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Information Memorandum dated November 18, 2020 Private & ConfidentialFor Private Circulation Only

(This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus)

No: ____________Addressed to: Punjab National Bank

INFORMATION MEMORANDUMSONATA FINANCE PRIVATE LIMITED

A Privatelimited company incorporated under the Companies Act, 1956Date of Incorporation:April 06,1995

Registered Office: II Floor, CP. 1, PG. Towers, Kursi Road, Vikas Nagar, Lucknow, Uttar Pradesh - 226026, India

Website: https://sonataindia.com/

Information Memorandum dated November 18, 2020for issue of Debentures on a private placement basis

Background

This Information Memorandum is related to the Debentures (as defined hereinafter) to be issued by Sonata Finance Private Limited(the “Issuer” or “Company”) on a private placement basis and contains relevant information and disclosures required for the purpose of issuing of the Debentures. The issue of the Debentures comprised in the Issue and described under this Information Memorandum has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on June 26, 2020and the Board of Directors of the Issuer on September 22, 2020and the Memorandum and Articles of Association of the Company.Pursuant to the resolution passed by the Company’s shareholders dated June 26, 2020in accordance with provisions of the Companies Act, 2013, the Company has been authorised to borrow by way of issuance of NCDs, upon such terms and conditions as the Board may think fit, for amounts up to INR 500 Crores(RupeesFiveHundredCroresOnly) which is within the overall limit of Rs. 2300 Crores (Rupees Twenty Three Hundred Crores Only) under section 180 (1) (c) of the Companies Act, 2013. The present issue of NCDs in terms of this Information Memorandum is within the overall powers of the Board.

General Risks

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

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Issue of 100 (one hundred)senior, secured,rated, listed, redeemable, transferable, taxable, non-convertible debentures of face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each, aggregating up to Rs. 10,00,00,000/- (Rupees Ten Crores Only) on a private placement basis (the “Issue”).

https://sonataindia.com/



Issuer’s Absolute Responsibility

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

Credit Rating

The Debentures proposed to be issued by the Issuer have been rated by ICRA Ratings.The Rating Agency has, vide its letter dated November09, 2020assigned a rating of “BBB/(Stable)”in respect of the Debentures. The above rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other ratings. Please refer to Annexure II of this Information Memorandum for the letter dated November 09, 2020from the Rating Agency assigning the credit rating abovementioned and disclosing the rating letter adopted for the aforesaid rating.

Issue Schedule

Issue/ Bid Opening Date: November 18, 2020Issue/ Bid Closing Date: November 18, 2020

Pay-in Date:November 19, 2020Deemed Date of Allotment: November 19, 2020

The Issuer reserves the right to change the Issue Schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue shall be open for subscription during the banking hours on each Business Day from the Issue Opening Date to the Issue Closing Date (both days inclusive).

The Debentures are proposed to be listed on the wholesale debt market segment of BSE Limited within 20 Business Days from Deemed Date of Allotment.

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Debenture TrusteeCatalyst Trusteeship LimitedAddress: Windsor, 6th Floor, Office No. 604, C.S.T. Road, Kalina, Santacruz (East), Mumbai - 400098, India Phone No.: 02249220555

Registrar & Transfer Agent

NSDL Database Management Limited (NDML) Address: 4th Floor, Trade World, A Wing Kamala Mills Compound, Mumbai, 400 013 IndiaPhone No: 02224994200



TABLE OF CONTENTS

SECTION 1: DEFINITIONS AND ABBREVIATIONS 4SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS 7SECTION 3: RISK FACTORS 11SECTION 4: FINANCIAL STATEMENTS 16SECTION 5: REGULATORY DISCLOSURES 17SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT 66SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS 67SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS 87SECTION 9: DECLARATION 98SECTION 10: UNDERTAKING FOR CREATION OF SECURITY98ANNEXURE I: TERM SHEET 100ANNEXURE II: RATING LETTER 100ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE 102ANNEXURE IV: LAST AUDITED FINANCIAL STATEMENTS 103ANNEXURE V: ILLUSTRATION OF BOND CASH FLOWS 114ANNEXURE VI: DIRECTORSHIP DETAILS 115

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SECTION 1: DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Information Memorandum.

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

Application Form The form used by the recipient of this Disclosure Document and/or the Private Placement Offer Cum Application Letter, to apply for subscription to the Debentures.

Applicable Law Shall include any statute, law, by-law, regulation, ordinance, rule, judgment, order, decree, clearance, approval, directive, guideline, policy, requirement, or other governmental restriction or any similar form of decision, or determination by, or any interpretation or administration of any of the foregoing by a Governmental Authority.

Arranger/ Sole Arranger Northern Arc Capital Limited.Board/Board of Directors The Board of Directors of the Issuer.Business Day Any day of the week (excluding Sundays and any other day which

is a ‘public holiday’ for the purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881)) on which banks are normally open for business in Mumbai and New Delhi and “Business Days” shall be construed accordingly.

CDSL Central Depository Services (India) Limited.Client Loan Each loan made by the Issuer as a lender, and “Client Loans” shall

refer to the aggregate of such loans.Debentures / NCDs 100 (one hundred) senior, secured, rated, listed, redeemable,

transferable, taxable, non-convertible debentures of face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each, aggregating up to Rs. 10,00,00,000/- (Rupees TenCrores Only)

Debenture Holder(s) / Investors

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

Deemed Date of Allotment November19, 2020.Debenture Trustee Catalyst Trusteeship Limited.Debenture Trustee Agreement

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

Debenture Trust Deed Shall mean the trust deed executed/to be executed by and between the Debenture Trustee and the Company which will set out the terms upon which the Debentures are being issued and shall include the representations and warranties and the covenants to be provided by the Issuer.

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

Depositories Act The Depositories Act, 1996, as amended from time to time.Depository A Depository registered with SEBI under the SEBI (Depositories

and Participant) Regulations, 1996, as amended from time to time.Depository Participant / DP A depository participant as defined under the Depositories ActDirector(s) Director(s) of the Issuer.Disclosure Document / This document which sets out the information regarding the

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Information Memorandum Debentures being issued on a private placement basis.DP - ID Depository Participant Identification Number.Due Date Any date on which the holders of the Debentures are entitled to any

payments, whether on maturity or earlier, on exercise of the option to redeem the Debentures prior to the scheduled Maturity Date or acceleration.

EFT Electronic Fund Transfer.Electronic Platform/BSE EBP Platform

Means electronic bidding platform provided by BSE Limited for privateplacement of securities

EBP / Electronic Book Provider

Means a recognized stock exchange(s), which pursuant to obtaining approval rom SEBI, provides an electronic bidding platform for private placement ofsecurities.

EBP Guidelines Means the guidelines / circular/ direction as may be prescribed / updated by SEBI from time to time, in relation to EBP.

Electronic Book Mechanism/ EBM

Means the mechanism for EBP as prescribed and updated by BSE from time to time

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

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

Governmental Authority Any government (central, state or otherwise) or any governmental agency, semi-governmental or judicial or quasi-judicial or administrative entity, department or authority, agency or authority including any stock exchange or any self-regulatory organization, established under Applicable Law.

Hypothecated Assets All the right, title, interest, benefit, claims and demands of the Issuer, in, to, or in respect of the receivables arising out of rupee loan facilities advanced / to be advanced by the Issuer to any person and charged under the terms of this Issue.

Hypothecation Agreement The hypothecation agreement entered/to be entered into between the Issuer and the Debenture Trustee, pursuant to which hypothecation over Hypothecated Assets shall be created by the Issuer in favour of the Debenture Trustee (acting for and on behalf of the Debenture Holder(s)).

Issue Private placement of the Debentures in terms of the Private Placement Offer Letter issued by the Issuer and/ or this Disclosure Document.

Issue/ Bid Closing Date November18, 2020.Issue/ Bid Opening Date November18, 2020.Issuer/ Company SonataFinancePrivate Limited.Majority Debenture Holder(s)

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

Maturity Date May19, 2022,being18months from the Deemed Date of Allotment, on which the final payment of the principal of the Debentures becomes due and payable.

N.A./ NA Not Applicable.NBFC Non-banking financial companyNSDL National Securities Depository Limited.

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Operational Guidelines Means the guidelines for EBP as prescribed and updated by BSE from time to time

PAN Permanent Account Number.Private Placement Offer Cum Application Letter

Shall mean the private placement offer cum application letter prepared and issued to the eligible investors by the Company in compliance with Section 42 of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.

RBI Reserve Bank of India.Rating Agency ICRA Limited, being a credit rating agency registered with SEBI

pursuant to SEBI (Credit Rating Agencies) Regulations 1999, as amended from time to time.

Record Date The date which will be used for determining the Debenture Holder(s) who shall be entitled to receive the amounts due on any Due Date, which shall be the date falling 7 (seven) calendar days prior to any Due Date.

R&T Agent Registrar and Transfer Agent to the Issue, in this case being NSDL Database Management Limited.

ROC Registrar of Companies.Rs. / INR Indian Rupee.RTGS Real Time Gross Settlement.SEBI Securities and Exchange Board of India constituted under the

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

SEBI Debt Listing Regulations

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

Security The security for the Debentures as specified in Section 5.21.TDS Tax Deducted at Source.The Companies Act/ the Act The Companies Act, 2013 or where applicable, the provisions of the

Companies Act, 1956, still in force.Terms & Conditions Shall mean the terms and conditions pertaining to the Issue as

outlined in the Transaction Documents.Transaction Documents Shall mean the documents executed or to be executed in relation to

the issuance of the Debentures as more particularly set out in Section 5.21.

WDM Wholesale Debt Market.Wilful Defaulter Shall mean an Issuer who is categorized as a wilful defaulter by any

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

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SECTION 2: NOTICE TO INVESTORS AND DISCLAIMERS

2.1 ISSUER’S DISCLAIMER

This Information Memorandum is neither a prospectus nor a statement in lieu of a prospectus and should not be construed to be a prospectus or a statement in lieu of a prospectus under the Companies Act. The issue of the Debentures is being made strictly on a private placement basis. The Debentures shall be unlisted at the time of the issuance and shall be listed within 20 days the Wholesale Debt Market Segment (WDM) of BSE.Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated as such. This Information Memorandum does not constitute and shall not be deemed to constitute an offer or invitation to subscribe to the Debentures to the public in general.

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

This Information Memorandum has been prepared in conformity with the SEBI Debt Listing Regulations as amended from time to time and the applicable RBI circulars governing private placements of debentures by NBFCs. This Information Memorandum has been prepared solely to provide general information about the Issuer to the eligible investors to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This Information Memorandum does not purport to contain all the information that any eligible investor may require. Further, this Information Memorandum has been prepared for informational purposes relating to this transaction only and upon the express understanding that it will be used only for the purposes set forth herein.

Neither this Information Memorandum nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and the recipient of this Information Memorandum should not consider such receipt as a recommendation to subscribe to any Debentures. Each potential investor contemplating subscription to any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyse such investment and the suitability of such investment to such potential investor’s particular circumstances.

The Issuer confirms that, as of the date hereof, this Information Memorandum (including the documents incorporated by reference herein, if any) contains all the information that is material in the context of the Issue and regulatory requirements in relation to the Issue and is accurate in all such material respects. No person has been authorized to give any information or to make any representation not contained or incorporated by reference in the Private Placement Offer Cum Application Letter or 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 Issuer certifies that the disclosures made in this Information Memorandum and/or the Private Placement Offer Cum Application Letter are adequate and in conformity with the SEBI Debt Listing Regulations. Further, the Issuer accepts no responsibility for statements made otherwise than in the Information Memorandum or any other material issued by or at the instance of the Issuer and anyone placing reliance on any source of information other than this Information Memorandum would be doing so at its own risk.

This Information Memorandum, the Private Placement Offer Cum Application Letter and the contents hereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the Issuer and only such recipients are eligible to apply for the Debentures. All investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of this Information Memorandum and/or the Private Placement Offer Cum Application Letter are

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

No invitation is being made to any person other than those to whom Application Forms along with this Information Memorandum and the Private Placement Offer Cum Application Letter being issued have been sent. Any application by a person to whom the Information Memorandum and/or the Private Placement Offer Cum Application Letter has not been sent by the Issuer shall be rejected without assigning any reason.

The person who is in receipt of this Information Memorandum and/or the Private Placement Offer Cum Application Letter shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents hereof without the consent of the Issuer. The recipient agrees to keep confidential all information provided (or made available hereafter), including, without limitation, the existence and terms of the Issue, any specific pricing information related to the Issue or the amount or terms of any fees payable to us or other parties in connection with the Issue. This Information Memorandum and/or the Private Placement Offer Cum Application Letter may not be photocopied, reproduced, or distributed to others at any time without the prior written consent of the Issuer. Upon request, the recipients will promptly return all material received from the Issuer (including this Information Memorandum) without retaining any copies hereof. If any recipient of this Information Memorandum and/or the Private Placement Offer Cum Application Letter decides not to participate in the Issue, that recipient must promptly return this Information Memorandum and/or the Private Placement Offer Cum Application Letter and all reproductions whether in whole or in part and any other information statement, notice, opinion, memorandum, expression or forecast made or supplied at any time in relation thereto or received in connection with the Issue to the Issuer.

The Issuer does not undertake to update the Information Memorandum and/or the Private Placement Offer Cum Application Letter to reflect subsequent events after the date of Information Memorandum and/or the Private Placement Offer Cum Application Letter and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer.

Neither the delivery of this Information Memorandum and/or the Private Placement Offer Cum Application Letter nor any sale of Debentures made hereafter shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof.

This Information Memorandum and/or the Private Placement Offer Cum Application Letter does not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. No action is being taken to permit an offering of the Debentures or the distribution of this Information Memorandum and/or the Private Placement Offer Cum Application Letter in any jurisdiction where such action is required. Persons into whose possession this Information Memorandum comes are required to inform themselves about and to observe any such restrictions. The Information Memorandum is made available to potential investors in the Issue on the strict understanding that it is confidential.

2.2 DISCLAIMER CLAUSE OF SOLE ARRANGER

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

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

The Sole Arranger has not conducted any due diligence review on behalf or for the benefit of the Debenture Trustee or any of the Debenture Holders. Each of the Debenture Holders should conduct such due diligence on the Issuer and the Debentures as it deems appropriate and make its own independent assessment thereof.

Distribution of this Information Memorandum and/or the Private Placement Offer Letter does not constitute a representation or warranty, express or implied by the Sole Arranger that the information and opinions herein will be updated at any time after the date of this Information Memorandum and/or the Private Placement Offer Letter. The Sole Arranger does not undertake to notify any recipient of any information coming to the attention of the Sole Arranger after the date of this Information Memorandum and/or the Private Placement Offer Letter. No responsibility or liability or duty of care is or will be accepted by the Sole Arranger for updating or supplementing this Information Memorandum and/or the Private Placement Offer Letter nor for providing access to any additional information as further information becomes available.

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

The Sole Arranger is acting for the Company in relation to the Issue of the Debentures and not on behalf of the recipients of this Information Memorandum and/or the Private Placement Offer Letter. The receipt of this Information Memorandum and/or the Private Placement Offer Letter by any recipient is not to be constituted as the giving of investment advice by the Sole Arranger to that recipient, nor to constitute such a recipient a customer of the Sole Arranger. The Sole Arranger is not responsible to any other person for providing the protection afforded to the customers of the Sole Arranger nor for providing advice in relation to the Debentures.

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

i. each recipient has been afforded an opportunity to request and to review and has received all additional information considered by the recipient to be necessary to verify the accuracy of or to supplement the information contained herein; and

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

2.3 DISCLAIMER CLAUSE OF STOCK EXCHANGES

As required, a copy of this Information Memorandum shall be filed with the BSEin terms of the SEBI Debt Listing Regulations. It is to be distinctly understood that submission of this Information Memorandum to the BSEshould not in any way be deemed or construed to mean that this Information Memorandum has been reviewed, cleared, or approved by the BSE; nor does the BSE in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum, nor does the BSE warrant that the Issuer’s Debentures will be listed or will continue to

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be listed on the BSE; nor does the BSE take any responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or any scheme or project of the Issuer.

2.4 DISCLAIMER CLAUSE OF SEBI

As per the provisions of the SEBI Debt Listing Regulations, it is not stipulated that a copy of this InformationMemorandumhas to be filed with or submitted to the SEBI for its review / approval. 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 and that this Issue is not recommended or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any proposal for which the Debentures issued thereof is proposed to be made or for the correctness of the statements made or opinions expressed in this Information Memorandum.

2.5 DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is made in India to investors as specified under the clause titled “Eligible Investors” of this Information Memorandum, who shall be/have been identified upfront by the Issuer. This Information Memorandum and/or the Private Placement Offer Cum Application Letter does not constitute an offer to sell or an invitation to subscribe to Debentures offered hereby to any person to whom it is not specifically addressed. Any disputes arising out of this Issue will be subject to the exclusive jurisdiction of the courts and tribunals at Mumbai. This Information Memorandum and/or the Private Placement Offer Cum Application Letter does not constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction.

2.6 DISCLAIMER IN RESPECT OF RATING AGENCIES

Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. The Rating Agency has based its ratings on information obtained from sources believed by it to be accurate and reliable. The Rating Agency does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by the Rating Agency have paid a credit rating fee, based on the amount and type of bank facilities/instruments.

2.7 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.

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SECTION 3: RISK FACTORS

The following are the risks relating to the Company, the Debentures and the market in general envisaged by the management of the Company. Potential investors should carefully consider all the risk factors in this Information Memorandum and/or the Private Placement Offer Cum Application Letter for evaluating the Company and its business and the Debentures before making any investment decision relating to the Debentures. The Company believes that the factors described below represent the principal risks inherent in investing in the Debentures, but do not represent that the statements below regarding risks of holding the Debentures are exhaustive. The ordering of the risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. Investors should also read the detailed information set out elsewhere in this Information Memorandum and/or the Private Placement Offer Cum Application Letter and reach their own views prior to making any investment decision.

3.1 REPAYMENT IS SUBJECT TO THE CREDIT RISK OF THE ISSUER.

Potential investors should be aware that receipt of the principal amount, (i.e. the redemption amount) and any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer. Potential investors assume the risk that the Issuer will not be able to satisfy their obligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures may not be made or may be substantially reduced or delayed.

3.2 THE SECONDARY MARKET FOR DEBENTURES MAY BE ILLIQUID.

The Debentures may be very illiquid and no secondary market may develop in respect thereof. Even if there is a secondary market for the Debentures, it is not likely to provide significant liquidity. Potential Investors may have to hold the Debentures until redemption to realize any value.

3.3 CREDIT RISK & RATING DOWNGRADE RISK

The Rating Agency has assigned the credit ratings to the Debentures. In the event of deterioration in the financial health of the Issuer, there is a possibility that the Rating Agency may downgrade the rating of the Debentures. In such cases, potential investors may incur losses on revaluation of their investment or may need to make provisions towards sub-standard/ non-performing investment as per their usual norms.

3.4 CHANGES IN INTEREST RATES MAY AFFECT THE PRICE OF NCDS.

All securities where a fixed rate of interest is offered, such as this Issue are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing economy, are likely to have a negative effect on the pricing of the Debentures.

3.5 TAX CONSIDERATIONS AND LEGAL CONSIDERATIONS

Special tax considerations and legal considerations may apply to certain types of investors. Potential Investors are urged to consult with their own financial, legal, tax and other advisors to determine any financial, legal, tax and other implications of this investment.

3.6 ACCOUNTING CONSIDERATIONS

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Special accounting considerations may apply to certain types of taxpayers. Potential investors are urged to consult with their own accounting advisors to determine implications of this investment.

3.7 SECURITY MAYBE INSUFFICIENT TO REDEEM THE DEBENTURES

While the debt securities are secured to the tune of 125% of the principal amount or as per the terms of Information Memorandum/ Debenture Trust Deed , in favour of Debenture Trustee, it is the duty of the Debenture Trustee to monitor that the security is maintained, however, the recovery of 100% of the amount shall depend on the market scenario prevalent at the time of enforcement of the security. In the event that the Company is unable to meet its payment and other obligations towards Investors under the terms of the Debentures, the Debenture Trustee may enforce the Security as per the terms of security documents, and other related documents. The Investor’s recovery in relation to the Debentures will be subject to (i) the market value of such secured property, (ii) finding willing buyers for the Security at a price sufficient to repay the potential Investors amounts outstanding under the Debentures. The value realised from the enforcement of the Security may be insufficient to redeem the Debentures.

3.8 MATERIAL CHANGES IN REGULATIONS TO WHICH THE ISSUER IS SUBJECT COULD IMPAIR THE ISSUER’S ABILITY TO MEET PAYMENT OR OTHER OBLIGATIONS.

The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any changes in the regulatory framework could adversely affect the profitability of the Issuer or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise.

3.9 LEGALITY OF PURCHASE

Potential investors of the Debentures will be responsible for the lawfulness of the acquisition of the Debentures, whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates or for compliance by that potential investor with any law, regulation or regulatory policy applicable to it.

3.10 POLITICAL AND ECONOMIC RISK IN INDIA

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

3.11 RISKS RELATED TO THE BUSINESS OF THE ISSUER

A. If the Issuer is unable to control the level of non-performing loans (“NPAs”) in the future, or if the Issuer’s loan loss reserves are insufficient to cover future loan losses, the financial condition and results of operations may be materially and adversely affected.

The Client Loans are secured against hypothecation of stock, receivables and other current assets and the clients of these loans are of the high-risk category. There is uncertainty on the client’s ability to fulfil its loan obligations. Such non-performing or low credit quality loans can negatively impact our results of operations.

As on June 30, 2020, the gross NPA was Rs. 20.85crores on a gross portfolio of Rs. 1649.49

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Crores (including managed/securitized portfolio of Rs. 465.38 Crores).

The Issuer cannot assure that the Issuer will be able to effectively control and reduce the level of NPAs in its total loan portfolio. The amount of the Issuer’s reported non-performing loans may increase in the future as a result of growth in the total loan portfolio, and also due to factors beyond the Issuer’s control. Failure to manage NPAs or effect recoveries will result in operations being adversely affected.

The Issuer’s current loan loss reserves may not be adequate to cover an increase in the amount of NPAs or any future deterioration in the overall credit quality of the Issuer’s total loan portfolio. As a result, if the quality of the Issuer’s total loan portfolio deteriorates the Issuer may be required to increase the loan loss reserves, which will adversely affect the Issuer’s financial condition and results of operations.

B. The Issuer’s business operates through a large number of rural and semi urban branches and is exposed to operational risks including fraud

The Issuer is exposed to operational risks, including fraud, petty theft and embezzlement, as it handles a large amount of cash due to high volume of small transactions. This could harm its operations and its financial position.

As the Issuer handles a large amount of cash through a high volume of small transactions taking place in its network, the Issuer is exposed to the risk of fraud or other misconduct by its employees or outsiders. These risks are further compounded due to the high level of delegation of power and responsibilities that the Issuer’s business model requires. Given the high volume of transactions processed by the Issuer, certain instances of fraud and misconduct may go unnoticed before they are discovered and successfully rectified. Even when the Issuer discovers such instances of fraud or theft and pursue them to the full extent of the law or with its insurance carriers, there can be no assurance that the Issuer will recover any such amounts. In addition, the Issuer’s dependence upon automated systems to record and process transactions may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect.

