iiedge finance limited - BSE

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: Grow wlth an edoe. '.:l t, Serial No.: 001

DISCLOSURE DOCUMENT2s.03.2020

St|ictly confdential andfor prirale circulation only

- ,-*.Heoge ;;;-i,1i

IIEDGE FINANCE LIMITEDThe Company was inco rporated as Hedge Finance L im ited on February I 5, 20 I I in the state of Kerala under the Companies Ac!' I 956 punuant to

cedjtjcate ol incorporarion issued by the Regist€r ofCornpanies. Kerali and Lnkshadweep and [eceived lhe cerlificale ofcommencement ofbusiness

on June 18.2012. iof funher derails, krndty refer rhc secrion lrrl.d "G€r€ral Infatmation" on pagel ofthis Disclosure Document.

Registcred Officc: I lcdge HoLrse. Mamangalan. Palarivatlom P O ' Kochi. Emakulam - 682 025' Kerala' lndia'

Phone No.: 0484-6130400: Email: cfo@hedeefinance com: website: www hedsefinance com

Compliance Officer: Mr. Suraj Ramachandran; Email: surai r@hedsefina4ce com' CorporateldentityNumber;U65923K-2011PLC02'7672

('onqarl rcle^zt lhc a?uon k) """"r'i{i'^1"'(i 3KL lfi:&2ir6::1y

Hedge Finance Limitecl 'Hedge House, Mamangalam, Kochi - 68202{ Kerala, lndia lTel:0484 71604OO

Email : [email protected] Web : wwwhedgefinancejor! -

PRIVATE PLACEMENT BASIS TO IDENTIFIED INVESTOR(S) IN ACCORDANCE WITII THE PROVISIONS OF

SECTIONS 42.7I AND OTHER APPLICABLtr PROVISIONS, IF ANY, OF THE COMPANTES ACT. 2OI3 AS AMENDED

AND RULES MADE THERETjNDER ("ACT'), THE sEauRl'rlEs AND ExcHANcE BoARr oF INDTA (lssuE AND

LrS.r'lNc OF DEBT StCrtntrtesy nrCirt.ertilNS, zOOS 1"Sent ILDS REGTTLATIONS') AND THE MASTER DIRECTIoN -

NON-BANKING FINANCIAL COMPANY _ NOI'{-SYSTiITICELLY IMPORTANT NON-DEPOSIT TAKING COMPANY

nOSOnve BANK) DrRECTIONS,2016 ISSIJED BY THE RESERVE BANK OF INDIA C'IyLA.STf,R DIRECIION - NBFC -

RTIBLE DEBENTURES ("NCDs") OF' l'000

EACIi Ar PAR FOR CASH AGGREGATING UP TO { s0,000,000 BY HEDGE FINANCE LIMITED C:C-O^t{.P-1ryY:l 9I

estolsshouldnotinvestanyfundsinthedebtinstruments,

unless they can afford to rake the risks attached to such iniestments. For taking an investment.decision, the investo:: ]l::.3t,:l :1"i:own exarn'ination ofthe Company and the Issue including the risks involved. The Securilies and Exchange Board oflndia ("SEBI") does

[;;;;i";"G;ii;";j-,t,.ougi,'rriiors"io,ur"Document.ttlsneitberintendednorbedeemedasaprospectusinvitingsubscriptionfor

ofler lo the public iri to any olher class of

investors to purchase NtDs.-1his Disclosure Document is nol an offer to sell and is not soliciling an^offtt.t9 t*t:1* -o-:-o:',)^99:gt

-yjurisdiction where such offer or sale is nol permitted lt is being issued for the.sole purpose ofinforma!:l.oi 9',tt"::l"j-l:l1lil"- 1:

TORS OF THE COMPANY HAS BEEN

AS WTLFULL DEFAULTER

that this Disclosure Documenl contains all theour conlpany, having made all reasonable inquiries. accepts responslbllrty lor anc conII'ms tnat lnrs r,rssrosurE uo!urr

informalion aboul the Company and the lssuc as required under the Conpanjes Acl'^2013 and rules made thereundl i:d 1:1qili"j^ll*1Schedulo 1 ofthe SEBI ILdS Cegulations and that t;e information contained in this Disclosur€ Document is rue and correct in all material

presenl position as Io the fihancial soundness

;ii; a;*pd ".

for the correctness of any ofin" .-tut",o"nt. o. ."preientations made or opinions expressed by the Company and for

miled vide its letrer daled June 14' 2019

Limited 1"nSE"; in accordance with the

l"-iA.rt"d R.si.ltv llanagemcnt Services Private Limited2'd Floor Kencis Toners ,l Ramak ishna Street Nor$ Usman

Road T Nagar, Chennai -.600017" Tamil Nadu, IndiaPhone: 044-28140801/03

Fa\ 1044-28142479

Vistra ITCL (lndia) LimitedThe lL & FS Financial Center, Plot C-22' C Block' Bandra- Kurla

Complex, Bardra East, Mumbai - 400051, Maharashtrq lndja' Tel | +9122 2659 3535: Farl. +912226533i97

Website: wilgllllilglr'

ISSI. E OPL-NS ON

:i!;\rr! -' : ,

a::.',-1 :- .,,:.'

INDEX OF CONTENT

SECTION I - DISCLOSURES IN TERMS OF REQUIREMENTS OF FORM PAS-4 ................ 3

SECTION II – RISK FACTORS ......................................................................................................... 6

SECTION III – ABOUT THE COMPANY ....................................................................................... 7

GENERAL INFORMATION ............................................................................................................. 7

CAPITAL STRUCTURE AND SHAREHOLDING ......................................................................... 9

BUSINESS OVERVIEW ................................................................................................................. 13

OUR MANAGEMENT .................................................................................................................... 16

DISCLOSURE OF WILFUL DEFAULTER ................................................................................... 19

SECTION IV - FINANCIALS INFORMATION ............................................................................ 20

KEY OPERATIONAL AND FINANCIAL PARAMETERS .......................................................... 20

ABRIDGED FINANCIAL STATEMENTS .................................................................................... 22

FINANCIAL INDEBTEDNESS ...................................................................................................... 32

RELATED PARTY TRANSACTIONS ........................................................................................... 37

SECTION V –ISSUE INFORMATION ........................................................................................... 45

SUMMARY TERM SHEET ............................................................................................................ 45

TERMS OF THE ISSUE .................................................................................................................. 48

SECTION VI – OTHER INFORMATION ...................................................................................... 52

OTHER REGULATORY AND STATUTORY DISCLOSURE ..................................................... 52

MATERIAL CONTRACTS AND DOCUMENTS .......................................................................... 54

DECLARATION .............................................................................................................................. 55

ANNEXURES ...................................................................................................................................... 56

SECTION I - DISCLOSURES IN TERMS OF REQUIREMENTS OF FORM PAS-4

The disclosure of information in terms of requirement of Form PAS-4 prescribed under the Companies Act,

2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014 as amended is set out

below:

Sr.

No. Disclosure Requirement Page No. / Remarks

(1) General Information

(i) Name, address, website, if any, and other contact details of the company

indicating both registered office and corporate office;

7

(ii) Date of incorporation of the company; 7

(iii) Business carried on by the company and its subsidiaries with the details of

\branches or units, if any;

12-13

(iv) Brief particulars of the management of the company; 14

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

the directors;

14

(vi) Management's perception of risk factors; 6

(vii) Details of default, if any, including therein the amount involved, duration of

default and present status, in repayment of _

(a) statutory dues; Nil

(b) debentures and interest thereon; Nil

(c) deposits and interest thereon; Nil

(d) loan from any bank or financial institution and interest thereon; Nil

(viii) Name, designation address and phone number, email ID of the nodal/

compliance officer of the company, if any, for the private placement offer

process;

7

(ix) Any Default in Annual filing of the company under the Companies Act, 2013

or the rules made thereunder.

