Private and Confidential
Mahindra Lifespace Developers Limited Mahindra Towers, 5th Floor, Worli, Mumbai - 400018 Tel: +91 022 67478000; Fax: +91 022 24975084 Email: [email protected] Website: http://www.mahindralifespaces.com
Issue on a Private Placement Basis of Secured Listed Rated Redeemable 10.78% YTM, Non-Convertible Debentures with a face value of ` 10,00,000/- each, aggregating up to ` 500 Cr (the “Issue”) RISK IN RELATION TO THE ISSUE There has been no formal market for the NCD of the issuer. No assurance can be given regarding an active or sustained trading in the NCDs of the issuer or regarding the price at which the NCD will trade after listing. GENERAL RISK 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 risk attached to such investments. For taking an investment decision, investors must rely on their own examination of the issue, the disclosure document and the risk involved. The NCD‟s have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this disclosure document. Specific attention of Investors is invited to the statement of risk factors set out in this Memorandum of Private Placement. This Disclosure Document has not been submitted, cleared or approved by SEBI. It should be clearly understood that the Company is solely responsible for the correctness, adequacy and disclosure of all relevant information herein.
ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Disclosure document 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 Disclosure document is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Disclosure document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
CREDIT RATING CRISIL has assigned its „CRISIL A+/Stable‟ rating to NCDs of Mahindra Lifespace Developers Limited (MLDL). The above rating reflects strong performance of the company consistently over last few years and its ability to successfully execute projects in both residential as well as integrated business cities. The 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 assigned Credit Rating Agency on the basis of new information and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future.
LISTING The NCDs are proposed to be listed on the Bombay Stock Exchange Limited ("BSE" or the "Stock Exchange"). The BSE has given its 'in-principle' approval to list the NCDs by letter no. DCS/COMP/SP/IP- PPDI/01/13-14 dated April 3rd 2013.
MEMORANDUM OF PRIVATE PLACEMENT This Disclosure document is neither a prospectus nor a statement in lieu of a prospectus. This is only an information brochure. In the form of a single initial disclosure document, intended for private use and should not be construed to be a prospectus and /or an invitation to the public for subscription to the NCDs under any law for the time being in force. This Disclosure document is in compliance with the applicable
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requirement of the regulatory authorities and has been prepared giving details as on 31st December, 2012. The Company however retains the right, at its sole and absolute discretion to change the “GENERAL TERMS AND CONDITIONS”
ARRANGERS
HDFC Bank Limited, Kotak Mahindra Bank Limited, Kamala mill compound, S.B. Marg, 2nd floor, Bakhtawar 229, Lower Parel, Mumbai – 400013 Nariman Point, Mumbai – 400021 Debenture Trustee Registrar and Transfer Agent Axis Trustee Services Limited Sharepro Services India Private Ltd. 2nd Floor –E, Axis House, 13/AB Samitha Warehousing Complex Pandurang Budhkar Marg, Worli, 2nd floor, Sakinaka Telephone Exchange Lane Mumbai – 400025 Saki Naka, Andheri East, Mumbai – 400072 ISSUE PROGRAM Issue Opens on 4th April 2013 Issue Closes on 4th April 2013 The Company reserves the right to change the Issue time table including the Date of Allotment (as defined hereinafter) at its sole discretion, without giving any reasons or prior notice. The Issue will be open for subscription at the commencement of banking hours and close at the close of banking hours. The Issue shall be subject to the terms and conditions of this Disclosure Document filed with the Stock Exchange and other documents in relation to the Issue.
This Disclosure document is dated April 4th 2013.
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DISCLAIMER
ISSUER’S DISCLAIMER
This Disclosure document is neither a prospectus nor a statement in lieu of a prospectus under the Companies Act, 1956. The Issue of Debentures is to be listed. This Disclosure document is not intended to be circulated to more than 49 (Forty Nine) person. Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated as such. It does not constitute and shall not be deemed to constitute an offer or an invitation to subscribe to the Debentures to the public in general.
Neither this Disclosure document nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this Disclosure document should not consider such receipt, a recommendation to purchase any Debentures. Each Investor contemplating purchasing any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential Investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations arising from an investment in the Debentures and should possess the appropriate resources to analyze such investment and the suitability of such investment to such Investor's particular circumstances.
The Issuer confirms that, as of the date hereof, this Disclosure document (including the documents incorporated by reference herein, if any) contains all information that is material in the context of the Issue and issue of the Debentures, is accurate in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in the light of the circumstances under which they are made, and are not misleading. No person has been authorized to give any information or to make any representation not contained or incorporated by reference in this Disclosure document 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.
This Disclosure document and the contents hereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the Company 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 Disclosure document are intended to be used only by those Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the recipient.
No invitation is being made to any persons other than those to whom application forms along with this Disclosure document being issued have been sent. Any application by a person to whom the Disclosure document has not been sent by the Issuer shall be rejected without assigning any reason.
The person who is in receipt of this Disclosure document shall not reproduce or distribute in whole or part or make any announcement in public or to a third party regarding the contents without the consent of the Issuer.
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The Issuer does not undertake to update the Disclosure document to reflect subsequent events after the date of the Disclosure document 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 Disclosure document nor any sale of Debentures made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof.
This Disclosure document 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 Disclosure document in any jurisdiction where such action is required. Persons into whose possession this Disclosure document comes are required to inform themselves about and to observe any such restrictions. The Disclosure document is made available to Investors in the Issue on the strict understanding that it is confidential.
ARRANGER DISCLAIMER
It is hereby declared that the Issuer has exercised due-diligence to ensure complete compliance of prescribed disclosure norms in this Disclosure document. The role of the Arranger in the assignment is confined to marketing and placement of the NCDs on the basis of this Disclosure document as prepared by us. The Arranger has neither scrutinized nor vetted or conducted any due-diligence for verification of the contents of this Disclosure document. The Arranger shall use this Disclosure document for the purpose of soliciting subscription(s) from qualified institutional investor(s) in the NCDs to be issued by us on private placement basis. It is to be distinctly understood that the use of this Disclosure document by the Arranger should not in any way be deemed or construed to mean that the Disclosure document has been prepared, cleared, approved or vetted by the Arranger; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure document. No representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Arranger or its affiliates for the accuracy, completeness, reliability, correctness or fairness of this Disclosure document or any of the information or opinions contained therein, and the Arranger hereby expressly disclaim, to the fullest extent permitted by law, any responsibility for the contents of this Disclosure document and any liability, whether arising in tort or contract or otherwise, relating to or resulting from this Disclosure document or any information or errors contained therein or any omissions there from. By accepting this Disclosure document, you agree that the Arranger will not have any such liability.
DISCLAIMER OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of Company or for the correctness of the statements made or opinions expressed in this document. The issue of NCDs being made on private placement basis, filing of this document is not required with SEBI, however SEBI reserves the right to take up at any point of time, with the Company, any irregularities or lapses in this document.
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DISCLAIMER OF THE STOCK EXCHANGE
As required, a copy of this Disclosure Document has been submitted to [the Bombay Stock Exchange Limited ("BSE")] for hosting the same on its website. It is to be distinctly understood that such submission of the document with BSE or hosting the same on its website should not in any way be deemed or construed that the document has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor does it warrant that this Issuer's securities will be listed or continue to be listed on BSE; nor does it take responsibility for the financial or other soundness of the Issuer, its promoters, its management or any scheme or project of the Company. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.
DISCLAIMER IN RESPECT OF JURISDICTION
This Issue is made in India to investors as specified under clause “Who Can Apply” of this Disclosure Document, who shall be specifically approached by the Company. This Disclosure Document 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 of Mumbai. This offer of Debenture is made in India to persons resident in India. This Disclosure Document 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.
CAUTIONARY NOTE
This Disclosure Document is not intended to provide the sole basis of any credit decision or other evaluation and should not be considered as a recommendation that any recipients of this Disclosure Document should invest in the Debentures proposed to be issued by the Company. Each potential investor should make its own independent assessment of the investment merit of the Debentures and the Company. 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 analyze such investment and the suitability of such investment to such investor‟s particular circumstance. This Disclosure Document is made available to potential investors on the strict understanding that it is confidential. Recipients shall not be entitled to use any of the information otherwise than for the purpose of deciding whether or not to invest in the Debentures.
No person including any employee of the Company has been authorized to give any information or to make any representation not contained in this Disclosure Document. Any information or representation not contained herein must not be relied upon as having being authorized by or on behalf of the Company. Neither the delivery of this Disclosure Document at any time nor any statement made in connection with the offering of the Debentures shall under the circumstances imply that any information/representation contained herein is correct at any time subsequent to the date of this Disclosure Document. The distribution of this Disclosure Document or the Application Forms and the offer, sale, pledge or disposal of the Debentures may be restricted by law in certain jurisdictions. This Disclosure Document does not constitute an offer to sell or an invitation to subscribe to the Debentures in any jurisdiction to any person to whom it is unlawful to make such offer or invitation in such jurisdiction. Persons into whose possession this Disclosure Document comes are required by the Company to inform themselves about and observe any such restrictions. The sale or transfer of these Debentures outside India may require regulatory approvals in India, including without limitation, the approval of the RBI.
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DISCLAIMER ...... 3 CONTACT LIST ...... 7 DEFINITIONS AND ABBREVIATIONS ...... 8 EXECUTIVE SUMMARY ...... 11 Purpose ...... 11 Arranger...... 11 About Mahindra Lifespace Developers Limited ...... 11 Brand Name ...... 11 Key Lending Considerations...... 11 Consolidated Financial Performance ...... 12 Standalone Financial Performance ...... 12 Details of debt securities and terms and conditions ...... 13 Term Sheet ...... 13 SECTOR OVERVIEW ...... 18 MAHINDRA LIFESPACE DEVELOPERS LIMITED ...... 19 Group Overview ...... 19 Revenue break-up ...... 20 Mahindra Real Estate Sector ...... 20 Business Activities ...... 20 Mahindra Lifespaces ...... 20 Mahindra World City Chennai ...... 22 Mahindra World City Jaipur ...... 22 Subsidiaries ...... 23 Brief history of the Company ...... 23 Share Capital history of Mahindra Lifespace Developers Limited ...... 23 Statement containing dates and parties of material contracts and agreements involving financial obligations ...... 26 MANAGEMENT AND OWNERSHIP ...... 26 Brief profiles of Directors of Mahindra Lifespace Developers Limited ...... 26 Corporate Details ...... 32 Shareholding Structure...... 32 Share Capital ...... 32 Details of Other Borrowings ...... 33 List of highest ten holders of equity capital of the issuer ...... 35 Credit Rating ...... 35 TERMS OF OFFER ...... 36 MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER ...... 48 SPECIAL CONSIDERATIONS AND RISK FACTORS ...... 51 GENERAL INFORMATION ...... 56 ANNEXURE 1: TERM SHEET ...... 59 ANNEXURE 2: CASH FLOWS ...... 64 ANNEXURE 3: UNDERTAKING BY THE COMPANY ...... 65 ANNEXURE 4: APPLICATION FORM ...... 66 ANNEXURE 5: CONSENT LETTER FROM DEBENTURE TRUSTEE ...... 69 ANNEXURE 6: RATING LETTER AND RATIONALE ...... 70 Information Memorandum P a g e | 6
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CONTACT LIST
Mahindra Lifespace Developers Limited
Name of Person Telephone Number Email Address Ms. Anita Arjundas 022 – 67478600 [email protected] Mr. Jayantt Manmadkar 022 – 67478660 [email protected]
Kotak Mahindra Bank Limited
Name of Person Telephone Number Email Address Manoj Gupta 022 - 66596195 [email protected]
HDFC Bank Limited
Name of Person Telephone Number Email Address Ritesh Sampat 022 - 33839203 [email protected]
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DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Disclosure Document.
General terms
Term Description “MLDL” or “Mahindra Lifespaces” or the “Company” a public limited company incorporated under the or the “Issuer” or “our Company” Companies Act, 1956 having its registered office at 5th Floor, Mahindra Towers, Worli, Mumbai-400018. “we”, “us”, “our” Unless the context otherwise requires, the Company, its Subsidiaries, and joint ventures,
Company related terms
Term Description
Articles of Association The articles of association of the Company Auditors B.K.Khare & Co, Chartered Accountants, Mumbai are the statutory auditors of the Company. Board of Directors/Board The Board of Directors of the Company or a duly constituted committee thereof.
Director(s) Director(s) on the Board, as appointed from time to time Promoter(s) Mahindra and Mahindra Limited Registered Office 5th Floor, Mahindra Towers, Worli, Mumbai-400018. Subsidiaries subsidiary of a company as defined under the Companies Act, 1956
Issue related terms
Term Description Allot/Allotment/Allotted Unless the context otherwise requires or implies, the allotment of the Debentures pursuant to the Issue. Application Form The form in which an investor can apply for subscription to the Debentures Beneficial Owner(s) Holder(s) of the Debentures in dematerialized form as defined under section 2 of the Depositories Act.
Coupon Payment Date Date of payment of interest on the Debentures Credit Rating Agency CRISIL Limited Debentures/NCDs Secured, Listed, Rated, Redeemable Non- Convertible debentures of the face value of ` 10,00,000/- each aggregating to ` 500 Crores Debenture holder(s) The investors who are allotted Debentures Debenture Trustee Trustee for the Debenture holders, in this case being Axis Trustee Services Limited. Debenture Trustee Regulations Securities and Exchange Board of India (Debenture Information Memorandum P a g e | 8
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Trustee) Regulations, 1993, as amended
Term Description Depository(ies) A depository registered with the SEBI under the Securities and Exchange Board of India (Depositories and Participant) Regulations, 1996, as amended from time to time, in this case being NSDL and CDSL. FII Foreign Institutional Investor [as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995] registered with SEBI.
Issue Issue by way of private placement of the Debentures by the Issuer. Arrangers The Arrangers appointed for the purposes of the Issue, in this case being HDFC Bank Ltd & Kotak Mahindra Bank Limited. Maturity Date The date on which repayment of principal amount in respect of the Debentures shall be made. Mutual Fund A mutual fund registered with SEBI under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. NRI A person resident outside India, who is a citizen of India or a person of Indian origin and shall have the same meaning as ascribed to such term in the FEMA Regulations. Pay-in Date The date on which the Debenture holders shall make payment for subscription to the Debentures Record Date The date prior to the Maturity Date on which the determination of the persons entitled to receive interest in respect of the Debentures (i.e., persons whose names are registered in the Register of Debenture holders or NSDL/CDSL record) shall be made. Registered Debenture holder The Debenture holder whose name appears in the Register of Debenture holders or in the beneficial ownership record furnished by NSDL/CDSL for this purpose. Register of Debenture holders The register maintained by the Company/R&T containing the name of Debenture holders entitled to receive interest in respect of the Debentures on the Record Date, which shall be maintained at the Registered Office Registrar/Registrar to the Issue Registrar to the Issue, in this case being Sharepro Services (India) Pvt Limited Disclosure Document Document dated 4th April 2013 for Private Placement of Secured, Listed, Rated, Redeemable Non-Convertible Debentures for cash at par aggregating to `500 Cr to be issued by the Company. Stock Exchange BSE Information Memorandum P a g e | 9
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Working Days All days except Saturday, Sunday and any public holiday.