The Issuer maintains an internal audit process to ensure the operations team follows the defined procedures and reports any deviations to the operations staff and management team. The Issuer also has a strong MIS system that has a wide range of data that can be used to monitor financial and operational performance.

To mitigate the above risk, the Issuer maintains an internal audit process to ensure the operations team follows the defined procedures and reports any deviations to the operations staff and management team. The Issuer also has a MIS system able to generate data analysis that can be used to monitor financial and operational performance.

C. Loans due within two years account for almost all of the Issuer’s interest income, and a significant reduction in short term loans may result in a corresponding decrease in its interest income

A majority of the loans the Issuer issues are due within approximately two years of disbursement. The relatively short-term nature of the Issuer’s loans means that the Issuer’s long-term interest income stream is less certain than if a portion of its loans were for a longer term. In addition, the Issuer’s customers may not obtain new loans from the Issuer upon maturity of their existing loans, particularly if competition increases. The potential instability of the Issuer’s interest income could materially and adversely affect the Issuer’s results of operations and financial position.

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The loans given by the issuer are at fixed interest rate, and the tenor of the underlying asset has increased from one year to two year which has provided stability to the portfolio and interest income and has also smoothened operating expense.

D. The Issuer is exposed to certain political, regulatory and concentration of risks

Due to the nature of its operations, the Issuer is exposed to political, regulatory and concentration risks. The Issuer believes a mitigant to this is to expand its geographical reach and may consequently expand its operations other states. If it is not effectively able to manage such operations and expansion, it may lose money invested in such expansion, which could adversely affect its business and results of operations.

E. Large scale attrition, especially at the senior management level, can make it difficult for the Issuer to manage its business.

If the Issuer is not able to attract, motivate, integrate or retain qualified personnel at levels of experience that are necessary to maintain the Issuer’s quality and reputation, it will be difficult for the Issuer to manage its business and growth. The Issuer depends on the services of its executive officers and key employees for its continued operations and growth. In particular, the Issuer’s senior management has significant experience in the microfinance and financial services industries. The loss of any of the Issuer’s executive officers, key employees or senior managers could negatively affect its ability to execute its business strategy, including its ability to manage its rapid growth. The Issuer’s business is also dependent on its team of personnel who directly manage its relationships with its members. The Issuer’s business and profits would suffer adversely if a substantial number of such personnel left the Issuer or became ineffective in servicing its members over a period of time. The Issuer’s future success will depend in large part on its ability to identify, attract and retain highly skilled managerial and other personnel. Competition for individuals with such specialized knowledge and experience is intense in this industry, and the Issuer may be unable to attract, motivate, integrate or retain qualified personnel at levels of experience that are necessary to maintain its quality and reputation or to sustain or expand its 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 the Issuer to manage its business and growth and to meet key objectives.

F. The Issuer’s business and results of operations would be adversely affected by strikes, work stoppages or increased wage demands by employees

The employees are not currently unionized. However, there can be no assurance that they will not unionize in the future. If the employees unionize, it may become difficult to maintain flexible labour policies, and could result in high labour costs, which would adversely affect the Issuer’s business and results of operations.

G. The Issuer’s insurance coverage may not adequately protect it against losses. Successful claims that exceed its insurance coverage could harm the Issuer’s results of operations and diminish its financial position

The Issuer maintains insurance coverage of the type and in the amounts that it believes are commensurate with its operations and other general liability insurances. The Issuer’s 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 the Issuer does 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 the Issuer on acceptable terms. A successful assertion of one or more large claims against the Issuer that exceeds its available insurance coverage or results in changes in its insurance policies, including premium increases or the imposition of a larger deductible or co-insurance requirement, could adversely affect the Issuer’s business, financial condition and results of operations.

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H. Issuer requires certain statutory and regulatory approvals for conducting business and failure to obtain or retain them in a timely manner, or at all, may adversely affect operations.

NBFCs in India are subject to strict regulation and supervision by the RBI. The Issuer requires certain approvals, licenses, registrations and permissions for operating its business, including registration with the RBI as a NBFC pursuant to Section 45-IA of the RBI Act, 1934. Further, such approvals, licenses, registrations and permissions must be maintained/renewed over time, applicable requirements may change and the Issuer may not be aware of or comply with all requirements all of the time. In particular, the Issuer is required to obtain a certificate of registration for carrying on business as a NBFC-MFI that is subject to numerous conditions.Additionally, RBI has issued detailed directions on prudential norms inter alia prescribing guidelines on income recognition, asset classification and provisioning requirements applicable to NBFCs, exposure norms, disclosures in the balance sheet, requirement of capital adequacy, restrictions on investments in land and building and unquoted shares besides others. In addition, its branches are required to be registered under the relevant shops and establishments laws of the states in which they are located. The shops and establishments laws regulate various employment conditions, including working hours, holidays and leave and overtime compensation. If the Issuer fails to obtain or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, its business may be adversely affected. If the Issuer fails to comply, or a regulator claims that it has not complied, with any of these conditions, the Issuer’s certificate of registration may be suspended or cancelled, and it shall not be able to carry on such activities. If the Issuer fails to comply with any directions issued applicable on NBFCs and fails to maintain the status of NBFC it may attract penal provisions under the RBI Act, 1934 for non-compliance. The penal action can also result in RBI cancelling the certificate of registration issued to the NBFC.

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SECTION 4: FINANCIAL STATEMENTS

The audited financial statements of the Issuer for the FY ended 2020 are set out in Annexure IV hereto.

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SECTION 5: REGULATORY DISCLOSURES

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.

5.1 Documents Submitted to the Exchanges

The following documents have been / shall be submitted to 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. Certified true copy of the resolution passed by the shareholders of the Company at the

extraordinarygeneralmeeting held on June 26, 2020authorizing the issue/offer of Debentures by the Company;

E. Certified true copy of the resolution passed by the Board of Directors in its meeting held onSeptember 22, 2020authorizing the borrowing and list of authorized signatories;

F. Certified true copy of the resolution passed by the Company at the extraordinarygeneral meeting held on June 26, 2020authorising the Company to borrow by way of issuance of NCDs, upon such terms as the Board may think fit, upto an aggregate limit of INR 500 Crores- (Rupees Five HundredCroresOnly) which is within the overall limit of Rs. 2300 Crores (Rupees Twenty Three Hundred Crores Only) under section 180 (1) (c) of the Companies Act, 2013 and for creation of Security thereof upto an amount not exceeding INR 2,530 Crores (Rupees Two Thousand Five Hundred and Thirty Crores Only);

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

H. Where applicable, an undertaking that permission / consent from the prior creditor for a second or paripassu charge being created, in favour of the trustees to the proposed issue has been obtainedand

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

J. An undertaking that permission / consent from the prior creditor for a second or paripassu charge being created, where applicable, in favor of the trustees to the proposed issue has been obtained.

K. The issuer shall give an undertaking in the Information Memorandum that the assets on which charge is created are free from any encumbrances and in cases where the assets are already charged to secure a debt, the permission or consent to create a second or pari-passu charge on the assets of the issuer has been obtained from the earlier creditor.”

5.2 Documents Submitted to Debenture Trustee

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

allotment of the Debentures;B. Copy of last 3 (three) years audited annual reports;

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C. Statement containing particulars of, dates of, and parties to all material contracts and agreements;

D. Latest audited / limited review half yearly consolidated (wherever available) and standalone financial information (profit & loss statement, balance sheet and cash flow statement) and auditor qualifications, if any.

E. An undertaking to the effect that the Issuer would, until the redemption of the debt securities, submit the details mentioned in point (D) above to the Debenture Trustee within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015, as amended from time to time, for furnishing / publishing its half yearly/ annual result. Further, the Issuer shall within 180 (One Hundred and Eighty) calendar days from the end of the financial year, submit a copy of the latest annual report to the Debenture Trustee and the Debenture Trustee shall be obliged to share the details submitted under this clause with all ‘Qualified Institutional Buyers’ and other existing debenture-holders within 2 (two) working days of their specific request.

5.3 Name and Address of Registered Office of the IssuerName: Sonata Finance Private Limited

Registered Office of Issuer: II Floor, CP-1, PG Tower,Vikas Nagar, KursiRoad,Lucknow - 226 026, Uttar Pradesh, India

Corporate Office of Issuer: II Floor, CP-1, PG Tower, Vikas Nagar, Kursi Road, Lucknow - 226 026, Uttar Pradesh, India

Compliance Officer of Issuer:

Mrs.PaurviSrivastava, Company Secretary

CEO of Issuer: Mr.Anup Kumar Singh

CFO of Issuer: Mr.Akhilesh Singh

Registration Number: 035286

Corporate Identification Number:

U65921UP1995PTC035286

Phone No.: +91-8400333464

Fax No: NA

Contact Person: Mrs.PaurviSrivastava, Company Secretary

Email: [email protected]/cs @sonataindia.com

Website of Issuer: https://sonataindia.com/

Name and address of auditors of the Issuer:

S.R. BATLIBOI & ASSOCIATES LLP2nd & 3rd FloorGolf View Corporate Tower - BChartered Accountants Sector - 42, Sector RoadGurugram - 122 002, Haryana, India

Name and address of trustee to the Issue:

Catalyst Trusteeship LimitedAddress: Windsor, 6th Floor, Office No. 604, C.S.T. Road, Kalina, Santacruz (East), Mumbai - 400098India

Name and address of registrar to the Issue:

NSDL Database Management LimitedAddress: 4th Floor, Trade World A Wing, Kamala Mills Compound, SenapatiBapatMarg, Lower Parel, Mumbai – 400 013.

Name and address of ICRA Limited

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mailto:[email protected]/



creditratingagencyof the Issue

1105, Kailash Building, 11th Floor,26, Kasturba Gandhi Marg, New Delhi - 110 001

Name and address of arrangers, if any, of the Issue:

Not Applicable

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

A. Overview

SonataFinance Private Limited (“the company”)isa private limited company incorporated in India. The company was registered as a non-deposit accepting non-banking finance company (‘NBFC-ND’) with the Reserve Bank of India(‘RBI’) and has got classified as a Non-Banking Financial Company – Micro Finance Institution (‘NBFC-MFI’) with effect from December 3, 2013. The company is engaged in empowerment of poor women by providing micro credit for Income Generation Programs both in rural and urban areas. As ofJune 2020, the companyisoperating in Bihar, Haryana, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Uttar Pradesh, Uttarakhandwith a gross portfolio outstanding of 1649.49 Cr, managed₹ through a network of 443 branches.

B. Corporate Structure/Organization Structure

C. Brief profile of the Board of Directors of the Issuer

Name of the Director Designation ExperienceAnup Kumar Singh CEO and

Managing Director

Mr.Anup Kumar Singh is one of the pioneers in Microfinance sectors having more than 21 years of experience to his credit. He is the promoter, MD and CEO of Sonata. He had earlier led Cashpor since its inception in 1997. He played a significant role in the establishment of Cashpor's operations in Eastern Uttar Pradesh. While with Cashpor, he was involved in key strategic areas such as new product

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development, portfolio management, and various other challenges faced by the company. In 2005, he decided to use his complementary skills and experience in an entrepreneurial venture and approached Bellwether Micro Finance Fund with idea to start a new microfinance institution in Central Uttar Pradesh. This was the genesis of Sonata Finance.

Educational BackgroundMasters degree in Economics& Sociology, a Postgraduate Diploma in Rural Development and Management, and MBA in Finance.

Anal Kumar Jain Independent Director

Mr. Anal Jain has over 42 years of experience in top management positions in major international and Indian IT firms including over 8 years of experience in the field of Microfinance. Among his key accomplishments are leading Wipro Infotech's marketing to IT Industry's leading status, building and leading IBM's business in India after their re-entry into the country, and starting and leading Sun Microsystems business in India. Starting his career in early 1970s with IBM India, Anal has been a part of the India IT story - steering companies through unchartered waters. Anal was Vice President - Marketing with ORG Systems, Vice President - Sales & Marketing with Wipro InfoTech, Head - Domestic Businesses of IBM India, President - South Asia of Sun Microsystems India, Chairman & CEO of Linc Software Systems, CEO of Birlasoft Ltd, Managing Director - South Asia for Network Appliance India. He has been active in the field of Microfinance for over 8 years. He has been Advisor to Sa-Dhan, the National Microfinance Industry Association. He was formerly Co-Founder and Managing Director of MicroVentures India, a Private Equity fund focused on the Indian Microfinance industry.

Educational BackgroundB.Tech. (Electrical Engineering) from IIT Kharagpur, M.S. (Electrical Engineering) and Research Fellowship from Brooklyn Polytechnic, New York City, USA

Pradip Kumar Saha Independent Director

Mr.Pradip Kumar Saha was the former Chief General Manager of Small Industries Development Bank of India (SIDBI) and has more than 37 years of experience in Development banking. He started his banking career with IDBI and then with SIDBI till his retirement in December 2013. During his long career in IDBI and SIDBI, he has discharged diverse responsibilities in the areas of Project Finance, Asset Recovery, Human Resources Management, MSME credit and Micro Finance etc.

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At the time of his retirement, he was heading SIDBI Foundation for Micro Credit (SFMC) and Promotion and Development Department of the Bank.

Kenneth Dan Vander Weele Nominee Director

Mr. Vander Weele is currently the Chief Investment Officer of Creation Investments. He is a founding board member for Creation Investments Social Ventures Fund I and was instrumental in the establishment of Creation Investments. Prior to Creation Investments, Mr.Weele was the President of the Investment Services Division at Opportunity International, a global microfinance network. In this role, Mr. Vander Weele was responsible for the development and oversight of all commercial MFIs institutions within the network, garnering over $1 billion in assets over his tenure.

Educational BackgroundBachelor’s in Business Administration from the University of Wisconsin, Madison and Ph.D. from the Open University of the U.K.

Sethuraman Ganesh Independent Director

Shri S. Ganesh is a former Principal Chief General Manager of Reserve Bank of India, with 3 decades’ Pan India experience, including 10 years at senior management level. Currently, he holds the position of Independent Director on the Board of Sonata Finance Pvt Ltd., an NBFC MFI based at Lucknow and has served as a Non-Executive Director on the board of BSS Microfinance Pvt. Ltd. at Bengaluru. In addition, he is a Member of the Advisory Board of Sanskriti University, Mathura and the Infimind Institute of Skill Development LLP, Bengaluru. He is also a Career Advisory Council Member at ISBR College, Bengaluru.

RanganathanVaradarajanDilip Kumar Nominee Director

Mr.Dilip has been with SIDBI Venture Capital Limited (“SVCL”) since its inception in 1999 and was part of the core team which set up SIDBI Ventures, SIDBI Trustee Company and National Venture Fund for Software & IT Industry. He represents SVCL on the boards of some of their portfolio companies, where he plays an active role in building up systems and processes, strengthening financial management and corporate governance. Prior to joining SVCL in 1999, Dilip was with SIDBI for nearly 8 years with experience in credit appraisal, accounts and audit functions.

Educational BackgroundPost Graduate in Commerce and Economics, AICWA, CS (Inter), PGDBA and CAIIB

Sanjay Goyal Nominee Director Mr. Sanjay Goyal is Chief General Manager at SFMC, SIDBI, Head Office, Lucknow. He has over 32 years of experience in the field of Commercial and Development Banking and worked in different

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positions & places including Regional Head of Mumbai, Faridabad and New Delhi.

Educational BackgroundPost Graduate in Commerce, CAIIB and PGDBF

Benoit Marie Luc Monsaingeon Nominee Director

Mr.Monsaingeon has previously worked with Bank of America for 9 years post which he joined Paribas and exercised executive responsibilities in Spain, Gabon, Luxembourg, the Netherlands and Greece and from 2000 (merger between Paribas and BNP) until 2006 he has been heading BNP Paribas in Portugal. Post retiring from BNP Paribas in early 2007, he launched and chaired an association called Micro Finance Sans Frontières – MFSF - developing volunteer technical assistance in favor of MFIs around the world (Africa, Asia, Central and South America, Europe).

Educational BackgroundMBA in Economics, Paris University

Aditya Mohan Nominee Director

Mr.Aditya has nearly a decade of experience in inclusive finance and is currently Senior Investment Officer for Asia at Triodos Investment Management where he oversees a portfolio of debt and equity investments that includes financial institutions and Agri-enterprises. He earlier served as an Investment Officer at BlueOrchard Finance, where he managed a debt portfolio of financial institutions in South and East Asia. Aditya began his career in microfinance as a Product Manager with Ujjivan Small Finance Bank in Bangalore, India.

Educational BackgroundMasters in Business Administration from Erasmus University, Rotterdam.

Saurabh Kumar Johri Nominee Director

Saurabh is Chief Finance Officer (CFO) at Caspian, responsible for managing finance and accounting, fund raising, financial control/risk. Prior to joining Caspian, Saurabh has total of 20 years of experience, having worked with Jana Small Finance bank in areas of Equity raise, Financial Planning, Treasury mid-office and Business Analytics. Prior to Jana, Saurabh was with Infosys Technologies Limited for more than 12 years working in a variety of roles in corporate strategy, program management and technology implementation.

Educational BackgroundBachelor’s in Technology from Institute of Technology, Varanasi, and Masters’ in Business Administration from Fisher College of Business, Ohio State University, USA

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D. Brief profile of the senior management of the Issuer

MANAGEMENT DETAILSName Designation ExperienceMr Anup Kumar Singh Managing

DirectorMr. Anup Kumar Singh is one of the pioneers in India’s microfinance sector with more than 20years of experience to his credit. He is presently serving as the Managing Director of the company. Before starting the company, Mr. Anup underwent training with Grameen Bank in Bangladesh. Mr. Singh was associated more than 8 years with the Cashpor group of Companies, and was acting as an ex-officio chief executive. He holds a Master’s degree in Economics & Sociology, a Postgraduate Diploma in Rural Development and Management, and a MBA in Finance.

Mr. Anil Kumar Singh Chief Business Advisor

He is a specialist in Micro Finance with an extensive experience of more than 38 years in this field throughout his career till date. He Joined Sonata on 6th June 2019 as Chief Business Advisor.

Previously he was associated with UP Regional Office (RO) of NABARD as a Chief General Manager since quite a long time. He was involved with Policy framing and advocacy, development of new products and processes of Micro Finance and their implementation, including ambitious programme of digitization of SHGs. He also has considerable experience in promotion and linkage of SHGs, JLGs and other groups with credit agencies at the grass root level.He is a dignified person with masters in Science along with certification from CAIIB.

Mr Shrikant Bhargava Chief Financial Advisor

He has a rich experience of 40 years in Banking Industry. He was Ex-GM of Union Bank of India. He is contributing to Sonata in various verticals as Chief Financial Advisor.

Mr.Akhilesh Singh Chief Financial Officer

He has over 18 years of progressive experience in global Microfinance Industry, Supporting Financial Institutions in financial sustainability, budgeting, accounting, fund acquirement and management. In the Banking & Financing Sector encompassing functional areas of Retail Banking (SME Lending), Credit Administration, Marketing/ Business Development as well as Relationship Management. He has worked with more than 50 small to medium size MFIs and Banks in South Asia, South East Asia, and Africa, countries including India, Sri Lanka, Nepal, Bangladesh, The Philippines, Vietnam, Myanmar, and Mozambique. For the past 10 years (2007-2017) he has been working with MicroSave (Global consulting company) as Specialist and Group Leader – Microfinance. Before Microsave he has worked for Cashpor Micro Credit for more than 8 years. His

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Academic background include MDP programme from IIM Ahmedabad & and is a Certified Expert in SME Finance from Frankfurt School of Finance and Management, Germany. He holds an Advanced Diploma in Rural Technology Development & Management from Institute of Engineering and Rural Technology, India. Currently working as Chief Fnancial officer of the Company.

Mr.Sneh Deep Agnihotri Chief Risk Advisor

Ex GM – SBI: Mr. Sneh Deep Agnihotri has joined Sonata as Chief Risk Advisor from 16 Jan 2018 at Head Office, Lucknow.

He has rich &valuable experience of 35 years in banking industry. He has retired as General Manager-Risk Audit in credit & Operational areas from State Bank of India, Lucknow. He has rich business insight & achievements in the banking sector in diverse range of functions across various geographical locations. He will head Risk & BDDepartment.

He is post graduate in science stream in Inorganic Chemistry from Kanpur University. He also holds certifications in CAMS (Certified Anti Money Laundering from CAMS Specialist Association and Certification on KYC & AML CFT from Indian Institute of Banking and Finance. He has also attended workshops on Ponzi scheme at Multi-disciplinary School of Economic Intelligence held by National Academy of customs, excise and Narcotics.

Mr Bramha Nand SVP & FinanceHead

He has more than 17+ years of experience in the microfinance and has been working with Sonata since its inception. He has a versatile experience spanning across managing Risk, Technology, Strategic leadership, Business Planning and Data Analysis, Treasury Planning, Fund mobilization and utilization, working capital management, Accounting, Taxation, and optimization of overall cost of the fund. He manages the entire resourcing for the company encompassing borrowings from Banks/DFIs/FIs, NCDs, ECB, Portfolio Securitization etc.He is a CA (Intermediate), M.Com, and LLB (Professional).

Mr.Devendra Singh Chief Complinace Officer

He is a qualified F.C.S (Fellow Company Secretary) with more than 30 years of post-qualification experience. He is proficient in the areas of corporate laws, Account, Finance, legal documentation & IPO compliances & is well versed in handling the due diligence. His professional qualification includes FCS from I.C.S.I. & LLB Professional. He is graduate in Commerce from University of Lucknow.

Mr. Ankur Agarwal Chief Officer-Legal & Corporate Affairs

He is a qualified F.C.S (Fellow Company Secretary) with more than 19 years of post-qualification experience. He has made valuable contributions in IFCI, Sahara India Group and has also played a pivotal role in

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establishing a propriety legal firm Talk Laws. His professional qualification include FCS from I.C.S.I, LLB, M.Com & B.Com from Kanpur University.

Mr.Davendra Singh Chief Complinace Officer

He is a qualified F.C.S (Fellow Company Secretary) with more than 30 years of post-qualification experience. He is proficient in the areas of corporate laws, Account, Finance, legal documentation & IPO compliances & is well versed in handling the due diligence. His professional qualification includes FCS from I.C.S.I. & LLB Professional. He is graduate in Commerce from University of Lucknow.

Mr. Ankur Agarwal Chief Officer-Legal & Corporate Affairs

He is a qualified F.C.S (Fellow Company Secretary) with more than 19 years of post-qualification experience. He has made valuable contributions in IFCI, Sahara India Group and has also played a pivotal role in establishing a propriety legal firm Talk Laws. His professional qualification include FCS from I.C.S.I, LLB, M.Com & B.Com from Kanpur University.

Mohd. Saif Khan Chief Operation Head - BC

He is an MBA with specialization in Finance. He has more than 15 years experience in MFI sector

Mr Vinay Singh Head- JLG Operation

He has more than 15 years of experience with CASHPOR at senior operations level and has been with Sonata for last two years

Mr Ashish Singh Head – IL Operation

Mr Ashish Singh has been working in the microfinance sector for more than 15+ years and has been associated with Sonata for the last 10 years. He was head of JLG Operation for last 7 years and now heading the Individual Loan operation. He holds an MBA degree in Finance & Banking.

Mr. Tarandeep Singh Head- Housing and Utility Loan

Previously he was associated with HDFC Bank as a Branch Manager and handle the operation of both UP and Uttarakhand. He has more than 15 year of experience in sales, Strategy Planning, Channel Management, Relationship Management & Business Development work. He is graduate in Commerce from University of Lucknow.