None

2. Particulars of offer:

(i) Financial position of the Company for the last 3 financial years; 20-28

(ii) Date of passing of Board Resolution January 8, 2020

(iii) Date of passing of resolution in the general meeting, authorizing the offer of

securities;

February 22,2020

(iv) Kind of securities offered (i.e. whether share or debenture) and class of

security; the total number of shares or other securities to be issued;

38

(v) Price at which the security is being offered including the premium, if any,

along with justification of the price;

38

(vi) Name and address of the valuer who performed valuation of the security

offered, and basis on which the price has been arrived at along with report of

the registered valuer;

Not Applicable

(vii) Relevant date with reference to which the price has been arrived at [Relevant

Date means a date at least thirty days prior to the date on which the general

meeting of the company is scheduled to be held]

Not Applicable

(viii) The class or classes of persons to whom the allotment is proposed to be made; 38

(ix) Intention of promoters, directors or key managerial personnel to subscribe to

the Offer (applicable in case they intend to subscribe to the offer)

Not Applicable

(x) The proposed time within which the allotment shall be completed; 38

(xi) The names of the proposed allottees and the percentage of post private

placement capital that may be herd by them [not required in case of issue of

non- convertible debentures];

Not Applicable

(xii) The change in control, if any, in the company that would occur consequent to

the private placement

Not Applicable

(xiii) the number of persons to whom allotment on preferential basis/private

placement/ rights issue has already been made during the year, in terms, of

number of securities as well as price;

195 Allottees

(xiv) the justification for the allotment proposed to be made for consideration other Not Applicable

Sr.


than cash together with valuation report of the registered valuer;

(xv) Amount which the company intends to raise by way of proposed offer of

securities;

38

(xvi) Terms of raising of securities: Duration, if applicable, rate of dividend or rate

of interest, mode of payment and repayment;

38

(xvii) Proposed time schedule for which the private placement offer cum application

letter is valid;

38

(xviii) Purposes and objects of the offer 38

(xix) Contribution being made by the promoters or directors either as part of the

offer or separately in furtherance of such objects;

16

(xx) Principle terms of assets charged as security, if applicable; 38

(xxi) The details of significant and material orders passed by the Regulators, Courts

and Tribunals impacting the going concern status of the company and its future

operations;

Nil

(xxii) The pre-issue and post-issue shareholding pattern of the company in the

prescribed format

10

3. Mode of payment for subscription

• Cheque

• Demand Draft

• Other Banking Channels

4. Disclosures with regard to interest of directors, litigations etc.

(i) Any financial or other material interest of the directors, promoters or key

managerial personnel in the offer and the effect of such interest in so far as it is

different from the interests of other persons

Nil

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

Department of the Government or a statutory authority against any promoter of

the offeree company during the last three years immediately preceding three

year of the issue of the private placement offer cum application letter and any

direction issued by such Ministry or Department or statutory authority upon

conclusion of such litigation or legal action shall be disclosed;

Nil

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

years);

15

(iv) Related Party Transaction entered during the last three financial years

immediately preceding the year of issue of private placement offer cum

application letter including with regard to loans made or guarantees given or

securities provided;

31

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

last five financial years immediately preceding the year of circulation of offer

letter and of their impact on the financial statements and financial position of

the company and the corrective steps taken and proposed to be taken by the

company for each of the said reservations or qualifications or adverse remark.

Nil

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

under the Companies Act or any previous company law in the last three years

immediately preceding the year of circulation of offer letter in the case of

company and all of its subsidiaries. Also if there were any prosecutions filed

(whether pending or not) fines imposed, compounding of offences in the last

three years immediately preceding the year of the offer letter and if so, section-

wise details thereof for the company and all of its subsidiaries.

Nil

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

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

5. FINANCIAL POSITION OF THE COMPANY

(a) The capital structure of the company in the following manner in a tabular form 9

(i)(A) the authorized, issued, subscribed and paid up capital (number of securities,

description and aggregate nominal value);

(B) size of the present offer;

(C) paid up capital

(I) after the offer;

Sr.


(II) after conversion of convertible instruments (if applicable);

(D) share premium account (before and after the offer);

(ii) the details of the existing share capital of the issuer company in a tabular form,

indicating therein with regard to each allotment, the date of allotment, the

number of shares allotted, the face value of the shares allotted, the price and

the form of consideration:

9-10

Provided that the issuer company shall also disclose the number and price at

which each of the allotments were made in the last one year preceding the date

of the private placement offer cum application letter separately indicating the

allotments made for considerations other than cash and the details of the

consideration in each case:

(b) Profits of the company, before and after making provision for tax, for the three

financial years immediately preceding the date of issue of private placement

offer cum application letter;

18

(c) Dividends declared by the Company in respect of the said three financial years;

interest coverage ratio for last three years (Cash profit after tax plus interest

paid/interest paid)

(d) A summary of the financial position of the Company as in the three audited

balance sheets immediately preceding the date of circulation of offer letter

20-28

(e) Audited Cash Flow Statement for the three years immediately preceding the

date of circulation of offer letter

(f) Any change in accounting policies during the last three years and their effect

on the profits and the reserves of the company Nil

APPLICATION FORM Annexed Overleaf

6. A DECLARATION BY THE DIRECTORS 48

SECTION II – RISK FACTORS

Internal Risk Factors

1. Operational and System Risk

The Company is faced with operational and system risk as a result of a range of factors viz. improper

authorizations, inappropriate documentations, failure in maintenance of proper securities policies, frauds

and inadequate training and employee errors. Further the security risk in terms of handling information

technology related products involves certain risk like data loss, confidentiality and business continuity and

network security.

External Risk Factors

1. Market Risk (Product Demand)

The Company is in the business of financing against securities like shares and mutual funds and also

provides loans against property, business loans and personal loans. The overall demand for the Company’s

products is linked to macroeconomic parameters like GDP growth, overall demand for credit. Any adverse

movement in these factors will have an adverse impact on the business of the Company. The performance

may also be affected by political/ economic developments and natural disasters like earthquakes, flood,

drought etc. These factors may affect the finance industry as well as the recovery of dues from the

customers.

2. Market Risk (Competition)

The Company is in a highly competitive environment resulting in a pressure on the spreads earned by the

Company.

3. Credit risk

Being a financial intermediary, the company faces credit risk of default by the customers.

4. Interest Rate/Liquidity Risk

The economic value of the Company’s Asset and Liabilities are affected by variations in the market interest

rate. Further, the liquidity risk is the potential inability of the Company to meet its liabilities as they become

due.

5. Legal and statutory Risk

The Company is regulated by RBI and is required with the statutory enactments including the Companies

Act, 2013, as amended, The Reserve Bank of India Act, 1934 and the regulations, guidelines and prudential

norms issued by RBI thereunder, SEBI Regulations, as applicable, and other applicable laws and

regulations.

6. Change in Management Personnel

Turnover of Key Management personnel and impact on day to day working of the Company.

SECTION III – ABOUT THE COMPANY

GENERAL INFORMATION

Details of the Company

Name Hedge Finance Limited

Registered office & Corporate

Office

Hedge House, Mamangalam, Palarivattom P.O., Kochi, Ernakulam –

682 025, Kerala, India.

Date of Incorporation February 15, 2011

Contact No. 0484-6130400;

Website www.hedgefinance.com

Email [email protected]

CIN U65923KL2011PLC027672

Chief Financial Officer & Compliance Officer

Mr. Suraj Ramachandran

Hedge House, Mamangalam,

Palarivattom P.O, Kochi – 682025,

Kerala, India

Telephone: +91-93494 97572

Email: [email protected]

Registrar to the Issue

Integrated Registry Management Services Private Limited

2nd Floor Kences Towers,1 Ramakrishna Street North,

Usman Road, T Nagar, Chennai – 600017, Tamil Nadu, India

Phone: 044-28140801/03

Fax: 044-28142479

Credit Ratings Agency

Brickwork Rating India Private Limited

A-209, Siddhi Vinayak Tower,

S.G Highway Makarba,

Ahmedabad - 380051, Gujarat, India

Debenture Trustee

Vistra ITCL (India) Limited

The IL & FS Financial Center, Plot C-22, G Block,

Bandra- Kurla Complex, Bandra East,

Mumbai - 400051, Maharashtra, India

Tel: +9122 2659 3535; Fax: +912226533297

Website: www.itclindia.com

The Debenture Trustee has given its consent for the appointment and to act as Debenture Trustee for the Issue

and the copy of the consent letter of the Debenture Trustee is annexed herewith.

Statutory Auditors of the Company

Name Address Auditor since

Manikandan & Associates

No.78, IInd Floor, DD Oceano Mall,

Marine Drive, Cochin -682 011 Incorporation

Change in Auditors during last 3 years

There has been no change in the statutory auditors of the Company during last 3 financial years.

Issue Programme

Issue Opens on March 25, 2020

Issue Closes on* March 28, 2020

Deemed Date of Allotment March 30,2020

*The Company reserves the option to close the issue prior to March 28, 2020, based on level of subscription, as

may be decided by the board or committee of directors of the Company.

CAPITAL STRUCTURE AND SHAREHOLDING

1. BRIEF HISTORY OF THE COMPANY SINCE ITS INCORPORATION

a. Details of Share Capital as on the date of this Disclosure Document

Particulars Amount in `

Authorized share capital

5,50,00,000 Equity Shares of ` 10 each 55,00,00,000

2,00,00,000 Preference shares of ` 10 each 20,00,00,000

Issued and subscribed share capital

2,37,16,544 Equity Shares of ` 10 each 23,71,65,440

Paid up share capital

A) Fully paid up share capital

2,12,93,817 Equity Shares of ` 10 each fully paid up 21,29,38,170

B) Partly paid up share capital

11,50,000 Equity Shares of ` 10 each of which ` 3.05 paid up 35,07,500

12,72,727 Equity Shares of ` 10 each of which ` 6.50 paid up 82,72,726

Total paid up share capital (A+B) 22,47,18,396

b. Changes in Authorized Share Capital in last five years

Our Company was incorporated with the authorized share capital of ` 10,00,00,000 divided into

1,00,00,000 Equity Shares of ` 10 each and details of changes in authorized share capital post

incorporation are set forth below:

Date of change AGM/EGM Change

October 1, 2012 EGM

Increased from `10,00,00,000 divided into 1,00,00,000

Equity Shares of `10 each to `75,00,00,000 divided into

7,50,00,000 Equity Shares of `10 each.

