Midland Microfin Limited

Prospectus May 17, 2014 MIDLAND MICROFIN LIMITED Our Company was originally incorporated on May 27, 1988 as a private limited company under the provisions of the Companies Act, 1956 as Sajan Hire Purchase Private Limited. Our Company was converted into a public limited company with the name “Sajan Hire Purchase Limited” on April 26, 2002. Subsequently, the name of our Company was changed to Midland Microfin Limited pursuant to a fresh Certificate of Incorporation dated January 24, 2011. Our Company got itself registered as Category-A NBFC with RBI vide registration no. A.06.00458 dated July 11, 2011. Thereafter our Company changed its category and consequently got itself registered as Category -B NBFC (non- deposit taking) with RBI vide registration no. B.06.00458 dated November 12, 2013. Registered & Corporate Office: 'Gobind Niwas', 2nd Floor, 36, G.T. Road, Jalandhar - 144 001 Punjab, India; Tel.: +91 181 5085555; Fax: +91 181-5087777; Website: www.midlandmicrofin.com For details of changes in Name and Registered Office, please refer to the chapter “History and Certain Corporate Matters” on page no. 89 Compliance Officer and Contact Person: Mr. Preetpal Singh Tel.:+91 181 5091545; Fax: +91 181 5087777; E-mail: [email protected] PUBLIC ISSUE BY MIDLAND MICROFIN LIMITED, (“COMPANY” OR “ISSUER”) OF SECURED, REDEEMABLE, NON-CONVERTIBLE BONDS IN THE NATURE OF DEBENTURES OF FACE VALUE OF ` 10,000 EACH, (“NCDS”), AGGREGATING UPTO ` 2,500 LACS. GENERAL RISKS Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, the investors must rely on their own examination of the Issuer and the Issue, including the risks involved. Specific attention of the investors is invited to the chapter titled “Risk Factors” on page 11. This document has not been and will not be approved by any regulatory authority in India, including the Reserve Bank of India (“RBI”), the Securities and Exchange Board of India (“SEBI”), any registrar of companies or any stock exchange in India. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus 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 Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. CREDIT RATING The NCDs proposed to be issued under this issue have been rated “BBB-“(Triple B Minus) by CARE for an amount of ` 2500 lacs vide it’s letter dated April 22, 2014. The rating of NCDs by CARE indicates instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations and carry moderate credit risk. The rating provided by CARE may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. This rating is not a recommendation to buy, sell or hold securities and investors should take their own decisions. Please refer to Exhibit B for the rationale for the above rating. LISTING The NCDs offered through this Prospectus are proposed to be listed on the BSE Limited (“BSE”). Our Company has obtained “in-principle” approval for the Issue from BSE vide their letter(s) dated May 09, 2014. BSE shall be the Designated Stock Exchange for this Issue. PUBLIC COMMENTS The Draft Prospectus dated April 28, 2014 was filed with BSE pursuant to the regulation 6(2) of the SEBI Debt Regulations for public comments for a period of 7 (seven) Working Days i.e. until 5 p.m. on May 09, 2014. LEAD MANAGER TO THE ISSUE DEBENTURE TRUSTEE** REGISTRAR TO THE ISSUE Real Growth Securities Private Limited CENTBANK Financial Services Limited Skyline Financial Services Private Limited 112-A, Jyoti Shikhar, District Centre, Janak Puri, New 15-16, Bajaj Bhawan, 1st Floor, Opp. Inox D- 153 A, 1st Floor, Okhla Industrial Area, Phase-I, Delhi- 110058 Muliplex, Nariman Point, Mumbai – 400021 New- Delhi, 110020 Tel.: 011-25513114-15 (Maharashtra) Tel.: 011-64732681 to 88 Fax: 011-25532212 Tel.: 022-2202 2788 Fax: 011-26812682 Email: [email protected] Fax: 022-2202 5043 Email: [email protected] Investor Grievance Email: [email protected] Email: [email protected] Investor Grievance Email: Website: www.realgrowth.org.in Website: www.cfsl.in [email protected] Contact Person: Mr. Sunil Chandra Contact Person: Mr. S Rama Krishna Website: www. skylinerta.com Compliance Officer: Mr. Sunil Chandra SEBI Registration Number: IND000000502 Contact Person: Mr. Virender Rana SEBI Registration Number: INM 000011492 SEBI Registration Number: INR 000003241 ISSUE SCHEDULE Issue Opens on: 26 May 2014 Issue closes on: 23 June 2014* *The subscription list for the Issue shall remain open for subscription up to 5pm, with an option for early closure or extension by such period, up to a period of 30 days from the date of opening of the Issue, as may be decided at the discretion of the duly authorised committee of Directors of our Company subject to necessary approvals. In the event of such early closure of the Issue or extension of the Issue, our Company shall ensure that notice of such early closure or extension of the Issue is given as the case may be on or before such early date of closure or the initial Closing Date through advertisement/s in a leading national daily newspaper. For further details please refer to “General Information” on page no. 27. ** CENTBANK Financial Services Limited has, by its letter dated April 18, 2014, given its consent for its appointment as Debenture Trustee to the Issue and for its name to be included in this Prospectus and in all the subsequent periodical communications sent to the holders of the Debenture issued pursuant to this Issue. For further details please refer to “General Information – Debenture Trustee” on page no. 28. A copy of the Prospectus and written consents of our Directors, our Company Secretary and Compliance Officer, our Auditor, the Lead Manager, the Registrar to the Issue, Escrow Collection Bank(s), Refund Bank, Credit Rating Agencies, the Legal Advisor, the Bankers to our Company, the Debenture Trustee, and the Syndicate Member to act in their respective capacities shall be filed with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh, in terms of section 56 and section 60 of the Companies Act, 1956 and other applicable provisions of the Companies Act, 2013 along with the requisite endorsed/certified copies of all requisite documents. For further details please refer to the chapter titled “Material Contracts and Documents for Inspection” beginning on page 177. TABLE OF CONTENTS SECTION I: GENERAL .............................................................................................................................................................................. 1 DEFINITIONS / ABBREVIATIONS ............................................................................................................................................................. 1 FORWARD-LOOKING STATEMENTS ....................................................................................................................................................... 8 PRESENTATION OF FINANCIAL AND OTHER INFORMATION ........................................................................................................... 10 SECTION II: RISK FACTORS .................................................................................................................................................................. 11 SECTION III: INTRODUCTION ................................................................................................................................................................27 GENERAL INFORMATION...........................................................................................................................................................................27 SUMMARY OF BUSINESS, STRENGTH & STRATEGY............................................................................................................................33 THE ISSUE ......................................................................................................................................................................................................38 CAPITAL STRUCTURE .................................................................................................................................................................................41 OBJECTS OF THE ISSUE ..............................................................................................................................................................................71 STATEMENT OF TAX BENEFITS ................................................................................................................................................................72 SECTION IV: ABOUT THE ISSUER AND INDUSTRY OVERVIEW ..................................................................................................78 INDUSTRY OVERVIEW................................................................................................................................................................................78

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