Mr. Anil Gupta Head - BC Operation

He is an MBA Finance, has been with the company since 13/10/2005 and has handled operations in various capacities.

Ms Paurvi Srivastava Company Secretary

She has over 8 years working experience with Sonata.She is responsible for managing Investors & Board Relations and manages statutory compliances of Sonata.

Mr Shyam Kanhaiya Head– Information Technology

He is one of the oldest employees at Sonata and has more than 10 years of experience with Sonata. He holds Master degree in Computer Application.

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Mr Tarun Srivastava Head – Audit He has more than 14+years of microfinance experience and has been working with Sonata since its inception. He has done his Masters in Social Welfare and is also a Law graduate (L.LB).

Ms. Richa Sharma Accounts Head She is a Chartered Accountant by profession with 9+ years of experience in Accounts, Taxation and Audit in micro finance industries. She is heading accounts in Sonata Finance Pvt Ltd..

Ms. Neha Singh HR Head She is heading the HR Department and has more than 6 years of experience in Sonata. She has done her Master of Business Administration in HR.

E. Key Operational and Financial Parameters for the last 3 audited years on a consolidated basis (wherever available) else on a standalone basis.

Rs. Crores

Parameters FY FY2019-20(IndAS)

FY 2018-19(IndAS)

FY 2017-18 (IndAS)

Net worth 272.69 181.85 143.91Total Debt 1,222.87 1,270.35 1,193.27- Non current maturities of long term Borrowings 635.38 570.75 665.03- short term borrowings 110.50 103.37 95.50- Current maturities of long term Borrowings 476.99 596.23 432.74Net Fixed Assets - Tangible 2.16 1.69 1.51Other Financial Assets 35.15 25.83 24.15Cash and Cash Equivalents 73.06 188.02 96.42Bank Balances other than cash and cash equivalents 115.19 98.74 66.36Investments 0.19 0.16 0.16Other Non-Financial Assets 2.56 1.04 0.48Other Financial Liabilities 36.34 31.10 16.76Other Non- Financial Liabilities 1.98 1.99 1.63Assets Under Management 1763.43 1441.08 1322.81Off Balance Sheet Assets 398.66 242.38 133.16Interest Income 295.72 279.34 200.33Interest Expense 154.42 154.26 133.91Provisioning & Write-offs 83.68 36.08 123.32PAT 14.09 32.99 (35.26)Gross NPA (%) 0.85% 2.71% 4.19%Net NPA (%) 0.19% 2.23% 3.29%Tier I Capital Adequacy Ratio (%) 17.00% 22.51% 12.26%Tier II Capital Adequacy Ratio (%) 6.07% 3.44% 5.14%

Gross Debt: Equity Ratio of the Company (as of September 30th, 2020)

Before the issue of debt securities 4.33times

After the issue of debt securities 4.37 times

Calculation:

Before the issue, debt-to-equity ratio is calculated as follows:

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*Debt – INR Crores 1,210.94

Equity – INR Crores 279.66

Debt / Equity 4.33 times

After the issue, debt-to-equity ratio is calculated as follows:*Debt – INR Crores 1,220.94

Equity – INR Crores 279.66

Debt / Equity 4.37 times

* Debt includes Securitization as per IND AS

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

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

A. Details of share capital as on last quarter end (being 30thJune, 2020):Share Capital Rs.

Authorised share capital: i. 4,00,00,000Equity shares of Rs. 10/- each 40,00,00,000

ii. 1,00,00,000Preference Shares of Rs10/- each 10,00,00,000Total authorized share capital 50,00,00,000

Issued, subscribed and fully paid-up share capital: i. 2,64,53,256 Equity shares of Rs. 10/- each 26,45,32,560

ii. Preference Shares 0Less: amount recoverable from Sonata Employee Welfare Trust # (1,42,83,190)

Total issued, subscribed and fully paid-up share capital: 25,02,49,370

B. Changes in its capital structure as on last quarter end (being 30thJune, 2020), for the last five years:

Date of change (AGM/ EGM) Rs. Particulars of change in authorized share capital

21.02.2020 50,00,00,000Increase in authorised capital from Rs. 40,00,00,000 (Rupees Forty Crores Only) Divided Into 30,000,000 (Three Crore) Equity Shares of Rs. 10/- (Rupees Ten Only) Each, and 10,000,000 (One Crore) Preference Shares of Rs. 10/- (Rupees Ten Only) to Rs. 50,00,00,000/- (Rupees Fifty Crores Only) consisting of 4,00,00,000 (Four Crores) Equity Shares of Rs 10/- (Rupees Ten Only) each and 1,00,00,000 (One Crore) Preference Shares Of Rs. 10/- (Rupees Ten Only) each.

C. Equity Share Capital History of the Company as on last quarter end i.e. June 30, 2020, for the last five years:

Cumulative Paid Up Capital

27



Date of Allotment

Name of investor

No of

Equity

Shares

Face Value

(Rs.)

Issue

Price

(Rs.)

Consideration

(Cash, other than cash, etc.)

Nature of AllotmentNo of Equity Shares

Equity Share Capital

( Rs in Crore)

Equity Share Premium

( Rs in Crore)

13.08.2019

Societe de Promotion et de Participation

Pour la Cooperation Economique

14,28,570

10

140

19,99,99,800

Non-Cumulative, 1.01% Compulsorily

Convertible Preference Shares (CCPS) converted

into equity

2,64,53,256

26,45,32,560

18,57,14,100

13.08.2019

Triodos Custody BV in its capacity as

custodian of Triodos Fair Share Fund

7,14,285

10

140

9,99,99,900



into equity

2,50,24,686

25,02,46,860

928,57,050

13.08.2019

Triodos SICA V II- Triodos Micro Finance Fund

7,14,285

10

140

9,99,99,900



into equity

2,43,10,401

24,31,04,010

928,57,050

13.08.2019

SIDBI Trustee Company Limited A/c Samridhi Fund

10,71,427

10

140

14,99,99,780



into equity

2,35,96,116

23,59,61,160

13,92,85,510

13.08.2019

Creation Investments Social Venture Fund

II, L.P.

14,28,570

10

140

19,99,99,800



into equity

2,25,24,689

22,52,46,890

18,57,14,100

31.03.2017

SIDBI 707214

10

70.7

70,72,140

OCPS Converted into equity

2,10,96,119

21,09,61,190.00

4,29,27,889.80

18.11.20

Societe de Promotion et de Participation

pour le Cooperation

19,27,

10

16

32,19,42,767

Equity 2,03,8

20,38,89,

30,26,64,

28



16 Economique (Proparco) 801 7

8,905

050.00

757.00

18.11.2016

Triodos Custody B.V acting in its capacity

as a custodian of Triodos Share Fair

Fund

9,63,900

10

167

16,09,71,300 Equity

2,03,88,905

20,38,89,050.00

15,13,32,300.00

18.11.2016

Triodos SICAV II-Triodos Microfinance

Fund

9,63,900

10

167

16,09,71,300 Equity

2,03,88,905

20,38,89,050.00

15,13,32,300.00

23.12.2015

SIDBI Trustee Company Limited

22,03,226

10

113.47

25,00,00,054.2 Equity

1,65,33,304

16,53,33,040.00

227967794.2

06.02.2014

SIDBI5000000

10

10

5,00,00,000.00 OCPS

5000000

5,00,00,000.00

Nil

11.09.2012

Michael & Susan Dell Foundation

3,79,747

10

79

3,00,00,013.00 Equity

1,43,30,078

14,33,00,780.00

2,62,02,543.00

07.09.2012

Creation Investments Social Ventures Fund

I

14,91,121

10

79

11,77,98,559.0

0Equity

1,39,50,331

13,95,03,310.00

10,28,87,349.00

07.09.2012

Creation Investments Social Ventures Fund

II LP.

21,79,765

10

79

17,22,01,435.0

0Equity

1,24,59,210

12,45,92,100.00

15,04,03,785.00

07.09.2012

Sonata Employee Welfare Trust

14,70,000

10

10

1,47,00,000.00 Equity

1,02,79,445

10,27,94,450.00

Nil

05. Anup Kumar Singh 2,3 1 3 75,00,0 Equity 88 8,8 51,

29



09.2012

4,375 0 2 00.00

,09,445

0,94,450.00

56,250.00

05.09.2012

Swaminathan Shankar Aiyar

2,34,375

10

32

75,00,000.00 Equity

85,75,070

8,57,50,700.00

51,56,250.00

08.01.2010

Swaminathan Shankar Aiyar

2,15,000

10

45.5

97,82,500 Equity

83,40,695

8,34,06,950.00

76,32,500.00

08.01.2010

RakeshDubey2,55,950

10

10

25,59,500 Equity

81,25,695

8,12,56,950.00

Nil

08.01.2010

Ashish Kumar Gupta 97,750

10

10

9,77,500 Equity

78,69,745

7,86,97,450.00

Nil

08.01.2010

Bellwether Micro Finance Trust

3,61,991

10

55.25

2,00,00,000 Equity

77,71,995

7,77,19,950.00

1,63,80,092.75

09.12.2009

AnupKumar Singh1,75,000

10

45.5

79,62,500.00 Equity

74,10,004

7,41,00,040.00

62,12,500.00

09.12.2009

Indian Financial Inclusion Fund (IFIF)

20,00,000

10

65

13,00,00,000.0

0Equity

72,35,004

7,23,50,040.00

11,00,00,000.00

09.12.2009

Micheal& Susan Dell Foundation (MSDF)

8,61,538

10

65

5,59,99,970.00 Equity

52,35,004

5,23,50,040.00

4,73,84,590.00

06.11.2009

Sonata Employee Welfare Trust

16,46,300

10

10

1,64,63,000.00 Equity

43,73,466

4,37,34,660.00

Nil

30



Notes, if any:Not Applicable

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

E. Details of any Reorganization or Reconstruction in the last 1 (one) year:NIL

Type of Event Date of Announcement

Date of Completion

Details

5.6 Details of the shareholding of the Company as on last quarter end (i.e.June 30, 2020)

A. Shareholding pattern of the Company as on last quarter end (i.e.June 30, 2020):

Sr.No. Particulars

Total Number of Equity

Shares

Number of shares held in

Dematerialized Form

Total Shareholding as a % of total no. of equity shares

1. Anup Kumar Singh 11,85,462 11,25,462 4.48%2. Caspian Impact Investment

Adviser Private Limited, Trustee of Bellwether Microfinance Trust

6,72,292 6,72,292 2.54%

3. Caspian Impact Investments Private Limited

4,66,850 4,66,850 1.76%

4. Swaminathan Shankar Aiyar 4,71,375 4,71,375 1.78%5. Sonata Employee Welfare Trust 14,28,319 - 5.40%6. SIDBI Trustee Company Limited

[A/c Samridhi Fund]32,74,653 - 12.38%

7. Shares held by Employees via ESOP

5,00,431 - 1.89%

8. Small Industries Development Bank of India

7,07,214 7,07,214 2.67%

9. India Financial Inclusion Fund, LLC

14,80,634 14,80,634 5.60%

10. Michael & Susan Dell Foundation 9,18,945 9,18,945 3.47%11. Creation Investments Social

Ventures Fund I14,91,121 14,91,121 5.64%

12. Creation Investments Social Ventures Fund II, LP.

59,01,934 59,01,934 22.31%

13. Societe De Promotion Et De Participation Pour La Cooperation Economique

39,77,013 6,20,642 15.03%

14. Triodos Custody B.V. As A Custodian of Triodos Fair Share Fund

19,88,507 3,10,322 7.52%

15. Triodos SICAV II- Triodos Microfinance Fund

19,88,506 3,10,321 7.52%

Total 26,453,256 100.00%

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

B. List of top 10 holders of equity shares of the Company as on last quarter end (i.e.30thJune 2020):

31



Sr.No ParticularsTotal Number of Equity Shares

Number of shares held in Dematerialized Form

Total Shareholding as a % of total no. of equity shares

1. Creation Investments Social Ventures Fund II, LP.

59,01,934 59,01,934 22.31%

2.

Societe De Promotion Et De Participation Pour La Cooperation Economique

39,77,013 6,20,642 15.03%

3. SIDBI Trustee Company Limited [A/c Samridhi Fund]

32,74,653 - 12.38%

4

Triodos Custody B.V. As A Custodian of Triodos Fair Share Fund

19,88,507 3,10,322 7.52%

5

Triodos Custody B.V. As A Custodian of Triodos Fair Share Fund

19,88,507 3,10,322 7.52%

6 Sonata Employee Welfare Trust

14,28,319 - 5.40%

7 Anup Kumar Singh 11,85,462 11,25,462 4.48%

8 Michael & Susan Dell Foundation

9,18,945 9,18,945 3.47%

9 Small Industries Development Bank of India

7,07,214 7,07,214 2.67%

10

Caspian Impact Investment Adviser Private Limited, Trustee of Bellwether Microfinance Trust

6,72,292 6,72,292 2.54%

Total: 2,20,42,846 1,05,67,133 83.32%

5.7 Following details regarding the directors of the Company:

A. Details of current directors of the Company:

This table sets out the details regarding the Company’s Board of Directors:

Sr Name of the Director Designatio DIN Date of Date of Other Directorships

32



No. n Appointmen

t Birth

1. Anup Kumar SinghCEO and Managing Director

00173413 06/09/2006 11/03/1972

1. Shrimayi Social And Allied Services

2. Anal Kumar Jain Independent Director 01239653 01/09/2011 26/06/194

5

1. Pay-Ota Systems India Private Limited

2. Inflow Technologies Private Limited

3. Inflow Knowledge Services (India) Private Limited

4. Comstor Distribution (India) Private Limited

5. Skillprofiler Analytics Private Limited

6. RblFinserve Limited

7. Dvara Solutions Private Limited

8. MvMicrofin Private Limited

3. Pradip Kumar Saha Independent Director 02947368 26/05/2017 19/12/195

3

1. Fusion Micro Finance Private Limited

4. Kenneth Dan Vander Weele Nominee Director 02545813 11/09/2012

-22/04/195

3

1. Fusion Micro Finance Private Limited

2. MuthootMicrofin Limited

3. Vivriti Capital Private Limited

4. Vivriti Asset Management Private Limited

5. Sethuraman Ganesh Independent Director 07152185 25/05/2015 06/10/195

71. Indel Money

Private Limited6. RanganathanVaradarajanDil

ip KumarNominee Director

01060651 29/12/2015 20/10/1968

1. NaturelandOrganic Foods Private Limited

2. Esaf Financial Holdings Private Limited

3. Rgvn (North East) Microfinance Limited

4. Caspian Impact Investments Private Limited

33



5. Saggraha Management Services Private Limited

6. Online Psb Loans Limited

7. Sanjay Goyal Nominee Director 07961517 30/05/2019 13/08/196

3

1. India SME Technology Services Limited

8. Benoit Marie Luc Monsaingeon

Nominee Director 07971713 24/10/2017 12/09/194

5 Not Applicable

9. Aditya Mohan Nominee Director 08299455 10/12/2018 12/10/198

4 Not Applicable

10. Saurabh Kumar Johri Nominee Director 08469704 01/06/2019 19/03/197

6 Not Applicable

Names of the current directors of the Issuer who are appearing in the RBI defaulter list and/or ECGC default list, if any:Nil

B. Details of change in directors since last three years:Name Designation DIN Date of

Appointment/ Resignation

Director of the Company since (in case of resignation)

Remarks

Chandni Gupta Ohri

Independent Director

03613229 26-06-2020 01-09-2011 Resignation

Mona Kachhwaha

Nominee Director

01856801 30-05-2019 10-02-2017 Resignation

Pradip Kumar Saha

Independent Director

02947368 26-05-2017 - Appointment

Emmanuel Haye Christian Alain

Nominee Director

07641857 22-08-2017 26-05-2017 Resignation

Charles James Middleton

Nominee Director

07644683 10-12-2018 26-05-2017 Resignation

Benoit Monsaingeon

Nominee Director

07971713 24-10-2017 - Appointment

Aditya Mohan

Nominee Director

08299455 10-12-2018 - Appointment

Saurabh Kumar Johri

Nominee Director

08469704 01-06-2019 - Appointment

Prakash –Kumar

Nominee Director

06758416 30-05-2019 12-08-2016 Resignation

Sanjay Goyal Nominee Director

07961517 30-05-2019 - Appointment

5.8 Following details regarding the auditors of the Company:

A. Details of the auditor of the Company:

34



Name Address Auditor since

M/s. S.R. Batliboi& Associates

22, Camac Street, 3rd Floor, Block-B , Kolkata, West Bengal

2019

B. Details of change in auditors since last three years:

Name AddressDate of

Appointment/Resignation

Auditor of the Company since

(in case of resignation)

Remarks

M/S S.R.Batliboi& Co., LLP

22, CAMAC STREET, 3RD

FLOOR, BLOCK-B, KOLKATA, WEST

BENGAL

06/08/2019 FY 2013-14 for 5 years and re-ap-

pointment in AGM 28/09/2018

Statutory Aud-itor

M/s S. R. Batliboi& Associates, LLP

22, CAMAC STREET, 3RD

FLOOR, BLOCK-B, KOLKATA, WEST

BENGAL

30/09/2019 FY 2019-20 Statutory Aud-itor

5.9 Details of borrowings of the Company, as on latest quarter end i.e. 30thJune 2020:

A. Details of Secured Loan Facilities as on 30thJune 2020

Name of Bank/FI Nature of Facility

Amount AvailedRs. In. Crs.

Outstand-ing as on

30-June-20Rs. In. Crs.

REPAYMENT-TERM Security

Ananya Finance Term Loan 25.00 10.23 Monthly Book DebtBandhan Bank Term Loan 200.00 90.89 Quarterly Book DebtBank of Baroda Term Loan 50.00 0.10 Monthly Book DebtCaspian Term Loan 72.10 12.95 Quarterly Book DebtNorthern Arc(Formerly IFMR Capital)

Term Loan 153.75 22.44 Monthly Book Debt

Laxmi Vilas Bank Term Loan 7.50 5.50 Monthly Book DebtDCB Bank Term Loan 105.00 4.57 Monthly Book DebtMaanaveeyaDevelop-ment


Manappuram Finance Limited


NABARD Term Loan 205.00 142.50 Half Yearly Book DebtProfectus Capital Term Loan 7.60 3.81 Monthly Book DebtPLI- Hinduja Leyland Finance


Reliance Capital Term Loan 173.90 0.36 Monthly Book DebtShriam City Union Fin-ance


South Indian Bank Term Loan 13.00 1.33 Monthly Book DebtStandard Chartered Term Loan 189.00 110.50 Quarterly Book DebtSamunnati Term Loan 10.00 1.40 Monthly Book DebtUnion Bank of India Term Loan 203.21 50.70 Quarterly Book DebtUnited bank of India Term Loan 14.17 11.04 Quarterly Book Debt

35



Utkarsh Small Finance Bank

Term Loan 20.00 3.31 Quarterly Book Debt

Vivriti Capital Term Loan 55.00 20.06 Monthly Book DebtFederal Bank Term Loan 15.00 10.24 Monthly Book DebtUjjivan Small Finance Bank


State Bank of India Term Loan 30.00 27.49 Monthly Book DebtAnnapurna Finance Term Loan 25.00 20.72 Monthly Book DebtIncred Capital Term Loan 20.00 14.76 Monthly Book DebtNABFINs Term Loan 10.00 8.33 Monthly Book DebtEasy Home Finance Lim-ited(EHFL)


MicroVest ECB 41.83 41.83 One Bullet Payment Book DebtFrankfurt School Finan-cial Services

ECB 30.21 30.21 One Bullet Payment Book Debt

IIV Hansainvest Finance I GMGH

ECB 42.33 42.33 One Bullet Payment Book Debt

DWM ECB 42.33 42.33 One Bullet Payment Book DebtTotal 1,973.93 790.86

B. Details of Unsecured Loan Facilities as on 30-Jun-20:

Lender’s Name Type of Facility Amount sanctionedRs. In. Crs

Principal Amount O/S Rs. In. Crs

Repayment Date/ Schedule

NorthernArc Unsecured Term Loan

51.00 12.67 Monthly

IDFC First Bank (Formerly Capital First)

Tier-II Subordinated Debt

40.00 40.00 One Bullet Payment

SIDBI Subordinated Debt 24.00 24.00 One Bullet Payment

Maanveeya Development

Tier-II Subordinated Debt

10.00 10.00 One Bullet Payment

Total 125.00 86.67

C. Details of non-convertible debentures as on last quarter end i.e. 30-Jun-20:

Debenture SeriesTenor / Period of Maturity

Coupon

Amount (in Crores)

Date of allotment

Redemption Date / Schedule

Credit Rating

Secured / Unsecured

Security

1748-1897IFMR Fimpact Investment

69 months from the

deemed date of Allotment

14.75%

15 06-04-2015

18-12-2020 ICRA [BBB] Stable

Secured 110%

1898-2197Blue Orchard Micro Finance Fund

5 years 12.76%

15 11-06-2015


Secured 110%

22198-22347IFMR Flmpact Long term Multi Asset Class Fund

72 months from the


16.25%

15 02-03-2016


Tier II -Unsecured

Nil

36



22348-22447IFMR Flmpact Long term Multi Asset Class Fund

72 months from the


14% 10 03-03-2016


Secured 110%

23128-23797Blue Orchard Micro Finance Fund

5 years 12.5266%

67 26-10-2016


Secured 110%

24098-24877Japan Asean Women's Empowerment Fund

3 years 12.5266%

78 31-07-2017


Secured 110%

24878-25077IFMR Flmpact Medium Term Opportunities Fund, a scheme of IFMR finance for freedom fund IV represented by Northern Arc Investment Managers Private Limited

53 months from the


14.20%

20 07-12-2018


Secured 110%

25078-25287StichingJuridischEigenaarActiam Institutional Microfinance Fund III (AFIF)

37 months from the

deemed date of allotment

13.50%

21 24-12-2019


Secured 100%

25288-25446Watercredit Investment Fund 1, LLC

36 months from the

deemed date of allotment

10.07%

15.9 10th

Feb 2019

and 21st

Feb 2020

24-02-2023 N.A. Secured 100%

Total 256.90

D. List of Top 10 Debenture Holder(s) as on last quarter end i.e.30thJune 2020:

Sr. No.