December 30, 2012 EGM

Reclassification of share capital from `75,00,00,000

divided into 7,50,00,000 Equity Shares of `10 each to

`75,00,00,000 divided into 7,00,00,000 Equity Shares of

`10 each and 50,00,000 8% convertible preference shares

of `10 each.

March 21, 2014 EGM


divided into 7,00,00,000 Equity Shares of `10 each and

50,00,000 8% convertible preference shares of `10 each

to `75,00,00,000 divided into 7,50,00,000 Equity Shares

of `10 each.

September 26,

2019 AGM


divided into 7,50,00,000 Equity Shares of Rs. 10 each to

5,50,00,000 Equity Shares of Rs. 10 each aggregating to

`55,00,00,000 and 2,00,00,000 preference shares of `10

each aggregating to `20,00,00,000.

c. History of equity share capital of the Company

The built up of equity share capital of the Company since incorporation is set forth below:

Date of

Allotment

No. of

Equity

Shares

Face

Value

(in `)

Issue

Price

(in `)

Nature of

Allotment

Consi

derati

on

Cumulative

No. of

Equity

shares

Paid up Equity

Share Capital

(in `)

Share

Premi

um

February 21,00,000 10/- 10/- Subscriptio Cash 21,00,000 2,10,00,000 -

Date of

Allotment

No. of

Equity

Shares

Face

Value

(in `)

Issue

Price

(in `)

Nature of

Allotment

Consi

derati

on

Cumulative

No. of

Equity

shares

Paid up Equity

Share Capital

(in `)

Share

Premi

um

15, 2011 n to MOA

June 1,

2011 5,00,000 10/- 10/-

Further

issue Cash 26,00,000 2,60,00,000 -

August 23,

2012 42,75,738 10/- 10/-

Further

issue Cash 68,75,738 6,87,57,380 -

September

19, 2012 12,00,000 10/- 10/-

Further

issue Cash 80,75,738 8,07,57,380 -

November

26, 2012 7,00,000 10/- 10/-

Further

issue Cash 87,75,738 8,77,57,380 -

January 21,

2013 27,00,000 10/- 10/-

Further

issue Cash 1,14,75,738 11,47,57,380 -

March 15,

2013 10,00,000 10/- 10/-

Further

issue Cash 1,24,75,738 12,47,57,380 -

March 29,

2013 38,72,727 10/- 10/-

Further

issue(1) Cash 1,63,48,465 16,34,84,650 -

March 29,

2013 27,22,624 10/- 10/-

Further

issue Cash 1,90,71,089 17,23,56,346 -

March 21,

2014 45,45,455 10/- 10/-

Conversion

of

preference

shares

Cash 2,36,16,544 21,78,10,896 -

March 21,

2014 1,00,000 10/- 10/-

Further

issue Cash 2,37,16,544 21,88,10,896(1) -

(1) During FY 2015-16, the Company has received an amount of Rs.59,07,500/- towards application

money for partly paid up shares

d. The details of the number and price at which each of the allotments were made in the last one

year preceding the date of this Disclosure Document separately indicating the allotments made

for considerations other than cash and the details of the consideration in each case

Except as disclosed below, no allotment has been made by the Company during last one year preceding

the date of this Disclosure Document:

Date of

Allotment Type of Security

Number of

Security

allotted

Price per

Security (in `)

Nature of

Consideration

01.01.2019 Unsecured Non-Convertible

Redeemable Debentures

20,000 1,000 Cash



60,000 1,000 Cash

01.02.2019 Secured Non-Convertible


22,400 1,000 Cash



10,300 1,000 Cash



20,000 1,000 Cash



14,500 1,000 Cash



59,700 1,000 Cash



54,860 1,000 Cash



100100 1,000 Cash



10,000 1,000 Cash



31,600 1,000 Cash



20,000 1,000 Cash



13,870 1,000 Cash



16,500 1,000 Cash



44,700 1,000 Cash



30,000 1,000 Cash



10,300 1,000 Cash

02.12.2019 Listed, Rated, Secured Non-

Convertible Redeemable

Debentures

1,00,000 1,000 Cash



9,050 1,000 Cash



85,000 1,000 Cash



30,000 1,000 Cash



30,000 1,000 Cash

No securities have been allotted for consideration other than cash in last one year.

e. Details of any Acquisition or Amalgamation in last one year

There has been no acquisition or amalgamation during last one year from the date of this Disclosure

Document.

f. Details of Reorganization or Reconstruction in last one year

There has been no reorganization or reconstruction during last one year from the date of this Disclosure

Document.

2. DETAILS OF SHAREHOLDING OF THE COMPANY

a) Shareholding Pattern of the Company as on the last quarter ended on December 31, 2019

Sr.

No Particular

Total No of

Equity Shares*

No. of Shares in

Demat Form

Total

Shareholdings as

% of total no

of equity shares

1 Promoters and Promoter Group 58,53,423 48,89,787 24.68%

2 Public 1,78,63,121 1,11,45,455 75.32%

Total 2,37,16,544 1,60,35,242 100.00%

*since the present Issue is of NCDs, there will be no change in the shareholding pattern of the

Company post Issue.

b) Top 10 holders of Equity Shares of the Company as on the last quarter ended on December 31,

2019

Sr.

No Name of Shareholder

Total No. of

Shares

No. of shares in

Demat form

Total

Shareholdings as

% of total no of

equity shares

1 Alex K. Babu 45,89,787 45,89,787 19.35%

2 Rapheal P. Thomas 35,00,000 35,00,000 14.76%

3 Dr. P. S. George 16,66,666 - 7.03%

4 Kiran B. 12,00,000 - 5.06%

5 Dr. Joseph V T & Celine

Joseph 10,00,000 - 4.22%

6 Cheriyath Varghese 10,00,000 - 4.22%

7 Pradeep Kumar C 9,63,636 - 4.06%

8 Lissy Mathew 4,25,000 4,25,000 1.79%

9 Mathew Philip 4,25,000 4,25,000 1.79%

Total 1,47,70,089 89,39,787 62.28%

c) Details of shareholding of promoters of the Company

Name of the

Promoter

Total no

of Equity

shares

No of

shares in

demat form

Total

Shareholding

as %of total no

of equity

shares

No of

shares

pledged

% of shares

pledged with

respect to shares

owned

Alex K. Babu 45,89,787 45,89,787 19.35% - -

Pradeep Kumar C 9,63,636 - 4.06% - -

Nithya Alex 3,00,000 3,00,000 1.26% - -

Total 58,53,423 48,89,787 24.68% - -

d) Details of shares pledged or encumbered by the Promoters

None of the Equity Shares held by the Promoters has been pledged or otherwise encumbered.

BUSINESS OVERVIEW

The Company was incorporated as Hedge Finance Limited on February 15, 2011 in the state of Kerala under the

Companies Act, 1956 pursuant to certificate of incorporation issued by the Registrar of Companies, Kerala and

Lakshadweep and received the certificate of commencement of business on June 18, 2012. The corporate

identity number of the Company is U65923KL2011PLC027672 and the registered office of the Company is

situated at Hedge House, Mamangalam, Palarivattom P.O., Kochi, Ernakulam – 682 025, Kerala, India.

The Company is a non-systemically important non-deposit taking Non-Banking Financial Company (“NBFC”)

registered with the Reserve Bank of India (“RBI”). The Company is primarily engaged in the business of

financing against securities like shares and mutual funds and also provides loans against property, business

loans and personal loans. The Company is a part of the Hedge group of companies which includes Hedge

Equities Limited (engaged in equity broking) and Hedge Commodities Limited (commodity broking).

The brief profile of products offered by the Company is set out below:

1) Loan against Securities:

Loans against Securities (LAS)/Margin Funding enables customers to get instant liquidity from their

Securities without selling them. It is given only against a selected list of securities which are reviewed

periodically.

2) Loan against Property:

Loan against Property (LAP) are secured long term loans secured by mortgage of residential or commercial

property. Risk related to the collateral in the case of Loan against Property is mitigated by proper valuation

of the property by a Chartered Engineer and through scrutiny of the documents by a legal expert. The

maximum up to which the loan can be sanctioned is limited to 50% of the value of the collateral.

3) Loans Against Personal Guarantee:

Loans are sanctioned only after a detailed study of the Borrower, viz. Management, Business Model and

financial statement/ cash flows. Personal guarantee of the Directors, Partners etc are taken as a security for

the loan advanced. Company does a strict follow-up of the repayment of the principal/ interest and also

scrutinise the financial performance of the borrower at frequent intervals. Most of the loans provided are

Bridge Loans till the time a term loan or OD facility is being sanctioned from a scheduled bank.