Conventional and General Terms, Abbreviations and References to Other Business Entities
Term Description AY Assessment Year Buy-Back Regulations Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, as amended from time to time. BSE The Bombay Stock Exchange Limited. CDSL Central Depository Services (India) Limited. IPO Initial Public Offering. Companies Act The Companies Act, 1956 as amended from time to time. Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant/DP A depository participant as defined under the Depositories Act. Equity Shares Equity shares of the Company of face value of ` 10 each. FEMA Foreign Exchange Management Act, 1999. FEMA Regulations Rules and Regulations issued by the RBI under the FEMA. Fiscal Period of twelve months ended March 31 of that particular year, unless otherwise stated HNI High Net worth Individual. HUF Hindu Undivided Family. ISIN International Securities Identification Number. IT Act The Income Tax Act, 1961, as amended from time to time. LOA Letter of Allotment NCR National Capital Region of Delhi. p.a. per annum. PAN Permanent Account Number PAC Persons Acting in Concert. RBI The Reserve Bank of India. RoC The Registrar of Companies, National Capital Territory of Delhi and Haryana, located at New Delhi. ` Rupees. SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992 SEBI Act The Securities and Exchange Board of India Act, 1992, as amended from time to time. SEBI Regulations The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued by SEBI. SEZ Special Economic Zone YTM Yield to Maturity
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EXECUTIVE SUMMARY
Purpose Mahindra Lifespace Developers Limited (MLDL) wishes to issue ` 500 Cr Secured, Listed, Rated, Redeemable Non Convertible Debentures to part finance any one of the following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions (e) Cost of Construction, (f) to invest into an existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (g) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks. Arranger Mahindra Lifespace Developers Limited has mandated “Kotak Mahindra Bank” and “HDFC Bank” to arrange ` 500 Crores worth Secured, Listed, Rated, Redeemable Non Convertible Debenture (NCD) facility (the “Facility”).
About Mahindra Lifespace Developers Limited Mahindra Lifespace Developers Ltd., the real estate and infrastructure development arm of the US$15.9 billion Mahindra Group, is one of the major players in sustainable urban development, through the creation of Residential developments and Integrated Business Cities across eight Indian cities - including Mumbai, Pune, Nagpur, Jaipur, Gurgaon, Faridabad, Hyderabad and Chennai. The Company‟s residential and commercial footprint includes completed developments of 7.60 million plus sq.ft. of space, and 9.90 million sq.ft. of ongoing and forthcoming projects.
Mahindra Lifespaces has pioneered the concept of an integrated business city at the „Mahindra World City‟ developments in Chennai and Jaipur. These developments cover over 4,500 acres and house over 100 reputed global companies, providing occupants with a convenient ecosystem. Together they currently provide employment to over 30000 individuals.
Brand Name Mahindra Lifespace Developers Limited (MLDL) enjoys the parentage of the Mahindra Group which holds 51.04% stake, and is one of the most reputed Indian Multinationals with presence in over 100 countries.
The brand name Mahindra which is manifested in values of trust, transparency and honesty, provides customers requisite value and comfort for projects of „Mahindra Lifespaces‟ and „Mahindra World City‟.
Key Lending Considerations For FY11-12, MLDL reported a net profit of `119 Cr on revenues of ` 728 Cr. The corresponding figures for FY10-11 were a net profit of ` 108 Cr on revenues of ` 627 Cr Completed residential/ commercial development of 7.60 million sft, projects under execution measuring 4.20 million sft and forthcoming projects measuring 5.70 million sft. At Mahindra World City Chennai, 91% of the area is sold with 46 customers operational. Total Investment by MWC Chennai and the companies located within is ` 3,300 Cr with a direct employment of 30,000. At Mahindra World City Jaipur, 41% of the industrial area is sold with 11 customers operational. Total Investment by MWC Jaipur and the companies located within is ` 1,190 Cr and direct employment of 3,528 Information Memorandum P a g e | 11
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Consolidated Financial Performance
Standalone Financial Performance
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Details of debt securities and terms and conditions
Term Sheet TERMS & CONDITIONS
Issuer/Company/Borrower Mahindra Lifespace Developers Limited (“MLDL”) Joint Lead Managers/ HDFC Bank Ltd (“HDFC Bank”) and Kotak Mahindra Bank Limited (“Kotak”) Arrangers Instrument Secured, Listed, Rated, Redeemable Non-Convertible Debentures (“NCD” or “Debentures”) Mode of Placement Private placement to eligible investors Purpose To part finance any of one following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions and (e) Cost of Construction, (f) to invest into an existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (e) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks. Rating A+ (Stable) from Crisil Listing Listed Face Value Rs. 10,00,000 (`Ten Lakhs only) per NCD. Terms of NCD Series I Series II Series III Amount ` 125 crores ` 175 crores ` 200 crores Face value `. 10,00,000 per `. 10,00,000 per `. 10,00,000 per NCD NCD NCD Coupon 0% 8% p.a payable 8% p.a payable annually annually Maturity 3 years from 4 years from 5 years from deemed date of deemed date of deemed date of allotment allotment allotment Redemption ` 3,59,896.61 ` 1,30,874.10 ` 1,72,782.29 Premium per debenture YTM 10.78% p.a 10.78% p.a 10.78% p.a
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Redemption Bullet, at premium Bullet, at premium Bullet, at premium Outstanding Amount The sum of the Outstanding Principal, accrued interest calculated based on YTM, Default Interest payable (if any) and other charges and fees payable (if any as per the “Transaction Documents”). Taxes duties cost and Relevant taxes, duties and levies are to be borne by the Issuer. The charges expenses / fees and any amounts payable under this Facility by the Issuer to the NCD Investor as mentioned herein do not include any applicable taxes, levies including service tax etc. and all such impositions shall be borne by the Issuer additionally. However any TDS as applicable may be deducted out of the payment due and paid as charges/fees/interest on the Facility. Security Secured by exclusive charge over: Assets, including land & building as identified by the Issuer from time to time. At present the identified assets are as follows: a. Building – Mahindra Towers Delhi b. Land owned by MLDL/MITL Minimum FACR of 1.25x at all times during the currency of the debentures; FACR to be calculated on semi-annual basis based on the following formula: Market Value of the Security created on exclusive basis/ Outstanding Amount. Security Cover to be calculated based on the market value of the Security. Security Valuation to be done by a Valuer, acceptable to the Majority Debenture Holders (75%). Charge / security to be created in favour of Debenture Trustee within 90 days which can be extended for another 90 days With the approval of Majority Debenture Holders (75%) which shall not be unreasonably withheld. Investors, at their own cost may get valuation of Security done by the agreed valuer at any time if required and FACR calculated accordingly. The security shall be added as per Top Up of Security. Acceleration Event Upon occurrence of the following events, the Majority Debenture Holders (75%) will have the right to recall the Outstanding Amount on the NCDs: The Promoters, i.e., Mahindra & Mahindra Ltd shall at all times be a Holding Company of Issuer by virtue of controlling, in accordance with the provisions of the Companies Act (as amended or enacted), the right
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to appoint majority of Board of Directors of the Issuer In the event, the Fixed Asset Coverage Ratio (FACR) as determined by the Debenture Trustee falls below 1.25x, the Company shall endeavor to create charge over additional assets ) and in the event the Company is unable to create such charge for any reason whatsoever within 30days from the date of determination of such event then the Majority Debenture Holders shall have an option to recall the NCDs within 15 days from expiry of aforesaid 30 days (“Top up of Security”)
Rating of the Instrument falls below A- by CRISIL
The Company will make the payment within 30 days without prepayment penalty, or otherwise specified, from the date of exercise of acceleration option by the Majority Debenture Holders (75%)
Issue of Debentures The Issuer will issue the Debentures / Letters of Allotment in dematerialized form within two business days from the Deemed Date of Allotment. Interest on Application To be paid to investors at YTM from the date of realization of subscription Money money upto one day prior to the Deemed Date of Allotment. Such interest is payable within seven business days from the Deemed Date of Allotment. Day Count Basis Interest payable on Debentures will be calculated on the basis of actual number of days elapsed in a year of 365 or 366 days as the case may be i.e. Actual/ Actual Conditions Precedent to Execution of Information Memorandum, Rating Letter, Consent letter Disbursement from Debenture Trustee. In-principle approval from BSE) The Issuer shall have obtained all necessary board / shareholder resolutions under Section 292 (1) (b), Section 293(1)(d), Section 293(1)(a), Section 372A and other provisions of the Companies Act, 1956 as are required in relation to the issue of the Debentures, provision of security, the appointment of the Debenture Trustee and the execution of necessary documents in connection therewith. No Event of Default by Issuer; There is no material adverse effect and there are no circumstances existing which could give rise, with the passage of time or otherwise, to a material adverse effect on the Issuer. Event of Default The Majority Debenture holders (75%) at their discretion directly or acting through the Debenture Trustee may initiate proceedings against the Issuer in the event of: Information Memorandum P a g e | 15
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Non-payment of Coupon or Face Value or Redemption Premium on the due date. Cross default – Other than default under the present issue, if the issuer is in default under the terms and conditions of any issuances/obligations under other facilities constituting a default of more than Rs. 25 Cr and receives such notice of event of default from such lender/investor, then that shall also constitute an event of default under the present issue as well Insolvency of the Issuer or winding-up (whether voluntarily or compulsorily) If the Issuer is declared a sick undertaking under the provisions of the Sick Industrial Undertakings (Special Provisions) Act, 1985 (“SICA”) or if a reference has been made to BIFR (as defined under SICA) by a creditor under SICA and the Issuer has not resolved the complaint or is nationalized or is under the management of the Central Government Breach of any Material Representations and Warranties as described in the Debenture Trust Deed Breach of any Covenants as described in the Debenture Trust Deed Non creation or Top-Up of Security within the stipulated timeline Any material event / material development or material change involving the Issuer at the time of issue or during the currency of the debentures which may affect continuance of outstanding investment in the debentures by the investor (Any materiality to be decided at the discretion of Majority of Debenture Holders (75%)) Covenants for the facility The Covenants shall include the following:
“Mahindra” to be part of the name of the Issuer at all times during the tenure of Facility. In case the Issuer intends to change its name without the “Mahindra” name, it shall seek approval from majority (75%) of debenture holders and such approvals shall not be unreasonably withheld. In case the Investors don‟t approve the change in name, the Issuer shall have an option to pay the Outstanding Amount without any prepayment penalty.
If the Debenture Holders do not give approval as mentioned above, and the Issuer changes its name, the Issuer will mandatorily prepay the Outstanding Amount to Debenture Holders immediately without any prepayment penalty.
Other Terms and Conditions So far the Issuer is in compliance with Minimum FACR, post sell/lease, the Company is free to sell / lease its land and /or units constructed / under construction on such land in the ordinary course of business to its customers and the security to that extent shall be deemed to have been released/
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charge vacated by the trustees without the express consent of the debenture holder(s). The sale of assets will be reported on quarterly basis within 45 days of the end of each quarter. Except as stated above, any release of security would require approval from Majority Debenture Holders (75%) which shall not be unreasonably withheld. Depositories Applications will be made for the Debentures to be deposited with NSDL & CSDL Default Interest In case of default of interest and/ or principal redemption on the due dates, additional interest @2% p.a. over the documented rate will be payable by the company Security Creation The Security shall be created within 3 months from the date of disbursement. The company may, with the consent of Investors / Trustee, seek additional 90 days for security creation subject to applicable laws. In the event security is not created within 90 days or such period as extended, , the Majority Debenture Holders (75%)shall reserve the right to recall the outstanding principal amount on the aforesaid debentures along with the amount/ accrued interest due in respect thereof after giving a 3 month notice period. Default interest will be levied if the security is not created within 6 months. Transaction Documents Debenture trust deed Debenture Trustee Agreement Any security creation documents including hypothecation deed, indenture of mortgage and forms for filing of charge Listing Agreement Any other document as agreed between the Issuer and the Debenture trustee Governing Law The Facility and security documents shall be governed by laws of India and shall remain subject to jurisdiction of Courts of Mumbai.
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SECTOR OVERVIEW
The Real estate Industry plays a very critical role in the development of the Indian economy and contributes to over 6% of the country's gross domestic product (GDP). It is the second largest employer after agriculture. Real estate and construction sectors play a crucial role in the development of India‟s core infrastructure.
Over the next decade, the sector is expected to grow by 30 per cent. The Indian real estate market size is expected to touch US$ 180 billion by 2020. The industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy, according to a recent study conducted by rating agency ICRA. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as 5 times. The positive effects of growth in the real estate sector are spread over more than 250 ancillary industries.
The sector is divided into four sub-sectors: housing, retail, hospitality, and commercial. The housing sub- sector contributes around 4-5% to the GDP. Meanwhile, retail, hospitality and commercial real estate are also growing significantly, catering to India's growing infrastructure needs.
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MAHINDRA LIFESPACE DEVELOPERS LIMITED
Group Overview Our Company is a part of the Mahindra group of companies, which is one of the leading and one of the largest business groups in India. The Mahindra group is a US$ 15.9 billion (based on revenues, at exchange rate of US$1 = ` 52.36) multinational group based in Mumbai, India and employs more than 155,000 people in over 100 countries. The Mahindra group is presently involved in sectors covering automotive, agribusiness, aerospace, components, consulting services, defence, energy, financial services, hospitality, information technology, industrial equipments, logistics, real estate, retail, steel and two wheelers.
Forbes has ranked the Mahindra Group amongst the Top 200 of the World's Most Reputable Companies. Dun and Bradstreet has recently ranked Mahindra at No. 1 in the automobile sector in its list of India‟s Top 500 Companies. In 2010, Mahindra was featured in the Forbes Asian Fab 50 list and the Credit Suisse Great Brands of Tomorrow.
The group is organized into 10 business sectors.
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Revenue break-up
Mahindra Real Estate Sector The real estate sector encompasses residential development and integrated cities/industrial clusters development undertaken by Mahindra Lifespace Developers Limited (MLDL) and its subsidiaries.
Mahindra Lifespace Developers Limited (MLDL), a 51.04% owned subsidiary of Mahindra and Mahindra Limited is one of the major real estate development companies in India. The Company along with its subsidiaries focuses on residential development in Tier 1 Cities of the country. Apart from residential real estate development, the Company also operates two integrated business cities – Mahindra World City (MWC) Chennai and Jaipur [Special Economic Zones (SEZ) and Domestic Tariff Areas (DTA)] covering a combined area of ~4500 acres. Business Activities
Mahindra Lifespaces The Company aims to develop environment friendly residential complexes. It partners with the Green Building Council to create certified state of the art green communities.
The Company along with its subsidiaries has developed various residential projects covering ~7.6 million square feet. It is currently developing ~4.2 million square feet. Besides this, projects covering ~5.7 million square feet are at a planning stage. The current residential footprint includes projects located in Mumbai, Pune, Nagpur, NCR- Gurgaon and Faridabad, Hyderabad and Chennai.
The mainstay of Mahindra Lifespaces thus far has been with residential projects in the mid and premium segment across cities. Expanding its portfolio coverage the Company has entered the luxury segment of residential housing at the top end of the customer pyramid and is also addressing the market needs of the bottom end of the customer pyramid with value and affordable homes.
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The luxury segment named L‟Artista will comprise of boutique offerings located in posh and premium parts of metros and mini metros. Each project would comprise limited luxurious units with spacious rooms with premium fixtures and amenities. The first project in this segment will be launched in Sopanbaug, Pune.
The Company will also be venturing into the second homes/weekend homes category with its first project in Alibaug. Comprising of well appointed villas with a seamless transition between the inside and the outside, this project will target customers in Mumbai and Pune, seeking a weekend getaway. The project will comprise of limited units with open green spaces.
Guided by the vision of increasing national home ownership, improving the quality of life of customers and enabling sustainable urbanization, the Company will enter the affordable housing space by initially focussing on Tamil Nadu and Maharashtra. Imbibed with the philosophy of selling to end users and providing an experience of community living, the typical project profile would be 1,000-1,500 units located in an area of 10-15 acres and priced between ` 5-15 lakhs.
During fiscal 2013, the Company acquired 3 land parcels for the formats mentioned above, one on an outright purchase basis and two under Joint Development Agreements. These land parcels are located in Chennai, Pune and Alibaug and have a development potential of 1 million square feet.
The company will also continue its focus on the premium and mid-market segments where it has multiple completed projects to its credit. It will continue to focus on the markets of Mumbai, Pune, NCR, Hyderabad and Chennai for this space besides adding Bangalore to its geographical presence.
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Mahindra World City Chennai Mahindra World City Developers Limited (MWC Chennai) is a public private partnership (PPP) between the Company and Tamil Nadu Industrial Development Corporation (TIDCO), a Government of Tamil Nadu undertaking).
