term Description

Majority Consent

The written consent obtained from the Debenture Holders

representing not less than 50% (Fifty percent) in value of the nominal amount of the Debentures for the time being outstanding; or consent

by special resolution duly passed at the meeting of the Debenture

Holders convened in accordance with the provisions set out in the

Debenture Trust Deed.

Material Adverse

Effect

The effect or consequence of an event, circumstance, occurrence or

condition which has caused, as of any date of determination, a

material and adverse effect on (i) the financial condition, business or operation of the Issuer; (ii) the ability of the Issuer to perform their

obligations under the Transaction Documents; or (iii) the validity or

enforceability of any of the Transaction Documents (including the

ability of any party to enforce any of its remedies thereunder).

Maturity Date July 25, 2017

Mutual Fund A mutual fund registered with SEBI under the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996.

NSDL National Securities Depository Limited.

Outstanding

Portfolio

The outstanding principal balance of all of the outstanding Client Loans of the Issuer including current, delinquent and restructured

Client Loans, but not Client Loans that have been charged off. It does

not include interest receivables and accrued interest

PAR The result obtained by dividing Portfolio at Risk by Total Loans.

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 15 (Fifteen) calendar Days prior to any Due Date.

Registrar/Registrar

to the Issue Registrar to the Issue, in this case being Sharepro Services (I) Pvt

Limited,

RBI The Reserve Bank of India

ROC The Registrar of Companies

RTGS Real Time Gross Settlement

SEBI Securities and Exchange Board of India

SEBI Debt Listing

Regulations

The Securities and Exchange Board of India (Issue and Listing of

Debt Securities) Regulations, 2008 as amended from time to time.

Stock Exchange / BSE

Bombay Stock Exchange Limited

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

Total Loans

The outstanding aggregate principal amount of all Client Loans and

other credit facilities provided by the Company, including securitised assets and managed (non-owned) portfolio;

Transaction

Documents

The Debenture Trust Deed, the Guarantee Deed, the Deed of

Hypothecation, the letters issued by the Rating Agency and the

Registrar and all other documents in relation to the issuance of the

Debentures shall be collectively referred to as the "Transaction



Term Description

Documents".

WDM Wholesale Debt Market segment of the BSE

“we”, “us”, “our” Unless the context otherwise requires, the Issuer

* Terms capitalised but not defined in this Information Memorandum shall have the

meaning given to the terms in the Debenture Trust Deed and the relevant Transaction Documents.

2. DISCLAIMERS GENERAL DISCLAIMER

THIS INFORMATION MEMORANDUM OF PRIVATE PLACEMENT (HEREINAFTER REFERRED TO AS THE “INFORMATION MEMORANDUM” IS NEITHER A PROSPECTUS NOR A STATEMENT IN LIEU OF PROSPECTUS. THE ISSUE OF RATED, SECURED LISTED TAXABLE, TRANSFERABLE, REDEEMABLE NON-CONVERTIBLE DEBENTURES (HEREINAFTER REFERRED TO AS “DEBENTURES”) TO BE ISSUED IS BEING MADE STRICTLY ON A PRIVATE PLACEMENT BASIS. IT IS NOT INTENDED TO BE CIRCULATED TO MORE THAN 49 (FORTY-NINE) PERSONS. MULTIPLE

COPIES HEREOF GIVEN TO THE SAME ENTITY SHALL BE DEEMED TO BE GIVEN TO THE SAME PERSON AND SHALL BE TREATED AS SUCH. IT DOES NOT CONSTITUTE AND SHALL NOT BE DEEMED TO CONSTITUTE AN OFFER OR AN INVITATION TO SUBSCRIBE TO THE DEBENTURES ISSUED TO THE PUBLIC IN GENERAL. APART FROM THIS INFORMATION MEMORANDUM, NO OFFER DOCUMENT OR PROSPECTUS HAS BEEN PREPARED IN CONNECTION WITH THE OFFERING OF THIS ISSUE OR IN RELATION TO THE ISSUER NOR IS SUCH A PROSPECTUS REQUIRED TO BE REGISTERED UNDER BY LAW. ACCORDINGLY, THIS INFORMATION MEMORANDUM HAS NEITHER BEEN DELIVERED FOR REGISTRATION NOR IS IT INTENDED TO BE REGISTERED.

SINCE THE ISSUE IS BEING MADE ON A PRIVATE PLACEMENT BASIS, THE PROVISIONS OF SECTION 60 OF THE COMPANIES ACT, 1956 SHALL NOT BE APPLICABLE AND ACCORDINGLY, A COPY OF THIS INFORMATION MEMORANDUM IS NOT REQUIRED TO BE FILED WITH THE REGISTRAR OF COMPANIES OR SEBI. THEREFORE, AS PER THE APPLICABLE PROVISIONS OF LAW, A COPY OF THIS INFORMATION MEMORANDUM HAS NOT BEEN FILED WITH OR SUBMITTED TO ROC OR SEBI FOR ITS REVIEW AND/OR APPROVAL.

THE ISSUER HAVING MADE ALL REASONABLE INQUIRIES, ACCEPTS RESPONSIBILITY FOR AND CONFIRMS THAT THE INFORMATION CONTAINED IN THIS INFORMATION MEMORANDUM IS TRUE AND CORRECT IN ALL MATERIAL ASPECTS AND IS NOT MISLEADING IN ANY MATERIAL RESPECT, THAT THE OPINIONS AND INTENTIONS EXPRESSED HEREIN ARE HONESTLY HELD AND THAT THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKE THIS DOCUMENT AS A WHOLE OR ANY OF SUCH INFORMATION OR THE EXPRESSION OF ANY SUCH OPINIONS OR INTENTIONS

MISLEADING IN ANY MATERIAL RESPECT.

THIS INFORMATION MEMORANDUM AND THE CONTENTS HEREOF ARE INTENDED ONLY FOR 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 INVITED ELIGIBLE INVESTORS ARE REQUIRED TO COMPLY WITH

THE RELEVANT REGULATIONS/ GUIDELINES APPLICABLE TO THEM FOR INVESTING IN THIS ISSUE. 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 THE INVITED ELIGIBLE INVESTORS. ANY APPLICATION BY A PERSON OTHER THAN AN INVITED ELIGIBLE INVESTOR SHALL BE REJECTED WITHOUT ASSIGNING ANY REASON. NO PERSON WHO IS IN RECEIPT OF THIS INFORMATION MEMORANDUM SHALL BE ENTITLED TO REPRODUCE OR DISTRIBUTE IN WHOLE OR PART OR MAKE ANY ANNOUNCEMENT IN PUBLIC OR TO A THIRD PARTY REGARDING THE CONTENTS OF THIS INFORMATION MEMORANDUM WITHOUT THE CONSENT OF THE ISSUER.

DISCLAIMER OF THE ISSUER



THIS INFORMATION MEMORANDUM 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 INFORMATION MEMORANDUM DOES NOT PURPORT TO CONTAIN ALL THE INFORMATION THAT ANY POTENTIAL INVESTOR MAY REQUIRE. NEITHER THIS INFORMATION MEMORANDUM NOR ANY OTHER INFORMATION SUPPLIED IN CONNECTION WITH THE DEBENTURES IS INTENDED TO PROVIDE THE BASIS OF ANY CREDIT OR OTHER EVALUATION NOR SHOULD ANY RECIPIENT OF THIS INFORMATION MEMORANDUM CONSIDER SUCH RECEIPT A RECOMMENDATION TO PURCHASE ANY DEBENTURES. EACH INVESTOR CONTEMPLATING THE PURCHASE OF ANY DEBENTURES SHOULD MAKE HIS OWN INDEPENDENT INVESTIGATION OF THE FINANCIAL CONDITION AND AFFAIRS OF THE ISSUER, AND HIS 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 INVESTORS TO ALSO ENSURE THAT THEY WILL SELL THESE DEBENTURES IN STRICT ACCORDANCE WITH THIS INFORMATION MEMORANDUM, THE TERMS OF THE TRANSACTION DOCUMENTS AND THE LAW, AND ENSURE THAT THE SALE DOES NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE COMPANIES ACT, 1956. NONE OF THE INTERMEDIARIES OR THEIR AGENTS OR ADVISORS ASSOCIATED WITH THIS ISSUE UNDERTAKE TO REVIEW THE FINANCIAL CONDITION OR AFFAIRS OF THE ISSUER DURING THE LIFE OF THE ARRANGEMENTS CONTEMPLATED BY THIS INFORMATION MEMORANDUM OR HAVE ANY

RESPONSIBILITY TO ADVISE ANY INVESTOR OR POTENTIAL INVESTOR IN THE DEBENTURES OF ANY INFORMATION AVAILABLE WITH OR SUBSEQUENTLY COMING TO THE ATTENTION OF THE INTERMEDIARIES, AGENTS OR ADVISORS. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS INFORMATION MEMORANDUM OR IN ANY MATERIAL MADE AVAILABLE BY THE ISSUER TO ANY POTENTIAL INVESTOR PURSUANT HERETO AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER. THE INTERMEDIARIES AND THEIR AGENTS OR ADVISORS ASSOCIATED WITH THIS ISSUE HAVE NOT SEPARATELY VERIFIED THE INFORMATION CONTAINED HEREIN. ACCORDINGLY, NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS MADE AND NO RESPONSIBILITY IS ACCEPTED BY ANY SUCH INTERMEDIARY AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS INFORMATION MEMORANDUM OR ANY OTHER INFORMATION PROVIDED BY THE ISSUER. ACCORDINGLY, ALL SUCH INTERMEDIARIES ASSOCIATED WITH THIS ISSUE SHALL HAVE NO LIABILITY IN RELATION TO THE INFORMATION CONTAINED IN THIS INFORMATION MEMORANDUM OR ANY OTHER INFORMATION PROVIDED BY THE ISSUER IN CONNECTION WITH THE ISSUE.

EACH COPY OF THIS INFORMATION MEMORANDUM IS SERIALLY NUMBERED AND THE PERSON, TO WHOM A COPY OF THE INFORMATION MEMORANDUM IS SENT, IS ALONE ENTITLED TO APPLY FOR THE DEBENTURES.

EACH PERSON RECEIVING THIS INFORMATION MEMORANDUM ACKNOWLEDGES THAT:

i. SUCH PERSON HAS BEEN AFFORDED AN OPPORTUNITY TO REQUEST AND TO REVIEW AND HAS RECEIVED ALL ADDITIONAL INFORMATION CONSIDERED BY AN INDIVIDUAL TO BE NECESSARY TO VERIFY THE ACCURACY OF OR TO SUPPLEMENT THE INFORMATION HEREIN; AND

ii. SUCH PERSON HAS NOT RELIED ON ANY INTERMEDIARY THAT MAY BE ASSOCIATED WITH ISSUANCE OF THE DEBENTURES IN CONNECTION WITH ITS INVESTIGATION OF THE ACCURACY OF SUCH INFORMATION OR ITS INVESTMENT DECISION.

THE ISSUER DOES NOT UNDERTAKE TO UPDATE THE INFORMATION MEMORANDUM TO REFLECT SUBSEQUENT EVENTS AFTER THE DATE OF THE INFORMATION MEMORANDUM 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 INFORMATION MEMORANDUM NOR ANY SALE OF DEBENTURES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CONSTITUTE A REPRESENTATION OR CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE HEREOF.

THIS INFORMATION MEMORANDUM 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 INFORMATION MEMORANDUM IN ANY JURISDICTION WHERE SUCH ACTION IS REQUIRED. THE DISTRIBUTION OF THIS INFORMATION MEMORANDUM AND THE OFFERING AND SALE OF THE DEBENTURES MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS. PERSONS INTO WHOSE POSSESSION THIS INFORMATION MEMORANDUM COMES ARE REQUIRED TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

DISCLAIMER OF THE STOCK EXCHANGE IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF THIS DISCLOSURE DOCUMENT WITH THE STOCK EXCHANGE SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY THE STOCK EXCHANGE. THE STOCK EXCHANGE DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY

SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS DISCLOSURE DOCUMENT.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA

THIS INFORMATION MEMORANDUM HAS NOT BEEN FILED WITH OR SUBMITTED TO SEBI. THE DEBENTURES HAVE NOT BEEN RECOMMENDED OR APPROVED BY SEBI NOR DOES SEBI GUARANTEE THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THIS INFORMATION MEMORANDUM SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED TO HAVE BEEN APPROVED OR VETTED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY PROPOSAL FOR WHICH THE DEBENTURE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS INFORMATION MEMORANDUM. THE ISSUE OF DEBENTURES BEING MADE ON A PRIVATE PLACEMENT BASIS, FILING OF THIS DOCUMENT IS NOT REQUIRED WITH SEBI.

DISCLAIMER IN RESPECT OF JURISDICTION

THIS ISSUE IS MADE IN INDIA TO INVESTORS AS SPECIFIED UNDER THE CLAUSE ENTITLED “ELIGIBLE INVESTORS” OF THIS INFORMATION MEMORANDUM, WHO SHALL BE SPECIFICALLY APPROACHED BY THE ISSUER. THIS INFORMATION MEMORANDUM 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 OF MUMBAI. THIS INFORMATION MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE TO THE DEBENTURES HEREIN, IN ANY OTHER JURISDICTION AND TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR INVITATION IN SUCH JURISDICTION.

1.1 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.

1.2 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.



CAUTIONARY NOTE

EACH INVITED ELIGIBLE INVESTOR ACKNOWLEDGES THAT IT

i. IS KNOWLEDGEABLE AND EXPERIENCED IN FINANCIAL AND BUSINESS MATTERS, HAS EXPERTISE IN ASSESSING CREDIT, MARKET AND ALL OTHER RELEVANT RISK AND IS CAPABLE OF EVALUATING, AND HAS EVALUATED, INDEPENDENTLY THE MERITS, RISKS AND SUITABILITY OF SUBSCRIBING TO/ PURCHASING THE DEBENTURES;

ii. UNDERSTANDS THAT THE ISSUER HAS NOT PROVIDED, AND WILL NOT PROVIDE, ANY MATERIAL OR OTHER INFORMATION REGARDING THE DEBENTURES, EXCEPT AS INCLUDED IN THE INFORMATION MEMORANDUM;

iii. HAS NOT REQUESTED THE ISSUER TO PROVIDE IT WITH ANY SUCH MATERIAL OR OTHER INFORMATION;

iv. HAS NOT RELIED ON ANY INVESTIGATION THAT ANY PERSON ACTING ON ITS BEHALF MAY HAVE CONDUCTED WITH RESPECT TO THE DEBENTURES;

v. HAS MADE ITS OWN INVESTMENT DECISION REGARDING THE DEBENTURES BASED ON ITS OWN KNOWLEDGE (AND INFORMATION IT HAS OR WHICH IS PUBLICLY AVAILABLE) WITH RESPECT TO THE DEBENTURES OF THE ISSUER;

vi. HAS HAD ACCESS TO SUCH INFORMATION AS DEEMED NECESSARY OR APPROPRIATE IN CONNECTION WITH SUBSCRIPTION TO/ PURCHASE OF THE DEBENTURES;

vii. IS NOT RELYING UPON, AND HAS NOT RELIED UPON, ANY STATEMENT, REPRESENTATION OR WARRANTY MADE BY ANY PERSON, INCLUDING, WITHOUT LIMITATION, THE ISSUER; AND

viii. UNDERSTANDS THAT, BY PURCHASE OR HOLDING OF THE DEBENTURES, IT IS ASSUMING AND IS CAPABLE OF BEARING THE RISK OF LOSS THAT MAY OCCUR WITH RESPECT TO THE DEBENTURES, INCLUDING THE POSSIBILITY THAT IT MAY LOSE ALL OR A SUBSTANTIAL PORTION OF ITS INVESTMENT IN THE DEBENTURES, AND THAT IT WILL NOT LOOK TO THE ADVISOR FOR ALL OR PART OF ANY SUCH LOSS OR LOSSES THAT IT MAY SUFFER.

NEITHER THE DELIVERY OF THIS INFORMATION MEMORANDUM AT ANY TIME NOR ANY STATEMENT MADE IN CONNECTION WITH THE OFFERING OF THE DEBENTURES SHALL UNDER THE CIRCUMSTANCES IMPLY THAT ANY INFORMATION/ REPRESENTATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE OF THIS INFORMATION MEMORANDUM.

THE SALE OR TRANSFER OF THESE DEBENTURES OUTSIDE INDIA MAY REQUIRE REGULATORY APPROVALS IN INDIA, INCLUDING WITHOUT LIMITATION, THE APPROVAL OF THE RBI. IT IS THE RESPONSIBILITY OF THE DEBENTURE HOLDERS TO ALSO ENSURE THAT THEY WILL SELL THESE DEBENTURES STRICTLY IN ACCORDANCE WITH THIS INFORMATION MEMORANDUM, THE OTHER TRANSACTION DOCUMENTS AND THE LAW AND ENSURE THAT THE SALE DOES NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE ACT.