4) Margin Trade Funding:

Margin Trade Funding offers customers the opportunity to invest/leverage/trade in equity shares at a pre-

defined margin. Margin Trade Funding essentially enables the customer to take a larger share of the equity

market to a level that goes above his resources at hand. Thus, it is a mechanism that allows trading with

borrowed funds or securities. It permits the customer to pay just a part of the total scrip purchase price,

while our company will provide a loan to account for the balance amount. However, the loan amount and

scrip purchase is subject to the quality of the securities owned by the customer.

5) Consumer loan:

Loan to consumers for buying electronic items through certain online sites.

6) Business Loan:

Loan for doing business purpose.

7) Personal Loans

Nowadays, it is quite difficult to raise a big amount of money suddenly for an emergency, either because we

don’t have sufficient cash in hand or because it is blocked in some investments or other assets. Personal

Loans are the immediate relief for those who need immediate liquidity. Personal loans are those loans taken

for Private Reasons and Requirements. It could be for marriage or other functions, vacation, medical

emergencies or any other reasons related to the person.

A personal loan is similar to instant cash one gets after his income is evaluated. The individual who takes a

loan can be salaried, businessman or any other person who has a regular income.

Just follow the simple steps in the application process and submit basic documents required to avail your

loan.

8) Equipment Loans

Equipment financing or machinery loans would help you buy new or upgrade equipment for your business

purposes easily, providing everything that’s necessary for your business growth. Get a business loan of up to

Rs.5 Lakh for equipment purchase, necessary for facility development, recasting existing plants and new

projects. We understand the importance of financing in the success of a business. Hedge Finance will partner

with you in evaluating capital expenditure, working capital, business expansion and design a customized

solution that’s ideal for you.

For whom Equipment Finance is best suited for Self-employed individuals, Proprietors, Private Limited

Companies, and Partnership firms and those working in manufacturing, trading, or services.

9) MSME Loans

MSME (Micro, Small and Medium Enterprises), also known as SME (Small and Medium Enterprises) are

loans that are offered to businesses falling under these two categories. Generally, these loans are given to

start-up owners, small business owners and women entrepreneurs on a short-term basis. The duration of

these loans varies as per the amount and minimum eligibility criteria.

Availing an MSME loan is simple and hassle free. It takes very less time to disburse the loan amount with

minimum documentation and even the processing time is very short!

Purpose

MSME Loans can help you in building or replenishing inventory, purchasing equipment/ machinery,

business expansion, new ventures etc. For whom MSME Loans are ideal for Self-employed Individuals,

Proprietary concerns, Private Limited Companies and Partnership firms, also those engaged in

manufacturing, trading, and activities.

10) Car Loans

Buying a car should always be a memorable experience. Choose the right car you can afford, that meets

your requirements, and drive it happily.

Hedge Finance Ltd introduces vehicle loans for new & pre-used cars and commercial vehicles, turning

your dream into reality. With simple steps, you can now easily own your dream vehicle that you have

always cherished with the good features! Hedge Vehicle Finance offers you faster processing, making it

possible to own a wide range of certified new/pre-owned vehicles quite conveniently.

Corporate and Management Structure

Details of subsidiary

The Company does not have any subsidiary.

Details of branches / units

Currently the Company has 16 branches at Ernakulam, Angamaly, Kollam, Mundakayam, Thiruvalla, Thrissur,

Kottayam, Kannur, Valancherry, Calicut, Palakkad, Pathnamthitta, Trivandrum, Alapuzha, Kalpetta and

Muvattupuzha.

MD

GM-RESOURCESSR. VP-SALES &

MARKETING CFO

AVP-COMPLIANCE CS

COO

AVP-OPERATIONS

GM-CREDIT & COLLECTION

WTD

CEO

OUR MANAGEMENT

Board of Directors

Currently, our Company has 5 (Five) Directors on the Board out of which 2 (Two) are Independent Directors

and 2 (Two) are Executive Directors and 1 (One) is Non-Executive Director. The composition of the Board of

Directors is governed by the provisions of the Companies Act. The following table sets forth details regarding

our Board as on the date of this Disclosure Document:

Sr.

No

Name, Address, Designation, director since,

DIN and Occupation Age Details of other directorship

1 Name: Mr. Alex Kalluvila Babu

Address: House No.1/60, West Hill P.O

Varakkal Temple Road, Kozhikode - 673 005,

Kerala, India

Designation: Managing Director

Director of Company since: February 15,

2011

DIN: 01254207

Occupation: Business

39 − Cordate Property Developers Private

Limited

− Lexine Builders and Developers

Private Limited

− Ganya Realtors And Developers

Private Limited

− Hedge Commodities Limited

− Carlton Logistics Private Limited

− Modus Logistics Private Limited

− Hedge Equities Limited

− Aesthetics Securities Private Limited

− Anuja Property Developers Private

Limited

− Hedge Properties Private Limited

− Gilgal Property Developers Private

Limited

− Hedgeinfo Systems Private Limited

− Omnicore Solutions Private Limited

− Trigger Logistics Private Limited

− Hedge School of Applied Economics

Limited

− Young Presidents Organisation

(Kerala Chapter)

2 Name: Mr. Rapheal Thomas

Address: Pozholi Parambil House, P.O

Nadavaramba, Trichur- 680 661, Kerala, India

Designation: Director

Director of Company since: April 19, 2018

DIN: 06379667


65 − Two Star Ajantha Properties Private

Limited

− Glaze Tech Contractors Private

Limited (under process of striking

off)

3 Name: Mr. Kuruppat Ajit Kumar

Address: Alaka, Maravanchery Lane,

Chakkamukku, Punkunnam, Thrissur-680 002

Designation: Independent Director

Director of Company since: September 04,

2019

DIN: 03588605

64 − No other directorship

Sr.

No

Name, Address, Designation, director since,

DIN and Occupation Age Details of other directorship

Occupation: Rtd. Senior Bank official

4 Name: Mr. Palathunkal Chacko John

Address: Palathunkal, C No 37/2344, D7, New

CC No 62/3613 D7, Flat 3P, DD Platinum

Planet, Kathirikadavu, Kaloor S O, Ernakulam,

Kerala-682017

Designation: Independent Director

Director of Company since: September 04,

2019

DIN: 00042147

Occupation: Retired Bank Executive

68 No other directorship

5 Name: Mr. Kiliyanat Padmakumar Puliasseri

Address: 3F, Skyline, Topaz Kaloor

Kadavanthra Road, Kaloor, Ernakulam-

682017, Kerala, India

Designation: Whole Time Director

Director of Company since: July 1, 2019

DIN: 00023176


74 − No other directorship

Details of Remuneration of Directors during last three years

The details of remuneration paid / payable to directors of the Company during the current year and during the

preceding three years are set forth below:

(Amount in Rupees)

Sr.

No Name of the Directors

Financial Year

2019-20* 2018-19 2017-18 2016-17

1 Mr. Alex Kulluvila Babu 16,62,453 22,16,604 22,16,604 22,16,604 2 Mr. Rapheal Thomas - - - -

3 Mr. Kuruppat Ajit Kumar - - - -

4 Mr. Palathunkal Chacko John - - - -

5 Mr. Kiliyanat Padmakumar

Puliasseri 9,00,000 - - -

Total 25,62,453 22,16,604 22,16,604 22,16,604 *Remuneration till December 31, 2019.

Details of Change in Directors during last three years

The details of changes in Board of Directors of the Company during last three years are set forth below:

Name of Director DIN Date of Change Nature of

change Reason

Kiliyanat Padmakumar

Puliasseri 00023176 September 26, 2019

Change in

designation

Appointed as Whole-

time Director

Name of Director DIN Date of Change Nature of

change Reason

John George 06560851 September 04, 2019 Cessation Resignation as

Director

Ambrish Naresh

Sampat 01969624 September 04, 2019 Cessation

Resignation as

Director

Palathunkal Chacko

John 00042147 September 04, 2019 Appointment

Appointed as

Additional Director

Kuruppat Ajit Kumar 03588605 September 04, 2019 Appointment Appointed as

Additional Director

Kiliyanat Padmakumar

Puliasseri 00023176 July 01, 2019 Appointment

Appointed as

Additional Director

Pradeep Kumar C 01038074 November 29, 2018 Cessation Resignation as

Director

Rapheal Thomas 06379667 September 12, 2018 Change In

Designation Appointed as Director

Rapheal Thomas 06379667 April 19, 2018 Appointment Appointed as

Additional Director

Boby Jose Arakunnel 01903646 March 27, 2018 Cessation Resignation as

Director

Bhuvanendran N 01903591 March 27, 2018 Cessation Resignation as

Director

Bhuvanendran N 01903591 January 9, 2017 Change In

Designation Appointed as Director

Interest of Promoters / Directors / KMPs in the proposed Issue

None of the director or promoter or key managerial personnel is having financial or other material interest in the

Issue.