Name of Debenture Holders Amount

1 Japan Asean Women's Empowerment Fund 78,00,00,0002 Blue Orchard Micro Finance Fund 67,00,00,0003 StichingJuridischEigenaarActiam Institutional Microfinance Fund III (AFIF) 21,00,00,0004 IFMR Flmpact Medium Term Opportunities Fund, a scheme of IFMR finance

for freedom fund IV represented by Northern Arc Investment Managers Private Limited

20,00,00,000

5 Watercredit Investment Fund 1, LLC 15,90,00,0006 Blue Orchard Micro Finance Fund 15,00,00,000

37



7 IFMR Fimpact Investment 15,00,00,0008 IFMR Flmpact Long term Multi Asset Class Fund 15,00,00,0009 IFMR Flmpact Long term Multi Asset Class Fund 10,00,00,000

Note: Top 10 holders’ (in value terms, on cumulative basis for all outstanding debentures issues) de-tails should be provided

E. The amount of corporate guarantee issued by the Issuer along with name of the counterparty (like name of the subsidiary, JV entity, group-company, etc.) on behalf of whom it has been issued. (if any): (As on June30, 2020)

S.No Issued to Amount1. Indusind Bank 1,44,715,859.82. Kotak Bank 72,87,188.453. SIDBI 63,37,948.20

F. Details of Commercial Paper (the total Face Value of Commercial Papers Outstanding as on the latest quarter end i.e. June 30, 2020 to be provided and its breakup in following table)

S. No. Maturity Date Amount OutstandingNIL NIL NIL

G. Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally Convertible Debentures / Preference Shares) as on June 30, 2020:

Party Name (In case of Facility)/ Instrument Name

Type of Facility/Instrument

Amount Sanctioned/Issued

Principal Amount Outstanding

Repayment Date/Schedule

Credit Rating

Secured/Unsecure

d

Security

NIL NIL NIL NIL NIL NIL NIL 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:The Company has not defaulted in payment of any interest or principal of any kind of term loans, debt securities or any other financial indebtedness, including any corporate guarantee issued by the Company, in the past 5 years

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:

The Issuer does not have any outstanding borrowings/debt securities 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

5.10 Details of Promoters of the Company:

A. Details of Promoter Holding in Company as on latest quarter end, i.e. 30thJune 2020:

Sr Name of the Total No of No. of Total No of % of shares

38



No shareholders equity shares shares in Demat form

shareholding as % of total no of equity shares

shares Pledged

pledged with respect to shares owned

1. Anup Kumar Singh

11,85,462 11,25,462 4.48% - -

5.11 Abridged version of the Audited Consolidated and Standalone Financial Information (like Profit and Loss statement, Balance Sheet and Cash Flow statement) for at least last three years and auditor qualifications, if any.

Please refer Annexure IV

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

[Note: Financial information submitted for furnishing/ publishing half yearly or annual results shall 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, as amended.]

Please refer Annexure IV

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

The Issuer hereby declares that there has been no material event, development or change at the time of the Issue from the position as on the date of the last audited financial statements of the Issuer, which may affect the Issue or the investor’s decision to invest/continue to invest in the debt securities of the Issuer

5.14 Names of the Debentures Trustees and Consents thereof

The Debenture Trustee of the proposed Debentures is CatalystTrusteeshipLimited. Catalyst Trusteeship Limited has given its written consent for its appointment as debenture trustee to the Issue and inclusion of its name in the form and context in which it appears in this Information Memorandum and in all the subsequent periodical communications sent to the Debenture Holder(s). The consent letter from Debenture Trustee is provided in Annexure III of this Information Memorandum.

5.15 Rating Rationale(s) adopted (not older than one year on the date of opening of the Issue)/ credit rating letter issued (not older than one month on the date of opening of the Issue).

The Rating Agency has assigned ratings of BBB (pronounced as Triple B) to the Debentures. Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

Please refer to Annexures II for the credit rating assigned by the Rating Agency.

39



Please note that the rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agency and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the future. The rating agencies have a right to suspend, withdraw the rating at any time including on the basis of new information.

5.16 If the security is backed by a guarantee or letter of comfort or any other document / letter with similar intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment structure (procedure of invocation of guarantee and receipt of payment by the investor along with timelines), the same shall be disclosed in the offer document.

Not Applicable

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

The Debenturesare proposed to be listed on the Wholesale Debt Market Segment (WDM) of 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.

5.18 Other details:

A. Debenture Redemption Reserve Creation:

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

B. Issue / instrument specific regulations:

The Issue of Debentures shall be in conformity with the applicable provisions of the Companies Act including the notified rules thereunder, the SEBI Debt Listing Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable RBI guidelines.

C. Application process:

The application process for the Issue is as provided in SECTION 8:of this Information Memorandum.

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

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

40



Sr. No. Nature of Contract1 Certified true copy of the Memorandum & Articles of Association of the Issuer.

2 Resolution dated September 22, 2020passed by the Board of Directors authorizing issue of Debentures offered under terms of this Disclosure Document.

3 Resolution dated June 26, 2020passed by the shareholders of the Company authorizing the issue of non-convertible debentures by the Company.

4Resolutions dated June 26, 2020passed by the shareholders of the Companyauthorizing the borrowing by the Company and the creation of Security, respectively.

5 Copies of Annual Reports of the Company for the last three financial years.6 Letter from the Rating Agency assigning the credit rating for the Issue.7 Letter from the Debenture Trusteegiving its consent to act as Debenture Trustee.8 Letter from Registrar and Transfer Agent.9 Certified true copy of the certificate of incorporation of the Company.

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

11 Copy of application made/ to be made(if and when applicable) to BSE for grant of in-principle approval for listing of Debentures.

12 Debenture Trustee Agreement dated November17, 2020entered by Sonata Finance Private Limited and Catalyst Trusteeship Limited

13 Debenture Trust Deed dated November18, 2020executed by Sonata Finance Private Limited in favour of Catalyst Trusteeship Limited.

14 Agreement of Hypothecation dated November18, 2020entered by Sonata Finance Private Limited and Catalyst Trusteeship Limited

5.20 Utilization of the Issue Proceeds

The Issuer undertakes that the proceeds of this Issue shall be used for General corporate purposes of the company and shall not be utilized for the deployment of funds on its own balance sheet and not to facilitate resource requests of its group entities/parent company/associates.

The Issue shall not be utilised towards acquisition financing: viz buyback of shares/securities, purchase of shares of other companies and/or promoter contribution towards the equity capital of a company or as a bridge loan.

5.21 Issue Details

Security Name 10.75% SFPL 2022Issuer Sonata Finance Private LimitedType of Instrument Senior, secured,rated, Listed, redeemable, transferable, taxable non-

convertible debenturesNature of Instrument SecuredSeniority SeniorMode of Issue Private placementEligible/Identified Investors As provided in Section8.14belowListing Proposed to be listed on the Wholesale Debt Market Segment

(WDM) of BSE and/ or NSERating of Instrument BBB as assigned by the Rating AgencyIssue Size Rs. 10,00,00,000/- (Rupees TenCrores only).

41



Option to retain oversubscription

Not Applicable

Objects of the Issue The proceeds of the Debentures shall be utilised by the Company for general corporate purposeonward lending and loan repayments/refinancing.

Details of the utilization of the Proceeds

The Issue proceeds will be utilized for onward lending to customers in the products offered by the company and for repayment/refinancing of existing debt. No part of the proceeds from the Issue will be used towards:

i. any capital market instrument such as equity and equity linked instruments or any other capital market related activities;

ii. any speculative purposes;iii. investment in the real estate sector; oriv. in contravention of any applicable law.v. Unsecured loans / inter-corporate deposits by the Issuer to /

in any company. vi. All types of loans and advances by the Issuer to their

subsidiaries, group companies / entities. vii. Further lending to individuals for subscribing to Initial

Public Offerings (IPOs) and for purchase of shares from secondary market

The proceeds of this Issue shall not be used for any purpose, which may be in contravention of the government/RBI/SEBI/other regulatory guidelines

Coupon Rate 10.75 % per annum payable quarterlyStep Up/ Step Down Coupon Rate

If the long-term credit rating of the Debentures is downgraded from “BBB” to “BBB-” by ICRA Limited and/or any other outstanding rating of the issuer, the coupon rate would stand increased by 0.25% over and above the prevailing coupon rate immediately prior to such rating downgrade. Such enhanced coupon rate shall be applicable from the date of issue of the rating downgrade, by any rating agency, to the residual maturity of bonds.For each subsequent downgrade of rating the coupon further increased by 25 bps

Coupon Payment Frequency QuarterlyCoupon Payment Dates 1st Coupon date February 19, 2021

2nd Coupon date May 19, 20213rd Coupon date August 19, 20214th Coupon date November 19, 20215th Coupon date February 19, 20226th Coupon date May 19, 2022

Coupon Type Fixed Coupon Reset Date NoneCoupon Reset Process(includingrates, spread, effective date, interest rate cap and floor, etc.)

None

Day Count Basis Actual/Actual

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Interest on Application Money

(a) Interest at the CouponRate per annum will be paid on the Application Money to the Applicants from the date of receipt of such Application Money up to 1 (one) day prior to the Deemed Date of Allotment for all valid applications, within 5 (five) Business Days from the Deemed Date of Allotment.

(b) Where the entire subscription amount has been refunded, the interest on Application Money will be paid along with the refunded amount.

(c) Where an Applicant is allotted a lesser number of Debentures than applied for, the excess amount paid on application will be refunded to the Applicant in the bank account of the Applicant as described in the Application Form towards interest on the refunded money by electronic mode of transfer like RTGS/NEFT/direct credit. Details of allotment will be sent to every successful Applicant.

Default Interest Rate 2% (Two percent) over and above the Coupon Rate per annum, for the defaulting period, in the event the Issuer fails to make any pay-ments of Interest and/or principal redemption to the Debenture Hold-ers on their respective due dates.

Delay Penalty 1. Security Creation: If the Company fails to execute the trust deed and create and perfect the charge within three months of the closure of the issue, the Company shall also pay in-terest of 2% p.a. to the debenture holder, over and above the agreed coupon rate, till the execution of the trust deed or re-fund the subscription (i.e. redemption at par) along with other monies/accrued interest due in respect thereof, at the option of the Debenture holders;

2. Default in Payment: In case of default in payment of interest and/ or principal redemption on the due dates, the Company shall pay additional interest at the rate of 2.00% p.a. over the Coupon Rate for the defaulting period i.e. the period com-mencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

3. The Company shall make listing application to BSE and/ or NSE within 15 days from the Deemed Date of Allotment of the Debentures and seek listing permission within 20 days from the Deemed Date of Allotment of Debentures. In case of delay in listing of the Debentures beyond 20 days from the Deemed Date of Allotment, the Company shall pay penal interest at the rate of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allot-ment till the listing of Debentures to the Debenture holder(s).

The interest rates mentioned in above covenants shall be independ-ent of each other.

Tenor 18 (eighteen) months from the Deemed Date of Allotment

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Redemption Date/Maturity Date

May19, 2022,being 18 (eighteen) months from the Deemed Date of Allotment

Redemption Amount Rs.10,00,000/- (Rs. Ten Lakhs Only) per Debenture on the Redemption Date/Maturity Date plus accrued Coupon if any.

Redemption Premium/ Discount

NA

Issue Price Rs. 10,00,000/- (Rs. 10,00,000Only) per DebentureDiscount at which security is issued and the effective yield as a result of such discount

NA

Put Date NAPut Price NACall Date NACall Price NAPut Notification Time NACall Notification Time NAFace Value Rs10,00,000/- (Rs. 10,00,000 only) per DebentureMinimum Application size and in multiples of 1 thereafter

10 debentures and in multiples of 1 Bond thereafter

Issue Timing Issue/ Bid Opening Date: November18, 2020Issue/ Bid Closing Date: November18, 2020Pay-in Date: November19, 2020Deemed Date of Allotment: November19, 2020

Issuance mode of the Instrument

Demat only

Trading mode of the Instrument

Demat only

Settlement mode of the Instrument

The pay-in of subscription monies for the Debentures shall be made by way of transfer of funds from the bank account(s) of the Eligible Investors (whose bids have been accepted) as registered with the Electronic Book Provider into the account of the ICCL.

Payment of interest and repayment of principal shall be made by way of cheque(s)/ credit through RTGS/ Electronic Fund Transfer or any other electronic mode offered by the Banks

Settlement Cycle for EBP [T+1]

Type of Bidding Closed bidding

Manner of Allotment Uniform – yield

Depositories NSDL/ CDSLBusiness Days Means a day (other than a Sunday or a ‘public holiday’ for the

purpose of Section 25 of the Negotiable Instruments Act, 1881 (26 of 1881)) on which banks are open for business in Mumbai and New Delhi

Business Day Convention ‘Business Day’ shall be a day on which commercial banks are open

44



for business in the city of Mumbai, Maharashtra & New Delhi, Delhi and when the money market is functioning in Mumbai. If the date of payment of interest/redemption of principal does not fall on a Business Day, the payment of interest/principal shall be made in accordance with SEBI Circular CIR/IMD/DF-1/122/2016 dated November 11, 2016.If any of the Coupon Payment Date(s), other than the ones falling on the redemption date, falls on a day that is not a Business Day, the payment shall be made by the Issuer on the immediately succeeding Business Day, which becomes the coupon payment date for that coupon. However, the future coupon payment date(s) would be as per the schedule originally stipulated at the time of issuing the debentures. In other words, the subsequent coupon payment date(s) would not be changed merely because the payment date in respect of one particularcoupon payment has been postponed earlier because of it having fallen on a non-Business Day.If the redemption date of the Debentures falls on a day that is not a Business Day, the redemption amount shall be paid by the Issuer on the immediately preceding Business Day which becomes the new redemption date, along with interest accrued on the debentures until but excluding the date of such payment.

Record Date The date which will be used for determining the Debenture Holder(s) who shall be entitled to receive the amounts due on any Due Date, which shall be the date falling 7 (seven) calendar days prior to any Due Date.

All covenants of the issue (including side letters, accelerated payment etc)

The Company has not entered into any separate arrangements or side letters with any debenture holders.

Description regarding Security (where applicable) including type of security (movable/immovable/tangible etc.), type of charge (pledge/ hypothecation/ mortgage etc.), date of creation of security/ likely date of creation of security, minimum security cover, revaluation, replacement of security, interest to the debenture holder over and above the coupon rate as specified in the Trust Deed and disclosed in the Offer Document/ Information Memorandum.

The Debentures shall be secured by way of a first ranking, exclusive and continuing charge on identified receivables (“Hypothecated Receivables”) created pursuant to the deed of hypothecation to be executed between the Company and the Debenture Trustee as described herein. The Issuer undertakes:

to maintain the value of security at all times equal to 1.25 times or 125% of the aggregate amount of principal outstanding of the NCDs (“Security Cover”).

to replace any slippage in loan receivables specifically charged to us with standard receivables. Asset coverage ratio will be maintained at 1.25 times at all times during the currency of the NCDs. The Company shall within 30 (thirty) Business Days of such occurrence, hypothecate further assets or such additional security as may be acceptable to the Debenture Trustee to maintain the Asset Cover.

to create the security over the Hypothecated Assets as contemplated above by executing a duly stamped deed of hypothecation (“Deed of Hypothecation”) and to perfect and register the security (including filing CHG-9) within the time period applicable under Companies Act, 2013.

to provide a list on a monthly basis, of specific loan receivables/identified book debts to the Debenture Trustee

45



over which the charge is created and subsisting by way of hypothecation in favour of the Debenture Trustee (for the benefit of the Debenture Holders) (“Monthly Hypothecated Asset Report”).

to add fresh loan assets to the Security Cover to ensure that the value of the Hypothecated Assets is equal to 1.25 times or 125% (One Hundred Twenty Five Percent) of the aggregate amount of principal outstanding of the NCDs

Eligibility Criteria for the Hypothecated Receivables:

the receivables are existing at the time of selection and have not been terminated or pre-paid;

the receivables have not been sub-standard category

all “Know Your Customer” norms have been complied with as prescribed by the Reserve Bank of India;

It is clarified that the assets would be ‘current’ on inclusion and replacement of receivables (to be carried out within 30 calendar days) would be upon becoming NPA (i.e. on crossing 90DPD);

Each client loan must be directly originated by the Issuer and not loans purchased from a third party;

All loans hypothecated under the deed of hypothecation comply with RBI norms and guidelines.

Security Creation: If the Company fails to execute the Debenture Trust Deed and charge documents and perfect the security interest created by way of the charge documents within 90days from the Deemed Date of Allotment, the Company shall pay penal interest at the rate of 2.00% p.a. over the Coupon Rate till these conditions are complied with or refund the subscription (ie. redemption at par) along with other monies/accrued interest due in respect thereof, at the option of the Bondholders.

The Company shall make listing application to BSE and/ or NSE within 15 days from the Deemed Date of Allotment of the Deben-tures and seek listing permission within 20 days from the Deemed Date of Allotment of Debentures. In case of delay in listing of the Debentures beyond 20 days from the Deemed Date of Allotment, the Company shall pay penal interest at the rate of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Debentures to the Debenture holder(s).

Risk factor with respect to Security

While the debt securities are secured to the tune of 100% of the principal and interest amount or as per the terms of offer document/ information Memorandum, in favour of Debenture Trustee, it is the duty of the Debenture Trustee to monitor that the security is maintained, however, the recovery of 100% of the amount shall depend on the market scenario prevalent at the time of enforcement of the security.”

Transaction Documents Shall be as set out in Sectionbelowbelow

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Conditions Precedent to Disbursement

The Issuer represents and warrants to the Investor or its successors or assigns, prior to and upon the execution of the Transaction Documents/Agreement and at the time of issuance of the Debentures and at all time during the currency of the Transaction Documents, that:

1. The Issuer is duly incorporated, validly existing, and in good standing;

2. The Issuer is authorized to enter into the Transaction Documents, and the Transaction Documents are a valid and binding obligation of the Issuer enforceable in accordance with its terms; and the execution and performance of the Transaction Documents by the Issuer is lawful and does not constitute a default, acceleration or termination of any other agreement to which the Issuer is a party or breach of any judgment, decree, order or award.

3. All information provided by the Issuer to the Investor at any time is true, complete, and accurate,

4. The Issuer is the sole owner of all assets shown on the Issuer’s financial statements delivered to the Investor save and except as stated in the said financial statements.

5. The Issuer is solvent and capable of paying its obligations as and when they become due.

6. There is no material litigation including winding up proceedings or governmental proceeding pending against the Issuer and the Issuer is not aware of any such proceeding being threatened, which could impair the Issuer’s net worth or ability to perform this Agreement.

7. The Issuer maintains and shall maintain accurate business and financial records and prepares and shall prepare its financial statements in accordance with generally accepted accounting principles.

8. In case the Issuer is a Company under the Companies Act, 1956 or Companies Act, 2013, as the case may be:-

i. All corporate authorizations required for entering into the Transaction Documents and performing the transactions pursuant hereto have been obtained and are in full force and effect, and the Transaction Documents and all transactions pursuant hereto are and will be in accordance with all applicable provisions of law;

9. Obligation hereunder are not in conflict with any other obligations of the Issuer

10. The execution of Transaction Documents is binding on the Issuer and such executed documents are valid and admissible in evidence in the court of law.

11. There is no Material Adverse Change occurred or event of default has occurred or continuing with respect to the Issuer and no such event or circumstance would occur as a result of its executing the Transaction Documents or performance of any obligation there under.

12. The Investor or it’s successors and assigns shall have an exclusive floating charge on the identified business loan receivables of our Company

13. The Issuer shall take appropriate measures and/or

47



authorization to create Security in favour of the Trustees or its successors and assigns and avail the financial indebtedness.

14. The Issuer shall have good title to assets, to be provided as security.

Conditions Subsequent to Disbursement

The Issuer shall ensure that the following documents are executed/ activities are completed as per time frame mentioned elsewhere in this Private Placement Offer Letter:

1. Ensuring that the payment made for subscription to the Debentures is received from the bank account of the person/ entity subscribing to the Debentures and keep record of the bank accounts from where payments for subscriptions have been received. In case of subscription to the Debentures to be held by joint holders, application monies is received from the bank account of the person whose name appears first in the Application Form;

2. Maintaining a complete record of private placement offers in Form PAS-5 and PAS-3

3. Filing a return of allotment of Debentures with complete list of all Debenture holders in Form PAS-3 under section 42 of the Companies Act, 2013, with the Registrar of Companies, within the prescribed time limit along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014;

4. Credit of demat account(s) of the allottee(s) by number of Debentures allotted within twoworking days from the Deemed Date of Allotment;

5. Making listing application to BSE and/ orNSEwithin15 busi-ness days from the Deemed Date of Allotment of Deben-tures and obtain listing permission within 20 calendar days from the Deemed Date of Allotment of Debentures;

6. Filing of CHG- 9 registering the charge within the timelines as per applicable laws.

Besides, the Issuer shall perform all activities, whether mandatory or otherwise, as mentioned elsewhere in the Private Placement Offer Letter.

Events of Default (including manner of voting/ conditions of joining inter creditor agreement)

Occurrence of any of the following events constitutes an event of default with respect to the Issuer:

i. The Issuer shall fail to promptly pay any amount now or hereafter owing to theInvestors as and when the same shall become due and payable; or

ii. If the Issuer fail to duly observe or perform any obligation under this agreement or under any agreement entered into by it in connection with any loans or other borrowings (including any kind of hybrid borrowing like FCCB, optionally convertible preference shares or Debentures) availed of by the Issuer and the lender or investor concerned; or

iii. Breach of any of the covenants, as specified above, which are not remedied within such period of time, if any, as the Debenture Trustee (acting on the instructions of the Debenture Holders) may allow. In case any of theCovenants is breached and continues breached for a period of 30 days from such breach coming to notice, the Debentureholders would reserve

48



the right to recall the outstanding principal amount on the NCDs (ie. redemption at par) along with other monies/accrued interest due in respect thereof.

iv. Breach of any of the covenants, representations and warranties (including any representation or warranty is held to be untrue, incomplete, incorrect or misleading in material (“material adverse changes”)contained in the Transaction Documents which are not remedied within 15 days from the date of such breach.

v. the Issuer entering into any material arrangement or composition with his/her/its/their creditors or committing any act of insolvency, or any act the consequence of which may lead to the insolvency or winding up of the Issuer;

vi. execution or distress or other process being enforced or levied upon or against the whole or any part of the Issuer’s property whether secured to the Investor or not;

vii. any order being made or a Resolution being passed for the winding up of the Issuer (except for the purpose of amalgamation or reconstruction with the prior approval of the Investor);

viii. a Receiver being appointed in respect of the whole or any part of the property of the Issuer;

ix. the Issuer being adjudicated insolvent or taking advantage of any law for the relief of insolvent debtors;

x. the Issuer ceasing or threatening to cease to carry on business or giving or threatening to give notice of intention to do so;

xi. Inability to pay debts, proceedings of winding up, or the Issuer’s being declared or considered to be a sick company, or a relief undertaking or a protected company or a sick industrial company or a protected industrial company or otherwise, under any law, statute, rule, ordinance etc. which would have the effect of suspending or waiving all or any right against the Issuer or in respect of any contract or agreement concerning the Issuer,

xii. The passing of any order of a court ordering, restraining or otherwise preventing the Issuer from conducting all or any material part of its business; or

xiii. The cessation of business by or the dissolution, winding-up, insolvency or liquidation of the Issuer.

xiv. Non-Maintenance of Debenture Redemption Reserve (DRR) / DSRA on specified date, if applicable.

xv. Events of default considered appropriate for the transaction of this nature including:

a. Breach of any of the covenants, representations and war-ranties. Cure period for (a) any breach of key covenants to be given at the sole discretion of the Investor, and (b) breach of any other covenants, representation and warranties to be cured within 30 days.

b. Failure to file a Form CHG 9 with the Registrar of Companies in form and substance required to perfect the Security within 30 days from the Date of Disbursement (or creation of secur-ity if creation is to happen later)

c. Security provided being invalid security or loss of lien on col-lateral

49



d. Unlawfulness or unenforceability of finance or securitye. Repudiation of any Transaction Documentf. Illegality for the Issuer to perform any of its obligations under

the Transaction Documentg. The withdrawal, failure of renewal, or failure to obtain any

statutory or regulatory approval in any relevant jurisdiction for the Debentures or any Security.

h. Representations or Warranties are found to be untrue or mis-leading when made or deemed to be made.

i. Cross default/ default with any other financial indebtedness of the Issuer.

j. The security cover falls below 1.25 times of the Outstanding principal Amount and interest thereon at any time during the currency of the Debentures and if the Issuer fails to reinstate to 1.25 times within 30 working days.