3. RISK FACTORS

The following are the risks envisaged by the management. Potential investors should

consider these risk factors carefully for evaluating the trading or profitability of the

Company and its business before making any investment decision. Unless the context

requires otherwise, the risk factors described below apply to the Company only.

The Investors must rely on their own examination and investigation of the Company and its

business, their promoters, associate companies and the Issue including the risks and

uncertainties involved.

The Company and its business are subject to risks, uncertainties and assumptions, internal as well as external, and could materially affect the performance of the Company.

The following are some of the important factors that could cause actual results to differ

materially from the Company’s expectations:



3.1 RISKS RELATING TO OUR BUSINESS We are in business of Extending Loans. Our business is exposed to risk of NPAs.

All of our loans are to schools catering to the lower and middle income group, against property of the schools or the promoters of the schools. Since such schools cater to

students from low and middle income households, their cash flows may be sporadic.

Further the cash flows of the schools may be seasonal in nature. Our financial condition is

directly correlated to our ability to control the level of Non-Performing Loans (“NPAs”) in the

future and if our loan loss reserves are insufficient to cover future loan losses, our financial condition and results of operations may be materially and adversely affected.

The Issuer has various procedures and process controls in place to mitigate the risk.

As at March 31, 2014, the audited gross NPA was Rs 83.39 lakhs on a gross portfolio of

about Rs. 5626 lakhs (including managed / securitized portfolio of Rs. 524 lakhs). The unaudited provisional gross NPA as on June 30, 2014 was Rs. 34.50 Lakhs on a gross

portfolio of Rs. 6027 Lakhs (including managed / Securitized portfolio of Rs. 484 Lakhs)

The amount of our reported NPAs may increase in the future as a result of growth in our

total loan portfolio, and also due to factors beyond our control, such as over -extended member credit that we are unaware of. If we are unable to manage our NPAs or adequately

recover our loans, our results of operations will be adversely affected.

Our current loan loss reserves may not be adequate to cover an increase in the amount of

NPAs or any future deterioration in the overall credit quality of our total loan portfolio. As a

result, if the quality of our total loan portfolio deteriorates we may be required to increase

our loan loss reserves, which will adversely affect our financial condition and results of

operations. Our customers/borrowers are poor and, as a result, might be vulnerable if

economic conditions worsen or growth rates decelerate in India, or if there are natural disasters such as floods and droughts in areas where our customers live. Moreover, there

is no precise method for predicting loan and credit losses, and we cannot assure you that

our monitoring and risk management procedures will effectively predict such losses or that

loan loss reserves will be sufficient to cover actual losses. If we are unable to control or

reduce the level of our NPAs or poor credit quality loans, our financial condition and results of our operations could be materially and adversely affected.

Loans due within five years account for almost all of our interest income, and a

significant reduction in short term loans may result in a corresponding decrease in

our interest income

The loans we issue are due within approximately four to five years of disbursement. The

relatively short-term nature of our loans means that our long-term interest income stream

is less certain than if a portion of our loans were for a longer term. In addition, our

customers may not obtain new loans from us upon maturity of their existing loans, particularly if competition increases. The potential instability of our interest income could

materially and adversely affect our results of operations and financial position.

We are exposed to certain political, regulatory and concentration of risks and plan

to expand into newer geographic locations

Due to the nature of operations, we are exposed to political, regulatory and concentration

risks. We believe a mitigant to this is to expand our geographical reach and we are

consequently expanding operations across different states in India. We have set up

presence in states of Haryana, NCR, Madhya Pradesh, Maharashtra and Rajasthan to this end and plan to expand our operations across the country.

If we are not effectively able to manage such operations and expansion, we may lose money

invested in such expansion, which could adversely affect our business and results of



operations.

Large scale attrition, especially at the senior management level, can make it

difficult for us to manage our business

If we are not able to attract, motivate, integrate or retain qualified personnel at levels of

experience that are necessary to maintain our quality and reputation, it will be difficult for us to manage our business and growth

We depend on the services of our executive officers and key employees for our continued

operations and growth. In particular, our senior management has significant experience in

the microfinance, banking and financial services industries. The loss of any of our executive officers, key employees or senior managers could negatively affect our ability to

execute our business strategy, including our ability to manage our rapid growth. Our

business is also dependent on our team of personnel who directly manage our

relationships with our members. Our business and profits would suffer adversely if a

substantial number of such personnel left us or became ineffective in servicing our

members over a period of time. Our future success will depend in large part on our ability to identify, attract and retain highly skilled managerial and other personnel. Competition

for individuals with such specialized knowledge and experience is intense in our industry,

and we may be unable to attract, motivate, integrate or retain qualified personnel at levels

of experience that are necessary to maintain our quality and reputation or to sustain or

expand our operations. The loss of the services of such personnel or the inability to

identify, attract and retain qualified personnel in the future would make it difficult for us to manage our business and growth and to meet key objectives.

Our business and results of operations would be adversely affected by strikes, work stoppages or increased wage demands by our employees

Our employees are not currently unionized. However, there can be no assurance that they

will not unionize in the future. If our employees unionize, it may become difficult for us to

maintain flexible labour policies, and we could incur higher labour costs, which would

adversely affect our business and results of operations.

Our insurance coverage may not adequately protect us against losses.

Successful claims that exceed our insurance coverage could harm our results of

operations and diminish our financial position

We maintain insurance coverage of the type and in the amounts that we believe are

commensurate with our operations and other general liability insurances. Our insurance

policies, however, may not provide adequate coverage in certain circumstances and may be subject to certain deductibles, exclusions and limits on coverage.

In addition, there are various types of risks and losses for which we do not maintain insurance, such as losses due to business interruption and natural disasters, because they

are either uninsurable or because insurance is not available to us on acceptable terms. A

successful assertion of one or more large claims against us that exceeds our available

insurance coverage or results in changes in our insurance policies, including premium

increases or the imposition of a larger deductible or co-insurance requirement, could adversely affect our business, financial condition and results of operations. We do not have

director‘s and officer‘s insurance which could impact an individual‘s decision to serve on

our Board of Directors.

Competition from banks and financial institutions, as well as state-sponsored

social programs, may adversely affect our profitability

We face our most significant competition from other NBFCs banks in India. Many of the

institutions with which we compete have greater assets and better access to, and lower



cost of, funding than we do. In certain areas, they may also have better name recognition and larger member bases than us. We anticipate that we may encounter greater

competition as we continue expanding our operations in India, which may result in an

adverse effect on our business, results of operations and financial condition.

We believe traditional commercial banks as well as regional rural and cooperative banks

have generally not directly targeted the schools in India. However, some banks do

participate in lending to the schools/education sector. In these cases we may find it

difficult to sustain high rates of interest, which may put pressure on our profitability

Movement in market interest rates may adversely affect the margins of the Issuer

Changes in interest rates at which the Issuer borrows can impact spreads, especially in

the short term. Increase in cost of funds can severely squeeze margins, impacting

profitability and operational self-sufficiency of NBFCs. With increasing competition and

pressure to cut interest rates, the Issuer may not be in a position to pass interest rate increases to clients which poses a considerable interest rate risk to us.

Implementation of the Right to Education Act

India passed the Right to Education Act in 2010. The title of the RTE Act incorporates the

words 'free and compulsory'. 'Free education' means that no child, other than a child who has been admitted by his or her parents to a school which is not supported by the

appropriate Government, shall be liable to pay any kind of fee or charges or expenses

which may prevent him or her from pursuing and completing elementary education.

While the percentage of students that can avail the benefit of this in one school has been capped, improper implementation of the act would mean that the cashflows of our

borrowers will be stressed – which could therefore adversely impact the repayments of our

loans. Implementation varies considerably state by state. There has been much more

disruption in the north (especially the NCR) than in the south. So far we have not seen

any extreme effects. Fees are constantly evolving, and we have not noted any changes

attributed to RTE. Most of the schools in our segment would be happy to get the fees, since they would be equivalent to what they charge students in any case. The bigger

concern is around the administrative hassles and suspicion that the government would

not pay on time.

3.2 RISKS RELATING TO THE ISSUE

The NCDs are subject to taxation requirements.

Potential purchasers and sellers of the Debentures should be aware that they may be

required to pay stamp duties or other documentary charges/taxes in accordance with the

laws and practices of India. Payment and/or delivery of any amount due in respect of the

Debentures will be conditional upon the payment of all applicable taxes, duties and/or

expenses. Potential investors who are in any doubt as to its tax position should consult

their own independent tax advisers. In addition, potential investors should be aware that tax regulations and its application by the relevant taxation authorities change from time to

time. Accordingly, it is not possible to predict the precise tax treatment which will apply at

any given time.

Early Termination for Extraordinary Reasons, Illegality and Force Majeure.

In case of changes of laws which, in the opinion of the Debenture Trustee (acting on the

instructions received from the Debenture Holders), adversely and materially impacts the

business of the Company, the Debenture Trustee and the Company shall discuss the

implications of such change on the business of the Company. Based on these discussions

the Trustee shall decide with Majority Consent whether the prepayment of the outstanding amount of the Debentures by the Company is required or not.



Uncertain trading market

The Company intends to list the Debentures on the WDM segment of the 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.

The Company will not create or maintain a Debenture Redemption Reserve (DRR) for the Debentures issued under this Information Memorandum.

The Department of Company Affairs notification G.S.R 265(E) dated March 31, 2014 Section 18 clause 7(b)(i) specifies that “No DRR is required for debentures issued by All India Financial Institutions (AIFIs) regulated by Reserve Bank of India and Banking Companies for both public as well as privately placed debentures”.

Therefore, the Company will not be maintaining a DRR in respect of the Debentures issued

herein and the Debenture Holders may find it difficult to enforce its interests in the event of

default.

Any downgrade in credit rating of the Company’s Debentures may affect the value of Debentures and thus its ability to raise further debts.

This Issue has been rated by IndiaRatings as having an BB+ with Stable outlook. The rating

letter is provided in Annexure [1]. The Company cannot guarantee that these ratings will

not be downgraded. Such a downgrade in the above credit ratings may lower the value of the Debentures and may also affect the Company’s ability to raise further debt.

Full value of the Security may not be realized as a result of certain factors

Enforcement of security takes an inordinately long period of time in India. An application

when made may be subject to delays and administrative requirements that may result, or be accompanied by a decrease in value of the security. Full value of the security may not be

realized as a result of among other factors, delays in bankruptcy and foreclosure

proceedings, defects in the registration of collateral and fraudulent transfers.

3.3 EXTERNAL RISK FACTORS

The Debentures may not be a suitable investment for all purchasers.

Potential investors should ensure that they understand the nature of the Debentures and

the extent of its exposure to risk, that they have sufficient knowledge, experience and

access to professional advisers to make its own legal, tax, accounting and financial

evaluation of the merits and risks of investment in the Debentures and that they consider

the suitability of the Debentures as an investment in the light of its own circumstances and financial condition.

Regulatory risk and the interpretation of some Indian laws are uncertain.

Indian laws comprise but are not limited to legislation at Central and State levels and also various rules, regulations, notifications, guidelines, governmental orders, by-laws and

internal policy rulings. The reporting mechanism relating to these is not entirely systematic

and such laws may be published in publications not having wide circulation and not

necessarily in a timely manner. There are limited and unsatisfactory facilities for

verification of such laws. Such laws are not always consistent or comprehensive, and

precedent to enable interpretation is limited. It is also possible that such laws may have retrospective effect. The application of such laws can therefore be uncertain.

Future legal and regulatory obstructions

Future government policies and changes in laws and regulations in India and comments,



statements or policy changes by any regulator, including but not limited to the SEBI or the RBI, may adversely affect the Debentures, and restrict the Company’s ability to do business

in its target markets. The timing and content of any new law or regulation is not within the

Company’s control and such new law, regulation, comment, statement or policy change

could have an adverse effect on its business, results of operations and financial condition.

There can be no assurance that the laws governing the Indian financial services sector will

not change in the future or that such changes or the interpretation or enforcement of existing and future laws and rules by governmental and regulatory authorities will not

adversely affect its business and future financial performance.

Further, the SEBI, the BSE or other regulatory authorities may require clarifications on this

Information Memorandum, which may cause a delay in the issuance of Debentures or may result in the Debentures being materially affected or even rejected.

A slowdown in economic growth in India could cause the Company’s business to

suffer

The Company’s performance and the quality and growth of its assets are necessarily dependent on the health of the overall Indian economy. A slowdown in the Indian economy

may adversely affect its business, including its ability to enhance its asset portfolio and the

quality of its assets, and its ability to implement certain measures could be adversely

affected by a movement in interest rates, or various other factors affecting the growth of

industrial, manufacturing and services sector or a general down trend in the economy.

Political instability or changes in the government could delay further liberalization

of the Indian economy and adversely affect economic conditions in India generally,

which could impact the Company’s financial results and prospects

Since 1991, successive Indian governments have pursued policies of economic liberalization. The role of the Central and State governments in the Indian economy as

producers, consumers and regulators has remained significant. If there was to be any

slowdown in the economic liberalization, or a reversal of steps already taken, it could have

an adverse effect on the Company’s business. Financial difficulties and other problems in

certain financial institutions in India could cause the Company’s business to suffer. The

Company is exposed to the risks of the Indian financial system, which in turn may be affected by financial difficulties, trends and other problems faced by certain Indian financial

institutions. The problems faced by such Indian financial institutions and any instability in

or difficulties faced by the Indian financial system generally could create an adverse market

perception about Indian financial institutions, banks and NBFCs. This in turn could

adversely affect the Company’s business, its future financial performance and its shareholders’ funds.

Specific laws and policies affecting financial services companies, foreign investment,

currency exchange rates and other matters affecting investments in Indian companies could

change.

The Company’s business may be adversely impacted by natural calamities or

unfavourable climatic changes.

India in the recent years has experienced natural calamities such as earthquakes, floods,

droughts and pandemics including the outbreak of avian flu. The extent and severity of these natural disasters and pandemics determines its impact on India’s economy and in

turn affects its financial services sector. Prolonged spells of abnormal rainfall and other

natural calamities could have an adverse impact on the Indian economy which could

adversely affect its business and the price of its NCDs.



4. REGULATORY DISCLOSURES

4.1 ISSUER INFORMATION

4.1.1 CONTACT DETAILS OF THE ISSUER AND OTHER RELEVANT PARTIES

Issuer Indian School Finance Company Private Limited

(ISFC)

Registered Office of the Issuer First Floor, No. 8-2-269/2/52,Plot No. 52 , Sagar

Society Road No.2 ,Banjara Hills Hyderabad – 500

034, Andhra Pradesh,

Corporate Office of the Issuer 502, KLJ Towers, Netaji Subhash Place, Pitampura, Delhi-110034

Compliance Officer of the Issuer Mr. Ankur Aggarwal

Email: [email protected]

COO of the Issuer (overseeing

Finance function)

Mr. Ankur Aggarwal

Email: [email protected]

Debenture Trustee IDBI Trusteeship Services Limited

Registrar of the Issue Sharepro Services (I) Pvt Limited, 13 AB Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (E) – 400 072 Mumbai. Tel: +91 22 67720329 Fax: +91 22 28508927

Credit Rating Agency IndiaRatings and Research Private Limited

Wockhardt Tower, Level 4, West Wing, Bandra Kurla

Complex, Bandra (E), Mumbai 400051

Auditors of the Issuer M/s Italia and Associates, House No. 1-8-373/A Chain

Fort Lane Begumpet, Hyderabad-500003

4.1.2 Summary of the business and activities of the Issuer

(a) OVERVIEW

ISFC is a non-banking finance company and operating in the segment of providing loans to

schools for school improvement. Currently Company’s focus is in the low-cost school

segment. The objective of the company is to assist the Schools in capacity building through infrastructure improvements, thereby enabling students to access quality education with a

current focus on schools serving low and middle income segments.

The loans provided by the Company to schools enable them to expand their delivery

capabilities by improving their infrastructure facilities – for instance, setting up of computer labs/facilities, science laboratories, construction of additional floors/wings within the

existing school premises, adding /basic amenities, providing finance for implementation of

new teaching methodologies like digital classrooms, experiential leaning and other similar

facilities, leading to a qualitative and quantitative improvement in their delivery model.

The Company is managed and controlled by GGV post acquisition of majority stake in the

Company.