Conceptualized as an integrated business city, MWC Chennai provides a holistic environment, enabling living and livelihood and making the synergy between life and work a reality. MWC Chennai has attracted several companies from across the world and the business zone currently has 46 companies that are operational and the city has a working population of approximately 30,000 people. The exports from the 3 sector specific SEZs was ` 4,581 crore in Fiscal 2012 and ` 4,600 crore between April 2012 and December 2012.
The residential zone is master planned in close proximity to the business zone with varied social amenities built into the master plan comprising residential units, schools, medical centres, retail malls, a business hotel, recreation and leisure facilities. The residential development started with Sylvan County (212 homes spread across 22 acres) and currently has two offerings, namely, Aqualily (895 homes over 56 acres) and Iris Court (702 apartments over 18 acres), both of which are currently under development and when completed will add an additional 1,500 homes to the city. The remaining homes (~ 6,000) are expected to be developed over the next 10 years.
MWC Chennai has a CBSE school, Mahindra World School, managed by the Mahindra World School Education Trust and has around 500 children. The city also has a day care centre for infants and toddlers.
MWC Chennai also has a commercial complex that provides various facilities catering to daily needs such as banks/ATMs, food court, restaurants, medical centre and a department store.
Holiday Inn Express is in the process of setting up a 4-star business hotel and JSP Hospitals is in the process of setting up a multi-specialty hospital to cater to the population within MWC Chennai. The future phases of development will include a club with sports facilities, multiplex, hostel, mall, recreation centre, and another school. MWC Chennai, as part of its approach to holistic development, with the support of NGOs, is involved in skill up-gradation and employability training. The company has enabled training and employment for over 2,500 village youth.
Mahindra World City Jaipur Mahindra World City, Jaipur (MWCJ) is a joint venture between the Company and the Rajasthan State Industrial Development and Investment Corporation Ltd (RIICO), an agency of the Government of Rajasthan.
Spread over 3,000 acres MWCJ has been master planned by Jurong Corporation, Singapore. It is strategically located off the Delhi-Mumbai Nation Highway–8 in the influence zone of the upcoming Delhi Mumbai Industrial Corridor.
MWCJ has exclusive zones for IT/ ITeS companies, engineering & related industries, handicraft companies and gem & jewellery companies. Besides these export oriented zones, MWCJ also has a Domestic Tariff Area (DTA) for catering to companies serving the domestic market. MWCJ will also have a dedicated logistics and warehousing zone for manufacturing companies, in order to provide complete end-to-end solutions. Social Infrastructure in the form of housing, education and health institutes, recreational zones, and retail & hospitality centres will also form an integral part of the development.
MWCJ is one of the 16 projects globally which has partnered with the Clinton Climate Initiative‟s (CCI) effort to create Climate Positive cities. Currently, approximately 4,800 people work with various companies within MWCJ. Information Memorandum P a g e | 22
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Subsidiaries The Company has 13 subsidiaries
1. Mahindra World City Developers Limited 2. Mahindra World City (Jaipur) Limited 3. Mahindra Integrated Township Limited 4. Mahindra Residential Developers Limited (A subsidiary of Mahindra Integrated Township Limited) 5. Mahindra Bebanco Developers Limited 6. Mahindra World City (Maharashtra) Limited 7. Knowledge Township Limited 8. Raigad Industrial & Business Park Limited 9. Industrial Township (Maharashtra) Limited 10. Anthurium Developers Limited 11. Watsonia Developers Limited 12. Mahindra Infrastructure Developers Limited 13. Mahindra Housing Private Limited
Brief history of the Company
Our Company was incorporated on March 16, 1999 under the name Gesco Corporation Private Limited. We became a public limited company on August 25, 1999 and our name was changed to Gesco Corporation Limited. Pursuant to the scheme of arrangement between Mahindra Realty and Infrastructure Developers Limited (MRIDL) and Gesco Corporation Limited which was approved by the High Court of Judicature at Mumbai, the realty and infrastructure business of MRIDL was demerged into Gesco Corporation Limited. The scheme of arrangement became effective from April 1, 2001. Pursuant to the terms of the scheme of arrangement, Gesco Corporation Limited issued and allotted to each member of MRIDL in the ratio of 54 equity shares of ` 10 each in Gesco Corporation Limited credited as fully paid up for every 100 equity shares of ` 10 each held by each member in MRIDL. On December 24, 2002, our name was changed to Mahindra Gesco Developers Limited and subsequently on October 25, 2007 the name was changed to Mahindra Lifespace Developers Limited.
Our Registered Office is situated at Mahindra Towers, 5th Floor, Worli, Mumbai – 400018.
Share Capital history of Mahindra Lifespace Developers Limited
(for equity shares) Date of No. of shares and Face Isuue Consideration Nature of Cumulative allotment distinctive value price allotment paid up numbers (`) (`) capital (`)
16th March, 20 10 10 Subscription to Pari passu 200 1999 (1-20) Memorandum of Association 21st March, 28760134 10 Nil In consideration of Pari passu 287601540 2000 (21-28760154) transfer of Property Division of The Great Eastern Shipping Co, Ltd. to Gesco Corporation Ltd. 31st 1,08,00,000 10 Nil Equity share of `10/- Pari passu 395601540 Information Memorandum P a g e | 23
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December, (28760155- each issued to the 2001 39560154) shareholders of Mahindra Realty & Infrastructure Developers Ltd. in ration of 54:100 in accordance with the Scheme of arrangement 31st (85,35,836) 10 Nil Equity shares NA 310243180 December, extinguished in lieu of 2001 issue of 10% Cumulative Redeemable Non- Convertible Preference shares 30th July, 2322 10 Cash (Rights Issue of Pari passu 310266400 2002 (39560155- GE Shipping which 39562476) were in abeyance) 30th July, 1440 10 Cash (Rights Issue of Pari passu 310280800 2004 (39562477- GE Shipping which 39563916) were in abeyance) 15th June, 270 10 Cash (Rights Issue of Pari passu 310283500 2005 (39563917- GE Shipping which 39564186) were in abeyance) 11th 60,00,000, 10 800 QIP Pari passu 370283500 October, (39564187- 2006 45564186)
30th March, 29,19,000 10 526 Conversion of Warrants Pari passu 408083500 2007 (45564187- 48483186)
31st 8,61,000 10 526 Conversion of Warrants Pari passu 378893500 January, (48483187- 2008 49344186)
28th July, 800 10 10 Cash (Rights Issue of Pari passu 408091500 2008 (49344187- GE Shipping which 49344986) were in abeyance) 7th May, 25000 10 428 Allotment of Shares Pari passu 408341500 2010 49344987- under ESOP 49369986) 8th Sept, 1000 (49369987- 10 428 Allotment of Shares Pari passu 408351500 2010 49370986) under ESOP
19th Jan, 4500 (49370987 10 10 Cash (Rights Issue of Pari passu 408396500 13 to 49375486) GE Shipping which were in abeyance) Total 40839650
for 10% cumulative redeemable preference shares (since redeemed) Information Memorandum P a g e | 24
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Date of No. of Face Isuue Consideratio Nature of Cumulativ Cumulativ allotment shares value (`) price (`) n allotment e paid up e preference preference capital (`) share premium (`) 31st 8535836 10 10 In lieu of 10% 85358360 Nil December 85,35,836 Cumulative , 2001 equity shares Reeemabl of Mahindra e Non- Realty & Convertile Infrastructure Preference Developers Shares Ltd. Total
for 13.10% non-cumulative redeemable preference shares (since redeemed) Date of No. of shares Face value (`) Isuue price (`) Consideration Cumulative allotment and distinctive paid up nos. preference capital (`) 11th January, 3000000 100 100 Cash 300000000 1996 (1-30,00,000) 13th February, 150000 100 100 Cash 315000000 1996 (3000001- 3150000) 26th February, 250000 100 100 Cash 340000000 1996 (3150001- 3400000) 29th March, 1600000 100 100 Cash 500000000 1996 (3400001- 5000000) 25th June, 500000 100 100 Cash 550000000 1996 (5000001- 5500000)
Total 5500000
Note : a) Nil rate from FY 1996 upto FY 2001. b) 13% for the financial year 2002 & 2003. c) 13.10% thereafter till redemption, i.e. upto 30th September, 2006.
for 10.50% non-cumulative redeemable preference shares (since redeemed) Date of No. of shares Face value (`) Issue price (`) Consideration Cumulative allotment paid up preference capital (`) 23rd March 1000000 100 100 Cash 100000000 2001 Information Memorandum P a g e | 25
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Note: a) Redeemed on 22nd March, 2011.
Statement containing dates and parties of material contracts and agreements involving financial obligations
Bank Description Sanctioned Utilized as Repaid till limit on 31/3/2013 31/3/2013 Central Bank (Fund based) Term Loan ` 350 Cr ` 210 Cr ` 100 Cr Working Capital ` 50 Cr ` 47 Cr NA HDFC Ltd. Working Capital / Short term ` 150 Cr `150 Cr NA borrowing – for 30 days (to be repaid from issue proceeds) Note: a) Figures as on 31st March 2013 are unaudited
MANAGEMENT AND OWNERSHIP
Brief profiles of Directors of Mahindra Lifespace Developers Limited Mr. Arun Nanda 3, St. Helens Court, Mr. Arun Nanda is a Law Graduate, fellow (Chairman) Dr. Gopalrao Deshmukh Marg, member of Institute of Chartered Accountants Mumbai – 400026 and Institute of Company Secretaries of India. Mr. Nanda has also participated in a Senior Executive Programme at the London Business School.
He joined the Mahindra Group in 1973. He was inducted to the Board of Mahindra & Mahindra Ltd. in August 1992 and resigned as Executive Director in March 2010 to focus on the social sector and create a favourable ecosystem for senior citizens. He was immediately re- appointed as non-executive director of M&M. He is Chairman of Mahindra Holidays & Resorts India Ltd. and Mahindra Lifespace Developers Ltd. He is also on the Advisory Boards of Advent India and TechnoServe India, and a Trustee of Integrity Action, U.K., Helpage India, and The Bombay City Policy Research Foundation.
He is Chairman Emeritus, Indo-French Chamber of Commerce, Chairman, CII Western Region for 2010-2011 and co-Chairman of CII National Committee on Tourism.
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Mr. Nanda was honoured with an award of “Chevalier de la Legion d‟Honneur” (Knight of the National Order of the Legion of Honour) by the President of French Republic, Mr. Nicolas Sarkozy in 2008, “Real Estate Person of the Year” from GIREM Leadership in 2008, “CA Business Achiever Award - Corporate” by The Institute of Chartered Accountants of India in 2009 and “Lifetime Achievement Award” for his outstanding contribution to Hospitality Industry and the Service Sector by Golden Star Awards in 2010. Mr. Uday Phadke Flat No. 1102, Harimangal Mr. Uday Phadke has been with Mahindra & Manor, 402, Telang Road, Mahindra Limited since 1973. He holds a Matunga (East), Bachelor‟s Degree in Commerce and Law from Mumbai – 400 019 Mumbai University. He is a member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He was President – Finance, Legal & Financial Services Sector and Member of the Group Executive Board at Mahindra & Mahindra Limited.
He is on the Board of various Mahindra Group companies such as Mahindra & Mahindra Financial Services Limited, Mahindra Holidays & Resorts India Ltd., & Mahindra Lifespace Developers Limited.
He is a member of the SEBI Committee on Disclosures and Accounting Standards, CII National Committee on Accounting Standards & The National group of Accounting Standards Board of Institute of Chartered Accountants of India (ICAI). He is also a Governing Council member of the Association for Finance Professionals in India Mr. Sanjiv 13/397, Civil Lines, A Commerce Graduate and F.C.A Mr. Sanjiv Kapoor Kanpur 208001 Kapoor is the senior partner of M/s. S.K.Kapoor & Co, Chartered Accountants, one of the leading Chartered Accountancy firms. As partner of the firm has conducted audits of number of large Organisations such as Reserve Bank of India, Life Insurance Corporation of India , N.T.P.C Ltd. Indian Oil Ltd. U.T.I. , Bharat Sanchar Nigam Ltd., Bank of India, Bank of Baroda etc.
Mr. Kapoor has been a Director of Mahindra & Mahindra Ltd., Ballarpur Industries Ltd., Indian Bank, Corporation Bank, UPSE Securities Ltd., Sahara Asset management Co Pvt. Ltd, Sahara India Life Insurance co. Ltd, Aamby Valley Ltd.
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He was the president of Kanpur Chartered Accountants Society in the year 1988-89. He has been a member of Northern Railway Users Consultative Committee, Kanpur Telephonic Advisory Committee. He was also the Vice President of Upper India Chamber of Commerce in the year 1996-97.
At present Mr. Kapoor is a Director on the Board of Mahindra Lifespace Developers Limited, Mahindra World City Developers Ltd., Mahindra Ugine Steel Co. Ltd. Sahara India Medical Institute Ltd, HLL Life care Ltd., U.P. Stock Exchange Ltd, General Insurance Corporation of India & HLL Biotech Ltd. Mr. Shailesh 228 Kalpataru Habitat, Mr. Shailesh Haribhakti is a Chartered and Cost Haribhakti B Wing, Dr. S S Rao Road, Accountant, and a Certified Internal Auditor, Parel, Mumbai 400 012. Financial Planner & Fraud Examiner. During a career span of four decades, he has successfully established and led many innovative services. His current passion involves Outsourcing of Knowledge Processes, Engaged Investing, and Efficiency & effectiveness enhancement in Social, Commercial and Governmental organisations. He strongly believes in „shared value‟ creation, good public and corporate governance and promoting a green environment. He actively promotes these causes, and contributes towards their evolution by participating in the process of framing regulations and standards.
Mr. Haribhakti lends his expertise to several professional and regulatory bodies, and has played a leadership role across several of these bodies.
Mr. Haribhakti is an active speaker at several seminars, conferences and training programs and has been associated with IIM-Ahmedabad as visiting faculty from 1981 to 1983. He frequently contributes his views on request to television channels, leading newspapers and business magazines. He is a Director on the board of public and private companies and holds chairmanship/membership in the regulatory committees of some companies. Mr. Anil Harish 13, CCI Chambers, Mr. Anil Harish is a Partner of the Law Firm, D. Dinshaw Wachha Road, M. Harish & Co. which was founded by his Mumbai - 400 020 father, late Mr. D. M. Harish. Mr. Anil Harish has since the time he joined D. M. Harish & Co. in 1971, expanded the scope of his practice to include many diverse areas of the law
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including Corporate Law, Joint Ventures and Collaborations, Property, Mergers and Acquisitions, Demergers, LLPs, Arbitration, Exchange Control, Foreign Investments, Trusts, Wills and Indian and International Taxation. He has been an office bearer of several institutions in the legal field such as the Society of Indian Law Firms, of which he was the Executive Vice President. As a specialist in the field of Real Estate, Mr. Harish is on the Advisory Board of the magazine “Property Scape” as well as the Accommodation Times Institute of Real Estate Management. Mr. Harish has been ranked by the prestigious legal directory of Chambers & Partners as a leading tax lawyer having a solid clientele of both domestic and overseas organizations.
Mr. Harish has authored several articles which have been published in the Times of India, Hindustan Times and several professional journals. He is a director of several prestigious public limited companies in India. He is involved with several educational and charitable trusts and is the former President of the Hyderabad (Sind) National Collegiate Board, which runs more than 25 educational institutions and has about 50,000 students.
Mr. Harish is a much sought after speaker in India and abroad and has given several professional speeches at prestigious events such as the India Calling Summit in Brussels, Belgium (2009) organized by the Indian Merchants Chamber.. He has also addressed audiences in London, Dubai, Doha, Muscat and Jakarta on several occasions on topics such as FEMA, Taxation Collaborations and the legal requirements to operate a business in India, and at many Seminars in India and is a regular speaker on the Annual Budget.