Contribution being made by Promoters / Directors / KMPs either as a part of the Issue or separately in

furtherance of such objects

None of the Promoter/Director/Key Management Personnel intend to subscribe to this offer and has not made

any contribution in furtherance of the objects for which the funds are being raising through present Issue.

Other Confirmations

None of the directors of the Company is appearing in the RBI Defaulter list or ECGC Default list.

DISCLOSURE OF WILFUL DEFAULTER

Neither the Company nor any of the Promoters or Directors of the Company has been declared as wilfull

defaulter and accordingly, the details specified in part C of Schedule I of the SEBI ILDS Regulations are not

applicable to the Company.

SECTION IV - FINANCIALS INFORMATION

KEY OPERATIONAL AND FINANCIAL PARAMETERS

The details of Key Operational and Financial Parameter of last three audited years of the Company are set forth

below:

(Amount in Rupees)

Particulars September

30, 2019# 2018-19 2017-18 2016-17

Net worth 24,38,75,799 23,75,66,238 25,39,34,897 24,50,94,876

Total Debt 86,49,43,612 65,36,76,133 45,54,34,910 19,32,36,651

Of which

Long Term Borrowings 63,60,27,866 31,79,25,321 16,94,94,561 19,29,83,499

Short Term Borrowings [●] 1,80,29,809 9,14,88,716 -

Current Maturities of Long Term

Borrowings

22,89,15,746 31,77,21,003 19,44,51,633 2,53,152

Net Fixed Asset (Tangible Assets) 4,12,89,930 4,20,75,930 1,64,25,489 34,17,546

Total Non-Current Asset 1,06,02,06,289 17,28,08,333 23,93,38,287 4,66,67,279

Cash and cash Equivalents 4,38,78,576 1,86,58,503 3,90,35,143 14,99,77,240

Current Investments 92,02,211 80,39,063 22,00,000 36,08,544

Total Current Asset 7,39,40,609 75,70,32,686 48,72,47,961 41,31,63,931

Current Liabilities 25,42,43,235 37,43,49,460 30,31,56,790 2,17,52,835

Assets Under Management 997437937.5 82,54,85,000 64,97,69,000 29,41,75,000

Off balance sheet Assets [●] [●] [] []

Interest income 7,22,41,844 10,60,75,385 7,45,68,866 5,55,85,761

Interest expense 4,19,31,357 6,08,78,440 3,01,45,829 1,27,58,527

Provisioning & write offs [●] 69.49 39.94 -

PBT 71,84,131 (48,45,555) 1,20,50,692 3,18,81,030

PAT 63,09,561 (35,54,290) 88,40,021 2,19,79,619

Gross NPA (%) 2.83% 4.25% 5.40% 0.07%

Net NPA (%) 2.11% 3.35% 4.80% 0.00%

Tier I Capital Adequacy Ratio (%) 11.46% 4.24% 34.99% 86.58%

Tier II Capital Adequacy Ratio (%) - - - -

Particulars September

30, 2019# 2018-19 2017-18 2016-17

Dividend Nil Nil 1,06,46,909 1,06,46,909

Interest coverage ratio* 1.17 0.97 1.33 2.76

*Cash profit after tax plus interest paid/interest paid #half yearly financials

Gross Debt: Equity Ratio of the Company:

Before the Issue of NCDs* 2.75:1

After the Issue of NCDs 3.17:1

*As per audited financial statements of FY 2018-19.

Project Cost and means of finance

Note Applicable

ABRIDGED FINANCIAL STATEMENTS

The summary financial information of our Company for the last three years as derived from the audited financial

statements of our Company for the financial year ended on March 31, 2019, March 31, 2018 and March 31,

2017 are reproduced below.

[The remainder of this page has been intentionally left blank]

32

FINANCIAL INDEBTEDNESS

The details of borrowings of the Company as on the last quarter ended on December 31, 2019 are set forth

below:

a. Details of Secured Loan

Sr.

No Lender’s Name

Type of

facility

Amount

Sanction

(in `)

Principal

Amount

Outstandi

ng (in `)

Repayment

Schedule Security

1 The Federal Bank

Limited

Term

Loan -

Vehicle

10,25,000 5,60,592 15th day of

every month

Hypothecation of

Maruti Brezza

2 South Indian Bank Overdraft 1,20,00,000 Nil On

availability

of fund

Current assets,

book debts, loans

and advances and

receivables

3 Bajaj Finance

Limited

Refinanci

ng

10,00,00,000 Nil On

availability

of fund

Approved security

b. Details of unsecured Loans

Nil

c. Details of NCDs

Debenture

Series

Tenure/period

of maturity

Coupon

(%)

Principle

amount

outstandin

g (In `)

Date of

Allotment

Credit

Rating

Secured /

unsecured Security

Tranche 1 1-5 years 11.5-12.5 10,00,000 27.07.2015 NA Secured Loan

receivables


receivables


receivables


receivables

Tranche 1 1-5 years 11.5-12.5 1,05,50,00

0

28.01.2016 NA Secured Loan

receivables


receivables


receivables


receivables


receivables


receivables


receivables


receivables


receivables


Debenture

Series

Tenure/period

of maturity

Coupon

(%)

Principle

amount

outstandin

g (In `)

Date of

Allotment

Credit

Rating

Secured /

unsecured Security

receivables


receivables

Tranche 3 1-5 years 9.50-

12.00

21,00,000 01.07.2017 NA Secured Loan

receivables


12.00

1,23,45,00

0


receivables


12.00

1,41,95,00

0


receivables


12.00

10,00,000 07.09.2017 NA Secured Loan

receivables


12.00

50,00,000 08.09.2017 NA Secured Loan

receivables


12.00

60,20,000 01.10.2017 NA Secured Loan

receivables


12.00

55,00,000 01.11.2017 NA Secured Loan

receivables


12.00

50,00,000 02.11.2017 NA Secured Loan

receivables


12.00

44,35,000 16.11.2017 NA Secured Loan

receivables


12.00

1,00,00,00

0


receivables


12.00

88,00,000 01.12.2017 NA Secured Loan

receivables


12.00

50,00,000 02.12.2017 NA Secured Loan

receivables


12.00

1,49,00,00

0


receivables


12.00

32,50,000 29.12.2017 NA Secured Loan

receivables


12.00

9,00,000 01.02.2018 NA Secured Loan

receivables


12.00

10,50,000 01.03.2018 NA Secured Loan

receivables


12.00

15,00,000 27.03.2018 NA Secured Loan

receivables


12.00

1,00,00,00

0


receivables


12.00

30,00,000 31.03.2018 NA Secured Loan

receivables


10.50

36,00,000 01.05.2018 NA Secured Loan

receivables


11.00

2,89,00,00

0


receivables


11.00

2,43,50,00

0


receivables


11.00

93,50,000 15.07.2018 NA Secured Loan

receivables


11.00

1,49,50,00

0


receivables


11.00

3,94,00,00

0


receivables


11.50

5,46,50,00

0


receivables

Debenture

Series

Tenure/period

of maturity

Coupon

(%)

Principle

amount

outstandin

g (In `)

Date of

Allotment

Credit

Rating

Secured /

unsecured Security


11.50

1,38,00,00

0


receivables


11.50

3,52,75,00

0


receivables


11.50

4,15,25,00

0


receivables


11.00

2,24,00,00

0


receivables


11.00

1,03,00,00

0


receivables


11.50

1,45,00,00

0


receivables

Tranche 5 1-5 years 10-11.50 5,97,00,00

0


receivables

Tranche 5 1-5 years 10-11.50 5,48,60,00

0


receivables

Tranche 5 1-5 years 10-11.50 1,001,00,0

00


receivables

Tranche 5 1-5 years 10-11.50 3,16,00,00

0


receivables


10.50

1,38,70,00

0


receivables

Tranche 5 1-5 years 10-11.50 1,65,00,00

0


receivables

Tranche 5 1-5 years 10-11.50 4,47,00,00

0


receivables

Tranche 3 1 year 12.50 3,00,00,00

0

20.04.2018 NA Unsecured NA

Tranche 3 1 year 12.00 2,00,00,00

0


Tranche 3 1 year 12.50 2,00,00,00

0


Tranche 3 1 year 12.50 6,00,00,00

0


Tranche 3 1 year 12.50 2,00,00000 01.03.2019 NA Unsecured NA

Tranche 4 1 year 11.75 1,00,00,00

0


Tranche 4 1 year 12.00 2,00,00,00

0


Tranche 4 1 year 11.75 3,00,00,00

0


d. List of top 10 debenture holders as on December 31, 2019:

i) Listed NCDs:

Sr.