MAIN OBJECTS AND BUSINESS OF THE ISSUER

An extract of one of the main objects of Memorandum of Association of the Company is reproduced below: “a. To carry on the business of finance company, to lend and negotiate all kinds of loans

including microfinance, to transact business as financiers, monetary agents, to carry on the business of a company established with the object of financing industrial enterprises within the meaning of Section 372A of the Companies Act, 1956, to finance the promotion of all types of instruments, or to finance their acquisition by leasing or hire purchase or in





any other manner, to finance the promotion of joint stock companies, to undertake advisory and counselling services, to finance and assist microfinance institutions, schools, and other enterprises in India and abroad, to provide finance and loan syndication, inter-corporate bills and unit broking import/export financing and factoring.

b. To do the business of hire-purchase and leasing finance of all durable goods such as

refrigerators, air conditioners, televisions, washing machines and other electrical and electronic equipment and appliances and vehicles of all descriptions for personal or commercial use.

c. To carry on the business of money lending and financing of all kinds including project

finance. equipment finance, asset credit, equipment leasing and lease finance, bill discounting, foreign exchange loans, mortgage loans, loans against pledge of movable assets, loans against shares and securities, educational loans, inter-corporate loans,

working capital loans, bridge loans, agricultural loans and to provide non-fund based credits such as issuing of letter of credit, letter of guarantees, guaranteeing loans granted by other financiers, providing security for loans granted by other financiers, discounting of bills, hundies, cheques, drafts, deferred payment guarantees.

d. To engage in the securitization business both as acquirer and / or the disposer of

securitized debt through purchase/sale, assignment and such other approved modes. e. To carry on the business of Corporate Insurance Agents and / or Brokers for the general

Insurance companies and/ or life insurance companies including Foreign Companies, by soliciting and procuring insurance business on behalf of such companies, for commission or on income sharing basis or on a fixed income basis”

PRODUCT DETAILS

Loan Eligibility:

ISFC mainly offers two types of Term Loan products: secured and unsecured loans. Though

the end use is for school construction, loan is secured against personal property in most of

the cases. As on March 31, 2014, about 58.5% of the loans are secured against the

personal property of the school owner, about 22.3% against school property and about

19.2% unsecured. ISFC has a board policy not exceeding 25% of the portfolio for unsecured

product.

Summary of products and their end use is as follows:

Product Interest

rate

Loan slab School size Tenor

Secured

loan

19 to 23% <= 100 lacs Student strength between

600 to 5000 Students

Up to 5 years

Unsecured loan

24 to 26% <= 5 lacs Student strength between 400 to 5000 Students

Up to 3 years

LENDING METHODOLOGY

Lead Generation

At the time of area scoping, a sales database of schools is created using primary research

methods to enhance the data collected from secondary sources.

Since this is a relatively niche product, leads are generated mostly through cold calling at

the beginning of the lifecycle of the branch, which later evolves into referrals of new schools

by the existing borrowers along with conventional channel of Cold Calling. The Relationship

manager plays a pivotal role in lead generation, both to maintain the existing portfolio, and

to garner new prospective customers through existing contacts.



Each spoke is selected where there is potential of 200 to 300 schools in the region and branch is established where there is a minimum potential for about 700 to 800 schools to

be catered. RM operates at about 40 to 50 km radius normally and can reach up to

100kms. Each RM is mapped to not more than about 250 to 300 schools in an area and a

branch is planned to cover maximum of 1500 to 1800 schools in the region before

establishing another branch/spoke.

The processing time for the secured loans is from 10 to 15 days and as low as 2 to 3 days

for an unsecured loan. ISFC has developed standard credit filters to facilitate the credit

process and help the RMs identify the potential schools owners.

Credit filters: 1. The school should be recognized by board of education in the respective states.

2. The minimum enrolment should be at least 400 students.

3. The school fees should be a minimum of Rs. 300.

4. The school should have positive cash flows after the operational expense

5. The school should have a minimum vintage of 3 years.

Separate Credit:

All loans are approved by the Credit Committee, chaired by the Managing Director and

CEO. A physical visit by at least the branch manager is a must for every case where it is not

cost effective for the Credit team member to travel. Currently there are two credit hubs one

each in Hyderabad and Bangalore to cater to the majority of the portfolio.

The credit team has its own checks and balances automated through MIS. In the

origination model, branch manager (BM) visits the client and performs field level check after

the client becomes eligible in the initial credit assessment. In branches that do not have a

branch manager on role, one of the members of the credit committee or the sales head of

the respective state visit the client for field understanding. There is a third party Legal verification and technical valuation of the collateral being offered after the in-principle

approval of the credit committee for a particular client.

Processing of the loans usually take on an average 10 to 15 working days in the case of

secured loans and 3 to 7 days in the case of unsecured loan.

Document Storage

All title documents of property are maintained in a locker room at a third party (Stock

Holding Corporation) facility in Hyderabad. Title documents are maintained in files arranged according to loan account number, and cheques are maintained in paper

envelopes on which the loan account number, school name and the cheque numbers are

written.

Internal Audit Process

ISFC has a detailed internal audit process in place and has appointed an independent CA

Firm for the same. The auditor looks at all the processes of the company with key focus on

the Loan Origination Process. Audit is conducted on the basis of Random Sampling of Loan

Accounts and observations are reported directly to the Managing Director and CEO of the company.

Apart from Loan Origination Process, other processes are also covered in the scope of

internal audit

1. Compliance- such as RBI compliances for NBFC’s, Interest rate policy, KYC and AML

policy; to be done mostly on an annual basis. 2. Review of credit policy; to be done on a quarterly basis

3. Review of sanction, disbursements, collections and end use reports; to be done

quarterly basis

4. Finance and accounting; to be done on a quarterly basis



5. Branch audit; to be done on a half yearly basis. Each branch would be covered twice in a year.

6. Implementation of Audit recommendation; half yearly basis.

IT Systems

a. ISFC has recently migrated to Smartlend 3G as its loan portfolio monitoring system

from BR.NET platform used earlier. Both these softwares are used by several other

players in the market. b. All initial loan details and collateral details can be input by the Operations staff at the

branch while all sanction and post sanction details are activities that are handled at

the HO.

c. ISFC follows the maker checker concept, where pre sanction all details are input by the

Operations person at the branch and the operations person at the HO level checks the

data entered. The MIS generates a Unique ID for every client post sanction. Disbursement can be done only with login ID and any changes post disbursement can

be done only at the HO.

At origination, the loan application, KYC details, details of CIBIL report and details of the

co-applicant are entered in the system. In terms of the collateral, the details of the property holder, type of property, area, value of property and the LTV is entered at origination. The

software allows tagging of loans to different funding agencies and also allows change in

tagging.

OUTSTANDING LITIGATION

There is no outstanding litigation pending against the Issuer which may have any material adverse effect on its business prospects or financial condition.

(a) CORPORATE STRUCTURE

ISFC has its corporate office in Delhi and has a well-established base of operations in the

states of Andhra Pradesh and Karnataka, and has recently expanded its presence in the states of Maharashtra, Tamil Nadu, Rajasthan, Haryana and the NCR region. The registered

office of the company is in Hyderabad. Bangalore and Vishakhapatnam branches have

dedicated Branch Managers whereas the other locations act as the spokes to these

branches.

The company follows a Hub and Spoke model, keeping its operational costs to a minimal level at the time of expansion into a new geography, gradually developing the location and

gradually spanning out into nearby geographies. Currently the company has about 60

employees.

CEO

COO

OperationFinance & Treasury

Collections

Technology

Sales

BM & RMs

Credit

Credit Officer

HR & Admin

Legal & Technical



(c) KEY OPERATION AND FINANCIAL PARAMETERS FOR THE LAST 3 AUDITED YEARS

Parameters FY 2014 FY 2013 FY 2012

Net worth 1981.42 1906.10 1838.86

Total Debt 2645.21 1519.09 985.09

Comprising of

Non-Current Maturities of Loan Term Borrowing

1578.97 841.37 433.35

Short Term Borrowing 62.41 73.31 551.74

Current Maturities of Long Term Borrowing

1003.83 604.40

Net Fixed Assets 62.94 9.75 8.97

Non-Current Assets 281.49 99.89 66.96

Non Current Liabilities (Including non current maturities of Debt)

70.66 23.10 29.58

Cash and Cash Equivalents 5.29 10.37 131.92

Current Investments 0.00 0.00 55.15

Current Assets (Including cash and investment)

176.94 120.49 48.16

Current Liabilities ( Including application money for Debenture)

902.56 618.36 95.46

Assets Under Management (GLP) 5626.23 3956.94 2878.25

Off Balance Sheet Assets 526.26 156.20 240.43

Interest Income 1019.28 800.29 574.61

Interest Expense 352.41 209.56 132.66

Provisioning & Write-offs 43.52 48.87 0.17

PAT 75.32 67.24 59.86

Gross NPA (% of AUM) 1.48% 2.00% 2.85%

Net NPA (% of AUM) 0.70% 0.78% 1.26%

Tier I Capital Adequacy Ratio (%) 34.99% 47.09%

Tier II Capital Adequacy Ratio (%) 9.16% 0.24%

Contingent Liabilities - All figures (in Indian Rupees lakhs)

Particulars Mar-14 Mar-13

On account of managed portfolio 133.42 51.84

Others 0.82 0.66

Total 134.24 52.50

Gross debt-equity ratio of the Issuer

Before issue of the Debentures 1.72

After issue of the Debentures 2.32



Calculations

Particulars Debt Equity Ratio as per audited Balance Sheet as on July 15th, 2014 (Rs. Lakhs)

Share Capital

- Share Capital (Including Share Application Money)

153

- Reserves and Surplus 2,302

-Intangible/Unamortized expense

- Profit & Loss Account (as on June 30th, 2014 (Unaudited provisional)

-456 1,999

Loan Funds (as on July 15th, 2014)

- Secured Loans 2,238

- Unsecured Loans 1198 3,436

Debt Equity ratio Pre Issuance 1.72

Loan Funds (post issue)

- Secured Loans 3,438

- Unsecured Loans 1198 4,636

Debt Equity ratio Post Issuance 2.32

Operational Statistics

Year/Period Ended 31-03-2014 31-03-2013 31-03-2012

Total Branches 21 10 4

Total Active Borrowers 735 483 402

Total portfolio including securitized & net of provision (Rs. crore)

56.26 39.57 28.78

(d) COST AND FINANCING OF NEW PROJECTS

Not Applicable

The proceeds of issuance of the ISFC Debentures will be applied to finance the Issuer’s customers for income generating activity.

4.1.3 BRIEF HISTORY OF THE ISSUER’S ACTIVITIES SINCE INCORPORATION

a) Details of Share Capital as on July 15th, 2014: (in Rupees Lakhs)

as on 15th July, 2014

Share Capital

Authorised:

Equity Shares: 545.00

Preference Shares: 55.00

Total 600.00

Issued, Subscribed and Fully Paid-up:

Equity Shares: 124.96



Preference Shares: 28.33

Total 153.29

b) Changes in its capital structure as on last quarter end, for the last five

years: Changes in its capital

structure as on last

quarter end i.e. Mar 31,

2014 for the last five

years:

Change in authorised Share

Capital Remarks

Date Existing Revised

February 02, 2009 4 Cr 6 Cr Increase in Authorised Capital

c) Equity Share Capital History of the Company as on end July 15th, 2014, for the

last five years:

Date of allotment

Name of

shareholder

No. shares

Face

Value (Rs.)

Issue price

Consideration Nature of Allotme

nt

Cumulative paid-up capital (Rs.)

Remarks

No. of

equity shares

Equity

share Capital

Equity

Share Premium

April 24,

2009

GGV School

Finance

Compan

y Private

Limited.

117,135 Rs.

10 25.46

2,982,257.

10 117135

11713

50

1810907.

1

Further

Issue

and

Allotme

nt

January

22, 2010

GGV School

Finance

Compan

y Private

Limited.

733,905 Rs.

10

189.9

355

139394613

.1

733,905

7,339,

050

132,055,5

63.13

Further Issue

and

Allotme

nt

June 05,

2013

Blayfort Limited,

Cyprus

10 Rs.

10 125 1250 10 100 1150

Further

Issue and

Allotme

nt

July 11,

2014

Neeraj

Sharma 10

Rs.

10

Transfe

r from

Caspian

Inpact

Investm

ent

Adviser

pvt. Limited

Compulsorily Convertible Preference Shares

Date of allotm

ent

Name of shareholder No. share

s

Face Value

(Rs.)

Issue price

Consideration

Cumulative paid-up capital (Rs.)

Remarks



Nature of Allot

ment

No. of equity share

s

Equity share Capit

al

Equity Share Premi

um

24-

Apr-

09

GGV School Finance

Company Private Limited

2,65,

283 10

179.

65

47658

091

2,65,

283

2652

830

4500

5261

12-

Nov-09

GGV School Finance Company Private Limited

18,000

10 2625.25

47254500

18,000

180000

47074500

a) Details of any Acquisition or Amalgamation in the last 1 year: NIL

b) Details of any Reorganization or Reconstruction in the last 1 year: NIL

4.1.4 DETAILS OF THE SHAREHOLDING OF THE ISSUER AS ON THE LATEST QUARTER END

a) Shareholding Pattern of the Company as on July 15th, 2014:

Shareholder Name Number of Equity

Shares % stake

No. of shares held in

Demat Format

M/s GGV School Finance

Co Limited 851,040 68.11% -

M/s Caspian Advisors

Private Limited 398,536 31.89% -

M/s Blayfort Limited 10 0.00% -

Neeraj Sharma 10 0.00%

Shareholder Name Number of CCCPS

Shares % stake

No. of shares held in

Demat Format


Co Limited 283,283 100.00% -

Shareholder Name Number of CCDs % stake No. of shares held in

Demat Format

M/s Blayfort Limited 4,790 100.00% -

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

NIL

b) List of top 10 holders of equity shares in the Company as on July 15, 2014:

Sr. No. Name of the

Shareholder/Particulars Class

Total

Number of

Equity

Shares

Percentage

of total

shareholding

Number of

shares

held in

Demat

form

1


Co Limited Equity 851,040 68.11% -

2 M/s Caspian Advisors Private Limited

Equity 398,536 31.89% -

3 M/s Blayfort Limited Equity 10 0.00% -

4 Mr. Neeraj Sharma Equity 10 0.00% -



Sr. No. Name of the


Total Number of

Equity

Shares

Percentage of total

shareholding

Number

of shares

held in

Demat

form

1


Co Limited CCCPS 283,283 100.00% -

Sr. No. Name of the


Total Number of

Equity

Shares

Percentage

of total

shareholding

Number

of shares

held in

Demat

form

1 M/s Blayfort Limited CCDs 4790 100.00% -

4.1.5 DETAILS OF THE DIRECTORS OF THE ISSUER

a) Details of the current directors of the Company:

S. No

.

Name of the

Directors

Designatio

n

Date of

Birt

h

Address DIN PAN

Director of the

compan

y since

1 Mr. Neeraj Sharma

CEO and

Managing Director

28-

05-1972

Nishnidhi House,

BP- 137 (West),

Shalimar Bagh, Delhi, 110085

(INDIA)

71579

ANHPS3616A

06-12-2012

2

Mr. Bulusu

Venkata

Narasimham

Director

01-

06-1968

Plot No. 2,

Progressive Housing

Society, Phase-II,

Manovikas Nagar,Old

Bowenpally,

Hyderabad-500003

616

29

AEWPB6

227Q

05-11-

2011

3

Mr. Arun

Gore

Laxman

Director

12-

07-

1957

270 Lake Summit

View, Atlanta

GA,30342, USA

512

699

8

AHZPL4

382L

22-12-

2011

Note: None of the current directors of the Company appears in the RBI defaulter list and

/ or ECGC default list.

b) Details of change in directors since last three years:

Sl. No. Name Din Number Date of Change Nature of Change

1. Mr. S. Vishwanatha

Prasad 00574928 27-Apr-2010 Resigned as Director

2. Mr. Prathamesh

Sudhir Naik 01439681 30-Apr-2010 Resigned as Director

3. Mr. B.V.Narasimham 00061629 30-Apr-2010 Resigned as Director

4. Mr. Steven Edwin

Hardgrave 02189073 11-May-2011 Resigned as Director



5. Mr. B.V.Narasimham 00061629 05-Nov-2011 Appointed as Additional

Director

6. Mr. Arun Gore 05126998 22-Dec-2011 Appointed as Additional

Director

7. Mr. Harish Inder

Mamtani 05171809 08-Mar-2012

Appointed as Additional Director

8 Mr. Neeraj Sharma 00071579 06-Dec-2012 Appointed as Additional

Director

9 Mr. Harish Inder

Mamtani 05171809 08-Mar-2013 Resigned as Director

10 Mr. Neeraj Sharma 00071579 03-Oct-2013 Promoted to Managing

Director

4.1.6 DETAILS OF THE AUDITORS OF THE ISSUER

a) Details of the auditor of the Company:

Name Address Auditor since

Italia & Associates House No. 1-8-373/A Chain Fort Lane Begumpet, Hyderabad-500003

2009

b) Details of change in auditor since last three years: NIL

4.1.7 DETAILS OF THE BORROWINGS OF THE ISSUER, AS ON THE DATE OF THIS DOCUMENT

The Company has discharged all its liabilities on term loans and debt securities in time and would continue doing so in future as well. The Company has been regular in payment of

interest and principal amounts, as and when due, and has not defaulted in any such

payments.

a) Details of Secured Loan Facilities:

Sr. No.

Institution / Lender’s Name

Type of

Facility

Cumulative Sancti

on (Rs. Mn)

Amt. Disburse

d (Rs. Mn.)

Principal O/S as on July 15,2014

(Rs. Mn.)

Repayment Sched

ule

Repayment Sched

ule int.