Dr. Prakash 601, Udyandarshan, Dr. Prakash Hebalkar is Founder President of Hebalkar Sayani Rd, the corporate strategy consulting organisation Prabhadevi, ProfiTech. ProfiTech is an International Mumbai 400 025 Business Consulting firm focused on providing Strategic Advice to Corporates from the US Fortune Global 1000 list and the Indian ET500 list of companies.
Dr. Hebalkar brings with him over 30 years of international senior executive experience following a Doctorate in Computer Science and
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Economics from Massachusetts Institute of Technology in the U.S.A.
Dr. Hebalkar pioneered software exports from India in the mid-1970s at TCS and later developed Tata Burroughs (now known as Tata Infotech) from its inception in 1978 into the nation's largest software exporter in just five years.
Dr. Hebalkar is the author of several innovative Economic and Public-policy concepts.Dr. Hebalkar's initiatives in the Infrastructure area include numerous pioneering projects done through his own erstwhile company MaxReach Consultants Pvt. Ltd.
Dr. Hebalkar's International work experience has taken him from IBM Research in the U.S.A. where he managed and participated in software research for the Research Division, to the house of Tata, the leading industrial house in India.
Dr. Hebalkar has served as international adviser on public policy to the United Nations and WIPO as well as the Government of India and has actively participated in several bilateral business councils and chambers of commerce (such as the Indo-U.S. Indo-Japan, Indo-U.K., Indo- German and Indo-EEC Business Councils) in promotion of bilateral trade and technology co- operation as well as in major national business organizations in India such as the Confederation of Indian Industry(CII), Associated Chambers of Commerce (ASSOCHAM) and the National Association of Software and Service Companies(NASSCOM). He is a former President of the Western Region of the Indo- American Chamber of Commerce. He has served in the Expert Group at WIPO on the Semiconductor Chip Protection Treaty as well as on the editorial advisory board of the International Computer Law Advisor and participated in the Salzburg Seminar on Intellectual Property Rights in 1995, where he was awarded a unique prize.
He has pioneered several tax administration reforms as a key member of the Ministry of Finance Empowered Committee headed first by Dr Vijay Kelkar and then by Dr Partho Shome.
Dr. Hebalkar writes frequently on matters of
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economic policy and international trade for leading publications, and for some 15 years wrote a regular column entitled "Strategic Perspectives" in Business India. Most recently, in February 2013, he organised an Economics Workshop on the Next Big Reforms with participation by several leading economists and reformers from the political- economy.
Ms. Anita Flat No. 2, Park View Co-Op Hsg Anita Arjundas is the CEO of the Real Estate Arjundas Soc, 95, St Andrews Road, Sector of the Mahindra Group; a USD 15.9 (MD & CEO) Bandra-West, billion, diversified, federation of companies. As Mumbai-400050 the CEO of the Real Estate Sector, Anita is responsible for setting the strategic direction that will enable the business to drive sustainable urban transformation in India.
Anita joined the Mahindra Group in 2002 as Vice President - Marketing in one of the subsidiary companies of Mahindra Lifespaces, Mahindra World City, India‟s first integrated business city in a public-private partnership. In 2006, Anita took over profit centre responsibility for this Company and in 2009 moved to Mumbai to head the Real Estate sector with profit centre responsibility for both the business units of the sector - Residential real estate and Industrial real estate / Integrated Cities. Anita is also a member of the Mahindra Group Executive Board from April 2010.
Prior to her career with the Mahindra Group, Anita spent 3 years in the IT industry and 10 years in the consumer goods space. Anita is Co-Chairperson of the Federation of Indian Chambers of Commerce and Industry (FICCI) - Real Estate Committee. Anita is also a member of the Asia Society and the Chair person of the ASSOCHAM – SEZ Committee.
An MBA from BIM, India and a Wharton AMP alumnus, Anita has been ranked 44 amongst the 50 “Most Powerful Women in Business 2012” by Fortune India. In addition, she has recently been awarded the „Woman Achiever of the Year‟ at Construction Week India Awards 2012 and has been named as India's Top 10 (Young) Builders at CWAB Awards 2012 for her valuable contribution towards the real estate industry.
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Corporate Details Sr. No. Particulars Details 1 Name of the Company Mahindra Lifespace Developers Limited 2 Type of Company Registered Public Company 3 Corporate Identification Number (CIN) L45200MH1999PLC118949 4 Permanent Account Number (PAN) AAACG8904C 5 Promoter Mahindra & Mahindra Limited 6 Authorized Share Capital Rs 121 Crores 7 Paid up Share Capital ~ ` 40.84 Crores
Shareholding Structure (As on 31st Dec‟ 12)
Domestic Financial Others, 17% Institutions, 4%
Parent (M&M), FIIs, 28% 51%
Share Capital ` In Crores Authorized 50,000,000 equity shares of ` 10 each 50.00 6,500,000 preference shares of ` 100 each 65.00 6,000,000 unclassified shares of ` 10 each 6.00
Issued 40,880,501 equity shares of ` 10 each 40.88
Subscribed and Paid-up 40,835,150 equity shares of Rs 10 each fully paid up 40.83
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Details of Other Borrowings
Details of debt outstanding (` In Crores) (as on 31st March 2013)
(A) SECURED LOANS ` 257 Cr (B) UNSECURED LOANS ` 150 Cr Total ` 407 Cr Due for repayment/redemption within next year ` 250 Cr
Note: a) Figures as on 31st March 2013 are unaudited
DETAILS OF BORROWINGS INCLUDING ANY DEBT SECURITIES OUTSTANDING as on 31st March 2013
Total Sr. Sanctioned Outstanding Particulars Outstanding Security Provided No. Loan (in Cr) (in Cr) (in Cr) First charge by way of hypothecation on present & future Construction Finance – inventory. 1 Term loan from Central 350.00 210.00 210.00 First charge by way of Bank of India assignment of present & future receivables.
First charge by way of equitable mortgage on land for projects Cash credit facility from 2 50.00 46.56 46.56 mortgaged with the bank (Min Central Bank Security Cover to be 1.33x at all times)
Total 400.00 256.56 256.56
Note: a) Figures as on 31st March 2013 are unaudited
DEBT EQUITY RATIO (` In Crores)
Particulars Pre-Issue (Unaudited as on 31st March 2013)
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Debt equity 0.34 (Standalone)
PARTICULARS OF 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
The Company hereby confirms that it has not issued any debt securities (Debentures) or agreed to issue any debt securities for consideration other than cash, whether in whole or in part, at a premium or discount or in pursuance of an option since inception.
SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS
The Company has been discharging all its liabilities in time including the payment of interest and principal due on loan facilities availed. The Company hereby confirms that: A) it has been servicing all its principal and interest liabilities on time and there has been no instance of delay or default since inception.
B) it has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of roll over against any of its borrowings in the past.
The Company has not defaulted in its debt service obligations. The Company undertakes to fulfill its future debt service obligations whenever they arise.
Repayment Schedule of restructured term loan for ` 350 Cr
Lender Name (Bank/MF/NBFC/Others) Loan (` Cr) Repayment dates Status
Central Bank of India 25.00 30-Jun-12 Repaid Central Bank of India 25.00 30-Sep-12 Repaid Central Bank of India 25.00 31-Dec-12 Repaid Central Bank of India 25.00 31-Mar-13 Central Bank of India 25.00 30-Jun-13 Central Bank of India 25.00 30-Sep-13 Central Bank of India 25.00 31-Dec-13 Central Bank of India 25.00 31-Mar-14 Central Bank of India 25.00 30-Jun-14 Central Bank of India 25.00 30-Sep-14 Central Bank of India 25.00 31-Dec-14 Central Bank of India 25.00 31-Mar-15 Central Bank of India 25.00 30-Jun-15 Central Bank of India 25.00 30-Sep-15
FUTURE BORROWINGS
The Company shall be entitled, from time to time, to make further secured / unsecured borrowings for meeting its business purpose / working capital requirements without consent from the debenture holders.
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The Company shall also be entitled to borrow from the parent company as and when the need be without consent from the debenture holders.
List of highest ten holders of equity capital of the issuer
Name Holding % HITESH SATISHCHANDRA DOSHI 268028 0.6563
MEENA JAIN 127000 0.311 RANJEET HINGORANI 104927 0.2569 RAJENDER DUDHERIA 55982 0.1371 HITEN ANANTRAI SHETH 55000 0.1347 SUNIL KUMAR JAIN 44500 0.109 MEENAL HINGORANI 31457 0.077 SUNIL KUMAR JAIN 27369 0.067 MILAN SHARAD RUPAREL 25000 0.0612 MERZI KERSY CHINOY 20000 0.049
Credit Rating CRISIL has assigned its „CRISIL A+/Stable‟ rating to the bank facilities and non-convertible debentures (NCDs) of Mahindra Lifespace Developers Limited (MLDL). The ratings reflect MLDL‟s strong brand name, established track record and focus on execution, strong support from its parent - Mahindra & Mahindra Ltd (M&M; rated „CRISIL AA+/Stable/CRISIL A1+‟) and prudent land acquisition policy.
Outlook: Stable CRISIL believes that MLDL will maintain its business and financial risk profiles over the medium term, driven by its strong brand name, execution strength and prudent land acquisition policy. The outlook may be revised to „Positive‟ in case of higher-than-expected turnover of its ongoing and proposed residential and integrated business city projects leading to improvement in operating cash flow. Conversely, the outlook may be revised to „Negative‟ if there is a sharp decline in the company‟s revenues and profitability, triggered by slackened saleability of its existing and proposed projects or larger-than-expected debt- funded land acquisition.
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TERMS OF OFFER
(DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, BASIS OF ALLOTMENT, STOCK EXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)
This is a Confidential Disclosure document setting out the terms and conditions pertaining to the issue of Secured, Listed, Rated, Redeemable Non-Convertible Debentures to be issued by the Company. Your participation and subscription is subject to the completion of the Application Form and submission of relevant documents.
ISSUE SIZE
The Company proposes to raise a total amount of ` 500 crores (Rupees Five Hundred Crores only) through issue of 5000 (Five Thousand) Secured, Listed, Rated, Redeemable Non-Convertible Debentures of Rs 10,00,000/- (` Ten Lakhs) each.
REGISTRATION AND GOVERNMENT APPROVALS This present issue of Debentures is being made in accordance with extant guidelines for floatation of Debentures as amended from time to time. The Company can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by the Company to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.
AUTHORITY
The Debentures are being issued pursuant to the resolution of the Board of Directors of the Company, passed on 30th December, 2011 and supplemental resolution dated 28th January, 2013 and are also subject to the provisions of the Memorandum and Articles of Association of the Company. The present Issue is within the general borrowing limits set out in the resolution passed under section 293 (1) (d) of the Companies Act, 1956, at the Annual General Meeting of the Company held on 21st July, 2011 and under Section 293(1)(a) through postal ballot held on 21st July 2011.
The Company hereby confirms that it is entitled to raise money through current issue of Debentures with the consent/ permission/ approval from the Debenture holders/ Trustees/ Lenders/ other creditors of the Company, wherever applicable.
NATURE OF THE INSTRUMENT
The instrument shall be issued in the form of Secured. Listed, Rated, Redeemable Non-Convertible Debentures with a face value of ` 10,00,000 each by way of private placement.
ISSUE PRICE
Each Debenture has a face value of `10,00,000/- and is issued at par for `10,00,000/-.
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The Debentures have been assigned a rating of “CRISIL A+/Stable” by CRISIL. A copy of rating letter from CRISIL is enclosed as Annexure 6 to this Disclosure Document. The present issue is covered by the above rating.
Instruments carrying this rating are judged to offer adequate degree of safety with regard to timely payment of financial obligations. Any adverse changes in circumstances are most unlikely to affect the payments on the instrument.
Other than the credit rating mentioned herein above, the Company has not sought any other credit rating from any other credit rating agency(ies) for the Debentures offered for subscription under the terms of this Disclosure document.
The above rating is not a recommendation to buy, sell or hold securities and investors should take their own decision. The rating may be subject to revision or withdrawal at any time by the assigning rating agencies 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 the right to suspend, withdraw the rating at any time on the basis of new information etc.
Minimum Subscription As the current issue of Debentures is being made on private placement basis, the requirement of minimum subscription shall not be applicable, however the company has provide for minimum subscription of 5 (Five) NCDs and in multiples of 5 (Five) thereafter Underwriting The present Issue of Debentures on private placement basis has not been underwritten
OBJECTIVE OF THE ISSUE
The proceeds from the present issue shall be used to part finance any of one following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions (e) Cost of Construction, (f) to invest into an existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (g) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks. Interim Use of Funds Pending utilization for the purposes described above, the Company intends to temporarily repay the funds in high quality interest/invest in dividend bearing liquid instruments including money market mutual funds, deposits with banks for the necessary duration and other investment grade interest bearing securities. Such transactions would be at the prevailing commercial rates at the time of investment.
SECURITY
The Debentures, interest thereon, Trustees‟ remuneration and all other monies relating thereto shall be secured by way of a First and exclusive charge by way of registered mortgage on the identified assets of the company including land and building as identified by the Company from time to time.
The said security will be created in favour of the Trustees within 90 days from the deemed date of allotment of the Debentures, extendable on request, for a further period of 90 days, which the Debenture Trustee, acting on behalf of the Debenture Holders, will not, withhold such extension unreasonably.
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The Company shall inform the Trustees as well as the Debenture holder, the creation of charge in favor of Trustees by filling the requisite form with Registrar of Companies under section 132 of Companies Act, 1956 within stipulated time.
Failing to create security within the time prescribed or the extended period as set out above the Company shall be liable to pay additional interest at the rate of 2 % p.a. on the outstanding amount of Debentures from the date of allotment till date of creation of security to the satisfaction of the Trustees.
In case the security is not created even after a period of further three months over and above the stipulated period of 3 months and any further extended period, as mentioned above, the Trustees shall, upon the approval of the majority of the Debenture holders, reserve the right to recall its outstanding principal amounts on the aforesaid debentures along with all other monies / accrued interest due in respect thereof, without prepayment penalty.
DESCRIPTION OF PROPERTY
The property comprises of
Mahindra Towers, Bhikaji Cama place, New Delhi – Building admeasuring approx 68000 sqft Land for residential development in Chennai within Mahindra World City Chennai owned by Mahindra Integrated Township Limited, (MITL-Subsidiary of MLDL) Land for residential development owned by MLDL in Mumbai.
TRUSTEE
The Debentures shall be issued in terms of a registered trust deed against mortgage on property owned by the Company or any of its subsidiaries as described below under the heading “Description of Property”.
In accordance with the provisions of Section 117B of the Companies Act, 1956 (1 of 1956) and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Company has appointed Axis Trustees Services Limited to act as Trustees (“Trustees”) for and on behalf of the holder(s) of the Debentures.
The address and contact details of the Trustees are as under:
Axis Trustee Services Limited Address: 2nd Floor E, Axis House, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai 400025 Tel: (022) – 24255206 Email: [email protected] Website: www.axisbank.com Fax: 91-22- 24254200 Contact Person: Mr D.J.Bora ,Dy. Gen. Manager
A copy of letter from Axis Trustees Services Limited conveying their consent to act as Trustee for the current issue of Debentures is enclosed as Annexure 3 in this Disclosure document.
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The Company hereby undertakes that a Trust Deed shall be executed by it in favour of the Trustees within three months of the closure of the Issue. The Trust Deed shall contain such clauses as may be prescribed under section 117A of the Companies Act, 1956 and those mentioned in Schedule IV of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further the Trust Deed shall not contain any clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Trustees or the Company in relation to any rights or interests of the holder(s) of the Debentures, (ii) limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and circulars or guidelines issued by SEBI, (iii) indemnifying the Trustees or the Company for loss or damage caused by their act of negligence or commission or omission.
The Debenture holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Debentures. Any payment made by the Company to the Trustees on behalf of the Debenture holder(s) shall discharge the Company to the extent of such payment. The Trustees shall protect the interest of the Debenture holders in the event of default by the Company in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Company. No Debenture holder shall be entitled to proceed directly against the company unless the Trustees, having become so bound to proceed, fail to do so.