In the event of occurrence of any of the Events of Default as mentioned above,a. the entire outstanding principal amount on the NCDs (ie.

redemption at par) along with other monies/accrued interest due in respect thereof shall become due for payment immediately and appropriated against DSRA/DRR if created/available.

b. Debenture Trustee shall enter into inter creditor agreement or take all such steps required to as decided or authorized by the Debenture Holders and applicable laws.

c. Debenture Trustee shall the enforce security as per applicable law and rights provided under the debenture documents;

d. Debenture Trustee shall appoint nominee director on the board of the Company.

Creation of recovery ex-pensefund

The Issuer shall, create a recovery expense fund in the manner specified by SEBI and to the extent applicable to it.

Provisions for meeting of debenture holders

The following provisions shall apply to the meetings of the Debenture Holders:

1. The Debenture Trustee or the Company may, at any time, and the Debenture Trustee shall (a) at the happening of an event, which constitutes, (i) a material breach of the Deed, (ii) an Event of Default (iii) breach of covenants, or (iv) in its opinion affects the interest of the Debenture Holders, or (b) at the re-quest in writing of the Debenture Holders representing not less than one-tenth in value of the Outstanding Principal Amounts of the Debentures, convene a meeting of the Debenture- hold-ers. Any such meeting shall be held at such place in the city where the registered office of the Company is situate or at such other place as the Debenture Trustee shall determine.

2. Meeting of Debenture Holders

(i) A meeting of the Debenture Holders may be called by giving not less than twenty-one days'

50



notice in writing.

(ii) A meeting of the Debenture Holders may be called after giving shorter notice than that specified in sub-paragraph (a) above, if consent is accorded thereto by Special Majority Debenture Holders.

3. Notice of Meeting of Debenture Holders

(i) Every notice of a meeting of the Debenture Holders shall specify the place and day and hour of the meeting and shall contain a statement of the business to be transacted thereat.

(ii) Notice of every meeting of the Debenture Holders shall be given to:

(1) every Debenture Holder in the manner provided in the Debenture Trust Deed;

(2) the persons entitled to a Debenture in con-sequence of death or insolvency of a Debenture Holder, by sending it through post in a prepaid letter addressed to them by name or by the title of the representat-ives of the deceased, or assignees of the in-solvent or by any like description at the ad-dress, if any, in India supplied for the pur-pose by the persons claiming to be so en-titled or until such an address has been so supplied, by giving the notice in any man-ner in which it might have been given if the death or insolvency had not occurred; and

(3) the Debenture Trustee when the meeting is convened by the Company and to the Company when the meeting is convened by the Debenture Trustee.

(a) The accidental omission to give notice to, or the non-re-ceipt of notice by, any Debenture Holder or other per-son to whom it should be given shall not invalidate the proceedings at the meeting.

(b) There shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular the nature of the concern or interest, if any, therein of every dir-ector and the manager, if any, of the Company. PROVIDED THAT where any item of business as aforesaid to be transacted at a meeting of the Debenture

51



Holders relates to, or affects, any other company, the extent of shareholding interest in that company of every director, and the manager, if any, of the first mentioned company shall also be set out in the statement if the ex-tent of such shareholding interest is not less than twenty per cent of the paid up share capital of that other com-pany.

(c) Where any item of business relates to the approval of any document by the meeting, said document should be attached to the notice of meeting.

(d) Quorum

(i) The Majority Debenture Holders, personally present shall be the quorum for the meeting of the Debenture Holders and the provisions of following sub-paragraph (ii) shall apply with respect thereto.

(ii) If, within half an hour from the time appointed for holding a meeting of the Debenture Holders, a quorum is not present, the meeting, if called upon the requisition of the Debenture Holders shall stand dissolved but in any other case the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Debenture Trustee may determine and if at the adjourned meeting also a quorum is not present within half an hour from the time appointed for holding the meeting, the Debenture Holders present shall be the quorum.

(e) Chairman of the Meeting of Debenture Holders

(i) The nominee of the Debenture Trustee shall be the chairman of the meeting and in his absence the Debenture Holders personally present at the meeting shall elect one of themselves to be the chairman thereof on a show of hands.

(ii) If a poll is demanded on the election of the chairman, it shall be taken forthwith in accordance with the provisions of the Act, the chairman elected on a show of hands exercising (for the time being) all the powers of the chairman under id provisions.

(iii) If some other person is elected chairman as a result of the poll, he shall be chairman for the rest of the meeting.

52



(f) The Debenture Trustee and the directors of the Com-pany and their respective solicitors may attend any meeting but shall not be entitled as such to vote thereat.

(g) At any meeting, a resolution put to the vote of the meet-ing shall be decided on a show of hands unless a poll is demanded in the manner hereinafter mentioned, and un-less a poll is so demanded, a declaration by the chair-man that on a show of hands the resolution has or has not been carried either unanimously or by a particular majority and an entry to that effect in the books con-taining the minutes of the proceedings of the meeting, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution.

(h) Before or on the declaration of the result on voting on any resolution on a show of hands, a poll may be ordered to be taken by the chairman of the meeting of his own motion, and shall be ordered to be taken by him on a demand made in that behalf by Debenture Holders representing not less than one-tenth in value of the Out-standing Principal Amounts of the Debentures, present in person or by proxy.

(i) Poll

(i) A poll demanded on a question of adjournment shall be taken forthwith.

(ii) A poll demanded on any other question (not being a question relating to the election of a chairman) shall be taken at such time not being later than forty-eight hours from the time when the demand was made, as the chairman may direct.

(j) At every such meeting each Debenture Holder shall, on a show of hands be entitled to 1 (one) vote only, but a poll be entitled to one vote in respect of every Deben-ture of which he is a holder in respect of which he is en-titled to vote.

(k) Voting; proxies; etc

(i) Any Debenture Holder entitled to attend and vote at the meeting shall be entitled to appoint another person (whether a Debenture Holder or not) as his proxy to attend and vote instead of himself.

(ii) In every notice calling the meeting there shall appear with reasonable prominence a statement that a Debenture Holder entitled to attend and

53



vote is entitled to appoint one or more proxies, to attend and vote instead of himself, and that a proxy need not be a Debenture Holder.

(iii) The instrument appointing a proxy and the power of attorney (if any) under which it is signed or a notary certified copy of the power of attorney shall be deposited at the registered office of the Company not less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote or in case of a poll, not less than twenty-four hours before the time appointed for the taking of the poll and in default, the instrument of proxy shall not be treated as valid.

(iii) The instrument appointing a proxy shall:

(1) be in writing; and

(2) be signed by the appointer or his attorney duly authorised in writing, or if the appointer is a body corporate, be under its seal or be signed by an officer or an attorney duly authorised by it.

(l) The instrument appointing a proxy shall be substantially in the format set out in Form MGT-11 in the Compan-ies (Management and Administration) Rules, 2014, and shall not be questioned on the ground that it fails to comply with any special requirements specified for such instruments.

(m) Every Debenture Holder entitled to vote at a meeting of the Debenture Holders of the Company on any resolu-tion to be moved thereat shall be entitled during the period beginning twenty four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting to inspect the prox-ies lodged, at any time during the business hours of the Company, provided not less than three days' notice in writing of the intention so to inspect is given to the Company.

(n) A vote given in accordance with the terms of an instru-ment of proxy shall be valid notwithstanding the previ-ous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed or the transfer of the Debenture in respect of which the proxy is given provided that no intimation in writing of such death, insanity, revocation or transfer shall have been received by the Company at the re-gistered office before the commencement of the meet-

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ing or adjourned meeting at which the proxy is used.

(o) On a poll taken at any meeting of the Debenture Hold-ers, a Debenture Holder entitled to more than one vote or his proxy or other person entitled to vote for him, as the case may be, need not if he votes, use all his votes or cast in the same way all the votes he has

(p) Scrutiny of Poll

(i) When a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers to scrutinise the votes given on the poll and to report thereon to him.

(ii) The Chairman shall have power, at any time before the result of the poll is declared, to remove a scrutineer from office and to fill vacancies in the office of scrutineer arising from such removal or from any other cause.

(iii) Of the two scrutineers appointed under this paragraph, one shall always be a Debenture Holder (not being an officer or employee of the Company) present at the meeting, provided such a Debenture Holder is available and willing to be appointed.

(q) Result of Poll

(i) Subject to the provisions of the Act, the Chairman of the meeting shall have power to regulate the manner in which a poll shall be taken.

(ii) The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken.

(r) In the case of joint Debenture Holders, the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the other joint holder or holders.

(s) The Chairman of a meeting of the Debenture Holders may, with the consent of the meeting, adjourn the same from time to time and from place to place, but no busi-ness shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

(t) In the case of equality of votes, whether on a show of hands, or on a poll, the Chairman of the meeting at which the show of hands takes place or at which the

55



poll is demanded, shall be entitled to a second or cast-ing vote in addition to the vote or votes to which he may be entitled to as a Debenture Holder.

(u) The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded.

(v) The Chairman of any meeting shall be the sole judge of the validity of every note tendered at such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.

(w) A meeting of the Debenture Holders shall, inter alia, have the following powers exercisable in the manner hereinafter specified in paragraphs (aa) to (dd) of this Clause 6 (Provisions for meeting of Debenture Hold-ers):

(i) Power to sanction re-conveyance and release, substitution or exchange of all or any part of the Hypothecated Assets from all or any part of the principal moneys and interest owing upon the Debentures.

(ii) Power to sanction any compromise or arrangement proposed to be made between the Company and the Debenture Holders.

(iii) Power to sanction any modification, alteration or abrogation of any of the rights of the Debenture Holders against the Company or the Hypothecated Assets whether such right shall arise under the Deed or Debentures or otherwise.

(iv) Power to assent to any scheme for reconstruction or amalgamation of or by the Company whether by sale or transfer of Assets under any power in the Company's Constitutional Documents or otherwise under the Act or provisions of any Law.

(v) Power to assent to any modification of the provisions contained in the Deed and to authorise the Debenture Trustee to concur in and execute any supplemental deed embodying any such modification.

(vi) Power to remove the existing Debenture Trustee and to appoint new trustee.

(vii) Power to give any direction, sanction, request

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or approval which under any provision of the Deed is required to be given by a Special Resolution.

(x) The powers set out in paragraph (z) of this Clause 6 shall be exercisable by a Special Resolution passed at a meeting of the Debenture Holders duly convened and held in accordance with provisions herein contained and carried by a majority consisting of not less than three-fourths of the persons voting thereat upon a show of hands or if a poll is demanded by a majority represent-ing not less than three-fourths in value of the votes cast on such poll.

(y) A resolution, passed at a general meeting of the Deben-ture Holders duly convened and held in accordance with these presents shall be binding upon all the Deben-ture Holders, whether present or not at such meeting, and each of the Debenture Holders shall be bound to give effect thereto accordingly, and the passing of any such resolutions shall be conclusive evidence that the circumstances justify the passing thereof, the intention being that it shall rest with the meeting to determine without appeal whether or not the circumstances justify the passing of such resolution.

(z) Minutes of all resolutions and proceedings at every such meeting as aforesaid shall be made and duly entered into books from time to time provided for the purpose by the Debenture Trustee at the expenses of the Company and any such minutes as aforesaid, if purpor-ted to be signed by the chairman of the meeting at which such resolutions were passed or proceeding held or by the chairman of the adjourned meeting shall be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly held and con-vened and all resolutions passed thereat or proceedings taken, to have been duly passed and taken.

(aa) Notwithstanding anything herein contained, it shall be competent to all the Debenture Holders to exercise the rights, powers and authorities of the Debenture Holders under the Deed by a letter or letters signed by or on be-half of the Majority Debenture Holders or Special Ma-jority Debenture Holders, as the case may be, without convening a meeting of the Debenture Holders as if such letter or letters constituted a Majority Resolution or a Special Resolution, as the case may be, passed at a meeting duly convened and held as aforesaid and shall have effect accordingly.

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(bb) For any written consent of the Debenture Holders, the Debenture Trustee (or as applicable, the Company or a Debenture Holder) shall provide a notice in writing to the last available address of each Debenture Holder at least 10 (ten) Business Days prior to the date on which any decision is required to be made or consent is re-quired to be provided. The record date of such notice shall be the date falling 3 (three) Business Days prior to the date of dispatch of such notice. If the notice spe-cifies any notice period, then any consents received after such notice period will not be accepted. The Debenture Holders are required to submit their consent only in written form to the Debenture Trustee. The Debenture Holders however can ratify any shorter no-tice depending on the reasons given/prevailing circum-stances on a case to case basis.

Role and Responsibilities of Debenture Trustee

To oversee and monitor the overall transaction for and on behalf of the Debenture Holder(s) and such other roles and responsibilities as set out in greater detail in the Debenture Trust Deed.

Risk factors pertaining to theIssue

As more particularly set out in Section 3 of the Information Memorandum dated November 18, 2020

Covenants (Conditions for breach of covenants as specified in the debenture trust deed)

Credit Rating Covenants

1. If the long-term credit rating of the Debentures is downgraded from “BBB” to “BBB-” by ICRA Limited and/or any other outstanding rating of the issuer, the coupon rate would stand increased by 0.25% over and above the prevailing coupon rate immediately prior to such rating downgrade. Such enhanced coupon rate shall be applicable from the date of issue of the rating downgrade, by any rating agency, to the residual maturity of bonds. For each subsequent downgrade of rating the coupon further increased by 25 bps.

2. If the long-term credit rating of the Debentures is downgraded to below “BBB-” by ICRALimited and/or any other outstanding rating of the issuer, post the issuance of debentures and at any point of time during the currency of the NCDs, The Debenture holders would reserve the right to recall the outstanding principal amount on the NCDs (i.e. redemption at par) along with other monies/accrued interest due in respect thereof. Such outstanding amount will be payable within a period of 30 days from the date of such notice of exercise of the right by the Debenture holders.

Reporting Covenants

Quarterly Reports – within 90 (Ninety) calendar days from the end of each financial quarter:

a) Unaudited Financial Statements

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b) Financial covenant compliance certificate signed by a Director or the Chief Financial Officer

c) Latest ALM detailsd) Change in Shareholding structuree) Change in Board compositionf) Changes in accounting policyg) Change in senior management officials (any CXO or

equivalent)h) Portfolio cuts including PAR datai) ALM table

Annual Reports – within 90 (Ninety) calendardaysfrom the end of each financial year:

a) Audited financial statements

Event Based Reports – within 10 (Ten) Business Days of the event occurring

a) Any fraud amounting to more than 2.0% of Gross Loan Portfolio.

b) Change in the constitutional documents of the Company.c) Material Adverse Effectd) Any dispute, litigation, investigation or other proceeding

which could result in a Material Adverse Effect.e) Winding up proceedings.f) Any Event of Default or Potential Default, and any steps

taken / proposed to remedy the same.

Financial Covenants

The Capital Adequacy Ratio shall be always compliant with min-imum levels stipulated by the regulator (“RBI”) at all points in time.

Affirmative Covenants

1. To utilise the proceeds of this issue in accordance with applicable laws and regulations.

2. To comply with corporate governance, fair practices code prescribed by the RBI.

3. To comply with latest regulatory guidelines4. Notification of any potential Event of Default or Event of

Default.5. Obtain, comply with and maintain all licenses /

authorizations.6. Provide details of any material litigation, arbitration, legal

action or or administrative proceedings, etc. including those that are required to be disclosed to the stock exchange under the listing agreement entered into with the stock (materiality threshold to be finalized during documentation), except the litigation, arbitration, legal action or administrative proceedings filed by or against the Company in its ordinary course of business in relation to the loan.

7. Maintain internal control for the purpose of (i) preventing

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fraud on monies lent by the Company; and (ii) preventing money being used for money laundering or illegal purposes.

8. Permit visits and inspection of books of records, documents and accounts to debenture holders as and when required by them.

9. Comply with any monitoring and/or servicing requests from Debenture Holders.

Negative Covenants

The Issuer shall not without the prior written permission of Debenture Trustee, acting on behalf of the debenture holders, do or undertake to do any of the following:

a. Effect any change in capital structureb. Formulate any scheme of amalgamation or reconstitutionc. Implement any major scheme of expansion. However

normal capital expenditure would not be covered by this covenant

d. Invest by way of share capital in or lend or advance funds to or place deposits with any other concern. Normal trade credit or security deposits required to be extended in the normal course of business or advances to employees, however would not be covered by this covenant

e. Enter into additional borrowing arrangements (including securitisation of receivables or provide escrow facilities), either secured or unsecured, with any Bank, Financial Institutions, Company / Firm or otherwise above the borrowing limits approved by the Shareholders of the company

f. Undertake guarantee obligations on behalf of any other Company / Firm etc.

g. Allow the promoters / directors to alienate, transfer, dispose or dilute their shareholding

h. Allow the promoters to retire from the firm till the currency of the debentures without specific and prior approval from the Investor.

i. Declare dividends for any year out of profits relating to the year if any of the financial commitments under these Debentures have not been duly met

j. Withdraw funds from the business out of the profits relating to the year if any of the financial commitments under these Debentures have not been duly met

k. Repay monies brought in by promoters / directors, principal shareholders, friends and relative in the business by way of Loans / deposits / share application money etc. and pay interest on any unsecured loan brought in as a quasi-equity. All such loans / deposits / unsecured loans shall subordinate to the NCDs issued vide this term sheet.

l. Enter into long term contractual obligation/s directly affecting the financial position of the Company / Firm

m. Sell, assign, mortgage or otherwise dispose off any of the assets charged to the Debenture Trustee

n. Change in promoter, ownership or control (excluding

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Employee Stock Option)would be communicated to Debenture Holders and consent would be sought. Any new equity raising and related change in board composition would be communicated to Debenture Holders.

o. Issuer shall not amend or modify clauses in its Memorandum of Association and Article of Association, where such amendment would have a Material Adverse Effect as defined earlier, without prior consent of the Debenture Trustee.

p. Any sale of assets/business/division that has the effect of exiting the business or re-structuring of the existing business, to be with the prior consent of the debenture holder.

q. The issuer shall not open bank accounts with other than lender’s bank without prior written consent

Other covenants:

1. Security Creation: If the Company fails to execute the trust deed and create and perfect the charge within three months of the closure of the issue, the Company shall also pay interest of 2% p.a. to the debenture holder, over and above the agreed coupon rate, till the execution of the trust deed or refund the subscription (i.e. redemption at par) along with other monies/accrued interest due in respect thereof, at the option of the Debenture holders;

2. Default in Payment: In case of default in payment of interest and/ or principal redemption on the due dates, the Company shall pay additional interest at the rate of 2.00% p.a. over the Coupon Rate for the defaulting period i.e. the period commen-cing from and including the date on which such amount be-comes due and upto but excluding the date on which such amount is actually paid.

3. Delay in Listing: The Company shall make listing application to BSE and/ or NSE within 15 days from the Deemed Date of Allotment of the Debentures and seek listing permission within 20 days from the Deemed Date of Allotment of Debentures. In case of delay in listing of the Debentures beyond 20 days from the Deemed Date of Allotment, the Company shall pay penal interest at the rate of 1.00% p.a. over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Debentures to the Debentureholder(s).

The interest rates mentioned in above covenants shall be independent of each other.In case any of the “Covenants” is breached and continues breached for a period of 30 days from such breach coming to notice, the Bondholder would reserve the right to recall the outstanding principal amount on the NCDs (i.e. redemption at par) along with other monies/accrued interest due in respect thereof.

Representation and 1. The Company is registered with the RBI as an NBFC

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warranties

2. No Event of Default has occurred and is continuing on the date of this transaction

3. Binding obligation of Transaction Documents

4. No conflict with other obligations / constitutional documents

5. No Material Adverse Change in business, condition or oper-ations of the Issuer

6. Company has the power and authority to issue Debentures and such Transactions Documents are valid and admissible in evidence

7. Absence of any pending or threatened litigation, investiga-tion or proceedings that may have a material adverse effect on the business condition (financial or otherwise), opera-tions, performance or prospects of the Issuer or that purports to affect the Facility

8. Illegality

And as set out in greater detail in the Transaction Documents.

Indemnification

The Issuer will indemnify, and hold harmless the Debenture Holders from and against any claim, liability, demand, loss, damage, judg-ment or other obligation or right of action which may arise as a res-ult of breach of this Term Sheet by the Issuer or its Promoter/s.

Illustration of Bond Cashflows

Kindly refer to Annexure V of this Information Memorandum

Governing Law and Jurisdiction

The validity, interpretation, implementation and resolution of disputes arising out of or in connection with this Information Memorandum shall be governed by the laws of India.

The courts and tribunals at Mumbaishall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Information Memorandum.

Powers and Duties of the Debenture Trustee

Duties of Debenture Trustee(a) the Debenture Trustee may, in relation to these

presents, act on the opinion or advice of or any in-formation obtained from any solicitor, counsel, ad-vocate, valuer, surveyor, broker, auctioneer, quali-fied accountant or other expert whether obtained by the Company or by the Debenture Trustee or other-wise;

(b) the Debenture Trustee shall be the attorney of the Company and shall have the right to execute, sign and do any deeds, documents, assurances, acts and things in the name and on behalf of the Company, which shall in the opinion of the Debenture Trustee

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be necessary or expedient that the Company should execute, sign and do for the purpose of carrying out any of the trusts or obligations declared or imposed upon the Debenture Trustee;

(c) the Debenture Trustee is not permitted to release / exclude any part of the Hypothecated Assets tem-porarily or permanently from the security created / to be created for the Debentures except in accord-ance with a Special Resolution;

(d) subject to the approval of the Debenture Holders by way of Special Resolution passed at a meeting of Debenture Holders held for determining the liability of the Debenture Trustee, the Debenture Trustee shall, as regards all trusts, powers, authorities and discretions, have absolute and uncontrolled discre-tion as to the exercise thereof and to the mode and time of exercise thereof and in the absence of any fraud, gross negligence, willful misconduct or breach of trust shall not be responsible for any loss, costs, charges, expenses or inconvenience that may result from the exercise or non-exercise thereof and in particular they shall not be bound to act at the re-quest or direction of the Debenture Holders under any provisions of these presents unless sufficient monies shall have been provided or provision to the satisfaction of the Debenture Trustee made for providing the same;

(e) with a view to facilitating any dealing under any provisions of these presents the Debenture Trustee shall have full power to consent (where such con-sent is required) to a specified transaction or class of transactions conditionally;

(f) the Debenture Trustee shall not be responsible for the monies paid by Applicants for the Debentures;

(g) the Debenture Trustee shall have full power to de-termine all questions and doubts arising in relation to any of the provisions hereof and every such de-termination bonafide made (whether or not the same shall relate wholly or partially to the acts or pro-ceedings of the Debenture Trustee) in the absence of any fraud, gross negligence, willful misconduct or breach of trust as decided by the court of competent jurisdiction, shall be conclusive and binding upon all persons interested hereunder;

(h) subject to the approval of the Debenture Holders by way of Special Resolution passed at a meeting of Debenture Holders held for determining the liability of the Debenture Trustee, the Debenture Trustee

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shall not be liable for anything whatsoever except any fraud, gross negligence, willful misconduct or breach of trust by the Debenture Trustee as decided by the court of competent jurisdiction;

(i) notwithstanding anything contained to the contrary in this Deed, the Debenture Trustee shall before tak-ing any action on behalf of the Debenture Holders or providing any consent on behalf of the Debenture Holders, obtain the written consent of the Majority Debenture Holders;

(j) the Debenture Trustee shall forward to the Deben-ture Holders copies of any information, documents from the Company pursuant to this Deed within 2 (two) Business Days of receiving the same from the Company;

(k) The Debenture Trustee shall take all reasonable steps to realise the monies due to the Trust;

(l) Trustee assumes that investors have carefully read the general risks, management’s perceptions of risk as set out in the information memorandum before making investments in Debentures;

(m) Investors should note and be aware that the receipt of any coupon payment on due date(s) and principal amount at the maturity is subject to the credit risk of the issuer company;

(n) Investor to note that decisions may be made by the majority on behalf all the Debenture Holders may be adverse to the interest of an individual Debenture Holder who do not attend and vote at the relevant meeting and Debenture Holders who voted in a manner contrary to the majority;

(o) The Issuer Company is solely responsible for the correctness, adequacy and disclosure of all relevant information contained in the information memor-andum; and

(p) The Debenture Trustee shall not be liable for any ac-tion taken by it unless such liability is caused dir-ectly by its gross negligence and wilful misconduct as decided by court of competent jurisdiction.