Moratorium

Security

1 Maanaveeya Dev. & Finance Pvt Ltd

Term Loan

40 40 8 Quart

erly Mont

hly NIL

Loan Receivab

les

2 IFMR Capital Term Loan

50 50 29.73 Mont

hly Mont

hly NIL

Loan Receivab

les

3 Blayfort Limited CCDs 49.45 49.4

5 49.45

Quarterly

NA Unsecur

ed

4 Reliance Capital Limited

Term Loan

30 30 16.08

Monthly

Monthly

NIL Loan

Receivables

5 Ratnakar Bank Term Loan

30 30 22.5 Quart

erly Mont

hly NIL

Loan Receivab

les



6 IFMR Capital Term Loan

50 50 40.73 Mont

hly Mont

hly NIL

Loan Receivab

les

7 Au Finance Term Loan

50 50 45.51 Mont

hly Mont

hly NIL

Loan Receivab

les

8 Hinduja Capital Limited

NCDs 70 70 61.25 Mont

hly Mont

hly NA

Loan Receivab

les

b) Details of Unsecured Loan Facilities:

Sr.No. Lender Name Type of Facility

Amount sanctioned

Principal

O/S as on June 30 2014

Repayment Schedule

1 HDFC Bank

Working Capital

100.0

41.44

c) Details of NCDs: Sr. No.

Secured / Unsecured

Series Name of Debenture Holders

Amount (Rs. Lakhs)

1. Secured ISFC/NCD/S001 Hinduja Leyland Finance Limited 641.67

d) List of top 10 Non-Convertible Debenture Holders (as on 30.06.2014) - Sr.

No.

Secured /

Unsecured

Series Name of Debenture Holders

Amount

(Rs. Lakhs)

1. Secured ISFC/NCD/S001 Hinduja Leyland Finance Limited 641.67

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

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

of whom it has been issued:

The Company has not issued any corporate guarantee for any third party as at July 15, 2014. NIL

f) Details of Commercial Paper:

The Company has not issued any Commercial Paper as at July 15, 2014. NIL

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

convertible debentures/preference shares) as on July 15, 2014 NIL

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

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

corporate guarantee issued by the Company, in the past 5 years: 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

4.1.8 DETAILS OF PROMOTERS OF THE ISSUER, AS ON THE DATE OF THIS DOCUMENT



Sr. No. Name of

shareholders

Total No. of

equity

shares

No. of shares in

demat form

Total

shareholding as a % of

total no. of

equity

shares

No. of shares

pledged

% of

shares

pledged with

respect

to

shares

owned

1.

M/s GGV School

Finance Co. Limited

851,040 - 68.11% - -

2.

M/s Caspian

Advisors Private

Limited

398,536 - 31.89% - -

3. M/s Blayfort

Limited 10 - 0.00% - -

4. Mr. Neeraj

Sharma 10 - 0.00%

4.1.9 ABRIDGED VERSION OF AUDITED CONSOLIDATED (WHEREVER APPLICABLE) AND STANDALONE

FINANCIAL INFORMATION (LIKE PROFIT & LOSS STATEMENTS, BALANCE SHEET AND CASH FLOW

STATEMENT) FOR AT LEAST LAST THREE YEARS AND AUDITOR QUALIFICATIONS, IF ANY

[Note: Financial Information submitted must be in line with the timelines specified in the

Simplified Listing Agreement, issued vide Circular no.SEBI/IMD/BOND/1/2009/11/05, dated May 11, 2009] 4.1.10 ABRIDGED VERSION OF LATEST AUDITED / LIMITED REVIEW HALF YEARLY CONSOLIDATED

(WHEREVER APPLICABLE) AND STANDALONE FINANCIAL INFORMATION (LIKE PROFIT & LOSS

STATEMENTS AND BALANCE SHEET) AND AUDITOR QUALIFICATIONS, IF ANY

[Note: Financial Information submitted must be in line with the timelines specified in the Simplified Listing Agreement, issued vide Circular no.SEBI/IMD/BOND/1/2009/11/05, dated May 11, 2009]



31.03.2012 31.03.2013 31.03.2014

Audited Audited Audited

Interest Income 574.61 800.29 1,019.28

Less: Interest Expenses 132.66 209.56 352.41

Net Interest Income 441.95 590.73 666.87

Other Income 14.55 24.76 38.47

Total Income 456.50 615.50 705.34

Operating Expenses 387.89 501.95 584.67

Provisions & Write Offs 0.17 48.87 43.52

Operating Profit 68.44 64.68 77.15

Depreciation 4.65 4.22 7.51

Profit Before Tax 63.79 60.46 69.63

Provisions for tax 3.93 -6.78 -5.69

Profit After Tax 59.86 67.24 75.32

Balance Sheet (INR Lakhs) 2948.99 4066.88 5601.36

Equity capital 153.29 153.29 154.79

Reserve & Surplus 1685.58 1752.82 1828.15

Share Application & Share Premium

Money0.00 0.23 0.00

TNW 1838.86 1906.10 1982.94

Total Debt 985.09 1519.08 2645.21

Current Liabilities+ Provisions 95.46 618.36 902.56

Total Outside Liabilities 29.58 23.10 70.66

Total Liabilities 1110.13 2160.54 3618.42

Fixed assets (Net) 7.80 9.37 45.58

Investments 55.15 0.00 0.00

Gross Advances 2683.69 3849.08 5101.97

Less : Loan Loss Reserve -45.86 -48.34 -47.51

Net Loan Outstanding 2637.82 3800.73 5054.46

Cash / Liquid Investments 131.92 10.37 5.29

Non Current assets 38.15 49.55 211.96

Other current assets 48.16 120.49 176.94

Deferred Tax Assets 19.52 26.29 31.98

Intangible Assets 1.18 0.38 17.36

Other Long Term Assets 9.29 49.70 57.79

Total Assets 2948.99 4066.88 5601.36

Profit and Loss Statement (INR Lakhs)

Profit and Loss Statement (in INR Lakhs) For the period ended

31-Mar-14

Revenue from Operations 1,043.33

Other Income 14.42

Total Revenue 1,057.75

Expenses:

Operating expenses



218.77

Employee benefits expense

365.90

Finance costs

352.41

Depreciation and amortisation 7.51

Provision for Loans 43.52

Total expenses

988.12

Profit / (Loss) for the period before Tax 69.63

- Current tax 13.50

- Deferred tax expense/(benefit) -13.50

- Prior period taxes -5.69

Profit after tax 75.32

Balance Sheet

EQUITY AND LIABILITIES

Shareholder's funds

Share capital 153.29

Stock option outstanding Account 1.50

Reserves and surplus 1,828.15

Non-current Liabilities

Long-term borrowings 1,578.97

Deferred tax liabilities, net -

Other long-term liabilities 26.02

Long-term provisions 44.64

Current liabilities

Short-term borrowings 62.41

Other current liabilities 1,150.67

Short-term provisions 55.71

Application money for NCDs 700.00

Total 5,601.36

ASSETS

Non-current assets

Fixed assets

(i) Tangible Assets 45.58

(ii) Intangible Assets 17.36



Deferred tax assets, net 31.98

Gross loan portfolio 3,544.12

Less : Managed portfolio -

Loan portfolio -

Long-term loans and advances 57.79

Other non-current assets 211.96

-

Current assets -

Current investments -

Cash and bank balances 5.29

Gross loan portfolio 1,510.34

Less : Managed portfolio -

Loan portfolio -

Short-term loans and advances 60.51

Other current assets 116.43

Total 5,601.36

4.1.11 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 THE ISSUE WHICH MAY

AFFECT THE ISSUE OR THE INVESTOR’S DECISION TO INVEST/CONTINUE TO INVEST IN THE

DEBT SECURITIES

Other than as disclosed in this Information Memorandum, there are no other material events or developments or changes at the time of this Issue or subsequent to the Issue

which may affect the Issue or the investors’ decision to invest/ continue to invest in the

Issue.

4.1.12 NAMES OF THE DEBENTURE 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 Information Memorandum and in all the subsequent periodical communications sent to the Debenture Holders. The consent letter from Debenture Trustee

is provided in Annexure 2 of this Information Memorandum.

4.1.13 RATING RATIONALE ISSUED BY THE RATING AGENCY

The Rating Agency has assigned rating of IND BB+ with Stable outlook to the Debentures.

Instruments with this rating are considered to have very strong degree of safety regarding

timely payment of financial obligation. Such instruments carry lowest credit risk. Rating

rationale is provided in Annexure 1.

4.1.14 SECURITY BACKED BY GUARANTEE OR LETTER OF COMFORT

Not Applicable

4.1.15 NAMES OF ALL THE RECOGNISED 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 on _______________ and is provided in Annexure 4.

4.1.16 OTHER DETAILS

a. Debenture Redemption Reserve Creation:

The Department of Company Affairs notification G.S.R 265(E) dated March 31, 2014 Section 18 clause 7(b)(i) specifies that “No DRR is required for debentures issued by All India Financial Institutions (AIFIs) regulated by Reserve Bank of India and Banking Companies for both public as well as privately placed debentures”.

Therefore, the Company will not be maintaining a DRR in respect of the

Debentures issued herein and the Debenture Holders may find it difficult to

enforce its interests in the event of default.

b. Issue/Instrument specific regulations

The Issue of Debentures shall be in conformity with the applicable provisions of:

(i) Companies Act, 2013

(ii) Securities Contracts (Regulation) Act, 1956

(iii) Securities and Exchange Board of India Act, 1992 (iv) Foreign Exchange Management Act, 1999

(v) Reserve Bank of India Act, 1934

(vi) SEBI(Issue and Listing of Debt Securities) Regulations, 2008

c. Application process

The application process for the Issue is as provided in Section 3 of this Information Memorandum.

The Information Memorandum 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

Documents Submitted to the Exchanges

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

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

for the allotment of the Debentures;

(b) Copy of last 3 (Three) years audited Annual Reports;

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

and agreements;

(d) Copy of the resolution passed by the shareholders of the Company at the Extra-

Ordinary General Meeting held on July 11th, 2014, authorizing the issue/offer of

non-convertible debentures by the Company;

(e) Copy of the Board / Committee Resolution authorizing the borrowing and list of

authorized signatories;

(f) Certified true copy of the resolution passed by the Company at the Extra Ordinary

General Meeting held on July 11th, 2014 authorising the Company to borrow, upon

such terms as the Board may think fit

(g) An undertaking from the Issuer stating that the necessary documents for the

creation of the charge, including the Trust Deed would be executed within the time

frame prescribed in the relevant regulations/acts/rules etc and the same would be



uploaded on the website of the BSE, where the debt securities have been listed, within 5 (five) working days of execution of the same;

(h) Where applicable, an undertaking that permission / consent from the prior creditor

for a second or pari passu charge being created, in favour of the trustees to the

proposed issue has been obtained; and

(i) Any other particulars or documents that the recognized stock exchange may call for

as it deems fit.

Documents Submitted to Debenture Trustee

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

(j) Memorandum and Articles of Association of the Issuer and necessary resolution(s) for the allotment of the Debentures;

(k) Copy of last 3 (Three) years audited Annual Reports;

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

and agreements;

(m) 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.

(n) An undertaking to the effect that the Issuer would, until the redemption of the debt

securities, submit the details mentioned in point (d) above to the 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 Trustee and the

Trustee shall be obliged to share the details submitted under this clause with all

‘Qualified Institutional Buyers’ and other existing debenture-holders within 2 (two) Business Days of their specific request.

4.2 ISSUE DETAILS

4.2.1 SUMMARY TERM SHEET Security Name Series–ISFC/NCD/S002

Issuer Indian School Finance Company Private Limited (“ISFC”)

Type of

Instrument Rated, Listed, Taxable, Senior, Secured, Redeemable INR denominated non-convertible debentures (“Debentures”)

Nature of

Instrument Secured

Seniority Senior

Mode of Issue Private Placement

Eligible

Investors

Refers to the following categories of investors eligible to invest in the

Debentures, when addressed directly:

i. Commercial Banks, Eligible Financial Institutions* and Insurance

Companies;

ii. Companies;

iii. Non-Banking Finance Companies (NBFCs) and Residuary NBFCs and

iv. Mutual Funds

v. Foreign Institutional Investors (FII)

vi. Provident Funds , Gratuity, Superannuation & Pension Funds,

subject to their Investment guidelines



vii. Qualified Foreign Investors

viii. Any other investor authorised to invest in these Debentures *Eligible Financial Institution means such financial institutions from whom monies borrowed even under an unsecured debenture would not constitute a ‘deposit’ within the meaning of the term as defined under Section 2(b) of the Companies (Acceptance Of Deposits) Rules, 1975.

Listing

(including name

of stock

Exchange(s)

where it will be

listed and

timeline for

listing)

Debentures are to be listed on the WDM of the Bombay Stock Exchange

within a maximum period of 15 (Fifteen) days from the Deemed Date of

Allotment

In the event that the Debentures are not listed within 15 (Fifteen) days

from the Deemed Date of Allotment for any reason whatsoever, then the

Issuer undertakes to immediately redeem and/or buyback the

Debentures from the Debenture Holders within 2 (two) Business Days of

the expiry of the Listing Period.

Rating of the

Instrument IND BB+ by IndiaRatings and Research Pvt. Ltd.

Issue Size INR equivalent of USD 2 Million subject to a maximum of Rs.


Option to retain

oversubscriptio

n (Amount)

Not applicable

Objects of the

Issue

To raise debt to the extent upto INR 12,00,00,000/- (Rupees Twelve

Crore Only)

Details of

Utilization of the

proceeds

To meet Funding Requirements for the business activities of the

Company

The Main Objects clause of the Memorandum of Association of the

Company enables it to undertake the activities for which the funds are being raised through the Issue and also the activities which the

Company has been carrying out till date. The proceeds of the Issue shall

not be utilised for any purpose prohibited by Applicable Law.

Coupon Rate 14.25% p.a. (Fourteen Decimal Point Two Five per cent) per annum

payable monthly

Step Up/Step

Down Coupon

Rate

N.A

Coupon

Payment

Frequency

Quarterly

Coupon

Payment Dates

25-Nov-14

25-Feb-15

25-May-15

25-Aug-15

25-Nov-15

25-Feb-16

25-May-16

25-Aug-16

25-Nov-16

25-Feb-17

25-May-17

25-Jul-17

Coupon Type Fixed Rate

Coupon Reset

Process (incl

rates, spread,

effective date,

interest rate cap

and floor etc)

N.A

Day Count

Basis Actual/365 days (or 366 days in the case of a leap year)

Interest on 14.25% p.a. (Fourteen decimal point Two Five per cent per annum)



Application

Money

Default Interest

Rate

In the event of a payment default or any other Event of Default (whether

by way of acceleration, at maturity or otherwise), of the amounts due

under this Issue, the Issuer shall pay an additional interest rate of 2% (Two per cent) per annum over and above the applicable Coupon Rate

from the date of the occurrence of the payment default on the

outstanding principal amount of the Debentures until such default is

cured of the Debentures are redeemed pursuant to such default, as

applicable.

Tenor 36 Months from Deemed Date of Allotment

Redemption

Date (s) and

Amount

25-08-16

25-09-16

25-10-16

25-11-16

9999840

10000080

10000080

9999840

25-12-16

25-01-16

25-02-17

25-03-17

10000080

10000080

9999840

10000080

25-04-17

25-05-17

25-06-17

25-07-17

10000080

9999840

10000080

10000080

Premature

Redemption

(a) On any date on which an interest payment is due on the

Debentures, the Company may, subject to prior written consent of the Debenture Trustee, redeem the Debentures pro rata, in full or

in part, before the Due Dates, by paying a premature redemption

premium of 0.25% (zero decimal point two five percent) on the

Outstanding Principal Amount of the Debentures.

(b) Any notice of premature redemption given by the Company will be irrevocable, and unless a contrary indication appears, will specify

the date or dates upon which the relevant premature redemption is

to be made and the amount of that premature redemption.

(c) The Company will not redeem all or any part of the Debentures

except at the times and in the manner expressly provided for in the

Debenture Trust Deed or the Transaction Documents.

Redemption

Premium/Disco

unt

N.A

Issue Price INR 5,00,000/- (Rupees Five Lakhs) per Debenture

Number of

Debentures

Issued

240

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 and Price N.A.

Put Notification

Time N.A.

Call Notification

Time N.A.

Face Value INR 5,00,000/- (Rupees Five Lakhs) per Debenture

Minimum

Application and 200 Debentures



in multiples of 1

Debt Securities

thereafter

Issue Timing

1. Issue Opening Date: July 23, 2014

2. Issue Closing Date: July 25, 2014

3. Pay in Date: July 25, 2014

4. Deemed Date of Allotment: July 25, 2014

5. Date of Allotment: July 31, 2014

Issuance mode

of the

Instrument

Demat only

Trading mode of

the Instrument Demat only

Settlement

mode of the

Instrument

RTGS

Depository NSDL

Business Day

Convention

If the Due Date for payment falls on a day that is not a Business Day,

then the due date in respect of such payment shall be the immediately preceding Business Day

Record Date 15 days prior to each Coupon Payment / Put Option Date / Call Option

Date / Redemption Date

Security (where

applicable)

(Including

description,

type of security,

type of charge,

likely date of

creation of

security,

minimum

security cover,

revaluation,

replacement of

security).