The Company shall produce to the satisfaction of the Trustees, within 3 months from the deemed date of allotment, a certificate stating that the title of the property offered as security is clear and marketable. Appropriate permissions for creation of pari-passu charge, if required in favour of the Debenture Trustee shall be obtained from all prior creditors.
The Debenture Trustee shall supervise the implementation of the conditions regarding creation of security for the debt securities and the debenture redemption reserve, in compliance with provisions of the Companies Act and other applicable law, including the Debenture Trustee Regulations. The Company shall, within 3 months, submit a detailed valuation report of the property offered as security duly certified by an independent valuer.
The Company, post creation of security, shall furnish a confirmation certificate in favour of the Debenture Trustee that the security created by it in favour of the Debenture holders is properly maintained, is adequate enough to meet the payment obligations towards the Debenture holders in the event of default and is in accordance with the terms described in this Disclosure document.
The issuer shall not create any further charge on security without prior permission of the Trustees. So far the issuer is in compliance with Fixed Asset Cover RtaioFACR, the Company is free to sell/ lease its land and / or units constructed / under construction on such land in the ordinary course of business to its customers and security to that extent shall be deemed to have been released / charge vacated by the trustees without the express the express consent of debenture holders. The sale of assets will be reported on quarterly basis within 45 days from the end of each quarter.
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ISSUE TIME TABLE
Offer Opening Date : 4th April, 2013 Offer Closing Date : 4th April, 2013
Pay-in Date & Deemed Date of Allotment : 4th April, 2013
(The Company, at its sole and absolute discretion, reserves the right to vary these dates without giving any reasons or prior notice).
The Issuer proposes to list the security on the BSE (Bombay Stock Exchange) and has applied for in principle approval for listing on the stock exchange.
TERMS OF PAYMENT
The full face value of the Debentures applied for is to be paid along with the Application Form. Investor(s) need to send in the Application Form and the cheque(s)/ demand draft(s)/ RTGS for the full face value of the Debentures applied for.
DEEMED DATE OF ALLOTMENT (“DDA”)
The deemed date of allotment would be 4th April, 2013 or on the date on which the funds are realised by the company, whichever is later. Interest on the Debentures will accrue to the allottee(s) starting from the Deemed Date of Allotment. The actual allotment of the Debentures may take place on a date other than the Deemed Date of Allotment.
The Company reserves the right to keep multiple allotment dates/deemed dates of allotment at its sole and absolute discretion and without any notice. In case, the issue closing date is changed (advanced/postponed), the Deemed Date of Allotment may also be changed (advanced/ postponed), by the Company at its sole and absolute discretion.
.
The Company shall, at its sole discretion, decide the quantum of amount to be allotted or retained under this Issue.
INTEREST ON THE DEBENTURES
Terms of NCD Series I Series II Series III Amount ` 125 crores ` 175 crores ` 200 crores Face value `. 10,00,000 per `. 10,00,000 per `. 10,00,000 per NCD NCD NCD Coupon 0% 8% p.a payable 8% p.a payable annually annually Maturity 3 years from 4 years from 5 years from
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deemed date of deemed date of deemed date of allotment allotment allotment Redemption ` 3,59,896.61 ` 1,30,874.10 ` 1,72,782.29 Premium per debenture YTM 10.78% p.a 10.78% p.a 10.78% p.a Redemption Bullet, at premium Bullet, at premium Bullet, at premium
The Debentures shall carry a YTM of 10.78 % p.a. on the principal amount of Debentures outstanding, from the Deemed Date of Allotment (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re- enactment thereof for which a certificate will be issued by the Company).
Payment will be made by way of cheque(s)/demand drafts/interest warrant(s), RTGS which will be dispatched to the Debenture holder(s) by registered post/ speed post/ courier or hand delivery on or before the interest payment dates.
INTEREST ON APPLICATION MONEY
Interest at the YTM (subject to deduction of tax at source at the rate prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof) will be paid on the application money to the applicants. Such interest shall be paid from the date of realisation of Cheque(s)/Demand draft(s) upto but not including the Deemed Date of Allotment. The relative interest warrants along with the letters of allotment/refund orders, as the case may be, will be dispatched by registered post/ speed post/ courier or hand delivery to the sole/first applicant, at the sole risk of the applicant. In case the deemed date of allotment is the same as the date of realisation of Cheque(s)/Demand draft, no interest on application money will be payable.
COMPUTATION OF INTEREST
Interest for each of the interest period shall be computed on an Actual/Actual days basis, compounded annually on the Principal outstanding on the Debentures at the applicable Coupon Rate.
Record date Record date for the purpose of payment of interest shall be at least 7 days prior to each interest payment date, and 7 days prior to the date of maturity.
PAYMENT OF INTEREST The interest will be payable annually. (In case of part redemption, as per the Redemption Payment, accrued coupon on the same will be paid on the date of payment of part redemption amount) to the registered Debenture holder(s) recorded in books of the Company/NSDL/CDSL and in case of joint holders, to the one whose name stands first in the Register of Debenture holder(s) on the Record Date. In the event of the Company not receiving any notice of transfer by the Record Date, the transferee(s) for the Debentures shall not have any claim against the Company in respect of interest so paid to the registered Debenture holder(s). Wherever the transfer is deemed to be defective by the Company, the Company will keep all payments of remaining interest on such Debenture(s) in abeyance till such time the defects are rectified to the satisfaction of the Company.
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TAX DEDUCTION AT SOURCE (TDS)
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 at the registered office of the Company, at least 30 days before the tax deduction 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.
Depository Arrangements
The Company has entered into depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services Ltd. (CDSL) for the issue of Debentures in dematerialised form.
The Company has signed two tripartite agreements in this connection viz. 1. Tripartite Agreement between the Company, National Securities Depository Limited (NSDL) and the Registrar i.e. Sharepro Services (India) Private Limited.
2. Tripartite Agreement between the Company, Central Depository Services Limited (CDSL) and the Registrar, i.e. Sharepro Services (India) Private Limited.
RIGHT TO ACCEPT OR REJECT APPLICATIONS
The Company is entitled at its sole and absolute discretion, to accept or reject any application, in part or in full, without assigning any reason thereto. The Application Forms, which are not complete in all respects, are liable to be rejected. The rejected applicants will be intimated along with the refund warrants, if applicable.
LETTER OF ALLOTMENT
The Company will make allotment to the investors in due course after verification of the Application Form(s), the accompanying documents and on realization of the application money.
The Depository Account of the investors with NSDL/CDSL will be credited within 7 working days from the realization of application money. The initial credit in the account will be akin to the Letter of Allotment. On completion of all statutory formalities such credit will be substituted with a credit for the number of debentures allotted.
ISSUE OF DEBENTURES IN DEMATERIALISED FORM
Subject to the completion of all statutory formalities within 90 days from the Deemed Date of Allotment, or such extended period as may be approved by the appropriate authority(ies), the Debenture shall be issued in dematerialized form as per the provisions of Depositories Act, 1996 (as amended from time to time).
The investors will have to hold the Debentures in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 /rules as notified by NSDL/CDSL from time to time.
Bidders desirous of receiving Debentures in the dematerialised form should mention their Depository Participants name, DP-ID and Beneficiary Account Number in the appropriate place in the Application Form. The Company shall take necessary steps to credit the Depository Account of the allottee(s) with the number of debentures allotted. In case of incorrect details provided by the investors and inability of the
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Company to credit the depository account, the debentures will be issued in physical form to such investors.
PAYMENT ON REDEMPTION
The debentures would be redeemed at premium at the end of 3 (three), 4 (four) and 5 (five) years from the Deemed Date of Allotment.
The maturity date would be as under:
Tranche Maturity Date Series 1 4th April 2016 Series 2 4th April 2017 Series 3 4th April 2018
The payment due per debenture upon redemption would amount to:
Tranche Redemption Amount per debenture (ex final coupon) Series 1 ` 13,59,896.61 Series 2 ` 11,30,874.10 Series 3 ` 11,72,782.29
The Debentures held in the Dematerialised Form shall be taken as discharged on payment of the redemption amount by the Company on maturity to the registered Debenture holders whose name appears in the Register of Debenture holders with the Company/NSDL/CDSL on the record date. Such payment will be a legal discharge of the liability of the Company towards the Debenture holders. On such payment being made, the Company will inform NSDL / CDSL and accordingly the account of the Debenture holders with NSDL / CDSL will be adjusted.
The Company's liability to the Debenture holders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due dates of redemption in all events. Further the Company will not be liable to pay any interest or compensation from the dates of such redemption.
On the Company dispatching the amount as specified above in respect of the Debentures, the liability of the Company shall stand extinguished. Further the redemption proceeds shall be directly credited through Real Time Gross Settlement ("RTGS") and where such facilities are not available the Company shall make repayment of all such payment of all such amounts by way of high value cheques / demand drafts.
RIGHT TO PURCHASE AND RE-ISSUE THE DEBENTURES
The Company will have the power exercisable at its absolute discretion from time to time to purchase some or all the Debentures at any time prior to the specified date(s) of redemption from the secondary market. In the event of the Debentures being so purchased and/or redeemed before maturity in any circumstances whatsoever, the Company shall have the right to re-issue the Debentures under section 121 of the Companies Act, 1956.
MODE OF TRANSFER
The Debenture(s) shall be transferable and transmittable in the same manner and to the same extent and be subject to the same restrictions and limitations as in the case of the existing debentures/ equity shares of the Company. Information Memorandum P a g e | 43
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The Debentures shall be transferable freely to all classes of eligible Investors. The Debentures may be transferred and/or transmitted in accordance with the applicable provisions of the Companies Act. The provisions relating to transfer, transmission and other related matters in respect of shares of the Company contained in the Articles of Association of the Company and the Companies Act shall apply, mutatis mutandis (to the extent applicable to debentures), to the Debentures as well. The Debentures held in dematerialised form shall be transferred subject to and in accordance with the rules/procedures as prescribed by NSDL/CDSL and the relevant depository participants of the transfer or transferee and any other applicable laws and rules notified in respect thereof. The transferee(s) should ensure that the transfer formalities are completed prior to the record date. In the absence of the same, interest will be paid/redemption will be made to the person, whose name appears in the register of Debenture Holders maintained by the Depositories. In such cases, claims, if any, by the transferees would need to be settled with the transferor(s) and not with the Company.
Provided further that nothing in this section shall prejudice any power of the Company to register as Debenture holder any person to whom the right to any Debenture of the Company has been transmitted by operation of law.
REGISTER OF DEBENTUREHOLDERS
Register of Debenture holders containing the necessary particulars shall be maintained by the Company at its Registered Office at
Mahindra Lifespace Developers Ltd, 5th floor, Mahindra Towers, Worli, Mumbai 400018
Registration of Transfers: All requests for registration of transfer along with appropriate transfer documents should be sent to the Company at the address mentioned above or at the office of Registrar to the Issue.
The transferee shall also furnish name, address and specimen signatures and wherever necessary, authority for purchase of Debentures. The Company/ Registrar to the Issue on being satisfied with the adequacy and correctness of the documentation; shall register the transfer in its books.
SUCCESSION
In the event of demise of the holder of the Debenture(s), the Company will recognize the executor or administrator of the deceased Debenture holder, or the holder of succession certificate or other legal representative as having title to the Debenture(s). The Company shall not be bound to recognise such executor, administrator or holder of the succession certificate or other legal representative as having title to the Debenture(s), unless such executor or administrator obtains probate or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Directors of the Company may, in their absolute discretion, where they think fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognise such holder as being entitled to the Debenture(s) standing in the name of the deceased Debenture holder on production of sufficient documentary proof and/or indemnity.
RIGHTS OF ALL DEBENTUREHOLDERS
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The Debenture holder(s) will not be entitled to any rights and privileges of shareholders other than those available to them under statutory requirements. The Debentures shall not confer upon the holder(s) 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 Debentures will be paid to the holder only, or in the case of joint holders, to the one whose name stands first. The Debentures shall be subjected to other usual terms and conditions incorporated in the Debentures that will be issued to the allottee(s) of such Debentures by the Company.
MODIFICATION OF RIGHTS
The rights, privileges, terms and conditions attached to the Debentures may be varied, modified or abrogated with the consent, in writing, of those holders of the Debentures who hold at least three fourth of the outstanding amount of the Debentures (of the current issue) or with the sanction accorded pursuant to a resolution passed at a meeting of the Debenture 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 Debentures, if the same are not acceptable to the Company.
STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED
The Secured, Listed, Rated, Redeemable Non-Convertible debentures are proposed to be listed on the Wholesale Debt Market (WDM) Segment of the Bombay Stock Exchange Limited ( BSE)].
The Company has obtained an in-principle approval from the BSE dated [*] for listing of said Debentures on its Wholesale Debt Market (WDM) Segment. The Company shall make an application to the BSE to list the Debentures to be issued and allotted under this Disclosure document and complete all the formalities relating to listing of the Debentures within 20 days from the date of closure of the Issue. If such permission is not granted within 20 days from the date of closure of the Issue or where such permission is refused before the expiry of the 20 days from the closure of the Issue, the Company shall forthwith repay without interest, all monies received from the applicants in pursuance of the Disclosure document, and if such money is not repaid within 8 days after the Company becomes liable to repay it (i.e. from the date of refusal or 20 days from the date of closing of the subscription list, whichever is earlier), then the Company and every director of the Company who is an officer in default shall, on and from expiry of 8 days, will be jointly and severally liable to repay the money, with interest at the rate of 4 per cent per annum on application money, as prescribed under Section 73 of the Companies Act, 1956.
In connection with listing of Debentures with BSE, the Company hereby undertakes that: (a) It shall comply with conditions of listing of Debentures as may be specified in the Listing Agreement with BSE. (b) Ratings obtained by the Company shall be periodically reviewed by the credit rating agencies and any revision in the rating shall be promptly disclosed by the Company to BSE. (c) Any change in rating shall be promptly disseminated to the holder(s) of the Debentures in such manner as BSE may determine from time to time. (d) the Company, the Trustees and BSE shall disseminate all information and reports on Debentures including compliance reports filed by the Company and the Trustees regarding the Debentures to the holder(s) of Debentures and the general public by placing them on their websites. (e) Trustees shall disclose the information to the holder(s) of the Debentures and the general public by issuing a press release in any of the following events: (i) default by the Company to pay interest on Debentures or redemption amount; (ii) revision of rating assigned to the Debentures; (f) The information referred to in para (e) above shall also be placed on the websites of the Trustees, the Company and BSE.
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Market Lot
The market lot shall be five Debenture of face value of ` 10,00,000/- each (“Market Lot”). Since the Debentures are being issued only in dematerialized form, odd lots will not arise either at the time of issuance or at the time of transfer of Debentures.
Trading of Debenture Trading of Debentures would be permitted in demat mode only in standard denomination of ` 10,00,000/- per Debenture and such trades shall be cleared and settled in recognized stock exchange(s) subject to conditions specified by SEBI. In case of trading in Debentures which has been made over the counter, the trades shall be executed and reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI.
EFFECT OF HOLIDAYS
Should any of the dates defined above or elsewhere in the Disclosure document, excepting the date of allotment, fall on a Saturday, Sunday or a Public Holiday, the next working day shall be considered as the effective date(s).
WHO CAN APPLY
Only the persons who are specifically addressed through a communication directly by the Company and only such recipients are eligible to apply for the Debentures. No other person can apply.
The categories of investors eligible to invest in the Debentures, when addressed directly, include HNIs, companies and body corporates, banks, financial institutions, insurance companies, mutual funds and such other category of investor as expressly authoirsed to invest in the Debentures.
Furthermore, NRIs, OCBs, FIIs and other persons resident outside India are not eligible to apply for or hold the Debentures. All investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue.)
In the following paragraphs, the procedure for making applications along with enabling provisions is given. However, the applicants should verify independently their eligibility to make an application under this issue.
By Commercial Banks
The applications must be accompanied by certified true copies of (i) Document authorizing investment, (ii) Specimen signatures of authorized signatories and (iii) Power of Attorney.