PROVIDED THAT nothing contained in this Clause shall exempt the Debenture Trustee or any receiver, attorney, manager, agent or other person appointed by the Debenture Trustee from or indemnify them against any liability for breach of trust nor any liability which by virtue of any rule or Law would otherwise attach to them in respect of any

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negligence, default or breach of trust which they may be guilty of in relation to their duties hereunder as decided by the court of competent jurisdiction.

Power of Trustee to Delegate

The Debenture Trustee hereof being a corporation may, in the execution and exercise of all or any of the trusts, powers, authorities and discretions vested in them act by an officer or officers for the time being of the Debenture Trustee and the Debenture Trustee may also, whenever they think it expedient, delegate by power of attorney or otherwise to any such officer all or any of the trusts, powers, authorities and discretions vested in them be these presents and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as the Debenture Trustee may think fit. The DebentureTrustee shall however be liable for any negligence, illegality, fraud, breach of trust, bad faith and wilful misconduct as decided by the court of competent jurisdiction of the officer or Person to whom the DebentureTrustee has delegated its powers and shall not be absolved of its obligations under this Deed. PROVIDED THAT the Debenture Trustee shall ensure that any powers under this Clause shall be exercised with reasonable care to ensure the competency of the officer or Person to whom the Debenture Trustee has delegated its powers.

The Debenture Trustee may at any time after the security created pursuant to the Hypothecation Agreement becomes enforceable, apply to the courts for an order that the powers and trusts hereof be exercised and carried into execution under the direction of the court and for the appointment of a receiver and manager of the Hypothecated Assets or any of them and for any other order in relation to the execution and administration of the powers and limits hereof as the Debenture Trustee shall deem expedient and they may assent to approve of any application to the court made at the instance of any of the beneficial owner(s) and shall be indemnified by the Company against all costs, charges and expenses incurred for or in relation to any such applications or proceedings.

Nominee Director:

The Debenture Holders and the Debenture Trustee shall have a right to appoint a nominee director as per the Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993 on the board of directors of the Company (hereinafter referred to as the "Nominee Director") upon the occurrence of any of the following:

(a) the earlier of (i) two consecutive defaults in the pay-ment of interest to the Debenture Holders (as per the Debenture Trustees Regulations) or (ii) without pre-

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judice to any other rights of the Debenture Trustee under the Transaction Documents, the occurrence of a Payment Default that has not been remedied for a period of 30 days;

(b) default in creation of security for Debentures;

(c) default in redemption of Debentures; or

(d) occurrence of any event specified in Schedule XIV (Events of Default) of this Deed;

(e) default in any of the reporting covenants prescribed in Schedule XII (Reporting Covenants).

Procedure followed by DT at the time of default

If one or more of the events specified in events of default) clause of the Debenture Trust Deed occur(s), the Debenture Trustee may, in its discretion, that is, without requiring any consent or confirmation of the Company, and 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 Clause 6 (Provisions for the meetings of the Debenture Holders) of Debenture Trust Deed hereto by a notice in writing to the Company initiate the following course of action:

(a) 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) 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;

(c) enforce any security created pursuant to the Hypothecation Agreement in accordance with its terms, as may be set out herein or therein, towards repayment of the Debentures;

(d) appoint any independent agency to inspect and examine the working of the Company and give a report to Debenture Holders/ the Debenture Trustee. The Company shall 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;

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(e) take all such other action expressly permitted under this Deed or in the other Transaction Documents or permitted under the Law; and

(f) exercise such other rights as the Debenture Trustee may deem fit under applicable Law to protect the interest of the Debenture Holders.

(g) appointment of nominee director as per the applicable laws.

(h) invoke/enforce any guarantees provided under the Transaction Documents in accordance with the terms thereof;

(i) enter into inter creditor agreement or take all such stemps to enforce security as decided or authorised by the Debenture Holders and applicable laws.

Note:

1. The list of documents which has been executed or will be executed in connection with the Issue and subscription of debt securities shall be annexed.

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

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SECTION 6: DISCLOSURES PERTAINING TO WILFUL DEFAULT

In case of listing of debt securities issued through private placement, the following disclosures are required to be made in terms of the Debt Listing Regulations:

A. Name of the Bank declaring the entity as a Wilful Defaulter:The Issuer has not been declared as a wilful defaulter by any bank or financial institution or consortium thereof.

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

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

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

E. Steps taken, if any, for the removal from the list of wilful defaulters:NA

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

G. Any other disclosure as specified by SEBI:NA

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SECTION 7: TRANSACTION DOCUMENTS AND KEY TERMS

7.1 Transaction Documents

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

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

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

C. Hypothecation Agreement pursuant to which the Issuer will create an exclusive and first ranking charge by way of hypothecation over the Hypothecated Assets in favour of the Debenture Trustee to secure its obligations in respect of the Debentures (“Hypothecation Agreement”); and

D. Such other documents as agreed between the Issuer and the Debenture Trustee.

The Transaction Documents shall be executed on or prior to the Issue Closing Date.

7.2 Affirmative Covenants

(a) Notice of winding up or other legal process

Company shall 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 Act 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;

(b) Loss or damage by uncovered risks

Company shall 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;

(c) Costs and expenses

Company shall 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;

(d) Payment of Rents, etc.

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Company shall 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 under this Deed;

(e) Preserve corporate status; authorisations

Company shall

(i) 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; and

(ii) conduct its business with due diligence and efficiency and in accordance with sound technical, managerial and financial standards and business practices with qualified and experienced management and personnel;

(iii) promptly obtain all consents and authorizations as maybe necessary for performing its obligations in relation to the issue of the Debentures;

(f) Pay stamp duty

Company shall 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;

(g) Furnish information to trustee

Company shall give 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;

(h) Grievance

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

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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;

(i) Specific Information to be provided to the Debenture Trustee

Company shall 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 in Events of Default;

(ii) periodic review of the ratings obtained by the Company by the credit rating agencies and any revision in the rating as per the listing agreement entered into with the stock exchange (if the Debentures are listed);

(iii) details of any material litigation, arbitration or administrative proceedings, etc. including those that are required to be disclosed to the stock exchange under the listing agreement entered into with the stock (if the Debentures are listed);

(iv) any and all information required to be provided to the Debenture Holders under the listing agreement that may be entered into between the Company and the BSE; and

(v) the declaration or distribution of dividend;

(j) Comply with Investor Education and Protection Fund requirements

Company shall comply with the provisions of the Act 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;

(k) Further assurances

Company shall

(i) execute and/or do, at their own expense, all such deeds, assurances, documents, instru-ments, 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 com-ply 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 oblig-ations under this Deed or to ensure the legality, validity, enforceability or admissibility in evidence in India of this Deed;

(iv) Permit visits and inspection of books of records, documents and accounts to Debenture Trustee as and when required by them with a prior written notice of at least 3 Business Days to the Company

(v) comply with:

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(A) all Laws, rules, regulations and guidelines (including but not limited to environ-mental, social and taxation related Laws), as applicable in respect of the Deben-tures and obtain such regulatory approvals as may be required from time to time, including but not limited, in relation to the following (if the Debentures are listed) (i) the Debt Listing Regulations, as may be in force from time to time during the tenor of the Debentures; (ii) the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and (iii) 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 Deben-tures 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 Act in relation to the issue of the Debentures;

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

(E) The Company shall ensure that, at time of making any payment of interest or re-payment 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 (in-cluding withholding tax benefit) but without, in any way, 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.

(l) Security and Guarantee

The Company hereby further agrees, declares and covenants with the Debenture Trustee as follows:

(i) the Debentures shall be secured with first ranking exclusive continuing security by way of a first ranking exclusive charge on the Hypothecated Assets in favour of the Debenture Trustee for the benefit of the Debenture Holders;

(ii) that all the Assets that shall be charged to the Debenture Trustee under the Hypotheca-tion Agreement 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. PROVIDED THAT the charge on the monies lying in the Designated Proceeds Account shall be a floating chargewith the intent that the Company may use the proceeds lying therein or to the credit thereof for the origin-ation of Loans and the charging of the Receivables thereof in favour of the Debenture Trustee in accordance with the terms of the Transaction Documents and the floating charge shall convert to a fixed charge in accordance with the terms of the Hypotheca-tion Agreement. 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 al-low 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;

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(iii) shall, on the First Security Cover Determination Date and at all times thereafter, ensure that the Security Cover Ratio is maintained and towards this end, it shall on or before each Monthly Security Cover Determination Date, Top-up the Hypothecated Assets with additional Receivables and/or Replace any Receivables constituting the Hypo-thecated Assets in accordance with the Hypothecation Agreement so as to ensure that Security Cover Ratio is maintained at all times from the First Security Cover Determ-ination Date until the redemption of the Debentures in full and perfect the first ranking and exclusive charge of the Debenture Trustee over such modified Hypothecated As-sets by filing Form CHG-9 with the concerned ROC and the required filing with the Central Registry in relation thereto as soon as practicable and no later than 30 (thirty) days therefrom;

(iv) shall, on the First Security Cover Determination Date and every Reporting Date, as also whenever required by the Debenture Trustee, give full particulars to the Debenture Trustee of all the Hypothecated Assets from time to time and shall furnish and verify all statements, reports (including Monitoring Reports as prescribed in the Hypotheca-tion Agreement), returns, certificates and information from time to time and as re-quired by the Debenture Trustee and furnish and execute all necessary documents to give effect to the Hypothecated Assets;

(v) the security interest created on the Hypothecated Assets shall be a continuing security as described in the HypothecationAgreement;

(vi) the Hypothecated Assets shall satisfy the eligibility criteria set out in Eligibility Cri-teria;

(vii) 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 Financial Indebtedness or liability of the Com-pany to the Debenture Trustee and/ or the Debenture Holders; and

(viii) 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 Out-standing Principal Amounts of the Debentures under this Deed;

(ix) to add fresh loan assets to the Security Cover to ensure that the value of the Hypothec-ated Assets is equal to 1.25 times or 125% (One Hundred Twenty FivePercent) of the aggregate amount of principal outstanding of the NCDs.

(x) the Debentures shall be supported by the GOI Guarantee to be provided by the Guar-antor in accordance with the GOI Guidelines

(m) Filings

If the Debentures are listed, the Company shall file with the BSE for dissemination, within 45 days 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:

(i) credit rating;

(ii) asset cover available accompanied with a half yearly certificate regarding mainten-ance of minimumSecurity Cover Ratio specified in the Hypothecation Agreement in re-

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spect of the Debentures, by either a practicing company secretary or a practicing chartered accountant, within one month from the end of the half year;

(iii) debt to Equity ratio accompanied with a certificate of a practicingchartered account-ant confirming such debt to Equity ratio;

(iv) previous Due Date for the payment of interest/principal and whether the same has been paid or not; and

(v) next Due Date for the payment of interest/principal.

(n) Amounts to be reimbursed to the Debenture Trustee

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 Assets and such amounts shall be deemed to be secured by the Hypothecated Assets;

(o) Where Debenture Holder is a Foreign Investor

Company shall in the event a Debenture Holder is a foreign portfolio investor, foreign institutional investor or sub-account of foreign institutional investors, or qualified foreign investor, the Company shall, in relation to each Interest Payment Date and in relation to each date when any other payment is due by the Company under the Debentures (each a "Relevant Payment Date"), courier to the Debenture Holders (or their designated agent, as confirmed by the Debenture Holders) within 1 (One) Business Day after a Relevant Payment Date, the duly completed and signed Form 15 CA/CB. A scanned copy of such duly completed and signed Form 15 CA/CB shall be sent to the Debenture Holders on the Relevant Payment Date by e-mail;

(p) Delay in Security Creation

Company shall in the event of any delay in the creation of first ranking and exclusive charge over the Hypothecated Assets within the timelines stipulated in the Hypothecation Agreement or in the event the Security Cover Ratio is not met on or prior to the First Security Cover Determination Date, the Company will, at the option of the Debenture Holders, either:

(i) refund the Application Money as set out in Clause 5.21 this Information Memor-andum, to the Debenture Holders; or

(ii) pay to the Debenture Holders additional interest at Default Interest Rate on the Out -standing Principal Amounts from the Deemed Date of Allotment till the creation of first ranking and exclusive charge over the Hypothecated Assets pursuant to the terms of the Hypothecation Agreement such that the Security Cover Ratio is met.

(q) Compliance with ESG Requirements

Company shall adhere to ESG requirements and provide a declaration to that effect in the format provided in ESG Requirements.

(r) Books of Account

Company shall maintain proper books of account as required by the Act and therein make true and proper entries of all dealings and transactions of and in relation to the Hypothecated Assets and the business of the Company and keep such books of account and all other books, registers and other documents relating to the affairs of the Company at its registered office or, where

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permitted by Law, at other place or places where the books of account and documents of a similar nature may be kept. The Company will ensure that all entries in the same relating to the Hypothecated Assets and the business of the Company shall at all reasonable times be open for inspection of the Debenture Trustee and such person or persons as the Debenture Trustee shall, from time to time, in writing for the purpose, appoint.

(s) Material Adverse Effect

Company shall promptly inform the Debenture Trustee in writing of the occurrence of any, or the occurrence of any event that is likely to have a, Material Adverse Effect, together with explanation of the reasons thereof;

(t) Insurance

Company shall maintain insurances on and in relation to its business and assets with insurance companies against those risks and to the extent as is usual for companies carrying on the same or substantially similar business and any other insurances as may be required by Law and ensure that all premiums are paid on time and other obligations of the Company under the insurance policies are duly complied with;

(u) Corporate Governance

(i) the Company shall maintain the highest standards of corporate governance in accordance with the NBFC Master Directions;

(ii) shall at all times until the redemption of all outstanding Debentures, ensure that there is at least 1 (One) independent director; and

(iii) the Company shall at all times comply with the NBFC Master Directions.

(v) General

(i) the Company shall perform all of its obligations under the terms of the Transactions Documents and maintain in full force and effect each of the Transaction Documents;

(ii) the Company shall promptly pay and discharge all its financial obligations and regularly make all payments due and payable by the Company, including but not limited to taxes and also such payment due and payable under or in respect of the Issue or any documents executed in connection there with;

(iii) the Company shall give the Debenture Trustee any information, relating to the business, property, affairs of the Company, that materially impacts the interests of the Debenture Holders;

(iv) the Company shall comply with the ‘Guidelines on Fair Practices Code for Non-Banking Financial Companies’ as prescribed by the RBI from time to time; and

(v) the Company shall at all times act and proceed in relation to its affairs and business in compliance with applicable Law.

(w) Access

Company shall permit the Debenture Trustee (and the Debenture holders) and/or accountants or other professional advisers and contractors appointed by the Debenture Trustee access at all reasonable times and on reasonable notice of the Company to:

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(i) check the management of the funds made available through subscription to the Debentures;

(ii) inspect and take copies and extracts from the books, accounts and records of the Company;

(iii) visit and inspect the premises of the Company; and

(iv) meet and discuss matters with senior management employees of the Company.

(x) Conditions Subsequent

Company shall comply with the conditions stipulated in Conditions Subsequent.

(y) Financial Covenants

Company shall comply with the financial covenants stipulated in Financials Covenants.

(z) Issue Terms and Conditions

At all times during the term of these presents comply with each of the Issue Terms and Conditions.

(aa) Internal Controls

Company shall maintain appropriate internal controls for the purpose of (i) preventing fraud on monies lent by the Company; and (ii) preventing money being used for money laundering or illegal purposes.

(bb) to inform debenture trustee of any major change in composition of its Board of Directors, which may amount to change in control as defined in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997;

(cc) Subsequent Valuation:

Carry out subsequent valuation of the Hypothecated Assets, at the request of the Debenture Trustee, at the Company’s cost.

(dd) Additional Covenants

i. Security Creation

If not already executed, the Company shall execute the Trust Deed within 3 months from date of closure of the issue in respect of the Debentures allotted under the first series of Debentures. In case of a delay in execution of Trust Deed and Security Documents, the Company will refund the subscription with agreed rate of interest or will pay penal interest of atleast 2% p.a. over the Coupon Rate till these conditions are complied with at the option of the investor.

ii. Default in Payment and Other Defaults

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In case of default in payment of interest and/or principal redemption on the due dates or observance of any other terms, conditions or covenants as per this Deed, Disclosure Document(s) in respect of a relevant tranche / series of the Debentures, additional interest/ default interest of atleast @ 2% p.a. or such other rate as may be prescribed under the Applicable Law over and above the applicable implicit yield / Coupon Rate/ Interest Rate will be payable by the Company for the defaulting period in respect of such tranche /series of the Debentures.

iii. Delay in Listing

In case of delay in listing of the debt securities, wherever applicable, beyond 20 (twenty) days from the Deemed Date of Allotment or such number of days as may be allowed (for getting the Debentures listed) under the Applicable Law in respect of the relevant tranche of the Debentures, the Company will pay default/ additional interest of atleast 1 % p.a. over the coupon rate or such other rate as may be prescribed under the Applicable Law from the expiry of 30 (thirty) days from the Deemed Date of Allotment till the listing of such debt securities to the investor.

(ee) The Company is aware that in terms of Regulation 14 of the SEBI (Debenture Trustees) Regu-lations, 1993 as amended from time to time, the Trust Deed has to contain the matters spe-cified in Section 71 of the Companies Act, 2013 and Form No. SH.12 specified under the Companies (Share Capital and Debentures) Rules, 2014. The Company hereby agrees to com-ply with all the clauses of Form No. SH.12 as specified under the Companies (Share Capital and Debentures) Rules, 2014 as if they are actually and physically incorporated herein in this deed.

(ff) Undertaking by the Company certifying that the total GOI Guarantee to all PSBs shall be capped at 1.25 times of Company’s total maturing liabilities over a period of six months from the date of issue of Debentures. A copy of the same to be submitted to Debenture Trustee.

(gg) Undertaking certifying that the Company will rework the Asset Liability structure within three months to have positive ALM in each bucket for the first three months and on cumulative basis for the remaining period. A copy of the same to be submitted to Debenture Trustee.

7.3 NEGATIVE COVENANTS

(a) Change of business; Role of Promoter

(i) Change the general nature of its business from that which is permitted by the RBI.

(ii) Change or make any alteration to its Constitutional Documents.

(iii) The Company will ensure that prior to the Final Redemption Date, there will be no sale, disposal or transfer in any matter whatsoever of the equity shares held by the Pro-moter in the Company.

(iv) Until the Final Redemption Date, the Company will procure and ensure that the Pro-moter will not exit from or reduce its involvement from the management activities of the Company as is subsisting on the date of execution of this Deed.

(b) Dividend

Declare or pay any dividend or make any distributions on its share capital (other than dividends or distributions payable on shares of the Company), unless:

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(i) the proposed payment or distribution is out of net income of the current Financial Year (excluding any amount resulting from the revaluation of any of the Company's assets);

(ii) no Event of Default has occurred and is then continuing, or could occur or is reasonably likely to occur, as a result of such payment or declaration of any dividend or distribution and after giving effect to any such action;

(iii) the Company is in compliance with the financial covenants set forth inFinancial Covenants; and

(iv) the company has paid or made satisfactory provision for the payment of the installments of principal and interest due on the Debentures.

(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) Associates, Subsidiaries, and Joint Ventures

Dispose of, acquire or incorporate any associates (as defined in the Act), subsidiary (as defined in the Act) or joint ventures.

(e) Acquisition

Acquire, without the prior written consent of the Majority Debenture Holders, any company, business or undertaking if the amount of the acquisition cost, whether paid by cash or otherwise, when aggregated with the aggregate acquisition cost of any other companies, business or undertaking acquired by it during that financial year exceeds 75% (seventy five percent) of the Equity.

(f) Joint Venture

Without the prior written consent of the Majority Debenture Holders:

(i) acquire (or agree to acquire) any shares, stocks, securities or other interest in any joint venture; or

(ii) transfer any assets or lend to or guarantee or indemnify or give security for the obligations of a joint venture (or agree to transfer, lend, guarantee, indemnify or give security for the obligations of a joint venture).

(g) Loans and Guarantees

The Company shall not:

(i) extend a loan to any single individual or entity amounting to greater than 10% (ten percent) of its Tangible Net Worth; or

(ii) undertake to guarantee the liabilities of any individual or entity (unless the entity is a wholly owned subsidiary of the Company).

(h) Arm's length basis; No profit sharing arrangements

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The Company shall not, without the prior written consent of the Majority Debenture Holders:

(i) enter into any transaction with any person or enter into or continue business relations with its shareholders, employees, affiliate(s), holding company(ies), and/or subsidiary(ies) except on proper commercial terms negotiated on an arm's length basis;

(ii) enter into or establish any partnership, profit sharing, royalty agreement or other similar other arrangement whereby the Company's income or profits are, or might be, shared with any other person; or

(iii) enter into any management contract or similar arrangement whereby its business or operations are managed by any other person.

(i) Immunity

Claim any immunity or limitation of liability against any payment obligations arising towards the Debenture Holders.

(j) Auditor

Change its auditor without the prior written consent of the Majority Debenture Holders. The Company shall authorize its auditors to communicate directly with the Debenture Trustee and the Debenture Holders.

(k) Liabilities

Incur, create, assume, or allow any Financial Indebtedness that ranks prior to the Debentures or subordinates the Debentures.

(l) 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, if such action results in change in Control of the Company. PROVIDED THAT if the written consent of the Debenture Trustee/ the Majority Debenture Holder(s) is withheld for the proposed change of control, the Company will, upon the instructions of the Debenture Trustee, redeem the Debentures forthwith within 45 (Forty five) days of receiving such written instructions from the Debenture Trustee and pay prepayment penalty on such redemption in accordance with the terms of the Transaction Documents.

No prior written consent of the Debenture Trustee is required if the issue of any additional shares or equity interests, transfer, sale, pledge or encumbrance of its existing shares or equity interests does not result in change in Control of the Company.

(m) Disposal of Assets

Sell, transfer, or otherwise dispose of in any manner whatsoever any material Assets of the Company, other than any securitization/portfolio sale of assets undertaken by the Company in its ordinary course of business.

(n) Management Control

Any change in Management Control of the Company.

(o) Material compromise or Settlement

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Enter into material compromise or arrangement or settlement with any of its creditors (secured and unsecured) that would prejudicially affect the interest of the Debenture Holders.