The Debentures shall be secured by way of a first ranking exclusive and

continuing charge to be created pursuant to the Deed of Hypothecation

to be executed by the Company and delivered to the Debenture Trustee

over the identified receivables of the Company, which shall be equal to

the value of the Outstanding Principal Amount (as defined in the Debenture Trust Deed).

All the Assets that have been charged to the Debenture Trustee under

the Deed of Hypothecation shall always be kept distinguishable and held

as the exclusive property of the Company specifically appropriated to this

security and be dealt with only under the directions of the Debenture Trustee and the Company shall not create any charge, lien or other

encumbrance upon or over the same or any part thereof except in favour

of the Debenture Trustee nor suffer any such charge, lien or other

encumbrance or any part thereof nor do or allow anything that may

prejudice this security and the Debenture Trustee shall be at liberty to

incur all costs and expenses as may be necessary to preserve this security and to maintain the same undiminished and claim

reimbursement thereof;

The Company shall, on each Top-Up Date (as defined in the Deed of

Hypothecation), add fresh loan Assets to the Hypothecated Property

(under the Deed of Hypothecation) so as to ensure that the value of the Hypothecated Property is at all times equal to the Outstanding Principal

Amount.

Transaction

Documents As defined in the Definitions section of this Information Memorandum

Event of Default As mentioned in Clause 6 below

Provisions

related to Cross

Default Clause

In case where Payment Default is due to occurrence of an Issuer Cross

Default, and the outstanding Corporate Guarantee is lower than the sum

outstanding under the Debentures, all outstanding Debentures of that

Issuer shall be accelerated immediately at the sole discretion of the Trustee acting on behalf of Debenture Holders.

Roles and

Responsibilities As per the Debenture Trust Deed and other Transaction Documents.



of Debenture

Trustee

Governing Law

and Jurisdiction Indian Law

Covenants As provided in Section 6

Representations

and warranties As provided in Section 6

4.2.2 MATERIAL CONTRACTS AND AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS

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

agreements involving financial obligations of the Issuer are set out below.

The Issuer has entered into the following material agreements:

1. Certified true copies of the Memorandum and Articles of Association of the Issuer

as amended till date.

2. NBFC Registration Certificate no B - 09.00433 issued by Reserve Bank of India, Hyderabad RO dated 12th Feb, 2014 in lieu of CoR no B – 06.00536 dated 27th

August, 2010 issued by Hyderabad RO.

3. Certified true copy of the resolutions of the Board of Directors dated Feb 06, 2014 authorizing the issue of the Debentures

4. Rating letters dated April 22, 2014 from IndiaRatings and Research Private

Limited assigning Ind BB+ with stable outlook.

5. Audited Annual Report of the Issuer for the Financial Year ended March 31,

2014

6. Consent letter from the Debenture Trustee dated 11th March, 2014. 7. Consent letter from the Registrar to the Issue dated March 22, 2014

8. Debenture Trustee Agreement between the Issuer and Debenture Trustee March

28, 2014

9. Transaction Documents

The Issuer, in the ordinary course of its business, enters into various agreements, including

loan agreements, which may contain certain financial obligations and/or provisions which

may have an impact on its financial condition. Such contracts or agreements may be

inspected at the Corporate Office from 10.00 am to 3.00 pm from the date of this

Information Memorandum, until the date of closure of this Issue, upon the prior request of

the applicant.

5. FINANCIAL STATEMENTS

The below sets out the audited balance sheet, profit and loss account and cash flow

statement for the two financial years FY 2013 and FY 2014. The audited financials for 2012, 2013 and 2014 are attached as Annexure 5.

BALANCE SHEET All figures in Indian Rupees Lakhs



March 31st 2014 March 31

st 2013

I. Equity and Liability

SHAREHOLDERS FUNDS

(a) Share Capital 153.29 153.29

(c) Stock Option Outstanding 1.50

(c) Reserves and Surplus 1828.15 1752.82

Subtotal Shareholders Funds (a

+b+c)1982.94 1906.10

Share Application Money 0.00 0.23

0.00 0.23

NON CURRENT LIABILITIES

(a) Long Term Borrowing 1578.97 841.37

(b) Other Long Term Liabilities 26.02 1.48

(c) Long Term Provisions 44.64 21.63

Subtotal Non-Current Liabilities

(a +b+c)

CURRENT LIABILITIES

(a) Short Term Borrowing 62.41 73.31

(b) Trade Payable 0.00 0.00

(c) Other Current Liability 1150.67 694.69

(d) Application Money for NCD 700.00

(e) Application Money for CCD 0.00 494.50

(f) Short Term Provisions 55.71 33.57

Sub total Current Liabilities

(a+b+c+d+e+F)

TOTAL EQUITY AND

LIABILITIES5601.36 4066.88

II. ASSETS

NON CURRENT ASSETS

(a) Fixed Assets

(i) Tangible Assets 45.58 9.37

(ii) Intangible Assets 17.36 0.38

(iii) Capital Work in progress 0.00 0.00

(b) Non-Current Investments 0.00 0.00

(c) Deferred Tax Assets (Net) 31.98 26.29

(d) Long Term Loans and

Advances3601.91 2420.85

(e) Other Non-Current Assets 211.96 49.55

Sub Total Non-Current Assets

(a+b+c+d+e)

CURRENT ASSETS

(a) Trade receivables under

Finance Contracts0.00

(b) Cash and Cash equivalents 5.29 10.37

(c) Short term loans and advances 1570.85 1453.01

(d) Other Current Assets 116.43 97.06

(e) Investment 0.00 0.00

Sub Total Current Assets

(a+b+c+d)

TOTAL ASSETS 5601.36 4066.88

1649.62

1968.80

3908.79

1692.56 1560.44

864.48

1296.07

2506.44



Statement of Income All figures in Indian Rupees Lakhs

Particulars

Audited

March 31,

2014

Audited

March 31,

2013

Income

Revenue From Operations 1043.33 816.92

Other Income 14.42 8.13

Total 1057.75 825.06

Expenses

Finance Cost 352.41 209.56

Employee Benefit Expenses 365.90 299.41

Other Expenses 218.77 202.54

Provsion/ Bad Debts written off 43.52 48.87

Depreciation 7.51 4.22

Total 988.12 764.59

Profit Before Exceptional And Extraordinary Items And Tax 69.63 60.46

Exceptional Items 0.00 0.00

Profit Before Extraordinary Items And Tax 69.63 60.46

Extraordinary Items 0.00 0.00

Profit Before Tax 69.63 60.46

Tax Expense: 0.00

(1) Less : Current Tax 13.50 14.76

(2) Less/(Add) : Tax Related To Earlier Years -13.50 -14.76

(3) Add/(Less) : Deferred Tax -5.69 -6.78

Profit After Tax For The Year From Continuing Operations 75.32 67.24

Earnings per share ( Par Value Rs. 10/- each)

Basic 6.01 5.37

Diluted 1.39 0.84

6. TRANSACTION DOCUMENTS AND KEY TERMS

Capitalised terms not defined in this section shall have the meaning as specified to the term in the Debenture Trust Deed, Debenture Issuance Documents and other Transaction Documents. The Representation, Warranties, Covenants etc contained below are indicative only and shall be more particularly specified in the relevant Transaction Documents.

6.1 TRANSACTION DOCUMENTS

The following documents shall be executed in relation to the Issue (“Transaction

Documents”):

a) Debenture Trust Deed

b) Deed of Hypothecation for Security c) Debenture Trustee Agreement

d) Listing Agreement (if not already executed with the Exchange)



6.2 REPRESENTATIONS AND WARRANTIES

For the benefit of the Debenture-holders on the date of the Debenture Trust Deed and

during the term of the ISFC Debentures.

a) STATUS

i. It is a company, duly incorporated, registered and validly existing under the Laws of India.

ii. The Issuer and each of its subsidiaries have the power to own its assets and

carry on its business as it is being conducted.

b) BINDING OBLIGATIONS:

The obligations expressed to be assumed by the Issuer under the Transaction

Documents are legal, valid, binding and enforceable obligations.

c) NON-CONFLICT WITH OTHER OBLIGATIONS:

The entry into and performance by the Issuer of, and the transactions contemplated by

the Transaction Documents do not and will not conflict with:

i. any Law or regulation applicable to it;

ii. its constitutional documents; or

iii. any agreement or instrument binding upon it or any of its assets.

d) POWER AND AUTHORITY:

It has the power to enter into, perform and deliver, and has taken all necessary action to

authorise its entry into, performance and delivery of, the Transaction Documents to

which it is a party and the transactions contemplated by those Transaction Documents.

e) VALIDITY AND ADMISSIBILITY IN EVIDENCE:

All approvals, authorizations, consents, permits (third party, statutory or otherwise)

required or desirable:

i. to enable it lawfully to enter into, exercise its rights and comply with its

obligations in the Transaction Documents to which it is a party;

ii. to make the Transaction Documents to which it is a party admissible in evidence

in its jurisdiction of incorporation; and

iii. for it to carry on its business, and which are material, have been obtained or effected and are in full force and effect.

f) NO DEFAULT:

No Event of Default has occurred and is continuing or would reasonably be expected to

result from the execution or performance of any Transaction Documents or the issuance of the ISFC Debentures. No other event or circumstance is outstanding which

constitutes (or which would, with the lapse of time, the giving of notice, the making of

any determination under the relevant document or any combination of the foregoing,

constitute) a default or termination event (however described) under any other

agreement or instrument which is binding on the Issuer or any of its assets or which might have a Material Adverse Effect.

g) RANKING:

Each Debenture will constitute direct and senior obligations of the Company. The

claims of the Debenture Holders shall be superior to all the claims of investors/ lenders of Tier 1 capital and Tier 2 capital and shall rank pari passu to all secured indebtedness

of the Company.



h) NO PROCEEDINGS PENDING:

To the best of Company’s knowledge (after making due and careful enquiry) and except

as disclosed by the Company in this Information Memorandum, annual reports and

financial statements, no litigation, arbitration or administrative proceedings of or before

any court, arbitral body or agency which have been started against the Company, which

if adversely determined, may have a Material Adverse Effect.

i) NO MISLEADING INFORMATION:

All information provided by the Company to the Debenture Trustee/Debenture Holders

for the purposes of this Issue is true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated, and no material facts have

been omitted.

j) COMPLIANCE:

(i) The Company has complied with the Law and there has not been and there is no investigation or enquiry by, or order, decree, decision or judgment of any

Governmental Authority been issued or outstanding or to the best of the

Company’s knowledge (after making due and careful enquiry), anticipated

against the Company which would have a Material Adverse Effect on the

Company, nor has any notice or other communication (official or otherwise) from

any Governmental Authority been issued or outstanding or to the best of the Company’s knowledge (after making due and careful enquiry), anticipated with

respect to an alleged, actual or potential violation and/or failure to comply with

any such applicable Laws or requiring them to take or omit any action.

(ii) The Company has completed all necessary formalities including all filings with the relevant regulatory authorities, including but not limited to SEBI, BSE and

the relevant ROC and has obtained all consents and approvals required for the

completion of the Issue.

k) ASSETS:

Except for the security interests and encumbrances created and recorded with the relevant

ROC updated from time to time, the Company has, free from any security interest or

encumbrance, the absolute legal and beneficial title to, or valid leases or licenses of, or is

otherwise entitled to use (in each case, where relevant, on arm's length terms), all material

assets necessary for the conduct of its business as it is being, and is proposed to be, conducted.

l) FINANCIAL STATEMENTS:

i. Its financial statements most recently supplied to the Trustee were prepared in

accordance with Indian GAAP consistently applied save to the extent expressly disclosed in such financial statements.

ii. Its financial statements most recently supplied to the Trustee as of 31st March

2014 give a true and fair view and represent its financial condition and

operations during the relevant financial year save to the extent expressly disclosed in such financial statements.

m) SOLVENCY:

i. The Issuer is able to, and has not admitted its inability to, pay its debts as they

mature and has not suspended making payment on any of its debts and it will not be deemed by a court to be unable to pay its debts within the meaning of

the law, nor in any such case, will it become so in consequence of entering into

the Transaction Documents.



ii. The Issuer, by reason of actual or anticipated financial difficulties, has not

commenced, and does not intend to commence, negotiations with one or more

of its creditors with a view to rescheduling its indebtedness.

iii. The value of the assets of the Issuer is more than its respective liabilities

(taking into account contingent and prospective liabilities) and it has sufficient capital to carry on its business.

iv. The Issuer has not taken any corporate action nor has taken any legal

proceedings or other procedure or steps in relation to any bankruptcy

proceedings.

6.3 COVENANTS

I. Affirmative Covenants

The Company shall:

(i) Notice of winding up or other legal process

promptly inform the Debenture Trustee if it has notice of any application for

winding up having been made or any statutory notice of winding up under

the provisions of the Companies Act, 1956, or any other notice under any

other statute relating to winding up or otherwise of any suit or other legal process intended to be filed or initiated against the Company;

(ii) Loss or damage by uncovered risks

Promptly inform the Debenture Trustee of any material loss or significant

damage which the Company may suffer due to any force majeure circumstances or act of God, such as earthquake, flood, tempest or typhoon,

etc. against which the Company may not have insured its properties;

(iii) Costs and expenses

pay all costs, charges and expenses in any way incurred by the Debenture

Trustee towards protection of Debenture Holders’ interests, including

traveling and other allowances and such Taxes, duties, costs, charges and

expenses in connection with or relating to the Debentures subject to such

expenses, costs or charges being approved in writing by the Company before

they are incurred and shall not include any foreign travel costs;

(iv) Payment of Rents, etc.

punctually pay all rents, royalties, taxes, rates, levies, cesses, assessments,

impositions and outgoings, governmental, municipal or otherwise imposed upon or payable by the Company as and when the same shall become

payable and when required by the Debenture Trustee produce the receipts of

such payment and also punctually pay and discharge all debts and

obligations and liabilities which may have priority over the Debentures and

observe, perform and comply with all covenants and obligations which ought

to be observed and performed by the Company;

(v) Preserve corporate status

diligently preserve and maintain its corporate existence and status and all

rights, contracts privileges, franchises and concessions now held or hereafter

acquired by it in the conduct of its business and comply with each and every



term of the said franchises and concessions and all acts, authorizations, consents, permissions, rules, regulations, orders and directions of any

legislative, executive, administrative or judicial body applicable to its assets

or any part thereof provided that the Company may contest in good faith the

validity of any such acts, rules, regulations, orders and directions and

pending the determination of such contest may postpone compliance

therewith if the rights enforceable under the Debentures are not thereby materially endangered or impaired. The Company will not do or voluntarily

suffer or permit to be done any act or thing whereby its right to transact its

business might or could be terminated or whereby payment of the principal

of or interest on the Debentures might or would be hindered or delayed;

(vi) Pay stamp duty

pay all such stamp duty (including any additional stamp duty), other duties,

Taxes, charges and penalties, if and when the Company may be required to

pay according to the applicable state laws and in the event of the Company

failing to pay such stamp duty, other duties, Taxes and penalties as aforesaid, the Debenture Trustee will be at liberty (but shall not be bound) to

pay the same and the Company shall reimburse the same to the Debenture

Trustee on demand;

(vii) Furnish information to trustee

provide to the Debenture Trustee or its nominee(s)/ agent(s) such

information/copies of relevant extracts as they shall require as to all matters

relating to the business of the Company or any part thereof and to

investigate the affairs thereof and the Company shall allow the Debenture

Trustee to make such examination and investigation as and when felt necessary and shall furnish him with all such information as they may

require and shall pay all reasonable costs, charges and expenses incidental

to such examination and investigation. The Company undertakes that it will

permit the Debenture Trustee to examine the books and records of the

Company and to discuss the affairs, finances and accounts of the Company

with, and be advised as to the same by, officers and independent accountants of the Company, all upon reasonable prior notice and at such

reasonable times and intervals as the Debenture Trustee may reasonably

request;

(viii) shall furnish quarterly report to the Debenture Trustee (as may be required in accordance with SEBI guidelines) containing the following particulars:

(i) updated list of the names and addresses of the Debenture Holders;

(ii) details of the interest due but unpaid and reasons thereof;

(iii) the number and nature of grievances received from the Debenture

Holders and resolved by the Company; and

(iv) a statement that the Hypothecated Property is sufficient to discharge

the claims of the Debenture Holders as and when they become due;

(ix) promptly and expeditiously attend to and redress the grievances, if any, of

the Debenture Holders. The Company further undertakes that it shall promptly comply with the suggestions and directions that may be given in

this regard, from time to time, by the Debenture Trustee and shall advise the

Debenture Trustee periodically of the compliance;



(x) inform and provide the Debenture Trustee with applicable documents in respect of the following:

(i) notice of any Event of Default or potential Event of Default, each as

listed herein; and

(ii) any and all information required to be provided to the Debenture Holders under the listing agreement to be entered into between the

Company and the BSE;

(xi) Comply with provisions of Section 205C of the Companies Act, 1956

The Company shall comply with the provisions of Section 205C of the

Companies Act, 1956 relating to transfer of unclaimed / unpaid amounts of

interest on Debentures and redemption of Debentures to Investor Education

and Protection Fund (IEPF), if applicable to it.