By Corporate Bodies/Companies/Financial Institutions
The application must be accompanied by certified true copies of (i) Memorandum and Articles of Association/Constitution/Bye-laws (ii) Resolution authorizing investment and containing operating instructions (iii) Specimen signatures of authorized signatories and (iv) Order under section 197 of the Income Tax Act, 1961 from the Assessing Officer for claiming exemption from deduction of tax at source on the interest income.
By Mutual Funds
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The application must be accompanied by certified true copies of (i) SEBI Registration Certificate (ii) Resolution authorizing investment and containing operating instructions and (iii) Specimen signatures of authorized signatories.
HOW TO APPLY
Investors are required to send application for investing in the Debentures, to the office of either of the Arrangers.
Applications for the Debentures must be made in the prescribed form, and must be completed in block letters in English. The format of the Application Form is enclosed.
Applications complete in all respects (along with all necessary documents as detailed in the memorandum of information) must be submitted before the last date indicated in the issue time table or such extended time as decided by the Company. Applications not completed in the said manner are liable to be rejected.
Application forms must be accompanied by a demand draft or cheque, drawn or made payable at par value in favour of “Mahindra Lifespace Developers Limited” only.
Cheques/demand drafts may be drawn on any bank including a co-operative bank, which is a member or sub-member of the Banker‟s Clearing House located at any of the places where the collection centers mentioned in the application form are located.
Investors in centers which do not have any bank, including a co-operative bank, which is a member or sub-member of the Banker‟s Clearing House located at the above mentioned centers, will be required to make payments only through demand drafts payable at any one of the centers mentioned in the application form.
Cash, outstation cheques, money orders, postal orders and stock invest will not be accepted. The Company assumes no responsibility for any applications/cheques/demand drafts lost in mail.
Applications 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 and the tax exemption certificate/ document, 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 Company or to its Registrars or to such other person(s) at such other address (es) as may be specified by the Company from time to time through a suitable communication.
PAN/GIR Number All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1961 and the Income Tax Circle/ Ward/ District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.
Acknowledgements No separate receipts will be issued for the application money. However, the Bankers to the Issue receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the Acknowledgement slip at the bottom of each Application Form.
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Right to Accept or Reject Applications The Company reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof.
The application forms that are not complete in all respects and are varying with the commitment letter are liable to be rejected and would not be paid any interest on the application money.
Nomination Facility As per Section 109 A of the Companies Act, 1956, only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Debentures shall vest in the event of his death. Non-individuals including holders of Power of Attorney can not nominate.
Debenture holder not a Shareholder The Debenture holders will not be entitled to any of the rights and privileges available to the shareholders. If, however, any resolution affecting the rights attached to the Debentures is placed before the members of the Company, such resolution will first be placed before the Debenture holders for their consideration.
Debenture Redemption Reserve As per clarification issued by the Department of Company Affairs, Government of India vide circular no. 6/3/2001-CL-V dated 18.04.2002, and circular no. 11/02/2012-CL-V dated 11.02.2013 for manufacturing and infrastructure companies, the adequacy of DRR is defined at 25% of the value of debentures issued through private placement route. In terms of extant provisions of Companies Act, 1956, the Company is required to create Debenture Redemption Reserve out of profits, if any, earned by the company. In case of the current issue of Debentures, the Company has also appointed a Trustee to protect the interest of the investors.
MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER
Our Company, in the ordinary course of its business, enters into various agreements, including loan agreements and joint venture agreements, which may contain certain financial obligations and/or provisions which may have an impact on its financial condition. Such contracts or agreements may be inspected at the Registered Office from 11.00 am to 1.00 pm from the date of this Disclosure document, until the date of closure of this Issue.
Mentioned below is an illustrative list of certain material contracts and agreements having certain financial obligations entered into by our Company as on date of this Disclosure document.
a. Memorandum and Articles of Association of the Company as amended from time to time. b. Board Resolution dated 30th December 2011 and 28th January, 2013 authorizing issue of Debentures offered under terms of this Disclosure Document. c. Letter of consent from Axis Trustee Services Ltd. for acting as Trustees for and on behalf of the holder(s) of the Debentures. d. Copy of application made to the BSE for grant of in-principle approval for listing of Debentures. e. Letter from BSE conveying its in-principle approval for listing of Debentures. f. Letter from CRISIL conveying the credit rating for the Debentures of the Company and the rating rationale pertaining thereto. g. Tripartite Agreement between the Company, NSDL and Sharepro Ltd. for issue of Debentures in dematerialised form. h. Tripartite Agreement between the Company, CDSL and Sharepro Ltd. for issue of Debentures in dematerialised form. Information Memorandum P a g e | 48
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i. Resolution of our shareholders dated July 21st 2011 authorising our Board to borrow for the purpose of the Company, upon such terms and conditions as the Board may think fit, up to ` 1500 Crores.
NOTICES The notices to the Debenture holder(s) required to be given by the Company or the Trustees shall be deemed to have been given if sent by ordinary post to the sole/first allottee or sole/first registered holder of the Debentures, as the case may be. All notices to be given by the Debenture holder(s) shall be sent by registered post or by hand delivery to the Company or to such persons at such address as may be notified by the Company from time to time.
GOVERNING LAW The Debentures are governed by and will be construed in accordance with Indian law. The Company, the Debentures and Trustee‟s obligations under the Debentures shall, at all times, be subject to the directions of the RBI and the SEBI. The Debenture holders, by purchasing the Debentures, agree that the courts in Mumbai shall have exclusive jurisdiction with respect to any matters relating to the Debentures.
Undertaking by the Company The Company undertakes that: 1. it shall attend to the complaints received in respect of the Issue expeditiously and satisfactorily; 2. the funds required for making refunds, if any, shall be made available on time; 3. necessary co-operation shall be extended to credit rating agency in providing true and adequate information till the debt obligations in respect of the instruments are outstanding; 4. it shall furnish a confirmation certificate that the security created by the Company in favor of the Debenture Trustee, is properly maintained and is adequate enough to meet the payment obligations towards the Debenture holders in the event of a default; 5. that it shall use a common form/ procedure for transfer of Debentures issued under terms of this Disclosure document.
COVENANTS
The Covenants shall include the following: “Mahindra” to be part of the name of the Issuer at all times during the tenure of Facility. In case the Issuer intends to change its name without the “Mahindra” name, it shall seek approval from majority (75%) of debenture holders and such approvals shall not be unreasonably withheld. In case the Investors don‟t approve the change in name, the Issuer shall have an option to pay the Outstanding Amount without any prepayment penalty. If the Debenture Holders do not give approval as mentioned above, and the Issuer changes its name, the Issuer will mandatorily prepay the Outstanding Amount to Debenture Holders immediately without any prepayment penalty.
In addition to this Disclosure document, the following documents shall be submitted in connection with the Issue:
1. The Memorandum and Articles of Association of the Issuer, as amended from time to time 2. Certificate of incorporation of the issuer 3. Board Resolution date 30th December, 2011 and 28th January, 2013 authorizing issue of debentures offered under the terms of this Disclosure document 4. Shareholder resolution dated 21st July, 2011 authorizing the issuer to avail of the borrowings up to an aggregate limit of ` 1500 Crs.
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5. Certificate issued by the Vice President, Finance of the issuer dated 3rd April 2013 certifying that the borrowing being availed of by the issuer is within the limits authorized by the shareholders resolution dated 21st July 2011 6. Depository Agreement with NSDL 7. Consent of Registrar to the Issue 8. Consent letter of Axis Trustee Services Limited, for acting as debenture trustee for the Debenture Holders 9. Credit rating letter for the Issue
In case of any discrepancy between Debenture Trust Deed and the Disclosure document, the clauses as per Debenture Trust Deed will prevail.
Litigation and other confirmations
We confirm that our company has been in compliance with the Takeover Code and the Listing Agreement as may be applicable. We have not been: (a) prohibited from accessing the capital markets under any order or direction passed by SEBI and no penalty has been imposed at any time by any of the capital market regulators in India or abroad; (b) subject to any penalties to disciplinary action or investigation by SEBI or the stock exchanges, nor has any appropriate regulatory or legal authority found any probable cause for enquiry, adjudication, prosecution or other regulatory action. (c) refused listing of the Equity Shares or failed to meet the listing requirements of any stock exchanges, in India or abroad. (d) found to be non-compliant with securities laws.
Legal Proceedings
In the normal course of business, we face claims and assertions by various parties. We assess such claims and assertions and monitor the legal environment on an ongoing basis, with the assistance of external legal counsel wherever necessary. We record a liability for any claims where a potential loss is probable and capable of being estimated, and disclose such matters in our financial statements, if material. For potential losses which are considered reasonably possible, but not probable, we provide disclosure in the financial statements, but do not record a liability in our accounts unless the loss becomes probable. Should any new developments arise, such as a change in law or rulings against us, we may need to make provisions in our financial statements, which could adversely impact our reported financial condition and results of operation. Furthermore, if significant claims are determined against us and we are required to pay all or a portion of the disputed amounts, there could be a material adverse effect on our business and profitability. There are claims against us which pertain to criminal cases, civil cases and consumer complaints. There are other claims against us which pertain to tax matters. We believe that none of the contingencies, either individually or in the aggregate, would have a material adverse effect on our financial condition, results of operations or cash flows.
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SPECIAL CONSIDERATIONS AND RISK FACTORS The Issuer believes that the following factors may affect its ability to fulfill its obligations under the Debentures issued under the Disclosure Document. All of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring.
In addition, certain factors which are material for the purpose of assessing the market risks associated with Debentures issued under the Disclosure Document are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in Debentures issued under the Disclosure Document, but the inability of the Issuer, as the case may be, to pay coupon, principal or other amounts on or in connection with any Debentures may occur for other reasons and the Issuer does not represent that the statements below regarding the risks of holding any Debentures are exhaustive. Prospective Investors should also read the detailed information set out elsewhere in this Disclosure document and all other information of the issuer available in the public domain and reach their own views prior to making any investment decision.
Prior to making an investment decision, prospective Investors should carefully consider, along with the other matters set out in this Disclosure Document, the following investment considerations. Structured products such as the Debentures are sophisticated instruments, can involve a high degree of risk and are intended for sale only to those Investors capable of understanding the risks entailed in such instruments. If in doubt, potential Investors are strongly recommended to consult with their financial advisors before making any investment decision.
The following discussion of a few risks associated to the Debentures, is subject to and pursuant to the terms of issuance of the Debentures as provided in this Disclosure Document, The initial subscriber by subscribing to, and any subsequent purchaser by purchasing the Debentures, shall be deemed to have agreed, and accordingly the Company shall be entitled to presume, that each of the initial subscriber, and any subsequent purchaser has reviewed, read and understood the terms and conditions contained in this Disclosure Document and found the same acceptable for investment.
1. Our business operations are subject to the performance of the Real Estate market and the financing of Real Estate in India
Our operations are subject to the performance of the real estate market in India. The development of a real estate project takes substantial amount of time and our business could be adversely impacted if there is a decline in prices over the timeframe of sale. Changes in government policies, economic conditions, demographic trends, employment and income levels and interest rates, among other factors may affect the real estate market and impact the demand for and valuation of our projects under implementation and our future projects. Low interest rates on housing loans and favourable tax treatment of these loans have helped boost the recent growth of the Indian real estate market. Interest rates in India, however, are on a rising trend that could dampen consumers from taking loans for acquiring real estate and thereby weaken the real estate market. Rising interest rates also increase the costs of our borrowings. Various provisions and norms imposed by the RBI in relation to housing loans by banks and housing finance companies could reduce the attractiveness of the property, and the RBI or the GoI may take further steps to reduce directly or indirectly the credit to the real estate sector which may adversely affect the availability of housing loans at attractive rates. These factors can negatively affect the demand for and valuation of our projects under development and our planned projects. Our business, financial condition and results of operations could be adversely affected if real estate market conditions deteriorate 2. Our projects require the services of third parties, which entails certain risks.
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To focus on our core business as a developer we outsource construction activity in respect of all our projects. All of our projects thus require the services of third parties. These third parties include engineers, contractors and suppliers of labour and materials. The timing and quality of construction of the projects we develop depends on the availability and skill of those third parties, as well as contingencies affecting them, including labour and raw material shortages and industrial action such as strikes and lockouts. We cannot assure you that skilled third parties will continue to be available at reasonable rates and in the areas in which we conduct our projects. As a result, we may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of contracted services and any delay in project execution could adversely affect our profitability. Further, we depend on manufacturers and other suppliers and do not have direct control over the products they supply, which may adversely affect the construction quality of our developments.
3. Our business is subject to extensive government regulation.
The real estate industry in India is heavily regulated by the Government of India, State governments and local authorities. Real estate developers need to comply with a number of requirements mandated by Indian laws and regulations, including policies and procedures established by local authorities. For example, we are subject to various Land Ceiling Acts, in particular the Urban Land Ceiling and Regulation Act, in certain states, which regulates the amount of land that can be held under single ownership. Additionally, in order to develop and complete a real estate project, developers must obtain various approvals, permits and licences from the relevant administrative authorities at various stages of project development. We may encounter major problems in obtaining the requisite approvals or licences, may experience delays in fulfilling the conditions precedent to any such approvals and we may not be able to adapt ourselves to new laws, regulations or policies that may come into effect from time to time with respect to the real estate sector. There may also be delays in obtaining requisite approvals. If we experience material problems in obtaining or fail to obtain the requisite governmental approvals, the schedule of development and sale or letting of our projects could be substantially disrupted. Although we believe that our projects are in compliance with applicable laws and regulations, there could be instances of non-compliance, which may subject us to regulatory action in the future, including penalties, seizure of land and other legal proceedings.
4. We may not be successful in identifying suitable projects, which may hinder our growth.
Our ability to identify suitable projects is fundamental to our business and involves certain risks including identifying and acquiring appropriate land, appealing to the tastes of residential customers for a premium residential accommodation, understanding and responding to their expectations and demands for better lifestyle amenities by anticipating the changing trends. While we have successfully identified suitable projects in the past, we may not be as successful in identifying suitable projects that meet market demand in the future. If we fail to anticipate and respond to consumer requirements, we could lose potential clients to competitors. Any failure to identify suitable projects, build or develop saleable properties or meet customer demand in a timely manner could have an adverse effect on our business, financial condition and results of operations.
5. Our revenues and profits can differ significantly from period to period.
Sales revenues are dependent on various factors such as the size of our developments, rights of lessors or third parties that could impair our ability to sell properties and general market conditions. The completion dates for our ongoing projects, are estimates based on current expectations and could change significantly, thereby affecting revenue recognition in our financial statements. .These factors may result in significant variations in our revenues and profits. Therefore, period-to-period comparisons of our results of operations may vary significantly.
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6. We may not be able to increase our land bank by acquiring suitable sites.
Our growth has been significantly dependent upon our ability to identify and acquire land in different geographic segments. In order to maintain and grow our business, we will be required to increase our land bank with suitable sites for development. Our ability to identify and acquire suitable sites is dependent on a number of factors that may be beyond our control. These factors include the availability of suitable land, the willingness of landowners to sell us land on attractive terms, the ability to obtain an agreement to sell from all the owners where land has multiple owners, encumbrances on targeted land, government directives on land use, and the obtaining of permits and approvals for land acquisition and development. The failure to acquire land may cause us to change, delay or abandon the entire projects, which in turn could cause our business to suffer. In addition, land acquisition in India has been subject to regulatory restrictions on foreign investment. These restrictions are gradually being relaxed and this taken together with the aggressive growth strategies and financing plans of real estate development companies as well as real estate investment funds in the country, are likely to make suitable land increasingly expensive. If we are unable to compete effectively in the acquisition of suitable land, our business and prospects may be adversely affected.