(p) Anti-money laundering

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.

(q) Related Party Transactions

Without the prior written consent of the Debenture Holders, the Company shall not enter into any transaction(s) in the nature of loans or advances to a related party(s) whereby the overall outstanding amount owed to the Company under all such transactions exceeds 10% of its net worth (as defined in the Act). Debenture Trustee or its representatives will have access to any additional information that it/they deem(s) necessary to monitor and evaluate the mentioned covenant till the Final Settlement Date.

(r) FinancialYear

Company shall not change its financial year-end from 31st March (or such other date as may be approved by Majority Debenture Holders) without the prior written consent of the Debenture Trustee.

(s) Others

Without prejudice to Clause (a) (Change of business; Role of Promoter) of this Negative Covenants, permit sale/ transfer/ disposal of (i) equity shares of the Company, or (ii) instruments that are compulsorily and mandatorily convertible into equity shares of the Company, by the Promoter(s) and/ or (iii) permit the Promoter(s) to exit from management activities in relation to the Company.

7.4 NEGATIVE COVENANTS

(a) Change of business; Role of Promoter

(v) Change the general nature of its business from that which is permitted by the RBI.

(vi) Change or make any alteration to its Constitutional Documents.

(vii) The Company will ensure that prior to the Final Redemption Date, there will be no sale, disposal or transfer in any matter whatsoever of the equity shares held by the Pro-moter in the Company.

(viii) Until the Final Redemption Date, the Company will procure and ensure that the Pro-moter will not exit from or reduce its involvement from the management activities of the Company as is subsisting on the date of execution of this Deed.

(b) Dividend

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Declare or pay any dividend or make any distributions on its share capital (other than dividends or distributions payable on shares of the Company), unless:

(i) the proposed payment or distribution is out of net income of the current Financial Year (excluding any amount resulting from the revaluation of any of the Company's assets);

(ii) no Event of Default has occurred and is then continuing, or could occur or is reasonably likely to occur, as a result of such payment or declaration of any dividend or distribution and after giving effect to any such action;

(iii) the Company is in compliance with the financial covenants set forth inFinancial Covenants; and

(iv) the company has paid or made satisfactory provision for the payment of the installments of principal and interest due on the Debentures.

(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) Associates, Subsidiaries, and Joint Ventures

Dispose of, acquire or incorporate any associates (as defined in the Act), subsidiary (as defined in the Act) or joint ventures.

(e) Acquisition

Acquire, without the prior written consent of the Majority Debenture Holders, any company, business or undertaking if the amount of the acquisition cost, whether paid by cash or otherwise, when aggregated with the aggregate acquisition cost of any other companies, business or undertaking acquired by it during that financial year exceeds 75% (seventy five percent) of the Equity.

(f) Joint Venture

Without the prior written consent of the Majority Debenture Holders:

(i) acquire (or agree to acquire) any shares, stocks, securities or other interest in any joint venture; or

(ii) transfer any assets or lend to or guarantee or indemnify or give security for the obligations of a joint venture (or agree to transfer, lend, guarantee, indemnify or give security for the obligations of a joint venture).

(g) Loans and Guarantees

The Company shall not:

(i) extend a loan to any single individual or entity amounting to greater than 10% (ten percent) of its Tangible Net Worth; or

(ii) undertake to guarantee the liabilities of any individual or entity (unless the entity is a wholly owned subsidiary of the Company).

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(h) Arm's length basis; No profit sharing arrangements

The Company shall not, without the prior written consent of the Majority Debenture Holders:

(i) enter into any transaction with any person or enter into or continue business relations with its shareholders, employees, affiliate(s), holding company(ies), and/or subsidiary(ies) except on proper commercial terms negotiated on an arm's length basis;

(ii) enter into or establish any partnership, profit sharing, royalty agreement or other similar other arrangement whereby the Company's income or profits are, or might be, shared with any other person; or

(iii) enter into any management contract or similar arrangement whereby its business or operations are managed by any other person.

(i) Immunity

Claim any immunity or limitation of liability against any payment obligations arising towards the Debenture Holders.

(j) Auditor

Change its auditor without the prior written consent of the Majority Debenture Holders. The Company shall authorize its auditors to communicate directly with the Debenture Trustee and the Debenture Holders.

(k) Liabilities

Incur, create, assume, or allow any Financial Indebtedness that ranks prior to the Debentures or subordinates the Debentures.

(l) 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, if such action results in change in Control of the Company. PROVIDED THAT if the written consent of the Debenture Trustee/ the Majority Debenture Holder(s) is withheld for the proposed change of control, the Company will, upon the instructions of the Debenture Trustee, redeem the Debentures forthwith within 45 (Forty five) days of receiving such written instructions from the Debenture Trustee and pay prepayment penalty on such redemption in accordance with the terms of the Transaction Documents.

No prior written consent of the Debenture Trustee is required if the issue of any additional shares or equity interests, transfer, sale, pledge or encumbrance of its existing shares or equity interests does not result in change in Control of the Company.

(m) Disposal of Assets

Sell, transfer, or otherwise dispose of in any manner whatsoever any material Assets of the Company, other than any securitization/portfolio sale of assets undertaken by the Company in its ordinary course of business.

(n) Management Control

Any change in Management Control of the Company.

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(o) Material compromise or Settlement

Enter into material compromise or arrangement or settlement with any of its creditors (secured and unsecured) that would prejudicially affect the interest of the Debenture Holders.

(p) Anti-money laundering

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.

(q) Related Party Transactions

Without the prior written consent of the Debenture Holders, the Company shall not enter into any transaction(s) in the nature of loans or advances to a related party(s) whereby the overall outstanding amount owed to the Company under all such transactions exceeds 10% of its net worth (as defined in the Act). Debenture Trustee or its representatives will have access to any additional information that it/they deem(s) necessary to monitor and evaluate the mentioned covenant till the Final Settlement Date.

(r) FinancialYear

Company shall not change its financial year-end from 31st March (or such other date as may be approved by Majority Debenture Holders) without the prior written consent of the Debenture Trustee.

(s) Others

Without prejudice to Clause (a) (Change of business; Role of Promoter) of this Negative Covenants, permit sale/ transfer/ disposal of (i) equity shares of the Company, or (ii) instruments that are compulsorily and mandatorily convertible into equity shares of the Company, by the Promoter(s) and/ or (iii) permit the Promoter(s) to exit from management activities in relation to the Company.

7.5 FINANCIAL COVENANTS

The Company shall comply with each of the following financial covenants at all times until the redemption of all outstanding Debentures:

(a) The Capital Adequacy Ratio shall be always compliant with minimum levels stipulated by the regulator (“RBI”) at all points in time

All covenants would be tested on quarterly basis for the Company, i.e. as on 31st March, 30th June, 30th September and 31st December every year, on consolidated and standalone balance sheet till the redemption of the Debentures.

The covenants shall be certified by the Company within 45 (Forty-Five) calendar days from the end of each financial half year

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For the purpose of aforementioned Financial Covenants, following terms shall have the following meanings:

"Capital Adequacy Ratio" means the capital adequacy ratio prescribed by the RBI for non-banking financial companies from time to time, currently being the aggregate of Tier I Capital and Tier II Capital divided by Risk Weighted Assets.

7.6 Representations and Warranties The Company makes the representations and warranties set out in this Clause to the Debenture Trustee for the benefit of the Debenture Holders on the date of this Deed and during the term of the Debentures.

(a) Status

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

(ii) It is registered as a non-banking financial company – microfinance institution with the RBI.

(iii) It and each of its subsidiaries (as defined under the Act) has the power to own its Assets and carry on their respective business as it is being conducted.

(b) Binding obligations

The obligations expressed to be assumed by it under the Transaction Documents are legal, valid, binding and enforceable obligations.

(c) Non-conflict with other obligations

The entry into and performance by it of, the transactions contemplated by the Transaction Documents do not and will not conflict:

(i) any Law or regulation applicable to it;

(ii) its Constitutional Documents

(iii) any agreement or instrument binding upon it or any of its Assets.

(d) Power and authority

It has the power to issue the Debentures and to enter into, perform and deliver, and has taken all necessary authorisations 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:

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(i) to enable it lawfully to enter into, exercise its rights and comply with its oblig-ations in the Transaction Documents to which it is a party;

(ii) to make the Transaction Documents to which it is a party admissible in evid-ence 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 or potential 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 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 Company or any of its Assets or which might have a Material Adverse Effect.

(g) Paripassu ranking

Each Debenture constitutes direct and unconditional and secured obligations of the Company. The claims of the Debenture Holders shall be superior to all the claims of equity investors/ lenders of Tier I Capital and Tier II Capital (including without limitation, any Subordinated Debt) and shall rank at least paripassu inter se and to all other lenders who have not expressly agreed to subordinate their claims to those of other lenders of the Company.

(h) No proceedings pending

Except as disclosed by the Company in its Debt Disclosure Document, annual reports and financial statements, no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which have been started or threatened against the Company, where such proceedings could result in or cause a Material Adverse Effect.

(i) No misleading information

(A) 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.

(B) It has disclosed all information in the Debt Disclosure Document that is relevant for the Applicants to apply for subscription of the Debentures.

(j) Compliance

(i) The Company has complied with 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)

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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 Law or requiring them to take or omit any action.

(ii) The Company shall complete all necessary formalities including all filings with the relevant regulatory authorities, including but not limited to SEBI, the BSE and the ROC (if applicable) and obtain 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 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 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 Debenture Trustee were prepared in accordance with Indian GAAP consistently applied save to the ex-tent expressly disclosed in such financial statements.

(ii) Its financial statements for the Previous Year supplied to the Debenture Trustee, give a true and fair view and represent its financial condition and op-erations during the relevant Financial Year save to the extent expressly dis-closed in such financial statements.

(iii) It has disclosed all its borrowings from various banks and financial institutions in the Debt Disclosure Document.

(m) Solvency

(i) The Company 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 has not been deemed by a court to be unable to pay its debts for the purposes of applicable Law, nor will it become unable to pay its debts for the purposes of applicable Law as a consequence of entering into this Deed or any other Transaction Document.

(ii) The Company, 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 Company is more than its liabilities (taking into account contingent and prospective liabilities) and it has sufficient capital to carry on its business.

(iv) The Company has not taken any corporate action nor has it taken any legal proceedings or other procedure or steps in relation to any bankruptcy proceed-ings.

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(v) No insolvency or bankruptcy process has commenced under the (Indian) In-solvency and Bankruptcy Code, 2016 (to the extent applicable) in respect of any of the Company.

(vi) No reference, enquiry or proceedings under corporate debt restructuring (CDR) mechanism or the strategic debt restructuring (SDR) mechanism of the RBI, and no steps have been taken by any lender in respect of any member of the Group, under the 'Scheme for Sustainable Structuring of Stressed Assets (S4A) issued by the RBI.

(n) No immunity

The Company is not entitled to any immunity or privilege (sovereign or otherwise) from any set-off, judgment, execution, attachment or other legal process.

(o) Legal and Beneficial Ownership

Except for the security interests and encumbrances created and recorded with the Ministry of Corporate Affairs (available using CIN/FCRN/LLPIN/FLLPIN of the Company on the website http://www.mca.gov.in/MCA21/index.html under the heading "Index of Charges"), 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.

(p) Compliance with Laws

The Company and its affiliates are in compliance in all respects with all applicable Laws, including but not limited to environmental, social and taxation related laws, for them to carry on their business.

(q) Anti-terrorism Laws

The Company and its affiliates are in compliance in all respects with all Anti-Terrorism Laws, and are adhering to all regulatory requirements pertaining to Anti-Terrorism and Anti-Money Laundering.

(r) No Corrupt Practices

Neither the Company nor its Promoters or affiliates have indulged in any corrupt practices pertaining to the business such as misstatement, fraud, misappropriation, embezzlement of financial and other resources or gains unreported in the audited financial statements.

(s) Taxation

(i) The Company has duly and punctually paid and discharged all Taxes imposed upon it or its assets within the time period allowed without incurring penalties save to the extent that (A) payment is being contested in good faith, (B) the Company has maintained adequate reserves for those Taxes, and (C) payment can be lawfully withheld;

(ii) The Company is not overdue in the filing of any Tax returns.

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(iii) No claims exceeding Tax Claims Amount are being or are reasonably likely to be asserted against the Company with respect to Taxes, where such claims could result in or cause a Material Adverse Effect.

(t) Disclosures in Debt Disclosure Document

The extent of disclosures made in the Debt Disclosure Document is consistent with disclosures permitted by Government Authorities in relation to the issue of securities made by the Company prior to the issue of the Debentures.

(u) Audit

The Company annual accounts are audited by an auditor from a reputable firm of independent chartered accountants.

(v) Good Business Standard

The Company in its business transactions with its shareholders, partners, managers, staff, affiliates or affiliates of such entities or persons keeps within normal, good and acceptable business standards, including transactions being on arm's length.

(w) Proper book-keeping and accounting

The Company has a proper, efficient and effective book-keeping and accounting system in place as well as adequate professional staff, including maintaining of accounts showing the loan drawings, payments, interest etc.

(x) Employees

The Company is in compliance with all obligations under the applicable labour laws and other applicable Laws in relation to its employees.

(y) Compliance with RBI/SEBI Regulations an’ the Act's Requirements

The Debentures are being issued in compliance with the applicable regulations of the RBI/SEBI and the relevant provisions of the Act as applicable. Any provision in the Deed which is not in compliance with regulations of the RBI/SEBI and the relevant provisions of the Act can be amended by the Company and the Debenture Trustee by executing an amendment to the Deed and the Debenture Holders shall have no right to raise any objection thereto.

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SECTION 8: OTHER INFORMATION AND APPLICATION PROCESS

The Debentures being offered as part of the Issue are subject to the provisions of the Act, the Memorandum and Articles of Association of the Issuer, the terms of this Information Memorandum, the Private Placement Offer cum Application Letter, Application Form and other terms and conditions as may be incorporated in the Transaction Documents.

8.1 Mode of Transfer/Transmission of Debentures

The Debentures shall be transferable freely; however, it is clarified that no Investor shall be entitled to transfer the Debentures to a person who is not entitled to subscribe to the Debentures. The Debenture(s) shall be transferred and/or transmitted in accordance with the applicable provisions of the Act and other Applicable Law. The Debentures held in dematerialized form shall be transferred subject to and in accordance with the rules/procedures as prescribed by NSDL/CDSL and the relevant DPs of the transferor or transferee and any other Applicable Law. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, amounts due will be paid/redemption will be made to the person, whose name appears in the register of debenture holders maintained by the R&T Agent as on the Record Date, under all circumstances. In cases where the transfer formalities have not been completed by the transferor, claims, if any, by the transferees would need to be settled with the transferor(s) and not with the Issuer. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in dematerialised form. The seller should give delivery instructions containing details of the buyer’s DP account to his DP.

8.2 Debentures held in Dematerialised Form

The Debentures shall be held in dematerialised form and no action is required on the part of the Debenture Holder(s) for redemption purposes and the redemption proceeds will be paid by cheque/fund transfer/RTGS to those Debenture Holder(s) whose names appear on the list of beneficiaries maintained by the R&T Agent. The names would be as per the R&T Agent’s records on the Record Date fixed for the purpose of redemption. All such Debentures will be simultaneously redeemed through appropriate corporate action.

The list of beneficiaries as of the Record Date setting out the relevant beneficiaries’ name and account number, address, bank details and DP’s identification number will be given by the R&T Agent to the Issuer. If permitted, the Issuer may transfer payments required to be made in any relation by EFT/RTGS to the bank account of the Debenture Holder(s) for redemption payments.

8.3 Trustee for the Debenture Holder(s)

The Issuer has appointed Catalyst Trusteeship Limited to act as trustee for the Debenture Holder(s). The Issuer and the Debenture Trustee intend to enter/have entered into the Debenture Trustee Agreement and the Debenture Trust Deed inter alia, specifying the powers, authorities and obligations of the DebentureTrustee and the Issuer. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of its agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture Trustee may in its absolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s). Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s) shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the repayment of principal and coupon thereon and they will take necessary action, subject to and in accordance with the Debenture Trustee Agreement and the Debenture Trust Deed, at the cost of the Issuer. No Debenture Holder shall be entitled to proceed directly against the Issuer unless the

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Debenture Trustee, having become so bound to proceed, fails to do so. The Debenture Trustee Agreement and the Debenture Trust Deed shall more specifically set out the rights and remedies of the Debenture Holder(s) and the manner of enforcement thereof.

8.4 Sharing of Information

The Issuer may, at its option, but subject to Applicable 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 banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Issuer nor its agents shall be liable for use of the aforesaid information.

8.5 Debenture Holder not a Shareholder

The Debenture Holder(s) shall not be entitled to any right and privileges of shareholders other than those available to them under the Act. The Debentures shall not confer upon the Debenture Holder(s) the right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the Issuer.

8.6 Modification of Debentures

The Debenture Trustee and the Issuer will agree to make any modifications in the Information Memorandum which in the opinion of the Debenture Trustee is of a formal, minor or technical nature or is to correct a manifest error.

Any other change or modification to the terms of the Debentures shall require approval by the Majority Debenture Holder(s) in the manner as provided for in the Debenture Trust Deed.

For the avoidance of doubt, the following matters require the consent of Majority Debenture Holder(s), either by providing their express consent in writing or by way of a resolution at a duly convened meeting of the Debenture Holder(s):

A. Creating of any additional security; andB. Amendment to the terms and conditions of the Debentures or the Transaction Documents.

8.7 Right to accept or reject Applications

The Board of Directors (including a duly authorized committee thereof) reserves its full, unqualified and absolute right to accept or reject any application for subscription to the Debentures, in part or in full, without assigning any reason thereof.

8.8 Notices

Any notice may be served by the Issuer/ Debenture Trustee upon the Debenture Holder(s) through registered post, recognized overnight courier service, hand delivery, e-mail or by facsimile transmission addressed to such Debenture Holder at its/his registered address, e-mail or facsimile number.

All notice(s) to be given by the Debenture Holder(s) to the Issuer/ Debenture Trustee shall be sent by registered post, recognized overnight courier service, hand delivery, email or by facsimile transmission to the Issuer or to such persons at such address/ facsimile number/ e-mail as provided in the Disclosure Document or as may be notified by the Issuer/ Debenture Trustee from time to time through suitable communication. All correspondence regarding the Debentures should be marked “Private Placement of Debentures”.

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Notice(s) shall be deemed to be effective (a) in the case of registered mail, 5 (Five) Business Days after postingvia certified or registered mail, return receipt requested; (b) 1 (One) Business Day after delivery by recognized overnight courier service, if sent for next Business day delivery (c) in the case of facsimile at the time when dispatched with a report confirming proper transmission; (d) in the case of personal delivery, at the time of delivery or (e) or in case of e-mail at the time of the sending thereof (provided no delivery failure notification is received by the sender within 24 hours of sending such email).

8.9 Issue Procedure

Only Eligible Investors as given hereunder and identified upfront by the Issuer may apply for the Debentures by completing the Application Form in the prescribed format in block letters in English as per the instructions contained therein. The minimum number of Debentures that can be applied for and the multiples thereof shall be set out in the Application Form. No application can be made for a fraction of a Debenture. Application Forms should be duly completed in all respects and applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must be duly completed by the applicant. This is required for the applicant’s own safety and these details will be printed on the refund orders and /or redemptions warrants.8.10 Application Procedure

The eligible investors will be invited to subscribe during the period between the Issue Opening Date and the Issue Closing Date (both dates inclusive)by way of the Application Form prescribed in the Private Placement Offer Cum Application Letter. The Issuer reserves the right to change the Issue schedule including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. The Issue will be open for subscription during the banking hours on each day from the Issue Opening Date to the Issue Closing Date (both dates inclusive).

8.11 Fictitious Application

All fictitious applications will be rejected.

8.12 Basis of Allotment

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

8.13 Payment Instructions

The Application Form should be submitted directly. The entire amount ofRs.10,00,00,000/- (Rupees TenCrores only) per Debenture is payable along with the making of an application. Applicants can remit the application amount through RTGS on Pay-in Date. The RTGS details of the issuer are as under:

Beneficiary Name SONATA FINANCE PRIVATE LIMITEDBank Account No 678050001144SWIFT Code Not ApplicableIFSC Code UTBI0VNG584Bank Name United Bank of India (Punjab National Bank)Branch Address 1/241 VIKAS NAGAR, IN FRONT OF LEKHRAJ COMMERCIAL COMPLEX LUC-

KNOW-226022, UTTAR PRADESH

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8.14 Eligible Investors

The following categories of investors who have been specifically approached and have been identified upfront, are eligible to apply in the Issue subject to fulfilling their respective investment norms/rules and compliance with laws applicable to them by submitting all the relevant documents along with the Application Form:A. Mutual FundsB. Alternative Investment FundsC. Non-banking financial companiesD. Provident Funds and Pension FundsE. CorporatesF. BanksG. Foreign Portfolio Investors (FPIs)H. Insurance CompaniesI. Investment holding companies of high net worth individualsJ. Any other person eligible to invest in the Debentures

All potential investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this issue of Debentures. Potential investors who are not resident in India shall also ensure compliance with conditions (including in relation to eligibility and mode of payment) as prescribed in the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 as well as the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017.

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

8.15 Procedure for Applying for Dematerialised Facility

A. The applicant must have at least one beneficiary account with any of the DPs of NSDL/CDSL prior to making the application.

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

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

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

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

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

G. For allotment of Debentures, the address, nomination details and other details of the applicant as registered with his/her DP shall be used for all correspondence with the applicant. The applicant is therefore responsible for the correctness of his/her demographic details given in

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the Application Form vis-a-vis those with his/her DP. In case the information is incorrect or insufficient, the Issuer would not be liable for the losses, if any.

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

8.16 Depository Arrangements

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

8.17 List of Beneficiaries

The Issuer shall request the R&T Agent to provide a list of beneficiaries as at the end of each Record Date. This shall be the list, which will be used for payment or repayment of redemption monies.

8.18 Application under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signature(s) of all the authorized signatories of the investor and the tax exemption certificate/document of the investor, if any, must be lodged along with the submission of the completed Application Form. Further modifications/additions in the power of attorney or authority should be notified to the Issuer or to its agents or to such other person(s) at such other address(es) as may be specified by the Issuer from time to time through a suitable communication.

In case of an application made by companies under a power of attorney or resolution or authority, a certified true copy thereof along with memorandum and articles of association and/or bye-laws along with other constitutional documents must be attached to the Application Form at the time of making the application, failing which, the Issuer reserves the full, unqualified and absolute right to accept or reject any application in whole or in part and in either case without assigning any reason thereto. Names and specimen signatures of all the authorized signatories must also be lodged along with the submission of the completed Application Form.

8.19 Procedure for application by Mutual Funds and Multiple Applications

In case of applications by mutual funds and venture capital funds, a separate application must be made in respect of each scheme of an Indian mutual fund/venture capital fund registered with the SEBI and such applications will not be treated as multiple application, provided that the application made by the asset management company/trustee/custodian clearly indicated their intention as to the scheme for which the application has been made.