No. Name of Debenture holders

Amount (in

`)

1 Aromatic Ingradients Pvt Ltd 5,00,00,000

2 Asha 5,00,00,000

ii) Unlisted NCDs:

Sr. Name of Debenture holders Amount (in

No. `)

1 CHENNAKATTUKALANGAMARIL VARKEY JACOB

3,00,00,000

2 BAFNA ENTERPRISES

3,00,00,000

3 NISHANT EXPORT

3,00,00,000

4 NISHANT EXPORT

2,00,00,000

5 MANISH JAIN BAFNA

1,00,00,000

6 MANISH JAIN BAFNA

1,00,00,000

7 AROMATIC INGREDIENTS PRIVATE LIMITED

1,00,00,000

8 PLANT LIPIDS PRIVATE LIMITED

1,00,00,000

9 BEENA GEORGE

1,00,00,000

10 CHERUKULANGARA PARAMESWARAN SUNIL

1,00,00,000

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

Nil

f. Details of Commercial Papers

Nil

g. Details of Rest of the borrowing (if any including hybrid debt like FCCB, Optionally Convertible

Debentures / Preference Shares ) as on December 31, 2019

Nil

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

consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in

pursuance of an option

Nil

i. Details of all default/s and/or delay in payments of interest and principal of any kind of term loans,

debt securities and other financial indebtedness including corporate guarantee issued by the

Company, in the past 5 years

Nil

j. Any material event/ development or change having implications on the financials/credit quality (e.g.

any material regulatory proceedings against the Issuer/promoters, tax litigations resulting in material

liabilities, corporate restructuring event etc) at the time of issue which may affect the issue or the

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

Nil

k. 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

N. A.

RELATED PARTY TRANSACTIONS

The details of related party transactions during last three audited years including guarantee, loans or

security provided to relative as disclosed in the financial statements as per applicable accounting standard

are reproduced below.

[The remainder of this page has been intentionally left blank]

Details of related party transactions for the financial year ended on March 31, 2019



SECTION V –ISSUE INFORMATION

SUMMARY TERM SHEET

General

Issuer Hedge Finance Limited

Security Name Hedge Finance Limited - 11.00% Non-Convertible Debentures 2022 – Series 1

Registrar to the Issue Integrated Registry Management Services Private Limited

Depository Central Depository Services (India) Limited (“CDSL”)

Debenture Trustee Vistra ITCL (India) Limited

Credit Rating Agency Brickwork Ratings India Private Limited

Instrument

Type of Instrument Non-Convertible Debentures (“NCDs”)

Nature of Instrument Listed Secured Redeemable Non-Convertible Debentures

Seniority Senior

Issue Details

Issue Size ₹ 50,000,000

Option to retain

oversubscription (Amount )

Nil

Face Value ` 1,000 per NCD

Premium Nil

Issue Price ` 1,000 per NCD

Mode of Issue Private Placement

Nature of consideration Cash

Eligible Investors Only the person(s) to whom this Disclosure Document is circulated by the

Company shall be eligible to apply for NCDs (“Identified Persons”).

Subject to provisions of the applicable laws and investment restriction and norms,

Investors in the following categories (not exhaustive list) are eligible to apply for

NCDs:

1. Companies, Body Corporate, Financial Institutions, NBFCs, Statutory

Corporations;

2. Commercial Banks including but not restricted to commercial, private,

foreign, co-operative and regional rural banks;

3. Provident funds/ Superannuation funds or gratuity funds, private trusts, as

may be permitted by respective rules and guidelines of such funds/ trusts;

4. Registered Society;

5. Partnership firms & LLPs;

6. Individuals and HUFs;

7. High Net worth Individuals;

8. Insurance Companies;

9. Mutual Funds;

10. Portfolio Manager registered with SEBI;

11. SEBI Registered FIIs/FPIs;

12. Any other investor permitted to invest in debentures of Indian body corporate

No Identified Person shall be entitled to renounce his right to subscribe to the

NCDs to any person.

Listing The NCDs are proposed to be listed on BSE Limited (“BSE”).

The Company will make a listing application to BSE within 15 days from the date

of allotment of NCDs and seek listing permission within 20 days from the date of

allotment of NCDs.

Rating “BWR BB-” (Outlook: Stable) by the Brickwork Ratings India Private Limited

Issue Schedule

Issue Opens on []

Issue Closes on

[]. The Company reserves the option to close the issue

prior to [], based on level of subscription, as may be

decided by the board or committee of directors of the

Company.

Pay in date Between the Issue Open Date and Issue Close Date

(both inclusive)

Deemed Date of Allotment March 30, 2020

The actual allotment of NCDs may take place on a date other than the Deemed

Date of Allotment. All benefits relating to the NCDs including interest on NCDs

shall be available to the NCD Holders from the Deemed Date of Allotment.

Issuance & Trading Dematerialized form only

Objects of the Issue The Object of the Issue is to meet the working capital requirements of the

Company

Utilization of Issue

Proceeds

The proceeds of the Issue after deducting the issue related expenses shall be

utilized for the objects as mentioned hereinbefore.

Coupon Rate 11.00% per annum

Step Up/Step Down

Coupon Rate

N.A.

Coupon payment frequency Annually

Coupon payment date 30/03/2021,30/03/2022,30/03/2023

Coupon type Fixed

Coupon Reset Process

(including rates, spread,

effective date, interest rate

cap and floor etc)

N.A.

Day count basis Actual / Actual

Interest on application

money

11.00% per annum

Default interest rate In case of default in payment of Interest and/or principal redemption on the due,

additional interest of at least @ 2% p.a. over the coupon rate will be payable by

the Company for the defaulting period.

Tenure 3 (Three) Years from the Deemed Date of Allotment.

Put & Call option None

Redemption Date March 30, 2023 , i.e., 3 years from the Deemed Date of Allotment

Redemption Amount ` 1,000.00 per NCD

Redemption Premium

/Discount Nil

Discount at which security

is issued and the effective

yield as a result of such

discount.

N.A.

Minimum Application Size

/ Minimum Subscription

per Investor

Category I – Minimum subscription of ` 20,000 (20 NCDs) and in multiple of

`1,000 (1 NCD) thereafter subject to maximum of ` 99,99,000 (9,999 NCDs)

Category II - Minimum subscription of ` 1,00,00,000 (10,000 NCDs) and in

multiple of ` 1,000 (1 NCD) thereafter subject to maximum of ` 10,00,00,000

(1,00,000 NCDs)

Basis of allotment First Come First Serve basis

Settlement Mode Settlement by way of Demand Draft/Cheque/RTGS/NEFT/Fund Transfer or any

other electronic mode offered by the Banks.

Record Date 15 days prior to the Coupon Payment Date and Redemption Date.

Security (Including

description, type of

security, type of charge,

likely date of creation of

security, minimum security

The NCDs shall be fully secured by way of creation of first pari passu

hypothecation over the loan receivables (both present and future) of the Company.

The Company shall maintain minimum security cover of 100% at all times.

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

The Company proposes to create the charge in favour of the Debenture Trustee

within 60 (Sixty) days from the Deemed Date of Allotment of NCDs.

In case of delay in execution of Debenture Trust Deed, the Company will pay

penal interest of at least 2% p.a. over the Coupon Rate to the NCD Holders till the

execution of Debenture Trust Deed.

Business Day Convention If any date except the date of allotment, falls on a public holiday, the Modified

Following Business Day convention shall be considered. In case any Interest

Payment Date(s) falls on a Sunday or a holiday, the coupon payment shall be

made on the next working day. In case the Redemption Date falls on a Sunday or

a holiday, the redemption proceeds and accrued interest (if any) shall be paid on

the previous working day.

Working day, for the purpose of this clause, shall mean a day on which scheduled

commercial banks are open for business in the city of Kochi, Kerala.

Transaction Documents a. Copy of resolution passed by the Board of Directors and shareholders of the

Company for issue of NCDs;

b. Copy of resolution passed by shareholders of the Company under section

180(1)(c) of the Companies Act, 2013;

c. Credit Rating Letter dated June 14, 2019 along with rating rationale issued

by Brickwork Ratings India Private Limited;

d. Consent Letter of the Debenture Trustee

e. Consent Letter of the Registrar to the Issue

f. Tripartite Agreement entered between the Company, Depository and the

Registrar to the Issue

g. Debenture Trust Deed

h. Disclosure Document

i. Listing Agreement with BSE

The Copy of the aforementioned documents is annexed herewith and will also be

available for inspection at the registered office of the Company during the

working hours on any working day till date listing of NCDs on BSE.

Conditions precedent to

Disbursement

N.A.

Conditions subsequent to

Disbursement

N.A.

Events of Default The events of default shall be set out in the Debenture Trust Deed and charge

documents which will be made available on the website of the Company.

Provisions related to Cross

Default Clause N.A.

Role and Responsibilities

of Debenture Trustee

The role and responsibilities of the Debenture Trustee shall be as defined under

the Debenture Trust Deed and as prescribed under the Companies Act, 2013, the

SEBI ILDS Regulations and the SEBI (Debenture Trustees) Regulations, 1993.

Governing Law The NCDs shall be governed by the existing laws of India.

Jurisdiction Any disputes arising out of or connected with the Issue of NCDs shall be subject

to exclusive jurisdiction of courts and tribunals located at Kochi, Kerala.