7. Our inability to manage growth could disrupt our business and reduce our profitability.
A principal component of our strategy is to continue to grow by expanding the size and geographical scope of our existing businesses, as well as the development of new infrastructure-related businesses. This growth strategy will place significant demands on our management, financial and other resources. It will require us to continuously develop and improve our operational, financial and internal controls. Continuous expansion increases the challenges involved in financial management, recruitment, training and retaining high quality human resources, preserving our culture, values and entrepreneurial environment, and developing and improving our internal administrative infrastructure. Any inability on our part to manage such growth could disrupt our business prospects, impact our financial condition and adversely affect our results of operations.
8. Increased raw material costs may adversely affect our results of operations.
Our business is affected by the availability, cost and quality of the raw materials we need to construct and develop our properties. Our principal raw materials include steel and cement. The prices and supply of these and other raw materials depend on factors not under our control, including general economic conditions, competition, production levels, transportation costs and import duties. If, for any reason, our primary suppliers of raw materials should curtail or discontinue their delivery of such materials to us in the quantities we need and at prices that are competitive, our ability to meet our material requirements for our projects could be impaired, our construction schedules could be disrupted and our business could suffer.
9. Taxation
Each Registered Debenture Holder will assume and be solely responsible for any and all taxes of any jurisdiction or governmental or regulatory authority, including, without limitation, any state or local taxes or other like assessment or charges that may be applicable to any payment to it in respect of the Debentures. The Issuer will not pay any additional amounts to the Registered Debenture Holders to reimburse them for any tax, assessment or charge required to be withheld or deducted by the Issuer from payments in respect of the Debentures.
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10. The secondary market for the Debentures may be non-existent or the Debentures maybe 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. Any such Debenture so purchased may be required to be held or resold or surrendered for cancellation. To the extent that an issue of Debentures becomes illiquid, an Investor may have to hold the Debenture until redemption to realize value. Under the terms and conditions of the Debentures, the Issuer or its affiliates may purchase Debentures at such times, in such manner and for such consideration as they may deem appropriate. Such Debentures may be resold or surrendered for cancellation, or held and then resold or surrendered for cancellation, and, if cancelled, may not be reissued by the Issuer, all at such time and in such manner as it may deem appropriate. Investors should not therefore make any assumption as to the number of Debentures in issue at any one time or in the future.
11. Uncertain trading markets and liquidity risk
The Company cannot assure holders of the Debentures that a trading market for their Debentures will ever develop or be maintained. Many factors independent of the creditworthiness of the Company affect the trading market of the Debentures. These factors include: (i) the complexity and volatility of the index or formula or other basis of reference applicable to the Debentures, (ii) the method of calculating the principal, premium and coupon, if any, or other consideration, if any, in respect of the Debentures, (iii) the time remaining to the maturity of the Debentures, (iv) the outstanding amount of the Debentures, (v) the redemption features of the Debentures, (vi) the amount of other debt securities linked to the index or formula or other basis of reference applicable to the Debentures, and (vii) the level, direction and volatility of market interest rates generally. In addition, certain Debentures may be designed for specific investment objectives or strategies and, therefore, may have a more limited secondary market and experience more price volatility than conventional debt securities. Registered Debenture Holders may not be able to sell such Debentures readily or at prices that will enable them to realize their anticipated yield. No Investor should purchase Debentures unless such Investor understands and is able to bear the risk that such Debentures may not be readily saleable, that the value of such Debentures will fluctuate over time, that such fluctuations may be significant 12. Credit Risk
Prospective Investors should be aware that receipt of any coupon payment and principal amount at maturity on the Debentures is subject to the credit risk of the Issuer. Investors assume the risk that the Issuer will not be able to satisfy their obligations under the Debentures. Any stated credit rating of the Issuer reflects the independent opinion of the referenced rating agency as to the creditworthiness of the rated entity but is not a guarantee of credit quality of the Issuer Any downgrading of the credit ratings of the Issuer or its affiliates by any rating agency could result in a reduction in the value of 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 be substantially reduced or delayed.
13. No claim against reference asset
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Registered Debenture Holders do not have any interest in or rights to the underlying assets, indices or securities to which Debentures relate.
14. Leverage risk
Borrowing capital to fund the purchase of the Debentures (leveraging) can significantly increase the risks of the investment such that if the value of the Debentures decreases on a mark to market basis, leveraging will magnify that decrease in value. Any statement on the potential risks and return on the Debentures does not take into account the effect of any leveraging. Investors must factor in and consider the potential impact of, amongst other things, the cost of funding and possibility of margin calls due to a decrease in the daily mark
DISCLAIMERS This Disclosure Document in relation to the Debentures is made available by the Company to the applicant on the further strict understanding that (i) the applicant is a “Person Resident in India” as defined under the Foreign Exchange Management Act, 1999, (ii) in providing this Disclosure Document to the applicant, there will be no violation of rules, regulations and byelaws issued by any applicable authority including those issued by the Securities And Exchange Board of India; (iii) the applicant has sufficient knowledge, experience, and professional advice to make his own evaluation of the merits and risks of a transaction of the type under this Disclosure Document; and (iv) the applicant is not relying on the Issuer nor on any of the affiliates of the Company for information, advice or recommendations of any sort except for the accuracy of specific factual information about the possible terms of the transaction. The Company is not acting as the advisor or agent of the applicant. This Disclosure Document does not purport to identify for the applicant, the risks (direct or indirect) or other material considerations, which may be associated with the applicant entering into the proposed transaction. Prior to entering into any proposed transaction, the applicant should independently determine, without reliance upon the Company or the affiliates of the Company, the economic risks and merits, as well as the legal, tax, and accounting characterizations and consequences of the transaction and including that the applicant is able to assume these risks. The Company, and/or the affiliates of the Company, may act as principal or agent in similar transactions and/or in transactions with respect to instruments underlying a proposed transaction. The Company, and/or the affiliates of the Company may, from time to time, have a long or short proprietary position/s and/or actively trade, by making markets to its clients, in financial products identical to or economically related to those financial products described in this Disclosure Document. The Company may also undertake hedging transactions related to the initiation or termination of a transaction, that may adversely affect the market price, rate, index or other market factors(s) underlying the financial product and consequently its value. The Company may have a commercial relationship with and access to information of reference securities, financial products, or other interests underlying a transaction.
This Disclosure Document and its contents are the Company‟s property, and are to be considered proprietary information and may not be reproduced or otherwise disseminated in whole or in part without the Issuer‟s written consent unless required to by judicial or administrative proceeding, and then with prior notice to the Company.
Applicants must understand that while the Debentures would be listed, in view of the nature and complexity of the Debentures, marketability may be impacted in a manner that cannot be determined.
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Past performance is not indicative of future performance. Investment in the Debentures may be subject to the risk of loss, meaning the Debenture holder may lose some or all of its investment especially where changes in the value of the transaction may be accentuated by leverage. Even where the Debentures are principal protected, there is a risk that any failure by a person including a counterparty to perform obligations when due may result in the loss of all or part of the investment.
No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this Disclosure Document. The Company undertakes no obligation to effect any updates on information. Any opinions attributed to the Company, and/or the affiliates of the Company constitute the Company‟s judgment as of the date of the material and are subject to change without notice. Provision of information may cease at any time without reason or notice being given. Commissions and other transaction costs may not have been taken into consideration. Any scenario analysis is provided for illustrative purposes only and does not represent actual termination or unwind prices, nor does it present all possible outcomes or describe all factors that may affect the value of your investment.
The past performance of the Company in any product/scheme/instrument etc. is not indicative of the future performance in the same product/scheme/instrument etc or in any other product/scheme/instrument etc either existing or that may be offered. There is no assurance that past performances indicated in earlier product/scheme/instrument etc will be repeated. Applicants are not being offered any guaranteed or indicative returns through these Debentures.
NOTE:
This Disclosure Document is not intended for distribution and it is meant solely for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The Debentures mentioned herein are being issued on a private placement basis and this offer does not constitute nor should it be considered a public offer/invitation. Nothing in this Disclosure Document shall constitute and/or deem to constitute an offer or an invitation to an offer to the Indian public or any section thereof to subscribe for or otherwise acquire the Debentures. This Disclosure Document and the contents hereof are restricted for only the intended recipient(s) who have been addressed directly through a communication by the Company and have been marked against the serial number provided herein 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 Company or any other parties whose names appear herein, shall not be liable for any statements made herein or any event or circumstance arising therefrom. A copy of this Disclosure Document has not been filed or submitted to the SEBI for its review and/or approval. Potential investors are required to make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in such instruments. GENERAL INFORMATION
NAME AND ADDRESS OF THE REGISTERED/ HEAD OFFICE OF THE ISSUER
Name of the issuer Mahindra Lifespace Developers Limited Registered Office 5th floor, Mahindra Towers, Worli, Mumbai - 400018 Registration number 11-118949 Corporate and head office 5th floor, Mahindra Towers, Worli, Mumbai – 400018 Address of the RoC Registrar of Companies Office of Registrar of Companies Everest Building Information Memorandum P a g e | 56
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100, Marine Drive Mumbai-400002
NAMES AND ADDRESSES OF THE DIRECTORS OF THE ISSUER
Name Designation Occupation Age (years) Residential Address Mr. Arun K Nanda Chairman Service 65 3, St. Helens Court, Dr. Gopalrao Deshmukh Marg, Mumbai – 400026
Mr. Uday Y. Phadke Director Service 62 Flat No. 1102, Harimangal Manor, 402, Telang Road, Matunga (East), Mumbai – 400 019
Mr. Sanjiv Kapoor Director Practising 60 13/397, Civil Lines, Chartered Kanpur 208001 Accountant Mr. Shailesh Director Practising 56 228 Kalpataru Haribhakti Chartered Habitat. Accountant B Wing, Dr. S S Rao Road. Parel, Mumbai 400 012.
Mr. Anil Harish Director Advocate 59 13, CCI Chambers,Dinshaw Wachha Road,Mumbai - 400 020
Dr. Prakash Director Business 68 601, Udyandarshan, Hebalkar Sayani Rd, Prabhadevi, Mumbai 400 025
Ms, Anita Arjundas Managing Director Service 45 Flat No. 2, Park & CEO View Co-Op Hsg Soc, 95, St Andrews Road, Bandra-West, Mumbai-400050
Company Secretary and Compliance Officer
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Mr. Suhas Kulkarni Mahindra Lifespace Developers :Limited 5th floor, Mahindra Towers, Worli, Mumbai – 400018
Tel:+91-022-67478600 / 67478601 Fax:+91022-24975084 Email: [email protected]
Investors can contact the compliance officer in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of debentures, interest on application money etc in the respective beneficiary account or refund orders, etc.
Auditors
M/s B.K. Khare & Co.,Chartered Accountants 706 /708, Sharda Chambers, New Marine Lines, Mumbai-400020 Tel:+91-022-22006360/22007318 Fax:+91-22003476 Email: [email protected] Website: www.bkkhareco.com
Registrar to the issue Sharepro Services (India) Pvt. Limited 13 A B Samhita Warehousing Complex Off. Andheri Kurla Road Sakinaka Telephone Exchange Lane Sakinaka, Andheri East Mum bai 400 072 Tel : 67720300 / 67720400 Fax: 28508927 E-mail: [email protected] Website: www.Shareproservices.com Contact Person: Mr Nilesh Bhandari, Sr. Manager-Depository
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ANNEXURE 1: TERM SHEET
TERMS & CONDITIONS
Issuer/Company/Borrower Mahindra Lifespace Developers Limited (“MLDL”) Joint Lead Managers/ HDFC Bank Ltd (“HDFC Bank”) and Kotak Mahindra Bank Limited (“Kotak”) Arrangers Instrument Secured, Listed, Rated, Redeemable Non-Convertible Debentures (“NCD” or “Debentures”) Mode of Placement Private placement to eligible investors Purpose To part finance any of one following or any combination thereof : (a) General Corporate purposes (b) Working Capital requirements (c) Real Estate Development (d) Land Acquisitions and (e) Cost of Construction, (f) to invest into an existing / to be incorporated subsidiary company being Special Purpose Vehicle (SPV) company, to enable it to part finance the cost of land acquisition and preliminary development expenditure for the residential projects proposed to be undertaken in the SPV and (e) pending full utilization of issue proceeds to invest the temporary surplus of the issue proceeds in money market instruments, mutual funds and deposits with banks. Rating A+ (Stable) from Crisil Listing Listed Face Value Rs. 10,00,000 (`Ten Lakhs only) per NCD. Terms of NCD Series I Series II Series III Amount ` 125 crores ` 175 crores ` 200 crores Face value `. 10,00,000 per `. 10,00,000 per `. 10,00,000 per NCD NCD NCD Coupon 0% 8% p.a payable 8% p.a payable annually annually Maturity 3 years from 4 years from 5 years from deemed date of deemed date of deemed date of allotment allotment allotment Redemption ` 3,59,896.61 ` 1,30,874.10 ` 1,72,782.29 Premium per debenture YTM 10.78% p.a 10.78% p.a 10.78% p.a
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Redemption Bullet, at premium Bullet, at premium Bullet, at premium Outstanding Amount The sum of the Outstanding Principal, accrued interest calculated based on YTM, Default Interest payable (if any) and other charges and fees payable (if any as per the “Transaction Documents”). Taxes duties cost and Relevant taxes, duties and levies are to be borne by the Issuer. The charges expenses / fees and any amounts payable under this Facility by the Issuer to the NCD Investor as mentioned herein do not include any applicable taxes, levies including service tax etc. and all such impositions shall be borne by the Issuer additionally. However any TDS as applicable may be deducted out of the payment due and paid as charges/fees/interest on the Facility. Security Secured by exclusive charge over: Assets, including land & building as identified by the Issuer from time to time. At present the identified assets are as follows: c. Building – Mahindra Towers Delhi d. Land owned by MLDL/MITL Minimum FACR of 1.25x at all times during the currency of the debentures; FACR to be calculated on semi-annual basis based on the following formula: Market Value of the Security created on exclusive basis/ Outstanding Amount. Security Cover to be calculated based on the market value of the Security. Security Valuation to be done by a Valuer, acceptable to the Majority Debenture Holders (75%). Charge / security to be created in favour of Debenture Trustee within 90 days which can be extended for another 90 days With the approval of Majority Debenture Holders (75%) which shall not be unreasonably withheld. Investors, at their own cost may get valuation of Security done by the agreed valuer at any time if required and FACR calculated accordingly. The security shall be added as per Top Up of Security. Acceleration Event Upon occurrence of the following events, the Majority Debenture Holders (75%) will have the right to recall the Outstanding Amount on the NCDs: The Promoters, i.e., Mahindra & Mahindra Ltd shall at all times be a Holding Company of Issuer by virtue of controlling, in accordance with the provisions of the Companies Act (as amended or enacted), the right
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to appoint majority of Board of Directors of the Issuer In the event, the Fixed Asset Coverage Ratio (FACR) as determined by the Debenture Trustee falls below 1.25x, the Company shall endeavor to create charge over additional assets ) and in the event the Company is unable to create such charge for any reason whatsoever within 30days from the date of determination of such event then the Majority Debenture Holders shall have an option to recall the NCDs within 15 days from expiry of aforesaid 30 days (“Top up of Security”)
Rating of the Instrument falls below A- by CRISIL
The Company will make the payment within 30 days without prepayment penalty, or otherwise specified, from the date of exercise of acceleration option by the Majority Debenture Holders (75%)
Issue of Debentures The Issuer will issue the Debentures / Letters of Allotment in dematerialized form within two business days from the Deemed Date of Allotment. Interest on Application To be paid to investors at YTM from the date of realization of subscription Money money upto one day prior to the Deemed Date of Allotment. Such interest is payable within seven business days from the Deemed Date of Allotment. Day Count Basis Interest payable on Debentures will be calculated on the basis of actual number of days elapsed in a year of 365 or 366 days as the case may be i.e. Actual/ Actual Conditions Precedent to Execution of Information Memorandum, Rating Letter, Consent letter Disbursement from Debenture Trustee. In-principle approval from BSE) The Issuer shall have obtained all necessary board / shareholder resolutions under Section 292 (1) (b), Section 293(1)(d), Section 293(1)(a), Section 372A and other provisions of the Companies Act, 1956 as are required in relation to the issue of the Debentures, provision of security, the appointment of the Debenture Trustee and the execution of necessary documents in connection therewith. No Event of Default by Issuer; There is no material adverse effect and there are no circumstances existing which could give rise, with the passage of time or otherwise, to a material adverse effect on the Issuer. Event of Default The Majority Debenture holders (75%) at their discretion directly or acting through the Debenture Trustee may initiate proceedings against the Issuer in the event of: Information Memorandum P a g e | 61
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Non-payment of Coupon or Face Value or Redemption Premium on the due date. Cross default – Other than default under the present issue, if the issuer is in default under the terms and conditions of any issuances/obligations under other facilities constituting a default of more than Rs. 25 Cr and receives such notice of event of default from such lender/investor, then that shall also constitute an event of default under the present issue as well Insolvency of the Issuer or winding-up (whether voluntarily or compulsorily) If the Issuer is declared a sick undertaking under the provisions of the Sick Industrial Undertakings (Special Provisions) Act, 1985 (“SICA”) or if a reference has been made to BIFR (as defined under SICA) by a creditor under SICA and the Issuer has not resolved the complaint or is nationalized or is under the management of the Central Government Breach of any Material Representations and Warranties as described in the Debenture Trust Deed Breach of any Covenants as described in the Debenture Trust Deed Non creation or Top-Up of Security within the stipulated timeline Any material event / material development or material change involving the Issuer at the time of issue or during the currency of the debentures which may affect continuance of outstanding investment in the debentures by the investor (Any materiality to be decided at the discretion of Majority of Debenture Holders (75%)) Covenants for the facility The Covenants shall include the following:
“Mahindra” to be part of the name of the Issuer at all times during the tenure of Facility. In case the Issuer intends to change its name without the “Mahindra” name, it shall seek approval from majority (75%) of debenture holders and such approvals shall not be unreasonably withheld. In case the Investors don‟t approve the change in name, the Issuer shall have an option to pay the Outstanding Amount without any prepayment penalty.