The Company hereby further agrees and undertakes that during the

currency of the Debentures it shall abide by the guidelines/listing requirements if any, issued from time to time by the SEBI/RBI.

(xii) The Company shall file with the BSE for dissemination, within one month

from the end of half years September and March, a half- yearly

communication, counter signed by the Debenture Trustee, containing inter-

alia the following information:

a) credit rating;

b) asset cover available accompanied with a half yearly certificate regarding

maintenance of security cover at least equal to the Outstanding Principal Amount in respect of the Debentures, by either a practicing company

secretary or a practicing chartered accountant, within one month from

the end of the half year;

c) debt-equity ratio accompanied with a certificate of a practicing chartered

accountant confirming the said debt-equity ratio;

d) previous due date for the payment of interest/principal and whether the

same has been paid or not; and

e) next due date for the payment of interest/principal.

(xiii) The Company shall, forthwith upon demand by the Debenture Trustee,

reimburse to the Debenture Trustee all amounts paid by the Debenture

Trustee to reasonably protect the Hypothecated Property and such amounts

shall be deemed to be secured by the Hypothecated Property.

(xiv) Management Control

Any change in management control of the Company will be subject to prior

written approval of the Debenture Trustee.

II. Financial Covenants

The Company shall at all times until the redemption of all outstanding Debentures

ensure that:

(a) the PAR Ratio Over 90 Days shall not exceed 20% (Twenty percent) of the

Total Net Worth of the Company; and



(b) the Capital Adequacy Ratio is at least 15% (Fifteen percent) or the minimum amount as required by the RBI whichever is higher.

For the purpose of this section:

"Capital Adequacy Ratio" means the ratio as defined by the RBI from time to time;

"Total Liabilities" means, for any date of determination, the total liabilities of the

Company on such date as the same would be determined in accordance with the

Indian GAAP at such date

"Total Net Worth” means the amount by which the Total Assets exceed the Total

Liabilities.

III. Reporting Covenants

The Company shall provide or cause to be provided to the Debenture Trustee (and to

the Debenture Holders if so requested), in form and substance reasonably

satisfactory to the Debenture Trustee, each of the following items:

(a) As soon as available, and in any event within 90 (Ninety) calendar days after the end of each Financial Year of the Company:

(i) certified copies of its audited consolidated and non-consolidated (if

any) financial statements for its most recently completed fiscal year,

prepared in accordance with Indian GAAP including its balance sheet,

income statement and statement of cash flow. All such information shall be complete and correct in all material respects and fairly

represent the financial condition, results of operation and changes in

cash flow and a list comprising all material financial liabilities of the

Company whether absolute or contingent as of the date thereof;

(ii) such additional information or documents as the Debenture Trustee

may reasonably request;

(b) As soon as available, and in any event within 30 (Thirty) calendar days after

the end of each fiscal quarter of the Company certified copies of its un-

audited consolidated and non-consolidated (if any) financial statements for its most recently completed Financial Year, prepared in accordance with

Indian GAAP including its balance sheet, income statement and statement of

cash flow. All such information shall be complete and correct in all material

respects and fairly represents the financial condition, results of operation

and changes in cash flow and a list comprising all material financial liabilities of the Company whether absolute or contingent as of the date

thereof

(c) As soon as practicable, and in any event within 5 (Five) Business Days after

the Company obtains or reasonably should have obtained actual knowledge

thereof, notice of any dispute, litigation, investigation or other proceeding affecting the Company or its property or operations, which, if adversely

determined, could result in a Material Adverse Effect.

(d) As soon as practicable, and in any event within 5 (Five) Business Days after

the Company obtains or reasonably should have obtained actual knowledge thereof, notice of any dispute, litigation, investigation or other proceeding

affecting the Company or its property or operations, which, if adversely

determined, could result in a Material Adverse Effect.



(e) As soon as practicable, and in any event within 5 (Five) Business Days after the Company obtains or reasonably should have obtained actual knowledge

thereof obtains or reasonably , notice of the occurrence of any Event of

Default or potential event of default.

(f) As soon as practicable, and in any event within 5 (Five) Business Days after

such prepayment, notice of any Indebtedness of the Company declared to be due and payable, or required to be prepaid other than by a regularly

scheduled required prepayment, prior to the stated maturity thereof.

(g) As soon as practicable, and in any event within 5 (Five) Business Days after

such default, notice of any default in the observance or performance of any agreement or condition relating to any Indebtedness or contained in any

instrument or agreement evidencing, securing or relating thereto or any

other event shall occur or condition exist, the effect of which default or other

event or condition is to cause or to permit the holder or holders of such

Indebtedness to cause (determined without regard to whether any notice is

required) any such Indebtedness to become due prior to its stated maturity.

(h) As soon as practicable and in any event within 30 (Thirty) calendar days

from the end of each fiscal quarter, deliver to the Debenture Trustee such

figures and results necessary for the Debenture Trustee or the Debenture

Holders to determine the fulfillment of the financial covenants specified

above.

(i) As soon as practicable and in any event within 30 (Thirty) calendar days of

receipt of a request, such additional documents or information as the

Debenture Trustee or the Debenture Holders, may reasonably request from

time to time.

IV. Utilization of proceeds of the Debentures

(a) To meet funding requirements of the Company and diversifying the funding sources of the Company. The funds raised by the Issue shall be utilized by

the Company solely towards the purpose as mentioned above. The Company

shall not use the proceeds of the Issue towards:

a. any capital market instrument such as equity and equity linked

instruments, any real estate business or any other capital market related

activities; or b. any speculative purposes.

V. Register of Debenture Holders

A Register of Debenture Holders shall be maintained at the registered office of the Company or with their Registrar and the Register of Debenture Holders/ the

Register of Beneficial Owners, shall be closed 7 (Seven) days prior to each interest

payment date, the final redemption date or any other payment date by acceleration.

In case of dissolution/bankruptcy/insolvency/winding up of Debenture Holders, the

debenture certificates shall be transmittable to the legal representative(s) / successor(s) or the liquidator as the case may be in accordance with the applicable

provisions of Law on such terms as may be deemed appropriate by the Company.

VI. Future Borrowings

The Company shall be entitled to borrow or raise loans or create encumbrances or

avail financial assistance in whatever form, and also issue promissory notes or

debentures or other securities, without the consent of, or intimation to the

Debenture Holders or the Debenture Trustee in this connection. However no such

borrowings will have the benefit of the security interest created over the



Hypothecated Property and granted to the Debenture Trustee and Debenture Holders under the Transaction Documents.

6.4 FURTHER ASSURANCES

The Company shall:

(i) execute and/or do, at their own expense, all such deeds, assurances,

documents, instruments, acts, matters and things, in such form and otherwise as the Debenture Trustee may reasonably or by law require or

consider necessary in relation to enforcing or exercising any of the rights

and authorities of the Debenture Trustee;

(ii) furnish to the Debenture Trustee details of all grievances received from the Debenture Holders and the steps taken by the Company to redress the

same. At the request of any Debenture Holder, the Debenture Trustee

shall, by notice to the Company call upon the Company to take

appropriate steps to redress such grievance and the Company shall

comply with the instructions of the Debenture Trustee issued in this

regard;

(iii) obtain, comply with the terms of and do all that is necessary to maintain

in full force and effect all authorisations necessary to enable it to lawfully

enter into and perform its obligations under the Transaction Documents

or to ensure the legality, validity, enforceability or admissibility in evidence in India of the Transaction Documents;

(iv) comply with:

(A) all laws, rules, regulations and guidelines (including but not

limited to environmental, social and taxation related Laws), as applicable in respect of the Debentures and obtain such regulatory

approvals as may be required from time to time, including but not

limited, in relation to the following (i) the Securities and Exchange

Board of India (Issue and Listing of Debt Securities) Regulations,

2008, as may be in force from time to time during the tenor of the Debentures ; and (ii) the provisions of the listing agreement to be

entered into by the Company with the BSE in relation to the

Debentures;

(B) the Securities and Exchange Board of India (Debenture Trustee)

Regulations, 1993 as in force from time to time, in so far as they are applicable to the Debentures and furnish to the Debenture

Trustee such data, information, statements and reports as may be

deemed necessary by the Debenture Trustee in order to enable

them to comply with the provisions of Regulation 15 thereof in

performance of their duties in accordance therewith to the extent applicable to the Debentures;

(C) the provisions of the Companies Act, 1956 in relation to the issue

of the Debentures;

(D) procure that the Debentures are rated and continued to be rated until the redemption of the Debentures; and

(v) the Company shall ensure that, at time of making any payment of interest

or repayment of the principal amount of the Debentures in full or in part,

the Company shall do so in the manner that is most tax efficient for the

Debenture Holders (including withholding tax benefit) but without, in any



way, except as provided in the Transaction Documents, requiring the Company to incur any additional costs, expenses or Taxes and the

Company shall avail of all the benefits available under any treaty

applicable to the Company and/or the Debenture Holders.

6.5 SECURITY

The Company hereby further agrees, declares and covenants with the Debenture

Trustee as follows:

(a) the Debentures shall be secured with continuing security by way of a first

ranking exclusive charge on the Hypothecated Property in favour of the

Debenture Trustee for the benefit of the Debenture Holders;

(b) that all the Assets that have been charged to the Debenture Trustee under the Deed of Hypothecation shall always be kept distinguishable and held as

the exclusive property of the Company specifically appropriated to this

security and be dealt with only under the directions of the Debenture Trustee

and the Company shall not create any charge, lien or other encumbrance

upon or over the same or any part thereof except in favour of the Debenture

Trustee nor suffer any such charge, lien or other encumbrance or any part thereof nor do or allow anything that may prejudice this security and the

Debenture Trustee shall be at liberty to incur all costs and expenses as may

be necessary to preserve this security and to maintain the same

undiminished and claim reimbursement thereof;

(c) provided that, the company may provide Loan Receivables as security to the

Debenture Trustee such that Receivables have a Security Cover Ratio of at

least 1:1 (One : One), and the Company shall ensure that the Hypothecated

receivables are sufficient to meet a Security Cover Ratio of 1:1 within 30

(Thirty) days of the Deemed Date of Allotment

(d) to provide a list of specific loan receivables / identified book debt to the

Debenture Trustee over which charge is created and subsisting by way of

hypothecation in favour of the Debenture Trustee (for the benefit of the

Debenture-holders) and sufficient to maintain the security cover on quarterly

basis within the 20th day of every calendar quarter; (e) the Company shall, on each Top-Up Date (as defined in the Deed of

Hypothecation), add fresh loan assets to the Hypothecated Property (under

the Deed of Hypothecation) so as to ensure that the value of the

Hypothecated Property is at all times equal to the Outstanding Principal

Amount.

(f) the Company shall, on a half yearly basis, as also whenever required by the

Debenture Trustee, give full particulars to the Debenture Trustee of all the

Hypothecated Property from time to time and shall furnish and verify all

statements, reports, returns, certificates and information from time to time

and as required by the Debenture Trustee and furnish and execute all necessary documents to give effect to the Hypothecated Property;

(g) the security interest created on the Hypothecated Property shall be a

continuing security as described in the Deed of Hypothecation;

(h) the Hypothecated Property shall satisfy the eligibility criteria as specified in the Transaction Documents;

(i) nothing contained herein shall prejudice the rights or remedies of the

Debenture Trustee and/ or the Debenture Holders in respect of any present

or future security, guarantee obligation or decree for any indebtedness or



liability of the Company to the Debenture Trustee and/ or the Debenture Holders; and

(j) the Debenture Holders shall have a beneficial interest in the moveable

Assets of the Company which have been charged to the Debenture Trustee to

the extent of the Outstanding Principal Amount of the Debentures;

6.6 NEGATIVE COVENANTS

Without the prior written permission of the Debenture Trustee the Company shall not take any action in relation to the items set out in Clause 3.6 of the Debenture

Trust Deed and the matters indicatively listed out below. The Debenture Trustee

shall convey its prior written approval/dissent within 15 (Fifteen) Business Days

after having received a request to give its approval provided such request is

accompanied by the relevant information substantiating the request for the

Debenture Holders to make a conscious discussion. The Debenture Trustee shall, prior to giving its written approval/ dissent to any action in relation to the items set

out below, obtain the consent of the Majority Debenture Holders and shall be bound

by the decision of the Majority Debenture Holders.

a) Change of business

Change the general nature of its business from that which is permitted as

‘Non-Banking Financial Company’ by the RBI. Change its Clauses of incorporation or organizational documents in any material way or reduce its

authorized capital.

b) Dividend

Declare or pay any dividend to its shareholders during any financial year

unless it has paid all the dues to the Debenture Holders/ Debenture Trustee

upto the date on which the dividend is proposed to be declared or paid or has

made satisfactory provisions thereof.

c) Merger, consolidation, etc.

Undertake or permit any merger, consolidation, re-organisation, scheme of arrangement or compromise with its creditors or shareholders or effect any

scheme of amalgamation or reconstruction.

d) Change of control

Issue any additional shares or equity interests and shall not have its existing

shares or equity interests transferred, sold, pledged or otherwise

encumbered.

e) Disposal of Assets

Sell, transfer, or otherwise dispose of in any manner whatsoever any material

Assets of the Company, any securitization/portfolio sale of Assets undertaken by the Company in its ordinary course of business.

f) Anti-money laundering and Exclusion List

Permit any of the Debenture proceeds to be used to fund:

(i) any form of violent political activity, terrorists or terrorist

organizations, nor any money laundering process or scheme to



disguise illegally obtained funds, nor any other criminal activity including arms sales, drug trafficking, robbery, fraud or racketeering;

or

(ii) permit any of the Debenture proceeds to be used to fund any activity

on the Exclusion List.

“Exclusion List” means any activity including 1) production or trade in any

product or activity deemed illegal under host country laws or regulations or

international conventions and agreements, or subject to international bans,

such as pharmaceuticals, pesticides/herbicides, ozone depleting substances,

PCB’s, wildlife or products regulated under CITES, 2) production or trade in

weapons and munitions, 3) production or trade in alcoholic beverages (excluding beer and wine), 4) production or trade in tobacco, 5) gambling, casinos and

equivalent enterprises, 6) production or trade in radioactive materials (this does

not apply to the purchase of medical equipment, quality control (measurement)

equipment), 7)_production or trade in unbonded asbestos fibers (this does not

apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%), 8) drift net fishing in the marine

environment using nets in excess of 2.5 km. in length, 9) production or activities

involving harmful or exploitative forms of forced labor, 10) harmful child labor,

11) production, trade, storage, or transport of significant volumes of hazardous

chemicals, or commercial scale usage of hazardous chemicals (hazardous

chemicals include gasoline, kerosene, and other petroleum products), 12) production or activities that impinge on the lands owned, or claimed under

adjudication, by indigenous peoples, without full documented consent of such

peoples.

6.7 EVENTS OF NON COMPLIANCE

The occurrence of any one of the following events shall constitute an Event of Non

Compliance ("Event of Non Compliance"):

(a) Misrepresentation

Any representation or warranty made by any Obligor in any Transaction

Document or in any certificate, financial statement or other document

delivered to the Debenture Trustee/Debenture Holders by any Obligor shall

prove to have been incorrect, false or misleading in any material respect when made or deemed made.

(b) Payment Defaults

The Company does not pay on the Due Date any amount payable pursuant to this Deed and the Debentures at the place and in the currency in which it

is expressed to be payable.

(c) Cross Default

If any Obligor: (i) defaults in any payment of any Indebtedness beyond the

period of grace (not to exceed 30 (Thirty) days), if any, provided in the

instrument or agreement under which such Indebtedness was created; or (ii)

defaults in the observance or performance of any agreement or condition

relating to any Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or

condition exist, the effect of which default or other event or condition is to

cause or to permit the holder or holders of such Indebtedness to cause



(determined without regard to whether any notice is required) any such Indebtedness to become due prior to its stated maturity; or (iii) any

Indebtedness of the Company shall be declared to be due and payable, or

required to be prepaid other than by a regularly scheduled required

prepayment, prior to the stated maturity thereof.

(d) Unlawfulness

It is or becomes unlawful for any Obligor to perform any of its obligations

under the Transaction Documents and/or any obligation or obligations of

any Obligor under any Transaction Document are not or cease to be valid,

binding or enforceable.

(e) Repudiation

The Company repudiates any of the Transaction Documents, or evidences an intention to repudiate any of the Transaction Documents.

(f) Material Litigation

Any litigation, arbitration, investigative or administrative proceeding is current, pending or threatened:

(i) to restrain the Company’s entry into, the exercise of any of the

Company’s rights under, or compliance by the Company with any of

its obligations under, the Transaction Documents; and

(ii) which the Trustee determines has a Material Adverse Effect.