Additional Covenants

Default in payment In case of default in payment of Interest and/or principal redemption on the due

dates, the additional interest of 2% p.a. over the Coupon rate will be payable by

the Company for the defaulting period.

Delay in listing In case of delay in listing of the NCDs beyond 20 days from the Deemed Date of

Allotment, the Company will pay penal amount of at least 1 % p.a. over the

Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till

the listing of such NCDs to the investor.

Transferability Subject to provisions of Memorandum of Association and Articles of Association

of the Company, the Companies Act, 2013 and other applicable laws, the NCDs

shall be freely transferable.

TERMS OF THE ISSUE

Eligible Investors / Who can apply

Only the person(s) to whom this Disclosure Document is circulated by the Company shall be eligible to apply

for NCDs (“Identified Persons”).

Subject to provisions of the applicable laws and investment restriction and norms, Investors in the following

categories (not exhaustive list) are eligible to apply for NCDs:

1. Companies, Body Corporate, Financial Institutions, NBFCs, Statutory Corporations;

2. Commercial Banks including but not restricted to commercial, private, foreign, co-operative and regional

rural banks;

3. Provident funds/ Superannuation funds or gratuity funds, private trusts, as may be permitted by respective

rules and guidelines of such funds/ trusts;

4. Registered Society;

5. Partnership firms & LLPs;

6. Individuals and HUFs;

7. High Net worth Individuals;

8. Insurance Companies;

9. Mutual Funds;

10. Portfolio Manager registered with SEBI;

11. SEBI Registered FIIs/FPIs;

12. Any other investor permitted to invest in debentures of Indian body corporate

No Identified Person shall be entitled to renounce his right to subscribe to the NCDs to any person.

How to Apply

All applications for the NCD(s) must be in the prescribed Application Form and be completed in block letters in

English. It is presumed that the application is signed and made by persons duly empowered and authorized by

the entity on whose behalf the application is made. Application forms must be accompanied by either a Demand

Draft or a Cheque, drawn in favour of “Hedge Finance Limited” and duly crossed “Account payee only” or

through National Automated Clearing House (“NACH”), Real Time Gross Settlement (“RTGS”) or National

Electronic Funds Transfer (“NEFT”). All cheques/ DDs/Pay orders of banks are to be made payable at Kochi.

Outstation cheques, money orders, postal orders will not be accepted. The Company will not be responsible or

accountable in any manner for any instruments or applications lost in transit or mail.

It may be noted that a separate application can be made in respect of each scheme of an Indian Mutual Fund/

Asset Management Companies registered with SEBI and such applications would not be treated as multiple

applications.

The application form will be made available along with the Summary Term Sheet at the time of offer. The

applicant should mention their PAN at the appropriate place in the application form.

The payment details for making payment through NACH / RTGS / NEFT is set forth below:

Settlement Bank FEDERAL BANK

Branch Address ERNAKULAM KALOOR BRANCH Account Number 14210200015575 Account Name HEDGE FINANCE LIMITED IFSC Code FDRL0001421

Every application must be accompanied by the bank account details of the applicant and the MICR code of the

bank for the purpose of availing direct credit and all other amounts payable to the NCD Holder through NACH,

RTGS or NEFT.

Documents to be provided by Investors

The Application form should be accompanied by a) certified copy of PAN Card; b) certified copy of

Memorandum and Articles of Association or other similar charter or constitutional documents or partnership

deed or LLP Agreement; c) certified copy of resolution passed by the board of directors or governing board or

authority letter from the partners authorizing investment; d) Specimen signature of authorized signatories; e)

copy of power of attorney, in case the application made under power of attorney; f) certified copy of registration

certificate with regulatory authorities, as may be applicable to the Investors.

Terms of Payment

The full Issue Price of NCD(s) is to be paid along with the Application Form.

Mode of Allotment

The NCDs shall be allotted by the Company in dematerialized form only. The Company has made depository

arrangement with CDSL for the NCDs. The investors will hold and deal in the NCDs in dematerialized form in

accordance with the provisions of the Depositories Act, 1996 and the regulations made thereunder and rules and

guidelines notified by CDSL from time to time.

Investors should mention their CDSL Depository Participant’s name (“DP”), DP-ID and Beneficiary Account

Number (Client Id) at the appropriate place in the Application Form. The Company shall take reasonable steps

to credit the Beneficiary Account of the Allotee(s), with the CDSL Depository Participant as mentioned in the

Application Form, with the number of NCD(s) allotted. The Applicant is responsible for the correctness of its

details given in the Application Form vis-à-vis those with its DP. In case the information is incorrect or

insufficient, the Company would not be liable for losses, if any.

Basis of Allotment

The NCDs shall be allotted by the Company on First Come First Serve basis.

Right to accept / reject applications

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

without assigning any reason. Incomplete Application Forms are liable to be rejected.

Nomination Facility

The NCD Holders can avail the nomination facility as per provisions of Section 72 of the Companies Act, 2013.

Mode of Transfer

The NCDs are being issued in dematerialised form and shall be transferable and transmittable in dematerialised

form and to the same extent and be subject to the same restrictions and limitations as in the case of the existing

equity shares of the Company. The provisions relating to transfer and transmission and other related matters in

respect of equity shares of the Company, contained in the Articles of Association of the Company, shall apply

mutatis mutandis to the transfer and transmission of the NCDs. The transfer of NCDs would be in accordance

with the rules / procedures as prescribed by CDSL/ Depository participant.

Register of NCD Holders

A register of all NCD Holder(s) containing necessary particulars will be maintained by the Company’s Registrar

and Transfer Agent.

Rights of NCD Holders

The NCD Holders will not be entitled to any rights and privileges of shareholders other than those available to

them under statutory requirements. The NCDs shall not confer upon the NCD Holders the right to receive

notice, or to attend and vote at the general meetings of shareholders of the Company. The principal amount and

interest, if any, on the NCDs will be paid to the NCD Holders only, or in the case of joint holders, to the one

whose name stands first.

Modification of Rights

The rights, privileges, terms and conditions attached to the NCDs may be varied, modified or abrogated with the

consent, in writing, of those holders of the NCDs who hold at least three-fourth of the outstanding amount of the

NCDs or with the sanction accorded pursuant to a resolution passed at a meeting of the NCD Holders, provided

that nothing in such consent or resolution shall be operative against the Company where such consent or

resolution modifies or varies the terms and conditions of the NCDs, if the same are not acceptable to the

Company.

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. Tax exemption certificate/document, under the relevant provisions of the Income

Tax Act, 1961, if any, must be lodged at the office of the Company, at least 30 days before the payment

becoming due.

Right to Re-purchase, Re-issue and Consolidate the Debentures

Subject to provisions of the SEBI ILDS Regulations and other applicable laws, the Company may repurchase

the NCDs, in the secondary market, at any time and from time to time prior to the specified date of redemption.

In the event of the NCDs being bought back, or redeemed before maturity in any circumstances whatsoever, the

Company shall be deemed to have always the right to re-issue and consolidate the NCDs. The Company shall

have the right to do all such acts in relation to re-issuance and consolidation of NCDs as may be permitted by

SEBI from time to time.

Record Date

The Record Date will be 15 days prior to the Coupon Payment Date and Redemption Date or as may be directed

by SEBI from time to time.

Payment of interest

Interest on the face value of the NCDs outstanding (subject to deduction of Income Tax at the prescribed rate

under the Income Tax Act, 1961 or any statutory modification or re-enactment being in force) shall be due from

the Deemed Date of Allotment up to the Redemption Date as provided in the Summary Term Sheet.

Interest amount will be electronically credited to the bank account of those NCD Holder(s) whose names appear

on the list of beneficial owners as on the Record Date, provided to the Company by the Depository. In case of

dispute of interest claim, the matter should be settled between the transferor(s) and the transferee(s), and not

with the Company. All interest on the NCD(s) shall cease on the date of repurchase of the NCD(s) by or on date

of redemption on maturity of NCD(s), whichever is earlier. In case NCD Holders do not provide their correct

bank particulars for electronic credit of interest the same may either be rejected or returned and the Company

shall not be held liable for the same in any manner whatsoever.

Redemption of Maturity of NCDs

Principal shall be credited to the account of NCD Holders whose names appear in the register of registered NCD

Holder(s)/in the list of beneficial owner(s) provided to the Company by the Depository as on the Record Date.

For this purpose bank details of NCD Holders registered against their depository account will be used by the

Company for payment of interest and redemption of principal amount. The NCD Holders shall immediately

intimate the Depository Participants with whom their depository accounts are maintained, about any change in

their address or bank details.

In case NCD holders do not provide their correct bank particulars for electronic credit of redemption proceeds

the same may either be rejected or returned and the Company shall not be held liable for the same in any manner

whatsoever.

SECTION VI – OTHER INFORMATION

OTHER REGULATORY AND STATUTORY DISCLOSURE

Authority for the Issue

The board of directors of the Company has, at its meeting held on January 8, 2020, authorized the present Issue

of NCDs.