If the Debenture Holders do not give approval as mentioned above, and the Issuer changes its name, the Issuer will mandatorily prepay the Outstanding Amount to Debenture Holders immediately without any prepayment penalty
Other Terms and Conditions So far the Issuer is in compliance with Minimum FACR, post sell/lease, the Company is free to sell / lease its land and /or units constructed / under construction on such land in the ordinary course of business to its customers and the security to that extent shall be deemed to have been released/
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charge vacated by the trustees without the express consent of the debenture holder(s). The sale of assets will be reported on quarterly basis within 45 days of the end of each quarter. Except as stated above, any release of security would require approval from Majority Debenture Holders (75%) which shall not be unreasonably withheld. Depositories Applications will be made for the Debentures to be deposited with NSDL & CSDL Default Interest In case of default of interest and/ or principal redemption on the due dates, additional interest @2% p.a. over the documented rate will be payable by the company Security Creation The Security shall be created within 3 months from the date of disbursement. The company may, with the consent of Investors / Trustee, seek additional 90 days for security creation subject to applicable laws. In the event security is not created within 90 days or such period as extended, , the Majority Debenture Holders (75%)shall reserve the right to recall the outstanding principal amount on the aforesaid debentures along with the amount/ accrued interest due in respect thereof after giving a 3 month notice period. Default interest will be levied if the security is not created within 6 months. Transaction Documents Debenture trust deed Debenture Trustee Agreement Any security creation documents including hypothecation deed, indenture of mortgage and forms for filing of charge Listing Agreement Any other document as agreed between the Issuer and the Debenture trustee Governing Law The Facility and security documents shall be governed by laws of India and shall remain subject to jurisdiction of Courts of Mumbai.
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ANNEXURE 2: CASH FLOWS
actual days in Date Day Particulars days year Series I Series II Series III
4-Apr-13 Thur Face Value (1,000,000.00) (1,000,000.00) (1,000,000.00)
4-Apr-14 Fri coupon 365.00 365.00 80,000.00 80,000.00
6-Apr-15 Mon coupon 367.00 365.00 80,438.36 80,438.36
4-Apr-16 Mon coupon 364.00 366.00 79,562.84 79,562.84
4-Apr-16 Mon red premium 364.00 366.00 359,896.61
4-Apr-16 Mon principal 364.00 366.00 1,000,000.00
4-Apr-17 Tue coupon 365.00 365.00 80,000.00 80,000.00
4-Apr-17 Tue red premium 365.00 365.00 130,874.10
4-Apr-17 Tue principal 365.00 365.00 1,000,000.00
4-Apr-18 Wed coupon 365.00 365.00 80,000.00
4-Apr-18 Wed red premium 365.00 365.00 172,782.29
4-Apr-18 Wed principal 365.00 365.00 1,000,000.00
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ANNEXURE 3: UNDERTAKING BY THE COMPANY
The Company undertakes that:
1. It shall attend to the complaints received in respect of the Issue expeditiously and satisfactorily;
2. The funds required for making refunds, if any, shall be made available on time
3. That necessary co-operation shall be extended to credit rating agency in providing true and adequate information till the debt obligations in respect of the instruments are outstanding;
4. The Company shall furnish a confirmation certificate that the security created by the Company in favor of the Debenture Holders is properly maintained and is adequate enough to meet the outstanding amount towards the Debenture Holders in the event of a default.
5. That it shall use a common form/ procedure for transfer of Debentures issued under terms of this Disclosure document
AUTHORIZED SIGNATORY
MAHINDRA LIFESPACE DEVELOPERS LIMITED
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ANNEXURE 4: APPLICATION FORM
Application No: ___ Date:
The Director, Mahindra Lifespace Developers Limited, 5th floor, Mahindra Towers, Worli, Mumbai 400018.
Dear Sirs,
Having read and understood the contents of the Disclosure Document dated April 4th 2013, I/we hereby apply for allotment of the Debentures to us. The amount payable on application as shown below is remitted herewith. I/We irrevocably give our authority and consent to Axis Trustee Services Limited, to act as my/our trustees and for doing such acts and signing such documents as are necessary to carry out their duties in such capacity. Notwithstanding anything contained in this Disclosure document dated April 4th 2013 and the attachments hereto, I/we confirm that I/we have carefully read and understood the contents, terms and conditions of the Disclosure document dated April 4th 2013 and the attachments hereto, in their entirety and further confirm that in making my/our investment decisions I/we have relied on my/our own examination of the Company and the terms of the issue of the Debentures. On allotment, please place my/our name(s) on the Register of Debenture holder(s). I/We bind ourselves to the terms and conditions as contained in the Information Document / Disclosure Document.
(Please read carefully the instructions on the next page before filling this form) Details No. of debentures applied (in figures) No. of debentures applied (in words) Amount( ` in figures) Amount ( ` in words) Cheque/Demand Draft/RTGS Details Date Drawn on Bank
Applicant’s Name & Address in full (please use capital letters)
Pin Code: Telephone: Fax: Email:
Status: Banking Company ( ) Insurance Company ( ) Mutual Fund ( ) Others ( ) – please specify
Name of Authorized Designation Signature Signatory
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Details of Bank Account
Bank Name & Branch Nature of Account Account No.: IFSC/NEFT Code
Depository Details
DP Name DP ID Client ID
(*) We understand that in case of allotment of debentures to us/our Beneficiary Account as mentioned above would be credited to the extent of debentures allotted.
Taxpayers PAN / GIR IT Circle/Ward/District ( ) Not Allotted No.
Tax Deduction Status ( ) Fully Exempt ( ) Tax to be deducted at ( ) Yes ( ) Source No
______(Tear here)______
ACKNOWLEDGEMENT SLIP Details No.of debentures applied (in figures) No.of debentures applied (in words) Amount( ` in figures) Amount ( ` in words) Cheque / DD/RTGS
(Cheques /Demand Drafts are subject to realization)
For all further correspondence please contact: Mr. Jayantt Manmadkar, Mahindra Lifespace Developers Limited, 5th floor, Mahindra Towers, Worli, Mumbai 400018.
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INSTRUCTIONS
1. You must complete application in full in BLOCK LETTERS IN ENGLISH. 2. Your Signatures should be made in English or in any of the Indian languages 3. Application forms duly completed in all respects, together with Cheques/Pay Order/Demand Draft, must be lodged at the Mahindra Lifespace Developers Limited‟ head office. 4. In case of payments through RTGS, the payments may be made as follows:
Beneficiary : Mahindra Lifespace Developers Limited Bank Details : HDFC Bank Limited Branch : Kamla Mills, Lower Parel Account No. : 05420310000400 IFSC Code : HDFC0000060
5. The Cheque(s)/Demand Draft(s) should be drawn in favour of "Mahindra Lifespace Developers Limited" and crossed "A/c payee" only. Cheque(s)/Demand draft(s) may be drawn on any scheduled bank and payable at Mumbai. 6. Outstation cheques, cash, money orders, postal orders and stock invest will NOT be accepted. 7. As a matter of precaution against possible fraudulent encashment of interest warrants due to loss/misplacement, you are requested to mention the full particulars of the bank account, as specified in the application form. 8. Interest warrants will then be made out in favour of the bank for credit to your account. In case the full particulars are not given, cheques will be issued in the name of the applicant at their own risk. 9. Mahindra Lifespace Developers Limited in the “Acknowledgement Slip” appearing below the Application Form will acknowledge receipt of applications. No separate receipt will be issued. 10. You should mention your Permanent Account Number or the GIR number allotted under Income-Tax Act, 1961 and the Income-Tax Circle/Ward/District. In case where neither the PAN nor GIR number has been allotted, the fact of non-allotment should be mentioned in the application form in the space provided. 11The application would be accepted as per the terms of the issue outlined in the Information Document / Disclosure Document.
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ANNEXURE 5: CONSENT LETTER FROM DEBENTURE TRUSTEE
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ANNEXURE 6: RATING LETTER AND RATIONALE
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April 03, 2013 Mumbai
Mahindra Lifespace Developers Limited
‘CRISIL A1’ assigned to CP issue
Total Bank Loan Facilities Rated Rs.5.0 Billion
Long-Term Rating CRISIL A+/Stable (Reaffirmed)
(Refer to Annexure 1 for details on facilities)
Rs.500 Million Commercial Paper Programme CRISIL A1 (Assigned)
Rs.5.0 Billion Non-Convertible Debentures CRISIL A+/Stable (Reaffirmed)
CRISIL has assigned its ‘CRISIL A1’ rating to the commercial paper programme of Mahindra Lifespace Developers Ltd (MLDL), and has reaffirmed its ratings on the company’s bank facility and non-convertible debentures (NCDs) at ‘CRISIL A+/Stable’.
The rating continue to reflects MLDL’s strong brand name, established track record and focus on execution, strong support from its parent, Mahindra & Mahindra Ltd (M&M; rated ‘CRISIL AA+/Stable/CRISIL A1+’), and prudent land acquisition policy. These rating strengths are partially offset by current concerns around possible moderate demand conditions in the Jaipur integrated business city due to uncertainty of tax benefits for units based in special economic zone (SEZ) of Mahindra World City (Jaipur) Ltd (MWCJL), and exposure to risks and cyclicality inherent in the real estate sector.
For arriving at its ratings, CRISIL has combined the business and financial risk profiles of MLDL and its subsidiaries. This is because all the entities operate in the real estate and related space with significant operational and financial linkages and have a common management.
MLDL has a strong brand name and an established track record with a focus on on-time execution. This is evident from the healthy booking it has received for the projects launched in the past two years. The company has completed 7.56 million square feet (sq ft) of residential real estate in Mumbai, National Capital Region (NCR), Chennai and Pune. Currently, MLDL is executing 4.22 million sq ft and is planning to launch another 5.69 million sq ft over the medium term. MLDL is also executing two integrated business city projects in Chennai (1550 acres) and Jaipur (3000 acres).
Going forward, MLDL is expected to replenish its land bank across cities (current land bank of MLDL and its subsidiaries involved in residential development is 12.09 million sq ft of which 10.5 million sq ft is in Mahindra World City, Chennai) which will be funded through internal accruals and debt. CRISIL believes that MLDL has sufficient gearing headroom for debt-funded land acquisition; its gearing as on December 31, 2012 was 0.63 times. CRISIL, however, believes that MLDL will maintain a conservative land acquisition policy, as
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in the past. Also, MLDL will continue to structure its future integrated business city projects in a prudent manner. The rating also factors in financial flexibility and management support enjoyed by MLDL as being part of M&M.
The above-mentioned strengths are partially offset by possible moderate demand conditions in the Jaipur integrated business city; its industrial area was operating at 45 per cent occupancy level as of December 31, 2012. The demand conditions are expected to be subdued due to the weak investment climate and uncertainty over the continuation of the tax benefits, imposition of minimum alternate tax and dividend distribution tax with respect to the SEZ area of MWCJL. However, other exemptions such as customs/excise duties for development of SEZs and central sales tax on inter-state purchase of goods, works contract tax, service tax, investment linked tax exemptions and duty drawback are expected to continue for the SEZ customers. Besides this, MLDL is exposed to the risks and cyclicality of the real estate sector, which could result in fluctuations in cash flows, owing to volatility in both saleability and realisations.
Outlook: Stable CRISIL believes that MLDL will maintain its business and financial risk profiles over the medium term, driven by its strong brand name, execution strength, and prudent land acquisition policy. The outlook may be revised to ‘Positive’ in case of higher-than-expected turnover of its ongoing and proposed residential and integrated business city projects leading to improvement in operating cash flow. Conversely, the outlook may be revised to ‘Negative’ if there is a sharp decline in the company’s revenues and profitability, triggered by slackened saleability of its existing and proposed projects or larger-than-expected, debt-funded land acquisition.
About the Company MLDL was incorporated in 1999 as Gesco Corporation Ltd. In 2002-03 (refers to financial year, April 1 to March 31), its name was changed to Mahindra Gesco Developers Ltd and in 2007-08 its name was further changed to MLDL. MLDL has two major business segments, residential development (78 per cent of the revenues in 2011-12) and integrated business cities (22 per cent of the revenues in 2011-12). MLDL is executing two integrated business city projects in Chennai and Jaipur through its subsidiaries, Mahindra World City Developers Ltd (83 per cent stake) and MWCJL (74 per cent stake), respectively. MLDL is listed on Bombay Stock Exchange and National Stock Exchange and M&M held 51 per cent stake in MLDL as on December 31, 2012.
For 2011-12, MLDL, on a consolidated basis, reported net sales of Rs.7.0 billion and a net profit of Rs.1.2 billion, against net sales of Rs.6.1 billion and a net profit of Rs.1.1 billion on for 2010-11. For the first nine months of 2012-13, MLDL reported an operating income of Rs.3.7 billion (Rs.4.3 billion) and net profit of Rs.0.64 billion (Rs.0.77 billion), on a consolidated basis.
Annexure 1 - Details of various bank facilities Current facilities Previous facilities
Amount Amount Facility Rating Facility Rating (Rs. Billion) (Rs. Billion)
Proposed Long- Proposed Long-Term CRISIL CRISIL 5.0 Term Bank Loan 5.0 Bank Loan Facility A+/Stable A+/Stable Facility
Total 5.0 -- Total 5.0 --
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About CRISIL Ratings CRISIL Ratings is India's leading rating agency. We pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we have a leadership position. We have rated over 60,000 entities, by far the largest number in India. We are a full-service rating agency. We rate the entire range of debt instruments: bank loans, certificates of deposit, commercial paper, non-convertible debentures, bank hybrid capital instruments, asset-backed securities, mortgage-backed securities, perpetual bonds, and partial guarantees. CRISIL sets the standards in every aspect of the credit rating business. We have instituted several innovations in India including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We pioneered a globally unique and affordable rating service for Small and Medium Enterprises (SMEs).This has significantly expanded the market for ratings and is improving SMEs' access to affordable finance. We have an active outreach programme with issuers, investors and regulators to maintain a high level of transparency regarding our rating criteria and to disseminate our analytical insights and knowledge.
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Last updated: April 30, 2012
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