(g) Cessation of business

If the Company suspends or ceases to carry on all or a material part of its

business, which has or is likely to have a Material Adverse Effect.

(h) Material Adverse Change

There shall have occurred a change in the business, operations, property,

Assets, liabilities, condition (financial or otherwise) or prospects of the

Company since the date hereof that has resulted in a Material Adverse Effect.

(i) Failure by the Company to meet standards with respect to collection quality, management, governance, internal systems and processes, and data

integrity, as may be required by the Debenture Trustee.

Consequences of occurrence of Event of Non Compliance

If one or more of Events of Non Compliance occur:

(a) the Company shall not declare any dividends, or make any other

distributions to the holders of common equity without obtaining the Debenture Trustee’s approval;

(b) the Debenture Trustee shall have the right to appoint a Nominee Director on

the board of the Company;

(c) the Company agrees to pay an additional interest rate of 2% (Two per cent)

per annum above the applicable Interest Rate on the Outstanding Principal



Amount from the date of the occurrence of the Event of Non Compliance until such Event of Non Compliance is cured; and

(d) the Company shall make weekly payment of the Interest and equal weekly

repayment of the Outstanding Principal Amount from the date of the

occurrence of the Event of Non Compliance and new schedules shall be

drawn up by the Debenture Trustee. Notwithstanding Clause 9.4 hereof, such new schedules shall be deemed to have been replaced Schedule III and

Schedule IV without the Company's consent. It is clarified that the new

Schedule III and Schedule IV shall be drawn up in such a manner to ensure

that the last payment date of an approximate 4 week period (or 5 week period

as applicable) shall fall on a Redemption Date as stipulated in the original Schedule IV.

The occurrence of any one of the following events shall constitute an Event of

Default ("Event of Default"):

(a) Non Payment by the Obligors

Non-payment any amount payable pursuant to the Transaction Documents

by the Guarantors.

(b) Continuation of Event of Non Compliance

The occurrence of an Event of Non Compliance or an event that is identical

to an Event of Non Compliance under the Collateralized Bond Issuance

Documentation, where the sum of the Outstanding Principal Amount of the Debentures and the outstanding principal of any of the CBO Debentures,

where an event that is identical to an Event of Non Compliance has occurred,

exceeds the Guarantee Cap, and such event is not remedied within 30 days

of occurrence of the Event of Non Compliance (or the event that is identical

to an Event of Non Compliance under the Collateralized Bond Issuance

Documentation).

(c) Rating Downgrade of either Guarantor

A downgrade of the rating of either Guarantor below 'A-' (or its equivalent by

a Rating Agency), and failure by the relevant Guarantor to provide a cash collateral equal to its share of the Guarantee Cap within 7 (seven) Business

Days of such downgrade.

(d) Insolvency / Inability to Pay Debts

A Guarantor is unable or admits inability to pay its debts as they fall due,

suspends making payments on any of its debts or, by reason of actual or

anticipated financial difficulties, commences negotiations with one or more of

its creditors with a view to rescheduling any of its Indebtedness.

(e) Liquidation or Dissolution of the Company / Appointment of Receiver or

Liquidator

Any corporate action, legal proceedings or other procedure or step is taken in

relation to:

(i) the suspension of payments, a moratorium of any Indebtedness,

winding-up, dissolution, administration or re-organisation (by way of

voluntary arrangement, scheme of arrangement or otherwise) of a

Guarantor;



(ii) a composition, compromise, assignment or arrangement with any creditor of a Guarantor;

(iii) the appointment of a liquidator, receiver, administrative receiver,

administrator, compulsory manager or other similar officer in respect

of a Guarantor; or

(iv) enforcement of any security over any Assets of a Guarantor or any

analogous procedure or step is taken in any jurisdiction.

Any other event occurs or proceeding instituted under any applicable Law

that would have an effect analogous to any of the events listed in sub-

Clauses (i), (ii), (iii) and (iv) above.

(f) Creditors’ Process

Any expropriation, attachment, sequestration, distress or execution affects

any Asset or Assets of a Guarantor having an aggregate value of 1% (One percent) of the Total Assets of the Guarantor and is not discharged within 30

(Thirty) calendar days or as given in the said order.

(g) Judgments Defaults

One or more judgments or decrees entered against a Guarantor involving a

liability (not paid or not covered by a reputable and solvent insurance

company), individually or in the aggregate, exceeding 1% (One percent) of the

Total Assets of the Guarantor provided such judgments or decrees are either

final and non-appealable or have not been vacated, discharged or stayed pending appeal for any period of 30 (Thirty) consecutive calendar days.

(h) Breach of Terms of this Deed

A breach by a Guarantor of any of its covenants provided in terms of this Deed or other Transaction Documents.

Consequences of occurrence of Event of Default

If one or more of Events of Default occur, the Debenture Trustee may, in their

discretion, and shall, upon request in writing of Special Majority Debenture Holders

or by a Special Resolution duly passed at the meeting of the Debenture Holders held

in accordance with the provisions set out in Schedule II hereto by a notice in writing

to the Company initiate the following course of action:

(a) to require the Company to mandatorily redeem the Debentures and repay the

principal amount on the Debentures, along with accrued but unpaid interest,

and other costs, charges and expenses incurred under or in connection with

this Deed and other Transaction Documents;

(b) to declare all or any part of the Debentures to be immediately (or on such

dates as the DebentureTrustee may specify) due and payable, whereupon it

shall become so due and payable within 2 (two) Business Days;

(c) to enforce the Guarantee or any security created pursuant to the Deed of

Hypothecation in accordance with its terms, as may be set out herein or therein, towards repayment of the Debentures;

(d) to appoint any independent agency to inspect and examine the working of the

Company and give a report to Debenture Holders/ the DebentureTrustee.

The Company shall to give full co-operation and provide necessary assistance to such agency and bear all costs and expenses of the examination including

the professional fees and travelling and other expenses;



(e) to take all such other action expressly permitted under this Deed or in the

other Transaction Documents or permitted under the Law;

(f) to exercise such other rights as the Debenture Trustee may deem fit under

applicable Law to protect the interest of the Debenture Holders; and/or

7. APPLICATION AND ISSUE PROCEDURE

Issue:

Issue of the Debentures of the face value Rs.5,00,000/- (Rupees Five Lakhs Only) on a private placement basis not open for public subscription.

Who Can Apply

Only the Eligible Investors who are specifically addressed through a communication by or

on behalf of the Company directly are eligible to apply for the Debentures. An application made by any other person will be deemed as an invalid application and rejected. In order to

subscribe to the Debentures a person must be either

a. Commercial Banks, Eligible Financial Institutions* and Insurance Companies;

b. Companies;

c. Non-Banking Finance Companies (NBFCs) and Residuary NBFCs and d. Mutual Funds

e. Foreign Institutional Investors

f. Provident Funds , Gratuity, Superannuation & Pension Funds, subject to their

Investment guidelines

g. Any other investor authorised to invest in these Debentures

*Eligible Financial Institution means such financial institutions from whom monies borrowed even under an unsecured debenture would not constitute a ‘deposit’ within the meaning of the term as defined under Section 2(b) of the Companies (Acceptance Of Deposits) Rules, 1975.

a. Application by Scheduled Commercial Banks/ Eligible Financial Institutions

The application must be accompanied by certified true copies of (i) Board Resolution

authorising investments or letter of authorization or Power of Attorney and (ii) specimen

signatures of authorized signatories.

b. Application by Insurance Companies

The applications must be accompanied by certified true copies of (i) Memorandum and

Articles of Association/Constitution/Bye-laws, (ii) Resolution authorising investment and

containing operating instructions, (iii) Specimen signatures of authorised signatories and

(iv) Form 15 AA for claiming exemption from deduction of Tax on the interest income (including interest on application money), if applicable.

c. Applications by Corporate Bodies/ Companies/ Statutory Corporations/ NBFCs

and RNBCs

The applications must be accompanied by certified true copies of (i) Memorandum and

Articles of Association (ii) resolution authorizing investment and containing operating

instructions, and (iii) specimen signatures of authorized signatories.

d. Application by Mutual Funds



(i) a separate application can be made in respect of each scheme of an Indian mutual fund register red with SEBI and that such applications shall not be treated as

multiple applications.

(ii) the applications made by the asset management companies or custodians of a

Mutual Fund shall clearly indicate the name of the concerned scheme for which

application is being made.

(iii) The applications must be accompanied by certified true copies of (i) SEBI

registration certificate and trust deed (ii) resolution authorizing investment and

containing operating instructions and (iii) specimen signatures of authorized

signatories.

DISCLAIMER: PLEASE NOTE THAT ONLY THOSE PERSONS TO WHOM THIS

INFORMATION 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 COMPANY. THE COMPANY 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 COMPANY 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 COMPANY IS NOT, IN ANY

WAY, DIRECTLY OR INDIRECTLY, RESPONSIBLE FOR ANY STATUTORY OR REGULATORY BREACHES BY ANY INVESTOR, NEITHER IS THE COMPANY REQUIRED TO CHECK OR

CONFIRM THE SAME. INFORMATION CONTAINED HEREIN OR PROVIDED TO

DEBENTUREHOLDERS SUBSEQUENTLY MAY BE NOT BE PUBLIC INFORMATION AND

MAY ONLY BE USED FOR THE PURPOSE FOR WHICH IT WAS DISCLOSED.

How to Apply

Application(s) for the Debentures must be made by submitting the Application Form which

must be completed in block letters in English.

Application Forms must be accompanied by either a demand draft or cheque, drawn or

made payable in favour of “Indian School Finance Company Private Limited”, payable at

Mumbai and crossed Account Payee only. The payment can also be made by Real Time Gross Settlement (RTGS) by crediting the funds to the account given below:

Beneficiary Name Indian School Finance Company Private Limited

Bank Account No. 00812790000804

IFSC Code HDFC0000081

Bank Name HDFC Bank Limited

Branch Address Himayath Nagar, Hyderabad

The applications must be accompanied by certified true copies of (i) a letter of authorization,

and (ii) specimen signatures of authorised signatories.



Instructions For Application

1) Application Forms must be completed in BLOCK LETTERS IN ENGLISH. A blank

must be left between two or more parts of the name.

2) Signatures should be made in English.

3) Minimum application shall be for 200 (Two Hundred) Debenture and in multiples of

1 (one) Debenture(s) thereafter.

4) The Debentures are being issued at par to the face value. Full amount has to be paid

on application per Debenture applied for. Applications for incorrect amounts are liable to be rejected. Face Value: Rs. 5,00,000/-.

5) Cheques/drafts must be made in the favour of “INDIAN SCHOOL FINANCE

COMPANY PRIVATE LIMITED” and crossed “Account Payee only” payable at

Hyderabad. Money orders or postal orders will not be accepted. The payments can

be made by RTGS, the details of which are given above.

6) No cash will be accepted.

7) The Applicant should mention its permanent account number or the GIR number

allotted to it under the Income Tax Act, 1961 and also the relevant Income-tax

circle/ward/District.

8) Applications under Power of Attorney/Relevant Authority

In case of an application made under a power of attorney or resolution or authority

to make the application a certified true copy of such power of attorney or resolution or authority to make the application and the Memorandum and Articles of

Association and/or bye-laws of the Investor must be attached to the Application

Form at the time of making the application, failing which, the Company 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 therefore. Further any

modifications / additions in the power of attorney or authority should be notified to the Company at its registered office. Names and specimen signatures of all the

authorised signatories must also be lodged along with the submission of the

completed application.

9) An application once submitted cannot be withdrawn. The applications should be submitted during normal banking hours at the corporate office of the Company,

mentioned below:

502, KLJ Towers,

Netaji Subhash Place, Pitampura,

Delhi – 110034

10) The applications would be scrutinised and accepted as per the terms and conditions

specified in this Information Memorandum.

11) The Company is entitled at its sole and absolute discretion to accept or reject any application, in part or in full without assigning any reason whatsoever. Any

application, which is not complete in any respect, is liable to be rejected.

12) Applicants residing or situate at places other than in Mumbai, may send their

application along with cheques or demand drafts to the address mentioned above.

The demand drafts must be payable at par at Bangalore. The demand draft charges will have to be borne by the Applicant.



13) The Investor/Applicant shall apply for the Debentures in electronic, i.e., dematerialised form only. Applicants should mention their Depository Participant’s

name, DP-ID and Beneficiary Account Number in the Application Form. In case of

any discrepancy in the information of Depository/Beneficiary Account, the Company

shall be entitled to not credit the beneficiary’s demat account pending resolution of

the discrepancy.

The Applicant is requested to contact the office of the Company as mentioned above for any

clarifications.

Succession

In case the investor is an individual, in the event of the demise of a registered Debenture

Holder or the first holder in the case of joint holders, the Company will recognize the

executor or administrator of the deceased Debenture Holder or the holder of succession

certificate or other legal representative of the deceased Debenture Holder as having title to

the Debenture. The Company shall not be bound to recognize such executor, administrator or holder of the succession certificate unless such a person obtains probate or letter of

administration or is the holder of succession certificate or other legal representation, as the

case may be, from a Court in India having jurisdiction over the matter and delivers a copy

of the same to the Company. The Company may at its absolute discretion, where it thinks

fit, dispense with the production of the probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled

to the Debenture standing in the name of the deceased Debenture Holder on production of

sufficient documentary proof or indemnity. In case the Debentures are held by a person

other than an individual, the rights in the Debenture shall vest with the successor

acquiring interest therein, including a liquidator or such any person appointed in

accordance with or under the law.

Over and above the aforesaid terms and conditions, the Debentures, if any issued under

this Information Memorandum, shall be subject to this Information Memorandum, the

relevant debenture trust deed and also be subject to the provisions of the Memorandum

and Articles of Association of the Company.

Option to Subscribe

The Company has made arrangements for issue and holding of the Debentures in

dematerialized form.

Nomination Facility

The Company does not offer any nomination facility to the investors of the Debentures

issued under this Information Memorandum.

Right to accept or reject applications

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

application in part or in full, without assigning any reason. Incomplete Application Forms

are liable to be rejected. The entire subscription amount for Debentures applied for must be

submitted along with the Application Form. Also, in case of over subscription, the Company reserves the right to increase the size of the placement subject to necessary

approvals/certifications, and the basis of allotment shall be decided by the Company.

Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will

be dispatched within 7 working 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.

Interest on Application Money

Interest on the application money (if any) at the applicable coupon, will be paid via interest

cheques / credit to the allottees’ bank account. Such interest will be paid for the period commencing from the date of realization of the cheque(s) / draft(s) up to but excluding the

Deemed Date of Allotment. The interest cheques / instruction to credit allottees’ bank

account for interest payable on application money will be dispatched by Registered Post /

courier / hand delivery on or before the working day of the Deemed Date of Allotment. It is

clarified that interest shall not be paid on invalid and incomplete applications. Tax exemption certificates, if applicable, in respect of non-deduction of tax at source on interest

on application money must be submitted along with the Application Form.

For applicants whose applications have been refunded/rejected or allotted in part, interest

on their refundable application money (if any) will be dispatched within 7 working days of

Issue closure and the Company shall ensure adequate funds for the same. Interest will be computed at applicable rate, on refundable application money from the date of realization of

cheque/draft/ RTGS inflow to the date of dispatch by the Company.

The interest on application money (if any) will be computed on 365 days a year basis.

Allotment Intimation The Company has made necessary arrangements with the National Securities Depository

Limited (NSDL) for the issue of these Debentures in electronic (dematerialised) form. The

investors holding these Debentures in the electronic (dematerialised) form will be governed as per the provisions of the Depository Act, 1996, Securities and Exchange Board of India

(Depositories and Participants) Regulations, 1996, rules notified by NSDL from time to time

and other laws and rules notified in respect thereof. Investors should mention their NSDL

depository participant’s name, DP-ID and beneficiary account number at the appropriate

place in the Application Form. The Company shall take reasonable steps to credit the beneficiary account of the allotee(s), with the NSDL depository participant as mentioned in

the Application Form, with the number of Debentures allotted. The applicant is responsible

for the correctness of its details given in the Application Form vis-à-vis those with its

depository participant. In case the information is incorrect or insufficient, the Company

would not be liable for losses, if any. The Company shall credit the letter(s) of allotment in

electronic form to the demat account of the investors as per the details furnished in the Application Form. The allotment intimation will be sent to the allottee(s). This allotment

intimation should neither be construed as a letter(s) of allotment nor as a credit advice; and

hence it is non-transferable/non-transmittable and not tradable. The Company will

dispatch the allotment intimation to allottee(s) within 2 working days of the Deemed Date of

Allotment and credit the investor(s) demat account with the investor(s) depository participant within 7 working days from Deemed Date of Allotment.

After completion of all legal formalities, the securities held by the investor, under the ISIN

representing the letter(s) of allotment shall be converted into Debentures as per the

procedure laid down by NSDL in this behalf.

The Company shall request the Depository to provide a list of beneficial owners. This shall

be the list, which shall be considered for payment of interest, repayment of principal, etc. as

the case may be.