The shareholders of the Company have, at its extra-ordinary general meeting held on February 22, 2020,

authorized the present Issue of NCDs by passing special resolution under Sections 42 and 71 of the Companies

Act, 2013.

The shareholders of the Company, have, at its extra-ordinary general meeting held on February 22,2020,

authorized the board of directors of the Company to borrow an aggregate sum of money outstanding at any one

time not exceeding ` 15,000.00 Lakh by passing special resolution under Section 180(1)(c) of the Companies

Act, 2013.

The shareholders of the Company, have, at its extra-ordinary general meeting held on February 22,2020,

authorized the board of directors of the Company to create charge/mortgage for securing the sum of monies

aggregating to ` 15,000.00 Lakh by passing special resolution under Section 180(1)(a) of the Companies Act,

2013.

Debenture Trustee

The Company has appointed Vistra ITCL (India) Limited as Debenture Trustee for this issue of NCDs. All the

rights and remedies of the NCD Holders will vest in and will be exercised by the trustees without the same

having to be referred to the NCD Holders.

The Debenture Trustee has given its consent for the appointment and to act as Debenture Trustee for the Issue

and in all the subsequent periodical communications sent to the NCD Holders and the copy of the consent letter

of the Debenture Trustee is annexed herewith.

Credit Rating and Rationale

The proposed Issue of NCDs has been rated “BWR BB-” (Outlook: Stable)” by Brickwork Rating India Private

Limited vide its letter dated June 14, 2019. The detailed rating rationale and credit rating letter issued by rating

agency is annexed herewith.

Listing

The NCDs are proposed to be listed on the WDM segment of the BSE. The Company will make a listing

application to BSE within 15 days from the date of allotment of NCDs and seek listing permission within 20

days from the date of allotment of NCDs.

Debenture Redemption Reserve (“DRR”)

Pursuant to provisions of Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 as amended,

the Company, being an NBFC registered with the RBI, is not required to create debenture redemption reserve

for the NCDs issued on private placement basis.

Instrument specific regulations

The present Issue of NCDs on private placement basis to Identified Investor(s) is governed by and is subject to

provisions of –

a) Sections 42, 71 and other applicable provisions, if any, of the Companies Act, 2013 as amended read with

Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014 as amended;

b) Regulations 20, 21 and Schedule I of the Securities and Exchange Board of India (Issue and Listing of Debt

Securities) Regulations, 2008 (“SEBI ILDS Regulations”) and relevant circulars issued by SEBI

thereunder;

c) the Master Direction - Non-Banking Financial Company – Non-Systemically Important Non-Deposit

Taking Company (Reserve Bank) Directions, 2016 issued by the Reserve Bank of India bearing reference

number - RBI/DNBR/2016-17/44 dated September 01, 2016 as amended (“MASTER DIRECTION –

NBFC – NSIND”)

Disclosure of Cash Flows as per SEBI Circular No. CIR/IMD/DF/18/2013 dated October 29, 2013 (“Day

Count Convention)

Company Hedge Finance Limited

Face Value per NCD ` 1,000

Issue Date / Date of Allotment March 30, 2020

Redemption Date March 30, 2023

Coupon Rate 11.00%

Frequency of coupon payment 1st interest on 30/03/2021 and subsequently on

[30/03/2022&30/03/2023]

Day count convention Actual / Actual

Cash Flow Date No. of days in Coupon Period Amount (in `) 1st Coupon 30/03/2021 365 110

2nd Coupon 30/03/2022 365 110

3rd Coupon 30/03/2023 365 110

Principal Redemption 30/03/2023 1,000

Total 1,330

Note: Payment dates are subject to change as per holidays declared in that particular year. Payment convention

as specified in SEBI Circular CIR/IMD/DF/18/2013 dated October 29, 2013 read with SEBI Circular

CIR/IMD/DF-1/122/2016 dated November 11, 2016 shall be followed.

MATERIAL CONTRACTS AND DOCUMENTS

The following documents which are or may be deemed have been entered or are to be entered into by our

Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the

Registered Office between 10:00 A.M. to 5:00 P.M. on all Working Days from the date of this Disclosure

Document till the date of listing of NCDs on the BSE:

1. Memorandum and Articles of Association of the Company;

2. Certificate of registration issued by the Reserve Bank of India under section 45-IA of the Reserve Bank of

India Act, 1934;

3. Certified copy of resolution under Section 180(1)(c) of the Companies Act, 2013 passed by shareholders of

the Company on April 3, 2019;

4. Certified copy of resolution under Sections 42 and 71 of the Companies Act, 2013 passed by shareholders

of the Company on February 22,2020 authorizing the issue of NCDs;

5. Certified copy of resolution passed under Section 179 of the Companies Act, 2013 by Board of Directors of

the Company on January 8, 2020 authorizing the issue of NCDs;

6. Certified copy of resolution by board of directors of the Company passed on January 8, 2020 authorizing

issuance of this Disclosure Document;

7. Copy of consent letter of Vistra ITCL (India) Limited (to act as debenture trustee for the proposed issue;

8. Copy of credit rating letter along with rating rationale issued by Brickwork Rating India Private Limited;

9. Copy of annual reports of the Company for the financial years 2018-19, 2017-18 and 2016-17;

10. Copy of consent letter of Integrated Registry Management Services Private Limited to act as Registrar and

Transfer Agent for the proposed Issue;

11. Tripartite Agreement dated November 21, 2019 entered between the Company, Depositories and the

Registrar to the Issue;

DECLARATION

I, Dir€ctor ofthe Company, declare that:

(a) The Company hascompliedwith all the relevant provisions ofthe Companies Act2013 ("the Act"), and theRules made there under, the guidelines is_sued by the Government and the guidelines and circulars issued bySEBI established under Section 3 ofthe Securities and Exchange Board of India Act, 1992 and the MasterDirection - Non-Banking Financial Company - Non-Systemically lmportant Non-Deposit Taking Company(Reserve Bank) Directions,20l6 dated September i,2016, issued by the RBI (as amended and updatedfrom time to time), have been complied with and no statement made in this Disclosure Document iscontrary to the provisions of the Companies Act, 20 i3 or the Securities and Exchange Board of India Act,1992 or rules, guidelines and circulars issued thereunder,

(b) The compliance with the said Act and th€ Rules made thereunder do not imply that payment of interest orrepayment ofdebentures is guaranteed by Central Covemment;

(c) The monies received under this offer shall b€ used only for the purposes and objects indicated in thisDisclosure Docu ment.

I am authorized by th€ Board of Directors ofthe Company vide resolution number 08 daled 8'h January 2020to

sign this form and Disclosure Document and declare that all the requirements of Companies Act, 2013 and therules made thereur'ldff in respect of the subject matter of this form and matters incidental thereto have beencomplied with. Whatever is stated in this form and Information Memorandum and in the attachments thereto istrue, correct and complete and no information material to the subject matter ofthis foqr has been suppressed orconcealed and is as. per the original records maintained by the promoters subscribing to the MemorandUm ofAssociation and Adicles ofAssociation.

,f ,.,li is further declared and verified that all the required attachments have been completely, correctly anil leliblyattached to this lnformation Memorandum,

s/d

D^te| 25/03/2020

Place: Kochi

Alex KalluirffiManaging Director(DIN: 0l254207)

ANNEXURES

*

Brickwork Ratings India Pvt. Ltd. 3rd Floor, Raj Alkaa Park, Kalena Agrahara,

Bannerghatta Road, Bengaluru - 560 076 P: +91 80 4040 9940 | F: +91 80 4040 9941

BWR/NCD/SRC/RB/0818/2019-20 25 Mar 2020

The Managing Director

Mr. Suraj Ramachandran

Chief Finance Officer

8th Floor, Hedge House, Mamangalam

Kochi - 682025, Kerala

Dear Sir,

Sub: Validation of Rating – Hedge Finance Limited – Proposed NCD issue of Rs. 20 Crs rated by

Brickwork Ratings.

Ref: Your email request dated 23 Mar 2020

We wish to advise that your Company’s aforementioned Proposed NCD issue of Rs. 20 Crs carries BWR BB-

(Pronounced BWR Double B Minus) (Outlook: Stable) rating as advised vide our letter

BWR/NCD/SRC/RB/0184/2019-20 dated 17 June 2019. The rating is valid up to 17 June 2020 We note that

the Company has raised Rs 10 Crs out of the rated amount and unutilized amount is Rs 10 Crs.

Instruments with this rating are considered to have moderate risk of default regarding timely servicing of

financial obligations.

Please note that all the terms and conditions of our earlier letter BWR/NCD/SRC/RB/0184/2019-20 dated 17

June 2019 remains unchanged.

On completion of borrowing, please furnish details of security creation and other aspects related to the

borrowing.

You are also requested to submit “No Default Statement” on a monthly basis

Best Regards,

Vydianathan Ramaswamy

Director & Head - Financial Sector Ratings