The application forms duly filled shall clearly indicate the name of the concerned scheme for which application is being made and must be accompanied by certified true copies ofA. SEBI registration certificateB. Resolution authorizing investment and containing operating instructionsC. Specimen signature of authorized signatories

8.20 Documents to be provided by Investors

Investors need to submit the following documents, as applicable

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A. Memorandum and Articles of Association or other constitutional documentsB. Resolution authorising investmentC. Power of Attorney to custodianD. Specimen signatures of the authorised signatoriesE. Registration certificate issued by RBI, SEBI or IRDAI, as applicable to the investor.F. Self-attested copy of PAN cardG. Application Form (including EFT/RTGS details)

8.21 Applications to be accompanied with Bank Account Details

Every application shall be required to be accompanied by the bank account details of the applicant and the magnetic ink character reader code of the bank for the purpose of availing direct credit of redemption amount and all other amounts payable to the Debenture Holder(s) through EFT/RTGS.

8.22 Succession

In the event of winding-up of the holder of the Debenture(s), the Issuer will recognize the liquidator or such other legal representative of the Debenture Holder(s) as having title to the Debenture(s).

The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of such other legal representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the concerned Debenture Holder on production of sufficient documentary proof and/or an indemnity.

8.23 Mode of Payment

All payments must be made through EFT/RTGS as set out in the Application Form.

8.24 Effect of Holidays

If the due date for payment of Coupon falls on a day that is not a Business Day, then the due date in respect of such payment shall be on the immediately succeeding Business Day; however, the dates of the future Coupon payments would be as per the schedule originally stipulated in Annexure V. In other words, the subsequent Coupon schedule would not be disturbed merely because the payment date in respect of one particular Coupon payment has been postponed because of it having fallen on non-Business Day.

If the date for performance of any event or the Maturity Date/ Redemption Date falls on a day that is not a Business Day, then the due date in respect of the performance of such event or the Maturity Date/ Redemption Date shall be paid on the immediately preceding Business Day.

8.25 Tax Deduction at Source

Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/lower rate of TDS, relevant certificate/document must be lodged by the Debenture Holder(s) at the office of the R&T Agents of the Issuer at least 15 (Fifteen) calendar days before the relevant payment becoming due. Tax exemption certificate / declaration of non-deduction of tax at source on interest on application money, should be submitted along with the Application Form.

If any payments under this issuance is subject to any tax deduction other than such amounts as are required as per current regulations existing as on the date of the Debenture Trust Deed, including if the Company shall be required legally to make any payment for tax from the interest/coupon payable under the Issue, (“Tax Deduction”), the Company shall make such Tax Deduction, and shall

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simultaneously pay to the Debenture Holder(s) such additional amounts as may be necessary in order that the net amounts received by the Debenture Holder(s) after the Tax Deduction shall equal the respective amounts which would have been receivable by the Debenture Holder(s) in the absence of such Tax Deduction.

8.26 Letters of Allotment

The letter of allotment, indicating allotment of the Debentures, shall be dispatched to the Investor within 2 (two) Business Days from the Deemed Date of Allotment. The aforesaid letter of allotment shall be replaced with the actual credit of Debentures, in dematerialised form, within 2 (two) Business Days from the Deemed Date of Allotment or within such timelines as permissible under Applicable Law.

8.27 Deemed Date of Allotment

All the benefits under the Debentures will accrue to the investor from the specified Deemed Date of Allotment. The Deemed Date of Allotment for the Issue is November 19, 2020by which date the investors would be intimated of allotment.

8.28 Record Date

The Record Date will be 7 (seven) calendar days prior to any Due Date.

8.29 Refunds

For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched within seven days from the Deemed Date of Allotment of the Debentures.

In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the application money relating to the Debentures in respect of which allotments have been made, the Issuer / R&T Agent shall upon receiving instructions in relation to the same from the Issuer repay the moneys to the extent of such excess, if any.

8.30 Interest on Application Money

Please refer Section 5.21 of this Information Memorandum.

8.31 PAN Number

Every applicant should mention its Permanent Account Number (“PAN”) allotted under Income Tax Act, 1961, on the Application Form and attach a self-attested copy as evidence. Application forms without PAN will be considered incomplete and are liable to be rejected.

8.32 Payment on Redemption

Payment on redemption will be made by way of cheque(s)/redemption warrant(s)/demand draft(s)/credit through RTGS system/funds transfer in the name of the Debenture Holder(s) whose names appear on the list of beneficial owners given by the Depository to the Issuer as on the Record Date.

The Debentures shall be taken as discharged on payment of the redemption amount by the Issuer on maturity to the registered Debenture Holder(s) whose name appears in the register of debenture holder(s) on the Record Date. On such payment being made, the Issuer will inform NSDL/CDSL and accordingly the account of the Debenture Holder(s) with NSDL/CDSL will be adjusted.

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On the Issuer dispatching the amount as specified above in respect of the Debentures, the liability of the Issuer shall stand extinguished.

8.33 Issue procedure for issuance through EBP Platform

In case the Issuer issues NCDs through Electronic Book Mechanism, in addition to the application process stipulated under the Information Memorandum, the issue of such NCDs will be in accordance with the below procedure.

Bidding ProcessThis section applies to all Eligible Participants. Please note that all Eligible Partici-pants are required to make payment of the full application amount in accordance with the Operational Guidelines.

Who can bid?All Eligible Participants (as defined in SEBI Circular SEBI/HO/DDHS/CIR/P/2018/05 dated January 5, 2018), as amended from time to time comprising of investors specifi-cally mapped by the Issuer on the BSE EBP Platform, are eligible to bid for this Issue. All Eligible Participants are required to comply with the relevant regulations/ guide-lines applicable to them for investing in this Issue in accordance with the norms ap-proved by the Government of India, RBI or any other statutory body from time to time, including but not limited to the Operational Guidelines in relation to the relevant EBP for investing in this Issue. The final subscription to the Debentures shall be made by the Eligible Investors through EBM as prescribed by SEBI under the EBP Guidelines by placing bids on the EBP during the Issue period.

Know Your Client (KYC) verification?

Know Your Client (KYC) verification and enrollment Know Your Client (KYC) veri-fication and enrollment of the eligible participants on the EBP platform shall be done in the following manner:KYC verification shall be undertaken by obtaining/utilizing existing KYCs of clients from KRAs registered with SEBI or on the basis of the guidelines as prescribed by SEBI from time to time. For QIB investors bidding directly or through arranger(s), KYCs and enrolment shall be done by the EBP. For Non QIB investors bidding di-rectly, KYCs shall be done by the issuer and enrolment shall be done by the EBP. For Non QIB investors, which are bidding through arranger(s), KYC and enrolment on EBP shall be ensured by arranger(s).

Right to Accept or Reject Bids

The Issuer reserves its full, unqualified and absolute right to accept or reject any appli-cation for bid, in part or in full, without assigning any reason thereof in accordance with the Operational Guidelines.

Manner of BiddingThe Issue will be through close bidding on the EBP Platform in line with EBP Guide-lines.

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Manner of settlement

Settlement of the Issue will be done through the Indian Clearing Corporation Limited.

Provisional or Final Allocation

Allocation shall be made on yield-time priority basis in the multiples of the bidding lot size, i.e., in multiples of Rs. 10,00,000 (Rupees Ten Lakh Only) as explicitly mention in the operating guidelines of BSE.

Bidding Scenario Allotment

First case scenario Yield priorityWhere two or more bids are at the same yield Time-priority basis Where two or more bids have the same yield and time Pro-rata basis

Post completion of bidding process, the Issuer will upload the provisional allocation on the BSE EBP Platform. Post receipt of details of the successful bidders, the Issuer will upload the final allocation file on the BSE EBP Platform.

Method of Allotment

The allotment will be done on the basis as mentioned in the respective Issue addendum in line with EBP Guidelines.

Settlement cycleThe process of pay-in of funds by investors and pay-out to Issuer will be done on T+1 day as more specifically mentioned in the respective Issue Addendum, where T is the Bidding day. For further, details, please see below section named ‘Settlement Process’.

How to bid?

All Eligible Participants will have to register themselves as a one-time exercise (if not already registered) under the BSE EBP Platform offered by BSE for participating in the electronic book mechanism. Eligible Participants will also have to complete the mandatory KYC verification process.

Eligible Participants should refer to the Operational Guidelines.

The details of the Issue shall be entered on the BSE EBP Platform by the Issuer at least 2 (two) working days prior to the Issue / Bid Opening Date, in accordance with the Op-erational Guidelines. The Issue will be open for bidding for the duration of the bidding window that would be communicated through the Issuer’s bidding announcement on the BSE EBP Platform, at least 1 (one) working day before the start of the Issue / Bid Opening Date. A bidder will only be able to enter the amount while placing their bids in the BSE EBP Platform, since the proposed issue is a fixed rate/coupon issue.

Payment Mechanism

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Payment of subscription money for the Bonds should be made by the Identified In-vestors as notified by the Issuer. The participants should complete the funds pay-in to the designated bank account of Indian Clearing Corporation Ltd (ICCL) as mentioned above under ‘Manner of settlement’. Successful bidders must do the subscription amount payment to the Designated Bank Account on or before 10:30 a.m. on the Pay-in Date (“Pay-in Time”). Identified Investors should ensure to make payment of the subscription amount for the NCDs from their same bank account which is updated by them in the BSE EBP Platform while placing the bids. In case of mismatch in the bank account details between BSE EBP Platform and the bank account from which payment is done by the successful bidder, the payment would be returned.

Note: In case of failure of any Identified Investor to complete the subscription amount payments by the Pay-in Time or the funds are not received in the Designated Bank Ac-count by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable to issue NCDs to such Identified Investors.

Settlement ProcessUpon final allocation by the Issuer, the Issuer or the Registrar on behalf of the Issue shall instruct the Depositories on the Pay In Date, and the Depositories shall accord-ingly credit the allocated NCDs to the demat account of the successful bidder. The Company shall give the instruction to the Registrar for crediting the Debentures by 12:00 p.m. on the Pay-In Date. The Registrar shall provide corporate action file along with all requisite documents to Depositories by 12:00 p.m. on the Pay-In Date. On the Pay-In Date, the Depositories shall confirm to the Issuer the transfer of Bonds in thedemat account(s) of the successful bidder(s).

Post-Allocation Disclosures by the EBPUpon final allocation by the Issuer, the Issuer shall disclose the Issue Size, coupon rate, ISIN, number of successful bidders, category of the successful bidder(s), etc., in accordance with the Operational Guidelines. The EBP shall upload such data, as pro-vided by the Issuer, on its website to make it available to the public.

Disclaimer: Please note that only those persons to whom this Information Memorandum has been specifically addressed are eligible to apply in the Issue. However, an application, even if complete in all respects, is liable to be rejected without assigning any reason for the same. The list of documents provided above is only indicative, and an investor is required to provide all those documents / authorizations / information, which are likely to be required by the Issuer. The Issuermay,but is not bound to revert to any investor for any additional documents / information, and can accept or reject an application as it deems fit. Investment by investors falling in the categories mentioned above are merely indicative and the Issuer does not warrant that they are permitted to invest as per extant laws, regulations, etc. Each of the above categories of investors is required to check and comply with extant rules/regulations/ guidelines, etc. governing or regulating their investments as applicable to them and the Issuer is not, in any way, directly or indirectly, responsible for any statutory or regulatory breaches by any investor, neither is the Issuer required to check or confirm the same.

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SECTION 9: DECLARATION

The Issuer hereby declares that all relevant provisions of the SEBI Debt Listing Regulations and other Applicable Laws, have been complied with and no statement made in this Information Memorandum is contrary to the provisions of the SEBI Debt Listing Regulationsor other Applicable Law.

The Issuer further certifies that all statements contained in this Information Memorandum are true and correct.The Issuer also confirms that this Information Memorandum does not omit disclosure of any material fact which may make the statements made therein, in the light of the circumstances under which they are made, misleading.

For SonataFinancePrivate Limited

Authorised SignatoryName: Mr BramhanandTitle: Head, FinanceDate:

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SECTION:10 UNDERTAKING FOR CREATION OF SECURITY

The issuerhereby undertakes that the assets on which charge is created are free from any encumbrances and in cases wherethe assets are already charged to secure a debt, the permissionor consent to createasecond or pari-passu charge on the assets of the issuer hasbeen obtained from the earlier creditor.

For SonataFinancePrivate Limited

Authorised SignatoryName: Mr BramhanandTitle: Head, FinanceDate:

10



ANNEXURE I: TERM SHEET

As per SECTION5.21 Issue details

10



ANNEXURE II: RATING LETTER

10



10



ANNEXURE III: CONSENT LETTER FROM THE DEBENTURE TRUSTEE

10



ANNEXURE IV: LAST AUDITED FINANCIAL STATEMENTS

10



10



11



ANNEXURE V: ILLUSTRATION OF BOND CASH FLOWS

Illustration of Bond Cash FlowsCompany Sonata Finance Private LimitedFace Value (per security) Rs. 10,00,000/- (Rupees Ten Lakhsonly)Deemed Date of Allotment 19th November 2020Redemption Date / Maturity Date

19th May, 2022

Coupon Rate 10.75% per annum payable quarterlyFrequency of the Coupon Payment with specified dates

Coupon payable quarterly.February 19, 2021May 19, 2021August 19, 2021November 19, 2021February 19, 2022May 19, 2022

Day Count Convention Actual / Actual

Cash Flow Chart

Cash Flows Date No. of days in Coupon Period

Coupon Amount (in Rupees)

1st Coupon 19-02-2021 92 2,709,5892nd Coupon 19-05-2021 89 2,621,2333rd Coupon 19-08-2021 92 2,709,5894th Coupon 19-11-2021 92 2,709,5895th Coupon 19-02-2022 92 2,709,5896th Coupon 19-05-2022 89 2,621,233Principal Redemption 19-05-2022 546 100,000,000

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ANNEXURE VI: DIRECTORSHIP DETAILS

Director Master DataDIN 00173413Name ANUP KUMAR SINGH

List of CompaniesCIN/FCRN Company Name Begin Date End DateU65921UP-

1995PTC035286SONATA FINANCE PRIVATE LIMITED

02/07/2009 -

U85191UP-2011NPL046040

SHRIMAYI SOCIAL AND ALLIED SER-VICES

03/01/2014 -

Director Master DataDIN 01060651Name RANGANATHAN VARADARAJAN DILIP KUMAR

List of CompaniesCIN/FCRN Company Name Begin Date End Date

U01222RJ2014PTC045633 NATURELAND ORGANIC FOODS PRIVATE LIM-ITED

01/08/2019 -

U65910T-N1996PTC036650

ESAF FINAN-CIAL HOLDINGS PRIVATE LIM-ITED

09/11/2015 -

U65921UP-1995PTC035286

SONATA FIN-ANCE PRIVATE LIMITED

29/12/2015 -

U65923AS-2008PLC008742

RGVN (NORTH EAST) MI-CROFINANCE LIMITED

12/04/2017 -

U65993T-G1991PTC013491

CASPIAN IM-PACT INVEST-MENTS PRIVATE LIM-ITED

14/11/2018 -

U72400KA2014PTC07457 SAGGRAHA 09/03/2018 -

11



9 MANAGEMENT SERVICES PRIVATE LIM-ITED

U74140GJ2015PLC082744 ONLINE PSB LOANS LIMITED

03/07/2019 -

Director Master DataDIN 01239653Name ANAL JAIN KUMAR


U01810KA2005PTC036632

PAY-OTA SYS-TEMS INDIA PRIVATE LIM-ITED

27/06/2005 -

U51109KA2005PTC036095

INFLOW TECH-NOLOGIES PRIVATE LIM-ITED

18/05/2005 -

U65921UP1995PTC035286 SONATA FIN-ANCE PRIVATE LIMITED

23/09/2011 -

U72100KA2008PTC045925

INFLOW KNOW-LEDGE SER-VICES (INDIA) PRIVATE LIM-ITED

31/08/2011 -

U72200KA2011PTC056749

COMSTOR DIS-TRIBUTION (IN-DIA) PRIVATE LIMITED

30/09/2013 -

U72900KA2005PTC036363

SKILLPROFILER ANALYTICS PRIVATE LIM-ITED

15/05/2006 -

U74110M-H2007PLC175181

RBL FINSERVE LIMITED

19/08/2013 -

U74999T-N2017PTC120042

DVARA SOLU-TIONS PRIVATE LIMITED

27/07/2020 -

U85110KA1996PTC021029

MV MICROFIN PRIVATE LIM-ITED

28/09/2017 -

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Director Master DataDIN 02545813Name KENNETH DAN VANDER WEELE


U65100DL1994PTC061287

FUSION MICRO FINANCE PRIVATE LIM-ITED

12/08/2016 -

U65190M-H1992PLC066228

MUTHOOT MI-CROFIN LIM-ITED

27/12/2016 -


11/09/2012 -

U65929T-N2017PTC117196

VIVRITI CAP-ITAL PRIVATE LIMITED

25/05/2019 -

U65929T-N2019PTC127644

VIVRITI ASSET MANAGEMENT PRIVATE LIM-ITED

14/08/2020 -

Director Master DataDIN 02947368Name PRADIP KUMAR SAHA


U65100DL1994PTC061287

FUSION MICRO FINANCE PRIVATE LIM-ITED

11/05/2016 -

U65921UP-1995PTC035286

SONATA FIN-ANCE PRIVATE LIMITED

26/05/2017 -

Director Master DataDIN 07152185Name SETHURAMAN GANESH


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25/05/2015 -

U65990M-H1986PTC040897

INDEL MONEY PRIVATE LIM-ITED

11/04/2019 -

Director Master DataDIN 07961517Name SANJAY GOYAL



30/05/2019 -

U74140DL2005PLC142633

INDIA SME TECHNOLOGY SERVICES LIM-ITED

25/09/2017 -

Director Master DataDIN 07971713Name BENOIT MARIE LUC MONSAINGEON



24/10/2017 -

Director Master DataDIN 08299455Name ADITYA MOHAN



10/12/2018 -

Director Master DataDIN 08469704Name SAURABH KUMAR JOHRI


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01/06/2019 -

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ANNEXURE VII: APPLICATION FORM

SonataFinance Private LimitedCIN: U65921UP1995PTC035286

A private limited company incorporated under the Companies Act, 1956Date of Incorporation: April 06,1995

Registered Office: II Floor, CP. 1, PG. Towers, Kursi Road, Vikas Nagar, Lucknow, Uttar Pradesh - 226026, India

Telephone No.:+91-532-6540311Website: https://sonataindia.com/

APPLICATION FORM SERIAL NO.

Issue of 100 (onehundred) rated, secured, senior, redeemable, taxable, transferable, listed, non-convertible debentures Rs. 10,00,000/- (Rupees Ten Lakh Only) each, aggregating uptoRs. 10,00,00,000/- (Rupees Ten Crores Only), fully paid-up for cash at par to the face value on a private placement basis (the “Issue”).

Debentures applied for:

Number of Debentures: _________________In words ______________

Amount Rs. ________________/-in words (Rupees __________________ Only)

DETAILS OF PAYMENT:

NEFT/ RTGS No. _____________ Drawn on_____________________ Bank

Funds transferred to Sonata Finance Private LimitedDated ____________

Total Amount Enclosed (In Figures) Rs. __________________________/- (In words) Indian Rupees _____________________ Only

APPLICANT’S NAME IN FULL (CAPITALS) SPECI-MEN SIGNATURE

APPLICANT’S ADDRESS:

ADDRESS

STREET

CITY

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PIN PHONE FAX

APPLICANT’S PAN/GIR NO. ________________ IT CIRCLE/WARD/DISTRICT ____

I AM / WE ARE ( ) COMPANY ( ) OTHERS ( ) SPECIFY __________

We have read and understood the terms and conditions of the issue of Debentures including the risk factors described in the private placement offer cum application letter dated September 28, 2020 ("PPOA") and have considered these in making our decision to apply. We bind ourselves to the terms and conditions of the PPOA and wish to apply for allotment of the Debentures. We request you to please place our name(s) on the register of holders.

Name of the Authorised Signat-ory(ies)

Designation Signature

_______________________Applicant’s Signature

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

DEPOSITORY NSDL ( ) CDSL ( )Depository Participant NameDP-IdBeneficiary Account NumberName of the Applicant(s)

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

FOR OFFICE USE ONLY DATE OF RECEIPT ________________ DATE OF CLEARANCE ________________

(Note: Cheque and Drafts are subject to realisation)

We understand and confirm that the information provided in the PPOA is provided by the Issuer and the same has not been verified by any legal advisors to the Issuer, and other intermediaries and their agents and advisors associated with this Issue. We confirm that we have, for the purpose of investing in these Debentures, carried out our own due diligence and made our own decisions with respect to in-

12




vestment in these Debentures and have not relied on any representations made by anyone other than the Issuer, if any.

We understand that: i) in case of allotment of Debentures to us, our Beneficiary Account as mentioned above would get credited to the extent of allotted Debentures, ii) the Applicant must ensure that the se-quence of names as mentioned in the Application Form matches the sequence of name held with our Depository Participant, iii) if the names of the Applicant in this application are not identical and also not in the same order as the Beneficiary Account details with the above mentioned Depository Parti-cipant or if the Debentures cannot be credited to our Beneficiary Account for any reason whatsoever, the Company shall be entitled at its sole discretion to reject the application or issue the Debentures in physical form.

_________________Applicant’s Signature

FOR OFFICE USE ONLY DATE OF RECEIPT ______________________ DATE OF CLEARANCE _________________(Note: Cheque and Drafts are subject to realisation)

-------------------------------------------------(TEAR HERE)--------------------------------------------

- ACKNOWLEDGMENT SLIP -(To be filled in by Applicant) SERIAL NO.

Received from _______________________________________________ Address______________________________________________________________________________________________________________________________________Cheque/Draft/UTR # ____________________Drawn on__________________________ for Rs. _____________________ on account of application of Debenture

________________________________________

Initial of the Officer of Sonata Finance Private Limited designated to keep the record

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INSTRUCTIONS

1. Application form must be completed in full, IN ENGLISH.

2. Signatures must be made in English or in any of the Indian languages. Thumb Impressions must be attested by an authorized official of the Bank or by a Magistrate/Notary Public under his/her official seal.

3. Application form, duly completed in all respects, must be submitted with the respective Collecting Bankers. Cheque(s)/Demand Draft(s) should be drawn in favour of “Sonata Finance Private Limited” and crossed “A/C Payee Only” Cheque(s)/Demand Draft(s) may be drawn on any scheduled bank and payable at Mumbai. The payment can also be made through RTGS as per the following details:

Beneficiary name SonataFinance Private LimitedBeneficiary account no. 1678050001144Beneficiary address II Floor, CP. 1, PG. Towers, Kursi Road,

Vikas Nagar, Lucknow, Uttar Pradesh - 226026, India

Beneficiary bank United Bank of India (Punjab National Bank)

Account type Current AccountIFSC code UTBI0VNG584

The Company undertakes that the application money deposited in the above-mentioned bank account shall not be utilized for any purpose other than a) for adjustment against allotment of securities; or b) for the repayment of monies where the company is unable to allot securities.

4. Outstation Cheques, Cash, Money Orders, Postal Orders and Stock Invest shall not be accepted.

5. Receipt of applicants will be acknowledged by the Company in the “Acknowledgement Slip” appearing below the application form. No separate receipt will be issued.

6. All applicants should mention their Permanent Account No. or their GIR No. allotted under Income Tax Act, 1961 and the Income Tax Circle/Ward/District. In case where neither the PAN nor the GIR No. has been allotted, the fact of non-allotment should be mentioned in the application form in the space provided. Income Tax as applicable will be deducted at source at the time of payment of interest including interest payable on application money.

7. The application would be accepted as per the terms of the manner outlined in the transaction documents for the private placement.

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