Register of Debentures holder(s)

A register of all Debenture Holder(s) containing necessary particulars will be maintained by

the Company at its Registered Office. A copy of the register of all Debenture Holder(s) will

also be maintained by the Company at its Corporate Office.



Transfer / Transmission

The Debentures shall be freely transferable subject to law. Further, any dispute in regard to

the sale, transfer or assignment of any Debentures or in respect to any principal/interest

claim, shall be settled between the transferor(s) and the transferee(s), and the Company

shall not be liable in this regard in any manner, whatsoever.

(a) Debentures held in Physical Form

Request for registration of transfer along with the Debentures /letter(s) of allotment

and proper transfer documents with appropriate stamp duty should be sent to the Registered Office of Company. The transferee shall also intimate the name, address

and wherever necessary, authority to purchase the Debentures. The Company on

verification and if satisfied with the documents shall register the transfer on its

books.

(b) Debentures held in Electronic (Dematerialised) Form

Debentures held in electronic form (dematerialized) form shall be transferred subject

to and in accordance with the rules / procedures as prescribed by the NSDL/

depository participant of the transferor/ transferee and any the law and rules

notified in respect thereof.

Authority for the Placement

This private placement of Debentures is being made pursuant to the resolution of the Board

of Directors passed at its meeting held on July 11, 2014 which has approved the placement

of Debentures up to Rs. 12.00 Crores. The borrowings under these Debentures will be within the prescribed limits as aforesaid.

The Company can carry on its existing activities and future activities planned by it in view

of the existing approvals, and no further approvals from any Government Authority are

required by the Company to carry on its said activities.

Security

The Debentures would be secured by creation of floating exclusive charge on the specific

receivables with a cover of 1.0 (one) time of the principal amount, on the terms and

conditions as may be agreed with the Debenture Trustee and as defined in the Debenture Trust Deed and the relevant security creation documents.

Record Date

The list of beneficial owner(s), provided by the Depository 7 working days in advance of any

payment, shall be used to determine the name(s) of person(s) to whom amount is to be paid.

Effect of Holidays

Should the interest or principal payment date fall on a day which is not a Business Day, the preceding Business Day shall be considered as the effective date(s) for that payment.

Tax Deduction at Source

Tax as applicable under the Income Tax Act, 1961 will be deducted at source. Tax exemption certificate/document, under Section 195(3) or Section 197(1) of the Income Tax

Act, 1961, if any, must be lodged at the office of the Company before the payment date. Tax

exemption certificate for interest on application money, if any, should be lodged along with

the Application Form. If any payments under this issuance is subject to any tax deduction

other than such amounts as are required as per current regulations existing as on the date



of the Debenture Trust Deed, including if the Company shall be required legally to make any payment for Tax from the sums payable under the Debenture Trust Deed, (“Tax

Deduction”), the Company shall make such Tax Deduction, and shall simultaneously pay to

the Debenture Holders such additional amounts as may be necessary in order that the net

amounts received by the Debenture Holders after the Tax Deduction shall equal the

respective amounts which would have been receivable by the Debenture Holders in the

absence of such Tax Deduction.

Redemption on Maturity of Debenture

Payment on redemption will be made by way of credit through RTGS system/ funds transfer

in the name of Debenture Holder(s) whose names appear on the list of beneficial owners setting out the relevant beneficiaries’ name and account number, address, bank details and

depository participant’s identification number given by the Depositories to the Issuer and

the Registrar as on the payment date. All such Debentures will be simultaneously redeemed

through appropriate debit corporate action.

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). Such payment will be a legal discharge of the liability of

the Issuer towards the Debenture Holder(s). On such payment being made, the Issuer will

inform NSDL and accordingly the account of the Debenture Holder(s) with NSDL will be

adjusted.

The Issuer's liability to the Debenture Holder(s) towards all their rights including for

payment or otherwise shall cease and stand extinguished from the due dates of redemption

in all events.

Further the Issuer will not be liable to pay any compensation from the dates of such

redemption. On the Issuer dispatching the amount as specified above in respect of the Debentures, the

liability of the Issuer shall stand extinguished.

Compliance Officer

The Investor may contact the Company in case of any pre-issue / post-issue related problems such as non-receipt of letters of allotment / Debenture certificates / refund

orders / interest cheques.

Sharing of Information

The Issuer shall as required by 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.

Debenture Holder not a Shareholder

The Debenture Holder(s) will not be entitled to any of the rights and privileges available to

the shareholders of the Issuer. 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.

Splitting and Consolidation

Splitting and consolidation of the Debentures is not applicable in the demat mode form

since the saleable lot is one Debenture.

Notices



All notices to the Debenture Holder(s) required to be given by the Company shall be sent to the Debenture Holder(s) at the address stated in the Application Form, or at the address as

notified by the Debenture Holder(s) from time to time. In case of Debentures held in

electronic (dematerialised) form, notices will be sent to those whose names appear on the

last list of beneficial owner(s), provided to the Company by Depository (ies)

All notices to the Company by the Debenture Holder(s) must be sent by registered post or by hand delivery to the Company at its Corporate Office or to such person(s) at such

address as may be notified by the Company from time to time.

Debentures to Rank Pari-Passu

The Debentures of this Issue shall rank pari-passu inter-se without preference or priority of

one other or others.

Payments at Par

Payment of the principal, all interest and other monies will be made to the registered

Debenture Holder(s)/ beneficial owner(s) and in case of joint holders to the one whose name

stands first in the register of Debenture Holder(s) / in the list of beneficial owner(s) provided

to the Company by the Depository (NSDL). Such payments shall be made by RTGS. If it is

not possible to make a payment through RTGS, the payment may be made by any method permitted by law for such a payment (including by national electronic funds transfer or

through the electronic clearing system).

The Company upon request from the investor, as stated above, may make the interest and

principal payment through RTGS.

Right to Re-Purchase and Re-Issue Debenture(s)

Repurchase of the Debentures by the Company shall only be with Majority Consent.

Prepayment of Debentures

Prepayment of the Inrepid Debentures by the Company shall only be with Majority Consent.

An amount of 0.25% of the Outstanding Principal Amount shall be payable by the Issuer to

the Debenture-holders as prepayment premium.

Future Borrowing

The Company shall be entitled to make further issue of secured non-convertible debentures

and/or raise term loans or raise further funds, in any manner as deemed fit by the

Company, from time to time from any persons/banks/financial institutions/body corporate or any other agency as per the prevailing guidelines/regulations of Reserve Bank of India

and other authorities. However, until the Debentures for which the Debenture Trustee have

agreed to act as trustee, are fully redeemed, the Company shall not create any mortgage or

charge on any of its properties on which security has been created by the Company in

favour of the Debenture Trustee or the said assets or properties without obtaining prior

written approval of the Debenture Trustee.

Tax Benefits

There are no specific tax benefits attached to the Debentures. Investors are advised to

consider the tax implications of their respective investment in the Debentures.

Trustees

IDBI Trusteeship Services Limited has agreed to act as the trustees for and on behalf of the

Debenture Holder(s). The Debenture Holder(s) shall, by signing the Application Form and



without any further act or deed, be deemed to have irrevocably given their consent to the trustees or any of their agents or authorized officials to do inter-alia all acts, deeds and

things necessary in respect of or relating to the security to be created for securing the

Debentures being offered on the terms and conditions of the private placement. All the

rights and remedies of the Debenture Holder(s) shall vest in and shall be exercised by the

said trustees without having it referred to the Debenture Holder(s).

Loss of Letter(s) of Allotment / Principal and Interest Payment Instruments

Loss of letter(s) of allotment and/ or principal payment instrument / interest payment

instrument should be intimated to the Company along with the request for issue of a

duplicate letter(s) of allotment/ payment instrument(s). If any letter(s) of allotment/ payment instrument(s) is lost, stolen, or destroyed, then upon production of proof thereof,

to the satisfaction of the Company and upon furnishing such indemnity, as the Company

may deem adequate and upon payment of any expenses incurred by the Company in

connection thereof, new letter(s) of allotment / payment instrument(s) shall be issued. A fee

will be charged by the Company, not exceeding such sum as may be prescribed by law.

Debentures subject to the Information Memorandum, Debenture Trust Deed, etc.

Over and above the aforesaid terms and conditions, the Debentures, issued under this

Information Memorandum, shall be subject to prevailing guidelines/regulations of Reserve

Bank of India and other authorities and also be subject to the provisions of the

Memorandum and Articles of Association of the Company and all documents to be entered into by the Company in relation to the issue of Debentures including this Information

Memorandum, the Debenture Trust Deed and the Deed of Hypothecation, as applicable

(“Transaction Documents”).

Governing Law

The Debentures are governed by and will be construed in accordance with the Indian Law.

The Company and Company’s obligations under the Debentures shall, at all times, be

subject to the directions of Department of Company Affairs, RBI, SEBI and Stock Exchanges and other applicable regulations from time to time. Applicants, by purchasing

the Debentures, agree that the High Court of Judicature at Bangalore shall have exclusive

jurisdiction with respect to matters relating to the Debentures.

Others

The Company shall at all times during the term of the Debentures comply with the

representations, warranties, financial covenants, undertakings of the Issuer under the

Transaction Documents.

Conflict

In case of any repugnancy, inconsistency or where there is a conflict between the conditions

as are stipulated in this Information Memorandum and any of the Transaction Documents

to be executed by the Company, the provisions as contained in the Debenture Trust Deed

shall prevail and override the provisions of such Transaction Document.

Listing

The Issuer shall list the Debentures at the WDM segment of the Bombay Stock Exchange

(BSE) within 30 (Thirty) days from the Deemed Date of Allotment and maintain continuous

listing till the term of the Debentures. The Debenture Trustee shall release such amount to the Issuer after the listing shall be completed and only with Majority Consent.



8. UNDERTAKINGS AND DECLARATIONS BY THE ISSUER

The Issuer undertakes that:

It will provide a compliance certificate duly certified by the Debenture Trustee

to the Debenture holders, (on a yearly basis), in respect of compliance with the terms and

conditions of Issue as contained in this Information Memorandum;

Every credit rating obtained shall be periodically reviewed by the Rating Agency and any

revision in the rating shall be promptly disclosed by the Issuer to the Stock Exchange. Any change in rating shall be promptly disseminated to Debenture holders and prospective

Investors in such manner as the Stock Exchange may determine from time to time;

All information and reports on the Debentures, including compliance reports filed by the

Issuer and the Debenture Trustee, shall be disseminated to the Debenture holders and the general public by placing them on the website of the Issuer and the Trust Deed shall

provide, that the Debenture Trustee place the same on its website; and

This Information Memorandum is compliant with all disclosures required to be made for

listing of non- convertible debentures on a private placement basis on a recognized stock exchange, as specified by Applicable Law.

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 Information

Memorandum 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 Information Memorandum is as applicable to privately placed debt securities and subject to

information available with the Issuer. The extent of disclosures made in the Information

Memorandum is consistent with disclosures permitted by regulatory authorities to the issue

of securities made by the companies in the past.

Compliance Officer Authorised Signatory

Date: 23rd July, 2014

Place: New Delhi



ANNEXURE 1: CREDIT RATING LETTER FROM RATING AGENCY





ANNEXURE 2: CONSENT LETTER FROM DEBENTURE TRUSTEE



ANNEXURE 3: APPLICATION FORM

INDIAN SCHOOL FINANCE COMPANY 502, KLJ Towers,

Netaji Subhash Place, Pitampura,

Delhi - 110034

APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE

DEBENTURES ("Debentures")

ISSUE OPENS ON: July 23, 2014 ISSUE CLOSING ON: July 25, 2014

Date of Application __________

Dear Sirs,

Having read and understood the contents of the Information Memorandum, I/We apply for

allotment to me/us of the Debentures. The amount payable on application as shown below

is remitted herewith. On allotment, please place my/our name(s) on the Register of

Debenture Holders under the issue. I/We bind myself/ourselves by the terms and

conditions as contained in the Memorandum of Private Placement.

DEBENTURES APPLIED FOR (Rs. 500,000/- per debenture)____________________

FOR ISSUER’S USE ONLY

Amount (Rs.) (in figures)

Date of clearance of cheque

Amount (Rs.) (In words)

PARTICULARS OF DP ID

RTGS/Cheque/Fund Transfer/ Demand Draft drawn on (Name of Bank and Branch)

Cheque/Demand Draft No./UTR No. in case of RTGS/

A/c no in case of FT

RTGS/Cheque/ Demand Draft/ fund transfer Date

DP ID No.

Client ID No.

Tax status of the Applicant (please tick one) 1. Non Exempt 2. Exempt under Self-declaration Under Statute Certificate from I.T. Authority

PAYMENT PREFERENCE (select one) We apply as (tick whichever is applicable)

1. Financial Institution 7. Mutual Fund

Cheque Draft RTGS Payable at ________________



2. Company 8. Religious/Charitable Trust 3. Insurance Company 9.Provident/Superannuation/Gratuity Fund 4. NBFC/ RNBFC 10. Commercial Bank/RRB/Co-op.Bank/UCB 5. Body Corporate 11. Society 6. FII APPLICANT’S NAME IN FULL:

Tax payer’s PAN or GIR No. if allotted

IT Circle/ Ward/ District

MAILING ADDRESS IN FULL (Do not repeat name) (Post Box No. alone is not sufficient)

Pin

Tel

Fax

CONTACT PERSON

NAME DESIGNATION TEL. NO. FAX NO. Email

TO BE FILLED IN BY THE APPLICANT

Name of the Authorized Signatory(ies)

Designation Signature

……………………………………………..…TEAR ……………………………..................................

APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES ACKNOWLEDGEMENT SLIP Received from _________________________________ an application for _____________ debentures under Series __ Address_______________________________________ cheque/ draft No.________________ dated _______________ _____________________________________________ Drawn on __________________________________________ _________________________________________ For Rs. (in figures)____________________________________ _______________ Pin Code ______________________ for Rs. (in words) ____________________________________



Application must be completed in full BLOCK LETTERS IN ENGLISH except in case of

signature. Applications, which are not complete in every respect, are liable to be rejected.

1. Payments must be made by RTGS or cheque marked ‘A/c Payee only’ or bank draft

drawn in favour of “Indian School Finance Company Private Limited” and as per the

following details:

Beneficiary Name Indian School Finance Company Private Limited

Bank Account No. 00812790000804

IFSC Code HDFC0000081

Bank Name HDFC Bank Limited

Branch Address Himayath Nagar, Hyderabad

Cheque or bank draft should be drawn on a scheduled bank payable at Hyderabad

2. In cases of PF, Pension Fund, Gratuity Fund etc., exemption from TDS shall be

granted against Income Tax Recognition Certificate granted by Income Tax Authorities. In case of mutual funds, exemption from TDS shall be granted only

against Certificate u/s 10(23D) of the Income Tax Act or self-declaration made by

the Investors in Form 15G (in Duplicate).

3. A copy of the Application Form along with relevant documents should be forwarded

to the Registered Office of the Issuer to the attention of Mr. Ankur Agarwal on the

same day the application money is deposited in the Bank. A copy of PAN Card must accompany the application.

4. In the event of Debentures offered being over-subscribed, the same will be allotted in

such manner and proportion as may be decided by the Issuer.

5. The Debentures shall be issued in demat form only and subscribers may carefully

fill in the details of Client ID/ DP ID. 6. In the case of application made under Power of Attorney or by limited companies,

corporate bodies registered societies, trusts etc., following documents (attested by

Company Secretary /Directors) must be lodged along with the application or sent

directly to the Issuer at its Registered Office to the attention of Mr. Ankur Aggarwal

along with a copy of the Application Form.

a. Certificate of Incorporation and Memorandum & Articles of Association; b. Resolution of the Board of Directors and identification of those who have

authority to operate;

c. Power of attorney granted to its managers, officers or employees to transact

business on its behalf;

d. Any officially valid document to identify the trustees, settlers, beneficiaries

and those holding Power of Attorney; e. Certificate of registration;

f. Telephone Bill;

g. PAN (otherwise exemption certificate by IT authorities).

7. The attention of applicants is drawn to Sub-Section (i) of Section 68-A of the Companies Act, 1956, which is reproduced below:

“Any person who

a. make in a fictitious name an application to a Corporation for acquiring for

any shares therein; or

b. otherwise induces a Corporation to allot or register any transfer of shares

therein to him or any other person in fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

8. The applicant represents and confirms that it has understood the terms and

conditions of the Debentures and is authorised and eligible to invest in the same

and perform any obligations related to such investment.

9. Interest on application money will be payable at the rate of 14.25% per annum from the date on which such application monies are realized by the Issuer till the day

prior to the allotment date and the interest amount shall be paid immediately on

allotment. Interest on application monies shall not be payable if the date on which

such funds are realized by the Issuer and Date of Allotment (or the deemed date of

Allotment) are the same.



ANNEXURE 4: IN-PRINCIPLE APPROVAL FROM BSE



ANNEXURE 5: AUDITED FINANCIALS

